CTR072825_Amd4_Adding_Dental.pdf

Contract Amendment Arizona Department of

Administration State Procurement Office

1802 W Jackson St. Suite 100 Phoenix, AZ 85007

CTR072825 Contract Amendment No. 4

ACKNOWLEDGEMENT AND AUTHORIZATION

This amendment shall be fully executed upon the electronic approval in the State e-Procurement system by an authorized representative of the Contractor and applied to the contract in the State e-Procurement system by the Procurement Officer or delegate.

Available online at app.az.gov Page | 1

Workers’ Compensation Fee Schedule Development and Consultation FAIR Health Inc.

In accordance with the Special Terms and Conditions, Section 5.1 Amendments, this contract is hereby amended as follows:

Section 1. Purpose and Background, which reads:

The Industrial Commission of Arizona (ICA or Commission), Medical Resource Office, is seeking one

(1) qualified Contractor for maintenance and updates to the Physicians’ and Pharmaceutical Fee Schedule. An annual review is required every year, but there could be unique projects during the course of this contract that require separate work that is associated with rate fee structures. This is a single agency contract.

Since 1925, when the Arizona Legislature passed the state’s first Workers’ Compensation Act, the Industrial Commission of Arizona has administered the workers’ compensation laws of that Act. The Act includes the authority of the Commission to set a schedule of fees to be charged by healthcare providers attending injured employees as outlined in A.R.S. §23-08(B). The law also requires the Commission to perform an annual review of the schedule of fees. In 2004, the Act was amended to include the setting of fees for prescription medicines required to treat an injured employee as outlined in §23-908(C).

The State of Arizona is always seeking Contractors who are familiar with Lean fundamentals.

Contractor should be proficient in identifying steps that are wasteful when meeting the objectives of this service while still meeting all legal requirements. Process improvements, creative ideas, and any value-added feature is encouraged throughout the cycle to identify and eliminate waste, increase the overall efficiency of the process, and reduce the amount of time to create reports.

It is hereby modified to read as follows:

The Industrial Commission of Arizona (ICA or Commission), Medical Resource Office, is seeking one

(1) qualified Contractor for maintenance and updates to the Physicians’ and Pharmaceutical Fee Schedule. An annual review is required every year, but there could be unique projects during the course of this contract that require separate work that is associated with rate fee structures. This is a single agency contract.

https://app.az.gov/

Administration State Procurement Office

This amendment shall be fully executed upon the electronic approval in the State e-Procurement system by an authorized representative of the Contractor and applied to the contract in the State e-Procurement system by the Procurement Officer or delegate.

app.az.gov Page | 2

Since 1925, when the Arizona Legislature passed the state’s first Workers’ Compensation Act, the Industrial Commission of Arizona has administered the workers’ compensation laws of that Act. The Act includes the authority of the Commission to set a schedule of fees to be charged by healthcare providers attending injured employees as outlined in A.R.S. §23-08(B). The law also requires the Commission to perform an annual review of the schedule of fees. In 2004, the Act was amended to include the setting of fees for prescription medicines required to treat an injured employee as outlined in A.R.S. §23-908(C). In 2025, the Act was amended to require the ICA to fix a schedule of fees to be charged by providers of dental care for services provided to injured workers.

The State of Arizona is always seeking Contractors who are familiar with Lean fundamentals.

Contractor should be proficient in identifying steps that are wasteful when meeting the objectives of this service while still meeting all legal requirements. Process improvements, creative ideas, and any value-added feature are encouraged throughout the cycle to identify and eliminate waste, increase the overall efficiency of the process, and reduce the amount of time to create reports.

In addition, Section 2, Scope of Work, Subsection 2.1, Definitions, which reads:

2.1.1 Centers for Medicare & Medicaid Services (CMS)

2.1.2 American Medical Association (AMA)

2.1.3 Base Units (BU)

2.1.4 Resource-Based Relative Value Scale (RBRVS

It is hereby modified to read as follows:

2.1.1 Centers for Medicare and Medicaid Services (CMS)

2.1.2 American Medical Association (AMA)

2.1.3 America Dental Association (ADA)

2.1.4 Base Units (BU)

2.1.5 Current Dental Terminology (CDT)

2.1.6 Durable Medical Equipment (DME)

2.1.7 Healthcare Common Procedure Coding System (HCPCS)

2.1.6 Resource-Based Relative Value Scale (RBRVS)

In addition, Section 3, Scope of Services, Subsection 3.1.1, which reads:

Develop Fee Schedules for nine separate sections of the updated Fee Schedule. To accomplish this the contractor agrees to deliver services consistent with industry best practices and will:

Administration State Procurement Office

This amendment shall be fully executed upon the electronic approval in the State e-Procurement system by an authorized representative of the Contractor and applied to the contract in the State e-Procurement system by the Procurement Officer or delegate.

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It is hereby modified to read as follows:

Develop Fee Schedules for eleven separate sections of the updated Fee Schedule. To accomplish this, the contractor agrees to deliver services consistent with industry best practices and will:

In addition, Section 3, Scope of Services, Subsection 3.1.6, which reads:

Identify “gap” codes from Optum 360’s current year publication, “The Essential RBRVS.” The RVUs from these codes are used to calculate the reimbursement values; however, the Commission does not publish these specific RVUs. If Contractor cannot receive quote from “The Essential RBRVS’ to support requirement due to no fault of their own, the following three options are available and can be utilized with the permission of the Industrial Commission.

(1) The Industrial Commission can make available copy of “the Essential RBRVS for FAIR Health’s use to support the fee schedule.

(2) FAIR Health can license “The Essential RBRVS” and pass through the cost of Optum’s licensing fee to the Industrial Commission.

(3) The use of FAIR Health data to gap fill values in the fee schedule.

It is hereby modified to read as follows:

Identify “gap” codes from Optum 360’s current year publication, “The Essential RBRVS.” The RVUs from these codes are used to calculate the reimbursement values; however, the Commission does not publish these specific RVUs. If the Contractor cannot receive a quote from “The Essential RBRVS’ to support the requirement due to no fault of their own, the following three options are available and can be utilized with the permission of the Industrial Commission.

(1) The Industrial Commission can make available its copy of “the Essential RBRVS for FAIR Health’s use to support the fee schedule.

(2) FAIR Health can license “The Essential RBRVS” and pass through the cost of Optum’s licensing fee to the Industrial Commission.

(3) The use of FAIR Health data to gap fill values in the fee schedule.

In addition, Section 3. Scope of Services, is hereby modified to add subjections 3.1.7 – 3.1.16, which reads as follows:

Administration State Procurement Office

This amendment shall be fully executed upon the electronic approval in the State e-Procurement system by an authorized representative of the Contractor and applied to the contract in the State e-Procurement system by the Procurement Officer or delegate.

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3.1.7. Gather CDT codes from the current year’s publication by the American Dental Association, used to describe services normally rendered to adults and provided in a workers’ compensation setting.

3.1.8. Assign a reimbursement value to each applicable service code using data indicated by the Commission for the Fee Schedule update.

3.1.9. Gather current Healthcare Common Procedure Coding System (HCPCS) codes applicable to the Fee Schedule.

3.1.10. Gather the most recent update of the Medicare Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) reimbursement values.

3.1.11. Assign a reimbursement value to each HCPCS code based on the values gathered in the previous step. Multiply those values by a factor designated by the Commission when applicable.

3.1.12. Identify HCPCS codes with no reimbursement value using the two aforementioned steps and assign values to those codes based on FAIR Health data. Multiply those values by a factor designated by the Commission when applicable.

3.1.13. Identify codes that need to be reviewed by the Commission prior to publication.

3.1.14. Provide assistance and technical advice to develop and/or update fourteen guidelines for each section of the Fee Schedule.

(1) Gather guidelines from other workers’ compensation jurisdictions as applicable.

(2) Gather guidelines from commercial payers (if available at no additional cost)

(3) Provide feedback and recommendations as appropriate

3.1.15 Be available for comment during Commission meetings as needed.

3.1.16. Meet with the MRO regularly, as needed, to provide updates on the project.

In addition, Section 4. Specific Requirements, Subsection 4.4 which reads:

4.1 Experience developing and updating fee schedules for government entities.

4.2 Extensive understanding of resource-based relative value scale (RBRVS) payment systems.

4.3 Knowledge of calculating reimbursement values.

4.4 Knowledge of Centers for CMS, AMA, BUs and other entities involved in healthcare payment models and regulation.

4.5. A Timeline for delivery of Fee Schedule.

Is hereby modified to read as follows:

4.1 Experience developing and updating fee schedules for government entities.

4.2 Extensive understanding of resource-based relative value scale (RBRVS) payment systems.

Administration State Procurement Office

This amendment shall be fully executed upon the electronic approval in the State e-Procurement system by an authorized representative of the Contractor and applied to the contract in the State e-Procurement system by the Procurement Officer or delegate.

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4.3 Knowledge of calculating reimbursement values.

4.4 Knowledge of Centers for CMS, AMA, ADA, BUs, CDT, and other entities involved in healthcare payment models and regulation.

4.5 A Timeline for delivery of Fee Schedule.

In addition, the Pricing Fee Schedule Table is hereby modified to add the additional cost of the Dental Fee Schedule as follows:

1 Required Item

Phase 1 – Preliminary Planning (6 months prior to the effective date of the Fee Schedule update)

1 EA $4,200.00

2 Required Item

Phase 2 – Delivery of the Initial Updated Fee Schedule

Documents (3 months prior to the effective date of the Fee Schedule update)

1 EA $9,500.00

3 Required Item

Year 1 – Delivery of Dental Fee Schedule 1 EA $4,350.00

4 Required Item

Subsequent Years – Delivery of Dental Fee Schedule

1 EA $2,030.00

4 Required Item

Phase 3 – Initial Posting of the Updated Fee Schedule for Public Review and Commission Approval (1 month prior to the effective date of the Fee Schedule update)

1 EA $9,500.00

5 Required Item

Phase 4 – Close Out, Best Practices, Plan for Next Cycle (1 month after the effective date of the Fee Schedule update)

1 EA $850.00

6 Hourly Consultation Fee 1 Hourly $290.00

RECITALS

The State and Supplier entered into that certain agreement title Master Service Agreement and was effective on September 13, 2022 pursuant to which Supplier is to provide Workers’ Compensation Bill Review Services.

Administration State Procurement Office

This amendment shall be fully executed upon the electronic approval in the State e-Procurement system by an authorized representative of the Contractor and applied to the contract in the State e-Procurement system by the Procurement Officer or delegate.

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THEREAFTER, contract amendment No. 1 extended the term of the contract from September 12, 2023 to September 12, 2024.

THEREAFTER, contract amendment No. 2 extended the term of the contract from September 12, 2024 to September 12, 2025 and to modify the Summary for Cost and Program Timeline, Pricing Fee Schedule, Scope of Services and Scope of Work.

THEREAFTER, contract amendment No. 3 extended the term of the contract from September 12, 2025 to September 12, 2026.

ALL OTHER REQUIREMENTS, SPECIFICATIONS, TERMS AND CONDITIONS REMAIN UNCHANGED