STATE OF MICHIGAN

CENTRAL PROCUREMENT SERVICES

Department of Technology, Management, and Budget

320 S. WALNUT ST., LANSING, MICHIGAN 48933

P.O. BOX 30026 LANSING, MICHIGAN 48909

CONTRACT CHANGE NOTICE

Change Notice Number 4 to

Contract Number 210000000685

CONTRACT SUMMARY

PRISONER HEALTH CARE AND PHARMACY SERVICES FOR MICHIGAN DEPARTMENT OF CORRECTIONS INITIAL EFFECTIVE DATE INITIAL EXPIRATION DATE INITIAL AVAILABLE OPTIONS EXPIRATION DATE

BEFORE

April 14, 2021 September 30, 2026 3 - 1 Year September 30, 2026

PAYMENT TERMS DELIVERY TIMEFRAME

.45% Net 15 Net 45 N/A

ALTERNATE PAYMENT OPTIONS EXTENDED PURCHASING

☐ P-Card ☐ PRC ☐ Other ☐ Yes ☒ No

MINIMUM DELIVERY REQUIREMENTS

N/A

DESCRIPTION OF CHANGE NOTICE

OPTION LENGTH OF OPTION EXTENSION LENGTH OF EXTENSION REVISED EXP. DATE

☐ ☐ N/A

CURRENT VALUE VALUE OF CHANGE NOTICE ESTIMATED AGGREGATE CONTRACT VALUE

$589,988,100.00 $0.00 $589,988,100.00

DESCRIPTION

Effective October 18, 2023, the contract is amended to correct the pricing tables incorporated in CN 2. See revised pricing tables in Schedule B - Pricing below. Note: The two corrections will be in red font.

All other terms, conditions, specifications and pricing remain the same. Per contractor and agency agreement, and DTMB Central Procurement Services approval.

C O

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A C

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Grand Prairie Services, P.C.

3340 Perimeter Hill Road

Nashville, TN 37211

Richard Maenza

615-466-3490

RMaenza@Wellpath.us

VS0176580

STATE

P ro g ram

M an ag er

Marti Kay Sherry MDOC

517-335-2252 sherrym@michigan.gov C o n tract

A d m inistrato r

Brandon Samuel DTMB

(517) 249-0439 samuelb@michigan.gov mailto:RMaenza@Wellpath.us mailto:sherrym@michigan.gov mailto:samuelb@michigan.gov

Contract No. 210000000685

Prisoner Health Care and Pharmacy Services

SCHEDULE B

PRICING

1. Contract pricing must include all costs, including but not limited to, any one-time or set-up charges, fees, and potential costs that Contractor may charge the State (e.g., shipping and handling, per piece pricing, and palletizing).

2. The Contractor has offered the following quick payment terms. The number of days must not include processing time for payment to be received by the Contractor's financial institution.

Quick payment terms: 0.45% discount off invoice if paid within 15 days after receipt of invoice. The invoice will not be submitted before the 16th of the preceding month.

The risk share pricing proposal consists of two components; base PPPM and a risk share base PPPM. The base PPPM will be the amount that is paid on a monthly basis by the 15th of the following month based on the census report that is received on the first day of the following month (i.e. July census report will be provided on August 1). The Contractor must detail the components that make up the base PPPM rate. The base PPPM does not include the dental rates. The risk share base PPPM will be the sum of the specialty care and pharmacy components that will be used in the risk share reconciliation as noted on each pricing table below. Between the risk share target and the risk share cap the MDOC will share the costs. The Contractor must propose a risk share cap.

The risk share pricing has been updated to reflect the change in payment terms. The base PPPM will be the amount that is paid on a monthly basis on the 1st of the month of service (with the exception of October when it will be paid on the first business day of the month). The PPPM will be based on the previous months census and will be trued up the following month based on the next month’s census.

The risk share component relates to specialty services (including on-site and off-site), pharmacy costs (net rebates and discount) and does not include on-site staffing for all contracted services, and the administrative/management fee. It must also include the range that the Contractor proposes for the risk share window.

The risk share window will start with the base risk share PPPM (target) for specialty services and pharmacy, and must contain a cap of costs for the MDOC. The MDOC cap is reached when the total specialty costs and/or pharmacy reach the cap amount, and not when the MDOC costs reach the cap amount. Any claims that are Medicaid or Medicaid eligible will not be included in the risk share calculation.

The MDOC will share costs equally 50/50 with the Contractor in excess of the risk share base PPPM up to the point where the costs equal the cap. All costs in excess of the cap will be the responsibility of the Contractor. The MDOC will share savings 85/15 (85% to MDOC and 15% to the Contractor) with the Contractor when actual costs are below the target. No savings related to the Affordable Care Act will be included in the risk share reconciliation, i.e. Medicaid.

The risk share will be reconciled on a quarterly basis based on actual paid claims and expenditures paid during the reporting period, this does not include accruals.

The risk share reconciliation process has been updated to add the SLA assessments, staffing paybacks, and any chargebacks into the reconciliation. The reconciliation will be completed within 60 days of the end of the quarter. Any amount due or payable will be made with the next monthly payment.

PRISONER HEALTH CARE SERVICES

Per Prisoner Per Month

Breakdown (PPPM) for Health Care Services

Contract

Year 1

Year 2 Contract Year 2

(Revised)

Contract Year 3

*(Updated)

Year 4

Year 5 *(Updated

Total Base

Onsite Medical Total (Schedule A, 1.0, Section C) $59.49 $61.27 $63.17 $65.06 $67.02 $69.03 $323.77

On-site Behavioral Health Total (Schedule A, 1.0, Section C) $31.09 $32.02 $33.01 $34.00 $35.02 $36.07 $169.19

Specialty Care (onsite and offsite) $85.94 $88.52 $106.72 $109.93 $113.22 $116.62 $532.43

Specialty Care Access Fee $7.41 $7.63 $7.87 $8.10 $8.35 $8.60 $40.33

Specialty Care Total (Schedule A, 1.0, Section E)

Total should include specialty care costs, specialty care access fee.

$93.35

$96.15

$114.59

$118.03

$121.57

$125.22

$572.76

*Cost Allocations and Indirect Costs $0 $0 $0 $0 $0 $0 $0

**Management Fee $17.87 $18.41 $18.98 $19.55 $20.14 $20.74 $97.20 Base PPPM (for prisoner health care services)

(Sum of all the “total” rows highlighted in gray)

$201.80

$207.85

$229.75

$236.64

$243.75

$251.06

$1,163.01

Risk Share Base PPPM (for prisoner health care services)

(Sum of all the Specialty Care Total)

Risk Share Cap PPPM (for prisoner

(Maximum potential costs to the MDOC for Specialty Care)

$120.15

$123.75

$133.05

$137.04

$141.15

$145.38

$676.77

Total Base Contract Cost for Prisoner Health Care Services

(Base PPPM x 32,500)

$6,558,500

$6,755,125

$7,466,875

$7,691,125

$7,921,875

$8,159,450

$37,797,825

Total Annual Base Contract Cost $78,702,000 $81,061,500 $89,602,500 $92,293,500 $95,062,500 $97,913,400 $453,573,900 NOTE: The Base PPPM is calculated using 32,500 prisoners per month. This number may change and is not a guarantee of number of prisoners needing service.

*This is an estimate only and not a guarantee using a 3% CPI, and may be adjusted based on actual Midwest Medical Consumer Price Index for September of each year.

PRISONER PHARMACY SERVICES

Breakdown (PPPM) for Pharmacy Services

Contract Year 2

(Revised)

Contract

*(Updated)

Total Base Contract

Pharmacy Staffing at On-site Pharmacy at DWHC Total $1.94 $2.00 $2.06 $2.12 $2.19 $2.25 $10.56

Pharmacy Dispensing Fee per prisoner not per script Total $7.26 $7.48 $7.71 $7.94 $8.18 $8.43 $39.52

Pharmaceutical Costs Total (Schedule A, 1.0, Section F)

$64.63

$66.57

$68.63

$70.69

$72.81

$75.00

$351.76

**Management Fee $9.30 $9.58 $9.88 $10.17 $10.48 $10.79 $50.62 Base PPPM (for pharmacy services)

$83.13

$85.63

$88.28

$90.92

$93.66

$96.47

$452.47

Risk Share Base PPPM (for pharmacy services)

(Sum of all the Pharmaceutical CostsTotal)

Risk Share Cap PPPM (for

MDOC for Pharmaceutical Services)

$77.83

$80.16

$82.64

$85.12

$87.68

$90.31

$423.58 pharmacy services

$2,701,725

$2,782,975

$2,869,100

$2,955,225

$3,043,950

$3,135,275

$14,705,275

Total Annual Base Contract Cost $32,420,700 $33,395,700 $34,429,200 $35,462,700 $36,527,400 $37,623,300 $176,463,300 NOTE: The Base PPPM is calculated using 32,500 prisoners per month. This number may change and is not a guarantee of number of prisoners needing service.

*This is an estimate only and not a guarantee using a 3% CPI, and may be adjusted based on actual Midwest Medical Consumer Price Index for September of each year.

Combined Annual Base Contract Cost $111,122,700 $114,457,200 $124,031,700 $127,756,200 $131,589,900 $135,536,700 $630,037,200

The proposed health care and pharmacy services costs are based on the following assumptions:

• Inpatient stays for the secure units will be billed to Medicaid for eligible patients.

• Risk share window of $40.00 PPPM ($26.80 for healthcare services and $13.20 for pharmacy services) of which MDOC and Contractor would split evenly. The Risk share window has been updated to reflect the contract change notice. The new risk share window is $32.47 (18.46 for healthcare services and $14.01 for pharmacy services)

Cost Explanation

The costs as provided in the above pricing tables include all costs to provide the services as requested in Schedule A (Statement of Work). These costs include the following:

• Comprehensive health care provider services and pharmacy staffing services, inclusive of key and essential personnel for the MDOC prisoner population (onsite medical staffing, onsite behavioral health staffing, and pharmacy staffing) and insurance costs.

• Specialty on-site and off-site care inclusive of all out-of-facility medical services ineligible for Medicaid, laboratory, radiology interpretation and offsite radiology, onsite specialty clinics not included in staffing plan, dialysis, and ambulance services, as well as BCBS network premiums and access fees.

• Pharmaceutical costs include our estimated drug costs based on the RFP requirements and developed independently of Schedule B-1 (in accordance with responses to Q&A).

• Pharmacy dispensing fees include the costs of labor, packaging, shipping, local deliveries, interface, information technology monthly support fees, discarded medication charges, and the back-up pharmacy cost overruns for all fills except the staffing costs at DWHC.

• Risk share base and risk share cap for health care services includes specialty on-site and off-site care as detailed above. The risk share base and cap for pharmacy services includes our pharmaceutical costs as detailed above.

Management Fee Breakdown

Our management fee costs include the following:

• Employee goodwill, education and scholarships include employee-related expenses that promote professional development and staff retention.

• Licensing fees include the costs of licensure obtained on behalf of employees.

• Background checks include pre-employment, criminal background checks, etc.

• Recruiting and relocation include expenses associated with identifying and acquiring new talent.

• Travel includes airfare, lodging, meals, mileage reimbursement, parking fees, etc.

• Office rental includes the rental expense of maintaining a local administrative office.

• Information technology includes the cost of IT maintenance and network communications.

• Telephone includes the cost of land lines and mobile telephones (for management staff).

• Legal fees include various site-specific legal costs.

• Consulting includes various clinical and operational consultants that may be engaged to provide training, seminars, etc.

• Payroll includes the cost of third-party payroll services.

• Overhead and margin include general and administrative (G&A) expenses and reasonable profit.

Department of Technology, Management, and Budget

320 S. WALNUT ST., LANSING, MICHIGAN 48933

P.O. BOX 30026 LANSING, MICHIGAN 48909

CONTRACT CHANGE NOTICE

Change Notice Number 3 to

Contract Number 210000000685 sherrym@michigan.gov

Marti Kay Sherry

Brandon Samuel rmaenza@wellpath.us

Richard Maenza

Nashville, TN 37211

Grand Prairie Healthcare Services, P.C.

VS0176580

615-466-3490

3340 Perimeter Hill Road

(517) 249-0439 S

T A

T E

P ro g ra m a n a g e r

C o n tra ct

A d m in istra to r

C O

N T R A C T O

R

517-335-2252

DTMB

samuelb@michigan.gov

$589,988,100.00

April 14, 2021 September 30, 2026

PRISONER HEALTH CARE AND PHARMACY SERVICES FOR MICHIGAN DEPARTMENT OF CORRECTIONS

September 30, 2026

INITIAL AVAILABLE OPTIONS EXPIRATION DATE

BEFORE

3 - 1 Year

PAYMENT TERMS DELIVERY TIMEFRAME

.45% NET 15 NET 45

ALTERNATE PAYMENT OPTIONS EXTENDED PURCHASING

☐ P-Card ☐ PRC ☐ Other ☐ Yes ☒ No

MINIMUM DELIVERY REQUIREMENTS

DESCRIPTION OF CHANGE NOTICE

OPTION LENGTH OF OPTION EXTENSION LENGTH OF EXTENSION REVISED EXP. DATE

☐ ☐ N/A

CURRENT VALUE VALUE OF CHANGE NOTICE ESTIMATED AGGREGATE CONTRACT VALUE

N/A

$0.00 $589,988,100.00

Effective August 25, 2023 the contract is hereby amended.

The Pharmacy Services subcontractor has changed from Correct Rx Pharmacy Services to PharmaCorr, LLC. Section 3.8 Disclosure of Subcontractors is revised to include the attached. Also see Exhibit 1 for additional information.

All other terms, conditions, specifications and pricing remain the same. Per contractor and agency agreement, and DTMB Central Procurement Services approval.

INITIAL EXPIRATION DATEINITIAL EFFECTIVE DATE

N/A

DESCRIPTION

MDOC

Disclosure of Subcontractors

PharmaCorr, LLC

1. The legal business name:

Pharmacorr, LLC

2. Full Address; telephone number:

7400 Plaza Mayor Blvd., Suite 100 Oklahoma City, Oklahoma 73149

(888) 321-7774

3. A description of subcontractor’s organization and the services it will provide:

Pharmacorr, LLC is an independent institutional mail-order pharmacy program located in Oklahoma City, Oklahoma. The program was begun in 1996 and has been in continuous operation since then, licensed in forty-six states and currently providing services in thirteen. Pharmacorr along with its Wholesale Distribution subsidiary, Endeavor Distribution, is licensed to distribute patient-specific, non-patient-specific and controlled substance pharmaceuticals to its client programs.

In addition to the centralized mail-order dispensing program, Pharmacorr will provide total pharmacy services to the patients of the Duane Waters Hospital through an in-state clinical and operational staff.

Primary oversight of the Pharmacorr program is the responsibility of Adam Curling, Vice President of Operations. Mr. Curling has 25 years’ experience in the correctional pharmacy sector, all with Pharmacorr. The Chief Executive Officer, N. Reed Heflin, has been affiliated with Pharmacorr since its beginning in 1996 and was the initial developer of the pharmacy programs. The nine senior managers of Pharmacorr have a combined average tenure of 18.5 years, and five have been with the company since inception.

4. Information concerning subcontractor’s ability to provide the Contract Activities:

Pharmacorr, LLC is a national leader in correctional pharmacy services with highly automated dispensing systems and enhanced clinical pharmacy programs focused on clinically appropriate cost avoidance. Our automation platform has resulted in a same-day fill rate of 98% with an accuracy rate of over 99.98%.

The pharmacy program is currently providing services to 56,000 offenders in 13 states, the majority of which are incarcerated in state prison systems.

Pharmacorr possesses unrestricted licensure in 47 states. The company is a full-service pharmacy available 24 hours a day, providing next-day delivery of medication six days per week, where available (excluding Sundays and state holidays).

Pharmacorr has cumulatively dispensed over 75 million prescriptions in its history. Currently the pharmacy dispenses approximately 10,000 prescriptions per day and has the capacity to quadruple that dispensing volume with its 35,000

sq. ft., highly automated facility. The pharmacy, with its Endeavor wholesaler affiliate, has the ability to dispense both patient-specific, non-patient-specific legend, OTC and controlled substances. In addition, Pharmacorr has historically provided comprehensive pharmacy services to the Duane Waters Hospital patients for over a decade.

Pharmacorr’s clinical pharmacy programs (SelectRx, PrecisionRx, MTM and CPIP) provide prospective clinical pharmacy consultation to prescribers daily.

Our program recommendations have an overall acceptance rate of 85% by our client prescribers. The goal of all our clinical services is to provide therapeutically appropriate recommendations to ensure excellence in pharmaceutical care with an eye on avoidance of unnecessary costs. From 2017 through June 2023, Pharmacorr’s Clinical Pharmacists have documented 37,267 interventions totaling $48,154,604 in savings to our clients cumulatively.

The licensure material to the provision of correctional pharmacy services in the State of Michigan is listed below:

Pharmacorr, LLC:

Oklahoma License Number 1-8304

OBNDD 60985

Michigan Non-Resident License P920281 Michigan CDS License P920061

DEA FP8098015

Endeavor Distribution, LLC:

Oklahoma License 1-W-5896

OBNDD 67178

Michigan Wholesale Distributor Q227403 Michigan Wholesale CDS Q227274

DEA RE0563418

5. The relationship of the subcontractor to the Contractor:

The relationship between Pharmacorr, LLC and Grand Prairie Healthcare Services, P.C. is that of an independent contractor.

6. Whether the Contractor has a previous working experience with the subcontractor. If yes, provide the details of that previous relationship.

Pharmacorr, LLC has no working experience with the contractor.

7. A complete description of the Contract Activities that will be performed or provided by the subcontractor.

As the pharmacy contractor, Pharmacorr will provide the following services to the Michigan DOC, utilizing our Oklahoma-based centralized pharmacy system, the onsite pharmacy located in the at Duane Waters Hospital facility, and Michigan-based Clinical Pharmacists and Pharmacy Manager:

• Formulary Management

• Prescription Fulfillment (mail-order)

• Prescription Fulfillment (DWH)

• Medication Delivery

• Pharmacy Continuous Quality Improvement

• Return / Destruction of Medication

• Customer Service

• Patient Education

• Cost Avoidance Strategies

• Data Management, Mining and Reporting

• Clinical Pharmacy Services (local)

• Clinical Pharmacy Services (corporate)

- Pharmacorr’s Clinical Pharmacy Intervention Program (CPIP)

- SelectRx

- PrecisionRx

- Medication Therapy Management (MTM)

• Third Party Audit Reconciliation

• Accreditation Preparation

GRETCHEN WHITMER

GOVERNOR

STATE OF MICHIGAN

DEPARTMENT OF TECHNOLOGY, MANAGEMENT & BUDGET

LANSING

MICHELLE LANGE

DIRECTOR

August 9, 2023

Exhibit 1 to CN 3 - 210000000685

Richard Maenza, President Grand Prairie Healthcare Services, P.C.

Nashville, TN 37211

Via email only at rmaenza@wellpath.us

Re: Contract# 210000000685, MDOC Prisoner Health Care and Pharmacy Services

Dear Mr. Maenza, GPHS has requested the State’s approval to replace subcontractor Correct Rx Pharmacy Services with PharmaCorr, LLC to provide pharmaceutical services under the above-referenced contract, effective August 25, 2023.

Section 13 of the contract states in full:

13. Subcontracting. Contractor will not, without the prior written approval of the State, which consent may be given or withheld in the State’s sole discretion, engage any Third Party to perform Services. The State’s approval of any such Third Party (each approved Third Party, a “Permitted Subcontractor”) does not relieve Contractor of its representations, warranties or obligations under this Contract. Without limiting the foregoing, Contractor will: (a) be responsible and liable for the acts and omissions of each such Permitted Subcontractor (including such Permitted Subcontractor's employees who, to the extent providing Services or Deliverables, shall be deemed Contractor Personnel) to the same extent as if such acts or omissions were by Contractor or its employees; (b) name the State a third party beneficiary under Contractor’s Contract with each Permitted Subcontractor with respect to the Services; (c) be responsible for all fees and expenses payable to, by or on behalf of each Permitted Subcontractor in connection with this Contract, including, if

ELLIOTT-LARSEN BUILDING, 2ND FLOOR ● 320 S. WALNUT STREET ● P.O. BOX 30026 ● LANSING, MICHIGAN 48909 www.michigan.gov/dtmb ● 517-241-5545 mailto:rmaenza@wellpath.us http://www.michigan.gov/dtmb applicable, withholding of income taxes, and the payment and withholding of social security and other payroll taxes, unemployment insurance, workers' compensation insurance payments and disability benefits; and (d) notify the State of the location of the Permitted Subcontractor and indicate if it is located within the continental United States.

The State will consent to GPHS utilizing PharmaCorr, LLC as a subcontractor to perform services under the contract, conditioned upon GPHS’s representation and warranty that neither Isaac Lefkowitz nor any of the Perigrove staff will have a direct role in the provision of pharmacy services or the negotiation of any services in support of GPHS’s contract with the State.

Please sign below with GPHS’s acceptance of this condition in order for PharmaCorr, LLC to be deemed a Permitted Subcontractor under section 13. Upon receipt, we will attach it as an exhibit to a Contract Change Notice #3 to be executed by the parties, at which point PharmaCorr will be deemed a Permitted Subcontractor.

Respectfully, Brandon Samuel SAA Category Specialist DTMB-Central Procurement Services State of Michigan

For Grand Prairie Healthcare Services, P.C.:

I, Richard Maenza, President of Grand Prairie Healthcare Services, P.C. (GPHS), represent and warrant on behalf of GPHS that neither Isaac Lefkowitz nor any of the Perigrove Staff will have a direct role with PharmaCorr, LLC as related to the provision of any services under GPHS’s contract with the State of Michigan, and that I have authority to execute this document on behalf of GPHS.

Richard Maenza, President

2023-08-14 15:06:11 UTC

Dated:

c: David Thompson, Wellpath Senior Vice President; Jared Ambrosier, DTMB Chief Procurement Officer; Marti Kay Sherry, MDOC Health Service Administration

E-SIGNED by Richard Maenza on 2023-08-14 15:06:11 EDT

Department of Technology, Management, and Budget

320 S. WALNUT ST., LANSING, MICHIGAN 48933

P.O. BOX 30026 LANSING, MICHIGAN 48909

CONTRACT CHANGE NOTICE

Change Notice Number 2 to

Contract Number 210000000685

PRISONER HEALTH CARE AND PHARMACY SERVICES FOR MICHIGAN DEPARTMENT OF CORRECTIONS INITIAL EFFECTIVE DATE INITIAL EXPIRATION DATE INITIAL AVAILABLE OPTIONS EXPIRATION DATE

BEFORE

April 14, 2021 September 30, 2026 3 - 1 Year September 30, 2026

PAYMENT TERMS DELIVERY TIMEFRAME

.45% Net 15 Net 45 N/A

ALTERNATE PAYMENT OPTIONS EXTENDED PURCHASING

☐ P-Card ☐ PRC ☐ Other ☐ Yes ☒ No

MINIMUM DELIVERY REQUIREMENTS

N/A

DESCRIPTION OF CHANGE NOTICE

OPTION LENGTH OF OPTION EXTENSION LENGTH OF EXTENSION REVISED EXP. DATE

☐ ☐ N/A

CURRENT VALUE VALUE OF CHANGE NOTICE ESTIMATED AGGREGATE CONTRACT VALUE

$589,988,100.00 $0.00 $589,988,100.00

DESCRIPTION

Effective October 1, 2022, the contract is amended to incorporate the following below (see revised Schedule B - Pricing below):

Additionally, Contractor’s Notices (Standard Contract Terms – Section 6 Notices) and Contract Administrator (Schedule A Statement of Work – Section 3.2 Contract Administrator) has changed to Richard Maenza.

All other terms, conditions, specifications and pricing remain the same. Per contractor and agency agreement, and DTMB Central Procurement Services approval.

C O

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A C

TO

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Grand Prairie Services, P.C.

Nashville, TN 37211

Richard Maenza

615-466-3490

RMaenza@Wellpath.us

STATE

P ro g ram ag er

Marti Kay Sherry MDOC

517-335-2252 sherrym@michigan.gov C o n tract

A d m inistrato r

Brandon Samuel DTMB

(517) 249-0439 samuelb@michigan.gov mailto:RMaenza@Wellpath.us mailto:sherrym@michigan.gov mailto:samuelb@michigan.gov

• The utilization of the Midwest Medical Consumer Price Index (CPI). The contract currently includes a built-in annual 3% CPI adjustment. Each September the aforementioned CPI will be reviewed and adjusted based on the inflation rate at that time.

Therefore, if the CPI shows a 2% increase, a change notice will be issued to reflect a 1% CPI decrease (3% built-in CPI - 2% actual CPI = 1% reduction) Similarly, if the CPI shows a 4% increase, the change notice will reflect a 1% CPI increase (3% built-in CPI - 4% actual CPI = 1% increase). Contract year two will have a CPI adjustment of 3.1% to the month of September CPI for all areas (as the CPI index was 6.1%).

• The risk share base on the specialty care line will be increased by $15.46. Additionally, the risk share cap will be increased by $5.46 on specialty care. This increase will occur after the year 2 CPI increase is made.

• The MDOC will receive an increase in the prompt payment discount from .3% to .45%.

1) Staff Reconciliation Process

Contractor shall issue to the MDOC monthly, in arrears, a staff vacancy report for each Group and amount as defined below by the 20th of each month. Staffing paybacks will be calculated on a monthly basis and reported to MDOC; however, reconciliation and payment will occur as part of the quarterly reconciliation process. Contractor agrees to provide a cross reference of the positions to the financial statement categories for purposes of reconciliation.

a) Group 1

i) A vacancy credit equal to

(1) the aggregate number of hours required for each position per the agreed Staffing Matrix, less the number of hours actually paid for each position multiplied by

(2) the average hourly wage of the positions.

(3) Contractor is committed to ensuring all Group 1 hours are provided using regular, overtime and Locum Tenens hours but will not slight one facility to provide coverage at another facility.

b) Group 2

i) A vacancy credit equal to

(1) Any staff vacancy related to Group 2 that exceeds thirty (30) days will require a staff vacancy credit equal to

(a) days over thirty (30) days vacant for the reporting period per the agreed Staffing Matrix for each position multiplied by

(b) the average hourly wage per position.

(2) If a Group 2 position is not filled within 30 days, Contractor will credit MDOC the hourly wage of the position starting at day 31 and lasting through day 60.

(3) If a Group 2 position remains unfilled at 60 days, Contractor will credit MDOC double the hourly rate beginning on day 61 and until the position is filled.

(a) A position is considered vacant if there is not an offer made and accepted in the 30-day period following the vacancy date.

(b) If the actual start date exceeds 30 days from the accepted offer Contractor will credit MDOC the actual hourly wage.

(c) If the start date exceeds 60 days from the accepted offer Contractor will credit MDOC double the hourly wage.

c) Group 3

i) If a Group 3 position is not filled within 30 days Contractor will credit MDOC the hourly wage of the position starting on day 31 and until the position is filled.

(1) There are Group 3 positions that are value add on the staffing matrix that will not be part of the vacancy credit.

2) Definitions

a) Group 1 represents the healthcare professionals delivering primary care to the prison population.

b) Group 2 represents the key personnel and other regional staff.

c) Group 3 represents support staff not designated as Key Personnel employees.

d) Parties agree that the matrix used for the staffing hours calculation is the March 2022 staffing matrix.

e) Contractor will not include excessive hours (more than 64 hours per week) for identified providers in the calculation of provided hours.

f) Value add positions are positions that were not part of the RFP response, but Contractor has added to support the contract.

g) A higher credentialed provider may fill the hours of a lower credentialed position (e.g., a psychiatrist may fill the hours of a psych mid-level and Physician to fill midlevel and Physician to fill a Mid-Level).

3) Group Definitions

a) Group 1

i) Physician

ii) Psychiatrist

iii) Mental Health Mid-Level

iv) Medical Mid-Level

v) Telehealth Facilitator

b) Group 2

i) Project Manager – Regional Director of Operations

ii) Operations Manager – Regional Vice President

iii) Medical Director – Statewide Medical Director

iv) Psychiatric Director – Statewide Psychiatric Director

v) Substance use Disorders Director

vi) Quality Assurance Director

vii) Provider Services Director

viii) Utilization Management Director – Utilization Management Physician

ix) Infectious Disease Director

x) Clinical Pharmacist

xi) Duane Waters Health Center Lead Physician – DWHC Medical Director

xii) Gender Dysphoria Consultant

xiii) End of Life Coordinator – CHOICES Director

xiv) Pharmacist

xv) Human Resources Business Partner

xvi) Director of High-Risk patients

xvii) OB/GYN

xviii) Recruiter

c) Group 3

i) Finance Manager

ii) Gender Dysphoria Mid-Level

iii) Infectious Disease RN

iv) Oncology RN

v) Physical Therapist

vi) Physical Therapy Assistant

vii) Quality Assurance Assistant

viii) Regional Manager

ix) Scheduling Clerk

x) UM Coordinator

Contract No. 210000000685

Prisoner Health Care and Pharmacy Services

SCHEDULE B

PRICING

1. Contract pricing must include all costs, including but not limited to, any one-time or set-up charges, fees, and potential costs that Contractor may charge the State (e.g., shipping and handling, per piece pricing, and palletizing).

2. The Contractor has offered the following quick payment terms. The number of days must not include processing time for payment to be received by the Contractor's financial institution.

Quick payment terms: 0.45% discount off invoice if paid within 15 days after receipt of invoice. The invoice will not be submitted before the 16th of the preceding month.

The risk share pricing proposal consists of two components; base PPPM and a risk share base PPPM. The base PPPM will be the amount that is paid on a monthly basis by the 15th of the following month based on the census report that is received on the first day of the following month (i.e. July census report will be provided on August 1). The Contractor must detail the components that make up the base PPPM rate. The base PPPM does not include the dental rates. The risk share base PPPM will be the sum of the specialty care and pharmacy components that will be used in the risk share reconciliation as noted on each pricing table below. Between the risk share target and the risk share cap the MDOC will share the costs. The Contractor must propose a risk share cap.

The risk share pricing has been updated to reflect the change in payment terms. The base PPPM will be the amount that is paid on a monthly basis on the 1st of the month of service (with the exception of October when it will be paid on the first business day of the month). The PPPM will be based on the previous months census and will be trued up the following month based on the next month’s census.

The risk share component relates to specialty services (including on-site and off-site), pharmacy costs (net rebates and discount) and does not include on-site staffing for all contracted services, and the administrative/management fee. It must also include the range that the Contractor proposes for the risk share window.

The risk share window will start with the base risk share PPPM (target) for specialty services and pharmacy, and must contain a cap of costs for the MDOC. The MDOC cap is reached when the total specialty costs and/or pharmacy reach the cap amount, and not when the MDOC costs reach the cap amount. Any claims that are Medicaid or Medicaid eligible will not be included in the risk share calculation.

The MDOC will share costs equally 50/50 with the Contractor in excess of the risk share base PPPM up to the point where the costs equal the cap. All costs in excess of the cap will be the responsibility of the Contractor. The MDOC will share savings 85/15 (85% to MDOC and 15% to the Contractor) with the Contractor when actual costs are below the target. No savings related to the Affordable Care Act will be included in the risk share reconciliation, i.e. Medicaid.

The risk share will be reconciled on a quarterly basis based on actual paid claims and expenditures paid during the reporting period, this does not include accruals.

The risk share reconciliation process has been updated to add the SLA assessments, staffing paybacks, and any chargebacks into the reconciliation. The reconciliation will be completed within 60 days of the end of the quarter. Any amount due or payable will be made with the next monthly payment.

PRISONER HEALTH CARE SERVICES

Breakdown (PPPM) for Health Care Services

Contract Year 2

(Revised)

Contract

*(Updated

Total Base

Onsite Medical Total (Schedule A, 1.0, Section C) $59.49 $61.27 $63.17 $65.06 $67.02 $69.03 $323.77

On-site Behavioral Health Total (Schedule A, 1.0, Section C) $31.09 $32.02 $33.01 $34.00 $35.02 $36.07 $169.19

Specialty Care (onsite and offsite) $85.94 $88.52 $106.72 $109.93 $113.22 $116.62 $532.43

Specialty Care Access Fee $7.41 $7.63 $7.87 $8.10 $8.35 $8.60 $40.33

Specialty Care Total (Schedule A, 1.0, Section E)

Total should include specialty care costs, specialty care access fee.

**Management Fee $17.87 $18.41 $18.98 $19.55 $20.14 $20.74 $97.20 Base PPPM (for prisoner health care services)

$201.80

$207.85

$229.75

$236.65

$243.75

$251.06

$1,163.01

Risk Share Base PPPM (for prisoner

(Sum of all the Specialty Care Total)

Risk Share Cap PPPM (for prisoner

MDOC for Specialty Care)

$120.15

$123.75

$133.05

$137.04

$141.15

$145.38

$676.77

Prisoner Health Care Services

$6,558,500

$6,755,125

$7,466,875

$7,691,125

$7,921,875

$8,159,450

$37,797,825

Total Annual Base Contract Cost $78,702,000 $81,061,500 $89,602,500 $92,293,500 $95,062,500 $97,913,400 $453,573,900 NOTE: The Base PPPM is calculated using 32,500 prisoners per month. This number may change and is not a guarantee of number of prisoners needing service.

*This is an estimate only and not a guarantee using a 3% CPI, and may be adjusted based on actual Midwest Medical Consumer Price Index for September of each year.

PRISONER PHARMACY SERVICES

Breakdown (PPPM) for Pharmacy Services

Contract Year 2

(Revised)

Contract

*(Updated)

Total Base Contract

Pharmacy Staffing at On-site Pharmacy at DWHC Total $1.94 $2.00 $2.06 $2.12 $2.19 $2.25 $10.56

Pharmacy Dispensing Fee per prisoner not per script Total $7.26 $7.48 $7.71 $7.94 $8.18 $8.43 $39.52

Pharmaceutical Costs Total (Schedule A, 1.0, Section F)

**Management Fee $9.30 $9.58 $9.88 $10.17 $10.48 $10.79 $50.62 Base PPPM (for pharmacy services)

$83.13

$85.63

$88.28

$90.93

$93.66

$96.47

$452.47

Risk Share Base PPPM (for

(Sum of all the Pharmaceutical CostsTotal)

Risk Share Cap PPPM (for

MDOC for Pharmaceutical Services)

$77.83

$80.16

$82.64

$85.12

$87.68

$90.31

$423.58 pharmacy services

$2,701,725

$2,782,975

$2,869,100

$2,955,225

$3,043,950

$3,135,275

$14,705,275

Total Annual Base Contract Cost $32,420,700 $33,395,700 $34,429,200 $35,462,700 $36,527,400 $37,623,300 $176,463,300 NOTE: The Base PPPM is calculated using 32,500 prisoners per month. This number may change and is not a guarantee of number of prisoners needing service.

*This is an estimate only and not a guarantee using a 3% CPI, and may be adjusted based on actual Midwest Medical Consumer Price Index for September of each year.

Combined Annual Base Contract Cost $111,122,700 $114,457,200 $124,031,700 $127,756,200 $131,589,900 $135,536,700 $630,037,200

The proposed health care and pharmacy services costs are based on the following assumptions:

• Inpatient stays for the secure units will be billed to Medicaid for eligible patients.

• Risk share window of $40.00 PPPM ($26.80 for healthcare services and $13.20 for pharmacy services) of which MDOC and Contractor would split evenly. The Risk share window has been updated to reflect the contract change notice. The new risk share window is $32.47 (18.46 for healthcare services and $14.01 for pharmacy services)

Cost Explanation

The costs as provided in the above pricing tables include all costs to provide the services as requested in Schedule A (Statement of Work). These costs include the following:

• Comprehensive health care provider services and pharmacy staffing services, inclusive of key and essential personnel for the MDOC prisoner population (onsite medical staffing, onsite behavioral health staffing, and pharmacy staffing) and insurance costs.

• Specialty on-site and off-site care inclusive of all out-of-facility medical services ineligible for Medicaid, laboratory, radiology interpretation and offsite radiology, onsite specialty clinics not included in staffing plan, dialysis, and ambulance services, as well as BCBS network premiums and access fees.

• Pharmaceutical costs include our estimated drug costs based on the RFP requirements and developed independently of Schedule B-1 (in accordance with responses to Q&A).

• Pharmacy dispensing fees include the costs of labor, packaging, shipping, local deliveries, interface, information technology monthly support fees, discarded medication charges, and the back-up pharmacy cost overruns for all fills except the staffing costs at DWHC.

• Risk share base and risk share cap for health care services includes specialty on-site and off-site care as detailed above. The risk share base and cap for pharmacy services includes our pharmaceutical costs as detailed above.

Management Fee Breakdown

Our management fee costs include the following:

• Employee goodwill, education and scholarships include employee-related expenses that promote professional development and staff retention.

• Licensing fees include the costs of licensure obtained on behalf of employees.

• Background checks include pre-employment, criminal background checks, etc.

• Recruiting and relocation include expenses associated with identifying and acquiring new talent.

• Travel includes airfare, lodging, meals, mileage reimbursement, parking fees, etc.

• Office rental includes the rental expense of maintaining a local administrative office.

• Information technology includes the cost of IT maintenance and network communications.

• Telephone includes the cost of land lines and mobile telephones (for management staff).

• Legal fees include various site-specific legal costs.

• Consulting includes various clinical and operational consultants that may be engaged to provide training, seminars, etc.

• Payroll includes the cost of third-party payroll services.

• Overhead and margin include general and administrative (G&A) expenses and reasonable profit.

Department of Technology, Management, and Budget

320 S. WALNUT ST., LANSING, MICHIGAN 48933

P.O. BOX 30026 LANSING, MICHIGAN 48909

CONTRACT CHANGE NOTICE

Change Notice Number 1 to

210000000685Contract Number sherrym@michigan.gov

Marti Kay Sherry

Brandon Samuel deanrieger@gmail.com

Dean Rieger

Nashville, TN 37217

Grand Prairie Services, P.C.

VS0176580

615-715-1034

1283 Murfreesboro Road , Suite 500

(517) 249-0439 S

T A

T E

P ro g ra m a n a g e r

C o n tra ct

A d m in istra to r

C O

N T R A C T O

R

517-335-2252

DTMB

samuelb@michigan.gov

$589,988,100.00

April 14, 2021 September 30, 2026

PRISONER HEALTH CARE AND PHARMACY SERVICES FOR MICHIGAN DEPARTMENT OF CORRECTIONS

September 30, 2026

INITIAL AVAILABLE OPTIONS EXPIRATION DATE

BEFORE

3 - 1 Year

PAYMENT TERMS DELIVERY TIMEFRAME

ALTERNATE PAYMENT OPTIONS EXTENDED PURCHASING

☐ P-Card ☐ PRC ☐ Other ☐ Yes ☒ No

MINIMUM DELIVERY REQUIREMENTS

DESCRIPTION OF CHANGE NOTICE

OPTION LENGTH OF OPTION EXTENSION LENGTH OF EXTENSION REVISED EXP. DATE

☐ ☐ N/A

CURRENT VALUE VALUE OF CHANGE NOTICE ESTIMATED AGGREGATE CONTRACT VALUE

N/A

$0.00 $589,988,100.00

Effective December 1, 2022 this change notice is to allow MDOC at their discretion to make a monthly prepayment of the PPPM on the 1st business day of the month based on an inmate census of the preceding month. The adjustment for the actual census will be made in the succeeding month by adding or deducting the payment as “True up population”. For example, the payment for December will be processed on the first business day, and will be based on November 1st inmate census report.

The payment for January will be processed on the first business day, and will be based on December 1st inmate census report noted as “True up population” for December’s payment. The parties also agree to a quarterly risk-share reconciliation completed within 60 days after the completion of the quarter. All other terms of contract year end risk share reconciliation will occur within the existing terms of the contract.

All other terms, conditions, specifications and pricing remain the same. Per contractor and agency agreement, and DTMB Central Procurement Services approval.

INITIAL EXPIRATION DATEINITIAL EFFECTIVE DATE

N/A

DESCRIPTION

MDOC

NOTICE OF CONTRACT

NOTICE OF CONTRACT NO. 210000000685 .

between

THE STATE OF MICHIGAN

and

CO

NT

RA

CT

O R

Grand Prairie Healthcare Services, P.C.

ST

A

TE

P ro gr am ag er

Marti Kay Sherry MDOC

1283 Murfreesboro Road, Suite 500 517-335-2252

Nashville, TN 37217 sherrym@michigan.gov

Dean Rieger

C on tra ct

A dm in is tra to r Brandon Samuel DTMB

615-715-1034 517-249-0439

Deanrieger@gmail.com samuelb@michigan.gov

DESCRIPTION: Prisoner Health Care and Pharmacy Services for Michigan Department of Corrections

INITIAL EFFECTIVE DATE INITIAL EXPIRATION DATE

INITIAL AVAILABLE

OPTIONS

EXPIRATION DATE BEFORE

CHANGE(S) NOTED BELOW

4/14/2021 9/30/26 3 – 1 year options

PAYMENT TERMS DELIVERY TIMEFRAME

0.3% Net 15; Net 45 N/A

ALTERNATE PAYMENT OPTIONS EXTENDED PURCHASING

☐ P-card ☐ Payment Request (PRC) ☐ Other ☐ Yes ☒ No

MINIMUM DELIVERY REQUIREMENTS

N/A

MISCELLANEOUS INFORMATION

This Contract Agreement is awarded on the basis of RFP 200000002287. Orders for delivery will be issued directly by MDOC (see Schedule A, 6.1 Authorizing Document)

ESTIMATED CONTRACT VALUE AT TIME OF EXECUTION $589,988,100.00

CONTRACT NO. 210000000685

STATE OF MICHIGAN PROCUREMENT

Department of Technology, Management & Budget 525 W. Allegan St., 1st Floor. NE, Lansing, MI 48913 P.O. Box 30026, Lansing, MI 48909

FOR THE CONTRACTOR:

Company Name

Authorized Agent Signature

Authorized Agent (Print or Type)

Date

FOR THE STATE:

Signature

Jared Ambrosier, Interim Chief Procurement Officer Name & Title

DTMB – Central Procurement Services Agency

Date

This STANDARD CONTRACT (“Contract”) is agreed to between the State of Michigan (the “State”) and Grand Prairie Healthcare Services, P.C. (“Contractor”), an Indiana Professional Corporation. This Contract is effective on April 14, 2021 (“Effective Date”), and unless terminated, expires on September 30, 2026. Although the contract effective date is April 14, 2021, the Contractor must begin providing all services, without interruption on September 29, 2021. The period between April 14, 2021 through September 28, 2021 will be for transition and implementation.

The State reserves the right to change, as necessary.

This Contract may be renewed for up to three additional one-year period(s). Renewal is at the sole discretion of the State and will automatically extend the Term of this Contract. The State will document its exercise of renewal options via Contract Change Notice.

1. Definitions. For the purposes of this Contract, the following terms have the following meanings:

“Accept” has the meaning set forth in Section 20.

“Acceptance” has the meaning set forth in Section 20.

“Affiliate” of a Person means any other Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such Person. For purposes of this definition, the term “control” (including the terms “controlled by” and “under common control with”) means the direct or indirect ownership of more than fifty percent (50%) of the voting securities of a Person.

“Allegedly Infringing Materials” has the meaning set forth in Section 33.

“Business Day” means a day other than a Saturday, Sunday or other day on which the State is authorized or required by Law to be closed for business.

“Business Owner” is the individual appointed by the agency buyer to (a) act as the agency’s representative in all matters relating to the Contract, and (b) co-sign off on notice of Acceptance. The Business Owner will be identified in the Statement of Work.

“Change” has the meaning set forth in Section 5.

“Change Notice” has the meaning set forth in Section 5.

“Change Proposal” has the meaning set forth in Section 5.

“Change Request” has the meaning set forth in Section 5.

“Confidential Information” has the meaning set forth in Section 38.a.

“Configuration” means State-specific changes made to the Software without Source Code or structural data model changes occurring.

“Contract” has the meaning set forth in the preamble.

STANDARD CONTRACT TERMS

“Contract Activities” refers to the includes the Services, Deliverables, delivery of commodities, or other contractual requirements set forth in Schedule A – Statement of Work, including any subsequent Statement(s) of Work, that the Contractor agrees to provide and the State agrees to purchase pursuant to the terms of this Contract.

“Contract Administrator” is the individual appointed by each party to (a) administer the terms of this Contract, and (b) approve any Change Notices under this Contract. Each party’s Contract Administrator will be identified in the Statement of Work.

“Contractor” has the meaning set forth in the preamble.

“Contractor’s Bid Response” means the Contractor’s proposal submitted in response to the State’s requests to obtain Contract Activities.

“Contractor Personnel” means all employees of Contractor or any Permitted Subcontractors involved in the performance of Services hereunder.

“Deliverables” means all materials, including, but not limited to Software, Documentation, written materials and commodities, that Contractor is required to or otherwise does provide to the State under this Contract and otherwise in connection with any Services, including all items specifically identified as Deliverables in Schedule A - Statement of Work.

“Dispute Resolution Procedure” has the meaning set forth in Section 55.

“Documentation” means all generally available documentation relating to the Software, including all user manuals, operating manuals and other instructions, specifications, documents and materials, in any form or media, that describe any component, feature, requirement or other aspect of the Software or Hosted Services (as defined in Schedule D), including any functionality, testing, operation or use thereof.

“DTMB” means the Michigan Department of Technology, Management and Budget.

“Effective Date” has the meaning set forth in the preamble.

“Fees” means collectively all fees collected by the Contractor pursuant to the terms of this Contract.

“Financial Audit Period” has the meaning set forth in Section 42.

“Force Majeure” has the meaning set forth in Section 54.

“HIPAA” has the meaning set forth in Section 47.

“Intellectual Property Rights” means all or any of the following: (a) patents, patent disclosures, and inventions (whether patentable or not); (b) trademarks, service marks, trade dress, trade names, logos, corporate names, and domain names, together with all of the associated goodwill; (c) copyrights and copyrightable works (including computer programs), mask works and rights in data and databases; (d) trade secrets, know-how and other confidential information; and (e) all other intellectual property rights, in each case whether registered or unregistered and including all applications for, and renewals or extensions of, such rights, and all similar or equivalent rights or forms of protection provided by applicable Law in any jurisdiction throughout the world.

“Key Personnel” means any Contractor Personnel identified as key personnel in Schedule A – Statement of Work.

“Law” means any statute, law, ordinance, regulation, rule, code, order, constitution, treaty, common law, judgment, decree or other requirement or rule of any federal, state, local or foreign government or political subdivision thereof, or any arbitrator, court or tribunal of competent jurisdiction.

“Loss or Losses” means all losses, damages, liabilities, deficiencies, claims, actions, judgments, settlements, interest, awards, penalties, fines, costs or expenses of whatever kind, including reasonable attorneys' fees and the costs of enforcing any right to indemnification hereunder and the cost of pursuing any insurance providers.

“Maintenance Release” means any update, upgrade, release or other adaptation or modification of the Software, including any updated Documentation, that Contractor may generally provide to its licensees from time to time during the Term, which may contain, among other things, error corrections, enhancements, improvements or other changes to the user interface, functionality, compatibility, capabilities, performance, efficiency or quality of the Software.

“New Version” means any new version of the Software that the Contractor may from time to time introduce and market generally as a distinct licensed product, as may be indicated by Contractor's designation of a new version number.

“Permitted Subcontractor” has the meaning set forth in Section 13.

“Person” means an individual, corporation, partnership, joint venture, limited liability company, governmental authority, unincorporated organization, trust, association or other entity.

“Pricing” means any and all fees, rates and prices payable under this Contract, including pursuant to any Schedule or Exhibit hereto.

“Pricing Schedule” means the schedule attached as Schedule B, setting forth the Fees, rates and Pricing payable under this Contract.

“Program Manager” is the individual appointed by each party to (a) monitor and coordinate the day-to-day activities of this Contract, and (b) for the State, to co-sign off on its notice of Acceptance of the Deliverables.

Each party’s Program Manager will be identified in the Statement of Work.

“Representatives” means a party's employees, officers, directors, partners, shareholders, agents, attorneys, successors and permitted assigns.

“RFP” means the State’s request designed to solicit responses for Contract Activities under this Contract.

“Software” means Contractor’s software set forth in the Statement of Work, and any Maintenance Releases or New Versions provided to the State and any Configurations made by or for the State pursuant to this Contract, and all copies of the foregoing permitted under this Contract and the License Agreement.

“Services” means any of the services Contractor is required to or otherwise does provide under this Contract, Schedule A - Statement of Work, Schedule C - Software Terms…