T-5 Draft RFP Section H.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 “purchased care” which is defined as care rendered outside the Direct Care System) provided to all TRICARE-eligible beneficiaries who are enrolled in the contract region, or for non-enrollees who reside in the contract region, except for the following non-underwritten categories:

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

• Continued Health Care Benefits Program (CHCBP)

• 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 the state of Alaska and care for non-enrollees who reside in the state of Alaska)

• Bonus Payments in Medically Underserved Areas (Health Professional Shortage

Areas (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

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

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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:

<TBD>

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.

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

H.1.3.3. The costs of medical management activities, such as case management, 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).

An Award Fee shall be administered semi-annually in accordance with the T-5 Award Fee Plan (Attachment TBD),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 and Quality.

H.2.2. The Contractor shall audit its HEDIS results using a third-party NCQA-Certified HEDIS Compliance auditor. The audit contract shall be in place within 6 months after the start of healthcare delivery and shall be made available to the Government upon request. Annually, the Contractor shall submit audit reports that support HEDIS metrics delivered to the Government along with a signed data certification letter attesting to the accuracy and completeness of the metrics by the auditor.

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 ma y 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

HT940220R0005 Page H4 of H35 negative incentive dollar amount is conducted separately from the underwriting fixed-fee payments for each option period. The administration of the Network Discount Incentive and Network Usage Incentive described herein is assessed before any cost audit that determines allowable and unallowable 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 Incentive: The purpose of this incentive is to encourage Contractors to proactively negotiate discounts with network providers and thereby 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):

H.2.3.1.2. The Contractor shall guarantee the following discounts:

OP1 OP2 OP3 OP4 OP5 OP6 OP7 OP8

H.3.2.1.2.1. 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 (excluding OHI claims) for care provided by Contractor network providers. The total value of discounts will be the sum of all dollar amounts reported on TED records in the field “Amount Network Provider Discount.” For care provided by Contractor network providers (excluding OHI claims and 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 amount of network provider discount fields.

H.2.3.1.2.2. In calculating its Guaranteed Provider Discounts, the Government will not credit more than 5% discount to individual professional providers. The purpose of this limit is to ensure that discount guarantees do not affect quality or access.

H.3.2.1.2.3. Reserved

H.3.2.1.2.4. 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.3.2.1.2.5. If the calculated average percentage network discount obtained for the option period does not exceed the levels listed above, the Government will offset the calculated deficit amount from the next payment(s) due under any CLIN.

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H.3.2.1.2.6. 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 shall fully understands the risks in financially underwriting the delivery of healthcare services under this contract, and assumes all risks of future conditions and changes that may affect the Contractor’s ability to achieve the guaranteed discounts.

H.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.

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 minimum claims percentage is not met, 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

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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 Period 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.3.2.2.1. 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 (4% represents the difference between the actual number of claims for care provided by a network provider and the standard). If 4% equates to 200 claims not meeting the standard, the performance incentive assessment for that month will be $3,000 or 200 claims times $15. 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 $15 for every claim falling below the minimum performance standard of 78%.

H.3.2.2.2. 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 program integrity and/or 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.

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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, 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 MTF commanders 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-7.

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 commanders 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.3.3.3.

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 (PGs)

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H.5.1. The PGs described in this Section are the Contractor’s guarantee that the Contractor’s performance during transition-in and transition out will not be less than the performance readiness standards described below. The rights of the Government and remedies described in the PG 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).

H.5.2. The Contractor shall guarantee that performance during transition-in 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 PG 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

H.5.4. Provider Network PGs (PCMs) 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 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 90 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 PG 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 PG amount of $10,000 per day for every day the standard is not until the standard is met. ($300,000 maximum) If the 120 calendar day standard is not by 100 calendar days prior to SHCD the penalty is increased to $50,000 a day for every day the standard is not met. ($500,000 maximum) If the 90 day standard is not met, the penalty increases to $100,000 for every day the standard is met. ($9,000,000 maximum) Total potential penalty= $9,800,000.

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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). 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 when the Specialty Providers load standard is not met, a PG 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 penalty 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 standard is applied, the penalty increases to $5,000 per day for every day the standard is not met. ($300,000) Total potential penalty=$510,000.

H.5.4.2.2. The Government reserves the right to reassess the Contractor’s performance until the standards are achieved. The PG 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). 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 PG shall be applied as follows:

10,000 per day for every day the standard is not until the standard is met.($300,000 maximum) If the 90 day standard is not met, the penalty increases to $100,000 for every day the standard is not met. ($9,000,000 maximum) Total potential penalty$9,300,000. The Government reserves the right to reassess the Contractor’s performance until the standards are achieved. The PG 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.

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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).

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.

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 PG 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 PG amount of $3,000 a day for every day the standard is not met until standard is met. If the 120 calendar day standard is not met by the time the 90 calendar standard is applied the penalty 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 penalty increases to $5,000 a day for every day the standard is not met. The Government reserves the right to reassess the Contractor’s performance until the standards are achieved. The PG 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.

Independent Application of PCM and BH Providers/Healthcare Facilities PG: The three standards under Section H.4.4.1 and H.4.4.2 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 again subject to withhold if it is not completed within 90 calendar days prior to the SHCD.

H.5.5. Enrollment PG:

H.5.5.1. Standard: 60 calendar days prior to the SHCD, the Contractor’s enrollment system shall be fully operational (i.e., 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.

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H.5.5.2. This performance guarantee will be evaluated during the PRAV process. Beginning on the 59th day prior to the SHCD, the Government will assess a PG 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 55 calendar days prior to the SHCD, a PG 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 (59 through 56 calendar days prior to the SHCD).

H.5.6. Customer Service PG:

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 90% 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 programs and policies).

H.5.6.2. For each occurrence when the Call Center response accuracy standard of 90% is not met during the PRAV process, a PG shall be applied as follows: For each occurrence when the Call Center response accuracy standard of 90% is not met during the PRAV process, a PG shall be applied as follows .25% of the annual administrative fee paid to the Contractor.

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 to 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 90% accuracy standard is achieved. The PG will continue to apply during any Government reassessment of the Contractor’s Call Center response accuracy H.4.6.5.

H.5.7. Referral Management PG:

H.5.7.1. RESERVED

H.5.7.2. This performance guarantee will be evaluated 120 days after start of healthcare delivery.

Standard: The Contractor shall demonstrate that its referral management system can process 90% of referrals within 2 business days and 100% within 3 business days with a 95% accuracy rate.

H.5.7.3. For each occurrence when referral timeliness or accuracy standard is not met, a PG shall be applied as follows.5% of the annual administrative fee paid to the Contractor for failure to meet either the timeliness or accuracy standard.

H.5.7.4. The Government intends to conduct an assessment of up to 5,000 referrals 120 days after start of health care delivery to assess the Contractor’s referral management system for timeliness and accuracy. The Government reserves the right to reassess the Contractor’s

HT940220R0005 Page H12 of H35 performance until the timeliness and accuracy standards are achieved. The PG will continue to apply during any Government reassessment of the Contractor’s referral management system timeliness and accuracy.

H.5.7.5. Independent Application of Referral Management PG: A PG assessment will be applied independently to each referral that fails to meet the minimum performance standard for timeliness or accuracy. The standards under Section H.4.7.1 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 performance withhold because the 90% timeliness standard/2 working business days was not met, is again subject to withhold if it fails to meet the 100% timeliness standard/3 working business days or the 95% accuracy rate.

H.5.8. Claims Processing PG:

H.5.8.1. This performance guarantee shall be evaluated 120 days after go-live. Standard: The Contractor shall demonstrate that its claims processing system can receive and apply referrals/authorizations information received from MTFs to claims with at least 98% accuracy.

H.5.8.2. For each occurrence when the referral/authorization accuracy standard of 98% for claims processing purposes is not met during the PRAV process, a PG shall be applied as follows:

Tier Standard Penalty Tier 1 75%-97% $500,000 Tier 2 51%-74% $750,000 Tier 3 Below 50% $1,000,000

H.5.8.3. The Government intends to conduct an assessment of up to 1,000 referrals/authorizations 120 days after start of health care delivery to assess the Contractor’s claims processing system for referral/authorization accuracy. The Government reserves the right to reassess the Contractor’s performance until the accuracy standard is achieved. The PG will continue to apply during any Government reassessment of the accuracy of the Contractor’s claims processing system regarding referrals/authorizations.

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. 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 to proven

HT940220R0005 Page H13 of H35 as required at no change in contract price or underwriting fixed fee. Changes to the requirements caused by changes in the statutory definitions of the benefit or new benefits added by statute will be implemented under the Changes clause.

H.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 be responsible for routinely reviewing the hierarchy of reliable evidence, as defined in 32 C.F.R. 199.2.

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 CO, in writing, of the nature of the actual or potential performance conflict. The Contractor shall submit a plan of action to the CO 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 other Contractor or the CO, 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) management; (5) referral management; (6) claims processing; and (7) medical management.

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 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. Results shall be briefed 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. A revised IMP/IMS will be submitted 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 chooses to provide an onsite briefing, the Contractor shall provide toll-free teleconference support to allow participation by all Government transition team members regardless of their location.

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H.9.3. If the Government determines that corrective actions are required (based on any PRV/PRAV activity, contract deliverable, or briefing), the CO will notify the Contractor in writing of the performance readiness issues to be resolved prior to the SHCD. Corrective actions that must be taken by the Contractor to correct performance readiness issues and reduce risk, resulting from Contractor actions, are the responsibility of the Contractor.

H.9.4. If the Government determines that corrective actions are required (based on any PRV/PRAV activity, contract deliverable, or briefing), the CO will notify the Contractor in writing of the performance readiness issues to be resolved prior to the SHCD. Corrective actions that must be taken by the Contractor to correct performance readiness issues and reduce risk, resulting from Contractor actions, are the responsibility of the Contractor.

H.X. Alternative Payment Models

DHA will utilize the 2017 Health Care Payment Learning & Action Network (HCPLAN) framework for defining acceptable Alternative Payment Models (APMs):

DHA will utilize the 2017 Health Care Payment Learning & Action Network (HCPLAN) framework for defining acceptable Alternative Payment Models (APMs):

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Standard: % of network health care payments made under alternative payment models

Requirements as aligned with 2017

HCPLAN

framework.

Categories 3N and 4N excluded.

Acceptable Quality Level

(AQL)

Inspection – Contract Data Requirements List (CDRL)

Incentive

2023 (Base Year)

25% Categories 2A- C, 3A-B, or 4A- C, any mix.

15% CDRL + if exceed the standard, - if below AQL

2025 OP 2 50% Categories 3A- B and 4A-C, any mix.

40% CDRL + if exceed the standard, - if below AQL

2028 OP 5 50% Categories 3B and 4A-C, with a minimum of 5% in categories 4A- C.

45% CDRL + if exceed the standard, - if below AQL

2030 OP 8 75% Categories 3B and 4A-C, with a minimum of 10% in categories 4A- C.

50% CDRL + if exceed the standard, - if below AQL

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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.10.1.2. The Government will use a contracted, independent external claims review service as stated in Section C.2.7.12.2 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.2.7.12.2 of this contract.

H.10.9.3. 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).

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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.

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 for each non-denied claim will be a requirement for documentation for both the Quarterly Claims Processing Accuracy Review, and the Annual Underwritten Unallowable Cost Compliance Review. Error rates will 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.

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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.

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). Claims for each type of review will be sampled as follows:

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QUARTERLY QUARTERLY QUARTERLY

CLAIMS PAYMENT

ACCURACY

DENIED CLAIM

COMPLIANCE

OCCURRENCE ERROR

Sampling Methodology: Sampling Methodology: Sampling Methodology:

TED records will be stratified by paid amount and selected via random sampling from the following:

TED records will be stratified by billed amount and selected via random sampling from the following:

TED records will be selected via random sampling from the following:

‐Non denied

‐Net records

‐UNDERWRITTEN &

NON‐ UNDERWRITTEN

CLAIMS

‐Records greater than low-dollar threshold (at discretion of Government, i.e., $100)

− 100% review of records above high-dollar threshold (at discretion of Government, i.e.

$200K)

‐Denied records

‐UNDERWRITTEN &

NON-

UNDERWRITTEN

CLAIMS

‐Records greater than low-dollar threshold (at discretion of Government, i.e., $100)

‐100% review of records above high-dollar threshold (at discretion of Government, i.e. $200K)

‐Non denied

‐Net records

‐UNDERWRITTEN &

NON‐ UNDERWRITTEN

CLAIMS

‐Up to 500 TED records

‐Includes both non-denied and denied claims

Periodicity: Periodicity: Periodicity:

Quarterly Quarterly, or at the discretion of the Government Quarterly, or at the discretion of the Government

Sample at time chosen by Government

Sample at time chosen by Government

Sample at time chosen by Government

H.10.2.5. Required Contractor Documentation: The Contractor shall forward all documentation required by TOM, Chapter 3, Section 5 to the TCRS Contractor within 45 calendar days of receipt of the letter transmitting the ICN listing for the quarterly period. Document and data requirements will be compliant with the MOU between the Contractor and the TCRS Contractor as required by the contract.

H.10.2.6. Payment Errors: Payment errors will be determined in accordance with TOM, Chapter 3, Section 5. Error Codes are listed in TOM, Chapter 3, Section 5.

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H.10.2.7. Compliance Review Rebuttal Procedures: Contractor rebuttals of initial payment error findings must be submitted to the DHA or designated compliance review Contractor within 30 calendar days after the date of the DHA transmittal letter. Additional guidance on rebuttals is found in TOM, Chapter 3, Section 5.

H.10.2.8. Results. The Government will provide the results of the Quarterly Claims Processing and Payment Accuracy Compliance Reviews and TEDS Occurrence Reviews to the Contractor via Contracting Officer (CO) letter at the end of the rebuttal process.

H.10.3. Annual Underwritten Unallowable Healthcare Cost Compliance Review (Reference FAR Clause 52.216-7, Allowable Cost and Payment).

H.10.3.1. The Government will conduct an annual payment accuracy review of healthcare claims. The purpose of this review will be to determine unallowable costs charged to the Government. After the end of each Option Period, the Government will draw a sample of claims from the TEDS database for that Option Period. The listing of TEDS Internal Control Numbers (ICN) will be forwarded to the Contractor.

H.10.3.1.1. The Contractor shall forward the claims documentation to the Government TCRS Contractor. Upon completion of the review the error rate for the sample will be determined. The error rate will be extrapolated across the universe to determine a total unallowable cost submitted to the Government.

H.10.3.1.2. The Contractor shall reimburse the Government for this amount either by direct payment/check, offset against future invoice payments, or claims adjustment offsets. The means of reimbursement will be at the discretion of the Government.

H.10.3.2. Sampling Methodology: The Government will draw a sample of claims as stated in TOM, Chapter 3, Section 5.

H.10.3.2.1. Claims will be sampled as follows:

ANNUAL UNDERWRITTEN UNALLOWABLE HEALTHCARE COST

COMPLIANCE REVIEW

Sampling Methodology:

TED records will be stratified by paid amount and selected via random sampling from the following:

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‐Non‐denied

‐Net records

‐UNDERWRITTEN CLAIMS ONLY

‐Up to 10,000 claims in sample

‐Government paid greater than low-dollar threshold (at discretion of Government i.e., $100)

-100% review of records above high-dollar threshold (at discretion of Government, i.e.

$200K)

-Samples drawn from 1st cycle in the Option period, through last cycle of Option Period

Periodicity: Annually

H.10.3.2.2. The Government will draw samples at the end of the second month following the end of each contract option period. The Government will send the ICN listing to the Contractor.

H.10.3.3. The Government will, at the time the sample listing of ICNs is provided to the Contractor, provide the Contractor with a complete listing of TED records in the universe for the Option Period being reviewed.

H.10.3.3.1. The Contractor shall validate that the universe of claims matches the Contractor’s Underwritten universe of claims.

H.10.3.4. Required Contractor Documentation. The Contractor shall, upon receipt of the claims sample from the Government, forward all documentation required by TOM, Chapter 3, Section 5 to the TCRS Contractor within 45 calendar days of receipt of the letter transmitting the ICN listing for the quarterly period. Document and data requirements will be compliant with the MOU between the Contractor and the TCRS Contractor as required by C.2.7.12.2 of this contract.

H.10.3.5. Payment Errors: Payment errors will be determined in accordance with TOM, Chapter 3, Section 5. Error Codes are listed in TOM, Chapter 3, Section 5.

H.10.3.6. Compliance Review Rebuttal Procedures: The Contractor shall submit to DHA or designated Contractor rebuttals of initial payment error findings within 30 calendar days after the date of the DHA transmittal letter. Additional guidance on rebuttals is found in TOM, Chapter 3, Section 5.

H.10.3.7.