260125_Chapter_1B_-_PBM_Scope_of_Work.docx

RFP# 260125 Attachment 1B - PBM

PHARMACY BENEFIT MANAGER (PBM)

Introduction The City of Tucson is soliciting proposals for Pharmacy services for employees and retirees for a July 1, 2026 effective date.

The City is looking to continue the current self-funding arrangement that went into effect July 1, 2019 (note that stop loss will be bid at a date closer to the effective date).

The City requires Contractors provide ALL services in this Attachment. Contractors must (1) on their own or (2) with partners provide ALL services included in this Attachment.

The City’s website: https://tucsonaz.gov/benefits contains current benefit plan information and contribution rates (employer and employee), and eligibility can be found in the Insurance Handbook. Current benefit booklets can be found on the City’s Procurement website with the RFP documents.

The City reserves the right to carve-out any service or program, change contribution strategies, funding, rate structure (e.g., blended/un-blended, etc.), benefit designs or any aspect of their program in the future as they deem appropriate. Plan Designs for effective date 7/1/2026 may be changed from current

Contractors should match or improve upon current plan design features as close as possible, specifically noting any differences in the Deviations section of this Attachment.

Please note that the requirements listed in the Scope of Work in this RFP are minimum service levels the City expects to receive through this solicitation. Any offeror may introduce enhanced services as part of their comprehensive response to this solicitation given that the minimum service levels are met.

MINIMUM REQUIREMENTS

At minimum, Contractor shall meet the following:

1. Have been in business, performing the services being proposed herein, for a minimum of five (5) years;

2. Has ten thousand (10,000) full-service Contractor covered members;

3. Has three (3) clients with a minimum of one hundred (100) retirees per client;

4. Has at least three (3) clients under contract with a minimum of two thousand five hundred (2,500) total members per client;

5. Has no bankruptcy filings within the last five (5) years;

6. Acknowledges it is compliant with all City of Tucson and federal applicable regulations and currently not restricted or prohibited from conducting business in all states where City of Tucson’s members reside or access related goods and services;

7. Has no current senior officer, board member, or director with a felony conviction on record

8. Has Utilization Review Accreditation Commission (URAC) accreditation

9. Has a direct contract with CMS

Any offeror not meeting the minimum requirements will be rejected.

Background CIGNA Healthcare has been the exclusive provider of the City’s medical and pharmacy programs since July 1, 2007. The City’s contract was fully insured with Cigna until they moved to a minimum premium contract with Cigna on 7/1/16. The City changed their funding with Cigna to self-funding on July 1, 2019.

The City currently covers approximately 4,498 employees/retirees (3,887 active employees/Cobra beneficiaries and 611 retirees) under benefits relating to this chapter.

Current Carrier / PBM: CIGNA since July 1, 2007.

Plan Information: The City of Tucson offers three plans.

HMO (“Network” Plan) HRA Open Access HSA Open Access Information on all three plans can be found in the Insurance Handbook on the City’s website:

https://tucsonaz.gov/benefits

Funding: Self-funded.

Current Prescription Plan Design:

Mail

*No Coverage available out of network on HMO Formulary: Cigna Standard Formulary; includes drug exclusions Utilization Management: Prior Authorization / Step Therapy / Quantity Limits Generic Program – Mandatory; Dispense as Written 2 (Member) pays as Generic Copayment + Difference in cost between the Brand and Generic medication.

Retail90 Program at two (2) retail copayments: Yes - includes most major chains. Walgreens, Sam’s Club, and Costco are NOT in the Retail90 network.

Mandatory Mail: No; Member cost share is two (2) retail copayments.

Exclusive Specialty Program: No

Requested Plan Design: Match or improve current pharmacy services and provisions.

Solicitation Purpose and Program Goals City of Tucson is seeking to continue to provide a Pharmacy Benefits Program through this solicitation. The City’s goal is to select a Pharmacy Benefit Manager that will be the most effective and proactive partner. The minimum program services shall include:

General Requirements

1. Contractor shall complete all Questionnaires, and Exhibits included in this solicitation, in the format indicated. Respondents will not leave any sections blank, with a reference to find answer(s) elsewhere in their proposal. ALL cost items must be included and reflected only in the appropriate areas of the Questionnaire.

2. Any changes in financial strength rating agencies (downgrades or upgrades) shall be disclosed to City of Tucson within thirty (30) days of the effective date of the award.

3. Contractor shall have the capability and requisite experience and expertise to manage the Pharmacy Program for City of Tucson in accordance with the provisions and requirements set forth herein for the duration of the Contract.

4. Contractor shall strictly adhere to the Summary Plan Description (e.g., covered services, frequency of service, etc.) in place at the time of the award as well as any changes and/or amendments to this solicitation throughout the term(s) identified as part of the award.

5. Contractor shall work with City of Tucson in good faith as new medication management opportunities arise, legislative and or market place dynamics occur (e.g., drug re-importation or rebate elimination), company acquisitions occur, or as the business requires to ensure that pharmacy benefit delivery and customer service is not unduly impacted and that steps occur to ensure financial performance is addressed.

6. This Contract is in a field which may be impacted by future regulatory and/or legislative changes, which will require the City of Tucson to purchase additional goods or services that are not specifically mentioned herein, but which will be considered by the City of Tucson to reasonably fall under the Scope of Work of this Contract at a later date. This Scope of Work, therefore, is meant to include any and all goods and services which are reasonably related to the Contract, including those which are currently unforeseen, during the Contract Term. Contractor agrees to enter into good faith negotiations regarding pricing for these goods and services, at the City of Tucson's request, to incorporate this type of good or service into the Contract through a Contract Amendment.

7. Contractor shall perform a mid-contract term market check that may start as soon as the second quarter of the second contract year, conducted by an independent third party to ensure the City of Tucson is receiving appropriate current pricing terms competitive within the industry based on its volume and membership, and will improve pricing in the event that the City of Tucson’s contract terms are less than current. The Contractor shall review the financial terms of the City of Tucson compared to financial offering presented to similar Funds in the marketplace as deemed appropriate as part of this process and offer improved pricing to the City of Tucson if there is savings of over one percent (1%) in the marketplace. The financial guarantees for any partial contractual year that results from the implementation of new pricing will still be guaranteed, reconciled and the Contractor will still make payments for any shortfalls for those resulting partial contractual years with less than twelve (12) months and those contractual years with over twelve (12) months. The City of Tucson shall have the right to terminate without penalty if the pricing terms are not industry competitive.

8. Contractor shall remit to the City of Tucson all rebate revenue, administrative fees, price protection payments, outcomes-based performance payments, and all other revenue directly attributable City of Tucson claims earned by the City of Tucson regardless of their termination status as a client. Lag rebates on claims incurred prior to the termination date shall continue to be paid to the City of Tucson after termination until one hundred percent (100%) of earned rebates are paid.

9. Contractor shall provide quarterly claims data to the City of Tucson and its delegates to perform quarterly financial discount reconciliations on actual claims experience with an end of year true-up to any guarantee shortfall.

10. Contractor shall make available all manufacturer rebate contracts, without restriction, to audit all rebate revenue earned by the City of Tucson.

11. All eligibility and claims records are the sole property of the City of Tucson and must be made available upon request to the City of Tucson and its representatives.

12. Selling or providing of the City of Tucson’s data to any outside entities is strictly prohibited. Even if Contractor has not "sold" the data, it is not free to use the data for analyses that they publish or provide to any other entity.

13. Contractor shall support and comply with the final guidance set forth in electronic prescribing (e-prescribing) foundational standards under § 101 of the Medicare Prescription Drug Improvement and Modernization Act of 2003 (MMA). Contractor shall maintain compliance as subsequent updated standards are published.

14. Contractor shall offer electronic point-of-service (POS) pharmacy claims adjudication services to communicate member eligibility and prescription approval information to Contractor’s provider network as part of the base administrative fees and with no additional cost to City of Tucson.

15. The POS system shall provide the following capabilities:

a. Authorization of overrides to allow processing of claims;

b. Ability to restrict access of individual members to designated classes of drugs, prescribers, and pharmacy providers; and

c. Ability to restrict individual prescribers from prescribing designated classes of drugs.

16. Contractor shall administer a ninety (90) day retail supply benefit via its retail network providers

17. Should Contractor modify any operational process during the term of this Contract that has a substantial financial impact on City of Tucson or that affects greater than two percent (2%) of utilizing Members or where City of Tucson plan costs will be impacted by greater than two percent (2%). Contractor shall provide notification to City of Tucson at least thirty (30) days prior to proposed change. City of Tucson reserves the right to reject any change to its current program or process if City of Tucson has reasonable evidence that such change will cause it or its member’s significant disruption.

18. Contractor shall develop and implement written policies and procedures for evaluating new pharmaceutical technologies and new uses of existing technologies. The evaluations shall consider national and state coverage guidelines and legislation, as appropriate, as well as research articles from respected industry journals and institutions.

19. Contractor shall establish written policies and procedures, including coverage rules, practice guidelines, payment policies, and pharmaceutical management that allow for individual medical necessity determinations.

20. Contractor shall promptly notify City of Tucson within thirty (30) days of any change to its ownership, partners, or control affecting ten percent (10%) or greater interest, any acquisition by it of ten percent (10%) or greater interest in any subsidiary, and any new agreement with, by, or between any affiliates that is relevant to the Contract.

21. Offshore Performance: Due to security and identity protection concerns, direct services under this contract shall be performed by Contractor within the borders of the United States. Any services that are described in the contract or scope of work that directly serve the City and may involve access to secure or sensitive data or personal client data or development or modification of software for the City shall be performed within the borders of the United States. Unless specifically stated otherwise in the contract, this definition does not apply to indirect or “overhead” services, redundant back-up services or services that are incidental to the performance of the contract. This provision applies to work performed by Contractor and subcontractors at all tiers.

22. Contractor shall submit to City of Tucson for approval any allowance or delegation of authority during the period of the award for the use of any subcontractor or any other contractor to deliver any services requested under this solicitation.

23. Contractor shall allow City of Tucson to participate in any quality assurance or Pharmacy & Therapeutic Committee meetings for any and all subcontractors. Contractor will provide, upon City of Tucson request, all drugs monographs, data, and meeting minutes for each Pharmacy & Therapeutics Committee meeting.

24. Contractor shall immediately, upon any oral or written notification, report to City of Tucson any potential litigation relating to issues involving Contractor, City of Tucson, and or any subcontractor as it pertains to any services provided under this Contract.

25. City of Tucson reserves the right to modify the benefit plan design at its discretion.

26. City of Tucson reserves the right to consult freely with the Arizona Department of Insurance (DOI) or any other agency or regulatory instrumentality of the state with respect to regulatory compliance of the Contractor.

27. Contractor shall provide to City of Tucson for approval all proposed changes to written policies or procedures used in the administration of this Contract at least ninety (90) days before such changes are implemented. A written notification shall be submitted to City of Tucson describing any proposed change and the reason for the change. If the City of Tucson does not agree with said changes, the City may terminate without cause.

28. All services provided shall be quality services, meeting or exceeding City of Tucson-approved industry standards. Contractor shall take immediate, corrective action when services do not meet industry standards. Contractor shall provide a written corrective action plan to City of Tucson within fourteen (14) days that clearly outlines the steps to be taken and the timeframes for their completion when services do not meet industry standards, or when standards are inappropriate, undesirable, and/or of poor quality as identified by City of Tucson. The resources needed to correct services that do not meet industry and City of Tucson-quality standards shall be provided at no additional cost to City of Tucson.

29. Contractor shall take immediate corrective action and provide a written corrective action plan within fourteen (14) days, as requested by City of Tucson, should City of Tucson identify any deficiencies in the performance of the Contract, including missed performance guarantees, or audit findings. No fees shall be charged in the recovery or reimbursement of any funds identified. The corrective action plan shall include, at a minimum:

a. Reference to the specific error or finding, summary of overall impact error, financial and/or member impact;

b. Causal factor(s);

c. Name and title of the person accountable for implementing and overseeing the corrective action plan;

d. Corrective action items including:

i. Specific deliverables including but not limited to impact reports

ii. The anticipated completion date(s);

iii. The reason the corrective action is not necessary, if applicable;

iv. Disclosure of metrics used to measure the success of each deliverable;

v. Member notification process, if applicable;

vi. Notification upon completion of issue resolution.

30. Contractor shall provide resources to respond within ten (10) days to all City of Tucson inquiries related to quality assurance, corrective actions, deficiencies, and/or inefficiencies in operations at no additional cost to City of Tucson.

31. Contractor shall ensure that staff is appropriately trained on the City of Tucson plan and that quality assurance and financial accuracy procedures are in place so that procedures are applied consistently, fairly, and accurately.

32. Contractor shall have the ability to provide Medicare Part D services.

Eligibility

1. City of Tucson shall be the final authority in deciding eligibility of members.

2. Contractor shall check the eligibility of claimants against the eligibility files that will be supplied electronically by City of Tucson or medical contractor before authorizing benefits. City of Tucson shall provide Contractor with a weekly eligibility file in an electronic format (Exhibit –Eligibility File Layout). Contractor shall accept the current eligibility file format as specified, including any potential changes in the future, and absorb any internal programming costs associated with file formatting to ensure its systems can accept this format.

3. Contractor shall provide coverage to all eligible members, as determined by City of Tucson. There shall be no minimum enrollment requirements or employer contribution requirements. The City reserves the right to change its contribution strategy in the future.

4. Contractor shall accept and accurately process benefits for any eligible member including retirees, eligible dependents, and any other member who meets eligibility requirements, as stipulated by City of Tucson. City of Tucson shall be the final, decisive authority on all special, unanticipated, unusual, or new enrollment determinations when new legislation or policy changes occur throughout the plan year.

5. Contractor shall conduct orderly transitions for all members at qualified life event changes and between plan years at no additional cost to City of Tucson. At minimum, Contractor shall provide:

a. Transfer claim, prior authorization (including electronic prior authorization), and mail order information, when applicable, to avoid prescription refill disruption;

b. Issue ID cards when applicable, as determined by the City;

c. Provide member enrollment materials (both print and electronic) when applicable, as determined by the City.

6. Contractor shall conduct manual eligibility updates as required by City of Tucson and at no additional cost to City of Tucson.

7. Contractor shall cover all benefits from the plan year effective date of the Contract, such that no current member will suffer a loss of coverage by virtue of a change in contractors other than by a change in the Pharmacy Program’s design (including any applicable co-payments, deductibles, annual and lifetime maximums, etc.) already contributed to the member. No member shall lose benefits because of transition issues.

8. Contractor shall begin services prior to the plan year effective date in order to prepare for the Pharmacy Program’s open enrollment. The plan year for City of Tucson is July 1 through June 30, with open enrollment, generally scheduled during the month of May. City of Tucson reserves the right to change these dates.

9. The Contractor shall communicate directly with City of Tucson or its representative regarding any uncertain claimant eligibility situations before notifying the claimant of ineligibility.

10. Contractor shall have the capability for managing claim recovery or retroactive terminations. Contractor shall provide City of Tucson with the required process and documentation to facilitate recoveries. The City of Tucson generally will notify Contractor of terminations within 60 days after coverage termination date. However, the City reserves the right to terminate more than 60 days retroactively, under unusual circumstances.

Licensing

1. Contractor shall be in compliance with all applicable state laws, rules and regulations, including those of the Arizona Department of Insurance and other state agencies. All costs associated with Contractor’s compliance shall be borne by Contractor, with no additional costs being passed on to City of Tucson or its members.

2. Contractor shall provide verification of licensing within fourteen (14) days of written request from City of Tucson.

Clinical Programs and Formulary Management

1. Contractor shall adhere to, develop, and administer a clinically sound formulary program including ongoing Pharmacy & Therapeutics Committee (P&T) review and maintenance.

2. Contractor shall adhere to and support the use of evidence-based literature in the development of utilization management programs. Contractor shall provide upon request background documentation to include, but be limited to clinical documentation, claim counts, member disruption, and financial analytics on all newly proposed utilization management programs.

3. Additions and/or deletions to the Formulary will be provided to the City of Tucson with ninety-days (90) days’ advanced notice along with a detailed disruption and financial impact analysis and subject to the City of Tucson’s discretion to elect not to implement any such addition or deletion. Contractor shall not require City of Tucson to participate in therapeutic interchange (i.e., “switch”) programs.

4. Contractor shall provide concurrent drug utilization review (cDUR) programs integrated across the retail, mail order, and specialty distribution channels as part of the base administrative fees and at no additional cost to City of Tucson.

5. Contractor’s pharmacies shall include at least the following POS concurrent drug utilization review (cDUR) activities:

a. Determining medication formulary status;

b. Monitoring for drug-drug and drug-disease state interactions;

c. Verifying appropriate dosages;

d. Tracking over and underutilization;

e. Maintaining a potential fraud alert;

f. Conducting member consultations in compliance with applicable state or federal laws;

g. Providing member education materials.

6. Contractor shall be responsible for managing requests for vacation overrides, dosage changes, direct member reimbursements, medication shortages, compound claims, limited/exclusive distribution drugs, and/or refill-too-soon exceptions from City of Tucson, members, and/or providers/pharmacists.

7. Contractor shall obtain written approval from City of Tucson prior to implementing any programs such as “coupon” programs, “waive the co-pay” programs, discount cards, etc.

8. Contractor shall provide support to City of Tucson for a coordinated effort around the City’s tobacco cessation program. Support shall include, but not be limited to, a coordinated member-enrolled program with scheduled member counseling and other tobacco cessation support.

9. Contractor shall support all City of Tucson wellness initiatives including recommendations on clinical, utilization, or medication management programs that will target specific populations to enhance quality or improve the cost performance as appropriately identified, analyzed, and reported in the quarterly reports and/or at the request of City of Tucson.

10. Contractor shall be able to provide the following medication management services if requested:

a. First fill reports to medical vendors for high use of narcotics as defined by Centers for Disease Control and Prevention and high cost drugs and/or specialty products;

b. A blood glucose program with free meters;

11. Contractor shall collaborate with case management referrals. For example if a member with multiple sclerosis responds positively to questions about exacerbations, relapses, falls, or durable medical equipment (DME) needs, Contractor shall refer the member to the appropriate City of Tucson-contracted medical vendor.

12. Contractor shall have a designated pharmacist/clinical program director available to medical vendors and to City of Tucson as a source for pharmacy questions.

13. Contractor shall provide program alternative recommendations and targeted “quality and cost return on investment” for any clinical, utilization, or medication management programs that will enhance the quality or improve the cost of performance as appropriately identified, analyzed, and reported in the quarterly reports and/or at the request of City of Tucson.

14. Contractor decisions regarding utilization management, member and provider education, coverage of services, provision of services, and other areas to which the guidelines are applicable shall be consistent as they apply to members covered under the Pharmacy Program.

15. Contractor shall administer a formulary/preferred drug list (PDL) that is aligned with the clinical and cost management approaches of the City of Tucson. The Contractor shall include in its bid two formulary options:

a. Contractor’s Standard Formulary/preferred drug list (PDL), which may include drug exclusions.

b. Contractor’s Custom Formulary/preferred drug list (PDL), which may include drug exclusions. Contractor shall include in their bid, pricing and guarantees with drug coverage, formulary placement, and clinical rules with utilization management programs that as closely as possible mirror the programs currently in place. This does not assume mandatory PDL or formulary exclusions, use of a preferred drug step therapy, or high performance formulary, unless these items will be in place by the implementation date and agreed to by City of Tucson.

16. Contractor shall remove non-specialty and specialty formulary drugs from coverage (other than FDA recalls and other safety reasons) at most one-time per year.

17. Contractor shall provide City of Tucson and members a minimum of sixty (60) days written notice for drug therapy deletions and/or drug tier changes made to the formulary.

18. Contractor shall notify City of Tucson or its designee ninety (90) days in advance of when a drug is targeted to be excluded from coverage or moved to/from the non-specialty and specialty preferred drug list. The Contractor shall provide a detailed disruption and financial impact analysis at the same time. City of Tucson reserves the right to reject any modification to its current program or process if City of Tucson has reasonable evidence that it will cause it or its members significant disruption.

19. Contractor shall notify members sixty (60) days in advance of when a member's utilized drug is targeted to be removed from the non-specialty and specialty preferred drug list and thus become excluded from coverage. The Contractor shall provide at least two (2) notifications to the member with the formulary alternative.

20. Contractor shall notify the City of Tucson or its designee ninety (90) days in advance of when a drug is targeted to change tiers or be moved to or from a preferred or non-preferred non-specialty/specialty formulary tier. The Contractor shall provide a detailed disruption and financial impact analysis at the same time.

21. Contractor shall notify members sixty (60) days in advance of when a member's utilized drug is targeted to be moved to a higher cost tier. The Contractor shall provide at least one (1) notification to the member with the formulary alternative.

22. Contractor shall provide a list of the non-preferred brand drugs that are covered by the City of Tucson upon request at any time during the term of the Contract.

23. Contractor shall grandfather the City of Tucson’s current formulary for up to ninety (90) days following the contract effective date, with no impact on rebate guarantees.

24. Contractor shall allow members to obtain formulary excluded drugs with a prior authorization for medical necessity without impacting the rebate guarantees.

25. Contractor shall provide notification to City of Tucson at least thirty (30) days prior to any impending modification to any clinical program or process during the term of this Contract. City of Tucson reserves the right to reject any modification to its current program or process if City of Tucson has reasonable evidence that it will cause it or its members significant disruption.

26. Contractor shall not charge more than once for a Prior Authorization fee for a single prescription (e.g., the Contractor shall not charge multiple times if they have to reach out to the doctor multiple times for a single prescription).

27. Contractor shall have edits or programs in place designed to detect and address potential drug fraud and/or abuse. Contractor shall notify the City of Tucson of any potential fraud and/or abuse.

Member Services

1. Contractor shall provide a dedicated fully-operational toll-free telephone line that is answered by a live person 24-hours per day, 365-day per year toll-free telephone access to live US-based customer service representatives. The toll-free telephone line will include alternative language options (or access to language translation services) to meet the Plan’s requirement under the ACA to provide culturally and linguistically appropriate notices. This toll-free telephone line shall be included as part of the base administrative fees and at no additional cost to City of Tucson.

2. Contractor shall provide a designated customer service team to facilitate and oversee Pharmacy Program services including but not limited to: prescription assistance for retail, mail order, specialty, prior authorizations etc. The Contractor’s dedicated customer service team shall be trained on City of Tucson’s Pharmacy Plan.

3. The dedicated customer service team shall have electronic access to eligibility, mail order claims, and claims history from all of the claims adjudication systems. At a minimum, this dedicated team shall be responsible for taking all calls from City of Tucson members between the hours of 7:00 am to 9:00 pm Mountain Standard Time from Monday through Friday, and 8:00 am to 5:00 pm Mountain Standard Time on Saturday and Sunday. Customer service representatives that are trained on City of Tucson benefits but not part of the dedicated team may take calls outside of these hours.

4. Contractor shall ensure that City of Tucson and its members who are deaf or hearing impaired have access to communication services that enable them to use the phone lines. This shall be done as part of the base administrative fees and at no additional cost to City of Tucson.

5. Contractor shall provide exceptional customer service support via phone, e-mail, and website for the City and their plan participants as documented by consistent reporting through performance guarantees and City specific customer satisfaction surveys.

6. Contractor shall provide an escalation process to assist in matters which cannot be resolved within one (1) business day at the customer service unit level.

7. Contractor shall accept “warm transfers” from City of Tucson’s medical vendors’ call centers to Contractor’s call center(s) at no additional cost to City of Tucson.

8. Contractor will record one hundred percent (100%) of member calls into a Member Call Center and the recordings will be available to the City for inspection within 24 hours of recording and should be retained for a minimum of 12 months.

Member Grievance and Appeals

1. Contractor shall adhere to the dispute resolution process developed by City of Tucson. Contractor shall provide a procedure for responding to and resolving member complaints and disputes regarding problems with network access, formulary drug coverage, and other matters concerning quality of care.

2. Contractor shall inform each member of the availability of City of Tucson’s dispute resolution process and provide each member with forms for problem reporting and resolution.

3. Contractor shall respond to all complaints and disputes promptly, according to time standards established by City of Tucson and per the requirements stipulated in the Summary Plan Description. In general, disputes about pharmaceutical services shall be resolved within seven (7) days of the complaint being filed. In matters of extreme urgency and time-sensitive issues, Contractor agrees to provide resolution within 48 hours of City notification.

4. Contractor shall maintain a record of all complaints from all members that minimally extends through the term of the Contract and shall provide the same to City of Tucson within ten (10) business days of the initial request. Such record shall include all correspondence relating to the disposition of the complaint.

5. As the prescription claims administrator, Contractor has the sole authority and discretion to determine whether submitted services/costs are eligible for benefits and to interpret, construe, and apply the provisions of the Summary Plan Description in processing and adjudicating claims. For external appeal of pharmacy benefit determinations, Contractor shall contract with at least three (3) accredited independent third party review organizations (IROs) in order for the City of Tucson to meet self-insured plan requirements of the ACA. For requests for External Review, where external review is applicable, Contractor shall manage this process in accordance with law. City of Tucson reserves the right to audit appeals.

6. Contractor shall adhere to the appeals process developed by City of Tucson and stipulated in the Summary Plan Description. Contractor shall meet all timeframes and reporting for all levels of appeals with responses and results, including external review when applicable. Processes shall be kept current and made available to City of Tucson at any interval requested by City of Tucson.

7. In such cases where a requested service is denied or reduced, the denial, reasons for the denial, and the criteria used in determining the denial shall be provided in writing to the member and his/her provider within five (5) days of the determination or as stipulated in the Summary Plan Description/Plan Document.

8. City of Tucson shall be solely responsible for any and all complaints, issues, disputes, and appeals related to its Health Plan enrollment, member eligibility, payroll deduction issues, direct-pay premium issues, and retirement check issues related to payment of the premium.

9. Contractor shall provide all requested information to assist in the completion of the member appeals process.

Financial / Pricing Terms

1. All fees associated with this Contract shall be stated on the appropriate tabs of the PBM Questionnaire. Any fee not stated on the Pricing Tab associated with any service or requirement in this Contract shall be deemed to be included in the base administrative fee.

Cost / Billing

1. Contractor shall submit a claims funding request bi-weekly, or pursuant to another timeframe mutually agreed upon by City of Tucson and Contractor, with a claims cleared check register that is in a format approved by City of Tucson and that totals to and supports the funding request.

2. The claims funding invoice shall solely include claims charges and charges associated with claims that are contained in the claims file submitted to City of Tucson. Any other charges shall be included in the monthly administrative and non-administrative fee invoice to City of Tucson.

3. Contractor agrees to accept the City's self-bill (no true up of any eligibility discrepancies other than those based on eligibility file transfer).

4. Contractor shall submit monthly, any and all administrative and non-administrative contractual fees and assessments, including any optional program fees, administrative adjustments, reconciliation charges prior authorization charges, and any other federal subsidies and refunds with the funding invoice. If those fees result in an amount owed to City of Tucson, the contractor shall submit those funds to City of Tucson on monthly basis based on a mutually agreed upon time frame and method of reimbursement with a statement, credit memo, or wire summary. All above mentioned fees, surcharges and refunds shall clearly ascertain whether they have been incurred and shall be billed separately.

5. Contractor’s funding request shall include, at a minimum:

a. Contractor information, including address, contact name, contact phone number and email.

b. Invoice number, invoice date and due date of payment.

c. Time period for the funding invoice covers.

d. Payment information including mailing address for check/warrant payments and/or bank name, address, wire and account information for ACH and wire payments.

e. Summary of total amount billed or summary of total funds being refunded to City of Tucson.

f. Separate delineation of claims costs and any and all other charges, fees, rebates and refunds by plan year or pertinent service period. Each plan year claims charges must be supported by accompanying claims register. The accompanying claims register shall be effortlessly reconciled at a later date against the monthly claims file.

g. Pharmacy rebates must indicate the incurred plan year month or plan year quarter of the claims against which the rebates are being applied. The processed rebates must match the rebate reports that are submitted to City of Tucson on quarterly basis.

6. Contractor shall accept City of Tucson’s eligibility reporting for all payments of administrative fees and shall allow retrospective adjustments as reported by City of Tucson.

7. City of Tucson shall pay invoiced claims within seven (7) business days from the receipt and Administration Fees within a sixty (60) business day window. Contractor shall immediately notify City of Tucson when funding is not received at the payment due date.

8. City of Tucson shall remit the amount to Contractor by way of Automated Clearinghouse (ACH) or similar electronic means as may be mutually agreed to in writing by City of Tucson and Contractor.

9. Any discrepancies of claims or fees based upon eligibility file transfers that result in variances of less than five percent (5%) shall be accepted by Contractor without dispute. Failure to provide written notice of a disputed discrepancy within ten (10) business days after receipt of payment shall be considered Contractor’s acceptance of City of Tucson’s calculations, records, and payments. Contractor shall not assess late fees, penalties, interest, or other charges on disputed amounts while the dispute is being resolved. This is subject to a third-party review at City of Tucson’s discretion.

10. Contractor shall submit, in writing, any change in remittance request at least ten (10) business days in advance of the implementation of the requested change.

11. City of Tucson reserves the right to offset any premiums, fees, or other remittances due to Contractor in order to collect overpayments resulting from incorrect calculations, eligibility adjustments, incorrectly paid claims, or other errors or adjustments identified by City of Tucson internal audit, operational review, financial analysis, external audit, or other means. If no premiums, fees, or other remittances are due to the Contractor, Contractor shall remit to City of Tucson any overpayments resulting from incorrect calculation, eligibility adjustment, incorrectly paid claim, or other errors or adjustments within thirty (30) days after identification and communication of such claim to Contractor. City of Tucson reserves the right to specify the method of payment of such amount.

12. Contractor shall have the right to audit/appropriate City of Tucson records, at Contractor’s expense, to determine the accuracy of fees paid to Contractor.

13. Contractor shall reimburse City of Tucson for overpayments resulting from incorrect calculations, eligibility errors, incorrectly paid claims, system and/or programing errors or other errors or adjustments made by the Contractor that are identified by City of Tucson through internal or contracted audit, operational review, financial analysis, or other means, unless caused by City of Tucson, regardless of whether or not the Contractor is able to recover the overpayment. City of Tucson reserves the right to direct the Contractor to not recover overpayments if it is probable that the recovery would have a member impact.

14. Contractor shall provide to City of Tucson any recovery monies within thirty (30) days from the date of the recovery, including any interest that has been included in the recovery.

15. Contractor shall not charge City of Tucson or offset any costs from a retail pharmacy audit recovery even if the Contractor has to pursue additional collection action to recover retail pharmacy audit discrepancies.

16. Contractor shall not charge banking fees, including late/penalty fees, to City of Tucson.

17. All reporting that Contractor submits shall be reconciled by Contractor to the billed amounts as reported on the monthly electronic claims data file.

18. Sales tax shall be included at the point of sale, when applicable.

Implementation

19. Contractor shall begin the implementation process immediately upon Contract award. Contractor shall provide a detailed implementation plan for City of Tucson to review and approve one hundred and twenty (120) days prior to the start of the plan year.

20. Contractor shall provide a team of individuals designated to implementing the provisions of this Contract upon award. The implementation team shall include, but not be limited to: implementation manager, strategic account executive, clinical director - pharmacist, account manager, claims advocate, an underwriter/financial analyst, programmers, data analysts, a network contracting manager, enrollment specialists, claims specialists, and customer service staff.

21. Contractor shall offer a separate, one-time implementation performance guarantee and notate the amount in the Questionnaire.

22. Contractor shall facilitate the transfer of at least the previous twelve (12) months of claims data, including prior authorization and authorized refills from the incumbent contractor as part of the base administrative fees and at no additional cost to City of Tucson.

23. Contractor shall load a minimum of twelve (12) months of historical claims data, including open refills for mail/specialty prescriptions and open prior authorization files into a pre-test adjudication system prior to implementation as part of the base administrative fees and at no additional cost to City of Tucson.

24. Contractor shall load all current prior authorizations, open mail order refills, specialty transfer files and claim history files that exist for current members from the existing Contractor at no charge to City of Tucson and with no charges being deducted from the implementation allowance for file loading or IT.

25. Contractor shall perform comprehensive systems and pre-implementation testing and quality assurance audits with results reported to City of Tucson prior to the Contract effective date as part of the base administrative fees and at no additional charge to City of Tucson.

26. The designated implementation manager shall continue to support City of Tucson for a minimum of forty-five (45) days after the implementation date of July 1, 2026. Such support includes, but is not limited to: weekly calls (as needed) with City of Tucson and the designated account management team, maintenance of issue tracking logs, and issue resolution. This support shall be provided as part of the base administrative fees and at no additional cost to City of Tucson.

27. Contractor shall provide a competitive implementation allowance to cover any cost associated with the transition.

28. All current policies and procedures not documented within this solicitation or its exhibits shall be established, in writing, during implementation by the Contractor and modified to current or improved policies and procedures to the satisfaction and approval of the City of Tucson implementation team.

29. A process for handling questions and a description of the escalation process;

30. Contractor shall work with City of Tucson’s auditor during a pre/post implementation audit to run test claims in a test environment utilizing City of Tucson’s actual plan parameters.

31. Contractor shall have its customer call center and website available by the City’s open enrollment which begins May 1st for members transitioning from the current contractor as well as for potential new members with questions about City of Tucson’s Pharmacy Program and those who want to view Program formulary information. Customer service representatives must be fully trained on City of Tucson benefits aby the City’s Open Enrollment.

32. Contractor shall have City of Tucson’s specific toll-free telephone number available to all plan members by the City’s May 1st open enrollment start date.

33. Contractor shall provide a customized mailing to members sixty (60) days before the effective date. City of Tucson shall provide a file listing members and address for the mailing. The mailing shall notify members of the change from the current contractor to the new Contractor, and shall provide relevant information about mail order transition, formulary transition, etc. The mailing shall be approved by City of Tucson prior to sending. This shall be provided at no additional cost to City of Tucson.

34. Contractor shall provide to City of Tucson a detailed transition-of-care plan by the implementation start date which shall detail the means in which Contractor will assist members currently taking specialty medications with the transition to Contractor’s specialty medication program and services.

35. Contractor shall fund the cost of a pre-implementation Audit before the start of claims adjudication.

36. Contractor shall fund the cost of a Post-Implementation Audit for at least 30 days after the start of claims adjudication.

37. Contractor shall waive any charges to City of Tucson or City of Tucson’s medical plan claims administrators such as a set-up fee, a programming fee or a monthly fee, for establishing a connection with a Third Party Administrator/Claims processor for real-time, bidirectional data integration, including non-standard data integration formats.

Account Administration

1. Contractor shall provide a team of designated and dedicated professionals, responsible for ensuring that all Contract requirements and service deliverables are met by the Contractor. City of Tucson reserves the right to approve the staffing of the City of Tucson service team.

2. Contractor shall provide an account management team that is experienced in providing services for similar entities, and programs trained in City of Tucson Health Plan issues, accessible to City of Tucson geographically, and with sufficient capacity and authority to respond to City of Tucson issues in a timely manner. The account management team shall include the following individuals:

a. Executive Sponsor – shall be responsible for working with City of Tucson on issues related to legislation and policy and shall provide recommendations to City of Tucson senior management. The Executive Sponsor shall work with the entire senior management team in other roles as well.

b. Clinical Pharmacy Director (CPD) – shall be in support of City of Tucson and the Pharmacy Program. The CPD shall provide analysis, assessment, and recommendations to City of Tucson based on City of Tucson’s formulary trend performance in order to improve the economic and clinical efficiency of its drug spend investment. The CPD shall also provide clinical recommendations to support quality improvement programs, wellness initiatives, and prior authorization guidelines. The CPD shall participate in City of Tucson medical director meetings and shall provide clinical recommendations to support quality improvement programs, wellness initiatives, and plan design changes.

c. Account Manager – shall be the single, day-to-day contact for City of Tucson with the primary responsibilities of responding to all plan issues, coordinating the efforts of Contractor’s staff to resolve issues, and overseeing all aspects of project management including, but not limited to, the initial implementation and ongoing new program facilitation. The Account Manager shall have a minimum of two (2) years’ experience with the Contractor’s organization or in a similar industry. The Account Manager is also responsible for developing and delivering program communications and training. Expectation is that this person is proactive – seeks out underlying needs of organization and creates solutions; develops and delivers related communications. If possible, the Account Manager shall also be a local resident of Arizona.

d. IT System Manager – shall be a day-to-day contact who will have the primary responsibility of responding to and resolving all IT-related issues that arise for the duration of the Contract.

e. Enrollment/Eligibility Lead – shall be a day-to-day contact with the primary responsibility of responding to all Plan issues related to billing, enrollment, termination, and eligibility. The Enrollment/Eligibility Lead will be responsible for resolving all such issues that surface during implementation, open enrollment, and all ongoing service. If applicable, Contractor may assign an enrollment/eligibility lead for each program.

f. Customer Service Representative (CSR) Lead – shall be a day-to-day designated contact who will have the primary responsibility of responding to all member-specific issues including, but not limited to: formulary coverage, prescription refills, vacation overrides, appeals, prior authorizations, direct member reimbursements, and drug shortages. The CSR will also be responsible for resolving all such issues for members for the duration of the Contract. If applicable, Contractor may assign a CSR lead for each program.

g. Reporting Analyst – shall be a day-to-day contact who will have the primary responsibility of producing standard and ad hoc reporting for the Plan. This includes modeling, presale analytics, and post-implementation reporting for recommended programs.

3. Contractor shall respond to account and member service issues within one (1) business day and…