Item C30
BOARD OF COUNTY COMMISSIONERS
AGENDA ITEM SUMMARy
Meeting Date: September 17-. 2003
Division: Manal!ement Services
Bulk Item: Yes -L No
Department: Group Insurance
AGENDA ITEM WORDING: Approval to renew the contract joinder for prescription benefit
manal!ement services with Wall!reens Health Initiatives (WHP) throul!h the Kevs Phvsician-
Hospital Alliance CKPHA) effective October 1. 2003 throul!h September 30. 2004.
ITEM BACKGROUND: Current contract effective October 1. 2002 throul!h September 30.
2003 with renewals for FY 03-04 & FY 04-05. The County is currently preparinl! RFP's for a
fully-insured and self-insured prOl!ram. If upon completion of the RFP the County desires to
terminate the current contract joinder with Wall!reens Health Initiatives throul!h the Kevs
Physician-Hospital Alliance a (90) day written notice must be !!iven.
PREVIOUS RELEVANT BOCC ACTION: BOCC directed that RFP be done March 2001 and
approved contract joinder for prescription benefit manal!ement services with Wall!reens Health
Initiatives (WHP) throul!h the Kevs Physician-Hospital Alliance CKPHA).
CONTRACT/AGREEMENT CHANGES: This is the first-year renewal. Rebate amount
increased from $.80 to $1.80 per paid prescription effective October 1. 2003.
STAFF RECOMMENDATIONS: Approval.
TOTAL COST:
$18.000.00
BUDGETED: Yes -X- No
COST TO COUNTY:
$18.000.00
SOURCE OF FUNDS: Primarily Ad Valorem
REVENUE PRODUCING: Yes
No
AMOUNTPERMONTH_ Year
APPROVED BY:
County Atty$ OMB/Purchasing _ Risk Management ~
~~ tlj-~
Sheila A. Barker
DIVISION DIRECTOR APPROVAL:
DOCUMENTATION:
Included l
To Follow____
Not Required_
DISPOSITION:
AGENDA ITEM # CJ{)
MONROE COUNTY BOARD OF COUNTY COMMISSIONERS
-
Contract with: Walgreens Health
Initiatives. Inc.
CONTRACT SUMMARY
Contract #
Effective Date:October I. 2003
Expiration Date:Seotember 30. 2004
Contract Purpose/Description:Renewal for prescription benefit management services.
Contract Manager:Maria Z. Fernandez
(Name)
4448
(Ext. )
Administrative Services
(Department)
for BOCC meeting on Sentember 17.2003 Agenda Deadline: Sentember 2 2003
Total Dollar Value of Contract: $18.000.00
Budgeted? Y es~ No 0 Account Codes:
Grant: $N/ A
County Match: $N/ A
CONTRACT COSTS
Current Year Portion: $_
501-08003-530316-_-_
- - - -
-----
- - - -
-----
ADDITIONAL COSTS
Estimated Ongoing Costs: $_/yr For:
ot included in dollar value above e . maintenance, utilities, . anitorial, salaries, etc.
- - - -
-----
CONTRACT REVIEW
Division Director
Changes
Date In Needed
YesO No
~3 YesONoG-
~03 YesO No~
f!g!o3 YesONo~
Date Out
Risk Management
~;L
711/0:3
~Io
:J4GJ
O.M.B./Purchasing
County Attorney
Comments:_
OMB Form Revised 9/1 1/95 MCP #2
AMENDMENT NO.1 TO PRESCRIPTION SERVICE AGREEMENT
This Amendment No.1 is entered into 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., d/b/a Walgreens Health Initiatives ("WHP").
WHEREAS, KPHA and WHP are parties to that certain Prescription Service Agreement (the
"Agreement"), effective as of October 1, 2002, which is incorporated herein by reference and made a part
hereof; and
WHEREAS, the Board of County Commissioners of Monroe County, Florida ("Plan") has agreed to
adopt and join the Agreement as evidenced by the Pharmacy Services Joinder Agreement dated October 1,
2002; and
WHEREAS, the parties desire to amend certain of the terms ofthe Agreement.
NOW, THEREFORE, in consideration of the covenants and agreements set forth herein, KPHA
and WHP agree as follows:
1. Effective July 1,2003, the following is added as a new Article IV of Attachment A:
II. SPECIALTY PHARMACY DRUGS. KPHA acknowledges that certain drugs available on the market
will not be subject to the rates set forth in Article I, above, due to reasons such as, but not limited to,
nonstandard administration, necessity for case management, limited availability, unique shipping or
handling requirements, and specialized manufacturer process and/or purchase arrangements. Such drugs
are referred to herein as "Specialty Pharmacy Drugs." Examples of Specialty Pharmacy Drugs include
biotechnology drugs and certain compounds. The rates for the dispensing of any Specialty Pharmacy
Drugs will be as set forth below in this Article IV or as otherwise agreed in writing between the parties.
KPHA further acknowledges that the dispensing of Specialty Pharmacy Drugs may be limited to the
Participating Mail Service Pharmacy, other subcontracted mail service provider, or certain Participating
Pharmacies only.
For all Specialty Pharmacy Drugs except those set forth below, ifany:
A. Retail:
1. Brand: 85% of the Average Wholesale Price of the dispensed medication plus a dispensing fee of
$2.25.
2. Generic: 85% of the Average Wholesale Price of the dispensed medication plus a dispensing fee
of $2.50
B. Mail:
1. Brand: 85% of the Average Wholesale Price of the dispensed medication plus a dispensing fee of
$2.25.
Am-KPHA.063.mm
2. Generic: 85% of the Average Wholesale Price of the dispensed medication plus a dispensing fee
of$2.50.
C. Exceptions to rates set forth above:
1. Cerezyme and Ceredase:
a. Brand: the Average Wholesale Price of the dispensed medication plus a dispensing fee of
$2.25.
b. Generic: the Average Wholesale Price of the dispensed medication plus a dispensing fee of
$2.50.
Notwithstanding the foregoing, if the rate set forth in this Article IV is less than the Member copayment
fee, WHP will receive as reimbursement, at a minimum, the lesser of the Member copayment fee or the
dispensing pharmacy's usual retail charge.
2. In all other respects, the Agreement and all of the applicable terms, covenants and conditions
contained therein will remain unchanged and will continue in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Amendment No.1 as of the day and year
last written below.
KEYS PHYSICIAN-HOSPITAL
ORGANIZATION, INC. d/b/a KEYS
PHYSICIAN-HOSPITAL ALLIANCE
WHP HEALTH INITIATIVES, INe.
BY:
BY:
TITLE:
TITLE:
DATE:
DATE:
BOARD OF COUNTY COMMISSIONERS
MONROE COUNTY, FLORIDA
(Seal)
Attest: Danny L. Kolhage, Clerk
By:
BY:
Deputy Clerk
Am-KPHA.063.mm
2
AMENDMENT NO.2 TO PRESCRIPTION SERVICE AGREEMENT
This Amendment No.2 is entered into by and between Lower Florida Keys Physician/HospitaI
Organization, Inc., a Florida not for profit corporation doing business as Keys Physician-Hospital Alliance
("KPHA") and WHP Health Initiatives, Inc., d/b/a Walgreens Health Initiatives ("WHP").
WHEREAS, KPHA and WHP are parties to that certain Prescription Service Agreement (the
"Agreement"), effective as of October 1,2002, which is incorporated herein by reference and made a part
hereof;
WHEREAS, the Board of County Commissioners of Monroe County, Florida ("Plan") has agreed to
adopt and join the Agreement as evidenced by the Pharmacy Services Joinder Agreement dated October 1,
2002; and
WHEREAS, the parties desire to amend certain of the terms of the Agreement.
NOW, THEREFORE, in consideration of the covenants and agreements set forth herein, KPHA,
Plan and WHP agree as follows:
1. Effective October 1,2003, Section 1.2 of the Agreement is deleted in its entirety and replaced with
the following:
1.2 "Avera2e Wholesale Price" shall refer to the price defined and distributed by First Data Bank for
each drug in the database. This price is based on the II-digit NDC number submitted for the
dispensed medication. Such A WP prices will be updated in the claims processing system on at least a
weekly basis to reflect current A WP pricing.
2. Effective October 1,2003, Section 1.9 of the Agreement is deleted in its entirety and replaced with
the following:
1.9 "MAC List" means WHP's list of generic drugs and their associated prices at which KPHA 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.
3. Effective October 1,2003, Article II of Attachment A is deleted in its entirety and replaced with the
following:
II. Incentives and Rebate Guarantees
A. Both Plan and KHP A 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 KHP A 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 KHP A to execute any documents in addition to this Agreement, Plan and KHP A agree to
Am-kpha.093.mm
cooperate fully with WHP in the execution thereof. Both Plan and KHP A warrant and represent that
neither party has a direct or indirect arrangement, either oral or written, with any drug manufacturers or
others for incentives based upon prescription drugs dispensed to Members. Neither Plan nor KHP A
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 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 $1.80, 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 KHP A 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 ofWHP's formulary. In accordance therewith, either Plan
or KHP A 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 KHP A of the WHP Payment amount. Furthermore, in the event of any design
changes that materially impact any Manufacturer Incentives WHP receives hereunder, the parties agree
to negotiate in good faith any applicable changes to the WHP Payment due hereunder. Notwithstanding
anything to the contrary 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 KHP A of any their obligations set forth in this Agreement;
(2) receipt by WHP of notice from KHP A 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 ofKPHA'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.
Am-kpha.093.mm
2
4. In all other respects, the Agreement and all of the applicable terms, covenants and conditions
contained therein will remain unchanged and will continue in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Amendment No.2 as of the day and year
last written below.
KEYS PHYSICIAN-HOSPITAL
ORGANIZATION, INC. d/b/a KEYS
PHYSICIAN-HOSPITAL ALLIANCE
WHP HEALTH INITIATIVES, INC.
BY:
BY:
TITLE:
TITLE:
DATE:
DATE:
BOARD OF COUNTY COMMISSIONERS
MONROE COUNTY, FLORIDA
(seal)
Attest: Danny L. Kolhage, Clerk
By:
By:
Deputy Clerk
Am-kpha.093.mm
3
'_o....._
PRESCRIPTION SERVICE AGREEMENT
. .'~^I:'.
PRESCRIPTION SERVICE AGREEMENT
This Prescription Service Agreement ("Agreement") is entered into this 1 SI day of October, 2002 by and
between LOWER FLORIDA KEYS PHYSICIANlHospital ORGANIZATION, INC., a Florida not
for profit corporation doing business as Keys Physician-Hospital Alliance ("KPHA"), and WHP
HEALTH INITIATIVES, INC., an nIinois 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 "A2reement" means this Prescription Service Agreement between KPHA and
WHP.
1.2 "A vera2e 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:
F:\R WM\Conlracls\3"'\KHP A 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. tThisprice 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..:r
1.3 "Certificate of Coveraee" means the description of Plan Benefits for a particular Plan.
1.4 "Copavment" 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 II means an individual who has entered into an Individual Subscription
Agreement with a Plan.
1.8 "Individual Subscriber Aereement" 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 II means an eligible Subscriber and his or her eligible d~pendents that have been
enrolled in a Plan under a Group Service Contract or an Individual Subscriber Agreement.
1.11 "Participatine Phvsician" 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 "Pavor Aereement" 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 \yhich are described in a
Certificate of Coverage.
F:\RWM\ConlraCls\3"'\KHPA I.DOC\09/05/02/
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 phm-tnacy
license, WHP shall arrange for the provision of those services through a Participating Pharmacy or the
Participating Mail Service Pharmacy.
2.2 Responsibilities ofWHP.
(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 indi..cated 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
F:\R WM\Conlracls\3"'\K H PAl. D0C\09/05/021
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 cQpayment 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.
f
~
0'lJ
(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: ti~P13R-mlI-f1arfur- fHi)' iHere&Bea shipping-~eeJts
eeeHrriftg after the effce:ti"(c datc of this Agreement as a L(..)ult Orielte -!u(.ieM<;;;> .L .th<;;-Uu~I:oJ
Stat"'" ~gEt:i1 S8r..ise-or-..privatemail paelcage'hatialers;-hndiii)' 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 the
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 Responsibilitv 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-lineelectronic transmission
link (lion 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:\R WM\Conlracts\3"'\KH PAl. 00009/05/021
WHP. Plans may not retroactively deny payment for valid and accurate claims properly submitted and
properly approved on-line at the time of dispensing.
(b) Each Plan will provide all Members with a standard identification card issued by WHP
(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 KHP A
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
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.
F:\R WM\Conlracls\..1"'\KHP A I. OOC\09/05/021
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 Aeainst Members: Collection of Copavments and DeductibIes. 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 reasonab)e 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 Billin2 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 Pavrnent. 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 day following 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, IT.. 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.
F:\R WM\ConlraCls\3"'\KHP A I.DOa09/05/021
(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
prescription services to such Plan and its Members have been suspended or terminated, as the case may
be, due to Plan's failure to meet its payment obligations as set forth in this Agreement. Upon 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 any of the
following events:
(a) The pharmacy license of any Participating Pharmacy or the Participating Mail Service 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 to the
performance of obligations by WHP hereunder;
(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 Confidentialitv 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
F:\R WM\Contracls\.1"'\KHP A I .DOa09/05/021
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 Sharine: 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 Reeulatorv 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 OOe, etseq.,
Section 1876 of the Social Security Act, as amended, and 42 CPR 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
F:\R WM\Conlracls\3"'\KH PAl. 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 toKPHA, 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 KPHA, 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 reasonably possible 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 Advertisine. 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
F:\R WM\Coniracls\3"\KH PAl. DOC\09/05/021
general public (i) ofWHP's role in providing Prescription Services and (ii) that Participating Pharmacies
and Participating Mail Service Phannacy are participating providers to KPHA, Plan and Members.
8.3 Siens and Displavs. 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 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.
F:\R WM\Conlracls\3"'\KHP A 1.00C\09/05/021
9.5 EndaDl~erment 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 iri:uninent danger to the health safety and welfare of any Member.
9.6 Oblieations 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 Indemnitv. 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 Non-disclosure of Trade Secrets and Proprietarv 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, \VHP 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
F:\R WM\ContraCls\.1"'\KH P A J . DOC\09/05/021
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 Jhan 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:
KPHA: Keys Physician-Hospital Alliance
5900 College Road
Key West, Florida 33040
Attention: President
WHP: WHP Health Initiatives, Inc.
Attn: Client Services
520 Lake Cook Road, Suite 200
Deerfield, Illinois 60015
with a copy to: WHP Health Initiatives, Inc.
Attn: Mark Mincy
7316 Greenbriar Parkway
Orlando, Florida 32819
12.2 Limitation of Assienment. 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 Bindine 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; Chanees 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:\R WM\ContraCls\3"'\KHP A I.DOa09/05/021
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 AereemenUAmendment. 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
KPHA. ...~".
12.9 Attachments. The following attachments are incorporated into and made a part of this
Agreement by reference:
Attachment A:
Attachment B:
Attachment C:
Fee Schedule of Prescription Services
Plan Joinder Agreement
Insurance Requirements
12.10 Governine 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 Headines. 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.
F:\R WM\Contrncls\.1"\KHP A I.OOC\09/05/021
12.15 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 Authoritv. 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.
F:\R WM\ContraCls\.1'''\KH PAl. OOC\09/05/021
IN WITNESS WHEREOF the parties have caused this Agreement 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
~
~By:
By:
(Signature)
Name Printed: .$fq>I,'-tI ~-thulI:P.O .
Title: Ru i dl..rrt:
Name Printed: (n~./)cyj). C ws.S00
Title: Pre,>:o.er1\-'
Date: ~o~
BOARD OF COUNTY COMMISSIONERS
MONROE COUNTY, FL RIDA
- t ..,\0 . DANNY L KOLHAGE CLERK
HC u Bf~C.. ~~
DEPUTY ClERK
BY:
F:\R WM\Contracls\3"\KHP A 1.00C\09/05/02/
ATIACHMENT A
Pricine 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 generje drugs not
covered by or included on the MAC List, reimbursement will be the lesser of (i) 8.5% of the .A:verage
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 MAll.. 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.
II. 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 drug
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
F:\R WM\Contracls\3"'\KH PAl. 00C\09/05/021
paid prescnptlOn 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
KHP A 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 KHP A 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 the contrary 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 aU 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 fromKHP A 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)
Direct Member Reimbursement (DMR) (per check)
Paper Eligibility Submission (per record, if applicable)
Deductible/Plan Max Tracking (per claim, if applicable)
ID Cards-Replacement Cards (per replacement PPD)
$ 1.00
$ 1.75
$ 0.75
$ 0.10
N/C
F:\R WM\Conlracls\3"'\K H P A I . DOC\09/05/02/
On-line Client Access (per user per month, first 2 ID's at no charge)
Individual Mailings (postage per PPD)
$ 50.00
$ 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.
......~
..
F:\R WM\Conlrac[s\3"'\KH PAl. 00C\09/05/021
ATTACHMENT B
- PHARMACY SERVICES JOINDER AGREEMENT
This Pharmacy Services Joinder Agreement ("Joinder Agreement") is entered into this I~-r day of
lJ..eJ-dxr , 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 A,&eement between Keys
Physician-Hospital Alliance (KPHA) and WHP Health Initiatives, Inc., dated cJ-dJq 0 I , 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, aQd any attempted assignment,
subcontract, delegation or transfer shall be void.
F:\R WM\Contracls\3"'\KHPA I.DOC\09/05/021
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 repo~s 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.
Date:
WHP Health Initiatives, Inc.
~ ~ of Monroe C
By: .~;;::- ;BY
Its: ~ rt~.~t(\\r Its:('~(1.{\~' "~tMl'\~' N\ c.c.oy
~~, ~Q~O\( ("' d...
:i0r(j)\c~~ ate: 0 ""'\- c. "-....J
,-~ .{~
~
~
Commissioners
, Florida
~t
APPROVED AS TO FORM
A At I
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