Section H Special Contract Requirements.pdf

SECTION H

SPECIAL CONTRACT REQUIREMENTS

CUI//PROCURE

H.1. Contract Clauses.

DFARS 252.203-7000, Requirements Relating to Compensation of Former DoD Officials

(SEP 2011)

H.2. Organizational Conflicts of Interest (OCI).

H.2.1. General. The Contractor's attention is directed to FAR 9.5, Organizational and Consultant Conflicts of Interest.

H.2.2 Actual or Potential Conflicts of Interest. It is the position of DHA that close business relationships between the Contractor and other entities may pose an actual or potential conflict of interest in the performance of the contract. This includes the following business arrangements:

ownership, either direct or a majority stake, of pharmacies by the Contractor; ownership of the Contractor and pharmacies under a mutual parent company; any other financial interest or minority ownership; or a partnership agreement. This potential conflict includes, but is not limited to, the Contractor’s performance as a fiscal intermediary for the Government and in its role in pursuing waste, fraud and abuse (TRICARE Operations Manual (TOM) Chapter 13).

Such impaired objectivity, internal allegiances, or conflicting roles must be avoided, neutralized, or mitigated.

H.2.3. Retail Network Pharmacies Affiliation. The Contractor shall disclose if any affiliated pharmacies are included in their proposed retail network. The Contractor shall ensure the reimbursement rates for such affiliated pharmacies to not exceed reimbursement rates for non-affiliated pharmacies. Mitigation plan regarding affiliated pharmacies reimbursement practices will be incorporated in the resultant contract.

H.2.4. Contractor Responsibilities. The Contractor shall avoid, mitigate, or neutralize any OCI, or the appearance thereof. If the Contractor obtains any knowledge of an actual or potential OCI involving the Contract, the Contractor shall immediately notify the Contracting Officer (CO), in writing, of the nature of the actual or potential OCI. The CO will examine the information provided by the Contractor and assess whether the actual or potential OCI exists and as applicable, whether the actual or potential OCI can be avoided, mitigated, or neutralized. Upon request by the CO, the Contractor shall provide a thorough and effective OCI plan to avoid, mitigate, or neutralize the actual or potential OCI. The Contractor shall submit the plan to the CO no later than 30 days from receipt of the CO request.

H.2.5. Other Proposals. To avoid conflicts which may create biased ground rules, impair the Contractor’s objectivity, or give the Contractor an unfair competitive advantage, the Contractor shall notify the Government should a potential conflict arise or when the Contractor plans to propose on a contract that could create a conflict.

H.2.6. 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.

H.2.6.1. At the request of the other Contractor, or the CO, the Contractor shall execute agreements with third party companies furnishing data in connection with work performed under this contract.

H.2.6.2. Non-disclosure agreements shall be completed by the Contractor, all employees, and sub-Contractors who obtain access to proprietary information.

H.2.6.3. Safeguards shall be implemented to restrict access to proprietary information and to avoid, mitigate, or neutralize potential conflicts of interest.

H.3. Cost Control Incentives.

H.3.1. Incentive Basis. Each incentive is based on a table containing the “Guaranteed Average Price Adjustment Percentage” (Guarantee Percentage) for costs defined. The agent costs are based on reference unit prices at the time of claim processing. The Wholesale Acquisition Cost (WAC) published by First DataBank (FDB) is the preferred reference unit price. If the WAC is not listed at the time of claim processing, the Average Wholesale Price (AWP) published in Medispan will be utilized. Some cost incentives may also include a "Guaranteed Average Dispensing Fee" (Guaranteed Dispensing Fee) where specified.

H.3.1.1. Incentive Source Data. The Government's Pharmacy Data Warehouse (PDW) will accumulate reimbursement data from all applicable pharmacy transactions as incentive source data. The PDW will be the sole data source for calculating any performance incentive or guarantee penalty based on the total actual reimbursement cost and the total expected Government cost for reimbursement.

H.3.1.2. Calculation of Incentive. The Contractor may earn a performance incentive if the total actual reimbursement cost to the Government during each contract option period is less than the total expected Government cost for reimbursement. The total expected Government cost is the result from applying the Guaranteed Average Price Adjustment Percentage and the Guaranteed Average Dispensing Fee per prescription (if applicable) to the prescriptions filled under the Guarantee during the contract option period. The total expected Government cost will be calculated by:

• Adjusting the WAC (or AWP, if WAC is not available at time of claim processing) for the NDC associated with the prescription transaction by the Guaranteed Average Price Adjustment Percentage in the applicable table.

• Multiply the total units dispensed for the NDC with the adjusted WAC or AWP rate to calculate the expected agent cost.

• Multiply the total number of prescription claims for the associated NDC with the applicable Guaranteed Average Dispensing Fee, if any, specified in the table to determine the total Guaranteed Average Dispensing Fee for the NDC.

• Add the expected agent cost to the total Guaranteed Average Dispensing Fee to get the total expected Government cost for the associated NDC.

• For Specialty Replenished prescriptions, only the Guaranteed Average Dispensing fees will be included in the incentive; no proposed adjustments to WAC or AWP will be proposed for these agents (See Table H-5).

H.3.1.2.1. Table H-1 — Calculation Example.

Guaranteed Average Price Adjustment Percentage -20% Guaranteed Average Dispensing Fee $1 WAC (price per unit) $3 Total number of Rx dispensed 10 Total units dispensed 300 Calculation:

Determine discount off of WAC $3 x 20% = $0.60 Subtract discount from WAC $3 - $0.60 = $2.40 To determine expected agent cost, multiply discounted WAC by total units dispensed

$2.40 x 300 = $720

To determine the total Guaranteed Dispensing Fee, multiply Guaranteed Dispensing Fee by the total Rx dispensed

$1 x 10 = $10

To determine the total expected Government cost, add expected agent cost to total Guaranteed Dispensing Fee

$720 + $10 = $730

H.3.1.3. Positive Incentive Amount. Cost control incentives will equal 10% of the difference between the actual total reimbursement cost processed during the option period and the total expected Government cost for reimbursement. For example, if in any option period the Contractor's Guaranteed Average Price Adjustment Percentage and the Guaranteed Average Dispensing Fee per prescription result in a Total Expected Government Cost for Reimbursement of $5 billion, and the actual cost to the Government was $4.95 billion, this reflects a savings of $50 million. The Contractor would be eligible for an incentive fee of $5 million (10% of the savings of $50 million) for that option period. The amount of the incentive that the Contractor may earn has no limit.

H.3.1.4. Negative Incentive Amount. In the event the total actual reimbursement cost in a contract option period exceeds the total expected Government cost for reimbursement that would have resulted from applying the Guaranteed Average Price Adjustment Percentage and any applicable Guaranteed Average Dispensing Fee per prescription to the prescription transaction processed during the contract option period, the difference between the actual costs and the total expected Government cost for reimbursement will be recouped by the Government for that option period. For example, if in any option period the Contractor's Guaranteed Average Price Adjustment Percentage and the applicable Guaranteed Average Dispensing Fee per prescription result in a total expected Government cost for reimbursement of $5 billion, and the actual cost to the Government was $5.01 billion, the Government would recoup the amount of $10 million (the entire difference) for that option period from the Contractor.

H.3.1.5. Additional Requirements. Additional requirements for the Contractor to be eligible for positive incentive are outlined in the specific incentive paragraphs below. In situations where these criteria are not met, the Contractor will not be able to earn a performance incentive but any negative recoupments will still apply. The determination of whether any such requirements have been met is at the sole discretion of the CO.

H.3.1.6. Timing. The Government will measure and calculate the incentive amounts after each option period and will notify the Contractor of the results. If the Contractor earns any performance incentives, the CO will provide invoice and payment instructions.

H.3.2. Cost Control Incentive 1--Retail Network Cost Control Incentive (CLINs X015). The following table, Retail Network Reimbursement Table H-4, contains the Guarantee for WAC and AWP, and Guaranteed Average Dispensing Fee guaranteed by the Contractor and accepted by the Government for prescriptions for non-specialty brand and generic agent categories for each respective option period

H.3.2.1. Table H-4 — Retail Network Reimbursement Table for Use in Determining Incentives

Option Period

Type of Rx

Pricing Basis

Guaranteed Average Price

Adjustment Percentage

Guaranteed Average

Dispensing Fee

1 Brand WAC

AWP

1 Generic WAC

AWP

2 Brand WAC

AWP

2 Generic WAC

AWP

3 Brand WAC

AWP

3 Generic WAC

AWP

4 Brand WAC

AWP

4 Generic WAC

AWP

5 Brand WAC

AWP

5 Generic

WAC

Period

Type of Rx

Pricing Basis

Guaranteed Average Price

Adjustment Percentage

Guaranteed Average

Dispensing Fee

6 Brand WAC

AWP

6 Generic WAC

AWP

7 Brand WAC

AWP

7 Generic WAC

H.3.2.2. Additional Requirement. No performance incentive referenced in paragraph H.3.1.3 will be paid to the Contractor for any option period in which the Contractor does not meet or exceed retail network access standards calculated in accordance with paragraph C.3.3.2 for a minimum of 11 months of the option period. For example, in the case where there is one month where more than one access standard is not met, but all access standards are met in the remaining 11 months, the incentive would be paid. In the case where there is one month where one access standard is not met and a second month where a different access standard is not met, the incentive would not be paid.

The Department of Veterans Affairs (DVA), Public Health Service, and Indian Health Service pharmacies will not be included in retail network access calculations for incentive eligibility determination.

H.3.2.3. Exclusions. Coordination of benefits claims, DVA claims, Medicaid claims, Public Health Service claims, Indian Health Service claims, non-network claims, vaccines administered by retail network pharmacies, and prescriptions for supplies and compounded agents will not be included in the calculation for the performance incentive or guarantee recoupment calculation.

H.3.3. Cost Control Incentive 2 - Retail Network Specialty Cost Control Incentive (CLINs X016). The following table, Specialty Reimbursement Table H-5, contains the Guaranteed Average Price Adjustment Percentage and Guaranteed Average Dispensing Fee guaranteed by the Contractor and accepted by the Government for non-replenished specialty agents dispensed in each respective option period. The information presented in this table will be used in calculating the Retail Network Specialty Cost Control Incentive.

H.3.3.1. Table H-5 — Specialty Reimbursement for Use in Determining Incentives

Period

Type of Rx Pricing Basis

Guaranteed Average Price

Adjustment Percentage

Guaranteed Average

Dispensing Fee 1 Specialty Brand WAC Brand AWP 1 Specialty Generic WAC Generic AWP

2 Specialty Brand WAC Brand AWP 2 Specialty Generic WAC Generic AWP

3 Specialty Brand WAC Brand AWP 3 Specialty Generic WAC Generic AWP 4 Specialty Brand WAC Brand AWP 4 Specialty Generic WAC Generic AWP

5 Specialty Brand WAC Brand AWP 5 Specialty Generic WAC Generic AWP 6 Specialty Brand WAC Brand AWP 6 Specialty Generic WAC Generic AWP 7 Specialty Brand WAC Brand AWP 7 Specialty Generic WAC Generic AWP

Note for Specialty Reimbursement Table H-5 Each applicable "Guaranteed Average Price Adjustment Percentage" and "Guaranteed Average Dispensing Fee" in this table will be used for the calculations described in H.3.1.2

H.3.3.2. Additional Requirement. The Contractor will be ineligible for this incentive for any period when beneficiaries do not have access to all covered specialty agents.

H.3.3.3. Exclusions. The following claims are excluded from this guarantee:

• Claims that meet the exclusion criteria per H.3.2.3.

• Agents replenished by the Government.

• Agents procured by the Contractor under the MPPP.

H.3.4. Market Priced Pharmaceutical Program (MPPP) Incentive

H.3.4.1. Incentive Basis. The incentive is based on a demonstrated cost savings between the Contractor’s offer and the NPV’s price of the same product or an equivalent available alternative.

H.3.4.2. Incentive Source Data. This incentive shall be calculated based on CDRL M140.

H.3.4.3. Calculation of Incentive. Cost savings is defined as the difference between the unit price(s) for the NDC specified in the offer under C.6.8.20 as listed on the Medical Master Catalog (MMC) (in effect at the time a prescription was dispensed), compared to the unit price of the MPPP recommended NDC actually dispensed; times the quantity of the NDC was dispensed during a given option period. If MMC prices for the agent in question have changed during the option period, cost savings will be measured correspondingly.

H.3.4.4. Incentive Amount. The Contractor shall earn a performance incentive for demonstrated savings to the Government equaling 10% of the cost savings for each of the Contractor’s MPPP recommendations implemented at TMOP. Any incentive earned will be reflected in CLIN X017.

H.3.4.5. Calculation Example. For example, consider the situation in which one prescription for a agent is dispensed each month, and the MMC unit price for that agent is $1.00 during the first two months of an option period, but increases to $1.10 for the final 10 months; and the price for the product sourced commercially for the same agent remains $0.50 throughout. Total savings is $7.00 = (2 x ($1.00 - $0.50)) + (10 x ($1.10-$0.5)) and the resulting incentive of $0.70 to the Contractor.

H.3.4.6. Additional Requirements. Incentives are only applicable if the government has accepted an offer under C.5.8.19.

H.3.4.7. Timing. This incentive will be calculated and settled on a quarterly basis for all savings commercial market recommendations which complete (i.e. the dispensing commercially acquired product was finished) in the preceding quarter.

H.3.4.8. Exclusions. If the savings generated by a particular offer is calculated to be negative, no incentive will apply for that offer. If the Contractor is not able to meet the terms of the recommendation as accepted by the Government, the incentive will not apply.

H.4. Performance Guarantees.

H.4.1. General. The performance guarantees described in this section are the Contractor’s guarantee that the Contractor’s performance will not be less than the performance standards described below. Each standard is guaranteed, measured, and assessed separately from contract standards specified in Section C and the referenced TRICARE Manuals. All self-reported Contractor data utilized in the assessment of performance relative to contract standards and performance guarantees is subject to review by the Government. 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.

H.4.1.1. Rights and Remedies. The rights of the Government and remedies described in the Performance Guarantee paragraphs are in accordance with, and in addition to all other rights and remedies of the Government. Specifically, the Government reserves the rights and remedies set forth in FAR Clause 52.246-4, Inspection of Services and FAR Clause 52.249-8, Default.

H.4.1.2. Rounding. For the assessment of performance guarantees, percentages shall be rounded the nearest tenth of a percentage. Example: A contract standard requires a minimum of 95%. If Contractor performance is 94.89%, performance shall be assessed at 94.9% and the Contractor deemed to have not met the standard. Performance of 94.95% will be assessed at 95% and the Contractor deemed to have met the standard.

H.4.2. Forfeiture. For each occurrence the Contractor fails to meet each guaranteed standard, the Contractor shall forfeit the amount listed in the schedule below. Performance guarantee forfeitures will be applied to each reporting period in which the Contractor fails to meet or exceed the standard. Performance will be measured as specified below. The Contractor will be notified of forfeitures accumulated and assessed subsequent to each contract quarter. For the purposes of section H.4, the term "performance standard" is defined as the standard specified in this section. Each standard will be measured and assessed independently.

H.4.2.1. Timing. For administrative purposes, the Contractor will be notified of performance guarantee forfeitures 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. Unless arrangements are made otherwise, forfeited amounts will be deducted from the next available contract payment under any line item at discretion of the Government. .

H.4.3. Performance Guarantee 1 — Mail Order Pharmacy Prescription Processing.

H.4.3.1. Standard: 100% within 10 business days H.4.3.2. Definition: Mail order agents shall either be shipped, scheduled for delivery, returned, pended or denied within 10 business days from receipt, reported monthly. Prescriptions under the Deployment Prescription Program that require clarification or intervention will not be included in the calculation of mail order pharmacy processing time but are subject to the requirements of C.5.7.

H.4.3.3. Performance Guarantee Application: $1,000,000 each full calendar month the standard is not met.

H.4.3.4. Measurement: Calendar days. Calendar month. Self-reported by the Contractor.

(CDRL Q040)

H.4.4. Performance Guarantee 2 — System Availability.

H.4.4.1. Standard: 99.9% of the time.

H.4.4.2. Definition: The Contractor’s claims processing system shall be available no less than 99.9% of the time, excluding external downtime. The system is considered to be unavailable when the failure rate for claims exceeds 10% for at least 30 minutes.

H.4.4.3. Performance Guarantee Application: $1,000,000 each full calendar month the standard is not met.

H.4.4.4. Measurement: Time measured in minutes per calendar month. Self-reported by the Contractor. (CDRL M060)

H.4.5. Performance Guarantee 3 — Clinical Review Processing.

H.4.5.1. Standard: 99% within 3 calendar days of receipt H.4.5.2. Definition: Clinical reviews shall be completed and notification sent to the beneficiary within 3 calendar days of receipt of a properly completed request, measured monthly.

H.4.5.3. Performance Guarantee Application: $1,000,000 each full calendar month the standard is not met.

H.4.5.4. Measurement: Calendar days. Calendar month. Self-reported by the Contractor.

(CDRL Q010)

H.4.6. Performance Guarantee 4 — Telephone Service.

H.4.6.1. Standard: Average Speed of Answer of not more than 60 seconds H.4.6.2. Definition: Measured monthly, all beneficiary services calls received shall be transferred to a Beneficiary Service Representative (BSR) with an Average Speed of Answer (ASA) of not more than 60 seconds between the initial connection (including any introductory message and/or automated menus) and when the phone is answered by the BSR. Calls where the beneficiary chooses not to speak to a BSR shall be excluded from this metric.

H.4.6.3. Performance Guarantee Application: $1,000,000 each full calendar month the standard is not met.

H.4.6.4. Measurement: Calendar days. Calendar month. Self-reported by the Contractor.

(CDRL Q020)

H.4.7. Performance Guarantee 5 — Correspondence Processing.

H.4.7.1. Standard: 85% of priority correspondence will be processed to completion within 10 calendar days.

H.4.7.2. Definition: Measured on a monthly basis. Considered processed to completion after providing a response to the Government. Priority correspondence and completion standards are defined in TOM Chapter 11, Section 5.

H.4.7.3. Performance Guarantee Application: $1,000,000 each full calendar month the standard is not met.

H.4.7.4. Measurement: Calendar days. Calendar month. Self-reported by the Contractor.

(CDRL Q030)

H.4.8. Performance Guarantee 6 — Formulary Search Tool Corrections.

H.4.8.1. Standard: 99% of identified errors corrected within two (2) business days.

H.4.8.2. Definition: An error is defined as missing or incorrect formulary status, PA/MN requirements, age restrictions, restrictions based on sex, quantity limit restrictions, point of service restrictions, BCF/ECF status, copay amount based on the current TRICARE benefit design at the time the error is identified.

H.4.8.3. Performance Guarantee Application: $1,000,000 for initial finding and each full calendar month the standard is not met.

H.4.8.4. Measurement: Business days. Calendar month. Self-reported by the Contractor.

(CDRL M200).

H.4.9. Performance Guarantee 7 — TEDS Edit Accuracy.

H.4.9.1. Standard: TEDS edit accuracy will be measured monthly. The accuracy rate for TEDS edits shall be:

H.4.9.1.1. waived during first six months of OP1 H.4.9.1.2. 95% during months seven through nine of OP1 H.4.9.1.3. 99% for duration of contract H.4.9.2. Definition: TEDS edit accuracy is defined in the TSM, Chapter 2.

H.4.9.3. Performance Guarantee Application: If the Contractor fails to meet the standard and falls below the standard, a performance guarantee amount of $10.00 for each TEDS record not meeting the standard will be forfeited. For example, if only 93.3% of all TEDS pass edits for each of months seven, eight, and nine, then a performance guarantee amount will be applied to 1.7% of all TEDS submitted during the period (1.7% equals the difference between the Contractor's actual performance and the standard in this example). If 1.7% equates to 153,000 TEDS records, the performance guarantee forfeiture amount will be $1,530,000.00 (i.e., 153,000 x $10.00).

H.4.9.4. Measurement: The number of TEDS failing to meet the standard will be determined each calendar month by the Government based on the DHA TEDS database.

H.4.10. Performance Guarantee 8 — Benefit Design Accuracy.

H.4.10.1. Standard: The benefit design should reflect the current design as determined by the DoW Pharmacy and Therapeutics Committee, DHA policy, applicable laws and regulations, and this contract. The benefit design shall not contain erroneous information, as identified in the definition section below. Any changes shall be completed by the applicable effective date.

H.4.10.2. Definition: The Benefit Design is defined in C.7.3. A “benefit design error” is defined as an incorrect cost-sharing amount or tier status, failure to implement the appropriate agent restrictions (e.g. quantity or day supply limits, prior authorization, look back logic, prohibited by law), failure to apply agent restrictions by point of service, or failure to include or exclude agents with regard to specific initiatives (e.g. Expanded Use of MTF and TMOP, smoking cessation, etc.).

H.4.10.3. Performance Guarantee Application: The Contractor guarantees it will pay the Government $1,000,000 each full calendar month the standard is not met and where the http://153,000.00 http://153,000.00

Government discovers the error. If the Contractor takes necessary steps to correct a Government –discovered error within 10 calendar days, the guarantee will not be applied. If the Contractor self-reports prior to the Government discovering the error and takes the necessary steps to correct the error, the guarantee will not be applied. The time taken to correct the error and the impact of the error will be factors considered in evaluation of Award Fee, as will how the discovery was made (i.e. self-reported or Government-discovered). The guarantee amount owed will be in addition to any reimbursements necessary to make either or both the beneficiary and the Government whole due to the error.

Note: An error on the FST may be calculated against the Formulary Search Tool Corrections performance guarantee or the Benefit Design Accuracy performance guarantee, but not both.

The Government has the sole discretion to determine which guarantee applies for a given error.

H.4.10.4. Measurement: Upon finding and each full calendar month . Reported by the Contractor (CDRL M200).

H.4.11. Reserved.

H.4.11.1.

H.5. Performance Metrics.

H.5.1. System Availability.

H.5.1.1. Standard: Claims Processing System is available no less than 99.9% of the time, excluding external downtime.

H.5.2. Reimbursement Claims.

H.5.2.1. Standard: 95% of reimbursement claims shall be processed to completion within 5 calendar days of receipt.

H.5.2.2. Standard: 100% of reimbursement claims shall be processed to completion within 10 calendar days of receipt.

H.5.3. Retail Network Access.

H.5.3.1. Standard: 95% of beneficiaries have at least one pharmacy within 15 minutes driving time.

H.5.3.2. Standard: 92.5% of beneficiaries have at least two pharmacies within 15 minutes driving time.

H.5.3.3. Standard: 98.5% of beneficiaries have at least one pharmacy within 30 minutes driving time.

H.5.3.4. Standard: No fewer than 35,000 retail network pharmacies.

H.5.4. Beneficiary Support.

H.5.4.1. Standard: Average Speed of Answer (measured from initial connection to answer by a service representative): 60 seconds or less H.5.4.2. Standard: Telephone Call Blockage rate: 5% or less H.5.4.3. Standard: Abandoned Call rate at any point: 5% or less H.5.4.4. Standard: Telephone Calls Resolved at any point: 95% during initial call H.5.4.5. Standard: Telephone Calls Resolved at any point: 100% within 2 calendar days

H.5.4.6. Standard: Priority Correspondence - Complete and issue resolved (to the Government’s satisfaction, includes Electronic): 85% during 10 calendar days H.5.4.7. Standard: Priority Correspondence - Complete and issue resolved (to the Government’s satisfaction, includes Electronic): 100% within 30 calendar days H.5.4.8. Standard: Routine Correspondence (Includes Electronic): 85% within 15 calendar days H.5.4.9. Standard: Routine Correspondence (Includes Electronic): 100% within 45 calendar days

H.5.5. Pharmacy Help Desk.

H.5.5.1. Standard: Average Speed of Answer (measured from initial connection to answer by a service representative): 60 seconds or less H.5.5.2. Standard: Telephone Call Blockage rate: 5% or less H.5.5.3. Abandoned Call rate at any point: 5% or less

H.5.6. Clinical Reviews.

H.5.6.1. Standard: 99% of all clinical reviews, to include those for compound agents, shall be completed and notification sent within three (3) calendar days of receipt of a properly completed request, measured monthly.

Standard: 100% of all clinical reviews shall be completed and notification sent within ten (10) calendar days of receipt of a properly completed request, measured monthly.

H.5.7. Mail Order Pharmacy.

H.5.7.1. Standard: 99% of Mail Order prescriptions not requiring intervention or clarification shall be shipped in two (2) business days from receiving the prescription.

H.5.7.2. Standard: 100% of Mail order prescriptions shall be shipped, scheduled for delivery, returned, or denied within ten (10) business days of receipt H.5.7.3. Standard: Prescriptions dispensed from the TMOP shall be accurate 100% of the time, measured monthly.

H.5.8. Formulary Search Tool (FST).

H.5.8.1. Standard: The Contractor shall correct 99% of FST content inaccuracies within two (2) business day of the inaccuracy being identified.

H.6. Award Fee. The award fee will be administered semi-annually during each contract option period in accordance with the award fee plan. The award fee pool is shown in Section B and any awarded portions will be disbursed semi-annually in accordance with the TPharm5 Award Fee Plan (see Attachment J-5). Unearned portions of the award fee pool are not available for any subsequent award fee.

H.7. Pilots, Demonstrations, and Integrated Product Teams (IPTs).

H.7.1. Pilots and Demonstrations. The Government may require the contractor to perform novel functions within the scope of this contract as part of pilots or demonstrations. These pilots or demonstrations may be externally driven (e.g. NDAAs) or developed by the Government to test the feasibility or practicality of changes to, additions to, or subtractions from any elements of the TRICARE Pharmacy Program. The nature of these pilots may vary across all functions of the contract and may vary in scope, duration, and effort required.

H.7.2. IPTs. The Government may develop major contract and program changes through Integrated Product Teams (IPTs). If asked to participate in this process, the Contractor shall provide the appropriate personnel (as agreed to by the CO and the Contractor) to serve on the IPTs to develop and/or improve the technical, business, and implementation approach to proposed TRICARE program changes. The Contractor shall participate in the process with the Government team from concept development through incorporating the change into the contract. This process includes developing budgetary cost estimates, preparing specification/statements of work, and establishing a mutually agreeable equitable adjustment to the contract price as a result of incorporating the change (including pricing, negotiation, etc.). IPTs will not be formed for all contract changes, but may be formed for complex, system-wide issues. The frequency and scheduling of IPT activities will vary depending on the topic, with no greater than 150 hours per Option Period.

H.8. Requirements for Minimum Level of Enhanced Safeguarding for Unclassified DoW Information. The Contractor shall implement and maintain information security in accordance with the requirements set forth TSM Chapter 1, Section 1.1 or DFARS 252, 204, 7021 (CMMC).

H.8.1. Checklist and Certification. In connection with the Enhanced Safeguarding requirements, the Contractor shall submit the System Security Plan as required in CDRL A120, System Security Plan, and annually provide the completed checklist and certification described in, CDRL A040, DoW/NIST Certification Report.

H.9. Claims Compliance and Accuracy Reviews

H.9.1. After pharmacy services begin, the Government will conduct quarterly and annual retrospective reviews of TRICARE pharmacy claims data to demonstrate agency compliance with the Payment Integrity Information Act of 2019 (PIIA).

H.9.2. The Government will conduct quarterly retrospective reviews of TRICARE pharmacy claims data. These reviews will look for errors in payment, occurrence, process and documentation. Results from claim reviews will be used to determine the Contractor's conformance to claims processing performance standards as indicated in H.9.2.7.

Retrospective reviews will identify the following types of errors:

• Payment errors – the amount of overpayments or underpayments on a claim.

• Occurrence errors – inaccurate TED record data.

• Process errors - payment errors with post payment actions that substantiate the initial processing decision. The payment error may be removed but the process error will remain.

• Documentation errors – missing or invalid documentation which impact the audit process or indicate a situation of contractual noncompliance identified during the compliance review.

On a quarterly basis, payment and occurrence reviews will be conducted on four separate categories of claims:

• Electronic retail pharmacy claims

• Paper retail pharmacy claims

• Electronic claims for specialty agents (for which replenishment does not occur)

• Paper claims for specialty agents (for which replenishment does not occur)

H.9.2.1. Sampling Methodology

H.9.2.1.1. Payment and occurrence samples shall be drawn from TED records which passed all DHA edits during the prior three months. Individual TED records within batches/vouchers which fail TRICARE edits or which are otherwise not valid for processing as submitted by the Contractor will not be included in the sampling frame. Records to be sampled for both the occurrence and payment claim reviews 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).

H.9.2.1.2. Stratified random sampling will be conducted for payment reviews to estimate the total payment error amount. The number of strata and strata boundary points will be optimally determined and may vary by sample based on the composition of the data in the audit universe.

A 100% review of claims above a high-dollar threshold (i.e. $8,000) will be conducted. Claims below a low-dollar threshold (i.e. $100) may be excluded, and a separate annual compliance review may be conducted on low dollar claims, as described in H.9.3. The low-dollar and high-dollar thresholds may vary by claim category and review period.

H.9.2.1.3. Payment errors will be extrapolated to determine the total payment error amount. The absolute value of errors will be considered so that underpayments do not offset overpayments.

The total payment error amount will be divided by actual total paid amount to determine the percentage of dollars paid in error, which will be used to measure claims processing performance standards as indicated in H.9.2.7.

H.9.2.1.4. Simple random sampling will be conducted for occurrence reviews to measure the accuracy of TED record data. The occurrence sample claims will not duplicate any claim already drawn in another claim category.

H.9.2.2. Required Contractor Documentation

H.9.2.2.1. The Contractor shall, upon receipt of the TEDs Internal Control Number (ICN) listing from DHA, retrieve and compile processing documentation and history files for each selected TED record/claim. All documentation must be received at DHA or designated claims review Contractor within forty-five (45) calendar days from the date of the DHA letter transmitting the ICN listing.

H.9.2.2.2. The Contractor shall submit documentation, through safe and secure electronic transmittal, to DHA or its designated compliance review contractor, in the agreed upon file format as stipulated in the Memorandum of Understanding (MOU) established between the Contractor and the designated compliance review Contractor (CDRL A025).

H.9.2.2.3. The Contractor shall, for each TED record/claim, provide one legible copy of all pertinent claims documentation that demonstrates accurate claims processing. Types of documentation include but are not limited to:

• Claim related correspondence when attached to the claim or related to the adjudication action

• (e.g., development records, pharmacy receipts)

• Medical necessity or prior authorization records

• Other health insurance (OHI) documents

• Agent pricing including Maximum Allowable Charge, AWP, and or discount rate

(network rate)

• Preferred Product Indicator

• Network Status

• Dispensing Fee Data

• Copy of the Explanation of Benefit (EOB) or Explanation of Payment (EOP) for each claim selected

Any additional documentation not specifically identified above that supports the Contractor’s adjudication of the selected claim.

H.9.2.2.4. The Contractor shall provide an initial set of documents explaining any pertinent data field or document for supporting claims adjudication. Updated documents can be provided as revisions occur.

Examples include:

• Benefit design document

• Adjudication rules (duplicate screening, refill too soon criteria, administrative overrides)

• Document and screen shot explanations

• Description of data elements by field position in beneficiary history file printout

• Field definitions for pricing and pricing logic

H.9.2.2.5. The Contractor shall send beneficiary history (15 to 27 months) for each claim selected for review. 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.

H.9.2.2.6. For any pharmacy service that does not have a valid reason for submitting a TED record, as defined in the TRICARE Systems Manual (TSM), a 100% payment error based on the total billed amount will be assessed. This condition is considered to be an unsupported TED record.

H.9.2.3. Payment and Process Error Determinations

H.9.2.3.1. Payment errors are the amount of over/under payments on a claim, including but not limited to a payment in the correct amount but sent to the wrong payee, denial of a payable claim, misapplication of the cost-share/co-pay/deductible, payment of a non-covered agent, etc.

There are two categories of payment errors: (1) a payment error which cannot be removed with post payment processing actions; and (2) a payment error which can be removed with post payment processing actions.

H.9.2.3.2. Payment errors which can be removed with post payment actions that substantiate the initial processing decision will be removed from payment error rate but the process error will remain. Process errors are noncompliance with a required procedure or process, such as development required but not performed or medical necessity review required but not evident and are cited in conjunction with a payment error. Claims containing process errors will not affect payment or occurrence error rates, but will be used as a performance indicator.

H.9.2.3.3. Payment errors which cannot be removed with post payment actions are based only on the claim information available up to the date the review sample is pulled. Consideration will be given to subsequent processing actions that occur prior to the date the review sample is pulled, including actions that have not passed the DHA TED record edits, only if supporting documentation to indicate the action taken and the date the action was completed is submitted with review documentation. Adjustment transactions are not allowed on claim denials, therefore, subsequent reprocessing actions to a denied claim which occurs prior to the date the audit sample is pulled will be considered during the audit. Subsequent processing actions after the date the review sample is pulled will not be considered in the audit regardless of whether resolution of a payment error exists.

H.9.2.3.4. 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

• 13K – OHI/TPL — Govt. Pay Miscalculated

• 14K – OHI Payment Omitted

• 15K – Payee Wrong – Patient/Sponsor

• 16K – Payee Wrong – Provider

• 18K – Pricing Incorrect

• 19K – Procedure Code Incorrect

• 20K – Signature Error

• 24K – Incorrect Benefit Determination

• 25K – Claim Not Provided

• 26K – Claim Not Auditable

H.9.2.3.5. 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

• 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

• 76K Pricing Incorrect – Pharmacy Pricing Methodology (i.e. AWP, U&C, billed discount) Incorrectly Applied and/or Miscalculated

• 77K Pricing Incorrect – Pharmacy Compound Agent Pricing Miscalculation

• 78K Pricing Incorrect – Pharmacy Specialty Agent Rate Miscalculated

• 79K Pricing Incorrect – Pharmacy Discount Miscalculated/Not Applied

• 80K Pricing Incorrect – Pharmacy Dispensing Fee Miscalculated/Not Applied

• 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.9.2.3.6. Upon rebuttal, if the procedure/process is followed to conclusion and the actions support the original decision, the payment error will be removed but the procedural/process error will remain.

• 01P – Authorization/Pre-authorization needed

• 02P – Unsupported Benefit Determinations

• 05P – Development Claim Denied Prematurely

• 06P – Development Required

• 10P – Medical Emergency Not Substantiated

• 11P – Medical Necessity/Review Not Evident

• 21P – Timely Filing Error

• 23P – Contract Jurisdiction Error

• 99P – Other

H.9.2.4. Occurrence Error Determination

H.9.2.4.1. Occurrence error determinations are based on only the claim information available and those processing actions taken at the time the sample is drawn. Actions and determinations occurring subsequent to the processed date of an audited claim, such as obtaining other health insurance documentation, adjusting a claim to correct financial or other data fields, or developing for required information not obtained prior to processing, are not a consideration of the audit regardless of whether a resolution of the incorrectly coded TED record results.

H.9.2.4.2. Occurrence errors result from an incorrect entry in any data field of the TED record.

There are no exceptions. Any error, including errors in financial fields, shall be counted as occurrence errors. Some TED record error conditions are not attributable to any one specific data field but apply to the record as a whole or to certain parts of the record. In addition to erroneous data field coding error. All incorrectly coded financial fields on a TED record are considered to be occurrence errors regardless of whether associated errors exists.

H.9.2.4.3. The following are occurrence error categories and codes. All TED record occurrence errors, including errors in financial fields, are counted and the error rate is expressed as a percentage of the total number of data fields in the TED record.

Error Codes

Error Condition Specific to Claim Number of Errors

01J Unlike Procedures/Providers Combined (Non-institutional Record)

7 errors for each additional utilization data set*

04J Missing Non-Institutional Utilization Data Set

7 errors for each missing data set*

05J Extra Non-Institutional Utilization Data Set

7 errors for each missing data set*

08J Incorrect Record Type 5 errors 09J Separate TED Record Required 1 error 10J Claim Not Provided for Audit 1 error plus 1 error for each revenue code utilization data set in the TED

11J Claim Not Auditable 1 error plus 1 error for each revenue code

12J Unsupported TED Transaction 1 error plus 1 error for each revenue code

* Not to exceed 21 errors for combination of these error conditions.

H.9.2.5. Documentation Errors

H.9.2.5.1. The following are documentation errors which can be assessed in conjunction with a payment or occurrence error. These errors are neither occurrence errors nor payment errors and are not used to calculate the occurrence or payment error rates. “L” errors are used to document and report the Contractor’s documentation problems which impact the audit process or indicate a situation of contractual noncompliance which is identified during the compliance review.

• 01L – Audit Documentation Incomplete

• 02L – Audit Documentation Illegible

• 03L – Documentation Submitted Late

• 04L – EOB/EOP Incorrect

• 05L – NAS Questionable

• 06L – Error in Claim History

• 08L – Erroneous Claim Split

• 09L – Erroneous TED Record Split

• 10L – Adjustment – No Authorizing Official

• 11L – Contract Jurisdiction Error

H.9.2.6. Rebuttals

H.9.2.6.1. The government will allow one rebuttal of initial payment and occurrence findings.

The Contractor shall electronically submit the rebuttal to DHA or designated compliance review Contractor within thirty (30) calendar days of the date of DHAs initial payment and occurrence error transmittal letter and in accordance with the established MOU (C.15.1.16.4). Rebuttal comments that are not electronically received within thirty (30) calendar days of DHAs transmittal letter will not be reviewed or considered. The post-rebuttal error determination(s) by DHA are final and will not receive further consideration.

H.9.2.6.2. After the rebuttals are reviewed by DHA or the designated claims review Contractor, the government may assess new errors based on the information submitted in the rebuttal.

Similarly, the Contractor may submit one rebuttal to the new errors not previously addressed within thirty (30) calendar days of the date of DHAs payment and occurrence error transmittal letter. Rebuttal comments that are not electronically received within thirty (30) calendar days of DHAs transmittal letter will not be reviewed or considered. The post-rebuttal error determination(s) by DHA are final and will not receive further consideration.

H.9.2.7. Error Rates

H.9.2.7.1. Claims Payment Error Rate

Standard: The percentage of dollars paid in error, measured though quarterly payment reviews, is 1% for electronic retail pharmacy claims, and 4% for DMR/paper retail claims.

Measurement: The absolute value of payment errors identified in a sample will be summed by stratum and divided by the number of claims sampled for that stratum to derive the ‘mean payment error’, which will then be multiplied by the number of universe claims in each stratum to derive the ‘estimated payment error,’ which will be summed for all strata to derive the ‘total payment error amount’. The ‘total payment error amount’ will be divided by the universe actual total paid amount to arrive at the percentage of dollars paid in error.

H.9.2.7.2. Occurrence Error Rate

Standard: The standard for occurrence errors for sampled TED records, measured quarterly is 3%.

Measurement: The TED record occurrence error rate is the total number of errors divided by the total number of data fields in the sample times 100.

H.9.3. Yearly Claims Accuracy and Compliance Reviews

The Government will conduct annual retrospective claim reviews of TRICARE pharmacy claims data under the Low Dollar threshold. This focus study will commence after the end of every Government fiscal year for the purpose of demonstrating agency compliance with the Payment Integrity Information Act of 2019 (PIIA).

H.9.3.1. The Contractor shall submit required documentation consistent with requirements in H.9.2.2.

H.9.3.2. Low dollar compliance reviews are focused on payment errors only. They will not address occurrence errors or process errors.

H.9.3.3. The Government will draw samples consistent with H.9.2.1.1. Each will be limited electronic retail claims of less than $30.00 and paper pharmacy claims less than $10.00. The Government will provide an ICN listing for each sample. The sample size for each audit will be limited to no more than 400 claims. Each sample will contain claims from a single fiscal year.

H.9.3.4. The Contractor shall, upon receipt of the TEDs Internal Control Number (ICN) listing from DHA, retrieve and compile processing documentation and history files for each selected TED record/claim. All documentation must be received at DHA or designated claims review Contractor within forty-five (45) calendar days from the date of the DHA letter transmitting the ICN listing.

H.9.3.5. These focus studies will not be subject to rebuttal processes as described in H.9.2.6.

H.9.3.6. The Contractor shall promptly support any requests for additional information (documentation or Government inquiries) needed to clarify or explain the calculation of a final TRICARE billed amount.

H.9.4. Performance Guarantee X – Beneficiary and Provider Communication and Outreach

H.9.4.1. Standard: The Contractor shall submit all content to the COR, Government Communications, or other designated authority for review and final approval prior to distribution across all public platforms (see beneficiary communication templates/SOP at C.14.13) – to internal government partners or MCSCs as well as external partners and the public.

H.9.4.2. Definition: All publications shall be in accordance with previously approved deliverables archived in the online repository (see contractor-maintained documents at C.14.13) and relevant DHA and MHS Style and Branding Guides, including those for TRICARE and the Federal EHR.

H.9.4.3. Performance Guarantee Application: The Contractor shall correct 100% of all beneficiary and provider communication/outreach platform inconsistencies within two (2) business day of the inaccuracy being identified. The Contractor guarantees it will pay the Government $500,000 each full calendar day the standard is not met and where the Government discovers the error. If the Contractor takes necessary steps to correct a Government –discovered error within two (2) calendar days, the guarantee will not be applied. If the Contractor self-reports prior to the Government discovering the error and takes the necessary steps to correct the error, the guarantee will not be applied. The time taken to correct the error and the impact of the error will be factors considered in evaluation of Award Fee, as will how the discovery was made (i.e. self-reported or Government-discovered). The guarantee amount owed will be in addition to any reimbursements necessary to make either or both the beneficiary and the Government whole due to the error.