Section_H-T-2017.pdf

SECTION H

SPECIAL CONTRACT REQUIREMENTS

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H.1 CONTRACTOR FINANCIAL UNDERWRITING OF HEALTH CARE COSTS

H.1.1. The Managed Care Support (MCS) Contractor shall underwrite the cost of civilian health care services (also referred to as “purchased care” which is defined as care rendered outside the Direct Care System) provided to all TRICARE-eligible beneficiaries who are enrolled in the contract region, or for non-enrollees who reside in the contract region, except for the following non-underwritten categories:

• Outpatient retail and mail order pharmacy services (on separate contract)

• Active Duty Service Members including TRICARE Prime Remote (TPR) for

Active Duty Service Members (Active Duty Family Members are underwritten)

• Continued Health Care Benefits Program (CHCBP)

• Foreign/OCONUS beneficiaries and CONUS-based beneficiaries who receive care

OCONUS (on separate contract)

• Medicare dual-eligible TRICARE CHAMPUS* beneficiaries (on separate contract)

• State of Alaska (care for beneficiaries who are enrolled in the state of Alaska and care for non-enrollees who reside in the state of Alaska)

• Bonus Payments in Medically Underserved Areas [Health Professional Shortage

Areas (HPSA) and Physician Scarcity Areas (PSA)]

• Capital and Direct Medical Education (Cap/DME)

• TRICARE Reserve Select

• Custodial Care Transitional Program (CCTP)

• Individual Case Management Program for Persons with Extraordinary Conditions

(ICMP-PEC)

• Residual Claims (date of service prior to the start of health care delivery under the contract)

• Autism Services Demonstration

• TRICARE Retired Reserve (TRR)

• Temporary Military Contingency Payment Adjustments

• TRICARE Young Adult Program

• TRICARE Transitional Outpatient Payments

• Laboratory Developed Tests Demonstration Project

• Temporary Disability Retirement List Physical Exams

• Disability Compensation and Pension Examinations (DCPE)

• Transitional Care for Service Related Conditions

• Respite Benefit for Seriously Injured or Ill ADSM

*CHAMPUS-eligible beneficiaries are defined as those beneficiaries that meet the requirements in Title 10, United States Code, Chapter 55.

H.1.2. In this contract, these underwritten beneficiaries may be referred to as “underwritten beneficiaries” or “non- TRICARE/Medicare dual-eligible CHAMPUS eligible beneficiaries”. In this contract, the health care costs the Contractor underwrites may be referred to as “health care cost” or “underwritten health care cost”.

H.1.3. Other supplemental details regarding underwritten health care follow:

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H.1.3.1. Beneficiaries may enroll in TRICARE Prime with an Military Treatment Facility (MTF) Primary Care Manager (PCM). Even though they may have an MTF PCM, Prime enrolled non-TRICARE/Medicare dual-eligible CHAMPUS beneficiaries’ costs outside of the MHS direct care system are underwritten by the Contractor, except for Active Duty Service Members (ADSM)s.

H.1.3.2. The health care costs for beneficiaries enrolled in Prime are underwritten by the Contractor in whose region the beneficiary is enrolled, regardless of the address or location of the beneficiary.

H.1.3.3. The costs of medical management activities, such as case management, disease management and utilization management, are not considered underwritten health care costs.

Cost under separate Clinical Support Agreement orders, if issued, are not considered underwritten health care costs.

H.1.4. Underwritten health care is cost-reimbursable. These costs are reimbursed with obligated funds that are disbursed under this contract. The associated underwritten fixed fee in Section B of the contract is considered the underwriting fee, or underwriting premium.

H.1.4.1. For administrative purposes, underwritten health care cost is broken down into two main Contractor underwriting risk categories:

H.1.4.1.1. Contractor Network Prime Enrollees: These are TRICARE Prime enrollees with network PCMs. The Contractor underwrites TRICARE healthcare services provided to Prime enrollees with network PCMs (exclusive of TRICARE Prime Remote [TPR] beneficiaries).

H.1.4.1.2. Non-Prime Beneficiaries and MTF Prime Enrollees: This category includes health care services provided to all other underwritten beneficiaries, including:

• Non-Prime enrolled, non-TRICARE/Medicare dual-eligible beneficiaries

• TRICARE Standard,

• TRICARE Extra

• TPR-ADFM Enrollees

• MTF Prime Enrollees (Prime Enrollees with MTF PCMs)

H.1.4.1.3. For underwritten healthcare claims, the Contractor shall assume full financial liability for care which is not eligible for cost-share and was provided subsequent to the contractor’s erroneous authorization of services and/or supplies listed as exclusions in the TRICARE Policy Manual (TPM). This underwriting mechanism applies to services/supplies specifically named under an exclusion, and does not apply to general exclusions such as services subsequently determined to not be medically necessary. For cases involving such specific exclusions, the contractor shall neither deny payment nor recoup erroneous payments from either the provider or the beneficiary. Payment will be made from the contractor’s funds and not reimbursed by the Government. The Contractor shall not be held liable for non-covered services/supplies provided that were beyond the scope of the Contractor's authorization. The Contractor’s financial liability under this provision is in addition to and not limited by the 2% claims error rate established by

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TRICARE Operations Manual, Chapter 1, Section 3, Paragraph 1.6.1. “Claim Payment Errors” nor the corresponding performance guarantee.

H.2. HEALTH CARE UNDERWRITING INCENTIVES

H.2.1. Introduction and Administration: This section addresses the administration of the positive and negative incentives that are part of the underwriting mechanism of the contract.

The Contractor may earn an underwriting incentive by either exceeding a minimum standard, or for performance above a fully satisfactory level in areas that reduce health care cost and are measurable as defined in this section for each respective option period. The financial administration of the incentives’ assessment for a given option period will be conducted after completion of the option period. When performance exceeds the standard, or exceeds the fully satisfactory level specified in the paragraphs below, the Government administratively obligates funding equal to, or greater than, the stated incentive amount into the applicable Performance Incentive Funding contract line item in Section B. After the Government has completed measurement and any administrative funding action(s), and the Contracting Officer notifies the Contractor of the incentive earned (if any), the Contractor may invoice and receive payment for the amount authorized by the Contracting Officer. The Government will obligate funds at any time on the performance incentive funding contract line item as the Contracting Officer determines necessary to ensure sufficient funds are available to pay the Contractor any earned incentive amount. If the Contractor fails to meet the fully satisfactory levels described below and earns a negative incentive, the funded amount on the performance incentive contract line item may be netted, or the payments from the performance incentive contract line item are offset by the negative incentive amount. If the offset amount is greater than any earned incentive (if any), or the Contractor only earns a negative incentive, the Contracting Officer will deduct that amount from the next payment from any administrative contract line item of this contract.

H.2.1.2. For purposes of administering underwriting incentives, the underwritten population will be divided into two separate underwriting risk groups, which are identified as two separate CLINs in Section B:

• -Contractor Network Prime Enrollees

• -Non-Prime Beneficiaries and MTF Prime Enrollees

H.2.2. There is no limit on the dollar amount, positive or negative, of the underwriting incentives that may be earned or assessed.

H.2.2.3. The incentives are independent of the results of the annual healthcare cost audits for overpayments to providers. The assessment, including recovery from the Contractor, of any negative incentive dollar amount is conducted separately from the underwriting fixed-fee payments for each option period. The administration of the Network Discount Incentive and Network Usage Incentive described herein is assessed before any cost audit that determines allowable and unallowable health care costs.

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H.2.3. Incentives. The Contractor will be assessed the following positive and negative incentives, based on performance:

H.2.3.1. Network Discount Incentive. The purpose of this incentive is to encourage Contractors to proactively negotiate discounts with network providers and thereby reduce underwritten health care costs. There are two separate aspects of this incentive, one negative (H.2.3.1.1) and one positive (H.2.3.1.2). The incentive will be calculated separately for two different categories of beneficiaries. The first category includes all Contractor network Prime enrollees and the second category consists of all non-prime beneficiaries and MTF Prime enrollees

H.2.3.1.1. Guaranteed Network Provider Discounts (negative incentive): The Contractor guarantees the following discounts:

OP 1 OP 2 OP 3 OP 4 OP 5

Contractor Network Prime Enrollees

MTF Prime Enrollees and Non-Enrolled Beneficiaries

H.2.3.1.1.1. At the end of each option period, the Guaranteed Network Provider Discounts will be calculated separately for the two beneficiary categories, above. For care provided to each of the two categories of beneficiaries, the achieved discount will be measured as the overall average value of discounts from TRICARE allowable charges. The network discount incentive will be calculated after the end of the option period based on TED records accepted during that option period (excluding OHI claims) for each of the above two categories of beneficiaries for care provided by Contractor network providers. The total value of discounts will be the sum of all dollar amounts reported on TED records in the field “Amount Network Provider Discount.” For care provided to Contractor network enrollees by Contractor network providers (excluding OHI claims), the total allowable cost will be the sum of all dollar amounts reported on TED records for all amount allowed fields and all amount of network provider discount fields.

H.2.3.1.1.2. The TED record must reflect the actual dollar amount of network discount, excluding other health insurance (OHI) claims. The dollar amount of the network discount is the difference between the network provider’s negotiated rate and what TRICARE reimbursement methodology would have allowed in the absence of the negotiated discount rate.

See the TRICARE Systems Manual, Chapter 2 for the TED record requirements for correctly coding the provider network discount.

H.2.3.1.1.3 If either or both of the calculated average percentage network discount obtained for the option period do not exceed the levels listed above, the Government will offset the calculated dollar amount from the Performance Incentive Pool line item and any payment under any administrative line item. If the contractor exceeds the guaranteed discount

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amount in one category, this amount will not be used to offset any losses on the other category.

H.2.3.1.1.4. These guaranteed discounts shall not be adjusted for changes to TRICARE allowable amounts, the expansion of TRICARE coverage to additional procedures and DME;

or any other actions and conditions that may affect providers’ willingness to accept discounts.

The Contractor fully understands the risks in financially underwriting the delivery of health care services under this contract, and assumes all risks of future conditions and changes that may affect the Contractor’s ability to achieve the guaranteed discounts.

H.2.3.1.2. Additional Discount Amounts (positive incentive) This incentive will be calculated as ten percent (10%) of the average value of discounts from TRICARE allowable charges for care provided by civilian network providers to Contractor network Prime enrollees, and MTF Prime enrollees and non-enrolled beneficiaries that exceed the minimum average discount levels listed in H.2.3.1.1 above (The incentive will be calculated once for care provided to Contractor network Prime enrollees and once again for care provided to MTF Prime enrollees and non-enrollees.) The method of calculation is the same as set forth in H.2.3.1.1. If the estimated network discounts obtained for the option period do not exceed the average level of discounts identified above, no incentive payment will be made.

H.2.3.2. Network Usage Incentive. The purpose of this incentive is to promote a higher percent of usage of network providers by all prime enrollees, thereby reducing the enrollees’ out-of-pocket costs and potentially reducing underwritten health care costs.

H.2.3.2.1. Network Usage by Prime Enrollees (Combined MTF enrollees and Contractor network enrollees). This incentive can only result in either no payment or a negative incentive. It will be measured based on the number of civilian network provider claims for Prime Enrollees compared with the total number of civilian claims for these beneficiaries, after excluding claims with OHI, Prime Point-of-Service (POS) claims, claims for care provided out-of-region, TRICARE Prime Remote, and claims for emergency care. The exclusion applies if any line item on the claim meets the exclusion criteria. If the percentage of network versus total claims meets or exceeds the minimum standard for a given month, no negative incentive will be applied. If the network percentage falls below that standard, a negative incentive will be assessed on a per-claim basis for the calculated number of non-network claims that fall below the standard. This will be done according to a series of percentage corridors, with larger negative incentives applied for successively larger discrepancies between the standard and the actual level of performance.

Region: Option Period 2: 75% Option Period 3: 76% Option Period 4: 77% Option Period 5: 78%

H.2.3.2.2. No incentive will be applied for Option Period 1. Beginning with Option Period 2 for each month that the minimum claims percentage is not met, a negative incentive shall

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apply. The network usage incentive will be calculated after the end of the option period based on TED records accepted during each month of the option period. The Government will apply an incentive for every claim that falls below the minimum standard. The amount assessed per claim is based on the percentage below the standard as follows:

Option Period Two:

If less than 75% and more than or equal to 72% = $7.00 per claim If less than 72% and more than or equal to 70% = $14.00 per claim If less than 70% and more than or equal to 69% = $21.00 per claim If less than 69% = $28.00 per claim

Option Period Three:

If less than 76% and more than or equal to 73% = $7.00 per claim If less than 73% and more than or equal to 71%= $14.00 per claim If less than 71% and more than or equal to 70% = $21.00 per claim If less than 70% = $28.00 per claim

Option Period Four:

If less than 77% and more than or equal to 74% = $7.00 per claim If less than 74% and more than or equal to 72% = $14.00 per claim If less than 72% and more than or equal to 71% = $21.00 per claim If less than 71% = $28.00 per claim

Option Period Five:

If less than 78% and more than or equal to 75% = $7.00 per claim If less than 75% and more than or equal to 73% = $14.00 per claim If less than 73% and more than or equal to 72% = $21.00 per claim If less than 72% = $28.00 per claim

H.2.3.2.3. For example, in month 2 of Option Period 2, if the actual percent of Prime enrollee claims with a network provider is 71%, then a negative performance incentive equal to 4% of the claims will be assessed (4% represents the difference between the actual number of claims for care provided by a network provider and the standard). If 4% equates to 200 claims not meeting the standard, the performance incentive assessment for that month will be $2,800.00 or 200 claims times $14.00.00. In determining the performance incentive, the applicable amount will be determined based on the Contractor’s actual performance. For instance, in the example above, the Contractor’s actual performance was 71% so the performance incentive will equal $14.00 for every claim falling below the minimum performance standard of 75%. In other words, the highest per claim amount will be applied to all claims failing the standard. The Government will not stratify the performance incentive based on the variable per claim amounts.

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H.2.3.2.4. The percentage standards above, and the claims volumes used to calculate performance against those standards, will reflect claims for both MTF Prime enrollees and Contractor Network Prime enrollees combined. In the event a negative incentive amount is assessed, the resulting dollar amount will then be administratively allocated to MTF Prime enrollees and Contractor Network Prime enrollees based on their respective percentage shares of the overall network plus non-network claims volume used in the incentive measurement (after the exclusions of OHI claims, POS claims, etc.). As an example of this allocation approach, if the composite network usage standard were not met and a $1 million negative incentive result were assessed, and if MTF Prime enrollees comprised 70% of the network plus non-network claims then $700,000 of the incentive result would be allocated to MTF Prime enrollees and $300,000 would be allocated to Contractor Network Prime enrollees.

H.3. PERFORMANCE INCENTIVES

H.3.1. Introduction: Monetary performance incentives are available to the Contractor. The Contractor may receive a positive performance incentive payment by either exceeding a minimum standard, or for performance above a fully satisfactory level in program integrity as defined in this section for each respective option period. If the Contractor fails to meet the minimum standard for electronic claims processing, a negative incentive is applied.

H.3.1.1. Incentive Administration: Contractor performance for a given option period will be measured after completion of each option period. When performance exceeds the standard, or exceeds the fully satisfactory level described below, the Government administratively obligates funding on the applicable performance incentive contract line item in Section B. If the Contractor fails to meet the minimum standard for electronic claims processing, the funding level on the performance incentive contract line item may be netted, or the payments from the performance incentive contract line item offset by the applicable negative incentive amount described in this section. If the offset amount is greater than any earned incentive (if any), the Contracting Officer will deduct that amount from the next payment from any administrative line item to the Contractor under this contract. After the Government has completed measurement, and the Contracting Officer notifies the Contractor, the Contractor may invoice the net amount authorized by the Contracting Officer. The Government may obligate funds into the performance incentive pool at any time as the Contracting Officer determines necessary to ensure sufficient funds are available to pay performance incentives under H.2 and H.3 to the Contractor after the option period is completed.

H.3.2. Program Integrity Incentive: The Government will evaluate the referral of fraud and abuse cases referred during each respective option period and determine if the Contractor satisfactorily met all minimum requirements contained in each of the following sections of TRICARE Operations Manual (TOM) Chapter 13:

Section 1 Contractor’s Program Integrity Responsibility Section 2 Controls, Education, and Prevention Section 3 Case Analysis, Referral and Administrative Action Section 4 Reports

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Section 5 Provider Exclusions, Terminations, and Suspension of Claims Processing Section 6 Provider Reinstatements

H.3.2.1.

H3.2.1.1. For East Region:

The Contractor will earn a performance incentive if performance results in referral of over 20 complete cases to the DHA Office of Program Integrity during each option period that are rated “5” on a quality scale.

H.3.2.1.2. For West Region:

The Contractor will earn a performance incentive if performance results in referral of over 10 complete cases to the DHA Office of Program Integrity during each option period that are rated “5” on a quality scale.

H.3.2.2. The monetary incentive amount applied to the performance incentive pool will be as follows:

H.3.2.2.1. For the East Region:

21-25 cases referred with a “5” rating as assigned: $300,000.00 26-30 cases referred with a “5” rating as assigned: $360,000.00 31 or more cases referred with a “5” rating as assigned: $410,000.00

H.3.2.2.2. For the West Region:

11-15 cases referred with a “5” rating as assigned: $180,000.00 16-20 cases referred with a “5” rating as assigned: $240,000.00 21 or more cases referred with a “5” rating as assigned: $300,000.00

H.3.2.2.1. Rating criteria: The rating of the individual cases will be based on the Government’s analysis of the case referral as follows: does the case identify a pattern of fraud or abuse; have the allegations been substantiated; how has TRICARE been affected (monetarily, patient harm, etc.); is the case referral complete (thoroughly documented with evidentiary data); was appropriate back-up information included (audit files, provider files, correspondence, etc.); and was the applicable TRICARE regulation and/or policy cited and included in the package. The PI “Case Referral Evaluation” sheet will be used to rate each referral. All case ratings will be determined by the Government solely based on the information within the initial case submittal.

Any information, rebuttals, or arguments provided by the Contractor subsequent to the initial submittal of a case will not be considered for the rating determination. Any case prepared, dated, or submitted prior to the start date of the delivery of care under this contract will not be considered for this incentive. If, in the opinion of the Contracting Officer, a newly referred case should reasonably have been referred under a separate contract, that case will not be considered for an incentive. The rating assignment is final and unappealable.

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H.4. PERFORMANCE GUARANTEES

H.4.1. The performance guarantee described in this Section is the Contractor’s guarantee that the Contractor’s performance will not be less than the performance standards described below.

The rights of the Government and remedies described in the Performance Guarantee Section are in addition to all other rights and remedies of the Government. Specifically, the Government reserves the rights and remedies set forth in the Inspection of Services clause (FAR 52.246-4, 52.246-5) and the Default clause (FAR 52.249-8, 52.249-6).

H.4.2. The Contractor guarantees that performance will meet or exceed the standards in this Section. For each occurrence the Contractor fails to meet each guaranteed standard, the Government will withhold from the Contractor the amount listed for each standard below. The total performance guarantee amount that can be assessed per option period is shown below. The total option period amount will be divided equally among the three performance guarantees.

Assessments for a specific performance guarantee will continue until the guarantee amount for the respective guarantee (i.e., one-sixth of the total option period amount) is depleted. For administrative purposes, the Contractor will be notified of performance guarantee withholds on a quarterly basis via a unilateral modification in accordance with FAR 43.103(b)(3) with this section as the cited authority for the modification. Withholds will be made from the next available contract payment under an administrative line item. The amount of the performance guarantee will not change after contract award.

H.4.3. Performance Guarantee Amounts:

Option Period 1 Option Period 2 Option Period 3 Option Period 4 Option Period 5

H.4.4. Claims Processing Timeliness (30 days)

H.4.4.1. Standard: Ninety-eight (98%) of retained claims and adjustment claims shall be processed to completion within 30 calendar days from the date of receipt. One hundred percent (100%) of all claims (both retained and excluded, including adjustments), shall be processed to completion within 90 calendar days unless the Government specifically directs the contractor to continue pending a claim or group of claims.

H.4.4.2. For each month that the claims processing timeliness standard is not met, a performance guarantee shall be applied as follows: Based on data from the DHA TEDs data base, the Government will assess a performance guarantee amount of $1.00 per retained claim in excess of the 98% standard. For example, if the actual percent of retained claims processed in 30 calendar days is 94% a performance guarantee equal to %4 of the retained claims processed that month will be assessed (4% represents the difference between the actual

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performance of 94% and the standard of 98% . If 4% equates to 600 retained claims not processed in 30 calendar days, the performance guarantee withhold will be $600.00, or 600 times $1.00.

H.4.4.3. The Government will calculate the contractor claims processing cycle time performance utilizing TED records. Included in the monthly measurement will be TED records in initial submission batch/vouchers (Batch/Voucher Resubmission Number equals zero), and TED records in adjustment/cancellation submission batch/vouchers, which are received by DHA during the reporting period, and that have passed the DHA batch/voucher header edit(s).

TED records in initial submission batch/vouchers, or TED records in adjustment /cancellation submission batch/vouchers, which fail the DHA batch/voucher header edits or which are otherwise unprocessable as submitted by the Contractor, and TEDS in resubmission batch/vouchers (Batch/Voucher Resubmission Number is greater than zero), will be excluded from the claims processing cycle time calculation. Only a single processing time will be calculated per claim. The cycle time calculation for initial submission TED records is one plus the difference between the Julian date the claim processed to completion, and the claim receipt date. The cycle time calculation for TED adjustments is one plus the difference between the Julian date the TED record was identified as an adjustment (Date Adjustment Identified not zero), and the date the adjusted record processed to completion.

H.4.5. Claim Processing Timeliness (90 Days)

H.4.5.1 Standard: 100% of all claims (both retained and excluded, including adjustments) shall be processed to completion within 90 calendar days unless the Government specifically directs the Contractor to continue pending a claim or group of claims.

H.4.5.2. For each month that the claims processing timeliness standard is not met, a performance guarantee shall be applied as follows: Based on data from the TMA TEDs data base, the Government will assess a performance guarantee amount of $1.00 per claim in excess of the 100% standard. For example, if the actual percent of all claims processed in 90 calendar days is 98%, a performance guarantee equal to 2% of all claims processed that month will be assessed (2% represents the difference between the actual performance of 98% and the standard of 100%). If 2% equates to 450 claims not processed in 90 calendar days, the performance guarantee withhold will be $450.00, or 450 times $1.00.

H.4.5.3 A performance guarantee assessment will be applied independently to each claim processing timeliness standard for claims that fail to meet the minimum performance. For example, a retained claim that received a performance withhold because the 98% in 30-day standard was not met, is again subject to withhold if it is not processed in 90 calendar days (and the Contractor’s performance is below the minimum standard of 100%).

H.4.5.4. The Government will calculate the contractor claims processing cycle time performance utilizing TED records. Included in the monthly measurement will be TED records in initial submission batch/vouchers (Batch/Voucher Resubmission Number equals zero), and TED records in adjustment/cancellation submission batch/vouchers, which are received by

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DHA during the reporting period, and that have passed the DHA batch/voucher edit(s). TED records in initial submission batch/vouchers, or TED records in adjustment/cancellation submission batch/vouchers, which fail the DHA batch/voucher header edits or which are otherwise unprocessable as submitted by the Contractor, and TEDS in resubmission batch/vouchers (Batch/Voucher Resubmission Number is greater than zero), will be excluded from the claims processing cycle time calculation. Only a single processing time will be calculated per claim. The cycle time calculation for initial submission TED records is one plus the difference between the Julian date the claim processed to completion, and the claim receipt date. The cycle time calculation for TED adjustments is one plus the difference between the Julian date the TED record was identified as an adjustment (Date Adjustment Identified not zero), and the date the adjusted record processed to completion.

H.4.6. TED Edit Accuracy

H.4.6. Standard: The accuracy rate for TED edits shall not be less than:

90% in months seven through nine;

95% in months ten through eleven 96% in months twelve through twenty-three 97% in month twenty-four through contract close.

H.4.6. Beginning in month seven of Option Period 1, for each month that the accuracy rate for TED edits is not met, a performance guarantee shall be applied as follows: Based on data from the TMA TEDs data base, if the Contractor fails to meet the standard, a performance guarantee amount of $3.00 for each TED record not meeting the standard will be assessed. For example, if only 85% of all TEDs pass editing in month seven, then a performance guarantee amount equal to 5% of all TEDs submitted during the month will be assessed (5% equals the difference between the Contractor’s actual performance and the standard in this example). If 5% equates to 1,000 TEDs, the performance guarantee amount will be $3,000.00 or 1,000 times $3.00.

H.5. EVOLVING PRACTICES, DEVICES, MEDICINES, TREATMENTS AND

PROCEDURES

H.5.1. Medical practices and procedures are expected to continue developing during the period of this contract: some will increase and some will decrease the cost of medical care. These changes will include practices, devices, medicines, treatments and procedures that previously were excluded from the benefits as unproven. The Contractor underwrites the cost of all drugs covered under this contract; and devices, and medical treatments or medical procedures that move from unproven to proven; and shall implement the move from unproven to proven as required at no change in contract price or underwriting fixed fee. Changes to the requirements caused by changes in the statutory definitions of the benefit or new benefits added by statute will be implemented under the Changes clause.

H.5.2. TRICARE can only cover costs for medically necessary supplies and services.

Regulatory procedures are in place at 32 C.F.R. 199.4(g)(15) that describe the procedure for

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evaluating the safety and efficacy of unproven drugs, devices, medical treatments, or medical procedures. The Contractor shall be responsible for routinely reviewing the hierarchy of reliable evidence, as defined in 32 C.F.R. 199.2.

H.6. Post-Award Organization Conflicts of Interest / Impaired Objectivity

The Contractor is responsible to prevent, avoid, or mitigate any situation where the Contractor may have potential performance conflicts of interests due to Contractor financial interests, multiple internal allegiance or impaired objectivity where the best interests of the Government could be compromised. This includes, but is not limited to, the Contractor's role as a fiscal intermediary and in its role in pursuing waste, fraud and abuse (TOM Chapter 13) involving organizations in which the Contractor has a financial interest. If situations that had not previously been addressed before award of the contract change or emerge after the award of this contract, and at any time during performance of the contract, the Contractor will immediately notify the Contracting Officer, in writing, of the nature of the actual or potential performance conflict. The Contractor shall submit a plan of action to the Contracting Officer within 30 days of notification, outlining the actions the Contractor has taken or proposes to take to avoid, neutralize, or mitigate the actual or potential performance conflicts of interest. The Government reserves the right, in case of a breach, misrepresentation or nondisclosure, to terminate this contract, disqualify the Contractor from subsequent related contractual efforts, or pursue any remedy permitted by law or this contract.

H.7. Third Party Information

It may become necessary in the performance of this contract to review proprietary information from other Contractors. The Contractor shall protect all proprietary information from unauthorized use or disclosure and refrain from using the information for any purpose other than that for which it was furnished. At the request of the other Contractor or the Contracting Officer, the Contractor shall execute agreements with third party companies furnishing data in connection with work performed under this contract. Nondisclosure agreements shall be completed by the Contractor, all employees, and subcontractors who obtain access to proprietary information.

Safeguards shall be implemented to restrict access to proprietary information and to avoid, neutralize, or mitigate potential conflicts of interest.

H.8. AWARD FEE

The award fee will be administered two times per contract option period (semi-annually) in accordance with the award fee plan. The award fee pool is as shown in Section B and awarded portions, if any, will be disbursed two times per contract option period. Unawarded portions of the award fee pool do not carry forward and are not available for any subsequent award fee period. The amount of the award fee pool will not change after contract award.

H.9. QUARTERLY CLAIMS PROCESSING AND PAYMENT ACCURACY

COMPLIANCE REVIEWS

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H.9.1. TRICARE Encounter Data (TED) batch/voucher payment records are utilized to validate the accuracy of claims payment for this compliance review. Results from this review will be used to measure the Contractors claims processing performance and assess the Contractor’s compliance with TRICARE claims processing performance standards as stipulated in the TOM, Chapter 1, Section 3, Paragraph 7.1 – Claims Processing Accuracy. At the time of the compliance review, TED records in batch/vouchers that have not passed TEDS validity edits, or which are otherwise unprocessable as submitted by the Contractor, will be excluded from this review sample.

H.9.2. Quarterly Compliance Review Sampling Methodology, Required Contractor Documentation, Payment Error Determinations and Compliance Review Rebuttal Procedures.

H.9.2.1. Sampling Methodology: There will be one non-denied payment sample type for this compliance review. Records to be sampled will be “net” records (i.e., the sum of transaction records available at the time the sample was drawn related to the initial transaction record).

Payment samples will be stratified at multiple levels, either by payment amount or by other claims-based parameters, such as type of care and/or type of provider (variables of the stratification will be defined prior to the data pull). Samples will be drawn from all TED records with Government payment amounts greater than zero, although the Government may choose to exclude certain claims strata from the sampling frame. In addition, the Government will conduct a one-hundred percent (100%) review of all records with Government payment amounts meeting or exceeding a high dollar threshold determined by the Government (i.e., $200,000).

H.9.2.2. Required Contractor Documentation: Upon receipt of the TEDs ICN listing from the DHA, the Contractor shall retrieve and compile claims processing documentation for each selected TED record. All documentation must be received at DHA or the designated compliance review Contractor within forty-five (45) calendar days from the date of the DHA letter transmitting the ICN listing. The Contractor shall submit one legible copy of each claim (i.e., CMS 1500, UB 92/04, etc.) and the following required documents in the agreed upon electronic data file format and electronic transmission method as stipulated in the MOU established between the Contractor and the designated compliance review Contractor (reference Section C- 2.7.12.2). Required documentation includes, but is not limited to, the following:

a) Claim-related correspondence when attached to claim or related to the adjudication action, such as status inquiries, written and/or telephone, development records, and other telephone conversation records.

b) Other claim-related documentation, such as medical reports and medical review records, coding sheets, all authorization and referral forms and their supporting documentation, referrals for civilian medical care (e.g. SF Forms 513 or 2161), other health insurance and third party liability documents, discounted rate agreements to include the following information:

1) Provider name and identification number; and

2) Effective and termination dates of agreements.

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c) Negotiated rate(s), per diem rate(s), state prevailing fee(s) or fee schedule(s), Diagnosis Related Group (DRG), Hospital Outpatient Prospective Payment System (OPPS), Skilled Nursing Facility (SNF), pricing information and such other documents as are required to support the reimbursement action(s) taken on the claim.

d) Copy of the Explanation of Benefits (EOB) (or EOB facsimile) for each claim selected.

e) Documentation to support DHA or contractor approved beneficiary participation in any DHA demonstration program.

H.9.2.2.1. The Contractor shall also send, via electronic data input, the current patient/family history (15 to 27 months) for each selected claim. This electronic data shall contain all agreed to and required data fields. The data file must be received by the DHA or the designated compliance review Contractor within forty five (45) calendar days from the date of the DHA letter transmitting the ICN listing.

H.9.2.2.2. Additional Data to be Furnished by the Contractor: The Contractor shall provide description of data elements by field position in family history file printout and field definitions for pricing, Other Health Insurance (OHI), authorization and/or referral screens, current claims adjudication guidelines used by processors, any unique internal procedure codes with narrative and cross-reference to approved TRICARE codes and pricing manuals used in claims processing.

Initial submission of documentation is due to the DHA by the commencement of claims processing with the submission of revisions as they occur, by not later than the fifth (5) work day of the month following the change.

H.9.2.2.3. Documentation for any claim selected with adjustment transactions completed prior to the date of the sample must include the documentation to indicate both initial and adjustment processing actions to include claims EOBs, and pricing information.

H.9.2.3. Payment Error Determinations: Payment errors are based on the claim information available and those processing actions taken up to the time the compliance review sample is pulled. Consideration will be given to subsequent processing actions that occur prior to the date the compliance review sample is pulled, including actions that have not passed the TEDS validity edits, only if supporting documentation to indicate the action taken and the date the action was completed is submitted. Actions and determinations occurring after the date the compliance review sample is pulled will not be considered in the compliance review described in this section regardless of whether resolution of a payment error exits.

H.9.2.3.1. There are two categories of payment errors: (1) a payment error which cannot be removed by Contractor post payment processing actions; and (2) a payment error which can be removed by Contractor post payment processing actions (see list of compliance review error codes defining payment error categories). Payment errors which can be removed by Contractor post payment actions will also be assessed a process error at review. If Contractor post payment actions substantiate the initial processing decision, the payment error will be removed but the process error will remain. If the initial processing action is not substantiated, both the payment

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and the process error will remain. Claims containing process errors will not affect payment or occurrence error rates, but will be used as a performance indicator.

H.9.2.3.2. Payment errors are the amount of over/under payments on a claim, including but not limited to misapplication of the deductible, payment of non-covered services/supplies, or payment of services/supplies for which a benefit cannot be determined based on the information available at the time of processing or a payment in the correct amount but sent to the wrong payee. The measure of the payment error is the TED record.

H.9.2.3.3. Payment errors will be assessed if a claim is selected for review and the Contractor cannot produce the claim or the claim provided is not auditable. For TEDs that do not represent a legitimate condition requiring submission of a record as defined in the TRICARE Systems Manual (TSM), a 100 percent error will be assessed. This condition is considered to be an unsupported TED. The payment error amount(s) will be based on either the institutional TEDs data field - Amount Paid by Government Contractor (TOTAL) or the non-institutional TEDs data field – Amount Paid by Government Contractor by Procedure Code, as submitted by the Contractor. The Contractor has the option of submitting the original document in those cases where the copy is not legible. DHA or the designated compliance review Contractor will return the original documents upon completion of the compliance review process.

H.9.2.3.4. Computation of the “Total Amount Billed” for Non-Denied Institutional Claims. For treatment encounters for which no per diem, negotiated rate or DRAG based amount applies for consideration of payment, the “Total Amount Billed” is the actual amount billed on the claim and as it appears on the TED record. This applies to treatment encounters involving services from DRG-exempt hospitals and hospital units, those involving DRG-exempt services and those which would otherwise be subject to the DRG-based payment methodology but for which a DRG allowed amount cannot be computed, regardless of whether or not these claim are paid.

H.9.2.3.5. For treatment encounters subject to the TRICARE per diem payments, negotiated rate, or the DRG reimbursement methodology, the “total amount billed” is the correct per diem, negotiated rate, or DRG-based allowable amount including any applicable outlier amounts.

H.9.2.3.6. The following are payment errors on which post payment actions are either not applicable or would not remove the payment errors assessed.

04K - Cost-Share/Deductible Error 07K - Duplicate Services Paid 08K - Eligibility Determination — Patient 09K - Eligibility Determination — Provider 12K - Non-Availability Statement Error 13K - Other Health Insurance (OHI) / Third Party Liability (TPL) – Government Payment Miscalculated 14K - OHI Payment Omitted 15K - Payee Wrong-Sponsor/Patient 16K - Payee Wrong- Provider

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17K - Participating/Non-Participating Error 18K - Pricing Incorrect 19K - Procedure Code Incorrect 20K - Signature Error 22K - DRG Reimbursement Error 23K – Contract Jurisdiction Error 24K - Incorrect Benefit Determination 25K - Claim Not Provided 26K - Claim Not Auditable 27K - Incorrect MCS System

H.9.2.3.7. The following are payment errors on which post-payment actions may support original processing. On rebuttal, if documentation is provided that supports the processing actions, the payment errors could be removed but the process errors would remain.

01K -Authorization/Pre-Authorization needed (all except the Extended Care Health Option (ECHO) and Adjunctive Dental Authorizations) 02K - Unsupported Benefit Determination 03K - Billed Amount Incorrect 05K - Development Claim Denied Prematurely 06K - Development Required 10K - Medical Emergency Not Substantiated 11K - Medical Necessity/Review Not Evident 21K - Timely—Filing Error 99K - Other - This payment error is very general and claims would have to be reviewed on an individual basis with regard to post-payment actions.

H.9.2.3.8. The following are procedural/documentation errors which will be assessed to document the Contractor’s procedural errors and documentation problems which impact the compliance review process or indicate a situation of contractual non-compliance which is identifiable during the compliance review and requires follow-up corrective action. These errors are not payment errors and are not used to calculate the payment error rate or to determine unallowable costs.

01L - Compliance Review Documentation Incomplete 02L - Compliance Review Documentation Illegible 03L - Documentation Submitted Late 04L - EOB Incorrect 05L - CA/NAS Questionable 06L - Error in Claims History 07L - Reserved 08L - Erroneous Claim Split 09L - Erroneous TED Record Split

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10L - Adjustment – No Authorizing Official 11L - Contract Jurisdiction Error

H.9.2.4. Compliance Review Rebuttal Procedures: Contractor rebuttals of initial payment error findings must be submitted to the DHA or designated compliance review Contractor within thirty

(30) calendar days of the date of the DHA transmittal letter. Rebuttal comments not postmarked or received by the designated compliance review Contractor within 30-calendar days of the transmittal letter will be excluded from further consideration. Rebuttal error determinations are considered final and will not receive further consideration except when during the rebuttal process the Contractor submits a claim not previously submitted with the initial claims compliance review process and an error is assessed on rebuttal, or when the Contractor’s rebuttal explanation of the basis on which a claim was processed results in the assessment of a new error not previously reviewed by the Contractor. Contractor rebuttal responses to new errors must be post marked or received by the designated compliance review Contractor within 30-calendar days of the DHA transmittal letter. Rebuttal comments to new errors not submitted within 30-calendar days from the date of the DHA transmittal letter will be excluded from further consideration.

H.9.2.4.1. The due dates of the Contractor’s rebuttal comments will be calculated by adding 30 days to the Julian calendar date of the DHA rebuttal transmittal letter or by adding 30 days to the Julian calendar date of the DHA second rebuttal transmittal letter.

H.9.3. DENIED CLAIM COMPLIANCE REVIEWS

H.9.3.1. TED batch/voucher payment records are utilized to determine the validity of claims payment denials by the Contractor. Results from this review will be used to assess the Contractors compliance with TRICARE claims processing performance standards as stipulated in the TOM, Chapter 1, Section 3, Paragraph 7.1 – Claims Processing Accuracy. At the time of the reviews, TED records in batch/vouchers that have not passed TEDS validity edits, or which are otherwise unprocessable as submitted by the Contractor, will be excluded from this review sample.

H.9.3.2. Sampling Methodology: The Government shall review denied claims (i.e., TED records with Type of Submission equal to ‘D’ and “O”) to ensure that healthcare services/supplies are not being denied inappropriately and to validate the correct application of other health insurance (OHI) payments that render a claim with zero government liability. The denied claims compliance reviews will occur on a six month basis but at the Government’s discretion, the frequency may change to a 12-month compliance review cycle based on review results or other factors that my impact this review. The Government will review one-hundred percent (100%) of all denied claims with Billed Amounts meeting or exceeding a high dollar threshold determined by the Government (i.e., $200,000), and claims falling below this threshold will be randomly selected for review. The total sample size is not expected to exceed 100 claims per review cycle, but this may change at the Government’s discretion if it is determined that the Contractor’s performance does not meet the TRICARE claims processing performance standard for denied claims.

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H.9.3.3. Required Contractor Documentation: Reference guidance provided in paragraph H-9.2.2 through H.9.2.2.3 above.

H.9.3.4. Denied Claims Compliance Review Error Determinations: The compliance review error codes (K codes) indicated in Section H.9.2.3.6 and H.9.2.3.7 above, applies to this review.

There are two categories of payment errors: (1) a payment error, which cannot be removed by Contractor post payment processing actions; and (2) a payment error, which…