T-5 Draft RFP 3 Section H 3.9.2021 FINAL.pdf

SECTION H

SPECIAL CONTRACT REQUIREMENTS

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H.1. CONTRACTOR FINANCIAL UNDERWRITING OF HEALTHCARE COSTS

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

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

• Continued Health Care Benefits Program (CHCBP)

• Active Duty Service Members (ADSMs)

• Supplemental Health Care Program (SHCP)

• Foreign/OCONUS beneficiaries and CONUS-based beneficiaries who receive care OCONUS (on separate contract)

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

• State of Alaska (care for beneficiaries who are enrolled in TRICARE Prime in the state of Alaska and care for other TRICARE beneficiaries who reside in the state of Alaska)

• Bonus Payments in Medically Underserved Areas (Health Professional Shortage Areas (HPSAs) and Physician Scarcity Areas (PSAs))

• Capital and Direct Medical Education (Cap/DME)

• TRICARE Reserve Select (TRS)

• Custodial Care Transitional Program (CCTP)

• Individual Case Management Program for Persons with Extraordinary Conditions

(ICMP-PEC)

• Residual Claims (date of service prior to the start of healthcare delivery (SHCD) under the contract)

• Autism Services Demonstration

• TRICARE Retired Reserve (TRR)

• Temporary Military Contingency Payment Adjustments

• TRICARE Young Adult Program

• TRICARE Transitional Outpatient Payments

• Laboratory Developed Tests Demonstration Project

• Temporary Disability Retirement List Physical Exams

• Disability Compensation and Pension Examinations (DCPE)

• Transitional Care for Service Related Conditions

• Respite Benefit for Seriously Injured or Ill ADSM

• Pilots and Demonstrations under the authority of 10 USC 1092 when included in pilot design

• State Vaccine Program (2017 NDAA, Section 719)

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*CHAMPUS-eligible beneficiaries are defined as those beneficiaries that meet requirements in

32 CFR 199.

H.1.2. In this contract, these underwritten beneficiaries may be referred to as “underwritten beneficiaries” or “non-TRICARE/Medicare dual-eligible CHAMPUS eligible beneficiaries.”

In this contract, the healthcare costs the Contractor underwrites may be referred to as “healthcare cost” or “underwritten healthcare cost.”

H.1.3. Other supplemental details regarding underwritten healthcare follow:

H.1.3.1. Beneficiaries may enroll in TRICARE Prime with a Military Treatment Facility (MTF) Primary Care Manager (PCM). Even though they may have an MTF PCM, Prime enrolled non- TRICARE/Medicare dual-eligible CHAMPUS beneficiaries’ costs outside of the MHS direct care system are underwritten by the Contractor, except for ADSMs and other exclusions noted in H.1.1.

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

H.1.3.3. The costs of medical management activities, such as case management, chronic care/disease management and utilization management, are not considered underwritten healthcare costs. Cost under separate Clinical Support Agreement (CSA) orders, if issued, are not considered underwritten healthcare costs.

H.1.4. Underwritten healthcare is cost-reimbursable. These costs are reimbursed with obligated funds that are disbursed under this contract. The associated underwritten fixed fee in Section B of the contract is considered the underwriting fee, or underwriting premium and is not subject to change after contract award.

H.1.4.1. For underwritten healthcare claims, the Contractor shall assume full financial liability for care which is not eligible for cost-sharing and was provided subsequent to the Contractor’s erroneous authorization of services and/or supplies listed as exclusions in the TRICARE Policy Manual (TPM). This provision applies to services/supplies specifically named under an exclusion, and does not apply to general exclusions such as services subsequently determined to not be medically necessary. For cases involving such specific exclusions, the Contractor shall neither deny payment nor recoup erroneous payments from either the provider or the beneficiary.

Payment will be made from the Contractor’s funds and not reimbursed by the Government. The Contractor shall not be held liable for non-covered services/supplies provided that were not authorized by the Contractor. The Contractor’s financial liability under this section is in addition to and not limited by the 2% claims error rate established by TRICARE Operations Manual (TOM), Chapter 1, Section 3, Paragraph 1.6.1. “Claim Payment Errors”.

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H.2. AWARD FEE

H.2.1. An Award Fee is available to Contractors as a performance incentive (see FAR 16.401;

FAR 16.402-2). An Award Fee shall be administered annually in accordance with the T-5 Award Fee Plan (Attachment J-12a), which has been developed to guide the application of the Award Fee. An Award Fee pool, identified under Section B ($20M per Option Period of healthcare delivery) is available for the Contractor to earn based on meeting or exceeding the Government’s requirements for Access, Readiness (which includes both Medically Ready Force and Ready Medical Force), and Quality.

H.2.2. A separate Award Fee pool of $1M (Attachment J-12b) is available for the Contractor to earn based on meeting or exceeding the Government’s requirements during transition-out activities.

H.3. HEALTHCARE UNDERWRITING INCENTIVES

H.3.1. Introduction and Administration: This section addresses the administration of the positive and negative incentives that are part of the underwriting mechanism of the contract. The Contractor may earn an underwriting incentive by either exceeding a minimum standard, or for performance above a fully satisfactory level in areas that reduce healthcare cost and are measurable, as defined in this section for each respective option period. The financial administration of the incentives assessment for a given option period will be conducted after completion of the option period. When performance exceeds the standard, or exceeds the fully satisfactory level specified in the paragraphs below, the Government administratively obligates funding equal to the stated incentive amount into the applicable Performance Incentive Pool contract line item number (CLIN) in Section B. After the Government has completed measurement and any administrative funding action(s), and the Contracting Officer (CO) notifies the Contractor of the incentive earned (if any), the Contractor may invoice and receive payment for the amount authorized by the CO. The Government will obligate funds at any time on the performance incentive funding CLIN as the CO determines necessary to ensure sufficient funds are available to pay the Contractor any earned incentive amount. If the Contractor fails to meet the fully satisfactory levels described below and earns a negative incentive, the funded amount on the performance incentive CLIN may be netted, or the payments from the performance incentive CLIN are offset by the negative incentive amount. If the offset amount is greater than any earned incentive (if any), or the Contractor only earns a negative incentive, the CO will deduct that amount from the next payment due from any CLIN of this contract. There is no limit on the dollar amount, positive or negative, of the underwriting incentives that may be accrued for the Network Discount Incentive or the Network Usage Incentive.

H.3.1.1. The incentives are independent of the results of the annual healthcare cost audits for overpayments to providers. The assessment, including recovery from the Contractor, of any negative incentive dollar amount is conducted separately from the underwriting fixed-fee

HT940220R0005 Page H4 of H38 payments for each option period. The administration of the Network Discount Incentive and Network Usage Incentive described herein is assessed before any cost audit that determines allowable and unallowable healthcare costs.

H.3.2. Incentives: The Contractor will be assessed the following positive and negative incentives based on performance:

H.3.2.1. Network Discount Guarantee: The purpose of the Network Discount Guarantee is to ensure Contractors meet their obligations in their bid proposals to reduce underwritten healthcare costs. The incentive will be calculated based on total Underwritten Healthcare Cost.

H.3.2.1.1. Guaranteed Network Provider Discounts (negative incentive):

The Contractor shall guarantee the following discounts:

OP1 OP2 OP3 OP4 OP5 OP6 OP7 OP8

H.3.2.1.2. At the end of each option period, the Guaranteed Network Provider Discount will be calculated. The achieved discount will be measured as the overall average value of discounts from TRICARE allowable charges. The calculation will be based on TRICARE Encounter Data (TED) records accepted during that option period for care provided by Contractor network providers, excluding OHI claims, non-underwritten care, and TED records for services for which the Contractor or provider has taken full risk under a capitation arrangement. The total value of discounts will be the sum of all dollar amounts reported on TED records in the field “Amount Network Provider Discount” (subject to the limit on credit for professional discounts described below). For care provided by Contractor network providers, (subject to the exclusions above) the total allowable cost will be the sum of all dollar amounts reported on TED records for all amount allowed fields and all amounts credited from network provider discount fields.

H.3.2.1.3. In calculating its Guaranteed Provider Discounts, the Government will not credit more than a 5% discount from TRICARE allowable charges for care provided by individual professional providers. To apply this limit when measuring discounts on TED records for administration of this Guaranteed Discount incentive, discounts greater than 5% will only be credited for TED Institutional (TED-I) records and for those TED Non-institutional (TED-N) records that have a 10-character Health Care Provider Taxonomy specialty code for which the first two characters are equal to 17-18, 24-34, or 37-38. The Government reserves the right to update the list of codes above if affected by an updated release of the taxonomy. The purpose of this limit is to ensure that discount guarantees do not negatively affect the overall quality of care provided to beneficiaries or beneficiary access to care.

H.3.2.1.4. Reserved

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H.3.2.1.5. The TED record must reflect the actual dollar amount of network discount, excluding other health insurance (OHI) claims. The dollar amount of the network discount is the difference between the network provider’s negotiated rate and what TRICARE reimbursement methodology would have allowed in the absence of the negotiated discount rate. See the TRICARE Systems Manual (TSM), Chapter 2 for the TED record requirements for correctly coding the provider network discount.

H.3.2.1.6. If the calculated average percentage network discount obtained by the Contractor for the option period does not exceed the levels listed above at H.3.2.1.1, then the Government will offset the calculated deficit amount from the next payment(s) due to the Contractor under any

CLIN.

H.3.2.1.7. These guaranteed discounts shall not be adjusted for changes to TRICARE allowable amounts, the expansion of TRICARE coverage to additional procedures and Durable Medical Equipment (DME); or any other actions and conditions that may affect providers’ willingness to accept discounts. The Contractor assumes all risks of future conditions and changes that may affect the Contractor’s ability to achieve the guaranteed discounts.

H.3.2.2. Network Usage Incentive: The purpose of this incentive is to promote a higher percent of usage of network providers by all Prime enrollees, thereby reducing the enrollees’ out-of-pocket costs and potentially reducing underwritten healthcare costs.

H.3.2.2.1. Network Usage by Enrollees (Combined MTF enrollees and Contractor network enrollees (TRICARE Prime and TRICARE Select): It will be measured based on the number of civilian network provider claims for TRICARE Prime and TRICARE Select enrolled beneficiaries compared with the total number of civilian claims for these beneficiaries, after excluding claims with OHI, Prime Point-of-Service (POS) claims, claims for care provided out-of-region, TPR, and claims for emergency care. The exclusion applies if any line item on the claim meets the exclusion criteria. If the percentage of network versus total claims meets or exceeds the minimum standard for a given month, no negative incentive will be applied. If the network percentage falls below that standard, a negative incentive will be assessed on a per-claim basis for the calculated number of non-network claims that fall below the standard. The following are the minimum standards for each option period:

Region: Option Period 2: 78%

Option Period 3: 80%

Option Period 4: 81%

Option Periods 5-8: 82%

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No incentive will be applied for the first six months of Option Period 1. Beginning on the seventh month of Option Period 1, for each month that the Contractor fails to meet the minimum claims percentage, a negative incentive shall apply. The network usage incentive will be calculated after the end of the option period based on TED records accepted during each month of the option period. The Government will apply a negative incentive for every claim that falls below the minimum standard. The amount assessed per claim is based on the percentage below the standard as follows:

Option Period one:

If less than 75% and more than or equal to 72% = $7 per claim If less than 72% and more than or equal to 69% = $14 per claim If less than 69% and more than or equal to 66% = $21 per claim If less than 66% = $28 per claim

Option Period Two:

If less than 78% and more than or equal to 75% = $7 per claim If less than 75% and more than or equal to 73% = $14 per claim If less than 73% and more than or equal to 70% = $21 per claim If less than 70% = $28 per claim

Option Period Three:

If less than 80% and more than or equal to 77% = $7 per claim If less than 77% and more than or equal to 75%= $14 per claim If less than 75% and more than or equal to 74% = $21 per claim If less than 74% = $28 per claim

Option Period Four:

If less than 81% and more than or equal to 78% = $7 per claim If less than 78% and more than or equal to 76% = $14 per claim If less than 76% and more than or equal to 75% = $21 per claim If less than 75% = $28 per claim

Option Periods Five through Eight:

If less than 82% and more than or equal to 79% = $7 per claim If less than 79% and more than or equal to 77% = $14 per claim If less than 77% and more than or equal to 76% = $21 per claim If less than 76% = $28 per claim

H.3.2.2.2. For example, in month 2 of Option Period 2, if the actual percent of Prime enrollee claims with a network provider is 74%, then a negative performance incentive equal to 4% of the claims will be assessed against the Contractor (4% represents the difference between the actual number of claims for care provided by a network provider and the standard). If 4% equates to 200 claims not meeting the standard, the performance incentive assessment for that month will

HT940220R0005 Page H7 of H38 be $2,800 or 200 claims times $14. In determining the performance incentive, the applicable amount will be determined based on the Contractor’s actual performance. The highest per claim amount will be applied to all claims failing the standard. The Government will not stratify the performance incentive based on the variable per claim amounts. In the example above, the Contractor’s actual performance was 74% so the performance incentive will equal $14 for every claim falling below the minimum performance standard of 78%.

H.3.2.2.3. The percentage standards above, and the claims volumes used to calculate performance against those standards, will reflect claims for both MTF Prime enrollees and Contractor Network Prime enrollees combined.

H.4. PERFORMANCE INCENTIVES

H.4.1. Introduction: Monetary performance incentives are available to the Contractor. The Contractor may receive a positive performance incentive payment for performance above the levels in customer satisfaction as defined in this section for each respective option period.

H.4.1.1. Incentive Administration: The Contractor’s performance for a given option period will be measured after completion of each option period. When performance exceeds the levels described below the Government administratively obligates funding on the applicable performance incentive CLIN in Section B. After the Government has completed measurement, and the CO notifies the Contractor, the Contractor may invoice the net amount authorized by the CO. The Government may obligate funds into the performance incentive pool at any time that the CO determines necessary to ensure sufficient funds are available to pay performance incentives to the Contractor after the option period is completed.

H.4.2. RESERVED

H.4.3. Customer Satisfaction Incentive: The purpose of this incentive is to promote a high degree of focus on customer service by the Contractor. The Government will measure the satisfaction among five categories of stakeholders (beneficiaries, providers, MTF leadership, DHA customers and Market Directors) via independently administered surveys.

H.4.3.1. Semi-annually, the Government will administer separate surveys to beneficiaries, providers and Market Directors containing questions designed to elicit responses to measure satisfaction during the applicable preceding performance period. Survey questions are included in the Customer Service Incentive Worksheet at Attachment J-8.

H.4.3.2. Results of the surveys will be used to calculate a weighted average composite score (WACS) whereby the results of the MTF leadership survey carry the greatest weight, and the results or the provider survey carry the least. Survey results will be populated in the Customer Service Incentive Worksheet and the Contractor will receive the incentive amount in accordance with paragraph H.4.3.3.

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H.4.3.3. The Government will notify the Contractor within 30 calendar days of survey results being collected. The following scale identifies the potential incentive the Contractor may earn for each biannual surveyed performance period.

INCENTIVE

Total Calculated

Composite Score Incentive Earned

0-7.000 $ - 7.001-7.500 $ 75,000.00 7.501-8.000 $ 100,000.00 8.001-8.500 $ 200,000.00 8.501-9.000 $ 350,000.00 9.001-9.500 $ 650,000.00 9.501-10.000 $ 1,100,000.00

H.4.3.4. The Government may unilaterally add, delete or change questions within the surveys applicable to this incentive at any time. In the event changes are made to the surveys, they will become effective in the next surveyed performance period after the notification is provided to the Contractor.

H.5. PERFORMANCE GUARANTEES

H.5.1. The Performance Guarantees described in this Section are the Contractor’s guarantee that the Contractor’s performance will not be less than the performance readiness standards described below. The rights of the Government and remedies described in the Performance Guarantee Section are in addition to all other rights and remedies of the Government. Specifically, the Government reserves the rights and remedies set forth in the Inspection of Services clause (FAR 52.246-4, 52.246-5) and Default clauses (FAR 52.249-8, 52.249-6). See G.3 for administrative details relating to performance standards.

H.5.2. The Contractor shall guarantee that performance will meet or exceed the standards in this Section. For each occurrence the Contractor fails to meet each guaranteed standard, the Government will reduce from the Contractor the amount listed for each standard below. For administrative purposes, the Contractor will be notified of Performance Guarantee reductions on a monthly basis via a unilateral modification in accordance with FAR 43.103(b)(3) with this section as the cited authority for the modification. Reductions will be made from the next available contract payment under an administrative line item.

H.5.3. RESERVED

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H.5.4. Provider Network Loading to Systems:

PCM Loading to Systems:

H.5.4.1. The Contractor shall load PCM information into the requisite systems in accordance with the timeliness standards below (based on the total number of PCMs required by the Contractor’s Network Implementation Plan). PCMs in excess of the required number of PCMs for each Prime Service Area will not count toward the achievement of this Performance Guarantee. PCMs loaded shall have an executed contract. Standard:

• 50% of PCMs loaded no later than 120 days prior to the SHCD

• 75% of PCMs loaded no later than 100 days prior to the SHCD

• 100% of PCMs loaded no later than 60 days prior to the SHCD

H.5.4.1.1. This performance guarantee will be evaluated during the PRAV process. For each day the PCM load standard is not met, a Performance Guarantee shall be applied as follows: based on a comparison of the actual number of PCM loads completed and the total number of PCMs identified in the Contractor’s Network Implementation Plan, the Government will assess a Performance Guarantee amount of $10,000 per day for every day the standard is not met until the standard is met ($200,000 maximum). If the 120 calendar day standard is not met by 100 calendar days prior to SHCD, the performance guarantee is increased to $50,000 a day for every day the standard is not met ($2,000,000 maximum). If the 60 day standard is not met, the performance guarantee increases to $100,000 for every day the standard is not met ($6,000,000 maximum). The total potential performance guarantee equals $8,200,000.

Specialty Providers Loading to Systems:

H.5.4.2. The Contractor shall load Specialty Providers information into the requisite systems in accordance with the timeliness standards below (based on the total number of Specialty Providers required by the Contractor’s Network Implementation Plan). Specialty providers in excess of the required number of Specialty Providers for each Prime Service Area will not count toward the achievement of this Performance Guarantee. Standard:

• 50% of Specialty Providers loaded no later than 120 calendar days prior to the SHCD

• 75% of Specialty Providers loaded no later than 90 calendar days prior to the SHCD

• 100% of Specialty Providers loaded no later than 60 calendar days prior to the SHCD

H.5.4.2.1. This performance guarantee will be evaluated during the PRAV process. For each day the Specialty Providers load standard is not met, a Performance Guarantee shall be applied as follows: $3,000 per day for every day the standard is not met until standard is met ($90,000 maximum). If the 120-calendar day standard is not met by the time the 90-calendar day standard is applied, the performance guarantee increases to $4,000 per day for every day the standard is not met ($120,000 maximum). If the 90‑calendar day standard is not met by the time the 60-day

HT940220R0005 Page H10 of H38 standard is applied, the performance guarantee increases to $5,000 per day for every day the standard is not met ($300,000). Total potential Performance Guarantee equals $510,000.

H.5.4.2.2. The Government reserves the right to reassess the Contractor’s performance until the standards are achieved. The Performance Guarantee will continue to apply during any Government reassessment of the Contractor’s progress towards meeting the PCM/Specialty BH provider/Inpatient facility loads into the requisite systems.

BH Provider Loading to Systems:

H.5.4.3. The Contractor shall load BH provider information into the requisite systems in accordance with the timeliness standards below (based on the total number of BH providers required by the Contractor’s Network Implementation Plan). BH providers in excess of the required number of BH providers for each Prime Service Area will not count toward the achievement of this Performance Guarantee. Standard:

• 75% of BH providers loaded no later than 120 days prior to SHCD

• 100% of BH providers loaded no later than 90 days prior to SHCD

H.5.4.3.1. This Performance Guarantee will be evaluated during the PRAV process. For each occurrence when the BH provider load standard is not met, a Performance Guarantee shall be applied as follows: 10,000 per day for every day the standard is not met until the standard is met ($300,000 maximum). If the 90 day standard is not met, the performance guarantee increases to $100,000 for every day the standard is not met ($9,000,000 maximum). Total potential performance guarantee equals $9,300,000.

H.5.4.3.1.1. The Government reserves the right to reassess the Contractor’s performance until the standards are achieved. The Performance Guarantee will continue to apply during any Government reassessment of the Contractor’s progress towards meeting the PCM/Specialty provider /BH provider/Inpatient facility loads into the requisite systems.

Inpatient Healthcare Facility Loading to Systems:

H.5.4.4. The Contractor shall load Inpatient Healthcare Facility information into the requisite systems in accordance with the timeliness standards below (based on the total number of Inpatient Healthcare Facilities required by the Contractor’s Network Implementation Plan).

Inpatient Health Care Facilities in excess of the required number of Inpatient Health Care Facilities for each Prime Service Area will not count toward the achievement of this Performance Guarantee. Standard:

• 50% of inpatient healthcare facilities loaded no later than 120 calendar days prior to the SHCD

• 75% of inpatient healthcare facilities loaded no later than 90 calendar days prior to the SHCD

• 100% of inpatient healthcare facilities loaded no later than 60 calendar days prior to the SHCD.

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H.5.4.4.1. This performance guarantee will be evaluated during the PRAV process. For each occurrence when the Inpatient Healthcare Facility load standard is not met, a Performance Guarantee shall be applied as follows: based on a comparison of the actual number of Inpatient Healthcare Facility loads completed and the total number of Inpatient Healthcare Facilities identified in the Contractor’s Network Implementation Plan, the Government will assess a Performance Guarantee amount of $3,000 a day for every day the standard is not met until the standard is met. If the 120 calendar day standard is not met by the time the 90 calendar standard is applied the performance guarantee increases to $4,000 a day for every day the standard is not met. If the 90 calendar day standard is not met by the time the 60 day standard is applied the Performance Guarantee increases to $5,000 a day for every day the standard is not met. Total potential performance guarantee equals $7,500,000.

H.5.4.4.2 The Government reserves the right to reassess the Contractor’s performance until the standards are achieved. The Performance Guarantee will continue to apply during any Government reassessment of the Contractor’s progress towards meeting the PCM/Specialty BH provider/Inpatient facility loads into the requisite systems.

H.5.4.5. Independent Application of PCM and BH Providers/Healthcare Facilities Performance Guarantee: The four standards under Section H.5.4.1, H.5.4.2, H.5.4.3, H.5.4.4. will be assessed independently, and a Performance Guarantee will apply to each instance a PCM or BH provider/healthcare facility load fails to meet a minimum performance standard. For example, a PCM load that received a performance withhold because the 50% standard/120 calendar days prior to the SHCD standard was not met, is subject to withhold if it is not completed within 90 calendar days prior to the SHCD.

H.5.5. Enrollment Performance Guarantee:

H.5.5.1. Standard: 90 calendar days prior to the SHCD, the Contractor’s enrollment system shall be fully operational: all hardware/software is operational, system access requirements are met, the system correctly interfaces with Government systems, the Contractor can perform all required billing enrollment and collection transactions, and all enrollment rules are loaded and accessible.

H.5.5.2. This Performance Guarantee will be evaluated during the PRAV process. Beginning on the 89th day prior to the SHCD, the Government will assess a Performance Guarantee amount of $5,000 for each calendar day that the Contractor fails to fully meet the standard. For example, if the Contractor’s enrollment system is not fully operational until 85 calendar days prior to the SHCD, a Performance Guarantee of $20,000 will be assessed ($20,000 equates to $5,000 times four, which represents the four days that the system was not fully operational (89 through 86 calendar days prior to the SHCD). The total potential Performance Guarantee equals $450,000.

H.5.6. Customer Service Performance Guarantee:

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H.5.6.1. Standard: No later than 90 calendar days prior to the SHCD, the Contractor shall demonstrate that its Call Center staff can respond to inquiries with at least 97% accuracy (i.e., responses provided by Call Center staff shall be accurate and complete according to the terms of the contract and all applicable TRICARE program rules, regulations, and policies).

H.5.6.2. For each occurrence when the Call Center response accuracy standard of 97% is not met during the PRAV process, a Performance Guarantee in the amount of $150,000 shall be applied.

An occurrence shall be considered a full assessment with up to 500 phone calls during the PRAV. In the event the government exercises its right to require a reassessment following an unsuccessful assessment (a final result less than 97% accurate), the final results of the reassessment shall be considered a new occurrence and will also be subject to this Performance Guarantee.

H.5.6.3. RESERVED

H.5.6.4. The Government intends to conduct an assessment of up to 500 phone calls on a variety of topics including but not limited to enrollment questions, PCM assignment, referrals, service denials, and claims by calling the Contractor’s Call Center staff during the PRAV to assess response accuracy. The Government reserves the right to reassess the Contractor’s performance until the 97% accuracy standard is achieved. The Performance Guarantee will continue to apply during any Government reassessment of the Contractor’s Call Center response accuracy.

H.5.7. Referral Management Performance Guarantee:

H.5.7.1. RESERVED

H.5.7.2. This Performance Guarantee will be evaluated 31 days after start of healthcare delivery.

Standard: The Contractor shall demonstrate that its referral management system can process 90% of referrals within 24 hours and 100% within 2 business days with a 95% accuracy rate.

H.5.7.3. For each occurrence when referral timeliness or accuracy standard is not met, a Performance Guarantee in the amount of $300,000 for failure to meet either standard shall apply.

In this context, an occurrence shall be considered the final result of a full assessment (i.e. up to 5,000 referrals, 120 days after the start of healthcare delivery). In the event the government exercises its right to require a reassessment following an unsuccessful assessment, the final results of the reassessment shall be considered a new occurrence and will be subject to this Performance Guarantee.

H.5.7.4. Independent Application of Referral Management Performance Guarantee: A Performance Guarantee assessment will be applied independently to each referral that fails to meet the minimum performance standard for timeliness or accuracy. The standards under H.5.7.2 will be assessed independently, and a performance guarantee will apply to each instance when a referral fails to meet a minimum performance standard. For example, a referral that received a

HT940220R0005 Page H13 of H38 performance withhold because the 90% timeliness standard/24 hours was not met, is again subject to withhold if it fails to meet the 100% timeliness standard/2 working business days and again if it misses the 95% accuracy rate.

H.5.8. Claims Processing PRAV Performance Guarantee:

H.5.8.1. This Performance Guarantee will be evaluated 120 days after Start of Healthcare Delivery and into health care performance until the contractor meets claims processing standards.

H.5.8.2. For each occurrence when the claims accuracy standard of 98% (TOM, Chapter 2, Section 8) for claims processing purposes is not met during the PRAV process, a Performance Guarantee shall be applied as follows:

Tier Standard Performance Guarantee Tier 1 >75%-97% $250,000 Tier 2 >50%-75% $375,000 Tier 3 Below 50% $500,000

H.5.8.3. For each occurrence when the claims first pass auto-adjudication standard of 80% for claims processing purposes is not met during the PRAV process, a Performance Guarantee shall be applied as follows:

Tier 1 >65%-79% $250,000 Tier 2 >40%-65% $375,000 Tier 3 Below 40% $500,000

H.5.8.4. In this context, an occurrence shall be considered the final result of a full assessment of up to 1,000 claims, 120 days after start of health care delivery to assess the Contractor’s claims processing system for accuracy of the claim as well as the first pass auto-adjudication percentage. The Government reserves the right to reassess the Contractor’s performance every 30 calendar days until the accuracy standard and/or the claims first pass auto-adjudication standard is achieved. The final results of each reassessment shall be considered a new occurrence and will be subject to the Performance Guarantee. The Performance Guarantee will continue to apply during any Government reassessment of the accuracy of the Contractor’s claims pro

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Tier 1 >65%-79% and/or >75%-97%

$250,000 + $250,000 = $500,000

Tier 2 >40%-65% and/or >50%-75%

$375,000 + $375,000 = $750,000

Tier 3 Below 40% and/or Below 50%

$500,000 + $500,000 = $1,000,000

H.5.9. Claims Processing Health Care Delivery Performance Guarantee:

H.5.9.1. This Performance Guarantee will be evaluated quarterly, beginning the second quarter of the first year of health care delivery, throughout the duration of the contract.

H.5.9.2. For each occurrence when the claims accuracy standard of 98% (first two option periods) and 98.25% (all remaining option periods (OPs)) (TOM, Chapter 1, Section 3) for claims processing purposes is not met during the evaluation period, a Performance Guarantee shall be applied as follows:

Tier Standard Performance Guarantee

Tier 1

>75%-97% (OP 1 & 2)

>75%-98.25% (OP 3-8) $187,500

Tier 2 >50%-75% $281,250 Tier 3 Below 50% $ 375,000

H.5.9.3. For each occurrence when the claims first pass auto-adjudication standard of 80% (increase in percentage by at least 1% in each subsequent option periods (OPs) 1-8) (TOM, Chapter 1, Section 3) for claims processing purposes is not met during the evaluation period, a Performance Guarantee shall be applied as follows:

Tier Standard Performance Guarantee

Tier 1

>65%-79% (OP 1)

>65%-81% (OP 3)

>65%-83% (OP 5)

>65%-85% (OP 7)

>65%-80% (OP 2)

>65%-82% (OP 4)

>65%-84% (OP 6)

>65%-86% (OP 8)

$187,500

Tier 2 >40%-65% $281,250 Tier 3 Below 40% $375,000

H.5.9.4. For each occurrence when the claims reprocessing rate standard of 2% (first two option periods) and 1.75% (all remaining option periods (OPs)) (TOM, Chapter 1, Section 3) for

HT940220R0005 Page H15 of H38 claims processing purposes is not met during the evaluation period, a Performance Guarantee shall be applied as follows:

Tier 1

2%-5% (OP 1 & 2)

1.75%-5% (OP 3-8) $187,500

Tier 2 >5%-10% $281,250 Tier 3 > 10% $ 375,000

H.5.9.5. In this context, an occurrence shall be considered the final result of a full assessment of a minimum of 1,000 claims received during the prior quarter, beginning the second quarter after start of health care delivery to assess the Contractor’s claims processing system for accuracy of the claim, first pass auto-adjudication percentage, and claims reprocessing rate. The Performance Guarantee will continue to apply quarterly during the duration of the health care delivery option periods.

H.5.10. Provider Directory Accuracy

This Performance Guarantee is assessed 90 days prior to the Start of Health Care Delivery and every three months afterward.

Standard: The Contractor shall demonstrate that its provider directory meets minimum accuracy standards as described in C.2.1.13.5.3 for all network providers (additionally refer to C.2.1.13.5.4 and C.2.1.13.5.5 for what the standard measures and how it is measured).

For each occurrence when the provider director accuracy standard is not met, a Performance Guarantee of $250,000 shall be applied.

An occurrence is considered a full assessment where the Government validates up to 500 network provider directory listings. In the event the government exercises its right to require a reassessment following an unsuccessful assessment (a final result less than the required accuracy rate), the final results of the reassessment shall be considered a new occurrence and will be subject to this performance guarantee.

H.6. EVOLVING PRACTICES, DEVICES, MEDICINES, TREATMENTS AND

PROCEDURES

H.6.1. Medical practices and procedures are expected to continue developing during the period of this contract: some will increase and some will decrease the cost of medical care. These changes will include practices, devices, medicines, treatments and procedures that previously were excluded from the benefits as unproven or as yet unknown.. The Contractor shall underwrite the cost of all drugs covered under this contract, and devices, and medical treatments or medical procedures that move from unproven to proven, and shall implement the move from unproven or as yet unknown to proven as required at no change in contract price or underwriting

HT940220R0005 Page H16 of H38 fixed fee. Changes to the requirements caused by changes in the statutory definitions of the benefit or new benefits added by statute will be implemented under the Changes clause.

H.6.2. TRICARE can only cover costs for medically necessary supplies and services.

Regulatory procedures are in place at 32 C.F.R. 199.4(g)(15) that describe the procedure for evaluating the safety and efficacy of unproven drugs, devices, medical treatments, or medical procedures. The Contractor shall routinely review the hierarchy of reliable evidence, as defined in 32 C.F.R. 199.2. and implementing the changes into the TRICARE program through changes to information and claims processing systems and business processes.

H.7. POST-AWARD ORGANIZATION CONFLICTS OF INTEREST/IMPAIRED

OBJECTIVITY

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

H.8. THIRD PARTY INFORMATION

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

H.9. PERFORMANCE READINESS VALIDATION (PRV)/PERFORMANCE

READINESS ASSESSMENT AND VERIFICATION (PRAV)

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H.9.1. Performance Readiness Validation: During contract transition, the Contractor shall conduct validation reviews to assess its performance readiness for accomplishing critical processes in seven key contract areas. This self-assessment process is called Performance Readiness Validation (PRV). The seven key contract areas that are subject to PRV reviews are:

(1) provider networks; (2) enrollment; (3) customer service; (4) records management; (5) referral management; (6) claims processing; and (7) clinical operations.

H.9.1.1. Specific validation review activities, techniques, accuracy/timeliness thresholds, and processes are at the Contractor’s discretion. However, the Contractor’s validation process shall be structured such that they meet or exceed the specific performance elements that will be verified by the Government during the Performance Readiness Assessment and Verification (PRAV) as discussed in TOM, Chapter 2. Base validation parameters required to meet the Government PRAV are identified for each critical process and the Contractor’s PRV is expected to provide the necessary information for the Government to complete the PRAV.

H.9.1.2. Timelines for completing PRV reviews will vary by contract area, but all must be completed prior to the Start of Healthcare Delivery (SHCD). PRV activities and milestones shall be identified in the Integrated Master Plan/Integrated Master Schedule (IMP/IMS) and progress/results shall be reported to the Government via the Weekly IMP/IMS Status Report and other reports as appropriate.

H.9.1.3. Following the completion of the PRV for each critical process, the Contractor shall provide the Government transition team with a comprehensive briefing on the processes, results, and findings. The briefing should summarize the information that was reported to the Government via the Weekly IMP/IMS Status Reports. The Contractor shall brief results as validated performance against desired PRAV performance levels and contract standards and/or requirements. The briefing shall include a description of specific performance issues and/or risks identified by the Contractor, any lessons learned, and a comprehensive discussion of the steps contemplated or taken by the Contractor to ensure full performance readiness at SHCD. The briefing schedule should incorporate adequate time for Government questions and feedback regarding any aspect of the Contractor’s performance management and performance readiness review activities. The Contractor shall submit a revised IMP/IMS if the Contractor anticipates any significant deviation from any stated activities and milestones.

H.9.2. Performance Readiness Assessment and Verification (PRAV): The Government will conduct PRAV activities during the transition-in period to assess and verify the Contractor’s performance readiness in accomplishing critical processes in the seven key contract areas described above. Following the completion of all PRAV activities, the Contractor shall participate in a summary out-briefing by the Government on the processes, results, and findings of all PRAV activities. At the Government’s discretion, this briefing will be conducted onsite at one of the Contractor’s facilities or via teleconference within 14 calendar days following the conclusion of all PRAV activities. If the Government elects the Contractor to provide an onsite

HT940220R0005 Page H18 of H38 briefing, the Contractor shall provide toll-free teleconference support to allow participation by all Government transition team members regardless of their location.

H.9.3. If the Government determines that corrective actions are required (based on any PRV/PRAV activity, contract deliverable, or briefing), the Contracting Officer will notify the Contractor in writing of the performance readiness issues to be resolved prior to the SHCD. The contractor shall take immediate corrective actions on performance readiness issues and shall reduce transition related risks identified by the Government.

H.10. Claims Processing, TEDS Occurrence Errors and Payment Accuracy Reviews

H.10.1. The Government will conduct Quarterly Claims Processing Payment Accuracy reviews, Occurrence reviews as well as the Annual Underwritten Unallowable Healthcare Cost Compliance Review under this contract. Refer to TRICARE Operations Manual (TOM), Chapter 3, Section 5 for complete details.

H.10.1.1. Reserved

H.10.1.2. The Government will use a contracted, independent external claims review service (TRICARE Claims Review Service or TCRS) as stated in Section C.2.12.9.3.1 and in TOM Chapter 3, Section 5.

H.10.1.2.1. The Government will facilitate the creation of a Memorandum of Understanding (MOU) between the Contractor and the Government's TRICARE Claims Review Services (TCRS) Contractor at the beginning of this contract as required by C.2.12.9.3 of this contract.

H.10.1.3. The Government will use results of the Quarterly reviews to determine compliance with the Claims Processing Standards stated in TOM, Chapter 1, Section 3 “Claims Processing Accuracy.”

H.10.1.4. The Government will use results of the Annual Underwritten Unallowable Healthcare Cost Compliance Review to determine the amount of Unallowable costs which will be recovered by the Government as directed by FAR Clause 52.216-7 (Allowable Cost and Payment).

H.10.1.5. The Government will draw a random sample of TRICARE Encounter Data System (TEDS) records from the universe of claims submitted for Quarterly and Annual reviews.

Sampling methodology is described in TOM, Chapter 3, Section 5.

H.10.1.5.1. The Government will exclude TED records in batch/vouchers submissions that have not passed TEDS validity edits, or which are otherwise unprocessable at the time of the compliance review.

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H.10.1.6. The Contractor shall forward to DHA documentation providing any unique internal procedure codes with narrative and cross-reference to approved TRICARE codes and pricing manuals used in claims processing.

H.10.1.6.1. Initial submission of documentation is due to DHA by the commencement of claims processing with the submission of revisions as they occur, by not later than the fifth calendar day of the month following the change.

H.10.1.7. For this contract, Patient Medical Record Documentation will be a requirement for Focus Study Reviews. Error rates may include errors assessed on payment accuracy as well as Medical Records review discrepancies.

H.10.2. Quarterly Claims Processing and Payment Accuracy Compliance Reviews/TEDS Occurrence Reviews.

H.10.2.1. The Government will perform Quarterly Claims Processing and Payment Accuracy Compliance Reviews at the end of each quarter. The Government will include only non-denied claims in this review. Some quarters will not undergo this review during a period when the contract is ending. The purpose of this review is to assess the Contractor’s compliance with claims processing accuracy standards stipulated in TOM, Chapter 1, Section 3 “Claims Processing Accuracy”.

H.10.2.1.1. The Contractor shall correct the errors found in these reviews within 60 calendar days on receipt of errors from the Government.

H.10.2.2. The Government will perform Denied Claims Compliance Reviews. The purpose of this review is to assess the Contractor’s compliance with claims processing accuracy standards stipulated in TOM, Chapter 1, Section 3 “Claims Processing Accuracy”. This review will only include denied claims. These reviews will occur at the discretion of the Government and will not occur every quarter during the contract.

H.10.2.2.1. The Contractor shall correct the errors found in these reviews within 60 calendar days on receipt of errors from the Government.

H.10.2.3. The Government will perform TED Record Occurrence Compliance Reviews. The purpose of this review is to assess the Contractor’s compliance with TEDS record coding requirements as stipulated in the TRICARE Systems Manual (TSM), Chapter 2.2. Results from this review will be used to assess Contractor claims processing performance as stipulated in the TOM, Chapter 1, Section 3 “Claim Occurrence Errors”. These reviews will occur at the discretion of the Government and will not occur every quarter during the contract.

H.10.2.3.1. The Contractor shall correct the errors found in these reviews within 60 calendar days on receipt of errors from the Government.

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H.10.2.4. Sampling Methodology:

To Government will generate a sample of claims as described in TOM, Chapter 3, Section 5.

The Government will forward the TEDS Internal Control Number (ICN) listing for the sample to the Contractor with instructions to gather required documentation and forward to the Government (TCRS Contractor).