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2007-271s:\our documents\ordinances\07\ ism health ordinance.doc ORDINANCE NO. Ot OO 7',,~ 'J I AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF DENTON, TEXAS, AUTHORIZING THE CITY MANAGER TO EXECUTE AN ADMINISTRATIVE SERVICES AGREEMENT FOR SELF-FUNDED EMPLOYEE BENEFIT PLANS WITH FISERV HEALTH PLAN ADMINISTRATORS, INC.; AUTHORIZING THE EXPENDITURE OF FUNDS THEREFOR; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, Fiserv Health Plan Administrators, Inc. ("Fiserv Health") is in the business of providing third party administrative services in conjunction with self-funded employee benefit plans; and WHEREAS, the City of Denton desires to enter into an Administrative Services Agreement (the "Agreement") with Fiserv Health to provide administrative services only for the City's self-funded health benefits program; NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. The City Manager, or his designee, is hereby authorized to execute an agreement with Fiserv Health in substantially the form of the Agreement which is attached hereto and incorporated herein by reference. SECTION 2. The expenditure of funds as provided for in the attached Agreement is hereby authorized. SECTION 2. This Ordinance shall become effective immediately upon its passage and approval. ,(p~ 7 PASSED AND APPROVED this the A k day of 6f'/lam x '2007. PERRY R. McNEILL, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY BY: 0, 164 c~ , lA~ APPROVED AS TO LEGAL FORM: EDWIN M. SNYDER, CITY ATTORNEY BY: ADMINISTRATIVE SERVICES AGREEMENT CITY OF DENTON CITY HALL EAST 601 E. HICKORY ST., STE A DENTON, TX 76205 HEALTH: 7670-00-410038 TABLE OF CONTENTS Page Section 1 - Definitions .............................................................................................................................1 Section 2 - Term and Termination ..........................................................................................................2 Section 3 - Scope of Relationship ..........................................................................................................3 Section 4 - Service Fees ..............................................................................:..................:........................4 Section 5 - General Responsibilities of the Plan Sponsor ..................................................................5 Section 6 - General Responsibilities of Fiserv Health .........................................................................7 Section 7 - Claims Appeal Services .....................................................................................................13 Section 8 - Independent Consulting Organizations (Applies to Health plan) ..................................13 Section 9 - Summary Plan Description (SPD) .....................................................................................14 Section 10 - Subrogation, Reimbursement or Third Party Services (Applies to Health plans) 15 Section 11 -Audit Rights and Standards ............................................................................................16 Section 12 - Limitation of Liability and Indemnification ....................................................................17 Section 13 - Dispute Resolution and Arbitration ................................................................................18 Section 14 - General Provisions and Signatures ................................................................................19 ADDENDUM #1 FEE SCHEDULE 22 ADDENDUM #2 PROVIDER RENTAL NETWORK SERVICES HEALTH PLAN(S) 24 ADDENDUM #3 CUSTODIAL BANKING PROCEDURES 25 ADDENDUM #4 MEDICAL PERFORMANCE STANDARDS 26 ADDENDUM #5 BUSINESS ASSOCIATE AGREEMENT 29 ADMINISTRATIVE SERVICES AGREEMENT This Administrative Services Agreement ("Agreement") is entered into by and between CITY OF DENTON, ("Plan Sponsor"), and Fiserv Health Plan Administrators, Inc., ("Fiserv Health"). The main body of this Agreement pertains to all products that are covered under this Agreement unless otherwise stated. Addendums are attached to the back of this Agreement as may be applicable, to set forth any unique product issues. RECITALS WHEREAS, the Plan Sponsor has established one or more self-funded employee benefit plans for certain employees of the Plan Sponsor and for certain dependents of such employees ("Covered Persons"); and WHEREAS, Fiserv Health is in the business of providing third party administrative services in conjunction with self-funded employee benefit plans; and WHEREAS, the Plan Sponsor has requested that Fiserv Health provide certain administrative services in connection with the operation and administration of such Plan(s), and Fiserv Health is willing to provide such services in accordance with the terms and conditions of this Agreement. NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, the parties intending to be legally bound hereby agree as follows: Section 1 - Definitions. Defined terms may be used in the singular or plural. 1.1 "Adverse Benefit Determination" means a denial, reduction or termination of a Covered Service, or a failure to provide or make payment, in whole or in part, for a Covered Service. This also includes any such denial, reduction, termination or failure to provide or make payment that is based on a determination that.the Covered Person is no longer eligible to participate in the Plan. 1.2 "Catastrophic Event" means a high-risk or high cost event including a diagnosis such as serious head injury, multiple trauma, cancer, organ transplant, cardiovascular disease, stroke, severe burn, spinal cord injury, prematurity in an infant, or high risk pregnancy. 1.3 "Certificate of Creditable Coverage". means the certificate as defined by and containing the information required by HIPAA. 1.4 "Claim" means every written or electronic request received by Fiserv Health for the payment of Covered Services under the applicable Plan. 1.5 "Covered Person" means all eligible employees, dependents and/or retired employees of the Plan Sponsor who are covered under the applicable Plan 1.6 "Covered Services" means any amount payable under the terms and conditions of the Plan, and as stated in the Summary Plan Description. 1.7 "HIPAA" means the Health Insurance Portability and Accountability Act of 1996, current amendments, and all rules and regulations promulgated thereunder. 1.8 "Independent Contractor" means one who renders service in the course of self employment or occupation, pursuant to Internal Revenue Code. 1.9 "Internal Revenue Code" means the Internal Revenue Code of 1986 as amended and any successor thereto. 1.10 "Plan" means the self-funded benefit plan(s) sponsored by the Plan Sponsor for Covered Persons. 1.11 "Preferred Providers" means any provider who is licensed to provide health or dental care services, as applicable, and has contracted with a preferred provider organization to provide services to Covered Persons at discounted rates. 1.12 "Protected Health Information" means information that is created or received by Fiserv Health on behalf of the health Plan that relates to the past, present or future physical or mental health condition of a Covered Person, as defined under the HIPAA privacy regulations. 1.13 "Shell" means the written document in draft form that Fiserv Health can make available to Plan Sponsor, if so requested, for Plan Sponsor to use as a starting point when preparing the Plan Sponsor's Summary Plan Description or other plan documents. 1.14 "Summary Plan Description (SPD)" means a written document that provides information regarding the terms of the employer sponsored benefit Plan for Covered Persons. 1.15 "URAC" means the Utilization Review Accreditation Commission. URAC is a health accreditation agency that promotes health care quality through its certification and accreditation programs. Section 2 - Term and Termination 2.1 This Agreement shall be effective January 1, 2008, and shall continue in effect for twelve consecutive months from the effective date. This Agreement shall automatically renew each year thereafter for successive one-year terms, unless terminated as hereinafter provided. 2.2 Fiserv Health may terminate this Agreement or certain services under this Agreement by giving written notice thereof to the Plan Sponsor at least ninety (90) calendar days prior to the renewal date of this Agreement. The Plan Sponsor may terminate this Agreement or certain services under this Agreement by giving written notice thereof to Fiserv Health at least thirty (30) calendar days prior to the renewal date. The decision to terminate this Agreement can be rescinded by mutual written agreement of both parties. 2.3 In the event of a material breach of a party's obligations under this Agreement (other than a breach relating to payment of Covered Services or payment of service fees), the non-breaching party shall give the breaching party written notice of any breach in accordance with the Notice provision of this Agreement, and allow breaching party thirty (30) calendar days to cure said breach from the date of said notice. In the event the breaching party fails to cure the breach within the thirty (30) calendar day period, this Agreement may be terminated by the non- breaching party at the expiration of such thirty (30) day period upon written notice. 2.4 This Agreement may be automatically terminated by Fiserv Health as provided below, by providing written notice to Plan Sponsor in the event that: a. All of the Plan Sponsor's Plans covered under this Agreement are discontinued; or b. The Plan Sponsor fails to maintain the bank account as required hereunder or fails to provide sufficient funds within which to pay Claims under the Plan, after being provided with a notice of default and fifteen (15) calendar days right to cure; or c. The Plan Sponsor fails to pay Fiserv Health the service fee as required when due, after being provided with a notice of default and fifteen (15) calendar days right to cure. If any part of the service fee is disputed, the Plan Sponsor shall pay Fiserv Health the undisputed portion of the service fee. as provided herein, and shall provide written details to Fiserv Health prior to the date payment of such fee is due, explaining the Plan Sponsor's good faith basis for disputing such fee. The Plan Sponsor may withhold the disputed portion 2 during pendency of such dispute, during which time both parties agree to use commercially reasonable efforts to resolve the dispute. 2.5 Notwithstanding any other provision of this Agreement, in the event of the filing by or against the Plan Sponsor of a petition for relief under the Federal Bankruptcy Code, Fiserv Health shall have the right to suspend the payment of Covered Services unless and until an order is obtained from the bankruptcy court, in form and substance acceptable to Fiserv Health, authorizing such payment, and the Plan Sponsor has deposited the funds necessary to pay such Covered Services in full. 2.6 In the event this Agreement is terminated, each party will promptly pay to the other any money due under this Agreement. 2.7 Any right to recover payment of any amounts due Fiserv Health or the Plan Sponsor under this Agreement shall survive any cancellation or termination of this Agreement. Section 3 - Scope of Relationship 3.1 Contract for Services Only: Fiserv Health does not represent, nor has it represented, this Agreement to be an insurance policy or an indemnity agreement. It is the intent of both parties, that this Agreement is a contract for the sale of services only, and not a contract of indemnity or a policy of insurance. 3.2 Communications: Fiserv Health shall be entitled to rely upon any written or oral communication from the Plan Sponsor, its designated employees, agents or authorized representatives. Fiserv Health shall assign an Account Manager to work directly with the Plan Sponsor on issues related to the Plan and this Agreement. The Plan Sponsor shall designate a contact person or persons that Fiserv Health can work with on issues related to the administration of the Plan and this Agreement. 3.3 Fiduciary: It is understood and agreed that Plan Sponsor is the named Plan Administrator and fiduciary within the meaning of the Internal Revenue Code, and Fiserv Health is not and shall not be deemed to be the Plan Administrator or fiduciary with respect to the Plan. Fiserv Health is retained under this Agreement to perform ministerial functions, not discretionary functions as clarified in the Department of Labor regulations at 29 CFR S2509.75-8, D(2). 3.4 Independent Contractors: It is understood and agreed that Fiserv Health is retained by the Plan Sponsor only for the purposes and to the extent set forth in this Agreement, and the relationship of Fiserv Health to Plan Sponsor for purposes of this Agreement shall be that of an Independent Contractor. 3.5 . Liability for Payment of Covered Services: It is understood and agreed that liability for payment of Covered Services under the Plan is the liability of the Plan Sponsor and that Fiserv Health shall not have any duty to use any of its funds for the payment of such Covered Services. Fiserv Health will have no obligation to arrange for payment of Covered Services under the Plan if the Plan Sponsor has not made the requisite funds available to Fiserv Health in accordance with this Agreement. 3.6 Plan Sponsor acknowledges that Fiserv Health is a member of a corporate group which includes companies involved in the following: • J.W. Hutton for the sale of subrogation services; • Innoviant for the sale of pharmacy benefits management services; • Avidyn Health for the sale of medical management services. • BP, Inc. and Sheridan Re for the sale and risk underwriting of a stop loss policy for the purpose of insuring a portion of the funding risk assumed by Plan Sponsor under the Plan. To the extent the Plan Sponsor chooses to purchase any of the above services from one of the listed companies, these companies will receive payment to compensate them for performing such services as stated on the Fee Schedule, elsewhere in this Agreement, or in the stop loss contract. Part of these fees may include administrative fees or other compensation for Fiserv Health in connection with the provision of such services, or stop loss commissions. The Plan Sponsor is aware of such compensation and the relationship between Fiserv Health and the above entities and so signifies its acceptance by its execution of this Agreement. Section 4 - Service Fees 4.1 Monthly Service Fee: The service fees paid by the Plan Sponsor pursuant to this Agreement are intended to compensate Fiserv Health for the services specifically enumerated in the body of this Agreement. The fees shall be paid by the Plan Sponsor from its general assets. 4.2 Due Date: The Plan Sponsor agrees to pay the service fees to Fiserv Health in a timely manner to ensure that Fiserv Health receives the service fees on or before the last day of each calendar month for which services are being rendered. 4.3 Fee Adjustments to monthly billing statements for enrollment or eligibility changes will be performed based on information provided by the Plan Sponsor to Fiserv Health. Request for fee adjustment must be made in a timely manner but not more than six (6) months following the date. of the change. If during an audit performed by the Plan Sponsor an error has been found and Fiserv Health is at fault, there will be no date limitation on the fee adjustment. 4.4 Billing procedures: Plan Sponsor agrees to pay service fees to Fiserv Health based on the monthly invoice that Fiserv Health provides, subject to the Fee Adjustment section of this Agreement. Fiserv Health reserves the right to give the Plan Sponsor an estimated invoice for the first month following the effective date of this Agreement. 4.5 Change to Service Fee:' Fiserv Health reserves the right to change the service fees applicable to this Agreement every twelve (12) months following the effective date of this Agreement unless otherwise stated on the attached Fee Schedule, subject to at least forty-five (45) calendar days prior written notice to the Plan Sponsor. The 45-day notice of fee change does not apply to stop loss fees. Fiserv Health also reserves the right to change the service fees sooner if one of the following conditions occur: • The number of employees changes by fifteen percent (15%) or more from the average number of employees upon which the original quotation for this Agreement was based; or • A division, subsidiary, or affiliated company is added to the Plan and that division, subsidiary or affiliated company requires new procedures, additional programming or implementation costs from Fiserv Health; or • Changes are made to the Plan(s) which increase the complexity of administering the Plan(s); or • Additional services are being purchased by the Plan Sponsor. 4.6 In the event Plan Sponsor has at any time failed to make funds available to pay Claims for Covered Services or undisputed fees to Fiserv Health, Fiserv Health shall have the right to offset any unpaid amounts against any amounts owed to Plan Sponsor by Fiserv Health, or any entity affiliated with Fiserv Health. 4.7 It is the intent of both parties to this Agreement that the funds utilized in accordance with this Agreement are not insurance premiums and shall in no event be construed to be insurance premiums. 4 Section 5 - General Responsibilities of the Plan Sponsor 5.1 Access to Protected Health Information: The Plan Sponsor agrees to provide Fiserv Health with the names and titles of employees who are designated as individuals who are permitted to access Protected Health Information, and to notify Fiserv Health within five (5) business days of when this list of designated employee changes are to take effect and the effective date for each such change. It is understood that Fiserv Health will not release Protected Health Information to any employee of the Plan Sponsor who is not on the Plan Sponsor's list of designated employees for Protected Health Information. The Plan Sponsor shall be solely responsible for training its employees and ensuring that its employees comply with the privacy regulations under the Health Insurance Portability and Accountability Act, as amended. 5.2 Bank Account: Fiserv Health shall establish a special bank account on behalf of the Plan Sponsor, in the Plan Sponsor's name and tax identification number, designated for the purpose of paying Claims for Covered Services under this Agreement. The custodial account is set up in a manner that minimizes assessment of banking fees for both parties in lieu of earning interest. It is understood that Fiserv Health is solely the Claims paying agent for the Plan Sponsor. Fiserv Health shall be given the necessary nonexclusive authority to utilize any funds in said account for payment of Covered Services under the Plan. Fiserv Health shall be responsible for the performance of account reconciliation. The Plan Sponsor agrees to follow the Custodial Banking Procedures as attached in the Addendum section of this Agreement. 5.3 Uncashed Checks: Fiserv Health agrees to send search letters to payees of uncashed checks that are greater than one year old. If the check remains unclaimed after thirty (30) days, the uncashed funds are returned to the Plan Sponsor. Any record keeping, reporting, or payment responsibilities set forth under any state's unclaimed property law shall be those of the Plan Sponsor, to the extent such laws apply. In no event shall Fiserv Health become a "holder" of unclaimed property, as defined in any applicable unclaimed property law, due to the failure of a Covered Person to negotiate any check issued from the account. 5.4 Financial Information: At Fiserv Health's request, Plan Sponsor will provide Fiserv Health with financial information to determine if Plan Sponsor can meet financial obligations under this Agreement and such information will be held in confidence. 5.5 Control of Plan Assets: In the event that the Plan is found to have Plan assets, the Plan Sponsor shall have absolute authority with respect to such Plan assets, and Fiserv Health shall neither have nor be deemed to exercise any discretion, control or authority with respect to the disposition of Plan assets. 5.6 Covered Service Information: The Plan Sponsor is responsible for incorporating sufficient Covered Service and other Plan details into its Summary Plan Description including information on any applicable federal, state, international and local laws and/or regulations to facilitate proper administration of the Plan(s) by Fiserv Health. Such information should be given to Fiserv Health before Fiserv Health begins processing Claims. In the event that the Plan Sponsor amends or modifies Covered Services, the effective date of such changes shall be on the date selected by the Plan Sponsor after notification to Fiserv Health, or the date reasonably possible for Fiserv Health to make needed systems or procedural changes to accommodate the change, whichever is later. 5.7 Cooperation: Plan Sponsor shall cooperate with Fiserv Health to the extent reasonably necessary to enable Fiserv Health to provide services in accordance with this Agreement and shall provide any needed information in addition to the information required under this Section that is reasonable and necessary to enable Fiserv Health to provide services in accordance with this Agreement. 5.8 Enrollment: The Plan Sponsor agrees to furnish Fiserv Health with such information as may be necessary or required by Fiserv Health to maintain adequate eligibility of Plan Sponsor's Covered Persons. Such information must be provided by the Plan Sponsor in a timely manner that will allow Fiserv Health to provide services in accordance with this Agreement. The Plan Sponsor shall submit the following enrollment data to Fiserv Health electronically via the FTP File Transfer with PGP Encryption method, or by using the Web Based File Exchange method, Internet or diskette: a. Plan Sponsor shall make the following determinations, pursuant to the terms of the Plan: • Identify which employees are eligible for Covered Services. • The effective date of coverage. • The applicable class of coverage. • The appropriate coverage level such as single/family/employee plus one. • The Plan(s) under which there is coverage. • Determine if the employee is a late enrollee. b. For all Covered Persons enrolled under the Plan, the Plan Sponsor shall inform Fiserv Health of any changes in contact information, including but not limited to name, address, and phone number as soon as possible but no later than thirty (30) calendar days of the Plan Sponsor being made aware of such change. C. The Plan Sponsor is responsible for complying with rules and regulations governing Qualified Medical Child Support Orders and National Medical Support Notices, completing any applicable paper work required by a court or state administrative entity, and notifying Fiserv Health if a dependent needs to be enrolled in the Plan in accordance with a QMCSO or similar order. 5.9 Establishment of Plan: The Plan Sponsor shall establish, maintain and appropriately fund the Plan and shall be solely responsible for the operation and administration of the Plan, except as expressly delegated to Fiserv Health in this Agreement. 5.10 Change of Status or Termination of Covered Persons: Plan Sponsor shall provide written, electronic or Internet notice to Fiserv Health of any change of status or termination of Plan coverage of Covered Persons as soon as reasonably possible. 5.11. Legal Advice: It is understood and agreed that Fiserv Health is not engaged in the practice of rendering legal advice. If the Plan Sponsor requires legal or other expert advice, the Plan Sponsor should consult its own legal counsel. Fiserv Health will provide compliance assistance on applicable federal regulations to the extent reasonably possible. 5.12 Provider Networks: Fiserv Health has contracted with or has access to a network of Preferred Providers. Some or all of those Preferred Providers shall be available to provide Covered Services under the Plan to Covered Persons. Fiserv Health makes no representations or warranties regarding the continued availability to the Plan or Covered Person of any particular Preferred Provider. Fiserv Health will coordinate administrative procedures necessary to process Preferred Provider Claims for Covered Services on behalf of the Plan, if applicable. Plan Sponsor understands that it has sole responsibility for paying any and all access fees charged by the network of Preferred Providers as stated on the Fee Schedule, and to pay the applicable Preferred Providers for Covered Services rendered to Covered Persons, which Plan Sponsor will accomplish by making appropriate funds available in its bank account described in this Agreement. It is understood that Fiserv Health is not responsible or liable for the care and treatment that providers give to Covered Persons under the Plan. In the event that the Plan Sponsor contracts directly with any provider networks, Plan Sponsor is responsible for providing Fiserv Health with any applicable provider network contract terms that may affect payment of Claims under this Agreement. 5.13 Medicare Coordination of Benefits and Secondary Payer Rules: In the event that Plan Sponsor receives correspondence from Medicare relative to a Claim processed by Fiserv Health, including but not limited to a Medicare recovery demand letter or debt recovery letter, Plan Sponsor is responsible for sending Fiserv Health a copy of all applicable correspondence and letters within five (5) business days of receiving the documents from Medicare. Fiserv Health will use commercially reasonable efforts to investigate whether the Plan Sponsor's Plan should have paid the Claim primary to Medicare rather than secondary, and to respond to the Medicare demand or debt recovery letters. Plan Sponsor is responsible for paying applicable interest charges from Medicare; except to the extent such interest charges arise out of or are based on Fiserv Health's intentionally wrongful, willful, reckless or negligent acts or omissions as stated in the Limitation of Liability and Indemnification section of the Agreement. Plan Sponsor is also responsible for reimbursing Medicare for Benefits if it is determined that the Plan should have paid the Claim primary to Medicare. 5.14 Legal Obligations: Plan Sponsor shall possess ultimate responsibility and authority for the design, funding and operation of the Plan and for its compliance with applicable laws and regulations, including the Internal Revenue Code. Further, Plan Sponsor represents and warrants to Fiserv Health that Plan Sponsor complies with applicable laws and regulations. Section 6 - General Responsibilities of Fiserv Health 6.1 Administration of Covered Services: All services to be provided by Fiserv Health hereunder shall be performed pursuant to the provisions of the Plan Sponsor's Summary Plan Description and subsequent amendments. Fiserv Health shall have systems in place to comply with ERISA and other applicable federal laws and regulations. 6.2 Determination of Plan Rules and Covered Services: Fiserv Health shall review the Plan Sponsor's Summary Plan Description to determine what Covered Services are payable or excluded under the Plan, eligibility rules and other Plan provisions. The Plan Sponsor agrees that Fiserv Health shall have no responsibility with respect to such document or with respect to the validity or compliance of such instrument, except as otherwise stated in this Agreement. 6.3 Claims Services (Health plan): Fiserv Health agrees to perform the following services with respect to the processing and payment of Claims under the Plan: 6.3.1 During the term of this Agreement, Fiserv Health will process only those Claims which are incurred on or after the effective date set forth in Section 2.1 of this Agreement. 6.3.2 As part of the base fee, the following general Claims services will be provided: • Fiserv Health will receive and review Claims for Covered Services under the Plan and will use commercially reasonable efforts, consistent with industry standards, to compute the Covered Services payable, if any, in accordance with the terms and conditions of the Plan. • Correspond with the Covered Persons and providers of services if additional information is deemed necessary by Fiserv Health to complete the processing of Claims. • Coordinate Covered Services payable under the Plan with other benefit plans, if any, according to the Coordination of Benefits provision in the Plan Sponsor's Summary Plan Description. It is understood, however, that Fiserv Health pays Claims for Medicare-eligible persons as either primary or secondary, based on the determination made by Medicare. • Prepare the disbursement checks for the amount of Covered Services determined to be payable under the Plan. Claims will be paid in the order processed, to the extent that sufficient funds are available from the Plan Sponsor's designated bank account. • Provide an Explanation of Benefits (EOB) notice to Covered Persons each time a Claim is submitted, if the patient has a balance due on the Claim. The EOB will explain how much the Plan has paid towards the Claim, if any, and how much of the Claim is the Covered Person's responsibility due to cost-sharing obligations, non- covered services, penalties or other Plan provisions. If a Claim is denied in whole or in part, the EOB will list the reason(s) for denial of services, and inform the Covered Person of his or her right to appeal. Provide a Remittance Advice (RA) statement to providers of services each time a Claim is submitted. The RA will explain how much the Plan has paid towards the Claim, if any, and how much of the Claim is the Covered Person's responsibility, negotiated rate or other provider discount. In the event that the Plan Sponsor asks Fiserv Health to load data from the prior third party administrator regarding Covered Persons' lifetime maximum data or other benefit accumulators, Fiserv Health will have no obligation to verify the accuracy of such data. Foreign service procedures: Covered Persons who receive services in a country other than the United States will need to pay the Claim upfront and then submit the Claim to Fiserv Health for reimbursement. Fiserv Health will reimburse the Covered Person for any covered amount in U.S. currency. The reimbursed amount will be based on the U.S. equivalency rate that is in effect on the date the Covered Person paid the Claim, or on the date of service if paid date is not known. 6.3.3 Fraud Services: Fiserv Health's Special Investigation Unit reviews and investigates potentially fraudulent or inappropriate billings submitted by providers and Covered Persons as a cost-containment service for Plan Sponsor. Claims that are identified as potentially fraudulent or inappropriate are pended in Fiserv Health's claims system, and following investigation, the identified Claims are either paid in accordance with the Plan, or are denied for such reasons as are uncovered by the Special Investigation Unit. 6.3.4 Claims Administration: Plan Sponsor acknowledges that, because of the great volume of Claims processed by Fiserv Health, administrative errors may occur. Should errors occur, Fiserv Health will make a reasonable effort, which may include initiating legal or other proceedings, to recover funds incorrectly paid. 6.3.5 Overpayments: In the event payment is made to or on behalf of an ineligible Covered Person who was retroactively terminated, or if an overpayment was made to a provider or Covered Person, Fiserv Health shall make an attempt to recover any payment over one hundred dollars ($100) by sending an initial request letter to the provider and/or Covered Person requesting the funds back. This will be followed by a second letter and a phone call as needed. The second letter will explain that the matter may be referred to a recovery (collection) agency. In the event that there is no response to the second letter, Fiserv Health will contact the Plan Sponsor to see if the Plan Sponsor wants the overpayment file sent to an outside recovery agency. Based on the written direction of the Plan Sponsor, Fiserv Health will either forward the overpayment file to an outside recovery agency, or Fiserv Health will close the overpayment file and take no further action. Overpayment files that are forwarded to an outside recovery agency will be worked for six (6) months in an attempt to recover the overpayment. If the recovery agency is unsuccessful at recovering the funds, it will contact Fiserv Health to see if the Plan Sponsor wants to approve litigation through outside legal counsel. If the Plan Sponsor approves sending an overpayment file to the outside recovery agency and/or outside legal counsel, the Plan Sponsor will be responsible for paying the applicable commission of the outside recovery agency and/or outside legal counsel, unless the overpayment arises out of or is based upon Fiserv Health's intentionally wrongful, willful, reckless or negligent acts or omissions (whether or not an act or omission is considered "negligent" will be determined in light of commonly accepted industry standards, it being agreed and understood that third party administrators are not expected to process 100% of Claims error free) in the performance of its duties under this Agreement. Other third party recovery efforts: Fiserv Health also contracts with an outside auditing firm that audits credit balances from various hospitals. If the outside audit firm identifies that this Plan is owed a refund, the refund minus the auditing firms' commission, will be sent to the Plan Sponsor. 6.3.6 Claim Reprocessing: At times, the Plan Sponsor may want Fiserv Health to reprocess certain Claims. At the Plan Sponsor's request, Fiserv Health will reprocess a reasonable number of Claims, unless such reprocessing will cause an undue business hardship to Fiserv Health. If the Claim is being reprocessed in connection with an inadvertent error made by Fiserv Health, there will be no fee to.the Plan Sponsor for such reprocessing. In the event, however, that certain Claims need to be reprocessed as a result of retroactive benefit or eligibility changes that the Plan Sponsor made or in connection with other action by the Plan Sponsor, its employees or agents, then a Claims reprocessing fee will be charged to the Plan Sponsor as stated on the Fee Schedule. A claim reprocessing fee will also be charged to the Plan Sponsor if the Plan Sponsor contracts directly with a provider network and that provider network gives Fiserv Health incorrect or late fee or other provider information. 6.3.7 Claims Run-Out Services: Fiserv Health agrees that it will use commercially reasonable efforts to process Claims received up to the date of termination of this Agreement. Any unprocessed Claims received near the end of this Agreement or following termination of this Agreement will be returned to the Plan Sponsor or the Plan Sponsor's designee, unless the Plan Sponsor requests claims run-out services at a mutually agreed upon fee prior to the termination of this Agreement. 6.3.8 Cost Reduction and Savings Program. Fiserv Health agrees to provide various cost reduction services on behalf of Plan Sponsor, aimed at generating savings on Claims. Services may include but are not limited to, obtaining discounts through travel networks, secondary networks, and fee negotiation with providers. In exchange for this service, Fiserv Health will retain a percentage of savings as stated on the Fee Schedule. If no discount is obtained, there is no cost to Plan Sponsor for.this service. 6.4 ' Medical Management Services (Health plan only): Fiserv Health, through Avidyn Health, will provide the following services for the fee as stated on the attached Fee Schedule: 6.4.1 Case Management: Fiserv Health agrees to provide individual case management services to Covered Persons who meet the criteria for case management which includes complex treatment plans, catastrophic events, trauma, transplant and chronic illness. Case Managers work with the Covered Person and the Covered Person's physician to assist with coordinating care, utilizing in-network services when available (if applicable), and helping to ensure that effective and appropriate treatment is provided. In the event that Medicare is the primary payer for a Covered Person's Claims, these services will be provided after Medicare funds have been exhausted. 6.4.2 Utilization Management: Fiserv Health will examine medical services for medical necessity and appropriateness prior to the services actually being provided. Fiserv Health will conduct utilization management services in the following areas to the extent it is required in the Plan Sponsor's Summary Plan Description: Inpatient hospital or behavioral health services, skilled nursing facility, home health care, rehabilitation services and durable medical equipment.. Fiserv Health will provide ongoing reviews for both in-network and out-of-network facilities to determine appropriateness of care, assess discharge needs, and refer to case management as applicable to promote positive patient outcomes. In the event that Medicare is the primary payer for a Covered Person's Claims, these services will be provided after Medicare funds have been exhausted. 6.4.3 Precious Cargo: Fiserv Health will provide Covered Persons who are pregnant with a prenatal education program. Through an assessment with the Covered Person, high-risk pregnancies will be identified and case management will be offered. Obstetrical nurses will provide trimester and post-partum education and assessments to all Covered Persons who are pregnant mothers, along with a toll free number for any pregnancy- related questions. 6.4.4 Disease Management: Fiserv Health's Disease Management Program works with Covered Persons who have chronic health conditions including asthma, chronic obstructive pulmonary disease, congestive heart failure, coronary artery disease, diabetes, hypertension and depression. Certified nurse case managers work with the Covered Person and family members to improve the management of their diseases. Fiserv Health will provide the Plan Sponsor with information on the participation, clinical and financial outcomes of the interventions. Fiserv Health reserves the right to modify the type of chronic health conditions that are targeted, subject to prior written notice to the Plan Sponsor. 6.4.5 Health Information Call Line: Fiserv Health provides Covered Persons with access to health information that allows Covered Persons to make good health and lifestyle choices. Online information is available via Fiserv Health's web site. Covered Persons can use direct links to a number of health information sites that Fiserv Health selected for quality, scope, workability and visual appeal. The web site also includes a health risk . assessment and view information on topics such as specific conditions, medications, first aid and self-care, wellness, research news, and the quality of health care in the area where the Covered Person lives. Covered Persons can access articles written by Fiserv Health's health professionals on general health and wellness topics. Health Information Line: 24 hour toll free telephone access to a registered nurse is provided by Fiserv Health to Covered Persons on a daily basis. This is an opportunity to talk about health concerns, but is not intended to replace or question the diagnosis or treatment of the Covered Person's health care provider. 6.4.6 It is understood and agreed that the medical management services provided by Fiserv Health do not in any way constitute the practice of medicine. 6.5 Customer Service: Fiserv Health shall provide customer service to Covered Persons including assisting Covered Persons with routine questions concerning Covered Services, Claims status, appeals procedures, access to provider network(s), if applicable, and other Plan-related customer service functions. Fiserv Health shall provide a toll-free number for customer service calls. Customer service is available from 7 a.m. to 5 p.m. central time, Monday through Friday. Online services are available seven days a week, 24 hours a day. 6.6 HIPAA Certificates of Creditable Coverage (COC): Fiserv Health shall utilize the Certificates of Creditable Coverage that a Covered Person gives the Plan Sponsor or Fiserv Health at the time of enrollment, to calculate any remaining pre-existing condition exclusion period that the Covered Person may have under the terms of the Plan. Fiserv Health has the right to rely on the Certificate of Creditable Coverage information that was provided by the issuer without further investigation of the underlying information. Fiserv Health shall also provide a Certificate of Creditable Coverage to Covered Persons within a reasonable period of time after each of the following events occur, as required by HIPAA: • When coverage terminates under the Plan. • When COBRA coverage terminates, if Fiserv Health administers COBRA services for Plan Sponsor. • Upon written request from the Covered Person if such request is made within 24 months after the date coverage ends. Fiserv Health shall mail all Certificates of Creditable Coverage to the last known address of the Covered Person via first class mail. 10 In the event, however, that the Plan Sponsor terminates all services with Fiserv Health and_ selects a new Third Party Administrator (TPA), Fiserv Health will send a report to the Plan Sponsor listing pertinent COC information that can be forwarded by the Plan Sponsor to the new Third Party Administrator. Fiserv Health will not be responsible for sending Covered Persons an individual Certificate of Creditable Coverage when there is no loss of coverage, but merely a transfer to a new TPA 6.7 Identification Cards: (Applies to Health plan) Fiserv Health will provide two standard ID cards (including replacement cards) for each employee who is covered under the Plan Sponsor's Plan. The Plan Sponsor may, at its option, order customized ID cards for employees. If the Plan Sponsor elects to provide customized ID cards, the Plan Sponsor agrees that it will be responsible for the additional cost of such ID cards. 6.8 New York Surcharge Services: It is understood that the Plan Sponsor is solely responsible for completing necessary New York Surcharge election forms and responding to inquiries regarding election. Upon acceptance from the New York Public Goods Pool, Fiserv Health agrees to compile and forward to the State of New York, an electronic report that shows the liability that the Plan Sponsor has for covered lives, patient services and total amount due from the Plan Sponsor. The report is compiled on a monthly or annual basis in accordance with the requirements of the State of New York for the Plan Sponsor. Fiserv Health agrees to file the report and send the applicable payment to the State of New York via a draw from the Plan Sponsor's bank account. In the event that a Claim is adjusted after the New York Surcharge fee has been paid and the adjustment affects how much the provider actually receives, Fiserv Health will make an adjustment on a future report to the State. As consideration for such services, Plan Sponsor agrees to pay Fiserv Health the fee as set forth on the attached Fee Schedule. 6.9 Massachusetts Surcharge Services: It is understood that the State of Massachusetts requires health plans to pay a surcharge when Covered Persons receive medical care in the State of Massachusetts. As part of the base medical fee, Fiserv Health agrees to calculate the amount of surcharge payments due from the Plan, and will draw the applicable amount from the Plan Sponsor's bank account. Fiserv Health will then send a check to the State of Massachusetts on behalf of the Plan Sponsor. 6.10 ' State Taxes or Fees: Plan Sponsor shall pay or reimburse Fiserv Health for any and all present U.S. state and local sales, use and transaction based taxes, fees or assessments (including without limitation taxes, fees or assessments based on gross receipts or value of Claims paid under the Plan), and other similar taxes, fees or assessments, except only for taxes, fees or assessments assessed based on the net income of Fiserv Health as it relates to this Agreement. 6.11 Recordkeeping: Fiserv Health will establish and maintain a recordkeeping system pertaining to the services to be performed hereunder. All such records shall be available for inspection by the Plan Sponsor at any time during normal business hours, upon reasonable prior notice. Fiserv Health will maintain records and information regarding Claims filed pursuant to this Agreement and determinations made thereon for a period of seven (7) years from the end of the applicable Plan Year. Fiserv Health may retain such records or information by scanning or otherwise. Except as necessary to cooperate in the defense of lawsuits, Fiserv Health shall have no duty under this Agreement to reconstruct individual Claim files. Reconstructing individual Claim files means retrieving an exact replication of the Claim(s), including all applicable documents such as subrogation questionnaires, medical records and coordination of benefits information. This does not include reasonable information requests such as Claim payment status or eligibility information. 6.12 Reports: As part of the base service fee, Fiserv Health will provide the Plan Sponsor with the following reports for health plans: • Monthly financial reports. • Monthly cash disbursement reports via Fiserv Health's web based check register. 11 • Ad-hoc reports that the Plan Sponsor requests are available up to the maximum number of hours as listed on the attached Fee Schedule. • An annual report that the Plan Sponsor can use to complete the 5500 form, including such details as plan period, plan type, beginning and ending employee enrollment counts, revenue, and commission information. Additional Online Services: Fiserv Health will provide the Plan Sponsor with the following encrypted online services that is compliant with HIPAA privacy regulations: • Eligibility and Benefits Inquiry: Online eligibility inquiry provides the Plan Sponsor with such information as the Covered Person's group name, employee name, identification number, date of birth, address, effective date and termination date. Online benefit inquiry provides specific benefit information for each Covered Person such as provider network, description of benefits under the Plan, out-of-pocket maximums and other details that pertain to the Plan. • Claims Inquiry: Covered employees can review the status of their own Claims online after they register online and obtain a unique ID and password to ensure privacy. Online Claims inquiry by the Plan Sponsor is also available, however, the Plan Sponsor is responsible for ensuring that its employees comply with HIPAA privacy regulations. • Results Information Center Reports (Results IC): The Results IC system provides the Plan Sponsor with monthly reports containing Plan performance details. The Plan Sponsor can also use online data to develop-ad-hoc queries such as.census information, claim activity and large claim detail.. • Banking: The Plan Sponsor has online access to the check register and can search for disbursement information at the transaction level. This could include transaction amounts by type and date, or transaction amounts at the check level (check number, date, payee, amount or check requisition number). • ID Cards: The Plan Sponsor and covered employee can order replacement or additional ID cards online. • Medstat Advantage Suite®: An interactive web-based application that provides the Plan Sponsor with access to up to 24 months of Plan performance, claim experience, and prescription drug and cost trend data, in user-modifiable report formats. This decision- making tool helps the Plan Sponsor with financial planning and health plan management. Plan Sponsor agrees that Fiserv Health is authorized to release claims data to Medstat on behalf of the Plan Sponsor, for purposes of providing this service. If additional (Ad-Hoc) reports are needed by the Plan Sponsor, or customization of the reports is requested, Fiserv Health will charge an additional fee for such agreed upon services. 6.13 Transition to new TPA: Fiserv Health will cooperate with the Plan Sponsor's transition to a new Third Party Administrator upon termination of this Agreement and will provide cancellation reports to the Plan Sponsor upon request. Plan Sponsor can obtain a list of the available cancellation reports and applicable fees from the Account Manager. 6.14. Stop Loss: In the event that Plan Sponsor has obtained stop loss insurance coverage for funding Plan benefits in excess of certain specified individual and aggregate limits, Fiserv Health will use commercially reasonable efforts to identify, track and file all specific stop loss insurance Claims with the stop loss carrier, on behalf of the Plan Sponsor. The Plan Sponsor, however, is responsible for providing Fiserv Health with a copy of the stop loss policy by the effective date of this Agreement or as soon thereafter as reasonably possible, if Fiserv Health did not place the Plan Sponsor's stop loss coverage with the carrier. Plan Sponsor shall be responsible for the premium for the stop loss insurance and it shall not be paid from the plan assets. Fiserv Health agrees to notify the Plan Sponsor and the stop loss carrier of any potential Claims that exceed the stop loss policy's attachment point, based on preliminary diagnosis or dollar amount of Claims or claim estimates that meet or exceed applicable thresholds. It is understood, 12 however, that Fiserv Health shall not be required to process Claims for Covered Services other than in the order that Claims are received, and no priority will be given to Claims merely because the stop loss year is coming to a close. In no event shall Fiserv Health have any liability for coverage decisions taken or any omissions by any stop loss insurance carrier, and Fiserv Health shall not be held liable for any Claims not covered by the stop loss carrier even if such Claims were paid by the Plan. It is understood that Fiserv Health cannot represent or warrant a carrier's stop loss coverage or any terms of a carrier's stop loss coverage. In the event that Fiserv Health places the Plan Sponsor's Stop Loss coverage, Fiserv Health may receive commissions from the insurer from whom Plan Sponsor purchases insurance. The commissions received by Fiserv Health may differ depending upon the product and insurer. Fiserv Health may receive additional compensation from the insurer based upon other factors, such as premium volume placed with a particular insurer or persistency rates. If the Plan Sponsor wants to know an estimate of the amount of commissions or other compensation received by Fiserv Health from carriers relating to your group for any year, please contact your Account Manager. If such a request is initiated, Fiserv Health will provide Plan Sponsor with that information when the amounts become known. Since the compensation may relate to an entire book of business, the amount attributable to any single customer would by definition be an estimate. Unless Plan Sponsor requests an estimate, one will not be provided. 6.15 Interruption by Disasters: Fiserv Health will take commercially reasonable steps to prevent and recover from disruptive events that are beyond its control and represents that it has backup systems in place in case of emergencies or natural disasters. Section 7 - Claims Appeal Services Fiserv Health will provide Claims appeal services, provided that Fiserv Health has received the applicable Summary Plan Description from the Plan Sponsor prior to receiving the appeal. Covered Persons who receive an Adverse Benefit Determination can file an appeal with Fiserv Health within the timelines established in the Plan Sponsor's Summary Plan Description. Fiserv Health will allow a five (5) calendar day mail time in addition to the maximum appeal timelines listed in the above documents. It is understood that Fiserv Health will provide two appeal levels for Claims that it has processed, based on Plan Sponsor's Summary Plan Description. Any additional appeal options will be the sole responsibility of the Plan Sponsor. It is understood that Fiserv Health is not responsible for handling appeals on claim- related decisions that were originally made by another vendor of the Plan Sponsor's. Section 8 - Independent Consulting Organizations (Applies to Health plan) - - - 8.1 Fiserv Health utilizes certain independent organizations for consultation review when needed to determine the medical status of an individual. Fiserv Health selects independent consultants prudently based on quality of the reviews, availability of specialists, timeliness of reviews, and fees associated with those reviews. Fiserv Health makes every effort to utilize independent consultants who are URAC accredited and who charge no more than market rates for the reviews. The independent consultants used will have appropriate training and experience in the field of medicine involved in the medical judgment. 8.2 It is understood that Fiserv Health may send a Claim to an independent consultant under any of the following circumstances: During an initial pre-authorization review or initial Claim review, when there is insufficient information in a Covered Person's medical record to make a decision regarding medical necessity, or if there is a question regarding the experimental/investigational nature of a procedure. When a Claim was denied based on medical necessity, medical judgment or experimental/investigational reasons, and the denied Claim is later appealed. 8.3 In the event that Fiserv Health incurs charges from an independent consulting organization to determine the medical status of an individual as outlined above, the Plan Sponsor understands 13 and agrees that the cost of such independent consulting services shall be the responsibility of the Plan Sponsor. It is also understood that the cost of each review may vary based on the medical issues being reviewed. Section 9 - Summary Plan Description (SPD) 9.1 Fiserv Health shall provide a Summary Plan Description Shell to the Plan Sponsor, if requested, that can be used as a starting point to develop a final document that reflects the Plan Sponsor's intended benefit design. It is understood that Fiserv Health will make reasonable efforts to update its Shell as is needed to maintain compliance with federal regulations, however compliance with applicable laws and regulations is the responsibility of the Plan Sponsor. The Plan Sponsor is responsible for ensuring that any changes it makes to Fiserv Health's Shell will be in compliance with federal and other applicable laws. Plan Sponsor is solely responsible for the final content of the Summary Plan Description. Fiserv Health shall not have the power or authority to alter, modify, or waive any terms of the Plan. 9.2 The Plan Sponsor is responsible for notifying Fiserv Health if it is subject to any state or international regulations or benefit mandates pertinent to the benefit plan(s), and shall provide exact wording to Fiserv Health regarding those regulations/mandates that need to be included in the Plan Sponsor's SPD. To the extent that the state or international regulations/mandates conflict with federal regulations, the Plan Sponsor is responsible for adding wording to its SPD that explains how the state and/or international provisions work with the federal provisions. 9.3 ' As part of the base fee, Fiserv Health will provide the Plan Sponsor with the following services related to the development and distribution of the Summary Plan Description(s) (SPD): • One initial copy of the Summary Plan Description, if requested, for each applicable product will be provided to the Plan Sponsor for approval. Fiserv Health will use its standard format when compiling the documents, however the Plan Sponsor can request customization of the document at an additional cost. Customization includes but is not limited to such things as colored covers, binders, different formats for the SPD and other non-standard formats. • Initial printing of the health Summary Plan Description booklet, in an amount equal to approximately 1.3 copies times the_number of covered employees. • Mid-year update to the Summary Plan Description: Fiserv Health will send the Plan Sponsor updated pages in an amount equal to approximately 1.3 copies times the number of covered employees, and the Plan Sponsor will be responsible for distribution of the updated pages to Covered Persons. There will be no additional charge for mid-year updates that are due to new federal regulatory changes, however, an additional charge will be assessed if other mid- year changes are made at the request of the. Plan Sponsor that require Fiserv Health to reprint documents. If the Plan Sponsor needs additional services, customization of documents, SPD's for a flex product, or additional copies of documents beyond what is stated above, there may be an additional charge to the Plan Sponsor. 9.4 The Plan Sponsor understands and agrees that it is responsible for carefully and thoroughly reviewing the Summary Plan Description proof(s) that Fiserv Health sends to the Plan Sponsor, and after determining that the document(s) accurately reflect the intent of the Plan Sponsor, Plan Sponsor shall sign and return the Acceptance Page to Fiserv Health. The Acceptance Page is a form that the Plan Sponsor must sign after reviewing the Summary Plan Description proof, confirming that the proof accurately reflects the intent of the Plan Sponsor. 9.5 The Plan Sponsor is responsible for complying with any applicable regulations and timelines governing distribution of the Summary Plan Description and amendments to Covered Persons. If Fiserv Health is responsible for preparing the Plan Sponsor's Summary Plan Description as stated in this Agreement, Fiserv Health agrees to have a completed copy of the document(s) to the Plan Sponsor within 30 calendar days following receipt of the signed Acceptance Page from the Plan Sponsor. 14 9.6 If the Plan Sponsor's Summary Plan Description is not finalized. before Fiserv Health begins administering the Plan(s), Fiserv Health is not responsible for any conflicts that may occur if changes are made by the Plan Sponsor. This does not apply to amendments that the Plan Sponsor may make at a later date to the extent those changes become effective after Fiserv Health has been notified of the change. 9.7 Fiserv Health is not responsible for any conflicts or liabilities that may occur if the Plan Sponsor chooses to give Covered Persons a copy of the schedule of benefits or some other summary of benefits document, before the actual SPD is finalized and distributed to Covered Persons. 9.8 At the request of the Plan Sponsor, Fiserv Health will send the Plan Sponsor an electronic copy of the Summary Plan Description instead of the paper copies. Fiserv Health is not responsible for any changes or modifications the Plan Sponsor may make to the documents. 9.9 The Plan Sponsor shall be solely responsible for furnishing copies of other plan-related documents to Covered Persons and others, as may be required by law or otherwise. This includes, but is not limited to, copies of required annual reports (i.e. the Form 5500), trust agreements, collective bargaining agreements, and other plan-related documents as is applicable to the Plan. Section 10 - Subrogation, Reimbursement or Third Party Services (Applies to Health plans) 10.1 Fiserv Health agrees to provide the Plan Sponsor with certain administrative services with respect to the Plan's subrogation provisions. Such services shall include, but not be limited to: • Contacting the claimant to determine the applicability of the subrogation provisions; • Notifying the claimant or his or her representative of the Plan's subrogation provisions; • Reserving any rights the Plan may have to recover the subrogation provisions; and • Requesting repayment under the Plan's subrogation provision. 10.2 In providing the above services, Fiserv Health does not represent or guarantee that it will discover or pursue each and every subrogation opportunity, nor that its attempt at collection will be successful. It is understood that Fiserv Health's claims system has edits in place to help identify potential subrogation Claims that are at least five hundred ($500) dollars. 10.3, If Fiserv Health or its contracted vendor is unsuccessful in its initial collection attempts, Fiserv Health may, at its own discretion, engage outside services to assist in the recovery efforts. Fiserv Health will manage and oversee these services and the Plan Sponsor shall not be responsible"far payment for such services except as provided for in the attached Fee Schedule of this Agreement. In no event is this provision to be interpreted to imply that Fiserv Health is engaged in the practice of providing legal services or offering legal advice to the Plan Sponsor. 10.4 Fiserv Health shall provide subrogation services on a contingency basis. In the event Fiserv Health is able to effectuate a recovery, whether in full or in part, Fiserv Health shall be entitled to the subrogation fee as set forth in the attached Fee Schedule of this Agreement. 10.5 In the event that Plan Sponsor directs Fiserv Health to stop working on a particular subrogation Claim because the Plan Sponsor wants to handle the subrogation Claim itself or for other reasons not related to Fiserv Health's negligence, Fiserv Health retains the right to charge Plan Sponsor a reasonable fee for costs incurred prior to receiving such notification from Plan Sponsor. 10.6 Any amount collected by Fiserv Health or its contracted vendor under the Plan's subrogation provision shall not reduce the service fees provided for in this Agreement. 15 10.7 Fiserv Health will provide quarterly and annual subrogation reports to the Plan Sponsor. 10.8 It is agreed that Fiserv Health shall have complete authority to accept settlement on subrogation claims for less than 100% of the original claim without seeking prior written approval from the Plan Sponsor, provided that the original claim is no more than $5,000. Settlements would be considered when there is contributory negligence, medical causation issues, or limited money. All other settlements will need the prior written approval of the Plan Sponsor. Section 11 - Audit Rights and Standards 11.1 Fiserv Health recognizes that from time to time, the Plan Sponsor may, at its expense, wish to perform (or have performed) audits for business reasons directly related to the payment of Claims or this Agreement. As part of the Base fee listed on the Fee Schedule of the Agreement, Fiserv Health will provide audit-related information and assistance to Plan Sponsor or Plan Sponsor's outside auditor for up to two (2) Standard Routine Audits of any kind conducted per year. Fiserv Health considers a Standard Routine Audit to be an audit that includes a statistically valid random sampling of Claims processed during no less than the recent six (6) month period and no more than the recent twenty four (24) month period, unless special or severe circumstances exist and are first agreed to by Fiserv Health, such agreement by Fiserv Health not to be unreasonably withheld. It is also agreed that no Claim shall be audited more than once at any time. In the event that Plan Sponsor requests an audit that does not meet the criteria for Standard Routine Audits, Fiserv Health reserves the right to charge Plan Sponsor a reasonable fee for Special Audits as described below. 11.2 Fiserv Health will only recognize a request for audit that is done so in writing at least sixty (60) days prior to the requested start of the audit. Such request must be sent to the Claim's Manager who works on Plan Sponsor's account. 11.3 Fiserv Health shall have the opportunity to review and formally comment on the audit criteria and the results of any audit before or concurrent with the final audit report being submitted to Plan Sponsor. Upon request from Fiserv Health, the Plan Sponsor shall deliver backup data to Fiserv Health for any audited Claims. 11.4. The Plan Sponsor agrees that no audit shall be conducted or files released until Fiserv Health's confidentiality agreement has been signed by the Plan Sponsor and/or its designated representative for the audit, to protect Fiserv Health's proprietary information and systems that may be seen during the audit. 11.5 Audits may encompass any relevant information that the Plan Sponsor or its representative for the audit requires, consistent with professional auditing practices and procedures applicable to this type of auditing. The records requested by such auditor will be compiled by Fiserv Health in the manner requested by such auditor, including, without limitation, computer selected random sampling or specific types of Claims selected through random selection or by stated dollar amount and/or range. 11.6 Plan Sponsor shall have the right to audit and make copies of the books, records and computations pertaining to this Agreement. Fiserv Health shall retain such books, records, documents and other evidence pertaining to this Agreement during the contract period and five years thereafter, except if an audit is in progress or audit findings are yet unresolved, in which case records shall be kept until all audit tasks are completed and resolved. These books, records, documents and other evidence shall be available, within sixty (60) business days of written request. The cost of a performance verification audit will be borne by the Plan Sponsor unless the audit reveals an overpayment of two percent (2%) or greater. If an overpayment of two percent (2%) or greater occurs, Fiserv Health agrees to reimburse Plan Sponsor for fifty percent (50%) of the reasonable audit and travel costs within twenty business days of receipt of an invoice. 16 Failure to comply with the provisions of this section shall be a material breach of this contract and shall constitute, in the Plan Sponsor's sole discretion, grounds for termination thereof. Each of the terms "books", "records", "documents" and "other evidence", as used above, shall be construed to include drafts and electronic files, even if such drafts or electronic files are subsequently used to generate or prepare a final printed document. 11.7 The Plan Sponsor further agrees that any audit firm retained by the Plan Sponsor will not be compensated based on a percentage of errors found, percentage of recovery or other similar contingency basis. Fiserv Health reserves the right to refuse the allowance of any audits, in whole or in part, that are compensated in this manner. Fiserv Health may require such agent or auditor to represent in writing it is not operating on such an arrangement as a condition to obtaining access to Fiserv Health's files and records. If Fiserv Health should find that the auditor is compensated on any contingency basis, the audit will be stopped. 11.8 Audit Standards Calculations: Financial accuracy will be calculated by dividing the total audited benefit dollars paid correctly by the total audited benefit dollars processed. If there is ambiguity in the Plan, such Claim shall be considered as accurately paid if the payment amount was determined in accordance with the instructions of the Plan Sponsor, regardless of the opinion of any outside auditor. This accuracy shall be expressed as a percent. Procedural accuracy will be calculated by dividing the total audited services processed without procedural errors by the total number of services audited. Procedure errors shall be those errors related to the correct coding of Current Procedural Terminology (CPT) procedure codes, Healthcare Common Procedure Coding System (HCPCS) coding, International Classification of Diseases 9 (ICD-9), and coding requirements of Uniform Bill 92 (UB-92) hospital bill coding or the standard HCFA-1500 bill coding. This accuracy shall be expressed as a percent. Payment accuracy is defined as the frequency of correct payments. Payment accuracy is calculated by dividing the total number of services with correct payments by the total number of services audited in that same period. If there is ambiguity in the Plan, such Claim shall be considered as accurately paid if the payment amount was determined in accordance with the instructions of the Plan Sponsor, regardless of the opinion of any outside auditor. This accuracy shall be expressed as a percent. Turnaround Time is calculated by taking the date processed and subtracting it from the date received. This value is expressed as a whole number. Claims will be considered processed when Fiserv Health: releases the Claims for payment, or denies the Claim, or requests additional information from any source outside of Fiserv Health. 11.9 Special Audits: Audits that do not comply with the criteria outlined above and would not be considered a regulatory/accreditation audit will be considered a Special Audit. Fiserv Health retains the right to charge Plan Sponsor a reasonable fee for the time and expense of supplying information and supporting Special Audits. The fee for the Special Audit will not exceed fifty dollars ($50) per Claim audited and one-hundred fifty dollars ($150) per report. Section 12 - Limitation of Liability and Indemnification 12.1 Fiserv Health agrees to indemnify the Plan Sponsor and hold it harmless from and against any and all claims, losses, liabilities, damages and expenses incurred by the Plan Sponsor, including reasonable court costs and attorneys' fees, to the extent that such claims, losses, liabilities, damages and expenses arise out of or are based upon Fiserv Health's intentionally wrongful, willful, reckless or negligent acts or omissions (whether or not an act or omission is considered "negligent" will be determined in light of commonly accepted industry standards, it being agreed and understood that third party administrators are not expected to process 100% of Claims error- free) in the performance of its duties under this Agreement. 17 12.2 Plan Sponsor agrees to indemnify Fiserv Health and hold it harmless from and against any and all claims, losses, liabilities, damages and expenses incurred by Fiserv Health, including reasonable court costs and attomeys' fees, to the extent that such claims, losses, liabilities, damages and expenses arise out of or are based upon the Plan Sponsor's intentionally wrongful, willful, reckless or negligent acts or omissions in the performance of its duties under this Agreement. 12.3 Plan Sponsor is solely responsible for payment of all Covered Services and Plan Sponsor shall indemnify.and hold Fiserv Health harmless from any claims asserted against Fiserv Health by a provider or any Covered Person as a result of Fiserv Health performing its obligations under this Agreement, except as stated in Section 12.1 above, including any claims for the payment of Covered Services. 12.4 In the event that legal action is brought against Fiserv Health by a Covered Person, or the Covered Persons authorized representative or provider regarding a claim for Covered Services under the Plan Sponsor's Plan and such action is not the result of Fiserv Health's intentionally wrongful, willful, reckless, or negligent acts or omissions as stated above, the Plan Sponsor will assume responsibility for the defense of such suit, to the extent the interests of the parties do not conflict. If Fiserv Health incurs charges for the services of counsel to have Fiserv Health dismissed as a defendant in such suit, the Plan Sponsor shall reimburse Fiserv Health for expenses incurred in seeking and obtaining any such dismissal. If the court finds Plan Sponsor liable, anyjudgment resulting from said suit requiring the payment of Covered Services or damages under the Plan shall be paid by the Plan Sponsor. Fiserv Health agrees to cooperate with the Plan Sponsor in the defense of such suit. 12.5 It is understood that Fiserv Health is responsible for complying with laws applicable to third party administrators, and for having systems in place to comply with other laws and regulations as described in Plan Sponsor's Summary Plan Description. It is further understood that Plan Sponsor is responsible for complying with applicable state, federal and other laws and regulations with respect to the Plan. 12.6 Notwithstanding any other provision in this Agreement to the contrary, in no event shall either party be liable for the loss of goodwill, or for special,. indirect, incidental or consequential damages arising from Plan Sponsor's receipt or use of services, or Fiserv Health's delivery of services hereunder, regardless of whether such claims arise in tort or in contract. Plan Sponsor may not assert any claims against Fiserv Health more than four (4) years after the termination of this Agreement. Fiserv Health's aggregate liability for any and all claims and/or obligations relating to this Agreement shall be limited to the fees received by Fiserv Health under this Agreement during the most recent thirty six (36) months that precede the date on which the claim against Fiserv Health is asserted. If thirty six (36) months have not expired under this Agreement, Fiserv Health's aggregate liability for any and all claims and/or obligations relating to this Agreement shall be limited to the greater of one hundred thousand dollars ($100,000) or the total fees received by Fiserv Health under this Agreement. 12.7 Reliance on Data: Fiserv Health is not responsible or liable for any acts or omissions made pursuant to any direction, consent, or other request reasonably believed by Fiserv Health to be genuine and from an authorized representative of Plan Sponsor. Fiserv Health is not responsible or liable for acts or omissions made in reliance on erroneous data provided by Plan Sponsor, its employees or agents, or the failure of Plan Sponsor to perform its obligations under this Agreement. 12.8 The Limitation of Liability and Indemnification provisions shall survive the termination of this Agreement. Section 13 - Dispute Resolution and Arbitration 13.1 In the event of a dispute arising out of or relating to this Agreement, the parties shall meet and confer in good faith in an attempt to resolve the dispute in a mutually satisfactory manner. If the 18 dispute is not resolved within forty-five (45) calendar days after the parties first meet to discuss the dispute, and a party wishes to pursue the dispute, the party shall refer the dispute to binding arbitration. 13.2 If a dispute is referred to arbitration, each party shall select an arbitrator within one month after written request for arbitration has been received from the parry requesting arbitration. These two arbitrators shall select a third arbitrator within ten days after both have been appointed. Should the arbitrators fail to agree upon a third arbitrator, each arbitrator shall select one name from a list of the three names submitted by the other arbitrator, and a third arbitrator shall be selected by lot between the two names_ chosen. None of said arbitrators shall be related to either party or have any interest, directly or indirectly, personally or otherwise, in the questions decided. 13.3 The expense of arbitration proceedings conducted hereunder shall be borne equally by the parties. 13.4 All arbitration proceedings hereunder shall be conducted at a mutually acceptable location based in part, on the type of dispute being arbitrated. The decision of the majority of the arbitrators shall be final and binding on the parties and may be enforced by either party in any court of record having jurisdiction over the subject matter and over the party against whom enforcement is sought. 13.5 The arbitrators shall have no power to award any punitive or exemplary damages or to ignore or vary the terms of this Agreement and shall be governed by the United States Arbitration Act, 9 U.S.C.§1 et seq. 13.6 This provision shall survive the termination of this Agreement. Section 14 - General Provisions and Signatures 14.1 Amendment: This Agreement may be amended only by mutual written agreement by an authorized officer of each of the parties, except that this Agreement shall automatically be updated if new federal regulations require modification of one or more of the provisions in this Agreement. When the Agreement needs to be amended, Fiserv Health will send the Plan Sponsor two copies of the amendment for review and signature. The authorized officer for the Plan Sponsor needs to sign each copy of the amendment with an original signature or an original signature stamp, and return both signed paper copies to Fiserv Health. The Fiserv Health authorized officer will then countersign the amendments with original signature or original signature stamp, and one original will be returned to the Plan Sponsor. Faxed amendments, copies of amendments and signed amendments sent via email are not accepted. 14.2 Forbearance: A forbearance or pattern of forbearances by either party of the other party s failure to cooperate or otherwise comply with the terms of this Agreement or the procedures prescribed hereunder shall not be deemed a waiver of its rights hereunder, nor shall it be deemed a modification of this Agreement or of said procedures. 14.3 Entire Agreement: This writing, including the body of the Agreement and any addenda attached hereto, shall constitute the entire Agreement of the parties and no agent or employee of either party has authority to change this Agreement or waive any of its provisions except as otherwise expressly provided herein. It is understood and agreed that since this Agreement was prepared prior to completion of the implementation meetings between Fiserv Health and City of Denton, changes to this Agreement may be needed to accurately reflect the actual services, banking arrangements and other details as mutually agreed to by the parties during the implementation meetings. 14.4 Assignment: Neither party may assign any of its rights or obligations under this Agreement without the written consent of the other party. 19 14.5 Headings: The captions and headings throughout this Agreement are for convenience and reference only, and the words contained therein shall in no way be held or deemed to define, limit, describe, explain, modify, amplify or add to the interpretation, construction or meaning of any provision, or to the scope or intent, of this Agreement. 14.6 Governing Law and Jurisdiction: This Agreement shall be governed by and construed in accordance with the laws of the state of Texas, except as to any applicable federal laws, without giving effect to the principles of conflicts of law thereof. 14.7 Waiver: A waiver of a breach or default under this Agreement will not be a waiver of any other subsequent breach or default. A failure or delay in enforcing compliance with any term or condition of the Agreement will not constitute a waiver of such term or condition unless it is expressly waived in writing. 14.8 Savings Clause: Whenever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law, but if any provision hereof is held to be invalid, illegal or unenforceable under any applicable law or rule in any jurisdiction, such provision shall be ineffective only to the extent of such invalidity, illegality or unenforceability, without invalidating the remainder of this Agreement. If this is not possible, such provision shall be deemed stricken and deleted from this Agreement, as the case may require, and this Agreement shall then be construed and enforced to the maximum extent permitted by law and to achieve the fundamental intent of the parties. 14.9 Counterparts: This Agreement may be executed by the parties hereto in counterparts, and taken together, such counterparts shall constitute the one and same document. 14.10 Force Majeure: Neither party shall be liable for any delay or non-performance of any covenant contained herein, nor shall any such delay or non-performance constitute a default hereunder, or give rise to any liability for damages if such delay or non-performance is caused by an event of force majeure. As used herein, the term "force majeure" means any act or explosion, action of the elements, strike or other labor relations problem, restriction or restraint imposed by law, rule or regulation of any public authority, whether federal, state, or local, and whether civil or military, act of any military authority, interruption of transportation, facilities or any other cause which is beyond the reasonable control of such party and which by the exercise of reasonable diligence such party is unable to prevent. The existence of any event of force majeure shall extend the term of performance on the part of such party to complete performance in the exercise of reasonable diligence after the event of force majeure has been removed. 14.11 Change in Law: If any change in law occurs that materially alters the rights or obligations of either party under this Agreement, the parties shall equitably adjust the terms of this Agreement to take into account such change in law. 14.12 Notices: Any notice required pursuant to this Agreement must be in writing and sent by registered or certified mail, return receipt requested, by facsimile transmission with proof of delivery, or by nationally recognized private overnight courier with proof of delivery, to the addresses of the parties set forth below. The date of notice will be the date on which the recipient receives notice or refuses delivery, and if in the case of a telex or facsimile transmission, on the date of transmission of the notice (if proof of successful transmission is retained by the transmitting party). All notices will be addressed as follows, or to such other address as a party may identify in a notice to the other party: FISERV HEALTH PLAN ADMINISTRATORS, INC. CITY OF DENTON JAY ANLIKER CITY HALL EAST 11 SCOTT ST STE 100 601 E HICKORY ST, STE A WAUSAU WI 54403-4808 DENTON TX 76205 20 IN WITNESS WHEREOF, the parties have signed this Agreement on the dates indicated below. FISERV HEALTH PLAN ADMINISTRATORS, INC. CITY OF DENTON By a~. By -(2 Signature Signatur Jay Anliker Print Name Print Name Title Division President Date Signed G Title C,, 114Nc<. Date Signed ~ZI2p I6A APPROVED AS TO FORM: CITY ATTORNEY CITY OF DENTON, TEXA BY: 21 ADDENDUM #1 FEE SCHEDULE Effective Date: January 1. 2008 Product Type: Health Plan Number: 7670-00-410038 The Base Fee and Stop Loss Interface fee is guaranteed from January 1, 2008 to January 1, 2011, subject to the provisions of this Agreement. Service ITEM BASIS FEE Code BASE FEE: Base Medical Service Fee ` PEPM $13.50 ADDITIONAL SERVICE FEES Enrollment Services 0209 Electronic eligibility sent to outside pharmacy Waived vendor 0219 Limiting Age Dependent Report Included in Base Fee 0526. HIPAA - Certificates of Creditable Coverage Per Certificate Mailed $12 ID Card Services 0200 Mail ID Cards to Employee's Home Included in Base Fee 0201 Custom ID Cards One Time Fee $1,000 (for 2 initial cards) Per Card $1,000 for future cards Reporting/Special Data Services 0417 Custom Ad-Hoc Reports - Request System Per Hour $100 after 10 hours per year. 0420 MedStat Reporting ' PEPM $.25 1202 Actuarially certified reserve estimate (if First Estimate $2,000 requested) Each Additional Estimate $1,000 1203 New York Surcharge - Filing and Administration Annual $1,000 Network/Managed Care 1400 United Resource Network (URN) Cost Per Transplant Basis 1406 Network Access Fees Texas True Choice ` PEPM $3.75 Private Healthcare Systems PPO ` PEPM $4.15 9938 Cost Reduction 8 Savings Program (CRS) Percent of Savings 30% 22 Service ITEM BASIS FEE Code Medical Management Services (Avidyn Health) Upgraded Utilization Management/Case PEPM $6.50 Management, Health Information Services, Precious Cargo, & Disease Management Billing 0804 Pharmacy Interface Fee Waived 1101 Five On-Site Customer Visits Per Year Included in Base Fee Claim Services 0105 Subrogation Services Percent of Recoveries 25% of recoveries; or 33% if handled by outside legal counsel. 0136 Stop Loss Interface fee PEPM $1.25 0140 Claim Reprocessing Per Claim $25 Banking Services 0306 Custodial Banking Setup $1,200 0307 Custodial Banking Maintenance Charges Per Month $500 ' PEPM - Per Employee Per Month (covered employee) 23 ADDENDUM #2 PROVIDER RENTAL NETWORK SERVICES HEALTH PLAN(S) Section 1 - Definitions 1.A "Preferred or Participating Provider" means any Provider who is licensed to provide health or dental care services, as applicable, and has contracted with the PPO network to provide services to Covered Persons at discounted rates. 1.B "Preferred Provider Organization (PPO)" means a mode of health care delivery whereby a sponsoring group negotiates price discounts with Providers. 1.C "Provider" means physicians, hospitals, and any other Providers of health care or other allied or related products or services. 1.13 "Rental Network (Network)" means a sponsoring group that contracts with Providers under a PPO arrangement. Section 2 - General Responsibilities of Plan Sponsor and Fiserv Health 2.A Fiserv Health will contract with Provider Rental Networks on behalf of the Plan Sponsor, as listed on the Fee Schedule, and will make Plan Sponsor aware of applicable Network rules for the Preferred Provider Organization (PPO). 2.B Plan Sponsor agrees to provide certain benefit incentives to Covered Persons who utilize the PPO Network as required by the above Provider Rental Networks. In exchange for these incentives, Network Providers have agreed to discounts, per diems, fee schedules or contracted fees for all covered services provided. It is agreed however that Covered Persons utilizing the PPO Network(s) will remain free to choose any Provider in or out of the Network, subject to provisions of the Plan Sponsor's Summary Plan Description. 2.C As compensation for the Provider Rental Network services rendered by Fiserv Health, the Plan Sponsor will pay Fiserv Health a monthly access fee as set forth in the attached Fee Schedule. Fiserv Health will, in turn, send the appropriate access fee to the Rental Network. 2.13 Plan Sponsor agrees to have sufficient funds in the established bank account to enable Fiserv Health to make timely payments to Providers for covered services under the Plan. 2.E . _ It is understood that the Rental Network. is. solely responsible for contracting with Providers and - for credentialing or determining their suitability to be a Provider. 24 ADDENDUM #3 CUSTODIAL BANKING PROCEDURES Plan Sponsor agrees to comply with the custodial banking procedures set forth herein. Such procedures may be amended by Fiserv Health upon thirty (30) days prior notice to the Plan Sponsor. 1. Plan Sponsor agrees to pay the special service charges, when applicable, related to the maintenance- of the custodial account. , 2. Plan Sponsor agrees to pay Fiserv Health a security deposit. The initial estimate of such security deposit will be $225,000.00. Fiserv Health reserves the right to require adjustments of the security deposit based on actual average disbursement activity. The security deposit is to cover periodic fluctuations in Claim activity and must remain in the account as long as Fiserv Health continues to issue checks against the account. 3. Authorization to release payments drawn on the Plan Sponsor's custodial account will be provided by Fiserv Health once Plan Sponsor's funding obligations have been met. It is understood and agreed that Fiserv Health is solely the claims paying agent for the Plan Sponsor. 4. Fiserv Health offers various frequencies (check holds) for the printing and release of checks. The check hold on a custodial account must have a month end clear. A month end clear means any checks held in queue at the end of the month will be printed and released on the last working day of the month. 5. Fiserv Health will provide weekly reports regarding cash disbursements to the Plan Sponsor via E-mail or telephone call. 6. Plan Sponsor shall make weekly reimbursements of the account via ACH debit. 7. The security deposit shall cover periodic fluctuations in disbursement activity. In the event Plan Sponsor's account balance falls below fifty percent (50%) of the security deposit amount, Fiserv Health reserves the right to either initiate an ACH for disbursements not funded or Fiserv Health will contact the Plan Sponsor and request that the Plan Sponsor wire transfers needed funds to their bank account for this product. 8. In the event the account balance falls below twenty five percent (25%) of the security deposit, Fiserv Health reserves the right to suspend payment of Claims under the Plan Sponsors Plan(s). Payment of such Claims will be restored when Fiserv Health has been reimbursed for all outstanding disbursements and the security deposit has been restored. 9. In the event the disbursement activity creates a deficit in the account, Fiserv Health will immediately notify the Plan Sponsor. A same day wire deposit to the Plan Sponsor's account will be made to fund all unpaid Claims and to restore the security deposit amount. 10. Fiserv Health will provide monthly reconciliation reports to the Plan Sponsor. 25 ADDENDUM #4 MEDICAL PERFORMANCE STANDARDS This Addendum, which is attached to and incorporated in the Administrative Services Agreement (Agreement), by and between Fiserv Health and CITY OF DENTON (Plan Sponsor), will apply to all medical Claims processed by Fiserv Health on or after April 1, 2008 (three months after the effective date of Agreement), subject to all provisions of this Addendum and the Administrative Services Agreement. The first year of the performance standards will run for a nine-month period, and will apply to all medical Claims processed by Fiserv Health from April 1, 2008 through December 31, 2008. Thereafter, the - performance standards shall be based on medical Claims processed during the 12-month Plan year period. I. Performance Audit Fiserv Health shall conduct monthly self-audits of each of the performance standards listed in this Addendum. Fiserv Health's audit must encompass a statistically valid random sampling of items selected. The audit shall be completed and the results presented in writing to the Plan Sponsor within thirty (30) days following the month to which the audit pertains. Although self-audits shall be - --monthly, the annual average thereof shall be the basis on which any fee adjustments are made, -provided such results are not disputed by an audit conducted by the Plan Sponsor. If the Plan Sponsor conducts an outside audit of Fiserv Health's performance, the outside audit results will be used to calculate any service fee adjustment that may be necessary provided the outside audit is conducted in a method consistent with generally practiced rules of statistical sampling and review. This includes, but is not limited to, selection of a statistically valid random sampling of claims. Fiserv Health performs audits in accordance with standard auditing principles regarding the appropriate sample size. Fiserv Health reserves the right to audit an additional amount of Claims related directly to the Plan Sponsor's medical Plan to provide a statistically valid sampling of Claims prior to paying any performance credits based on the claims randomly reviewed. The Plan Sponsor, upon advance written notice to Fiserv Health, whether directly or through the appointment of a third party, shall be entitled to conduct, at its sole expense, a performance audit of Fiserv Health's books, accounts and/or records relating to its performance of any and all services delivered pursuant to the Agreement to confirm the accuracy of such records. In no event, however, shall the Plan Sponsor retain an audit firm whose compensation for such services is calculated on a percentage of penalties paid by Fiserv Health, or any similar type of contingency basis. To commence such audit, the Plan Sponsor shall deliver a thirty (30) day advance written notice to Fiserv Health, which informs Fiserv Health that the audit is requested, the time period covered by the audit (not less than six (6) months, but not to exceed twelve (12) months), the audit sample size (not to exceed 2.5 percent (2.5%) of the relevant Claims) and how the data is to be provided for the audit. Such audit may encompass any relevant information that the Plan Sponsor requires, consistent with professional auditing practices and procedures applicable to this type of auditing as mutually agreed upon by Fiserv Health and.the Plan Sponsor. Fiserv Health will provide the Plan Sponsor or its designated auditor with a Claims Paid Report that covers the period to be audited, and the auditor will select a statistically valid sample. The records selected by such auditor will be then be compiled by Fiserv Health in the manner requested by such auditor, including, without limitation, computer selected random sampling or specific types of claims selected through random selection or by stated dollar amount and/or range. The audit must encompass a statistically valid random sampling of the Claims selected. II. Service Fee Credit Fiserv Health hereby agrees that it shall provide to the Plan Sponsor a service fee credit (or if the --Agreement has or will terminate prior to the Plan Sponsor's recovery of such credit, Fiserv Health 26 shall refund such amount to the Plan Sponsor) for each deviation from the performance guaranteed herein (as defined below). Such service fee credit will be granted for deviations identified by an audit performed in accordance with Section I of this Addendum. Such credit will be made provided that the Administrative Services Agreement has been signed by the Plan Sponsor and received by Fiserv Health prior to the audit period that is being used to calculate the credit, subject to the following conditions: In the event that Fiserv Health does not meet certain performance guarantees due to the actions or inactions of the Plan Sponsor, its employees or agents, Fiserv Health shall not be liable for that performance guarantee and the Plan Sponsor shall not be entitled to the applicable service fee credit. Performance guarantees shall not be applicable to, and no penalties related to such guarantees shall accrue or be incurred during any time period for which the Plan Sponsor's service fees or other fees become past due as per the Agreement, or if insufficient funds are in the Plan Sponsor's bank account to pay Claims. Fiserv Health will provide the Plan Sponsor with monthly updates on its performance for the standards listed below. It is understood, however, that any credits to the Plan Sponsor will be based on the cumulative annual performance of Fiserv Health and will be calculated in accordance with the provisions described in this Addendum. Reconciliation of any credits due will be processed within ninety (90) days following the end of each plan year, to the extent reasonably possible. Ill. Medical Claims Performance Standards The parties agree to the following minimum performance standards. Should plan enrollment decrease by more than 15% at any time, Fiserv Health must be notified and performance standards as stated must be re-negotiated. Certain performance standards will be measured based on a "department result." This means that results for that particular performance standard will be based on the average results for all of Fiserv Health's medical plan customers rather than only on the Plan Sponsor's results. A. Financial Accuracy (This area is measured based on a department result.) Financial accuracy will be calculated by dividing the total audited benefit dollars paid correctly by the total audited benefit dollars processed. If there is an ambiguity in the Plan, such Claim shall be considered as accurately paid if the payment amount was determined in accordance with the instructions of the Plan Sponsor. Fiserv Health agrees that Claim payments, on an aggregated dollar basis, shall be ninety- nine percent (99%) accurate to the plan of benefits. If, however, the financial accuracy falls below the agreed upon level, Fiserv Health will give the Plan Sponsor a credit as stated on the table below. Fiserv Health's Performance Credit to Plan Sponsor 99.0% or higher 0% 98.5% to 98.9% 1 % 98.0% to 98.4% 2% Less than 98.0% 3% ;B. Turnaround Time (This area is measured based on the Plan Sponsor's own results). Fiserv Health agrees that ninety percent (90%) of all Claims will be processed within ten (10) business days from the date that Fiserv Health receives all information necessary to adjudicate the Claim. Claims will be considered "processed" when Fiserv Health has released the Claim for payment, denial, or request for additional information. Fiserv Health's performance will be documented by claim turnaround reports that are claim system generated. 27 In the event that Fiserv Health turnaround time falls below the agreed upon level, Fiserv Health will give the Plan Sponsor a credit as stated on the table below. Fiserv Health's Performance Credit to Plan Sponsor 90% or higher 0% 85.0% to 89.9% 1 % 80.0.0% to 84.9% 2% Less than 80.0% 3% C. Customer Service: (These areas are measured based on a department result). C.1 Average Speed to Answer Phone Calls On average, calls will be answered in thirty (30) seconds or less. If calls are answered in more than thirty (30) seconds, Fiserv Health will give the Plan Sponsor a credit as stated on the table below. Fiserv Health's Performance Credit to Plan Sponsor 30 seconds or less 0% 31 to 45 seconds 1 46 seconds or higher 2%' C.2 Abandonment Rate It is anticipated that on average, three percent (3%) of calls will be abandoned. If more than the agreed upon level of calls are abandoned, Fiserv Health will give the Plan Sponsor a credit as stated on the table below. Fiserv Health's Performance Credit to Plan Sponsor 3.0 or less average 0% 3.1 % to 4.0% average 1 % More than 4.0% average 2% IV. Interruption By Disasters In the event that the operations of Fiserv Health's facilities, or any substantial portion thereof, are interrupted by war, fire, insurrection, labor disputes, riots, earthquakes, acts of God, or, without limiting the foregoing, any other cause beyond the control of Fiserv Health's the provisions of this Addendum (or such portions hereof as Fiserv Health is hereby rendered incapable of performing) may be suspended for the duration of such interruption. V. Maximum Aggregate Credit: The maximum aggregate credit available to the Plan Sponsor per year for all performance standards set forth in this Addendum shall be five percent (5%) of the base medical fees payable to Fiserv Health for the plan year audited, provided that these performance standards are in effect for the entire plan year. In the event that the performance standards are in effect for less than a 12-month period during any given year, the maximum aggregate credit available for that year shall be limited to the above percentage of base medical fees that are payable to Fiserv Health for the period of time covered by these performance standards for that year. The base medical fees do not include any optional or additional service fees. 28 ADDENDUM #5 BUSINESS ASSOCIATE AGREEMENT THIS BUSINESS ASSOCIATE AGREEMENT (the "BA Agreement"), is effective January 1, 2008, by and between CITY OF DENTON (hereinafter referred to as the "Plan Sponsor") on behalf of the health and welfare benefit plan (hereinafter referred to as the "Covered Entity'), and Fiserv Health Plan Administrators, Inc. (hereinafter referred to as the "Business Associate"). WITNESSETH: WHEREAS, Plan Sponsor and Business Associate are parties to a customer agreement in which Business Associate provides Claims processing, reporting, third party administration services and certain related health plan administrative services for Covered Entity for the benefit of Plan Sponsor's employees and their dependents (hereinafter collectively referred to as the "Administrative Services Agreement"); WHEREAS, the Privacy Standards (as defined below) under the Health Insurance Portability and Accountability Act ("HIPAA") permit group health plans to disclose certain Protected Health Information of a patient to a Business Associate of such plan who performs certain functions or activities on behalf of the plan, provided that the plan enters into an agreement with the Business Associate that limits the use and - - --disclosure of such Protected-Health Information to the same extent that such limitations apply to-the - - group health plan; WHEREAS, pursuant to the Administrative Services Agreement, Business Associate provides such functions or activities on behalf of the Covered Entity as to constitute a "business associate" of the Covered Entity, as defined in the Privacy Standards; WHEREAS, Plan Sponsor on behalf of the Covered Entity, and Business Associate do hereby desire to enter into this BA Agreement as required under the Privacy Standards; NOW, THEREFORE, for the reasons set forth above and in consideration of the mutual promises and agreements set forth herein, Plan Sponsor on behalf of Covered Entity, and Business Associate do hereby contract and agree as follows: Definitions. Terms used, but not otherwise defined in this BA Agreement, shall have the same meaning as those terms in 45 CFR 160.103 and 164.501. A. Business Associate. "Business Associate" shall mean the entity defined above. B. Covered Entity. "Covered Entity" shall mean the entity defined above. C. Data Aggregation. "Data Aggregation" shall have the same meaning as the term "Data Aggregation" in 45 CFR § 164.501. D. Designated Record Set. "Designated Record Set" shall have the same meaning as the term "Designated Record Set" in 45 CFR § 164.501. Electronic Protected Health Information. "Electronic Protected Health Information" shall have the same meaning as the term "Electronic Protected Health Information" in 45 CFR §160.103, limited to the information created or received by Business Associate from or on behalf of Covered Entity. Individual. "Individual" shall have the same meaning as the term "individual" in 45 CFR § 164.501 and shall include a person who qualifies as a personal representative in accordance with 45 CFR § 164.502(g). - G. Plan Sponsor. "Plan Sponsor' shall mean the entity defined above. 29 H. Privacy Standards. "Privacy Standards" shall mean the Standards for Privacy of Individually Identifiable Health Information at 45 CFR Part 160 and Part 164, Subparts A and E. Protected Health Information. "Protected Health Information" shall have the same meaning as the term "Protected Health Information" in 45 CFR § 164.501, limited to the information created or received by Business Associate from or on behalf of Covered Entity. J. Secretary. "Secretary" shall mean the Secretary of the Department of Health and Human Services or his designee. K. Security Standards. "Security Standards" shall mean the Health Insurance Reform: Security Standards at 45 CFR Part 160, Part 162 and Part 164. II. Obligations and Activities of Business Associate. A. Confidentiality. Business Associate agrees to hold Protected Health Information confidential and shall not use or disclose it other than as permitted or required by this BA Agreement or the Privacy Standards. B. Safeguard PHI. Business Associate agrees to use appropriate safeguards to prevent use or disclosure of the Protected Health Information other than as provided for by this BA Agreement. C. Mitigation. Business Associate agrees to mitigate, to the extent commercially reasonable, any harmful effect that is known to Business Associate of a use or disclosure of Protected Health Information by Business Associate in violation of the requirements of this BA Agreement or the Privacy Standards. Business Associate agrees to report to Covered Entity any.use or disclosure.of the Protected Health Informationnot provided for by this BA- Agreement. D. Subcontractors. Business Associate agrees to take commercially reasonable steps to ensure that any agent, including a subcontractor, to whom it provides Protected Health Information received from, or created or received by Business Associate on behalf of Covered Entity agrees to the same restrictions and conditions that apply through this BA Agreement to Business Associate with respect to such information. E. Access. Business Associate agrees to make available to Covered Entity the Protected Health Information of participants in Covered Entitys Plan, within the control of Business Associate, to enable Covered Entity to provide access to, or a copy of such Protected Health Information, to an individual Plan participant in order to meet the requirements under 45 CFR § 164.524. Amendments. Business Associate agrees to make available to Covered Entity the Protected Health Information of participants in Covered Entity's Plan, within the control of Business Associate, to enable Covered Entity to make amendments to Protected Health Information in a Designated Record Set pursuant to 45 CFR § 164.526. G. Internal Books and Records. Business Associate agrees to make internal practices, books, and records relating to the use and disclosure of Protected Health Information received from, or created or received by Business Associate on behalf of, Covered Entity available to the Covered Entity, or at the request of the Covered Entity, to the Secretary for purposes of the Secretary determining Covered. Entity's compliance with the Privacy Standards. H. Accounting for Disclosures. Business Associate agrees to document such disclosures of Protected Health Information and information related to such disclosures as would be required for Covered Entity to respond to a request by an Individual for an accounting of disclosures of Protected Health Information in accordance with 45 CFR § 164.528. Business 30 Associate agrees to provide to Covered Entity or as directed by the Covered Entity, to an Individual, all required information in response to such request for an accounting of disclosures of Protected Health Information in accordance with 45 CFR § 164.528. Imposition of Fees. Business Associate may impose a reasonable, cost-based fee on Covered Entity or an Individual for a request for a copy of Protected Health Information under Section 2(e). Such fee shall include only the cost of copying, including the cost of supplies for and labor of copying, the requested Protected Health Information; the cost of postage, when Business Associate has been asked to mail copies; and the cost of preparing an explanation or summary of the requested Protected Health Information, if agreed to by the Individual as required under 45 C.F.R. § 164.524(c)(2)(ii). Business Associate may also impose a fee on Covered Entity or an Individual for a request for an accounting of disclosures in accordance with Section 2(h), provided that Business Associate informs the Individual or Covered Entity in advance of the fee and provides the Individual or Covered Entity with an opportunity to withdraw or modify the request for an accounting in order to avoid or reduce the fee. J. Electronic Protected Information. Business Associate agrees that with regard to Electronic Protected Health Information (as defined in 45 C.F.R. Parts 160, 162 and 164 (the "Security Standards")), effective on the later of the effective date of this BA Agreement or the date on which Covered Entity is required to comply with the Security Standards, Business Associate shall: (i) implement administrative, physical and technical safeguards that reasonably and appropriately protect the confidentiality, integrity and availability of Electronic Protected Health Information that Business Associate creates, receives, maintains or transmits on behalf of Covered Entity as required by the Security Standards; (ii) ensure that any agent, including a subcontractor, to whom the party provides such information agrees to implement reasonable and appropriate safeguards to protect it; and (iii) report to Covered Entity any Security Incident (as defined by the Security Standards) of which Business Associate becomes aware. K. Standard Transactions. Business Associate shall, without limitation, comply with HIPAA's Administrative Requirements for Transactions, 45[C.F.R. § 162.100 et seq., and shall not: (a) change the definition, data condition or use of a data element or segment in a standard; (b) add any data elements or segments to the maximum defined data set; (c) use any code or data elements that are either marked "not used" in the standard's implementation specification or are not in the standard's implementation specification(s); or (d) change the meaning or intent of the standard's implementation specifications. III. General Use and Disclosure Provisions. 'Except as otherwise limited in this BA Agreement, Business Associate may use or disclose Protected Health Information to perform functions, activities, or services for, or on behalf of, Covered Entity as specified in the Administrative Services Agreement, provided that such use or disclosure would not violate the Privacy Standards if do6e by Covered Entity. IV. Specific Use and Disclosure Provisions. A. Except as otherwise limited in this BA Agreement, I 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. B. Except as otherwise limited in this BA Agreement, I Business Associate may disclose Protected Health Information for the proper management and administration of the Business Associate, provided that disclosures are required by law, or Business Associate obtains reasonable assurances from the person to whom the information is disclosed that it will remain confidential and be used or further disclosed only as required by law or for the purpose for which it was disclosed, and the person' notifies the Business Associate of any 31 instances of which it is aware in which the confidentiality of the information has been breached. C. Except as otherwise limited in this BA Agreement, Business Associate may use Protected Health Information to provide Data Aggregation services to Covered Entity as permitted by 45 CFR § 164.504(e)(2)(i)(B). - D. Except as otherwise limited in this BA Agreement, Business Associate may de-identify any and all Protected Health Information provided that the de-identification conforms to the requirements of the Privacy Standards. The parties acknowledge and agree that de- identified data does not constitute Protected Health Information and is not subject to the terms of this BA Agreement. V. Obligations of Covered Entity. A. Covered Entity shall provide Business Associate with the notice of privacy practices that Covered Entity produces in accordance with 45 CFR § 164.520, as well as any changes to, such notice. B. Covered Entity shall provide Business Associate with any changes in, or revocation of, permission by Individual to use or disclose Protected Health Information, if such changes affect Business Associate's permitted or required uses and disclosures. C. Covered Entity shall notify Business Associate of any restriction to the use or disclosure of Protected Health Information that Covered Entity has agreed to in accordance with 45 CFR § 164.522. D. Covered Entity shall require that all of its other business associates shall agree to similar terms and conditions as are contained in this BA Agreement in accordance with the HIPAA Privacy Regulations. Covered Entity may request Business Associate to disclose Protected Health Information to other business associates of the Plan, and such request shall be made in writing. VI. . Permissible Requests by Covered Entity. Covered Entity shall not request Business Associate to use or disclose Protected Health Information in any manner that would not be permissible under the Privacy Standards if done by Covered Entity. Covered Entity and Plan Sponsor agree to indemnify Business Associate with respect to any and all costs, including reasonable attorney fees and penalty assessments that Business Associate may incur with respect to any uses or disclosures made at the direction or request of the Covered Entity or Plan Sponsor. VII. Term and Termination. A. The term of this BA Agreement shall be effective on the date stated in the opening section of this BA Agreement, and unless otherwise terminated as provided herein, shall expire upon the expiration or termination of the Administrative Services Agreement. B. Termination for Cause. Upon Covered Entity's knowledge of a material breach by Business Associate under this BA Agreement, Covered Entity shall provide an opportunity for Business Associate to cure the breach or end the violation. If Business Associate does not cure the breach or end the violation within the time specified by the Covered Entity, then Covered Entity may terminate this BA Agreement. If Business Associate has breached a material term of this BA Agreement and cure is not possible, Covered Entity may immediately terminate this BA Agreement. Upon the termination of this BA Agreement for cause as described herein, the Administrative Services Agreement shall also be deemed terminated for cause. C. Effect of Termination. 32 Except as provided in paragraph (2) of this subsection (c), upon termination of this BA Agreement, for any reason, Business Associate shall return or destroy all Protected Health Information received from Covered Entity, or created or received by Business Associate on behalf of Covered Entity. This provision shall apply to Protected Health Information that is in the possession of subcontractors or agents of Business Associate. Business Associate shall retain no copies of the Protected Health Information. 2. In the event that Business Associate. determines that returning or destroying the Protected Health Information is infeasible, Business Associate shall extend the protections of this BA Agreement to such Protected Health Information and limit further uses and disclosures of such Protected Health Information to those purposes that make the return or destruction infeasible, for so long as Business Associate maintains such Protected Health Information. VIII. Miscellaneous. A. Regulatory References. A reference in this BA Agreement to a section in the Privacy Standards means the section as in effect or as amended, and for which compliance is _ required. B. Future Amendments. If it becomes necessary to amend the BA Agreement in the future to allow one or both of the parties hereto to comply with the requirements of the Privacy Standards, Security Standards, and the Health Insurance Portability and Accountability Act, Public Law 104-191, Business Associate may send notice to Covered Entity of such a proposed amendment and such amendment will automatically become effective thirty (30) days after such notice is sent, absent any written objection that is delivered to Business Associate. C. Survival. The respective rights and obligations of Business Associate under Section 7(c) of this BA Agreement shall survive the termination of this BA Agreement. D. Interpretation. Any ambiguity in this BA Agreement shall be resolved in favor of a meaning that permits Covered Entity to comply with the Privacy Standards. E. Third Party Beneficiaries. Nothing express or implied in this BA Agreement is intended to confer, nor shall anything herein confer, upon any person other than the parties and the respective successors and assigns of the parties any rights, remedies, obligations, or liabilities whatsoever. 33 .,EXHIBIT 1 ACCESS AGREEMENT Your TPA, Fiserv Health, (Distributor), has an agreement with United Resource Networks (URN) that gives your benefit plan access to health services at negotiated rates. You may access this arrangement according to the terms of that agreement, summarized in the following points below: 1. You will be entitled to receive the rates URN has with providers and you will pay for services in accordance with the terms of the agreements negotiated with those providers. - 2. You or your Distributor will follow the requirements for notification and approval of payment. You will pay for the health care services and supplies that have been approved and that are provided or supervised by a URN contracted provider pursuant to that provider's agreement with URN and rendered to persons enrolled for coverage under your benefit plan. Your accessing health services under this Access Agreement creates an obligation between you and the provider of those health services, and if you fail to perform your obligations, the provider will have a direct cause of action against you. 3. You agree to pay URN its administrative fees, as set forth below for each product. Payment of fees is due within 30 days of receipt of your receipt of the invoice from URN. Fees not paid within this time period may be subject to a surcharge of 2% of the outstanding past due balance. Transplant Network. 1 11 or more Davs - hrpact ran~ar can nn~ or If, before a member receives a transplant, a) the member is not accepted to a provider's transplant program, or b) the member dies, or c) the member's coverage ends, you will pay URN 35% of the difference between billed charges and URN's negotiated rate for the services rendered, capped at the amount of the administrative fee for the corresponding transplant set forth above. Payment to URN under these circumstances is in lieu of the payment specified in the table above. Transplant Access Program. The fees are 15% of savings, calculated as the difference between billed charges and amounts paid pursuant to the applicable provider agreement. The fees shall not exceed the administrative fee for the corresponding transplant set forth in the table above. Specialized Physician Review. The fees are: a) for bone marrow transplants, $2,250 for a written opinion from a single reviewer, or $2,700 for three written opinions, one from each of three reviewers; and b) for organ transplants, $1,850 for a written opinion from a single reviewer, or $2,450 for three written opinions, one from each of three reviewers. An expedited review carries an additional fee of $200 per physician reviewer if the written opinion is delivered within two (2) business days. The fee for an additional review about a previously prepared written opinion is .$1,000 for each physician reviewer. This fee will not apply if additional information was anticipated and noted by the author of the original opinion and received within 4 months of the date of the initial written opinion. Congenital Heart Disease. The fees are 15% of savings, calculated as the difference between billed charges and amounts paid pursuant to the applicable provider agreement. The fees shall not exceed $10,000 per case. 5. You will obtain URN's consent before using any marketing, member materials, or benefit documents that refer to URN, its affiliates or URN's contracted providers. 6. You will maintain the confidentiality of all information about members in accordance with applicable law. You will protect URN's confidential information, including the terms of URN's Access Protocol Manual and any provider agreement. Such information may not be disclosed to any third party without URN's prior written consent, except: a) to a party that acts as your paying agent and that has agreed in writing to maintain the confidentiality of the information, or b) as disclosures may be required by law or court order. You agree, in this instance, to notify URN in advance of any such disclosure so that URN may intercede at its option. URN will treat any information relating to a member that Benefit Planners Exhibit 1-Access Agreement 10/29/2003 is disclosed to URN as confidential. These obligations shall survive the termination, cancellation, or expiration of this Access Agreement. 7. You have sole responsibility for verifying member benefits or eligibility for transplant coverage, and for any plan coverage dispute that may arise with employees and dependents. 8. You will use URN's agreement with a provider for the products referenced in this Access Agreement even if you have an agreement, or have access to an agreement through a PPO or another vendor, for those same services with that provider. 9. You will not renew or directly enter into an agreement with a URN contracted provider for the provision of services that are of the type included in URN's agreement with that provider while this Access Agreement is in effect and for 2 years after it terminates. 10. For members who begin receiving services under the terms of this Access Agreement before the provider's agreement with URN ends, Distributor's agreement with URN ends, or your agreement with Distributor ends: a) the provider will continue to provide services to the member in accordance with the terms of provider's agreement with URN, b) you will continue to pay for services in accordance with the terms of this Access Agreement and the terms of provider's agreement with URN, and c) you shall pay URN its administrative fees as set forth in this Access Agreement. 11. Disputes between you and URN will be resolved in accordance with the laws of the State of Texas except to the extent such laws are preempted by any federal law, in which case federal law shall govern. Any dispute with a URN contracted provider that relates to the terms of the URN agreement with that provider will be resolved in accordance with the dispute resolution process described in that provider agreement. 12. You acknowledge that URN will not be deemed or understood to be an ERISA plan administrator or fiduciary, and that URN has no responsibility of any kind for: a) medical outcomes; b) payment of any medical, hospital, or other bills resulting from any medical or surgical treatment or confinement; and c) interpretation of any benefit plan contract concerning coverage or denial of benefits. 13. The signed agreement is effective on the day it is received by URN. Upon receipt of this Access Agreement by URN, URN reserves the right to deny you access. This Access Agreement terminates when your agreement with Distributor terminates or upon 30 days written notice by you or by URN. Acknowledged and agreed Payor Name: City Dent Address: 401 •E , AcKorv( $~•a-<4A A Signature: 7kwi,•E-r~ 762r~5 "'L I Name: sc t Telephone: qdd- 349- 183 Title: RSV- MQKR , # of Covered Lives: aQQrer. 12,20 y qL.t.. r Date: 1211 o'► To activate this arrangement, fax this form to URN at (262) 313-9808 and Distributor at: Benefit Planners Exhibit 1-Access Agreement 10/29/2003