05/27/2003 Audit 1
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' AUDIT REPORT OF MONROE COUNTY
PRESCRIPTION BENEFIT PLAN
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May 27, 2003
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Prepared by:
Internal Audit Department
Clerk of the Circuit Court
Danny L. Kolhage, Clerk
Monroe County, Florida
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CLERK OF THE CIRCUIT COURT
. MONROE COUNTY BRANCH OFFICE
BRANCH OFFICE PLANTATION KEY
I MARATHON SUB COURTHOUSE . MONROE COUNTY COURTHOUSE GOVERNMENT CENTER
3117 OVERSEAS HIGHWAY 500 WHITEHEAD STREET,SUITE 101 88820 OVERSEAS HIGHWAY
MARATHON,FLORIDA 33050 KEY WEST,FLORIDA 33040 PLANTATION KEY,FLORIDA 33070
TEL.(305)289-6027 TEL.(305)292-3550 TEL.(305)852-7145
IFAX(305)289-1745 FAX(305)295-3663 FAX(305)852-7146
May 23, 2003
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The Honorable Danny L. Kolhage
IClerk of the Circuit Court
Re: Audit of the Monroe County Prescription Benefit Program
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Dear Mr. Kolhage,
The Clerk's Internal Audit Department has completed the audit of the Monroe County
Prescription Benefit Program. The purpose of the audit was to assess compliance with the
applicable chapters of the Florida Statutes, and the Monroe County Board of County
Commissioners' policies, procedures, resolutions, ordinances and agreements. We also
I evaluated the extent to which WHP Health Initiatives, Inc., an Illinois corporation, doing
business as Walgreens Health Initiatives (WHP) and Keys Physician-Hospital Alliance (KPHA)
implemented procedures to administer the Prescription Plan and to evaluate the effectiveness of
ICounty Management's systems employed to monitor the Contractor's performance.
We would like to thank the Division Director of Administrative Services and her staff for their
Icooperation while conducting the audit. By its nature, this report focuses on exceptions,
weaknesses, and problems. This should not be understood to mean there are not also various
strengths and accomplishments.
IOur audit revealed that althou h the Count has contracts with g Y private business organizations to
administer the prescription program, one of the key responsibilities of contract management is
1 monitoring the administrator's performance. Due to the complexity of the constantly changing
prescription industry, the large costs involved, and that there is usually very little built into the
third party administrator's contract for financial incentives to control costs, constant oversight
and monitoring are required by Monroe County Management.
The audit was completed with the assistance of Patricia Sutton, Internal Auditor.
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The accompanying audit report is provided for your information. Additional copies of the report
will be provided upon your request.
Sincerely,
Sandra L. Mathena, CIA, CFE, CPA
Director of Internal Audit
Cc: Board of County Commissioners (5)
' James Roberts, County Administrator
Sheila Barker, Division Director of Administrative Services
Sandee Carlile, Clerk's Finance Director
1 Marva Green, External Auditor
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AUDIT REPORT OF MONROE COUNTY
PRESCRIPTION BENEFIT PROGRAM
tTABLE OF CONTENTS
' Page
' I. SCOPE AND OBJECTIVES 1
II. METHODOLOGY 1-2
' III. BACKGROUND 3-4
IV. CONCLUSIONS 5-6
V. AUDIT FINDINGS:
' A.Incentive and Rebate Guarantees
1. Guaranteed Rebates Not Renegotiated 7
' 2. Rebate Check for 1st Quarter 2001 Not Received 8
B. Maintaining Eligible Member Records
1. County Entities and Departments Not Reporting Employee
Changes Timely 9
2. Terminated Employees and Dependents Receiving Prescription Benefits 10-11
C. Prescription Service agreements
1. WHP Health Initiatives Contract 12-13
2. Identification Cards Not Collected 14
3. Contract Definition of Average Wholesale Price 15
' D.Request For Proposals
1. Cost Analysis 16
2. Prescription Plans of Other Florida Businesses 17
E. Not-For-Profit Reports Not Submitted 18
' F. Receipt From Pharmacy Does Not List Cost to The County 19
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1 AUDIT REPORT OF MONROE COUNTY
PRESCRIPTION BENEFIT PROGRAM
' TABLE OF CONTENTS
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VI. EXHIBITS
1 A. Prescription Service Agreement A
B. Pharmacy Services Joinder Agreement B
1 C. Rebate Checks C
D. Contract Definition Average Wholesale Price D
E. Request For Proposals For Prescription Management Plan E
1 F. Sample RFP Schedule of Actual AWP And Cost Per RX F
G. Prescription Drug Program Comparison-Other Florida Programs G
H. Letter From Executive Director H
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VII. AUDITEE RESPONSES
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' AUDIT REPORT OF MONROE COUNTY
PRESCRIPTION BENEFIT PROGRAM
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I. OBJECTIVES AND SCOPE
At the request of the Monroe County Clerk of the Circuit Court, the Internal Audit
' Department has completed an audit of the Prescription Benefit Program with WHP Health
Initiatives, Inc. doing business as Walgreen Health Initiatives (WHP) administered by the
Keys Physician-Hospital Alliance (KPHA).
The audit objectives were to determine
' 1. compliance with state and local laws, ordinances, and contracts,
2. policies and procedures properly document the system,
' 3. internal controls have been established and are being followed and
4. to determine the efficiency and effectiveness of WHP and KPHA in coordinating
the plan and to review the extent of contract oversight provided.
II. METHODOLOGY
A. We interviewed the following personnel to obtain information about the prescription
benefit program:
1. The County Administrator
2. Division Director of Management Services
3. Group Insurance Administrator
4. The Clerk's Finance Department personnel
5. Interisk Corporation, Consultant- Lawton Swan
' 6. Assistant Administrator, Lower Keys Medical Center&
Keys Physician-Hospital Alliance, Director of Operations -Meyaln Lowe-Watler
7. Walgreens Health Initiatives, Account Manager- Shawna Turner
' 8. Walgreens Health Initiatives, Sales Manager- Mark Mincy
9. Walgreens, Pharmacy Supervisor-Vivian Cebellos
10. Acordia National, Inc., personnel
11. Health Spectrum- Emilio Monte
12. Express Scripts, Inc., Sales Director- Tom Aufiero
13. Other City and County Prescription Plan Managers
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B. Internal Audit Department examined the following documents:
' 1. Pharmacy contract between WHP and KPHA
2. Plan joinder
' 3. Employee plan documents
4. Pharmacy invoices
' C. The Internal Audit Depailuient reviewed the contract to ensure that all terms and
conditions were being complied with as documented within the agreement.
' D. Internal Audit reviewed rebate payments, recomputed rebates and traced receipts to
Monroe County records.
E. Obtained an understanding of WHP's formulary.
F. Reviewed invoices and recomputed costs based on Average Wholesale Price (AWP).
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G. Compared the total amount of prescription paid per month to the total amount of
' medical claims paid per month.
H. Compared the Acordia Employee/Dependent File Listing to WHP Claim Detail Report
of prescriptions to ensure claims paid were for eligible participants.
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III. BACKGROUND INFORMATION
Prescription drug costs, which represent approximately 10 to 12% of the overall healthcare
dollar, have been increasing at double-digit rates due to the introduction of new and expensive
drug therapies, an increase in direct-to-consumer advertising and the aging of our population.
The Health Care Financing Administration estimates that prescription drug expenses will rise
from 9.4% of personal healthcare spending to 16%by 2010, the fastest increase in any medical
' category.
Prescription expenses represent a significant annual liability ($1,396,272 for fiscal year ending
Sept. 2002, $1,397,793 for fiscal year ending Sept. 2001) for Monroe County. Monroe
County's prescription cost has decreased slightly from the previous fiscal year due to the cost
savings methods implemented by the Director of Administrative Services and Group Insurance
by utilizing higher copayments and switching to a three tier prescription plan. According to the
Kaiser Family Foundation 2002 Annual Survey the use of three-tier cost sharing arrangements,
' where a worker faces one copay for generic drugs, a higher one for preferred drugs, and an
even higher one for non-preferred drugs has increased over the past two years, growing from
29% of covered workers in 2000 to 57% in 2002. Sixty-nine percent of covered workers are in
' plans that use a formulary that restricts which drugs will be covered, up from 58% in 2001.
Historically, the amount paid for Monroe County prescriptions has increased; (2000 to 2001 -
26%, 1999 to 2000 - 22.7%, 98 to 99 - 27.5%, 97 to 98 - 46.91%).
1 The County established a self-insurance program for medical, prescription, dental and vision
claims effective July 1, 1996 and changed claims administrators. The County also began the
' utilization of a newly formed preferred provider organization, Keys Physician Hospital
Alliance (KPHA). The Proposal submitted by KPHA states "The Keys Physician-Hospital
Alliance is a cooperative effort by local physicians, hospital and other health providers to
identify and provide the highest level of care in the most cost-effective manner. The Keys
Health Plan was developed for the self-insured employer to provide a local community
response to the health care needs of the organizations and their employers and insured. It
' provides for an integrated health delivery network, which will:
1. Function to identify, develop and maintain access to needed services,
' 2. Assure appropriate utilization of resources and services,
3. Monitor and maintain the quality of services,
' 4. Work to control the cost of health care services."
Lower Florida Keys Health System was originally also a participant in the Keys Physician
Hospital Alliance. KPHA had hoped that other county businesses would join the Alliance to
lower costs through a large user profile, however, Monroe County is the only employer using
KPHA and WHP.
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1 The contract awarded for prescription benefit services is between Lower Florida Keys
Physician/Hospital Organization, Inc. a Florida not-for-profit corporation doing business as
1 Keys Physician-Hospital Alliance and WHP Health Initiatives, Inc., an Illinois corporation,
doing business as Walgreens Health Initiatives. See Exhibit A - Prescription Service
Agreement. Monroe County adopted the Prescription Service Agreement between KPHA and
1 WHP with a plan joinder. See Exhibit B - Pharmacy Services Joinder Agreement. The
Prescription Plan currently provides benefits for the employees of the Board of County
Commissioners, the Clerk of the Circuit Court, the Tax Collector, the Property Appraiser, the
Supervisor of Elections, the Sheriffs Department, the Mosquito Control District and Land
Authority. The program is a "self insured" program which means services are provided
through charges to users of the program on a cost recovery basis.
1 Cost Containment
Pharmacy benefit management pricing methodology is inherently complex with contracted
' discounts, maximum allowable cost, usual and customary pricing, administrative fees, rebates,
deductibles and copayments. Pharmacy benefit managers have saved employees and health
1 plans billions of dollars in the past decade according to the Wall Street Journal. They do it by
steering doctors and patients to cheaper drugs, especially low-cost generic copies of branded
drugs from big pharmaceutical companies. Pharmacy benefit companies receives its revenues
1 from three sources: compensation from employers and insurers whose drug benefit programs it
manages; rebates from drug manufacturers for buying large quantities of brand-name
medicines; and fees from the drug companies for special initiatives by pharmacy benefit
1 managers to promote brand-name drugs among doctors. Monroe County uses a three tier
patient drug formularly. The lowest copayment ($10) is for generic drugs, the middle
copayment ($20) is for brand drugs on the formulary (no generic available), and the highest
1 copayment ($35) 'brand drugs not listed on the formulary or brand drugs with a generic
available. Walgreens Health Initiatives defines their formulary as "a list of medications that
can help you and your physician to maximize your benefits while minimizing overall
1 prescription drug costs to you or your plan. These drugs have received FDA approval as safe
and effective, and have been chosen by a committee of physicians and pharmacists for
inclusion on this list." The formulary achieves cost savings through lower prescription costs by
creating preference for the most cost-effective brand name and generic medications. U.S.
prescription drug costs climbed at more than 15% a year from 1997 through 2001, according to
the research firm IMS Health. In 2003, there will be many patent expirations for high use, high
' cost drugs opening the door to more generic alternatives.
1 Pharmacy benefit management requires more involvement on the part of the employee. Group
Insurance has implemented mandatory use of generics to control costs in fiscal year ending
2003. Walgreens Health Initiatives literature for the employee explains that you should show
1 the formulary to your physician whenever you receive a prescription. Group Insurance holds
annual meetings to educate employees on their benefit plan such as the use of the formulary
and copayments which benefits both the County and the employee.
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' IV. Audit Conclusions:
' A. Guaranteed rebate per paid claim was not renegotiated by KPHA as required by the
pharmacy agreement.
B. Rebate check dated 11/21/01 issued by WHP to KPHA for $6,716.80 was never
remitted to the County. This was corrected and reissued during the audit.
' C. Failure of some County Entities and Departments to communicate employee changes
to Group Insurance in a timely manner can result in overpayment of benefits.
' D. Terminated employees and dependents were receiving prescription benefits and were
still on the prescription plan in January 2003.
E. Pharmacy benefit contract is between Lower Florida Keys Physician/Hospital
Organization, Inc. a Florida not-for-profit corporation doing business as Keys
Physician-Hospital Alliance and WHP Health Initiatives, Inc., an Illinois corporation
doing business as Walgreens Health Initiatives. Monroe County adopted the
Prescription Service Agreement between KPHA and WHP with a plan joinder.
tF. Identification cards issued by WHP are not collected by the Plan upon termination of
the employee.
' G. Contract definition of average wholesale price is incorrect, it states that the price is
based on 100 tablets or capsules not the actual eleven digit national drug code number.
H. The Request for Proposal submitted by the Insurance Consultant does not include
specific questions and analysis about how the pricing is calculated. The proposal could
request the individual cost for the top twenty-five drugs using a specific date, specific
eleven digit National Drug Code Number, number of pills, ,average wholesale price,
and include all rebates, discounts and administrative fees related to their quote.
I. A review of other County businesses with prescription plans revealed that Monroe
County did not receive bids from some viable pharmacy benefit management
companies.
J. Not-for-profit reports were not submitted as requested. Although KPHA was
organized as a Florida not-for-profit corporation, the PHO is not a tax-exempt entity
and has never applied for tax-exempt status from either the Federal Government or the
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State of Florida. KPHA has always maintained the independence of their organization
by stating it is not a part of the hospital, they are a separate organization with a separate
board of directors. KPHA is responsible for certain medication categories that require
prior authorization. Independence in the performance of their medication utilization
process is essential for the cost effectiveness of the plan and provides for objective and
uninhibited appraisal.
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' K. The receipts from Walgreens Pharmacies do not display the total cost of the
prescription only the copayment made by the eligible participant. The amount saved
' by using the plan is an important benefit to the employee and displaying it on the
receipt would educate the employee on the total cost to Monroe County of this benefit.
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V. Audit Findings
A. Incentives and Rebate Guarantees
1. Guaranteed Rebates Not Renegotiated
Finding:
The Pharmacy Benefit Agreement with Walgreens Health Initiatives requires WHP to
pay a guaranteed rebate of $.80 per paid prescription claim, regardless of the
incentive amounts received by WHP. The contract states that WHP and KPHA will
negotiate in good faith the monetary amount of any WHP payment to apply to the
subsequent twelve month period. Rebates are money that is returned to a payer from
a prescription drug manufacturer based upon the utilization of brand-name drugs by a
covered person or purchases by a provider.
Rebates received by other comparable entities ranged from approximately $1.60 to
$5.00 per claim. The rebate was never renegotiated by KPHA as required by the
contract. When asked why the rebate was not renegotiated KPHA management
stated that Monroe County attends the insurance meetings, therefore, we don't need
to. During fiscal year ending 2002 there was $26,776 (33,470 claims times $.80 per
claim) paid to Monroe County as rebates. Revenue may have been lost due to the
County due to KPHA not fulfilling their fiduciary responsibility of renegotiating the
rebate.
Recommendation(s):
1. Group Insurance Management should ensure that rebates are renegotiated
according to the terms of the agreement.
County Administrator's Response:
Management has been relying on KPHA to administer the contract with WHP as we
are a joinder to their contract. In the years since the pharmaceutical contract was
signed, KPHA has not asked what the County's preference in negotiating a different
discount nor have they inquired as to the County's desire to have input into the
negotiation or participate in the negotiation. The response that was quoted in the
audit is amazing in that our relationship with KPHA is one of mutual cooperation to
lower the cost of medical related items to the taxpayer of Monroe County. Numerous
discussions were held on ways to decrease the cost of our plan and at no point in our
discussion of various cost containment issues was this recommended as an option
that they would pursue or that should be pursued.
Management will insist that this discount be negotiated per the terms of the contract
to which the County is a joinder.
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2. Rebate Check for 1st Quarter 2001 Not Received.
' Finding:
Rebate check #476421 in the amount of$6,716.80 for the claims paid during the 1st
quarter of 2001 dated 11/16/01 was not processed by KPHA. The check for each
quarter's rebate is issued to KPHA by WHP. KPHA deposits the check and then
issues a check in the same amount to Monroe County. During the audit while
verifying that all payments were properly accounted for, internal audit discovered that
' KPHA had never remitted one check to the County. Further research revealed that
KPHA had never cashed the check. WHP reissued the check to KPHA on 8/27/02
and it was remitted to the County by KPHA on 09/17/02. See Exhibit C - Rebate
' Checks.
Recommendation(s):
1. Group Insurance Management should ensure that procedures are established to
monitor the quarterly incentive payment.
' County Administrator's Response:
Management will develop a procedure for tracking timely receipt of rebate checks.
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B. Maintaining Eligible Member Records
1. County Entities and Departments Not Reporting Employee Changes Timely
' Finding:
A review of participant eligibility revealed that employing County Entities and
Departments are not always reporting employee changes on a timely basis. Group
Insurance personnel are responsible for maintaining the eligibility records and they
rely on the County Entities and Departments to report employee terminations, leave
of absences, new hires, retirements and dependent infoiiiiation with the
' corresponding effective date. A sample test of terminations entered in WHP's system
by Group Insurance personnel ranged from 11 days prior to termination and up to 60
days after termination.
' Failure of the County Entities and Departments to communicate employee changes to
Group Insurance in a timely manner can result in overpayment of benefits for
ineligible employees and their dependents. An interview with Group Insurance
personnel indicated the Sheriff's Department, Social Services and Mosquito Control
have had trouble in the past reporting changes timely. Group Insurance notified the
entities through memos of the necessary requirements to report employee changes.
This has improved the reporting of employee changes. However, due to the large
' number of participants and numerous employers and departments within the plan, all
County Entities and Departments would benefit from documentation of the eligibility
notification procedures.
Recommendation(s):
1. Group Insurance Management should establish and implement an Administrative
Instruction to provide guidelines regarding procedures on notification
requirements and the responsibility of County Departments and Entities for
employee terminations, leave of absences, new hires, dependent eligibility and
retirements.
County Administrator's Response:
Many of the entities covered under the pharmaceutical program do not come under
the responsibility of the County Administrator; therefore, they would not be covered
under Administrative Instructions. Management will periodically remind the various
entities and departments of the need for prompt notification of any terminations,
retirements, etc. Management will develop a procedure for reminding the various
entities of the importance of prompt reporting of payroll changes and also cover the
correct procedure for BOCC employees.
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2. Terminated Employees and Dependents Receiving Prescription Benefits
Finding:
To ensure claims paid were for eligible participants the auditors compared the
Acordia Employee/Dependent File Listing to WHP Claim Detail Report of
prescriptions. Group Insurance personnel must report each employee termination or
employee change to Acordia and to WHP. Group Insurance personnel informed the
auditors the detail claim listings from WHP were verified to ensure only claims were
paid for eligible employees and dependents. However, the test month of June 2002
identified three terminated employees who were receiving prescription benefits at the
time of the audit. One employee terminated on March 9, 2001 and the appropriate
paperwork was submitted to WHP, but was not processed and resulted in 42
prescriptions processed with a plan cost of$1,099.01. One employee terminated on
January 9, 2002, but a modification was made to their original WHIP record
incorrectly and resulted in 56 prescriptions processed with a plan cost of$1,085.08.
The third employee terminated on May 7, 2002 and Group Insurance was not notified
of the change until May 21, 2002 and resulted in 7 prescriptions processed with a
plan cost of $262.20.
Group Insurance personnel were not reviewing WHP's active eligible employees and
dependents list to ensure the changes were made. During the audit, Group Insurance
requested a current listing of eligible participants from WHP and made the
appropriate corrections. In addition to the terminated employees identified in the
auditor's test month, their review identified a dependent that became ineligible on
April 26, 2002, but a modification was made to their original WHP record incorrectly
and resulted in 7 prescriptions processed with a plan cost of$59.63. Maintaining an
accurate and up-to-date list of eligible members of the Prescription Program is
essential to ensure that prescriptions are dispensed only to eligible individuals.
Recommendation(s):
1. Group Insurance Management should document and ensure internal controls are
being performed to verify paid prescription claims are for eligible employees and
their dependents.
2. Group Insurance Management should request refunds from the ineligible
individuals.
3. Group Insurance Management should request a listing of employees and
dependents eligible to receive prescriptions benefits from WHP on a regular basis
and update the records accordingly.
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County Administrator's Response:
Management recognizes that everything possible should be done to prevent mistakes,
' but also recognizes that sometimes mistakes do occur. The records are updated
approximately 115 times a month. This includes new hires, terminations, dependent
coverage changes, requests for new ID cards, and address changes. It is projected
that WHP will process 36,000 prescriptions this year for a cost of$1,500,000. Of the
three errors, the first one was created before eligibility directly on-line was updated.
The necessary information was transmitted, but the change was never processed by
WHP. The second error was due to a change in the social security number that
somehow created two files and then when employee terminated, only one file was
changed showing the termination. The third was due to an untimely notification of a
' termination.
WHP is now requested to provide reports on a quarterly basis to update the records.
' A modification in the format of the report that facilitates the checking for only
eligible participants has been requested.
The County has requested refunds in the past, but has very little success in getting
former employees to repay payments that were made in error. The county attorney
will be requested to review any further steps can be taken to recover this money.
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C. Prescription Service Agreement
1. WHP Health Initiatives Contract
' Finding:
The contract awarded for prescription benefit services is between Lower Florida Keys
Physician/Hospital Organization, Inc. a Florida not-for-profit corporation doing
business as Keys Physician-Hospital Alliance and WHP Health Initiatives, Inc. an
Illinois corporation doing business as Walgreens Health Initiatives. Monroe County
adopted the Prescription Service Agreement between KPHA and WHP with a plan
1 joinder. KPHA had hoped other County businesses would join the PHO to lower
costs through a large user profile, however, this economy of scale benefit was not
realized and Monroe County is the only participant. Lower Florida Keys Health
System was originally a participant in KPHA also using WHP. They are no longer a
member and use one of the largest pharmacy benefit plans called Express Script.
Both Acordia and KPHA stated in their proposal that they can work with any
1 Pharmacy Benefit Management Company selected by the County.
KPHA is responsible for the following medication categories that require prior
authorizations: Accutane, Retin-A, Oral Contraceptives, Viagra, and Anabolic
Steroids. KPHA has processed 143 prior authorizations since the plans inception in
' 1996, 126 were approved and 17 were denied. WHP is responsible as of the new
contract for prior authorizations of Proton Pump Inhibitors, COX -2 Inhibitors,
Migraine Category, Lamisil, Sporonox and insomnia medication. All prior
' authorizations are customarily provided by the pharmacy benefit management
companies.
Recommendation:
1. Group Insurance Management should consider contracting directly with the
pharmacy benefit company.
County Administrator's Response:
Management has always had the option of contracting with the pharmacy benefit
company directly, but has not seen any additional benefits for doing so. KPHA does
' prior authorizations and they do not charge us for that service. Under the findings, it
indicated that only 17 requests were denied from 143. Management is not sure this is
a bad thing. The purpose of prior authorizations is to ensure physicians are
prescribing according to our plan. An example of that would be birth control
medication being prescribed for birth control would be denied, but for other medical
' problems might be an acceptable form of treatment and would be covered under our
plan.
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There is not sufficient data on the prior authorizations being handled by WHP for
Accutane, Retin-A, Oral Contraceptives, Viagra and Anabolic Steroids. It was
recommended that we do prior authorizations on these issues, to direct physicians and
patients to use equally as effective, but less costly, medications and treatments. The
County is being charged $30 per prior authorization handled by WHP and has
requested cost savings. When pharmaceutical services contract is due for renewal,
the County will consider a direct contract with the provider.
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2. Identification Cards Not Collected
Finding:
' Identification cards issued by WHP are not collected by the Plan upon termination of
the employee. According to the Prescription Service Agreement Section 2.4
Responsibility of Plans each Plan shall be responsible for collecting the Identification
' Card from the Member upon termination of the Member's eligibility.
During an interview with the supervisor of Walgreens pharmacies in Miami-Dade
1 and Monroe County, she stated it was important to physically collect the
identification card to prevent delays that might occur deactivating employees after
termination. There could be circumstances when a pharmacy does not operate
' through the database and the terminated employee only needs the card to fill a
prescription.
Recommendation(s):
1 1. Group Insurance Management should establish and implement a procedure that
would ensure the collection of the identification cards at the time of an
employee's termination.
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County Administrator's Response:
It is Management's experience that once an employee is set up with a pharmacy, the
pharmacy does not request to see the card again for further refills and new
prescriptions. In these cases collecting the card will not prevent an employee from
1 receiving a prescription to which they are not entitled. Also, employees can have
multiple cards in the family and it would be a nightmare to retrieve cards issued to
employee, spouses and dependents. There are also retirees that cover dependents that
1 lose eligibility and it would require a considerable amount of time and money to
make a fail-safe method of retrieving cards. Management will add this requirement
to the Administrative Instruction that all cards should be turned in along with other
' county property, keys, identification cards, etc., but does not feel creating a massive
data collection of cards issued, reissued, collected, etc. would justify the staff effort
and time involved.
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3. Contract Definition of Average Wholesale Price
Finding:
WHP charges for a prescription based on the Average Wholesale Price (AWP) listed
in the First DataBank Pricing Service. The drug cost is determined by the eleven
digit National Drug Code (NDC) number minus the contracted discount. The last
two numbers in the NDC number identifies the lot size. Based on information
provided by First DataBank to determine the AWP, they survey national wholesalers
and the markup that First DataBank utilizes is a weighted cost average.
IInterviews with our sales representative confirm that our price is based on the actual
eleven pharmacy fi
Howeverdigit, theNBC Prescriptionnumber Serviceandthe Agreement Defibenenitiont 1.2manager statesdoes that no"This pricerepricing.is
based on 100 tablets or capsules, one pint of liquid, or the closest quantity to that
prescribed for ointments, creams, suppositories, or other medication not packaged in
100's or pints." Prices of smaller packages such as 100 lots are more expensive. Our
Account Representative says the definition is incorrect and is having a corrected
Idefinition prepared. See Exhibit D - Contract Definition.
I Recommendation(s):
1. Group Insurance Management should coordinate the definition change with WHP.
ICounty Administrator's Response:
As stated in the Audit, the incorrect definition in the contract has not cost additional
I money because "Interviews with our sales representative confirm that our price is
based on the actual eleven digit NDC number " The correct definition will be
added to future contracts.
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D. Request for Proposals
1. Cost Analysis
Finding:
The Request for Proposal submitted by the Insurance Consultant (Interisk, Inc.) did
not include specific questions and analysis about how the pricing is calculated. The
proposal states "Quoted Price/Fees or Discount Arrangement." See Exhibit E -
Request for Proposal for Prescription Management Plan. The contracted discount is
the discount from the AWP used in calculating the plan sponsor's liability. A plan
sponsor's liability will be the lower of either the Contracted Discount or Maximum
Allowable Cost (MAC), and the Usual and Customary Price, if applicable, minus the
member's contribution.
Pharmacy benefit management pricing methodology is inherently complex with
contracted discounts, maximum allowable cost, usual and customary pricing,
administrative fees, rebates, deductibles and copayments. All of these items effect
the total price to the County. There was no detailed analysis of the total cost by the
Insurance Consultant for the self insured pharmacy benefit plans. For example, the
proposal could request the individual prescription cost for the top twenty drugs using
a specific date, specific NDC number, specific number of pills, and including all
rebates, discounts and administrative fees related to their quote. This specific
analysis could then be compared for all prescription plans providing us a level basis
to judge the merits of each plan. Average wholesale price could also be compared for
all proposals to ensure that each pharmacy benefit manager defines AWP the same
way. See Exhibit F - Sample RFP Schedule of Actual AWP and Cost per RX.
Recommendation(s):
1. Group Insurance Management should coordinate the change to the proposal with
the Insurance Consultant.
County Administrator's Response:
Management appreciates the clarity provided by this audit on an improvement that
can be added to the pharmacy RFP process in the future.
II
16
2. Prescription Plans of Other Florida Businesses
Finding:
A review of other businesses with prescription plans revealed that Monroe County
did not receive bids from some viable pharmacy benefit companies. See Exhibit G -
Prescription Drug Program Comparison-Other Florida Programs. The County's
prescription plan was properly bid to obtain competition, however, the prescription
plan was bid as part of the overall total benefit plan. The request for proposal was
titled "Health Benefits Plan Claims Administration & Utilization Review Services,
Excess/Stop Loss for Group Self-Insured Medical Benefits, Prescription Benefits
Plan, Group Life Insurance and Accidental Death and Dismemberment, Group
Employee Voluntary Supplemental Life Insurance, Group Voluntary Short Term &
Long Term Disability, Employee Assistance Plan, Nationwide Provider Network,
Flexible Spending Account".
Express Script, AdvancePCS and Medco Health Solutions, Inc. are three of the
largest pharmacy benefit companies. The top three firms handle more than 75% of
retail drug purchases. Express Script has contracts with the City of Key West
(through the Florida League of Cities) and Lower Keys Medical Center. Fausto's
uses AdvancePCS. During interviews with management of one of the pharmacy
benefit companies listed above, he stated that they would definitely have been
interested in bidding for the County's business, but they were not aware of the request
for proposal.
Recommendation(s):
1. Group Insurance Management should consider sending the request for proposal to
pharmacy benefit managers used by other County businesses to increase
competition.
County Administrator's Response:
Management will specifically target pharmacy benefit managers used by other county
businesses for the next RFP. The County has always advertised both locally and in
Miami and has received responses from companies other than WHP. It is not felt the
title of the RFP has caused the lack of participation. However, the County will try to
target the companies mentioned in the Audit (Express Script and Advance PCS.)
However, as an interesting bit of information, the above companies and others have
been sued by the country's largest union of public employees, the American
Federation of State, County and Municipal Employees. The suit charges that the four
largest pharmacy benefit managers have "inflated drug prices through `illegal, secret
dealings' with pharmaceutical companies." WHP is not included in the suit. Copy of
article attached.
17
E. Not-For-Profit Reports Not Submitted
Finding:
As part of our standard audit procedures, we requested KPHA's Form 990 Return of
Organization Exempt from income tax. An organization's completed Form 990 is
available for public inspection as required by Section 6104 of the Internal Revenue
Code. Lower Florida Keys Physician/Hospital Organization, Inc. is organized as a
Florida not-for-profit corporation doing business as Keys Physician-Hospital
Alliance. KPHA has always maintained the independence of their organization by
stating that it is not part of the hospital, they are a separate organization with a
separate board of directors.
Form 990 was not submitted as requested. The Executive Director of KPHA states
"Please note that although the PHO was organized as a Florida not-for-profit
corporation, the PHO is not a tax-exempt entity and has never applied for tax-exempt
status from either the Federal Government or the State of Florida. See Exhibit H -
Public Inquiry - Florida Department of State, Division Of Corporations, Florida Non
Profit, Lower Florida Keys Physician/Hospital Organization, Inc. Therefore, the
PHO cannot comply with your request for copies of any applications for tax
' exemption or Form 990's for the past three years." See Exhibit I - Letter from
Executive Director.
' KPHA is responsible for certain medication categories that require prior
authorizations. Prior authorizations are approved using a clinical criteria and use of
some judgment by KPHA employees. The employees of KPHA are making decisions
' regarding prescribing practices of physicians who are members of the KPHA
organization. The Assistant Administrator of the Lower Keys Medical Center is also
the Director of Operations for the Keys Physician-Hospital Alliance. Independence
in the performance of the review process for both prescription management and the
health plan is essential for the cost effectiveness of the plan and provides for
objective and uninhibited appraisal.
1
Recommendation(s):
1 1. County Management should obtain clarification of the relationship between
KPHA and Lower Keys Medical Center and whether or not there are any
1 independence issues that may negatively affect KPHA's ability to act on behalf of
Monroe County pursuant to the Prescription Service Agreement should a
determination be made that it is in the best interest of the prescription plan to
continue to utilize the services of KPHA.
County Administrator's Response:
Management will attempt to clarify the relationship.
1
I18
F. Receipt From Pharmacy Does Not List Cost to the County
Finding:
The receipts from Walgreens Pharmacies do not display the total cost of the
prescription only the copayment made by the employee or dependent. Receipts from
I Eckerd Pharmacies display the copayment made and the amount paid by the County
is displayed on the receipt as "You have saved $xxx by using your plan". The
amount saved by using the plan is an important benefit to the employee and having it
displayed on the receipt would educate the employee on the total cost to Monroe
County for this benefit.
IRecommendation(s):
1. Group Insurance Management should consider requesting that WHP display the
I
employee cost and the benefit provided by Monroe County under the prescription
plan.
County Administrator's Response:
I Management will request this feature of all WHP providers. Management believes it
is a good feature and one that should be pursued.
I
I
I
I
I
1
I
19
VI . Exhibits
1
1
1
1
1
1
i
Exhibit A
Prescription Service Agreement
FILED FOR RECORD
2002 NOV — I Afill : 40
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L. ii0LHAGE
CLK. CIR. CT.
MONROE COUNTY, FLA.
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MINI NMI NMI MINI IIIIII
PRESCRIPTION SERVICE AGREEMENT
This Prescription Service Agreement("Agreement") is entered into this list day of October, 2002 by and
between LOWER FLORIDA KEYS PHYSICIAN/Hospital ORGANIZATION,INC., a Florida not
for profit corporation doing business as Keys Physician-Hospital Alliance("KPHA"), and WHP
HEALTH INITIATIVES, INC.,an Illinois corporation, doing business as Walgreens Health Initiatives
("WHP").
RECITALS
WHEREAS, KPHA operates a provider network which, as its primary objective, arranges for the
delivery of health care services to persons enrolled in health care plans;
WHEREAS, KPHA has entered or will enter into agreements (all referred to as "Payor Agreements")
with managed care plans such as health maintenance organizations, self-insured employers, third party
administrators, or preferred provider organizations (individually and collectively referred to as "Plans") to
provide health services to Members of such Plans;and
WHEREAS, WHP manages prescription benefit programs that include the dispensing of prescription
drugs by and through its network of retail community pharmacies (hereinafter "Participating
Pharmacy(ies)") and arranges for prescription benefit management and claim processing services for
Plans; and
WHEREAS, WHP also manages a prescription benefit that includes the dispensing of prescription drugs
by mail service pharmacy (hereinafter"Participating Mail Service Pharmacy"); and
WHEREAS, KPHA desires to arrange for the provision of Prescription Services to Plan Members (and
their eligible dependents) through WHP's network of Participating Pharmacies and by Participating Mail
Service Pharmacy, as well as prescription benefit management and claim processing services by and
through WHP;and
WHEREAS, WHP is willing to make available Members Prescription Services to M e
p b rs through its network of
Participating Pharmacies and by Participating Mail Service Pharmacy and to provide pharmacy benefit
management and claim processing services to Plans•upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual promises and covenants set forth in this
Agreement, and other good and valuable consideration, the parties to this Agreement agree as follows:
1. DEFINITIONS
For purposes of this Agreement, the following words and phrases shall have the meaning specified..
1.1 "Agreement" means this Prescription Service Agreement between KPHA and
WHP.
1.2 "Average Wholesale Price" means the wholesale cost of the dispensed medication on the date
dispensed as defined in the latest edition of any of the following:
FAR KH PA I.DOC\09/05/021
The Drug Topic Red Book with supplements, the American Druggist Blue Book with
supplements., Medispan and weekly updates, or any other reference which may be agreed to
in writing by the parties to this Agreement. This price is based on 100 tablets or capsules,
one pint of liquid, or the closest quantity to that prescribed for ointments, creams,
suppositories, or other medication not packaged in 100s or pints.
1.3 "Certificate of Coverage" means the description of Plan Benefits for a particular Plan.
1.4 "Copayment" means those charges collected directly by WHP from a Member as additional
payments for Covered Services.
L5 "Covered Services" means those properly authorized Prescription Services that are expressly
covered under the Members'Plan.
L6 "Group Service Contract" means an agreement between a Plan and an Employer, including, but
not limited to, an administrative services only type agreement, under which Subscribers and eligible
dependents, if any, are entitled to become Members of the Plan in accordance with the terms of such
agreement.
1.7 "Individual Subscriber" means an individual who has entered into an Individual Subscription
Agreement with a Plan.
1.8 "Individual Subscriber Agreement" means an agreement between a Plan and an Individual
Subscriber by which such individual and his or her eligible dependents, if any, are entitled to become
Members of the Plan in accordance with the terms of such agreement. Individual Subscription
Agreements shall include agreements between a Plan and a Subscriber entitled to benefits under Title
XVIII of the Social Security Act,as amended.
1.9 "MAC List" means WHP's.Choice list of generic drugs and their associated prices at which Plan
will pay WHP for dispensing services provided by Participating Pharmacies and the Participating Mail
Service Pharmacy hereunder. The MAC List is subject to periodic review and modification by WHP.
1.10 "Member" means an eligible Subscriber and his or her eligible dependents that have been
enrolled in a Plan under a Group Service Contract or an Individual Subscriber Agreement.
1.11 "Participating Physician" means any physician licensed to practice in the State of Florida who
satisfies the participation criteria established by KPHA and who has entered into a contractual
arrangement with, or is otherwise engaged by, KPHA to provide Covered Services to Members.
1.12 "Payor Agreement" means an agreement by and between a Plan and KPHA under which
KPHA agrees to provide or arrange for the provision of certain health care services, and/or provide or
arrange for the provision of other non-health care services, including, for example, utilization review and
quality assurance programs, for the benefit of Subscribers.
1.13 "Plan" means a health maintenance organization, preferred provider organization, insurer,
employer and/or other third party payor for health care services.
1.14 "Plan Benefits" means the medical services or supplies to which Members are entitled pursuant
to an Individual Subscription Agreement or a Group Service Contract and which are described in a
Certificate of Coverage.
1
F:\R WM\Contracts\3`6\KH PA I.DOC\09/05/021
1.15 ' Prescription Services" means dispensing of medications, general support and consultative
services regarding pharmacy benefit design and implementation, administrative and claims processing
services, standard reporting packages, marketing, quality management and utilization management
functions, as applicable to pharmacy benefits.
2. PRESCRIPTION SERVICES ENGAGEMENT
2.1 Provision of Services. KPHA hereby engages WHP, and WHP hereby agrees to be engaged, to
provide Prescription Services, pursuant to this Agreement. WHP shall provide all Covered Services that
are Prescription Services to Members of Plans with which KPHA has entered Payor Agreements. For all
Members, WHP agrees to: (i) coordinate the provision of Covered Services; and (ii) monitor all Covered
Services received by Members, all in accordance with the terms of this Agreement, each Plan's rules and
regulations, and each Plan's utilization management program. All Covered Services provided by WHP to
Members shall be within the limits of WHP's competence and shall meet the applicable community
standards of care. WHP shall maintain adequate personnel and facilities to fulfill the contractual
obligations hereunder. WHP is not licensed or otherwise authorized to practice pharmacy and nothing
herein shall require WHP to directly perform services for which a pharmacy license is required; provided,
however, that to the extent this Agreement requires the provision of services which require a pharmacy
license, WHP shall arrange for the provision of those services through a Participating Pharmacy or the
Participating Mail Service Pharmacy. •
2.2 Responsibilities of WHP.
(a) WHP shall provide Prescription Services described in this Agreement and/or otherwise mutually
agreed to by the parties in writing, including, but not necessarily limited to, general support and
consultative services regarding pharmacy benefit design and implementation, administrative and claims
processing services, standard reporting packages, marketing, quality management and utilization
management functions. Upon request, WHP will provide personnel to participate in quarterly meetings
to review drug utilization and quality assurance.
(b) WHP shall provide its standard WHP identification card and introductory materials for issuance
to Members. Upon a Plan's request and a mutual written consent of the parties, WHP shall provide
customized identification cards and/or introductory materials for a mutually agreeable fee, prior to
providing such cards and/or materials.
(c) WHP shall provide to Participating Pharmacies and Participating Mail Service Pharmacy via
the on-line system at the time of dispensing all information necessary (as specified in Section 2.4) for said
pharmacies to provide prescription services to Members upon the following terms and conditions:
(1) Upon presentation by a Member or his/her agent of the Identification or (in the case of
prescriptions by mail) receipt of appropriate prescriptions and any required copayment,
Participating Pharmacies or Participating Mail Service Pharmacy, whichever the case may be,
shall compound and dispense all qualified prescriptions and covered drugs pursuant to the
pharmacy benefit information provided by the Plan to WHP and communicated to said
pharmacies via the on-line system at the time of dispensing, subject to legal restrictions-and
professional ethics and professional judgment.
(2) Participating Pharmacies shall collect any applicable copayment fee or deductible from
each Member or dependent for each covered prescription, as indicated by the on-line system at
the time of dispensing, except when the reimbursement rate set forth in Attachment A is less than
applicable copayment. In such cases, Participating Pharmacies shall collect the lessor of the usual
FAR WM\Cont rat ts3i"1K H PA I.DOC\09/05/02I
and prevailing retail charge or the Member's copayment. In the case of mail order prescription
services, each Member shall transmit with the order to the Participating Mail Service Pharmacy
the applicable copayment fee for each prescription or refill covered by this Agreement.
(3) Participating Pharmacies and/or Participating Mail Service Pharmacy may withhold
prescription services to a Member for good cause, including, but not necessarily limited to, the
Member's failure to pay for services rendered (e.g., copayment); requests by Member for
quantities of drugs in excess of prescribed amounts or refill limitations pursuant to the pharmacy
benefit information;. or where, in the professional judgment of the dispensing pharmacist, the
prescription should not be filled.
(4) Mail Order prescriptions will be sent to Members from the Participating Mail Service
Pharmacy facility via United Parcel Service, United States Postal Service or any other method the
Participating Mail Service Pharmacy may select. Risk of loss or damage to covered drugs
provided hereunder shall be on the Participating Mail Service Pharmacy until said drugs have
been delivered to Member. The cost of shipping shall be borne by the Participating Mail Service
Pharmacy, except for the following costs: fi)— - •
� rnerrt-as a-icsult of iaL-iiicicasW•l, thc_United
StatgS Pggtal ge t 'I I ._ ._L ., -(..y
�' r tr Members shall pay Participating
. Mail Service Pharmacy additional expense due to expedited delivery requested by Member.
(5) Participating Pharmacies and Participating Mail Service Pharmacy shall be (and WHP
shall cause them to agree to be) bound by and subject to the obligations of WHP hereunder as
applicable, including without limitation those set forth in Sections 2. 1, 2.2(c), 2.3, 3, 4, 6, 8 and
11 hereof, as fully as if the Participating Pharmacies and Participating Mail Service Pharmacy
were named in addition to WHP.
(d) WHP shall be responsible for the reasonable costs associated with its development and printing
of standard marketing materials that WHP provides to Plan in connection with this Agreement provided,
however, that all costs associated with the distribution of such materials to Members shall be the sole
responsibility of Plan.
(e) WHP may add or terminate Participating Pharmacies to or from its network in its sole discretion;
subject to the requirement that Participating Pharmacies be conveniently available to Members on a
countywide basis in Monroe County, Florida.
2.3 Discrimination Prohibited. WHP agrees to provide Prescription Services to Members in
same manner, in accordance with the same standard of care, and with the same promptness with which
WHP provides Prescription Services to WHP's other patients. In addition, WHP shall not discriminate
against a Member on the basis of such Member's age, race, creed, national origin, sex or sexual
preference.
2.4 Responsibility of Plans.
(a) Each Plan shall provide WHP with Member enrollment, eligibility and benefit coverage
information, including, but not necessarily limited to, copayment, covered drugs, days' supply and
participating physicians (including any updates, deletions or additions to the foregoing information as
changes occur). This information shall be transmitted by WHP to Participating Pharmacies and the
Participating Mail Service Pharmacy at the time of dispensing through the on-line electronic transmission
link ("on line system") maintained between•WHP and said pharmacies. Each Plan shall be responsible
for the accuracy, completeness and reliability of eligibility and benefit coverage information provided to
F:\RWM\Con tracts\3"\KHPA I.DOC\09/05/021
WHP. Plans may not retroactively deny payment for valid and accurate claims properly submitted and
P Y
properly approved on-line at the time of dispensing.
(b) Each Plan will provide all Members with a standard identification card issued by WHIP
(hereinafter "Identification"), which shall contain, but not necessarily be limited to, the Members
identification number and full name of Member. Eligibility to receive the prescription benefit is
established at the time of dispensing through the on-line system. Each'Plan shall be responsible for
collecting the Identification from the Member upon termination of the Member's eligibility or upon
termination of this Agreement.
' (c) Each Plan authorizes WHP, as its prescription benefit manager, to perform formulary
management° and other services described in this Agreement, subject to the following terms and
conditions:
(1) Plan represents that its benefit plan design(s) in no way prohibits Plan from implementing
formulary management services performed by WHP or the Participating Pharmacies hereunder,
such as, but not necessarily limited to, generic or therapeutic prescription drug substitutions and
any other measures that may be appropriate to effectuate formulary management. Either KHPA
or Plan will notify WHP in advance of any benefit plan design changes that may materially affect
WHP's ability to perform formulary management and/or other services described in. this
Agreement.
' (2) To the extent WHP has provided Plan with a formulary in connection with the services
provided hereunder, Plan may not sell, distribute, or otherwise provide such formulary to any third
party without WHP's prior written consent. On or prior to termination of formulary management
' services by WHP, Plan will cease all use of WHP's formulary and return to WHP all copies in its
possession, and Plan will instruct all Members and other parties to whom Plan has provided
WHP's formulary to discontinue use of such formulary and to destroy all copies in their
I
possession on or before the effective date of termination. Upon WHP's request, Plan will provide
proof to WHP that it has complied with all of the terms and conditions set forth in this paragraph.
(3) For those clinical programs that may require certain medical claims information (such as,
but not necessarily limited to, retrospective drug utilization review), and subject to Section 6.1.,
below, Plan will provide to WHP and/or its designee all complete and accurate Member related
medical claims and record information that WHP reasonably requests, in a format and time frame
mutually acceptable to the parties.
(4) Both KHPA and each Plan acknowledge that compliance with the terms and conditions of
this Section 2.4. is a condition precedent to participation in any manufacturer incentive
' arrangements described in Attachment A, attached hereto and incorporated herein.
(d) Subject to Section 8.2., below, Plan will accurately describe and represent the role of WHP and
the Participating Pharmacies and the Participating Mail Service Pharmacy in providing services hereunder
in all communications, including marketing and advertising materials, to Members and potential Members.
°Formulary management at a minimum shall consist of WHP: (i) providing on-line messages at the time of
' dispensing to Participating Pharmacies and Participating Mail Service Pharmacies concerning preferred medications
and(ii)contacting Participating Physicians regarding preferred and non-preferred medications. Any additional
formulary management services will be performed in accordance with the mutual agreement of the parties hereto.
FAR WM\Contracts3' KHPAI.DOC109/0S/021
1
1
3. COMPENSATION
3.1 WHP's Compensation. WHP's compensation for Prescription Services rendered to Members
shall be as set forth in Attachment A to this Agreement.
' 3.2 No Recourse Against Members; Collection of Copayments and Deductibles. WHP shall not
bill, charge, collect a deposit from, seek compensation, remuneration or reimbursement from, or have any
recourse against Members, Plans or any persons or entities other than the Plans for Covered Services
' unless otherwise specified in any amendments hereto. This provision shall not prohibit WHP's,
Participating Pharmacies° or Participating Mail Service Pharmacies' collection of copayments and
deductibles permitted under the Plan or the collection of payment for any Prescription Services delivered
to a Member if such service is not a Covered Service, unless such services are not Covered Services
' because of WHP's failure to comply with this Agreement or KPHA's or each Plan's rules and regulations
(subject to notice as provided in Section 4.1 hereof). WHP agrees to use reasonable efforts to collect
from Members applicable copayments, and upon request from a Plan, WHP will prepare reports
' regarding copayments billed and collected, on forms developed by WHP and reasonable acceptable to
KPHA and the Plans. WHP further agrees that: (i) the provisions of this Section 3.2 shall survive the
termination of this Agreement regardless of the cause giving rise to such termination and shall be .
' construed for the benefit of Members; and (ii) the provisions of this Section 3.2 supersede any oral or
written agreement to the contrary now existing or hereafter entered into between WHP and any Member
or persons acting on any Members'behalf.
3.3 Refunds. WHP shall refund to a Plan any and all sums collected by WHP from Members to
which WHP was not entitled under this Agreement, provided that Plans shall provide prior(or if a refund
is recovered by setoff then contemporaneous) written documentation of the basis for the claimed refund
' due. Such refunds shall take the form of cash payments or setoffs against amounts owed to WHP by a
Plan. When appropriate, the Plan shall return to the Member such sums improperly charged by WHP.
' 3.4 Billing Procedure. WHP shall comply with all billing and reporting procedures established by
KPHA and the Plans as set forth in the Agreement or the attachments hereto and in each Plan's rules and
regulations as promulgated from time to time, subject to notice in accordance with Section 4 hereof.
3.5 Payment. Each Plan shall be solely responsible for payment of Prescription Services provided
by Participating Pharmacies and Participating Mail Service Pharmacy to Members, in addition to the
administrative fees and other costs and charges set forth in Attachment A to this Agreement.
(a) WHP shall invoice each Plan on the fourth (4th) business dayfollowing Ilo tng the close of each
twice-
monthly billing cycle. Said invoices shall include, but not necessarily be limited to, prescription claims,
administrative fees and/or any other costs and charges specified in this Agreement.
(b) Each Plan shall pay all complete, undisputed invoices sent to it within thirty (30) days of WHP's
' issuance thereof. Payment dates as used in this Agreement shall mean the date payment is to be delivered
to the location designated in this Agreement as follows: •
WHP Health Initiatives, Inc.
P.O. Box 93741
Chicago, IL 60673-3741
' All sums owed by a Plan shall bear interest of one and one-half percent (1-1/2%) per month from the date
payment is due until paid; however, in no event shall such interest rate be greater than the rate permitted
by law.
1
F:\R W M\Coniractsll"\K HPA 1.DOC\09/05/021 _
1
(c) Subject to the notice and cure provisions of Section 9.3 hereof, in the event that a Plan defaults on
any payment obligation specified in this Agreement WHP shall have the right, at its sole option, to
suspend and/or terminate all prescription benefits and services provided to such Plan and its Members.
WHP may notify Participating Pharmacies and Participating Mail Service Pharmacy on-line that
ei iim h b terminated, y
bpre, due
scription to Plaservn's failurecestosuch to meetPlan itsand paymenttsMe bers obligationsave aseen setsus forthpended inor this Agreement.as the Uponcase such
notification, Participating Pharmacies and Participating Mail Service Pharmacy may cease providing
prescription services to such Plan and its Members and shall have the right, along with WHP, to pursue
' any legal remedy directly against such Plan for any breach of said Plan's payment obligations.
4. COMPLIANCE WITH RULES AND REGULATIONS
' 4.1 KPHA and Plan Rules. WHP agrees to be bound by and comply with KPHA and Plan policies,
procedures and rules as promulgated from time to time, which, as now in effect and as hereafter adopted
' and amended, are incorporated in this Agreement for all purposes; provided that KPHA and Plans must
give WHP sixty (60) days prior written notice of such policies, procedures and rules (unless such notice
is waived in writing by WHP). Such policies, procedures and rules shall not be interpreted to require
WHP to provide additional services to KPHA or Plans which are not expressly set forth in or otherwise
' required to be provided by WHP under this Agreement.
5. NOTIFICATION OF WHP STATUS
WHP shall notify KPHA in writing as soon as reasonably possible upon the occurrence of an
y of the
following events:
(a) The pharmacy license of any Participating Pharmacy or the Participating Mail Service
P g Pharmacy
in the State of Florida is suspended, revoked, terminated, or subject to terms of probation or other
' restrictions;
(b) there is a.change in WHP's business address;
(c) any act of nature or any event beyond WHP's reasonable control likely to interrupt all or a
portion of the WHP's practice for a period of sixty (60) consecutive calendar days, or which may have a
material adverse effect on the WHP's ability to perform his obligations for this period;
' (d) any change in the nature or extent of services rendered by WHP which could be relevant
performance of obligations by WHP hereunder; to the
' (e) any material change or addition to the information and disclosures submitted by
WHP as part of the application for a contract with KPHA to provide Covered Services to Members;
(f) any other act, event, occurrence or the like that might materially affect WHP's ability to carry out
its duties and obligations to Members.
6. MEDICAL RECORDS AND FACILITIES
6.1 Confidentiality of Records.
' (a) The parties will maintain the confidentiality of all medical, prescription, and other patient-
identifiable health information specifically relating to Members ("Patient Information") in accordance
1
FAR WM\Contracts\l"'\KHPA I.DOC109/05/021
1
1
' with applicable laws and regulations, including the Health Insurance Portability and Accountability Act of
1996 ("HIPAA"), as may be amended from time to time. The parties acknowledge that WHP will have
' access to Patient Information in order to provide services and/or perform the obligations undertaken
hereunder and that Patient Information may be obtained from and/or distributed to KPHA, Plan,
Participating Pharmacies, and/or any other third party in connection with services provided hereunder,
including any and all disclosures made by WHP, such as, but not limited to, those made in connection
' with provider audits conducted by WHP or its agents or service providers, and disclosures made at
KPHA's or Plan's request, such as, but not limited to, those made to third party administrators or to a
new vendor upon transition of services following termination of this Agreement.
(b) Plan and KPHA acknowledge that certain management reports, reporting packages, utilization
data, prescription claims information and/or clinical or formulary-related programs may contain Patient
Information. Plan further acknowledges that (i) its request to WHP to disclose Patient Information to any
third party (i.e. broker, healthcare consultant and/or third party administrator) constitutes Plan's direction
and authorization to disclose such information to the third party; and (ii) WHP will disclose such
information pursuant to Plan's direction until such time as WHP receives written notice from Plan to
cease further disclosures. KPHA and Plan acknowledge the requirements and obligations under HIPAA
regarding the disclosure of Patient Information to third parties on their behalf. Accordingly, if and when
required, KPHA and/or Plan agree to enter into "Business Associate" contracts(as such term is defined in
' Title 45, Section 160.103, of the Code of Federal Regulations) with such parties as well as any other
agreements required by state, federal law and regulations. In the event that WHP is a party to a broker or
consultant arrangement in connection with the services provided hereunder, WHP is solely responsible
' for any and all fees that may be due such broker or consultant. Further, in conjunction with any such
payments, KPHA and Plan acknowledge that WHP may disclose non-patient identifiable health
information related to such Plan's claim volume to such brokers or consultants.
(c) This Section 6.1. will survive the termination of this Agreement.
6.2 Sharing of Records. WHP shall cooperate with and support KPHA's utilization review and
management, and quality control programs, subject to applicable confidentiality requirements, subject to
laws on patient records confidentiality prohibiting such participation.
6.3 Regulatory Compliance. WHP shall maintain and provide to Plans, the Florida Department of
Insurance or the Florida Department of Health and Rehabilitative Services all necessary records and
information which may be required for compliance by Plans with applicable state law, including, without
' limitation, the Florida HMO Act, Chapter 641, Florida Statutes, and the regulations promulgated
thereunder, and to Plans and the Department of Health and Human Services as may be required for
compliance by Plans with applicable federal law including, with limitation, 42 U. S.C. 3 00e, et seq.,
' Section 1876 of the Social Security Act, as amended, and 42 CFR Part 417.
Specifically, since the value or cost of services provided under this Agreement may be $10,000 or more.
within a twelve-month period, then, to the extent that the cost of such services is reimbursable by the
Medicare program, WHP agrees to comply with the Access to Books, Documents and Records of
Subcontractors provision of Section 952 of the Omnibus Budget Reconciliation Act of 1980 (PL 96-499)
and 42 CFR Part 420, Subpart D, Section 420.300 et seq. In accordance with these provisions, WHP
' will, upon proper written notice, allow the Comptroller General of the United States, the Secretary of
Health and Human Services, and their duly authorized representatives access to this Agreement and to the
WHP's books, documents and records necessary to certify the nature and extent of costs of Medicare
' reimbursable services provided under this Agreement. Such access will be allowed, upon request, until
the expiration of four (4) years after the Medicare reimbursable services are furnished pursuant to this
Agreement. If WHP carries out any of the duties of this Agreement through a subcontract with a related
1
F:\R WM\Contracts\Y\KHPA I.DOC\09/05/021
party with a value or cost of $10,000 or more over a twelve (12) month period, such subcontract shall
contain a clause which requires the subcontractor to comply with the above statutes and regulations.
6.4 Inspection. of Facilities. KPHA and Plans shall, upon prior written notice, have reasonable
access to Participating Pharmacy and Participating Mail Service Pharmacy facilities at reasonable times
convenient to KPHA, Plans, and said pharmacies within two (2) weeks of such request,unless a later date
is mutually agreed on, to allow the designated representatives to inspect said pharmacies' facilities, to
confirm that these facilities are in keeping with generally accepted pharmacy standards in the relevant
community and applicable state law, or standards that may reasonably be established by KP)FIA, provided
that standards established by KPHA shall be reasonably acceptable to WHP, Participating Pharmacies
and Participating Mail Service Pharmacy and consistent with applicable state law.
' 6.5 Inspection of Records. KPHA and Plans shall have the right, upon request and during normal
business hours, to inspect and to copy at their expense books, records (including any accounting,
administrative and medical records) maintained by WHP pertaining to claims for Prescription Services
under this Agreement. WHP shall make its books and records relating to Members or relating in any way
to KPHA and Plans available to representatives of federal, state or local regulatory authorities pursuant to
any examination of Plans by such authorities. Plans warrant that each has the authority from Members
(and their eligible dependents) for Plans and KPHA to obtain and possess prescription information, which
may be deemed confidential.
7. INSURANCE AND NOTICE OF CLAIMS
' 7.1 Notice of Claims. WHP agrees to notify KPHA as soon as reasonablypossible of any claim or
cause of action by or relating to a Member filed against WHP within five (5) working days of WHP's
' receipt of notice that such a claim or cause of action has been filed. WHP shall provide KPHA with any
information regarding such claim or cause of action reasonably requested by KPHA, subject to applicable
laws regarding patient confidentiality which prohibit the release of such information.
7.2 Insurance. WHP may satisfy, in whole or in part, the insurance requirements detailed in
Attachment C, by a plan of self-insurance. A certificate of insurance coverage will be provided to KPHA
upon written request.
8.
ADMINISTRATION
8.1 Grievance and.Disputes. WHP agrees to cooperate with KPHA in resolving any Member
grievances related to the provision of Covered Services. KPHA shall notify WHP concerning all
Member complaints involving WHP, and WHP shall notify KPHA and the applicable Plan of any
' complaints, and in consultation with KPHA and the applicable Plan shall use WHP's best efforts to
resolve any complaints in a fair and equitable manner. Subject to the notice provisions of Section 4
hereof, WHP agrees to participate in and cooperate with KPHA's and Plan's Member grievance
procedures and comply with all final determinations rendered in accordance with those procedures.
8.2 Advertising. For those Plans with which KPHA has Payor Agreements, KPHA may include
' WHP's name, address, telephone number and type of service in a roster of Participating Providers,-it
being understood by the parties that this roster may be inspected by and is intended for the use of current
and prospective Members, Subscribers, Participating Providers, and other providers. WHP shall not
engage in any direct marketing activities with respect to a Plan with which KPHA has a Payor Agreement
' and shall not use the trademarks and trade names employed by KPHA or Plans with which KPHA has'
Payor Agreements without the prior written approval of KPHA or such Plans, respectively; provided,
however, that WHP may reference KPHA's or Plan's name or service mark to inform Members and the
1
FAR W M\Con trac tsl3"'\KH PA I.DOC\09/05/02I
' general public (i) of WHP's role in providing Prescription Services and (ii) that Participating Pharmacies
and Participating Mail Service Pharmacy are participating providers to KPHA, Plan and Members.
8.3 Signs and Displays. Participating Pharmacies may (but shall not be required to) display in a
visible and prominent place any reasonable card,plaque or similar identifying logo provided by KPHA or
Plans to identify such pharmacies as Participating Pharmacies hereunder to Subscribers.
8.4 Coordination of Benefits. WHP shall cooperate in the effective implementation of
P any
provisions of the Plan relating to coordination of benefits and other third party claims. WHP shall bill,
when requested by KPHA, any third party payor for services provided to Members. WHP shall, when
permitted by law,reimburse KPHA in the event that payments are received from such payors for Covered
Services provided to Members, or assign to KPHA all payments owed by such payors, and execute any
further documents that reasonably may be required or appropriate to permit KPHA to bill and process
forms for any third party on WHP's behalf or to bill such payors directly, as determined by KPHA.
KPHA and Plans shall notify WHP of their respective policies and procedures regarding coordination of
benefits, which shall be subject to the provisions of Section 4 hereof.
9. TERM AND TERMINATION
9.1 Term. The initial term of this Agreement shall commence on October 1, 2002, and shall
continue in effect for one (1) year from the date hereof, unless and until terminated pursuant to this
Section 9. Upon expiration of the initial term, this Agreement shall automatically renew for two
' additional, successive one (1) year terms, unless otherwise terminated by either party for any reason by
written notice to the other party delivered at least ninety (90) days prior to the end of the then current
term.
' 9.2 Immediate Termination. KPHA, in its absolute discretion, may terminate this Agreement
immediately in the event that the pharmacy license of any Participating Pharmacy or the Participating
Mail Service Pharmacy in the State of Florida is revoked or if WHP is convicted of a felony or any crime
' related to the practice of medicine or pharmacy, but with respect to revocation of a pharmacy license,
only in the event that the revocation of such license results in inadequate geographic network coverage or
an inability to conveniently serve the needs of Members.
' 9.3 Termination for Cause. KPHA or WHP may terminate this Agreement for cause upon thirty
(30) days written notice (with the exception of non payment), with an opportunity to cure, which notice
' shall set forth the grounds for termination. "Cause" shall mean for purposes of this Agreement: (i) a
material breach of any provision of this Agreement; and (ii)commission of an act of fraud or theft against
the other party. Notwithstanding the foregoing, in the event of nonpayment by a Plan in accordance with
' the terms hereof, which is not cured within ten (10) days after notice by WHP to KPHA and such Plan,
WHP may terminate this Agreement as to such Plan only, upon notice to KPHA and such Plan.
9.4 Termination Without Cause. KPHA or WHP may terminate this Agreement or any
' Amendment hereto for any reason upon sixty (60) days' prior written notice to the other party.
Notwithstanding the foregoing or any termination rights set forth in this Agreement, WHP may
immediately terminate or refrain from implementing any formulary management or other clinical program
' services in any geographic area (in their entirety or for specific drugs only) if, in WHP's sole
determination, the implementation or continued provision of such services is or may be in violation of
applicable laws, rules, or regulations governing the practice of pharmacy or prescription benefits
' management, or may otherwise present an issue related to the practice of pharmacy or prescriptions
benefits management.
FAR WM\Contractsk.V1KHPAI.D()C\09/05/01_I
9.5 Endangerment of Members. KPHA may terminate this Agreement effective upon written
notice to WHP upon a determination in good faith by KPHA that the continuation of the Agreement may
result, or is resulting, in imminent danger to the health safety and welfare of any Member.
9.6 Obligations Upon Termination. In the event of termination of this Agreement or termination of
WHP by KPHA, the rights and obligations of each party hereunder shall cease unless otherwise provided
by this Agreement. In the event of termination of this Agreement for any reason, WHP will use WHP's
best efforts to cooperate with transition of Members to ensure continuity of care.
9.7 Department of Insurance Order. This Agreement shall be cancelable upon the issuance of an
order by the Department of Insurance pursuant to Section 641.234, Florida Statutes, or any successor
statute.
10. RELATIONSHIP OF PARTIES
10.1 Independent Contractors. In the performance of their responsibilities, duties and obligations
under this Agreement, KPHA, WHP, and Plans are at all times performing as independent contractors.
No act, work commission, or omission by either party, its agents, servants, contractors, or employees,
pursuant to the terms and conditions of this Agreement shall be construed to make'or render KPHA,
WHP,or Plans an agent, servant, employee of, or joint venture with, the other.
10.2 Indemnity. WHP, KPHA and Plans shall indemnify, defend and hold harmless the others,
including their respective shareholders, directors, officers, employees, agents, representatives, parent and
affiliated companies from and against any liability arising from the sole negligence of WHP, KPHA or
Plans, as the case may be, in carrying out its respective duties and obligations under this Agreement.
KPHA and Plans acknowledge and agree that neither WHP nor its shareholders, directors, officers,
employees, agents, representatives, parent and affiliated companies shall have any liability whatsoever to
KPHA, Plans or Members for the acts or omissions of any Participating Pharmacy and/or Participating
Mail.Service Pharmacy in connection with such pharmacies'provision of services to KPHA, Plans and
Members, including, but not necessarily limited to, any of the following (i) any actual or alleged
malpractice, negligence or misconduct of said pharmacies; or (ii) the sale, compounding, dispensing,
failure to sell, manufacture or use of any drug dispensed to a Member hereunder. WHP and Plans
acknowledge and agree that neither KPHA nor its shareholders, directors, officers, employees, agents,
representatives, parent and affiliated companies shall have any liability whatsoever to WHP or Plans for
the acts or omissions of any Plan or provider in KPHA's provider network, including, but not necessarily
limited to, any of the following: (i) nonpayment by a Plan of any amounts becoming due hereunder; or(ii)
any actual or alleged malpractice, negligence or misconduct of said Plans and/or providers. This Section
10.2 shall survive the termination of this Agreement for any reason.
11. TRADE SECRETS, SOLICITATION OF SUBSCRIBERS
11.1 Nondisclosure of Trade Secrets and Proprietary Information. WHP agrees that
information regarding Members is a highly confidential trade secret of KPHA and Plans entitled to
protection, and WHP agrees not to reveal any information regarding Members to any other person or
entity during the term of and after the term or expiration of this Agreement without the written consent-of
KPHA or Plans, unless required by law, and except as necessary in WHP's provision of services and
WHP's performance of the terms of this Agreement. WHP and KHPA further agrees that the means or
methods by which KPHA, WHP and Plans operate their respective business, including but not limited to
contract terms, bidding information, methods of operation, levels of costs, utilization and profits, and the
procedures, forms and techniques for servicing accounts, are highly confidential trade secrets entitled to
protection, and each party agrees not to reveal such means and methods of information to any other
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F:\R W M\Con trac tSu'\KH PA I.DOC109/05/02I
I �
person or entity during the term of and after the termination or expiration of this Agreement without the
written consent of the respective other party, unless required by law and except as such information is in
the public domain other than as a result of a breach hereof. Without limiting the foregoing, Member
information may only be disclosed in compliance with applicable laws and regulations regarding the
confidentiality of patient information.
In the event of an actual or threatened breach by a party of this Agreement, KPHA, WHP or Plans, as the
case may be, shall be entitled to an injunction restraining the breaching party from the prohibited conduct.
If the court should hold that the duration and/or scope of the covenants contained in this Section are
unreasonable, then, to the extent permitted by law, the court may prescribe duration and/or scope that is
reasonable; and KPHA, Plans and WHP agree to accept such determination, subject to their rights of
appeal. Nothing herein shall be construed as prohibiting a party from pursuing any other remedies
available for such breach or threatened breach, including the recovery of damages from a breaching party.
In any action or proceeding to enforce the provisions of this Section, the prevailing party shall be
reimbursed by the other party for all costs and attorneys'fees incurred in such action or proceeding.
11.2 Solicitation of Subscribers. During the term of this Agreement WHP shall not take any action or
make any communication to Subscribers which undermines or could undermine the confidence of
Subscribers or the public in the Plans, or KPHA. During the effective term of this Agreement and any of
its amendments, and for a period of one (1) year following the termination or non-renewal of this
Agreement or any of its amendments for any reason, WHP shall not directly cause any Subscriber to
disenroll from a Plan. By way of example but not limitation, WHP shall not solicit Subscribers through
meetings, visits, telephone calls, or individual letters.
12. MISCELLANEOUS •
12.1 Notices. Any notice required or permitted to be given hereunder to either party shall be deemed
given if sent by registered or certified mail, return receipt requested, or by overnight mail delivery for
which evidence of delivery is obtained by the sender, to such party at:
K.PHA:Keys Physician-Hospital Alliance
5900 College Road
•
Key West, Florida 33040
Attention: President
WHP: WHP Health Initiatives, Inc. with a copy to: WHP Health Initiatives, Inc.
Attn: Client Services Attn: Mark Mincy
520 Lake Cook Road, Suite 200 7316 Greenbriar Parkway
Deerfield, Illinois 60015 Orlando, Florida 32819
12.2 Limitation of Assignment. This Agreement shall not be assigned by either party without the
prior express written consent of the other party, which consent shall not be unreasonably withheld.
12.3 Binding on Successors in Interest. The provisions of, and obligations arising under, this
Agreement shall extend to, be binding upon and inure to the benefit of the successors and assigns of each
party.
12.4 Severability; Changes in Law. If any part of this Agreement is determined to be invalid, illegal,
inoperative, or contrary to law or professional ethics, the part shall be reformed, if possible, to conform to
law and ethics; the remaining parts of this Agreement shall be fully effective and operative to the extent
reasonably possible. If any restriction contained in this Agreement is held by any court to be
F:\RWM\Contrac KHPAI.DOC\09/OS/021
i
unenforceable or unreasonable, a lesser restriction shall be enforced in its place and the remaining
restrictions shall be enforced independently of each other.
12.5 Conformance With Law. Each party agrees to carry out all activities undertaken by it pursuant
to this Agreement in conformance with all applicable federal, state, and local laws, rules, and regulations.
12.6 Liaison. Each party agrees to use its best efforts in the implementation of this Agreement, to
establish and use channels of communication with the other party and with representatives of Members
and Plans, and to maintain effective liaison with each other, Members and Plans all to the end that the
provisions of this Agreement may be carried out in the most efficient manner possible.
12.7 Time of the Essence. Time shall be of the essence with respect to each and every term,
covenant,and condition of this Agreement.
12.8 Entire Agreement/Amendment. This Agreement, including the Attachments, Exhibits and
' Schedules now and hereafter incorporated herein, supersedes all previous contracts related to the subject
matter hereof and constitutes the entire agreement between the parties. Oral statements or prior written
materials not specifically incorporated in this Agreement shall not be of any force and effect. In entering
into and executing this Agreement, the parties rely solely upon the representations and agreements
contained in the Agreement and no others. No changes in or additions to this Agreement shall be
recognized unless and until made in writing and signed by an authorized officer or agent of WHP and
1 KPHA.
12.9 Attachments. The following attachments are incorporated into and made a part of this
Agreement by reference:
Attachment A: Fee Schedule of Prescription Services
Attachment B: Plan Joinder Agreement
Attachment C: Insurance Requirements
12.10 -:, Governing Law. This Agreement has been executed and delivered and shall be construed and
' enforced in accordance with the laws of the State of Florida. Any action by any party whether at law or in
equity,shall be commenced and maintained and venue shall exclusively be in Monroe County,Florida.
12.11 Third Party Beneficiaries. Plans, Participating Pharmacies and Participating Mail Service
' Pharmacy shall be third party beneficiaries of this Agreement. However, with the exception of Plans,
Participating Pharmacies and Participating Mail Service Pharmacy, this Agreement shall not be construed
to create any third party beneficiaries, including without limitation, Members.
12.12 Waiver of Breach. No provision of this Agreement shall be deemed waived unless evidenced
by a written document signed by an authorized officer or agent of WHP and KPHA. The waiver by
either party of a breach or violation of any provision of this Agreement shall not operate as, or be
construed to be, a waiver of any subsequent breach of the same or other provision of this Agreement.
12.13 Section and Other Headings. The section and other headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or interpretation of this
Agreement.
12.14 Cumulative Remedies. Remedies provided for in this Agreement shall be in addition to and not
in lieu of any other remedies available to either party and shall not be deemed waivers or substitutions for
any action or remedy the parties may have under law or equity.
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12.1 Gender and Number. When the context of this Agreement requires, the gender of all words
shall include the masculine, feminine, and neuter, and the number of all words shall include the singular
and plural.
12.16 Execution. This Agreement and any amendments may be executed in multiple originals, each
counterpart shall be deemed an original, but all counterparts together shall constitute one and the same
instrument.
12.17 Force Majeure. Neither party shall be liable nor deemed to be in default for any delay or failure
in performance under this Agreement or other interruption of service or employment deemed resulting,
directly or indirectly, from acts of God, civil or military authority, acts of public enemy, war, accidents,
fires, explosions, earthquakes, floods, failure of transportation, strikes or other work interruptions by
either party's employees, or any similar or dissimilar cause beyond the reasonable control of either party;
provided, however, in the event the provision of Covered Services is substantially interrupted, KPHA
shall have the right to terminate this Agreement upon ten (10) days prior'written notice to WHP.
12.18 Authority. Each signatory to this Agreement represents and warrants that he possesses all
necessary capacity and authority to act for, sign, and bind the respective entity on whose behalf he is
signing.
12.19 Enforcement. In the event either party or a Plan files suit in any court, or commences arbitration
as herein provided, to enforce the terms of this Agreement, the prevailing party shall be entitled to recover
all reasonable costs incurred in connection therewith, including reasonable attorney's fees. In addition,
the parties and Plans agree that any dispute as to amounts due hereunder may, with the consent of the
parties and involved Plan be submitted to binding arbitration in accordance with the rules and procedures
of the National Health Lawyers Association, Alternative Dispute Resolution Service, Rules of Procedure
for Arbitration, and judgment on the decision of the arbitrator may be entered in any court of competent
jurisdiction.
12.20 Public Entity Crime Statement. A person or affiliate who has been placed on the convicted
vendor list following a conviction for public entity crime may not submit a bid on a contract to provide
any goods or services to a public entity, may not submit a bid on a contract with a public entity for the
construction or repair of a public building or public work, may not submit bids on leases of real property
to public entity, may not be awarded or perform work as a contractor, supplier, subcontractor, or
consultant under a contract with any public entity and may not transact business with any public entity in
excess of the threshold amount provided in Section 287.017 for CATEGORY TWO for a period of 36
months from the date of being placed on the convicted vendor list.
FAR
IN WITNESS WHEREOF the parties have caused this Agreeinent to be executed by their duly
authorized officers or agents.
WHP HEALTH INITIATIVES, INC. KEYS PHYSICIAN-HOSPITAL
ORGANIZATION,INC.
D/B/A KEYS PHYSICIAN-HOSPITAL
ALLIANCE
b/44011r-----
By: By:
(Sign ure) (Signature)/
Name Printed: C-n�.9. y . (,vc.,s.so" Name Printed: I'�P�-n <21.-6&-rl,lA O.
Title: Pre 5:Jzr14' Title: Pr c.s i dent
Date: 15 I C0' Date: g f -/D
•
(ii: t_.ter\
7 .,,i 1.,_,„ ......4;\\
MONROE COUNTY BOARD OF COUNTY t -"
�� ram.=1:�w�..�
COMMISSIONERS, MONROE COUNTY, ., a'� f~ '" '`
I FLORIDA a L_
�• •r,>-r9.. bANM'L OL}iA EVrtx.2)
6.
BYs DEPUTY CLERK i q / _ 0
MAYOR/CHAT
111
APPROVED AS TO FORM
A EG
I B
BERT ` b�
DATE ` Cs
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•
ATTACHMENT A
Pricing Arrangements
I, REIMBURSEMENT RATES FOR SERVICES
A. REIMBURSEMENT FOR CLAIMS BY PARTICIPATING PHARMACIES: For each retail
pharmacy prescription or refill covered by this Agreement, Plan will pay WHP at the rates set forth in
this Section I.A:
' 1. Brand Name Drugs: the lesser of(i) 85% of the Average Wholesale Price, as defined
herein, of the dispensed medication plus a dispensing fee of$2.25; or(ii) the dispensing Participating
Pharmacy's usual and prevailing retail charge. Reimbursement will be reduced by the applicable
copayment fee received.
2. Generic Drugs: for generic drugs covered by the Maximum Allowable Cost ("MAC") List,
as defined herein, reimbursement will be the lesser of(i) the MAC plus a dispensing fee of$2.50; or(ii)
the dispensing Participating Pharmacy's usual and prevailing retail charge; for those generic drugs not
covered by or included on the MAC List, reimbursement will be the lesser of (i) 85% of the Average
Wholesale Price of .the dispensed medication plus a dispensing fee of $2.50; or (ii) the dispensing
Participating Pharmacy's usual and prevailing retail charge.
' B. REIMBURSEMENT FOR CLAIMS BY PARTICIPATING MAIL SERVICE PHARMACY: For
each mail service pharmacy prescription or refill covered by this Agreement, Plan will pay WHP at the
rates set forth in this Section I.B:
' 1. Brand Name Drugs: 82% of the Average Wholesale Price of the dispensed medication.
Reimbursement will be reduced by the applicable copayment fee received.
2. Generic Drugs: 55% of the Average Wholesale Price of the dispensed medication.
Reimbursement will be reduced by the applicable copayment fee received.
H. Incentives and Rebate Guarantees
A. Both Plan and KHPA hereby appoint WHP as their exclusive agent, and certifies that WHP is
authorized to act on their behalf, for the purpose of negotiating and arranging, either directly or
indirectly, incentive opportunities in connection with prescription drugs dispensed to Members under
this Agreement. Accordingly, both Plan and KHPA acknowledge that WHP may receive rebates or
other incentive payments from certain drug manufacturers or others, either directly or indirectly, in
connection with prescription drugs dispensed hereunder.
B. In the event that the development and implementation of any such incentive program requires
either Plan or KHPA to execute any documents in addition to this Agreement, Plan and KHPA agree
to cooperate fully with WHP in the execution thereof. Both Plan and KHPA warrant and represent
that neither party has a direct or indirect arrangement, either oral or written, with any drag
manufacturers or others for incentives based upon prescription drugs dispensed to Members. Neither
Plan nor KHPA may, during the term of this Agreement, either directly or indirectly, negotiate,
arrange, or contract with any drug manufacturer or other entity for incentives on prescription drugs.
C. In connection with and subject to the terms and conditions of this Attachment A and Section
2.4(c). of the main body of the Agreement, WHP will make payments to the respective Plan on a per
111
FAR '\KHPAI.DOC\09/OS/021
paid prescription claim basis ("WHP Payment") based on the services provided under this
Agreement, regardless of the amount of Manufacturer Incentives received by WHP. WHP will make
such WHP Payments in the amount of $0.80, with the initial WHP Payment to be made
approximately nine (9) months after the end of the first quarter (or portion thereof) of services
provided hereunder, with subsequent WHP Payments to be made quarterly thereafter. Both Plan and
KHPA acknowledge that the amount of WHP Payments described herein is based upon the value of
incentives WHP expects to receive as a result of Plan's adoption and use of WHP's formulary. In
accordance therewith, either Plan or KHPA will notify WHP in writing of any changes to the
formulary and WHP will implement any such changes approximately 30 days following WHP's
receipt of such written notification; provided, however, that to the extent WHP determines, in
WHP's sole discretion, that any such changes may adversely impact the value of incentives WHP is
likely to receive hereunder, WHP will initiate renegotiations with KHPA of the WHP Payment
amount. Notwithstanding anything to thecontrary elsewhere in this Agreement, if no agreement can
be reached within thirty (30) days, the WHP Payments will cease accruing effective thirty (30) days
following WHP's receipt of written notification of the formulary change.
D. Notwithstanding the foregoing, and in addition to any other remedies to which WHP may be
entitled, WHP will cease forwarding to Plan any and all amounts described in Paragraph C above
immediately upon the occurrence of any of the following:
(1) breach by either Plan or KHPA of any their obligations set forth in this Agreement;
(2) receipt by WHP of notice from KHPA that Plan intends to terminate this Agreement in
its entirety or any portion thereof which in WHP's sole discretion may adversely impact the
value of incentives WHP receives hereunder; or
(3) WHP's exercise of its right to terminate any clinical program services under Section 9.4.
of this Agreement if, in WHP's sole discretion, such termination, may adversely impact the value
of incentives WHP receives hereunder.
E. KPHA represents that to the extent any Plan's funding for the provision of prescription services to
their Members is received from Medicaid, Medicare, or any other state or federal health care program,
such funding is in accordance with the risk or capitation contract provisions of the Social Security Act
or comparable state health care programs. In the event circumstances arise in which either Members'
drug utilization is required to be reported for Manufacturer Incentives purposes by an entity other than
WHP or Members' prescription claims are to be filed for reimbursement with Medicaid, Medicare, or
any other state or federal health care program, said Plan or KPHA will immediately notify WHP,
clearly identifying all involved Members. KPHA and Plan agree that to the extent WHI has received
any Manufacturer Incentives improperly as a result of KPHA's or said Plan's failure to provide such
notice, KPHA and Plan will pay WHP, upon request, the full amount of any Manufacturer Incentives
to be refunded and any penalties resulting therefrom.
III. Administrative Fees and Associated Costs or Charges
For services provided hereunder, Plan will pay WHP an administrative fee of $0.52 per paid
claim. Upon the written request of Plan, WHP will provide the following additional services.at
the rates indicated.
Prior Authorization(per authorization, if applicable) $ 1.00
Direct Member Reimbursement(DMR)(per check) $ 1.75
Paper Eligibility Submission (per record, if applicable) $ 0.75
Deductible/Plan Max Tracking(per claim, if applicable) $
ID Cards-Replacement Cards(per replacement PPD) N/C
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F:\RWM\ContractsU \KHPA I.DOC\09/05/021 _
' On-line Client Access (per user per month, first 2 ID's at no charge) $ 50.00
Individual Mailings(postage per PPD) $ 0.55
Any other additional services may incur additional charges. WHP is not required to supply any
additional reports or information unless and until it has been agreed to in writing by both parties.
' Taxes. In addition to the pricing terms stated in this Attachment A or elsewhere in this Agreement, each
KPHA Plan shall be solely responsible for payment of any applicable wholesale distributor tax or any
other excise or value added tax based upon purchases at wholesale associated with the provision of
prescription services by Participating Pharmacies and Participating Mail Service Pharmacy to Members in
connection with this Agreement. Each KPHA Plan shall also reimburse WHP any applicable federal,
state, or local sales tax liability for prescriptions dispensed or goods and services provided by any
' Participating Pharmacy or Participating Mail Service Pharmacy to Plan and its Members. Sales tax is
defined as an excise tax based on consumer retail sales or gross revenues whether designated a sales tax,
gross receipts tax, retail occupation tax, vale added tax, health care provider tax or tax otherwise titled or
styled. It includes any tax in existence or hereafter created whether or not the bearer of the tax is the
retailer or consumer.
•
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F;\R WM\Contractskr\KH PA I.DOC\09/05/021
•
•
ATTACHMENT B
PHARMACY SERVICES JOINDER AGREEMENT
This Pharmacy Services Joinder Agreement ("Joinder Agreement") is entered into this I 5+ day of
9c. obu- , 2002, by and between The Board of County Commissioners of Monroe County,
Florida, (hereinafter referred to as the "Plan")and WHP Health Initiatives,Inc., an Illinois coreoration,
doing business as Walgreens Health Initiatives (hereinafter referred to as "WHP").
JOINDER OF PLAN. Plan hereby adopts and joins the Prescription Service Agreement between Keys
Physician-Hospital Alliance (KPHA) and WHP Health Initiatives, Inc.,.dated De.&obs-r 01 , 2002 (the
Agreement), as a "Plan" defined therein, and agrees to perform the obligations of the Plan set forth
° therein as respects its Members, as defined in the Agreement, including without limitation the payment
obligations of Plan thereunder, and provided that any modification or amendments to the Agreement shall
not be effective as against the Plan unless approved by the Plan.
TERM. This Joinder Agreement shall become effective on October 1, 2002 and continue thereafter for
an initial term of one (1) year. Thereafter, this Joinder Agreement may be renewed for two (2)
consecutive one (1) year terms at the sole option of the Plan. WHP agrees to provide the Plan with at
least (90) days written notice of its intent to terminate, non-renew, or amend this Joinder Agreement,
except as otherwise states in Sections 9. and 12.9. of the Agreement. The Plan agrees to provide WHP
with at least ninety (90) days written notice of its intent to terminate, non renew, or amend this Joinder
Agreement. If WHP or KPHA terminate or materially amend their agreement, the Plan is given the
option of contracting directly with WHP on the same terms and provisions.
NOTICES. Any notices required to be given pursuant to the terms and provisions hereof shall be in
writing and shall be hand delivered, with return receipt thereof, or sent by certified or registered mail,
return receipt requested and first class postage paid to the addressee as follows:
Plan: County of Monroe
Manager: Employee Benefits
Public Service Building
5100 College.Road,Stock Island
Keys West, FL 33040
WHP: WHP Health Initiatives, Inc. •
Attn.: Client Services
520 Lake Cook Road
Suite 400
Deerfield, IL 60015
Copy to: WHP Health Initiatives, Inc.
Attn.: Mark Mincy
7680 Universal Blvd.
Suite 460
Orlando, FL 32819
ASSIGNMENT. This Joinder Agreement may not be assigned, subcontracted, delegated, transferred by
either party without the express written consent of the other party, and any attempted assignment,
subcontract, delegation or transfer shall be void.
FAR W M\Contractslr"`\KH PA I.DOC\09/OS/02I
ORDINANCE 10-1990. WHP warrants that it has not employed, retained, or otherwise has.acted on
behalf of any former County of Monroe officer subject to the prohibition Sec. 2 of Ordinance no. 10-1990
or any County of Monroe officer or employee in violation of Sec. 3 or Ordinance 10-1990, and that no
employee or officer of the County of Monroe has any interest, financially or otherwise, in WHP except
for such interest, permissible by law and fully disclosed by affidavit attached hereto. For breach or
violation of this paragraph, the County of Monroe may, in its discretion, terminate this Joinder Agreement
without liability and may also, in its discretion, deduct from the contract or purchase price, or otherwise
recover, the full amount of any fee, commission, percentage, gift or consideration paid to the former
County of Monroe officer or employee.
CONFLICT OF INTEREST. WHP assures the County of Monroe that to the best of its knowledge,
information and belief, the signing of this Joinder Agreement does not create a conflict of interest.
OWNERSHIP OF INFORMATION. Subject to federal and state laws pertaining to patient
confidentiality, all Drug Utilization Review and Disease State Management documents and reports which
are prepared in the performance of this Joinder Agreement will be made available to the Plan upon
written request for use as the Plan deems appropriate. Any patient identifying information shall not be
disclosed without written consent of the patient.
RIGHT TO AUDIT. Upon prior written and reasonable notice, WHP is required to allow the Plan to
audit or review documents in support of the billings, made to the County.
NON-APPROPRIATION. Monroe County's performance and obligation to pay under this contract is
contingent upon an annual appropriation by the Board of County Commissioners.
In Witness Whereof, Plan and WHP have caused this Agreement to be executed by their respective
corporate officers, on the day set forth below.
WHP Health Initiatives, Inc. Board of County Commissioners
of Monroe County,Florida
blaaftifr-
ik By: By. t o l.o
Its:
Its: Ono.. \ r G AA a 0(
Date: '14da Date: 9- / _ O a
ryr2
•X
•;:`;14.
t *ED ram CLE ` °
`�'�� CLERit
S TO FOR
opROVED AM•
1 A A`
•
DATE
F:\RWM\CootractS Y\KHPA I.DOC\09/05/021
1
I
itiV.7Jd Prof=r
•
d
•
rC�1 JG �1�I1('1<'Y'Y CR1M ' CI1f'AT�tw��-r
1
I "A person or affiliate who has been placed on the convicted vendor list
following a conviction for public entity crime may not submit a bid on a
contract to provide any goods or services to a public entity, may not submit
I
a bid on a contract with a public entity for the construction or repair of a
public building or public work° may not submit bids on leases of real
Iproperty to public entity, may not be awarded or perform work as a . .
contractor, supplier, subcontractor, or consultant under a contract with any
public entity, and may not transact business with any public entity in excess
Iof the threshold amount provided in Section 287.017, for CATEGORY
TWO for a period of 36 months from the date of being placed on the
convicted vendor list."
1 .
IA?A/xe/- ,..,,4 . .
Signature Date
•
I Robert Halaska
Name
WHP Health Initiatives, Inc.
I ' ' entity . •
I .
. 1
•
•
I . .
•
I .
I
ATTACHMENT B
I
v_ _• __ a_ v_ ... .. �. .....�..v �• ..rva...r we a e�✓. •.ow o. .,tin
'mu• �.Jt7 YYJd J-'b;
•
DRUG-FREE WORKPLACE FORM
The undersigned vendor in accordance with Florida Statute 287.087 hereby certifies that:
1
W1E$P Health Initiatives, Inc.
(Name of Business)
I. Publish a statement notifying employees that the unlawful manufacture, distribution, dispensing,
possession. or Ilse of a controlled substance is prohibited in the workplace and specifying the actions that
will be taken against employees for violations ol'such prohibition.
2. Inform employees about the dangers of drug abuse in the workplace, the business's policy of maintaining
a drug-free workplace, any available drug counscline, rehabilitation, and employee assistance programs
and the penalties that maybe imposed upon employees for drug abuse violations.
3. Give each employee engaged in providing the commodities or contractual services that arc under hid a
copy of the statement specified in subsection (I).
4. In the statement specified in subsection (I), notify the employees that, as a condition of working on the
commodities or contractual services that are under bid, the employee will abide by the terms of the
statement and will notify the employer of any conviction of, or plea of guilty or nolo contenders to, any
violation of Chapter 893 (Florida Statutes).or of any controlled substance law of the United States or any
state, for a violation occurring in the workplace no later than five (5)days after such conviction.
5. Impose a sanction on, or require the satisfactory participation in a drug abuse assistance or rehabilitation
program if such is available in the employee's community,or any employee who is so convicted.
6. Make a good faith effort to continue to maintain a drug-free workplace through implementation of this
section.
As the person authorized to sign the statement, I certify that this firth complies fully with the above
requirements.
Bidder's Signature
August 9, 2001
Date
ATTACHMENT C
OMf3 - MCPf/5
08007/01 15:15 LJHPH.[. EAST SALES/C SUCS 9 WHP ADMINBMKTG NO.93G P014,01
•
NON-COLLUSION AFFIDAVIT
WHP Health Initiatives, Inc. of the city
111
of Deerfield according to law on my oath, and under
penalty of perjury, depose and say that;
1) I am IMP Health Initiatives, Inc. , the bidder making the
• Proposal for the project described as follows:
I
Pharmacy Benefit Management Services
1
2) The prices in this bid have been arrived at independently without collusion,
consultation, communication or agreement for the purpose of restricting competition, as
to any matter relating to such prices with any other bidder or with any competitor;
3) Unless otherwise required by law, the prices which have been quoted in this bid
have not been knowingly disclosed by the bidder and will not knowingly be disclosed by
the bidder prior to bid opening,directly or Indirectly, to any other bidder or to any
competitor; and
4) No attempt has been made or will be made by the bidder to Induce any other
person, partnership or corporation to submit, or not to submit, a bid for the purpose of
restricting competition;
5) The statements contained in this affidavit are true and correct, and made with
full knowledge that Monroe County relies upon the truth of the statements contained In
this affidavit In awarding contracts for said project.
I ' •
STATE OF Illinois
(Signature of Bidder)
I COUNTY OF Lake
August 9, 2001
• DATE
PERSONALLY APPEARED BEFORE ME, the undersigned authority,
who, after first being sworn by me, (name of
individual
signing) affixed his/her signature in the space provided above on this
9.74day of
_ — ®�
_ • My commission expires;
NO RY PUBLIC P
•.;i�a.v�. ;irs i �i°.a%�fiiati�Prli�PFi4i
OMB • MCP FORM tt1 s "OFFICIAL SEAL"
ELLA BORISOV
Notary Public,State of Illinois
•
My Commission Expires 01/13/02 'TTACHMENT D
. �`s s:eoi.:pipe ee..��Ai.s�e•s-e•r, .f.o,s� _.
r_ • > i>> >r .>s rd�.oaa
�i 1
08,07/01 15: 15 WHPHI_EAST SALES'C SUCS 4 WHP ADMINBMKTG. NO.938 PO;'y'
•
SWORN S I'A I EN'1EN'C UNDER ORDINANCE NO.J O 1990
• MONROE COuh1T1, I'LORIDA
ETHICS CLAUSE
Robert ,Halaska warrants that he/it has not employed. retained
or otherwise had act on his/its behalf any firmer County officer or employee in violation of
Section 2 of Ordinance no. I 0-1000 or any County officer or employee in violation of
Section 3 of Ordinance No. 10-1')')0. For breach or violation of this provision the County
may. in its discretion. term in;mte this contract without liability and may also, in its discretion,
deduct from the contract or purchase price. Or otherwise recover, the full amount of any fee,
commission, percentage. gift. or consideration paid to the former County officer or employee.
(signature)
Date: August 9, 2001
STATE OF Illinois
COUNTY OF Lake
PERSONALLY APPEARED BEFORE ME, the undersigned authority,
111 n- 1-/-: n`.Q"kj who, after first being sworn by me., affixed his/her
signature(name of individual signing) in the space provided above on this 9 day of
Cat moo/
• "OFFICIAL SEAL"
ELLA BORISOV
N ARY PUBLIC' a Notary Public,State of Illinois
My Commission Expires 01/13/02
My commission expires:
o rrrsi✓ss.
()n413 . MCP FORM N4
aTTAC.HMFPiT F.
1996 Edition
RISK MANAGEMENT
POLICY AND PROCEDURES
CONTRACT ADMINISTRATION
MANUAL
General Insurance Requirements
for
Other Contractors and Subcontractors
As a pre-requisite of the work governed, or the goods supplied under this contract (including the
pre-staging of personnel and material), the Contractor shall obtain, at his/her own expense,
insurance as specified in any attached schedules, which are made part of this contract. The
Contractor will ensure that the insurance obtained will extend protection to all Subcontractors
engaged by the Contractor. As an'alternative, the Contractor may require all Subcontractors to
obtain insurance consistent with the attached schedules.
The Contractor will not be permitted to commence work governed by this contract (including
pre-staging of personnel and material) until satisfactory evidence of the required insurance has
been furnished to the County as specified below. Delays in the commencement of work,
resulting from the failure of the Contractor to provide satisfactory evidence of the required
insurance, shall not extend deadlines specified in this contract and any penalties and failure to
perform assessments shall be imposed as if the work commenced on the specified date and time,
except for the Contractor's failure to provide satisfactory evidence.
The Contractor shall maintain the required insurance throughout the entire term of this contract
and any extensions specified in the attached schedules. Failure to comply with this provision
may result in the immediate suspension of all work until the required insurance has been
reinstated or replaced. Delays in the completion of work resulting from the failure of the
Contractor to maintain the required insurance shall not extend deadlines specified in this contract
and any penalties and failure to perform assessments shall be imposed as if the work had not
been suspended, except for the Contractor's failure to maintain the required insurance.
The Contractor shall provide, to the County, as satisfactory evidence of the required insurance,
either:
Certificate of Insurance
or
A Certified copy of the actual insurance policy.
The County, at its sole option, has the right to request a certified copy of any or all insurance
policies required by this contract.
All insurance policies must specify that they are not subject to cancellation, non-renewal,
material change, or reduction in coverage unless a minimum of thirty (30) days prior notification
is given to the County by the insurer.
The acceptance and/or approval of the Contractor's insurance shall not be construed as relieving
the Contractor from any liability or obligation assumed under this contract or imposed by law.
Administration Instruction
#4709.3 14
1996 Edition
The Monroe County Board of County Commissioners, its employees and officials will be
included as "Additional Insured" on all policies, except for Workers' Compensation.
Any deviations from these General Insurance Requirements must be requested in writing on the
County prepared form entitled "Request for Waiver of Insurance Requirements" and
approved by Monroe County Risk Management.
•
Administration Instruction
#4709.3
15
1
1996 Edition
INSURANCE REQUIREMENTS
FOR
CONTRACT
BETWEEN
MONROE COUNTY, FLORIDA
AND
WHP Health Initiatives, Inc.
d/b/a/Walgreens Health Initiatives
Prior to the commencement of work governed by this contract, the Contractor shall obtain
General Liability Insurance. Coverage shall be maintained throughout the life of the contract
and include, as a minimum:
' a Premises Operations
• Products and Completed Operations
9 Blanket Contractual Liability
• Personal Injury Liability
• Expanded Definition of Property Damage
The minimum limits acceptable shall be:
$500,000 Combined Single Limit (CSL)
If split limits are provided, the minimum limits acceptable shall be:
$250,000 per Person
$500,000 per Occurrence
$ 50,000 Property Damage
An Occurrence Form policy is preferred. If coverage is provided on a Claims Made policy, its
provisions should include coverage for claims filed on or after the effective date of this contract.
In addition, the period for which claims may be reported should extend for a minimum of twelve
(12) months following the acceptance of work by the County.
The Monroe County Board of County Commissioners shall be named as Additional Ins
ured on
all policies issued to satisfy the above requirements.
GL2
Administration Instruction
#4709.3 55
1996 Edition
WORKERS° COMPENSATION
INSURANCE REQUIREMENTS
FOR
CONTRACT
BETWEEN
MONROE COUNTY, FLORIDA
AND
WHP Health Initiatives, Inc.
d/b/a Walgreens Health Initiatives
Prior to the commencement of work governed by this contract, the Contractor shall obtain
Workers° Compensation Insurance with limits sufficient to respond to the applicable state
statutes.
In addition, the Contractor shall obtain Employers' Liability Insurance with limits of not less
than:
$500,000 Bodily Injury by Accident
$500,000 Bodily Injury by Disease, policy limits
$500,000 Bodily Injury by Disease, each employee
Coverage shall be maintained throughout the entire term of the contract.
Coverage shall be provided by a company or companies authorized to transact business in the
state of Florida.
If the Contractor has been approved by the Florida's Department of Labor, as an authorized self-
insurer, the County shall recognize and honor the Contractor's status. The Contractor may be
required to submit a Letter of Authorization issued by the Department of Labor and a Certificate
of Insurance, providing details on the Contractor's Excess Insurance Program.
If the Contractor participates in a self-insurance fund, a Certificate of Insurance will be required.
In addition, the Contractor may be required to submit updated financial statements from the fund
upon request from the County.
WC2
Administration Instruction _
#4709.3 89
•
1996 Edition
PROFESSIONAL LIABILITY
INSURANCE REQUIREMENTS
FOR
CONTRACT
BETWEEN
MONROE COUNTY, FLORIDA
AND
WHP Health Initiatives, Inc,
d/b/a Walgreens Health Initiatives
Recognizing that the work governed by this contract involves the furnishing of advice or services
of a professional nature, the Contractor shall purchase and maintain, throughout the life of the
contract, Professional Liability Insurance which will respond to damages resulting from any •
claim arising out of the performance of professional services or any error or omission of the
Contractor arising out of work governed by this contract. a •
The minimum limits of liability shall be:
$500,000 per Occurrence/$1,000,000 Aggregate
•
PRO2
Administration Instruction
#4709.3 78
1996 Edition
VEHICLE LIABILITY
INSURANCE REQUIREMENTS
FOR
CONTRACT
BETWEEN
MONROE COUNTY, FLORIDA
AND
WHP Health Initiatives, Inc.
d/b/a Walgreens Health Initiatives
Recognizing that the work governed by this contract requires the use of vehicles, the Contractor,
prior to the commencement of work, shall obtain Vehicle Liability Insurance. Coverage shall be
maintained throughout the life of the contract and include, as a minimum, liability coverage for:
Owned, Non-Owned, and Hired Vehicles
The minimum limits acceptable shall be:
$300,000 Combined Single Limit (CSL)
If split limits are provided, the minimum limits acceptable shall be:
$100,000 per Person
$300,000 per Occurrence
$ 50,000 Property Damage
The Monroe County Board of County Commissioners shall be named as Additional Insured on
all policies issued to satisfy the above requirements.
1
VL2
Administration Instruction
#4709.3 82
1996 Edition
tEMPLOYEE DISHONESTY
INSURANCE REQUIREMENTS
CONTRACT FOR
' BETWEEN
MONROE COUNTY, FLORIDA
AND
' WHP Health Initiatives, Inc.
d/b/a Walgreens Health Initiatives
1
The Contractor shall purchase and maintain, throughout the term of the contract, Employee Dishonesty
t Insurance which will pay for losses to County property or money caused by the fraudulent or dishonest
acts of the Contractor's employees or its agents,whether acting alone or in collusion of others.
The minimum limits shall be:
$100,000 per Occurrence
1
1
1
1
1
' ED2
' Administration Instruction
#4709.3 46
1
I�
Exhibit B
Pharmacy Services Joinder Agreement
� 4
1
i I
ATTACHMENT B
PHARMACY SERVICES JOINDER AGREEMENT
This Pharmacy Services Joinder Agreement ("Joinder Agreement") is entered into this (.S4- day of
Ottoe , 2002, by and between The Board of County Commissioners of Monroe County,
Florida, (hereinafter referred to as the "Plan") and WHP Health Initiatives, Inc., an Illinois corporation,
doing business as Walgreens Health Initiatives (hereinafter referred to as "WHP").
JOINDER OF PLAN. Plan hereby adopts and joins the Prescription Service Agreement between Keys
Physician-Hospital Alliance (KPHA) and WHP Health Initiatives, Inc.,.dated ae oba-r o! , 2002 (the
Agreement), as a "Plan" defined therein, and agrees to perform the obligations of the Plan set forth
therein as respects its Members, as defined in the Agreement, including without limitation the payment
obligations of Plan thereunder, and provided that any modification or amendments to the Agreement shall
not be effective as against the Plan unless approved by the Plan.
TERM. This Joinder Agreement shall become effective on October 1, 2002 and continue thereafter for
an initial term of one (1) year. Thereafter, this Joinder Agreement may be renewed for two (2)
consecutive one (1) year terms at the sole option of the Plan. WHP agrees to provide the Plan with at
least (90) days written notice of its intent to terminate, non-renew, or amend this Joinder Agreement,
except as otherwise states in Sections 9. and 12.9. of the Agreement. The Plan agrees to provide WHP
with at least ninety (90) days written notice of its intent to terminate, non renew, or amend this Joinder
Agreement. If WHP or KPHA terminate or materially amend their agreement, the Plan is given the
option of contracting directly with WHP on the same terms and provisions.
NOTICES. Any notices required to be given pursuant to the terms and provisions hereof shall be in
writing and shall be hand delivered, with return receipt thereof, or sent by certified or registered mail,
return receipt requested and first class postage paid to the addressee as follows:
Plan: County of Monroe
Manager: Employee Benefits
Public Service Building
5100 College Road,Stock Island
Keys West,FL 33040
WHP: WHP Health Initiatives, Inc.
Attn.: Client Services
520 Lake Cook Road
Suite 400
Deerfield, IL 60015
Copy to: WHP Health Initiatives, Inc.
Attn.: Mark Mincy
7680 Universal Blvd.
Suite 460
Orlando, FL 32819
ASSIGNMENT. This Joinder Agreement may not be assigned, subcontracted, delegated, transferred by
either party without the express written consent of the other party, and any attempted assignment,
subcontract, delegation or transfer shall be void.
F:RWM\Contracts\3"\KHPAI.Dr)(109/05/021
ORDINANCE 10-1990. WHP warrants that it has not employed, retained, or otherwise has acted on
behalf of any former County of Monroe officer subject to the prohibition Sec. 2 of Ordinance no. 10-1990
or any County of Monroe officer or employee in violation of Sec. 3 or Ordinance 10-1990, and that no
employee or officer of the County of Monroe has any interest, financially or otherwise, in WHP except
for such interest, permissible by law and fully disclosed by affidavit attached hereto. For breach or
violation of this paragraph, the County of Monroe may, in its discretion, terminate this Joinder Agreement
without liability and may also, in its discretion, deduct from the contract or purchase price, or otherwise
recover, the full amount of any fee, commission, percentage, gift or consideration paid to the former
County of Monroe officer or employee.
CONFLICT OF INTEREST. WHP assures the County of Monroe that to the best of its knowledge,
information and belief, the signing of this Joinder Agreement does not create a conflict of interest.
OWNERSHIP OF INFORMATION. Subject to federal and state laws pertaining to patient
confidentiality, all Drug Utilization Review and Disease State Management documents and reports which
are prepared in the performance of this Joinder Agreement will be made available to the Plan upon
written request for use as the Plan deems appropriate. Any patient identifying information shall not be
disclosed without written consent of the patient.
•
RIGHT TO AUDIT. Upon prior written and reasonable notice, WHP is required to allow the Plan to
audit or review documents in support of the billings, made to the County.
NON-APPROPRIATION. Monroe County's performance and obligation to pay under this contract is
contingent upon an annual appropriation by the Board of County Commissioners.
In Witness Whereof, Plan and WHP have caused this Agreement to be executed by their respective
corporate officers, on the day set forth below.
WHP Health Initiatives,Inc. Board of County Commissioners
of Monroe County,Florida
bAll#41
By: - I/waW : By. c ov r\ c Co
Its: m►' yllt. Its: C\i\G.i I CA M G U(
Date: I°J4
1 Date: O a
y// CIS Z ` •
vt
' t ,• D 5- LHA CLE K °
etr&-PL--)
ARROVED AS TO FORM
A AL
6 R •
Z
i
DATE
FAR WIN\Contractsl3"'\KH PA I I.DOC\o9/o5/021
Exhibit C
Rebate Checks
Au : 20 02 04 a 04p kFh a 305.234937E; - 4
~ • •�9a90 _ g a 29,. writ-E�' -' 1305296eezr` r � : -• 1'
°m 476421
UNA EPtesiber:30 6GV620 Roane°c :GEw ACCT 330?KA Dare;
e:wia•I•`: ,1.. .. ....;,;..,� rks:flnoi�N: • ,/t•Kaofilostlyhoi!! iAataoa
.,.: .... miler
AK PLAN REBATE 11,16e01 011116 6,716.90 52092639
s
GROSS ICITAL OISCOlJNT TRIAL [NECK /put_
6,716.80 1..00 :6,716.80
0
3
•
f
1
. 1
I
qy
}
•
aP.
ifigIZA
Its T�� 104.16.1 northern Truce
fEAF1FAD, 8L 60015 OW
7a+ CbtogolL mTa®
�1AQ.CA EEA1 ®..'8L hynlie ThwoQh
Ne°dlem Truer 6.41DePase
0 SIX THOUSAND SEVEN HUNDRED SIXTEEN AND B0/11 0 OCLLAA2---- -_ems OIIt--- a
-- OATS ' al0UN1
11/21/01 t+raat6 716.E0
i*A*Curie64kt7i•ttta*******d4•P$#Q6 I.
KPRA
PO BOX 9107 PAYABLE ONLY TO '.
PM KEY WEST FL33041 RPH11
To THE
DROP
:!;F=....,..
Atm-cm ED SIGNATURE 4
R'OOFrtl.sic. ?Au'6°f19 64 ?3A .Pibeeolinnlrr,alao.0, tape 1f
I •
5 —t 35 e2403a 6 +r aN1WO P 5®Ruh 29 Bad Ete2) s-1305-y9W8Cy
•
•
•
�-�— TJHoo
F�.EALTH INITIATIVES, INC.
• S20 Yoke Cook Road a Suite c';A0
Deerfield,Illinois 60015
November 18,2001
KPRA
Attn: Meylan Lowe-Waller
Director of Operations
P.O.Box 9107
Key West,FL 33041
•
Ms.Lowe Watler;
We arc pleased to present you with this check in the amount of S6 716.80 resulting front your
participation in the Walgreens l•letdth Initiatives Formulary Rebate Programs.
This quarterly payment is for thus trine period listed on the attachee supporting documentation.
If you have any questions regarding this payment,please contact)Laren Rolsing at 847-914-5372. Thank
you for your ongoing participation in this value-added program.
Sincerely,
,4 7
Karen Rolsing
cc: Peter Meehan,Walgreens Health Initiatives,Inc.
•
•
•
1
1.1
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Exhibit D
Contract Definition
Average Wholesale Price
-I
PRESCRIPTION SERVICE AGREEMENT
I
This Prescription Service Agreement("Agreement") is entered into this I"day of October, 2002 by and
between LOWER FLORIDA KEYS PHYSICIAN/Hospital ORGANIZATION,INC., a Florida not
for profit corporation doing business as Keys Physician-Hospital Alliance("KPHA"),and WHP
HEALTH INITIATIVES,INC.,an Illinois corporation, doing business as Walgreens Health Initiatives
("WHP").
RECITALS
WHEREAS, KPHA operates a provider network which, as its primary objective, arranges for the
delivery of health care services to persons enrolled in health care plans;
WHEREAS, KPHA has entered or will enter into agreements (all referred to as "Payor Agreements")
with managed care plans such as health maintenance organizations, self-insured employers, third party
administrators, or preferred provider organizations(individually and collectively referred to as "Plans") to
provide health services to Members of such Plans;and
WHEREAS, WHP manages prescription benefit programs that include the dispensing of prescription
drugs by and through its network of retail community pharmacies (hereinafter "Participating
Pharmacy(ies)") and arranges for prescription benefit management and claim processing services for
Plans; and
WHEREAS,WHP also manages a prescription benefit that includes the dispensing of prescription drugs
by mail service pharmacy(hereinafter"Participating Mail Service Pharmacy"); and
WHEREAS, KPHA desires to arrange for the provision of Prescription Services to Plan Members (and
their eligible dependents) through WHP's network of Participating Pharmacies and by Participating Mail
Service Pharmacy, as well as prescription benefit management and claim processing services by and
through WHP;and
WHEREAS, WHP is willing to make available Prescription Services to Members through its network of
Participating Pharmacies and by Participating Mail Service Pharmacy and to provide pharmacy benefit
management and claim processing services to Plans•upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual promises and covenants set forth in this
Agreement, and other good and valuable consideration, the parties to this Agreement agree as follows:
1. DEFINITIONS
For purposes of this Agreement, the following words and phrases shall have the meaning specified:
1.1 "Agreement" means this Prescription Service Agreement between KPHA and
WHP.
1.2 • "Average Wholesale Price" means the wholesale cost of the dispensed medication on the date
dispensed as defined in the latest edition of any of the following:
FAR I.DOC\09/05/021
1 -
The•Drug Topic Red Book with supplements, the American Druggist Blue Book with
supplements., Medispan and weekly updates,or any other reference which may be agreed to
in writing by the parties to this Agreement. This price is based on 100 tablets or capsules,
one pint of liquid, or the closest quantity to that prescribed for ointments, creams,
suppositories, or other medication not packaged in 1OOs or pints.
1.3 "Certificate of Coverage" means the description of Plan Benefits for a particular Plan.
1.4 "Copayment" means those charges collected directly by WHP.from a Member as additional
payments for Covered Services.
1.5 "Covered Services" means those properly authorized Prescription Services that are expressly
covered under the Members'Plan:
1.6 "Group Service Contract" means an agreement between a Plan and an Employer, including, but
not limited to, an administrative services only type agreement, under which Subscribers and eligible
dependents, if any, are entitled to become Members of the Plan in accordance with the terms of such
agreement.
1.7 "Individual Subscriber" means an individual who has entered into an Individual Subscription
Agreement with a Plan.
1.8 "Individual Subscriber Agreement" means an agreement between a Plan and an Individual
Subscriber by which such individual and his or her eligible dependents, if.any, are entitled to become
Members of the Plan in accordance with the terms of such agreement. Individual Subscription
Agreements shall include agreements between a Plan and a Subscriber entitled to benefits under Title
XVIII of the Social Security Act,.as amended.
1.9 "MAC List"means WHP's-Choice list of generic drugs and their associated prices at which Plan
will pay WHP for dispensing services provided by Participating Pharmacies and the Participating Mail
Service Pharmacy hereunder. The MAC List is subject to periodic review and modification by VVHP.
1.10 "Member" means an eligible Subscriber and his or her eligible dependents that have been
enrolled in a Plan under a Group Service Contract or an Individual Subscriber Agreement.
1.11 "Participating Physician" means any physician licensed to practice in the State of Florida who
satisfies the participation criteria established by KPHA and who has entered into a contractual
arrangement with, or is otherwise-engaged by, KPHA to provide Covered Services to Members.
1.12 "Payor Agreement" means an agreement by and between a Plan and KPHA under which
I{PHA agrees to provide or arrange for the provision of certain health care services, and/or provide or
arrange for the provision of other non-health care services, including, for example, utilization review and
quality assurance programs, for the benefit of Subscribers. •
- 1.13 "Plan" means a health maintenance organization, preferred provider organization, insurer,
{ employer and/or other third party payor for health care services.
1.14 • "Plan Benefits" means the medical services or supplies to which Members are entitled pursuant
to an Individual Subscription Agreement or a Group Service Contract and which are described in a
Certificate of Coverage.
FAR WM\Contracts\3"'1KHPA I.DO009/05/021
I
Exhibit E
Request For Proposals
For
Prescription Management Plan
•
Section 3
MONROE COUNTY BOARD OF COUNTY COMMISSIONERS
REQUEST FOR PROPOSALS
FOR
PRESCRIPTION MANAGEMENT PLAN
GENERAL INFORMATION
The Monroe County Board of County Commissioners desires to obtain proposals for a stand-alone Prescription Plan as
part of its self-insured Medical Benefits Plan. Currently, prescription benefits are provided by a prescription card
program. The cost of the prescription card is included in the County's overall medical costs.
CURRENT PROGRAM
The current prescription plan is provided by Walgreens Health Plan, (WHP). Prescriptions are filled through
participating pharmacies. The employee co-pay amount is $6 per generic prescription and$12 for non-generic. Mail
order prescriptions are$12 for generic(3 months)and$30 for non-generic(3 months). Beginning October 1,2001,the
plan changes to: Retail -$10 for generic, $20 brand, $35 for non-preferred brands (usually up to 30 day supply. Via
mail-$25 for generic,$50 brand,and$87.50 for non-preferred brands(90 day supply).
The Health Plan currently provides benefits for the employees of The Board of County Commissioners, the Clerk of
the Circuit Court, the Tax Collector, the Property Appraiser, the Supervisor of Elections, the Sheriffs Department, the
Mosquito Control District and Land Authority.
DESIRED PROGRAM
The County desires the successful Prescription Management Plan provider to provide the following:
Prescription Card benefits for employees and dependents participating in the health plan,
A generous selection of participating retail pharmacies throughout the County and the United States,
Retail and Mail-order coordination,if possible,and
Significant discounts in the costs of prescriptions,including incentives for the use of generics.
Adequate monthly management reports to determine employee utilization and track provider activity as
well as display number of dispenses by pharmacy location
The County will consider proposals that may also include the use of formularies or other alternative programs
to reduce and contain prescription costs.
The County also wishes to be able to determine prescription usage and patterns and will cooperate with proposers to
develop a reporting system that can analyze needs,costs and usage. •
References must be included.
RATING DATA
Current census information and historical enrollment counts are included as exhibits.
23
EFFECTIVE DATE OF CONTRACT
The contract will be Implemented sometime during the.10/1/2001-9/30/2002 Fiscal Year and may be initially be for
less than 12 months. Subsequent contract terms will coincide with the County's fiscal year.
PROPOSAL SUBMITTAL
Questions relating to the specifications of this Request For Proposals shall be submitted in writing directly to:
Lawton Swan,III,CPCU,CLU,ARM
Interisk Corporation
1111 North Westshore Blvd.,Suite 208
Tampa,Florida 33607-4711
facsimile: 1-813-287-1041
All questions seeking additional information must be received no later than 5:00pm twenty(20) days preceding
the bid opening date If needed, an addendum to the RFP will be issued shortly thereafter and distributed to all
interested Proposers,responding with the County's best ability to answer all questions.
Sealed proposals including two(2)originals and five(5)copies shall be directed to:
Purchasing Department
Monroe County
5100 College Road West
Cross Wing,Room 002
Key West,Florida 33040
and must be received no later than 3:00 p.m. on the date specified in the legal notice.. All proposals will be
officially opened at that time. Any proposal received after the specified date and time will be returned unopened to the
proposer.
All proposals must be clearly marked with the words:
REQUEST FOR PROPOSAL
PRESCRIPTION MANAGEMENT PLAN
RIGHT TO REJECT PROPOSALS
Monroe County reserves the right to reject or waive any proposal, including any portion of a proposal for any reason
that it deems appropriate. Monroe County reserves the right to negotiate with whichever proposer(s) it deems
appropriate.
Monroe County reserves the right to select the proposal(s)that it believes will serve its best interests. -
AUTHORITY OF PROPOSERS
Proposals must be signed by an authorized representative of the company that will provide the service. Proposals
submitted without a proper signature will not be given the same consideration as authorized proposals.
24
QUALIFICATIONS OF PROPOSER
Experience with Government Entities will be a major factor in the evaluation of the proposals. All proposers should
furnish a summary of all such experience. References, including client name, contact person and telephone number,
should also be included.
PARTICIPATING PHARMACIES
A complete listing, by city, of all participating pharmacies in Monroe County, must be included. Proposals will be
considered for County-wide service or for service to a significant portion of the County. The County reserves the right
to select more than one proposal if in the County's sole discretion such selection is in the best interest of the County.
PAYMENT TERMS
The preferred method of payment is monthly. Proposers must fully explain fees, rates and negotiated discounts. If
other terms are proposed,please be specific regarding amounts and time schedule.
SAMPLE CONTRACT OR AGREEMENT
Each proposal must contain a sample contract or agreement that will be used between the successful proposer and
Monroe County.
TERMINATION/NON-RENEWAL NOTICE
Ninety, (90),days written notice is requested by the service provider for termination or non-renewal of the contract or
agreement.
CLAIM REPORTING LOCATIONS
All proposals should indicate the address,telephone number and names of individuals who will be contacts in reference
to claims and management reports.
QUARTERLY MEETING WITH THE COUNTY
The proposer will be required to attend quarterly meeting at the County location to discuss plan utilization, cost
analysis,changes in regulation,trend analysis and others.
STATISTICAL MANAGEMENT REPORTS.
Monroe County will require the successful proposer to submit utilization and cost reports on a monthly basis. Reports
should be completed in plain English and received by the County within seven(7)days following the end of the month.
The reports should include:
Generic vs.name brands dispensed,
Employee vs.dependent utilization,
=, Retiree utilization
25
Program savings,
Value of discounts and,
Other reports requested by the County
All proposals must contain a sample of the reports that will be provided.
USE OF PROPOSALS FORMS
Proposers are required to submit their proposal on the forms included in this request. It is important that the proposal
be signed by an authorized representative of the insurer/service provider in order to receive consideration. Additional
information or proposals may be submitted in addition to the initial proposal.
INSURANCE REQUIREMENT
The successful proposer(s), throughout the term of the contract,shall purchase and maintain insurance as set forth in
Attachment A.
ADDITIONAL REQUIRED FORMS
The following forms, included as Attachments B, C, D and E must be signed by an authorized representative and
included with the proposals:
1. Public Entity Crime Form-Attachment B
2. Drug Free Workplace Form-Attachment C
3. Non-Collusion Affidavit-Attachment D
4. Ethics Clause-Attachment E
•
26
MONROE COUNTY BOARD OF COUNTY COMMISSIONERS
REQUEST FOR PROPOSALS
FOR
SECTION 3
PRESCRIPTION MANAGEMENT PLAN
PROPOSAL.FORM
Please complete a separate proposal form for each option offered.
Name of Prescription Management Plan
Address:
Telephone Number:
Does Plan include retail and mail-order?
What are retail co-pays?
Generic?
Preferred?
Non-Preferred?
What are mail-order participant co-pays?
Will the proposer charge any initial or set-up
fees?
If so,please explain
27
•
Are alternate approaches available such as the use of
Formularies or other arrangements? If so,include specifics.
Are samples of all management and statistical reports
included?
Is a sample contract or agreement included?
Quoted Price/Fees or Discount Arrangement:
(attach separate page if necessary)
•
Is there a dispensing fee? If so,state amount.
1
Will a minimum fee apply to the contract?
If so,please specify
How many participating pharmacies are located
in Monroe County?
Locations:
How many participating pharmacies are in the U.S.?
Is sample participant information/communication
materials included?
Are there any exceptions to specifications?
Will you agree to quarterly meetings at the County's location
To provide utilization review,cost analysis,changes in
Regulation,trend analysis and others?
The representative stated below is the authorized agent of the Proposer and is authorized to bind the company upon
acceptance by The County. Deviations from the requested program have been stated. Coverage(s)or servics.will be
issued as proposed.
Signature of Authorized Representative Date
1
28
1
' 0
Exhibit F
Sample RFP
Schedule of Actual AWP And Cost Per RX
1
1
1
' Units per Retail Price per '
AWP per , Mail Price per Rx
# NDC-11 . Drug Name Strength . 30 Day Rx(30 Day
Supply • Unit Supply)
I (90 Day Supply)
1 00300304613 PREVACID 30MG 30
2 00071015523 LIPITOR 10MG 30
3 00186074231 PRILOSEC 20MG 30 `
4 00025152531 CELEBREX . 200MG 30
5 00071015623 LIPITOR 20MG 30
6 00186504031 NEXIUM 40MG 30
7 00006011068 VIOXX 25MG 30
8 00069306075 ZITHROMAX • 250MG 6
9 00029608612 AUGMENTIN 875-125MG 20
10 00029321120 PAXIL 20MG 30
11 00173013555 WELLBUTRIN SR 150MG 60
12 00069551066 ZYRTEC 10MG 30
13 00049491066 ZOLOFT 100MG 30
14 00088110947 ALLEGRA 180MG 30
15 00049490066 ZOLOFT 50MG 30
16 00045152550 LEVAQUIN 500MG 10 •
17 00456402001 CELEXA • 20MG 30
18 00006003144 FOSAMAX 70MG 4
19 00071015723 LIPITOR 40MG 30
20 00026851351 CIPRO 500MG 20
21 00003519410 PRAVACHOL 40MG 30
22 62856024330 ACIPHEX 20MG 30
23 00173045301 FLONASE 50MCG 16
24 00008084181 PROTONIX 40MG 30 .
25 00008083301 EFFEXOR XR 75MG 30
Exhibit G
Prescription Drug Program Comparison-
Other Florida Programs
1-,
Prescription Drug Program Comparision
Other Florida Programs
2002/2003 2001/2002
Monroe Monroe Brevard Broward City of City of Monroe Lower Keys
I Location Coun Coun Count Coun Ke West Na.les Coun Quote Med Center FKAA
Program WHP Health Initiatives,Inc. Express Scripts,Inc. United Furniture
' Contact Person Mark Mincy Tom Aufiero Workers
Union Only
Website Address www.whpi.com www.express-scripts.com
Telephone Num ber 407-903-9015 727-786 8340
Copayments:
Generic $10 $10 $10
Brand $20 $20 $20 $10 $10
$20 $15
Non-preferred Brand $35 $35 $30 $30 $35
Deductibles:
Individual $0.00 $0.00
Family $0.00 $0.00 50
$150
Manufacturer's Incentive Rebates:
Per paid prescription basis $0.80 $0.80 $1.60 $0.75 $0.00 °' $1.60
Per paid prescription basis-mail service rebate $5.00
Adminstrative Fees
Per paid claim $0.52 $0.52 $0.25 $0.20 $0.25 $0.25 $0.00
Member submitted Claims $1.75 $1.75 $0.00 $1.50 $1.50 $1.50
Brand Name Drugs
The lesser of:
(i)Brand Name- Average Wholesale Price(AWF 85% 88% 85% 86% 87% 87% 87%
plus Dispensing Fee $2.25 $1.25 $2.00 $2.35 $2.50 $2.25 $1.75
(ii)or dispensing Participating Pharmacy's usual •
I ,and prevailing retail charge
- Generic Drugs
The lesser of:
(i)Maximum Allowable Cost(MAC)List°plus •
Dispensing Fee $2.50 N/A° $2.50 $2.35 $2.50 $2.25 $1.75
(ii)or dispensing Participating Pharmacy's usual
and prevailing retail charge
I°In the 2001 agreement there w as no MAC list
used for prescriptions in the State of Florida
For Generic Drugs not included on MAC List:
I
(i)Average Wholesale Price(AWP)plus 85% 80% 80% 86% 87% 87% 80%
Dispensing Fee $2.50 $1.25 $2.50 $2.35 $2.50 $2.25 $1.75
(ii)or dispensing Participating Pharmacy's usual
and prevailing retail charge
I
Service Pharmacy
(i)Brand Name Drugs-AWP plus 82% 82% 82% 81% 82% 81% 80%
Dispensing Fee 0 $1.00 0
1.75
(ii)Generic Drugs-AWP plus I
Dispensing Fee 55% 55% 55% 50% 50% 50% 55%
0 $1.00 0• 0 0 1.75 0
The definition of Average Wholesale Price is very important when comparing contracts. SEE WHI's definition
versus ESI's definition.
"ESI will remit to Sponsor amounts equal to 60%of the rebates paid to pharmaceutical manufacturers
with respect to qualifying Covered Drugs dispensed to Members,and ESI will retain the balance of Rebates.
I
I
•
Exhibit H
Letter From Executive Director
• Yew- •
�`Iii
i/
LK MEDICAL CENTER
Lower Keys
December 2,2002
Sandra L. Mathena, CGFO, CFE, CPA
Director of Internal Audit
Monroe County Circuit Court, Clerk's Office
Monroe County Courthouse
° 500 Whitehead Street, Suite 101
Key West, Florida 33040
Re: Lower Florida Keys Physician/Hospital Organization, Inc.
Dear Ms. Mathena:
I am responding to your November 12, 2002 letter requesting copies of Internal Revenue
Service Form 990's (Return of Organization Exempt from- Income Tax) and other
corporate documents for Lower Florida Keys Physician/Hospital Organization, Inc.
' ("PHO") as part of the County's audit. Please note that although the PHO was organized
as a Florida not-for-profit corporation, the PHO is not a tax-exempt entity and has never
applied for tax-exempt status from either the federal government or the State of Florida.
Therefore, the PHO cannot comply with your request for copies of any applications for
tax exemption or Form 990's for the past three years. With respect to your additional
request for corporate records, enclosed please find a copy of the PHO's Articles of
Incorporation for your review.
If I can be of any further assistance,please feel free to contact me directly.
cerely,
onald L. Bierman,
Executive Director
•
5900 College Road dePoo Building
P.O.Box 9107 1200 Kennedy Drive
Key West, FL 33041-9107 -- Key West, FL 33040
Ph. 305-294-5531 Ph. 305-294-5531
Fax 305-294-8065 Fax 305-294-8844
VII. AUDITEE RESPONSES
MEMORANDUM
Date: May 19, 2003
To: Danny L. Kolhage, Clerk of the Circuit Court
From: James Roberts, County Administrator
Subject: Preliminary Audit Report-Preliminary Draft Audit Report of Monroe County
Prescription Benefit Plan.
In response to the Preliminary Draft Audit,the County Administrator's responses to Findings are
as follows:
A. Incentives and Rebate Guarantees
1. Guaranteed Rebates Not Re-negotiated
Finding:
The Pharmacy Benefit Agreement with Walgreens Health Initiatives requires WHP to pay
a guaranteed rebate of $.80 per paid prescription claim, regardless of the incentive
amounts received by WHP. The contract states that WHP and KPHA will negotiate in
good faith the monetary amount of any WHP payment to apply to the subsequent
twelve-month period. Rebates are money that is returned to a payer from a prescription
drug manufacturer based upon the utilization of brand-name drugs by a covered person
or purchases by a provider.
Rebates received by other comparable entities ranged from approximately $1.60 to $5.00
per claim. The rebate was never renegotiated by.KPHA as required by the contract.
When asked why the rebate was not renegotiated KPHA management stated that
Monroe County attends the insurance meetings, therefore,_we don't need to. During
fiscal_year ending 2002 there was $26,776 (33,470 claims times$$.80 per claim) paid
to Monroe County as rebates. Revenue may have been lost due to the County due to
KPHA not fulfilling their fiduciary responsibility of renegotiating the rebate.
Recommendation(s):
1. Group Insurance Management should ensure that rebates are re-negotiated
according to the terms of the agreement.
ray �1 03 08: 3Ga James L Roberts Co Rdmin 305-292-4544
p. 2
County Administrator's Response:
Management has been relying on KPHA to administer the contract with WIIP as we
are a joinder to their contract. In the years since the pharmaceutical contract
was signed, KPHA has not asked what the County's preference in negotiating a
different discount nor have they inquired as to the County's desire to have input
into the negotiation or participate in the negotiation. The response that was
quoted in the audit is amazing in that our relationship with KPHA is one of
mutual cooperation to lower the cost of medical related items to the taxpayer of
Monroe County. Numerous discussions were held on ways to decrease the cost of
our plan and at no point in our discussion of various cost containment issues was
this recommended as an option that they would pursue or that should be
pursued.
Management will insist that this discount be negotiated per the terms of the contract
to which the County is a joinder.
2. Rebate Check for 1st Quarter 2001 Not Received.
Finding:
Rebate check #476421 in the amount of $6,716.80 for the claims paid during the 1st
quarter of 2001 dated 11/16/01 was not processed by KPHA. The check for each
quarter's rebate is issued to KPHA by WHP. KPHA deposits the check and then issues
a check in the same amount to Monroe County. During the audit while verifying that •
all payments were properly accounted for, internal audit discovered that KPHA had
never remitted one check to the County. Further research revealed that KPHA had
never cashed the check. WHP reissued the check to KPHA on 8/27/02 and it was
remitted to the County by KPHA on 09/17/02. See Exhibit C - Rebate Checks.
Recommendation(s):
1. Group Insurance Management should ensure that procedures are established to
monitor the quarterly incentive payment.
County Administrator's Response:
Management will develop a procedure for tracking timely receipt of rebate checks.
R. Maintaining Eligible Member Records
•
1. County Entities and Departments Not Reporting Employee Changes Timely
ti
Finding:
A review of participant eligibility revealed that employing County Entities and
Departments are not always reporting employee changes on a timely basis. Group
Insurance personnel are responsible for maintaining the eligibility records and they rely
on the County Entities and Departments to report employee terminations, leave of
absences, new hires, retirements and dependent information with the corresponding
effective date. A sample test of terminations entered in WHP's system by Group
Insurance personnel ranged from 11 days prior to termination and up to 60 days after
termination.
Failure of the County Entities and Departments to communicate employee changes to
Group Insurance in a timely manner can result in overpayment of benefits for ineligible
employees and their dependents. An interview with Group Insurance personnel
indicated the Sheriff's Department, Social Services and Mosquito Control have had
trouble in the past reporting changes timely. Group Insurance notified the entities
through memos of the necessary requirements to report employee changes. This has
improved the reporting of employee changes. However, due to the large number of
participants and numerous employers and departments within the plan, all County
Entities and Departments would benefit from documentation of the eligibility
notification procedures.
Recommendation(s):
1. Group Insurance Management should establish and implement an Administrative
Instruction to provide guidelines regarding procedures on notification requirements
and the responsibility of County Departments and Entities for employee
terminations, leave of absences, new hires, dependent eligibility and retirements.
County Administrator's Response:
Many of the entities covered under the pharmaceutical program do not come under
the responsibility of the County Administrator; therefore, they would not be
covered under Administrative Instructions. Management will periodically
remind the various entities and departments of the need for prompt notification of
any terminations, retirements, etc. Management will develop a procedure for
reminding the various entities.of the importance of prompt reporting of payroll
changes and also cover the correct procedure for BOCC employees.
2. Terminated Employees and Dependents Receiving Prescription Benefits
Finding:
To ensure claims paid were for eligible participants the auditors compared the Acordia
Employee/Dependent File Listing to WHP Claim Detail Report of prescriptions.
Group Insurance personnel must report each employee termination or employee change
3 -
1-1
to Acordia and to WHP. Group Insurance personnel informed the auditors the detail
claim listings from WHP were verified to ensure only claims were paid for eligible
employees and dependents. However, the test month of June 2002 identified three
terminated employees who were receiving prescription benefits at the time of the audit.
One employee terminated on March 9, 2001 and the appropriate paperwork was
submitted to WHP, but was not processed and resulted in 42 prescriptions processed
with a plan cost of $1,099.01i. One employee terminated on January 9, 2002, but a
modification was made to their original WHP record incorrectly and resulted in 56
prescriptions processed with a plan cost of$1,085.08. The third employee terminated
on May 7, 2002 and Group Insurance was not notified of the change until May 21,
2002 and resulted in 7 prescriptions processed with a plan cost of$262.20.
Group Insurance personnel were not reviewing WHP's active eligible employees and
dependents list to ensure the changes were made. During the audit, Group Insurance
requested a current listing of eligible participants from WHP and made the appropriate
corrections. In addition to the terminated employees identified in the auditor's test
month, their review identified;a dependent that became ineligible on April 26, 2002,
but a modification was made to their original WHP record incorrectly and resulted in 7
prescriptions processed with a plan cost of$59.63. Maintaining an accurate and up-to-
date list of eligible members of the Prescription Program is essential to ensure that
prescriptions are dispensed only to eligible individuals.
Recommendation(s):
1. Group Insurance Management should document and ensure internal controls are
being performed to verify paid prescription claims are for eligible employees and
their dependents.
2. Group Insurance Management should request refunds from the ineligible
individuals.
3. Group Insurance Management should request a listing of employees and dependents
eligible to receive prescriptions benefits from WHP on a regular basis and update
the records accordingly.
County Administrator's Response:
Management recognizes that everything possible should be done to prevent mistakes,
but also recognizes that sometimes mistakes do occur. The records are updated
approximately 115 times a: month. This includes new hires, terminations,
dependent coverage changes, requests for new ID cards, and address changes. It
is projected that WHP will process 36,000 prescriptions this year for a cost of
$1,500,000. Of the three errors, the first one was created before eligibility
directly on-line was updated. The necessary information was transmitted, but
the change never was processed by WHP. The second error was due to a change
in the social security number that somehow created two files and then when
employee terminated, only one file was changed showing the termination. The
third was due to an untimely notification of a termination.
4
1
WHP is now requested to provide reports on a quarterly basis to update the
records. A modification in the format of the report that facilitates the
checking for eligible participants has been requested.
The County has requested refunds in the past, but has very little success in
getting former employees to repay payments that were made in error. The
county attorney will be requested to review any further steps which can be
taken to recover this money.
C. Prescription Service Agreement
1. WHP Health Initiatives Contract
Finding:
The contract awarded for prescription benefit services is between Lower Florida Keys
' Physician/Hospital Organization, Inc. a Florida not-for-profit corporation doing
business as Keys Physician-Hospital Alliance and WHP Health Initiatives, Inc. an
Illinois corporation doing business as Walgreens Health Initiatives. Monroe County
adopted the Prescription Service Agreement between KPHA and WHP with a plan
joinder. KPHA had hoped other County businesses would join the PHO to lower
costs through a large user profile, however, this economy of scale benefit was not
realized and Monroe County is the only participant. Lower Florida Keys Health
System was originally a participant in KPHA also using WHP. They are no longer a
member and use one of the largest pharmacy benefit plans called Express Script.
_ Both Acordia and KPHA stated in their proposal that they can work with any
Pharmacy Benefit Management Company selected by the County.
KPHA is responsible for the following medication categories that require prior
authorizations: Accutane, Retin-A, Oral Contraceptives, Viagra, and Anabolic
Steroids. KPHA has processed 143 prior authorizations since the plans inception in
1996, 126 were approved and 17 were denied. WHP is responsible as of the new
contract for prior authorizations of Proton Pump Inhibitors, COX -2 Inhibitors,
Migraine Category, Lamisil, Sporonox and insomnia .medication. All prior
authorizations are customarily provided by the pharmacy benefit management
companies.
Recommendation:
1. Group Insurance Management should consider contracting directly with the
pharmacy benefit company.
County Administrator's Response:
Management has always had the option of contracting with the pharmacy benefit
company directly,but has not seen any additional benefits for doing so. KPHA
5
Idoes prior authorizations and they do not charge us for that service. Under the
findings, it indicated that only 17 requests were denied from 143. Management is
not sure this is a bad thing. The purpose of prior authorizations is to insure
physicians are prescribing according to our plan. An example of that would be
birth control medication being prescribed for birth control would be denied, but
' for other medical problems might be an acceptable form of treatment and would
be covered under our plan.
' There is not sufficient data on the prior authorizations being handled by WHP for
Accutane, Retin-A, Oral Contraceptives, Viagra and Anabolic Steroids. It was
recommended that we do prior authorizations on these issues, to direct physicians
and patients to use equally as effective, but less costly, medications and
1 treatments. The County is being charged $30 per prior authorization handled by
WHP and has requested cost savings. When pharmaceutical services contract is
due for renewal, the County will consider a direct contract with the provider.
2. Identification Cards Not Collected
Finding:
Identification cards issued by WHP are not collected by the Plan upon termination of the
employee. According to the Prescription Service Agreement Section 2.4 Responsibility
of Plans each Plan shall be responsible for collecting the Identification Card from the
Member upon termination of the Member's eligibility.
During an interview with the supervisor of Walgreens pharmacies in Miami-Dade and
' Monroe County, she stated it was important to physically collect the identification card
to prevent delays that might occur deactivating employees after termination. There
could be circumstances when a pharmacy does not operate through the database and
the terminated employee only needs the card to fill a prescription.
Recommendation(s):
1. Group Insurance Management should establish and implement a procedure that
would ensure the collection of the identification cards at the time of an employee's
termination.
County Administrator's Response:
It is Management's experience that once an employee is set up with a pharmacy, the
pharmacy does not request to see the card again for further refills and new
prescriptions. In these cases collecting the card will not prevent an employee
from receiving a prescription to which they are not entitled. Also, employees can
have multiple cards in the family and it would be a nightmare to retrieve cards
issued to employee, spouses and dependents. There are also retirees that cover
dependents that lose eligibility and it would require a considerable amount of time
6 •
and money to make a fail-safe method of retrieving cards. Management will add
this•requirement to the Administrative Instruction that all cards should be turned
in along with other county property, keys, identification cards, etc., but does not
feel creating a massive data collection of cards issued, reissued, collected, etc.
would justify the staff effort and time involved.
3. Contract Definition of Average Wholesale Price
Finding:
WHP charges for a prescription based on the Average Wholesale Price (AWP) listed in the
First DataBank Pricing Service. The drug cost is determined by the eleven-digit
National Drug Code (NDC) number minus the contracted discount. The last two
numbers in the NDC number identifies the lot size. Based on information provided by
First DataBank to determine the AWP, they survey national wholesalers and the
markup that First DataBank utilizes is a weighted cost average.
Interviews with our sales representative confirm that our price is based on the actual eleven
digit NDC number and the pharmacy benefit manager does no repricing. However, the
Prescription Service Agreement Definition 1.2 states that "This price is based on 100
tablets or capsules, one pint of liquid, or the closest quantity to that prescribed for
ointments, creams, suppositories, or other medication not packaged in 100's or pints."
Prices of smaller packages such as 100 lots are more expensive. Our Account
Representative says the definition is incorrect and is having a corrected definition
prepared. See Exhibit D - Contract Definition.
Recommendation(s):
1. Group Insurance Management should coordinate the definition change with WHP.
County Administrator's Response:
As stated in the Audit, the incorrect definition in the contract has not cost additional
money because "Interviews with our sales representative confirm that our price is
based on the actual eleven digit NDC number..." The corrected definition will be
added to future contracts.
D. Request for Proposals
1. Cost Analysis
Finding:
The Request for Proposal submitted bythe Insurance Consultant sultant (Intensk, Inc.) did not
include specific questions and analysis about how the pricing is calculated. The
proposal states "Quoted Price/Fees or Discount Arrangement." See Exhibit E -
7
Request for Proposal for Prescription Management Plan. The contracted discount is
the discount from the AWP used in calculating the plan sponsor's liability. A plan
sponsor's liability will be the lower of either the Contracted Discount or Maximum
Allowable Cost (MAC), and the Usual and Customary Price, if applicable, minus the
member's contribution.
Pharmacy benefit management pricing methodology is inherently complex with contracted
discounts, maximum allowable cost, usual and customary pricing, administrative fees,
rebates, deductibles and co-payments. All of these items affect the total price to the
County. There was no detailed analysis of the total cost by the Insurance Consultant for
the self-insured pharmacy benefit plans. For example, the proposal could request the
individual prescription cost for the top twenty drugs using a specific date, specific
NDC number, specific number of pills, and including all rebates, discounts and
administrative fees related to their quote. This specific analysis could then be
compared for all prescription plans providing us a level basis to judge the merits of
each plan. Average wholesale price could also be compared for all proposals to ensure
that each pharmacy benefit manager defines AWP the same way. See Exhibit F -
Sample RFP Schedule of Actual AWP and Cost per RX.
Recommendation(s):
1. Group Insurance Management should coordinate the change to the proposal with the
Insurance Consultant.
County Administrator's Response:
Management appreciates the clarity provided by this audit on an improvement that
can be added to the pharmacy RFP process in the future.
2. Prescription Plans of Other Florida Businesses
Finding:
A review of other businesses with prescription plans revealed that Monroe County did not
receive bids from some viable pharmacy benefit companies. See Exhibit G -
Prescription Drug Program Comparison-Other Florida Programs. The County's
prescription plan was properly bid to obtain competition; however, the prescription
plan was bid as part of the overall total benefit plan. The request for proposal was
titled "Health Benefits Plan Claims Administration 8:. Utilization Review Services,
Excess/Stop Loss for Group Self-Insured Medical Benefits, Prescription Benefits Plan,
Group Life Insurance and Accidental Death and Dismemberment, Group Employee
Voluntary Supplemental Life Insurance, Group Voluntary Short Term & Long Term
Disability, Employee Assistance Plan, Nationwide Provider Network, Flexible
Spending Account".
8 -
Express Script, AdvancePCS and Medco Health Solutions, Inc. are three of the largest
pharmacy benefit companies. The top three firms handle more than 75% of retail drug
purchases. Express Script has contracts with the City of Key West (through the Florida
League of Cities) and Lower Keys Medical Center. Fausto's uses AdvancePCS.
During interviews with management of one of the pharmacy benefit companies listed
above, he stated that they would definitely have been interested in bidding for the
County's business, but they were not aware of the request for proposal.
Recommendation(s): •
1. Group Insurance Management should consider sending the request for proposal to
pharmacy benefit managers used by other County businesses to increase
competition.
County Administrator's Response:
Management will .specifically target pharmacy benefit managers used by other
county businesses for the next RFP. The County has always advertised both
locally and in Miami and has received responses from companies other than
WHP. It is not felt that the title of the RFP has caused the lack of
participation. However, the County will try to target the companies
mentioned in the Audit (ExpressScript and Advance PCS.) However, as an
interesting bit of information, the above companies and others have been sued
by the country's largest union of public employees, the American Federation of
State, County and Municipal Employees . The suit charges that the four
largest pharmacy benefits managers have "inflated drug prices through
`illegal, secret dealings' with pharmaceutical companies. " L1 WHP is not
included in the suit. Copy of article attached.
E. Not-For-Profit Reports Not Submitted
Finding:
As part of our standard audit procedures, we requested KPHA's Form 990 Return of
Organization Exempt from income tax. An organization's completed Form 990 is
available for public inspection as required by Section 6104 of the Internal Revenue
Code. Lower Florida Keys Physician/Hospital Organization, Inc. is organized as a
Florida not-for-profit corporation doing business as Keys Physician-Hospital Alliance.
KPHA has always maintained the independence of their organization by stating that it
is not part of the hospital, they are a separate organization with a separate board of
directors.
Form 990 was not submitted as requested. The Executive Director of KPHA states "Please
note that although the PHO was organized as a Florida not-for-profit corporation, the
PHO is not a tax-exempt entity and has never applied for tax-exempt status from either
the Federal Government or the State of Florida. See Exhibit H - Public Inquiry -
9 _
I
1 Florida Department of State, Division of Corporations, Florida Non Profit, Lower
Florida Keys Physician/Hospital Organization, Inc. Therefore, the PHO cannot comply
with your request for copies of any applications for tax exemption or Form 990's for
the past three years." See Exhibit I - Letter from Executive Director.
KPHA is responsible for certain medication categories that require prior authorizations.
Prior authorizations are approved using a clinical criteria and use of some judgment by
KPHA employees. The employees of KPHA are making decisions regarding
prescribing practices of physicians who are members of the KPHA organization. The
Assistant Administrator of the Lower Keys Medical Center is also the Director of
Operations for the Keys Physician-Hospital Alliance. Independence in the
performance of the review process for both prescription management and the health
plan is essential for the cost effectiveness of the plan and provides for objective and
uninhibited appraisal.
Recommendation(s):
2. County Management should obtain clarification of the relationship between KPHA
and Lower Keys Medical Center and whether or not there are any independence
issues that may negatively affect KPHA's ability to act on behalf of Monroe
County pursuant to the Prescription Service Agreement should a determination be
made that it is in the best interest of the prescription plan to continue to utilize the
services of KPHA.
County Administrator's Response:
Management will attempt to clarify the relationship.
F. Receipt From Pharmacy Does Not List Cost to the County
Finding:
The receipts from Walgreens Pharmacies do not display the total cost of the prescription
only the co-payment made by the employee or dependent. Receipts from Eckerd
Pharmacies display the co-payment made and the amount paid by the County is
displayed on the receipt as "You have saved $xxx by using your plan". The amount
saved by using the plan is an important benefit to the employee and having it displayed
on the receipt would educate the employee on the total cost to Monroe County for this
benefit.
Recommendation(s):
3. Group Insurance Management should consider requesting that WHP display the
employee cost and the benefit provided by Monroe County under the prescription
plan.
10
County Administrator's Response:
Management will request this feature of all WHP providers. Management
believes it is a good feature and one that should be pursued.
1
1
al What's New In Benefits&Compensation,April 15,2003
11
I April 15, 2003
1 E L
_a Benefits TM
II
The leading one-stop service to keep benefits managers up to date,in a quick-read format,twice a month.
1
At last! New plan offers -hope
for out-of-control drug costs
■ Novel approach could save your company money
•
A benefits professional's job is just might save your company money.
i ; - WHAT'S INSIDE . .something like beingthe captain
_, gProponents of the pricing structure
of a ship. say it's been proven to save money for
•
.. , 2 Sharpen Your Judgment • Your task is to take care of the health plan sponsors.
day-to-day details that keep the ship Several American insurance
i Is taking sick wife to funeral on course.
covered under FMLA regs? companies are taking a look at
But just as important is keeping whether it can work here.
4 Cost of Noncompliance a lookout for shifting conditions-
Court award was only$720, because when circumstances change, Sets cost cap
but the legal bill was$130K. you need to be able to respond Therapeutic MAC (that stands for
- quickly. maximum allowable cost) sets a cap
I 4 Compensation Ideas That's why you're always alert to on the amount health insurers pay for
IRS: Unused vacation can new trends in health care. And here's specific groups of prescription
go into 401(k)tax-free. the latest development you'll need to medications.
know about: "therapeutic MAC." If that results in lower annual
5 Real Problems/Real Solutions It's a European approach to (Please turn to New plat:...p.2)
A return to the'old way' managing prescription drug costs that
boosted firm morale.
1 , DRUG PRICES
7 What Worked, What Didn't
Cut mistakes, saved money by Pharmacy benefit managers on the hot seat- again
1 direct deposit of FSA funds.
These aren't very good days for Solutions and Caremark Rx.
pharmacy benefit managers The "big four" account for about
(PBMs). 80% of the U.S. market. So if your
The Purpose of What's New in Here's the bright side: It's possible company uses a PBM, the odds are
Benefits &Compensation all these lawsuits will force PBMs to good that one of these firms handles
What's New in Benefits 6-Compensation drop prices. your drug claims.
-- is an authoritative fast-read publication
to help benefits and compensation The latest problem? There's a new Joiningthe crowd
professionals address the cost concerns g
suit against the four largest PBIvfs,
of senior management while meeting the charging that they've inflated drugThe AFSCME suit, filed in
complex needs of employees.
Twice a month it keeps you up to date prices through "illegal, secret California, echoes the charges that
on all"need-to-know"legal,tax and I dealings" with pharmaceutical have been leveled in previous court
policy developments.It follows trends i companies. action against the PBMs.
and provides real-world examples of
how other companies cut costs,avoid It was filed by the country's largest The allegation: PBMs have made
in legal/tax pitfalls,maximize benefit values union of public employees, the billions of dollars in illegal profits by
1 and successfully communicate programs i American Federation of State, County taking kickbacks from drugmakers in
to employees—all in an effort to make
their firms more competitive through and Municipal Employees (AFSCME). exchange for steering consumers to
creative,cost-effective benefits and The defendants: Advance PCS, those companies' products.
compensation programs. Express Scripts, IvledCo Health We'll keep you up-to-date.
r' n- --.,.,