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HomeMy WebLinkAboutC15-157 Kroger Prescription Plans, Inc. roger _...41'„ ,, , I ‘,. Prescription ,00444 Plans fr 40 ., SERVICE AGREEMENT Eagle County Government Eagle County Government 1 P a g e • I PRESCRIPTION PLAN SERVICE AGREEMENT THIS SERVICE AGREEMENT (hereinafter referred to as the"AGREEMENT")is ent red into the 1st day of January, 2015,between Kroger Prescription Plans,Inc., Joe ted at 1014 Vine Street, 3"d Floor, Cincinnati, OH 45202,hereinafter referred to as " P,"and Eagle County Government located at 500 Broadway, Eagle, CO 81631, hereinafter referred to as "Plan". WHEREAS,KPP is a corporation organized under the laws of the State of Ohio which offers comprehensive Pharmacy Benefit Management("PBM")benefits to eligible individuals ("Eligible Members"), and WHEREAS, KPP has contracted with retail, and specialty pharmacies for the purpose of providing prescription services to Eligible Members of Plan, and WHEREAS,the Plan desires hereby to engage KPP to perform Pharmacy Benefit Management ("PBM") services relating to prescription claim processing, eligibility verification, pricing, managing and administering prescription drug programs, compliance and disease management programs, certain other PBM services, and reporting required by the Plan, and WHEREAS, KPP agrees to perform such matters, subject to the terms and conditions hereof: NOW THEREFORE, in consideration of the mutual promises and agreement herein contained,the Plan and KPP hereby agree as follows: I. DEFINITIONS 1.1 Average Wholesale Price The term "Average Wholesale Price" shall mean the average wholesale price of a prescription drug or medication dispensed as set forth in the current price list in recognized sources such as Medi-Span, including its supplements, or other nationally recognized pricing sources as determined by KPP. The applicable Average Wholesale Price ("AWP") for prescriptions dispensed at retail and mail services pharmacies shall be based on the actual 11 digit National Drug Code (NDC) from which it was dispensed. The Average Wholesale Price of a prescription drug (a) first available on the market before September 26, 2009 shall be, either (i) the product of the wholesale acquisition price (WAC) of a prescription drug as set forth in the Pricing Source on the date dispensed times the mark-up factor over WAC that was established by the Pricing Source to calculate the average wholesale price of Eagle County Government 2 1 P a g e try, such drug on September 25,2009, or (ii) the product of the manufacturer direct price (DP) of a prescription drug as set forth in the Pricing Source on the date dispensed times the mark-up factor over DP that was established by the Pricing Source to calculate the average wholesale price of such drug on September 25,2009,and (b) for products first available on the market on or after September 26, 2009, the average wholesale price of a prescription drug as set forth by the Pricing Source on the date dispensed. In the event of any material change in the method used to determine AWP by the applicable Pricing Source or other sources, the parties agree to renegotiate the AWP discount rates for Prescription Plan Services provided under this Agreement in an equitable manner. 1.2 Benefit Plan The term "Benefit Plan" shall mean the Plan's evidence of coverage ("EOC") summary including claims processing parameters and other information specifying healthcare coverage for Eligible Members, as those parameters currently exist or may be amended in the future. The Plan will provide KPP with certain information relating to such Benefit Plans ("Benefit Plan Information") including, but not limited to, the names of the Eligible Members and their Dependents entitled to Prescription Drug Services, Eligible Members' Copayments, maximum benefit amounts, deductible amounts, pre-existing drug exclusions, and other parameters of the Eligible Members' Benefit Plan as KPP may reasonably request from time-to-time. 1.3 Brand Drug The term "Brand Drug" shall mean a drug that has a trade name, that is patent protected, and can be produced and sold only by the company holding the patent. 1.4 Compound Drug The term "Compound Drug" shall mean a customized medication derived from two or more chemical compounds, devices, or powders, one of which is a federally legend drug. 1.5 Copayment The term "Copayment" shall mean such amounts (copayment, deductible, coinsurance) as are required to be collected by Participating Pharmacies from Eligible Members,pursuant to the Benefit Plan Information provided by the Plan. 1.6 Custom Network The term "Custom Network" shall mean any network designed and contracted to fit the specific needs of the Plan. 1.7 Dependents Eagle County Government 3 I P a g e The term p "Dependents" shall mean the dependents of each Eligible Member who are entitled to Prescription Drug Services through the Plan as identified in the Benefit Plan Information prepared and maintained by the Plan and delivered to KPP. 1.8 Effective Date The term "Effective Date" shall mean the date upon which this Agreement shall be effective. The Effective Date for this Agreement is the 1st day of January, 2015 or, the first day of the month post January 1, 2015 in which the contract is ratified, whichever is later. 1.9 Eligible Members "Eligible Members" shall mean those individuals who are entitled to Prescription Drug Services through the Plan as identified in the Eligible Member List prepared and maintained by the Plan, and delivered to KPP. 1.10 Eligible Member List The term`Eligible Member List"shall have the meaning set forth in Section 2.1. 1.1 ERISA The term"ERISA"shall mean the Employee Retirement Income Security Act of 1974,as amended. 1.12 Formulary The term "Formulary" shall mean the list of FDA approved prescription drugs and/or supplies that are recommended by KPP to the Plan for routine use and which will be dispensed through Participating Pharmacies to Eligible Members. 1.13 Generic Drug The term "Generic Drug" shall mean drugs that are off-patent, multi-source and single source drugs. Multi-source generic drugs are those drugs available from multiple manufacturers or those drugs available only from one manufacturer provided they had been available from multiple manufacturers in the past. Single- source generic drugs are those drugs available from one manufacturer only and that have never been available from another manufacturer. 1.14 HIPAA The term HIPAA shall mean the Health Insurance Portability and Accountability Act of 1996, Subtitle F—Administrative Simplification. 1.5 Identification Cards The term "Identification Cards" ("ID Cards") shall mean printed identification cards containing specific information about the prescription drug benefits to which the Eligible Members are entitled. KPP shall provide Identification Cards to Eligible Members. Family members will be listed on the cards at no additional cost to the Plan. Eagle County Government 4 1 P a g e 1.16 MAC The term "MAC" shall mean the then current maximum allowable cost of certain prescription products that will be reimbursed at a generic product level. 1.17 Mail Service Pharmacy The term"Mail Service Pharmacy" shall mean Postal Prescription Services (PPS) and the services of which are described in Exhibit A. 1.18 Participating Pharmacies The term "Participating Pharmacies" shall mean those organizations that contract with KPP to provide Prescription Drug Services for Eligible Members of the Plan, and shall include,but shall not be limited to, walk-ins, and specialty pharmacies. 1.19 Pharmaceutical Manufacturer The term "Pharmaceutical Manufacturer" shall mean a pharmaceutical company which has entered into an agreement with KPP to offer rebates and/or discounts for drugs and supplies. 1.20 Pharmacy Benefit Management("PBM") Services The terra "Pharmacy Benefit Management Services" shall mean KPP's Claims Processing Services, Pharmacy Network Management, rebate administration, reporting, and formulary and clinical support. These services shall be more specifically described in Exhibit A. 1.21 Pharmacy Network Management The term "Pharmacy Network Management" shall mean KPP's responsibility for contract reimbursement negotiations, as well as provider relations with Participating Pharmacies. Reimbursement negotiations shall include: i) payment terms; ii) method of payment; iii) timeliness of payment; and iv) access fees, as well as any other issues related to payment to Participating Pharmacies. Provider relations shall include: i) store information updates; ii) credentialing; iii) contract compliance; iv) Eligible Member service issues; v) auditing of performance as well as any other issues related to the relationship with Participating Pharmacies. 1.22 Prescription Drug Services The term "Prescription Drug Services" shall mean those prescription drug services or supplies provided as a covered benefit to Eligible Members as set forth in the Benefit Plan. 1.23 Processed.Claims or Claim Fauns The terms "Processed Claims," "Claims," or"Claim Forms" shall mean all claims transmitted to KPP by Participating Pharmacies or Eligible Members as a result of dispensing Prescription Drug Services to Eligible Members. 1.24 Rebate The term "Rebate" shall mean any and all compensation that KPP receives from a Eagle County Government 5 I P a g e Pharmaceutical Manufacturer, attributable to the purchase or utilization of Covered Drugs by an eligible participant under this Agreement, including, but not limited to, discounts, credits, rebates, regardless of how categorized; fees, market share incentives, commissions, and administrative management fees. 1.25 Specialty Products The term Specialty Products shall mean those prescription drug products provided in a separate list to the Plan. Any additional drugs added to the list must be made in good faith and be consistent with the industry prevailing characterization of the drug as a specialty drug in the marketplace by other reputable sources. Characteristics of specialty products include unique requirements for handling, shipping and storage, unique patient compliance and/or safety monitoring, and potential high cost products. 1.26 Subsidy Reports The term"Subsidy Reports" shall mean a monthly eligibility file and cost data extract representing gross covered retiree plan-related prescription drug costs for required Centers for Medicare and Medicaid("CMS")reporting for payment of the subsidy, in such a format and contract as required under CMS rules. II. DUTIES TO BE PERFORMED BY THE PLAN 2.1 Eligible Member List. The Plan or a designee shall provide to KPP a list of Eligible Members and their Dependents (the "Eligible Members List") and KPP agrees to provide mutually agreed upon refreshes and updates. The Plan shall be solely responsible for ensuring the accuracy of its Eligible Members List and shall be obligated to pay KPP for Claims accepted by KPP that are submitted by or on behalf of persons listed on any Eligible Members List. The Plan bears the risk of all fraudulent Claims submitted by Eligible Members or by unauthorized persons using an Eligible Member's ID Card or identification number for which the Plan knows or should have known were fraudulent. The Eligible Members List shall contain mutually agreed upon minimum information as required by KPP in the prescribed format. Subject to Section VI of this Agreement, KPP will be financially responsible for unauthorized paid claims in the event of KPP's negligence. 2.2 Benefit Plan Information. The Plan will deliver to KPP detailed Benefit Plan Information for each Eligible Member group. Such information shall contain all of the elements required by KPP (as set forth in Section 2.2) so that KPP may verify and price the Claims submitted by Participating Pharmacies, and to prepare the various reports specified by the Plan. In addition, the Plan shall provide any Benefit Plan Information changes that would require systems modifications to KPP at least thirty (30) days before the date such changes shall become effective (the "change date"). Failure to provide Benefit Plan Information changes in the in this Section 2.2 may result in postponement of the time frame described t S Y p P proposed change date. The Plan shall also provide to KPP on a timely basis any Eagle County Government Wage subsequent changes to applicable Benefit Plan Information related to the Prescription Drug Services administered by KPP under this Agreement. 2.3 Provision of Eligibility Information. KPP will provide Eligible Members List to the Participating Pharmacies; however, in providing this information, KPP will rely on the Eligible Members List as provided by the Plan or its designee. KPP will not pay any Claims for persons not listed on the Eligible Members List. The Plan shall indemnify KPP from any damages arising from inaccuracies in the Eligible Members List. KPP shall indemnify and hold harmless the Plan from any costs or damages arising from KPP's use of and/or reliance on Eligible Member information not provided by the Plan or its designee. The Plan accepts no responsibility for Eligible Member information not provided by the Plan or its designee. 2.4 Review and Notification Requirements. The Plan will review all reports, statements, and invoices provided by KPP and shall notify KPP in writing of any errors or objections within one hundred twenty (120) days of receipt. Specifically, this shall also apply to all service requests, benefit change request forms, and pharmacy operations change requests. Until the Plan notifies KPP in writing of any errors or objections, KPP will be entitled to rely on the information contained in the reports, statements, and invoices. If the Plan does not notify KPP in writing of any errors or objections within the one hundred twenty (120) day period, the information contained therein will be deemed accurate, complete, and acceptable to the Plan, and thereafter KPP shall have no liability related thereto. III. DUTIES TO BE PERFORMED BY KPP 3.1 Provision of Services to the Plan. KPP shall provide to the Plan the services listed in Exhibit A. These services shall be provided at the agreed upon rates listed in Exhibit A. KPP shall perform the Services in a skillful, professional and competent manner and in accordance with the standard of care, skill and diligence applicable to consultants performing similar services. Consultant represents and warrants that it has the expertise and personnel necessary to properly perform the Services and covenants that its professional personnel are duly licensed to perform the Services within Colorado. 3.2 Audit. The Plan shall have the right to audit the books and records, pursuant to Section 5.3 herein. IV. PAYMENT DUE KPP 4.1 Payments a. Compensation to KPP. The Plan will reimburse KPP in accordance with Exhibits of this Agreement. The Plan agrees to pay all valid invoices for administrative fees submitted by KPP within ten(10) days of receipt. Eagle County Government 7 I P a g e Alt b. Billing and Funding. KPP shall invoice the Plan as set forth herein. All payments by the Plan shall be made via electronic fund transfer, Automated Clearing House ("ACH") debit, or other mutually agreeable method, within ten j (10) calendar days after the Plan receives an invoice from KPP. KPP shall retain cash management responsibilities over the Claims Payments to help ensure prompt payment to Participating Pharmacies. Notwithstanding the provisions above, in the event that KPP elects to render Claims Payments prior to its receipt of such funds from the Plan, such election shall not constitute a waiver of KPP's right to suspend performance or of the Plan's obligation to render payment to KPP, either as to that payment or as to any other payment,nor shall such election serve to establish a course of dealing or a course of performance between KPP and the Plan. 4.2 Sale and Use Taxes. The parties hereby agree that the payment of any and all state and local sales taxes (and use taxes, if applicable) attributable to any Prescription Drug Services delivered pursuant to this Agreement shall be the sole and exclusive obligation of the Plan using the business processes and practices established by KPP. 4.3 Notwithstanding anything to the contrary contained in this Agreement, Eagle County Government ("Plan") shall have no obligations under this Agreement after, nor shall any payments be made to consultant in respect of any period after December 31 of any year, without an appropriation therefor by County in accordance with a budget adopted by the Board of County Commissioners in compliance with Article 25, title 30 of the Colorado Revised Statutes, the Local Government Budget Law(C.R.S. 29-1-101 et. seq.) and the TABOR Amendment (Colorado Constitution,Article X, Sec. 20). V. RECORDS 5.1 Maintenance of Records. KPP shall maintain documentation of all Claims processed for six (6) years from the date of payment of the Claim or for such longer period if required by applicable law. Such documentation shall be in a format and media deemed appropriate by KPP. Upon request, the Plan shall be entitled to review and audit all Claims processed by KPP, pursuant to Section 5.3 below. 5.2 Ownership of Information. Subject to the restrictions set forth therein: a. Claims data information provided to KPP by the Plan shall be the property of the Plan. b. The PIan agrees that the aggregate compilations of information contained in any and all databases developed by KPP, and any prior and future Eagle County Government Wage versions thereof, are the property of KPP and protected by copyright, which shall be owned by KPP. c. KPP, its agents, employees, and contractors shall have the right to use, reproduce, and adapt all aggregate compilations of information obtained from the Plan in order to perform its duties under this Agreement or to render services to its clients. Any work, compilation,processes, or inventions developed by KPP or its agents,employees, or contractors shall be owned by KPP or the appropriate party and deemed its confidential information. 5.3 Right to Audit Claims and Business Records. The Plan, or, if permissible under KPP's agreement with its subcontractor, a mutually agreed upon third party, may inspect and audit, as often as reasonable necessary,but at least annually, aspects of the service agreement directly related to Plan, including but not limited to all financial agreements/arrangements and business records that directly relate to the performance between the Plan and KPP. This includes the ability to audit on-site and perform a call monitoring at KPP sites. KPP's business records that directly relate performance of the services provided herein and to the billings made to the Plan for services performed hereunder. KPP may inspect and audit, or cause to be inspected and audited, once annually,the books and records of the Plan directly relating to this Agreement, including the existence and number of Eligible Members. The Plan and KPP shall fully cooperate with each other to conduct any such inspection or audit. Such audits shall be at the auditing party's sole expense, unless the cause for audits is related to KPP's or the Plan's material failure to perform key functions of contracted services, at which point the aggrieved party will bear no costs for the audit services. Such audits shall only be made during normal business hours, following thirty (30) days written notice, without undue interference to the audited party's business activity, and in accordance with reasonable audit practices. An audit of KPP's records shall be conducted at KPP's office where such records are located and shall be limited to transactions over the three (3) year period preceding such audit. If a completed audit reveals a discrepancy in the results and the previous calculations of the audited party, then the auditing party shall deliver written notice setting forth in reasonable detail the basis of such discrepancy. The parties shall use reasonable efforts to resolve the discrepancy within thirty (30) days following delivery of the notice, and unless disputed, such resolution shall be final, binding, and conclusive upon the parties. Upon a final and conclusive determination of a discrepancy revealed by an audit procedure under this Agreement, the party that owes money shall pay such sums to the other party within thirty (30) days of the delivery of the conclusive audit findings. If corrective actions in operating procedures result from the audit, the parties will work in good faith to establish a reasonable time frame for correction. The audit rights shall survive the termination of this Agreement. Audits may be performed Eagle County Government 9 1 P a g e up to two years after termination of this Agreement and the audit period may include up to three prior calendar years. The Plan acknowledges and agrees that any review by the Plan of Pharmaceutical Manufacturer rebate contracts shall be performed by a mutually agreed independent third party auditor for the limited purpose of verifying KPP's compliance with the terms of this Agreement. The Plan further agrees and acknowledges that the third party auditors shall disclose rebate contract information to the Plan in the aggregate only. Upon KPP's request, during and after the term of this Agreement, the Plan shall respond to reasonable information requests from KPP, resulting from audits by manufacturers participating in the Rebate Program, within thirty (30) days of receipt of the information request. Responses to KPP's requests for information related to manufacturer audits shall be at no cost to KPP. Such requests from KPP shall not be considered an "audit" for purposes of this Section. VI. INDEMNIFICATION 6.1 Indemnity by the Plan. The Plan shall indemnify and hold KPP, and its officers, directors, shareholders, employees, successors, other agents and assigns ("KPP Indemnitees"), harmless from and against any claims, liabilities, damages, judgments or other losses (including attorneys' fees) imposed upon or incurred by KPP Indemnitees arising out of or as a result of any negligent act or omission of the Plan, or its officers, directors, employees or other agents in connection with the performance of any of their respective obligations arising under this Agreement, including without limitation, the submission to Participating Pharmacies or Pharmaceutical Manufacturers of inaccurate or false information provided by the Plan, as a result of a negligent act or omission. 6.2 Indemnity by KPP. KPP shall indemnify and hold the Plan, and its officers, directors, shareholders, employees, successors, other agents and assigns ("Plan Indemnitees"), harmless from and against any claims, liabilities, damages, judgments or other losses (including attorneys' fees)imposed upon or incurred by Plan Indemnitees arising out of or as a result of (i) any failure to comply with federal, state and local laws, rules and regulations applicable to the services performed by KPP, or (ii) any negligent acts or omissions of KPP, or its officers, directors, employees or other agents, in connection with the performance of any of their respective obligations under this Agreement. 6.3 Limitation of Liability a. Upon any default or failure by KPP in performing any services or any other obligation hereunder, KPP shall use reasonable commercial efforts to re-perform the services or other obligation for which it is in default, provided that it has received notice of the default or failure from the Plan within thirty (30) days of the date the Plan becomes aware or should reasonably become aware of the default. If KPP fails to re-perform such services or other obligation in accordance Eagle County Government 10 P a g e with the provisions of this Agreement within a commercially reasonable time,the Plan shall be entitled to recover from KPP any damages incurred by the Plan arising from the default or failure by KPP, subject to the provisions of this Section 6.3. b. The Plan agrees that, with the exception to third party claims or violations of law, KPP's maximum liability for any claim of loss or damage arising out of or in connection with this Agreement shall not exceed the greater of: i) the transaction fees paid to KPP during the most recent eighteen (18) months prior to the date of loss or damage for services performed hereunder, or ii) such amount that KPP may recover under any insurance policy maintained by KPP from time to time in respect of claims made against KPP by the Plan or others. The Plan shall give timely written notice to KPP of any alleged loss or damage. The foregoing limitation shall apply regardless of the cause of action or legal theory on. which the claim is based,whether in contract,tort or otherwise VII. DISPUTE RESOLUTION PROCEDURE 7.1 Resolution of Disputes. a. The parties agree that any and all disputes arising out of or relating to,this Agreement shall first be addressed by direct negotiation between the parties. The disputing party shall provide the other party with written notice of the dispute("Notice of Dispute"), containing a detailed description of the matter in controversy. The parties agree to exercise reasonable commercial efforts to resolve the dispute as soon as practicable. In the event that the parties cannot agree on the resolution of the dispute through direct negotiations, but in no event sooner than ten (10)business days following the other party's receipt of the Notice of Dispute (unless otherwise agreed by the parties), either party may submit the matter to final and binding arbitration before the American Arbitration Association in Denver, Colorado. Arbitration proceedings hereby shall be governed by the American Arbitration Association ("AAA") guidelines. b. The arbitrator shall have full authority to decide any matters in controversy or dispute between the parties relating to this Agreement. Any remedies awarded shall be awarded for the purpose of making the injured party whole and shall be limited to actual damages proximately caused by the event giving rise to liability, and shall, where applicable, be limited by the terms of this Agreement. No punitive damages or damages in the nature of a penalty shall be awarded. The cost of any arbitration proceedings shall be borne equally by the parties. Each party shall bear its own costs for the preparation and presentations of its contentions notwithstanding and irrespective of any other provision or rule of law pertaining to the matter to be arbitrated. The arbitrator's decision shall be final and binding upon the parties. The arbitration proceeding provided for herein is a private proceeding. Neither party shall disclose or publicize Eagle County Government 11 1 P a g e the decision of the arbitrator other than as required by law. VIII. CONFIDENTIALITY 8.1 Confidential Information. The term "Confidential Information" means information of a confidential or proprietary nature relating to the subject matter described in this Agreement which is taken from or disclosed by one party (the "Disclosing Party") to the other (the "Receiving Party"). Confidential Information includes, but is not limited to, matters of a technical nature such as trade secrets, methods, compositions, data and know-how, designs, systems, processes, computer programs, files and documentation, similar items or research projects, and any information derived there from; matters of a business nature, such as the terms of this Agreement (including any pricing terms and Pharmaceutical Manufacturer contract terms which must be subject to a protective order), marketing, sales, strategies, proposals, Eligible Member information, all utilization, formulary, and pharmacy and therapeutics programs developed in conjunction with The Plan and lists of actual or potential Eligible Members, Participating Pharmacies and Pharmaceutical Manufacturers as well as any other information that is designated by either party as confidential. 8.2 Treatment of Confidential Information. The Receiving Party agrees: (i)to hold the Disclosing Party's Confidential Information in strict confidence and to take reasonable precautions to protect such Confidential Information(including, without limitation, all precautions Receiving Party employs with respect to its own confidential materials); (ii)not to divulge any such Confidential Information or any information derived there from to any third party unless required in the performance of the Receiving Party's duties under this Agreement; (iii)not to make any use whatsoever at any time of such Confidential Information except for the purpose of this Agreement and will not use it for its own or any third party's benefit; and (iv)not to copy, analyze, transcribe,transmit, decompile, disassemble or reverse engineer any such Confidential Information, and not use such Confidential Information in any patent application. The confidentiality obligations of this Section 9.2 shall not apply to information which, as evidenced in writing: a. is or becomes publicly known by Receiving Party*through no breach of this Agreement; b, is learned by the Receiving Party from a third party entitled to disclose it; c. is rightfully obtained by the Receiving Party prior to this Agreement; The confidential obligations contained in the foregoing clauses (i), (ii), (iii) and (iv) shall be perpetual. Receiving Party may make disclosures required by law or court order provided Receivin g Party provides notice of such disclosure to the p y p Disclosing Party. Eagle County Government 12 ' P a g e 8.3 No Transfer Or Right Or Title. Receiving Party acknowledges that it shall not acquire any rights or title to any Confidential Information merely by virtue of its use or access to such Confidential Information hereunder. Neither the execution of this Agreement nor the furnishing of any Confidential Information hereunder shall be construed as granting, either expressly or by implication, or otherwise, the Receiving Party any license under any invention or patent now or hereafter owned by or controlled by the Disclosing Party. Each party agrees that it may not be adequately compensated for damages arising from a breach or threatened breach of any of the covenants contained in this Article 8 by the other party, and each party shall be entitled to injunctive relief and specific performance in addition to all other remedies. None of the information that may be submitted or exchanged by the parties shall constitute any representation, warranty, assurance, guarantee, or inducement by a party to the other with respect to the infringement of patents, copyrights, trademarks, trade secrets, or any other rights of third persons. 1X. EXCLUSIVITY 9.1 Exclusivity. The Plan agrees that KPP shall be the sole and exclusive agent for the Plan for each of the services described in Exhibit A during the Term of this Agreement,unless agreed to in writing by both parties. X. TERM AND TERMINATION 10.1 Term. This Agreement shall become effective on the Effective Date (as defined in Section 1.8) and shall be for an initial term of three (3) years,with an option for either party to extend the contract for two one-year periods, unless terminated on its contract term anniversary date by either party by certified or registered mail, mailed at least ninety (90) days prior to such date ("Term"). Termination shall have no effect upon the rights and obligations of the parties arising out of any transactions occurring prior to the effective date of such termination, except as described in Section 10.4. KPP will provide a complete renewal package to the Plan no later than 180 days prior to the end of the Initial Term and any renewal term thereafter. 10.2 Termination With Cause. This Agreement may be terminated at anytime by either party based on a material breach of any terms or conditions herein stated provided that thirty (30) days' advance written notice of such material breach shall be given to the other party and such party shall have the opportunity to cure such material breach during such thirty(30) day notice period. 10.3 Termination Due_to Non-Payment. Notwithstanding the termination rights described in Section 10.2, above, in the event the Plan fails to timely wire, or otherwise transmit, to KPP the full undisputed amount of payment and such payment is not received by KPP within the time limits set forth in Section 4.1 above, KPP will notify the Plan of late payment; the Plan will be given 10 days Eagle County Government 13 ' P a g e from the date of notice of late payment to wire the full undisputed amount of payments to KPP. If the Plan fails to respond within that 10 day time period,KPP may terminate this Agreement on any date thereafter; effective on the date notice of such termination is received by the Plan. 10.4 Effect of Termination. If this Agreement is terminated pursuant to this Article 10 (i) all further obligations of the parties under this Agreement shall terminate (but not such party's obligation to make payments arising prior to the termination of this Agreement or any obligation surviving the termination hereof); (ii) all Confidential Information provided by either party shall, except for Confidential Information required by law to be retained by a party, be immediately returned by a Receiving Party(as defined in Section 8.1), or such Receiving Party shall certify to the Disclosing Party that such materials have been destroyed; (iii) neither party shall be relieved of any obligation or liability arising from any prior breach of such party or any provision of this Agreement; (iv) KPP shall supply to the Plan upon request information regarding claims processed under this Agreement; and (v) the parties shall, in all events, remain bound by and continue to be subject to the provisions which by their nature are intended to survive expiration or termination of this Agreement. If The Plan invokes a Termination of this Agreement using the ninety (90) day termination clause as described in Section 10.1, KPP will retain 100% of any outstanding or earned Rebates attributable to the purchase or utilization of Covered Drugs by an eligible participant under this Agreement. XL GENERAL PROVISIONS 11.1 Insurance. KPP shall obtain (to the extent not already possessed) and maintain, with respect to the activities in which it engages pursuant to this Agreement, professional liability (errors and omissions) insurance in amounts reasonable and customary for the nature and scope of business engaged herein, as well as comprehensive liability insurance. In no event shall the amount of such insurance be less than $1,000,000.00 per occurrence and $3,000,000.00 aggregate. KPP shall deliver to the Plan such evidence of insurance satisfactory for the aforementioned purposes. KPP agrees to notify the Plan promptly upon its receipt of any notice canceling, suspending or reducing the coverage limits of its professional liability insurance or comprehensive liability insurance. 11. Regulatory Compliance. The Plan represents and warrants that it is an "employee welfare benefit plan" as defined in the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. §1001 et seq., and Plan's compliance with any laws and regulations applicable to the Plan, including ERISA, shall be the sole responsibility of the Plan. The Plan shall comply and ensure that Plan complies with all such laws and regulations. KPP will obtain and maintain any licenses or regulatory approvals necessary for it to perform its services under this Agreement. Eagle County Government 14 I P a g e The Plan shall not name KPP or represent that KPP is, and KPP shall not be, a Plan Administrator or a named fiduciary of the Plan as those terms are used in ERISA. The Plan shall have complete discretionary, binding and final authority to construe the terms of the Plan, to interpret ambiguous Plan language, to make factual determinations regarding the payment of claims or provision of benefits,to review denied claims and to resolve complaints by Eligible Members. In the event that the Plan, the arrangement established by this Agreement or any payments for claims for Prescription Drug Services or fees to KPP are subjected to any form of governmental or regulatory charges,including any premium taxes, insolvency fund fees, guarantee fund fees, licensing fees or any similar charges, such charges shall be the sole responsibility of the Plan and the Plan shall hold harmless and indemnify KPP from the payment of any such charges 11.3 Successors and Assigns,.Binding Effect. Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by either party hereto (whether by operation of law or otherwise) without the prior written consent of the other party hereto, except that KPP may assign this Agreement to an affiliate or subsidiary without such consent. 11.4 Waiver. Any term or condition of this Agreement may be waived at any time by the party that is entitled to the benefit thereof, but no such waiver shall be effective unless set forth in a written instrument duly executed by or on behalf of the party waiving such term or condition. No waiver by any party of any term or condition of this Agreement, in any one or more instances, shall be deemed to be or construed as a waiver of the same or other term or condition of this Agreement on any future occasion. 11.5 Severability. In the event that any provision of this Agreement shall be determined to be invalid, unlawful, void or unenforceable to any extent, the remainder of this Agreement, and the application of such provision other than those as to which it is determined to be invalid, unlawful, void or unenforceable, shall not be impaired or otherwise affected and shall continue to be valid and enforceable to the fullest extent permitted by law. 11.6 Further Assurances. Each party hereto shall execute and cause to be delivered to each other party hereto such instruments and other documents, and shall take such other actions, as such other party may reasonably request (at or after the date hereof) for the purpose of carrying out or evidencing any of the transactions contemplated by this Agreement. 11.7 Choice of Law. Any and all claims, disputes or controversies related to this Agreement, or breach thereof, shall be litigated in the District Court for Eagle County, Colorado, which shall be the sole and exclusive forum for such litigation. This Agreement shall be construed and interpreted under and shall be governed by the laws of the State of Colorado." Eagle County Government 15 I P a g e it respectively 11.1 Force Majeure. The performance obligations of KPP and/or the Plan hereunder shall be suspended to the extent that all or part of this Agreement cannot be perfouned due to causes which are outside the control of KPP and/or the Plan, and could not be avoided by the exercise of due care, including but not limited to acts of God, acts of a public enemy, acts of a sovereign nation or any state or political subdivision or any department or regulatory agency thereof or entity created thereby, acts of any person engaged in a subversive or terrorist activity or sabotage, fires, floods, earthquakes, explosions, strikes, slow-downs, lockouts or labor stoppage, freight embargoes, or by any enforceable law, regulation or order. The foregoing shall not be considered to be a waiver of any continuing obligations under this Agreement, and as soon as conditions cease, the party affected thereby shall fulfill its obligations as set forth under this Agreement. In order to benefit from the provisions of this Section 11.8, the party claiming force majeure must notify the other reasonably promptly in writing of the force majeure condition. If any event of force majeure, in the reasonable judgment of the parties, is of a severity or duration such that it materially reduces the value of this Agreement, then this Agreement may be terminated without liability or further obligation of either party (except for any obligation expressly intended to survive the termination of this Agreement and except for all amounts that have become or will become due and payable hereunder). 11.9 Entire Agreement; No Third Party Beneficiaries. This Agreement, including the Exhibits: (i)constitutes the entire agreement among the parties with respect to the subject matter hereof and supersedes all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof; and (ii) is intended solely for the benefit of each party hereto and their respective successors or permitted assigns, and it is not the intention of the parties to confer third party beneficiary rights, and this Agreement does not confer any such rights, upon any other third party. 11.10 Use of Name. Neither party shall use the other party's name, trade or service mark, logo, or the Lame of any affiliated company in any advertising or promotional material, presently existing or hereafter established, except in the manner and to the extent permitted by prior written consent of the other party. 11.11 Notice. Any notice required or permitted by this Agreement, unless otherwise specifically provided for in this Agreement, shall be in writing and shall be deemed given: (i) one (1) day following delivery to a nationally reputable overnight courier; (ii) one (1) day following receipt by facsimile during the receiving party's business hours with written confirmation thereof; or (iii) three (3) days after the date it is deposited in the United States mail, postage prepaid, registered or certified mail, or hand delivered addressed as follows: Eagle County Government 16 Wage To KPP: Kroger Prescription Plans 1014 Vine Street, 3rd Floor Cincinnati, OH 45202 Attn: Matthew Feltman General Manager of KPP Phone: 513-762-4860 Toll Free: 1-800-917-4926 E-mail: Matthew.Feltman @,kroger.com To the Plan: Eagle County Government C/O Human Resources 500 Broadway PO Box 850 Eagle, CO 81631-0850 Either party may at any time change its address for notification purposes by mailing a notice stating the change and setting forth the new address. 11.12 Counterparts; Facsimile. This Agreement may be executed in two or more counterparts, each of which will constitute an original signature and all of which shall be considered one and the same agreement and shall become effective when two or more counterparts have been signed by each of the parties and delivered to the other parties, it being understood that all parties need not sign the same counterpart. This Agreement may be executed and delivered by facsimile and upon such delivery the facsimile signature will be deemed to have the same effect as if the original signature had been delivered to the other party. The original signature copy shall be delivered to the other party by express overnight delivery. The failure to deliver the original signature copy and/or the non-receipt of the original signature copy shall have no effect upon the binding and enforceable nature of this Agreement. 11.13 Independent Contractors. The Plan and KPP are independent entities and nothing in this Agreement shall be construed or he deemed to create a relationship of employer and employee or principal and agent or franchiser and franchisee or any relationship, fiduciary or otherwise, other than that of independent parties contracting with each other solely for the purpose of carrying out the provisions of this Agreement. Nothing in this Agreement is intended to be construed, or be deemed to create, any rights or remedies in any third party, including but not limited to an Eligible Member. Nothing in this Agreement shall be construed or deemed to confer upon KPP any responsibility for or control over the terms or validity of the Prescription Drug Services. Eagle County Government 17 I P a g c 11.14 Consent to Amend. This Agreement or any part or section of it may be amended at any time during the Term of this Agreement only by mutual written consent of duly authorized representatives of KPP and the Plan. 11.15 Headings. The headings of Articles, Sections and Exhibits contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. 11.16 Compliance with Laws and Regulations. This Agreement will be in compliance with all pertinent federal and state statutes and regulations. If this Agreement, or any part hereof, is found not to be in compliance with any pertinent federal or state statute or regulation, then the parties shall renegotiate the Agreement or the part that is affected for the sole purpose of correcting the non-compliance. 11.17 Construction. a. For purposes of this Agreement, whenever the context requires: the singular number shall include the plural, and vice versa;the masculine gender shall include the feminine and neuter genders;the feminine gender shall include the masculine and neuter genders; and the neuter gender shall include the masculine and feminine genders. b. The parties hereto agree that any rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not be applied in the construction or interpretation of this Agreement. c. As used in this Agreement,the words "include"and"including,"and variations thereof,shall not be deemed to be terms of limitation,but rather shall be deemed to be followed by the words "without limitation." d. Except as otherwise indicated, all references in this Agreement to "Articles," "Sections"and"Exhibits" are intended to refer to Articles of this Agreement, Sections of this Agreement and Exhibits to this Agreement. 11.18 Remedies Cumulative. The rights and remedies of the parties hereto shall be cumulative(and not alternative). 11.1 HIPAA Compliance. The parties agree to be bound by the terms and conditions of the Business Associate Addendum attached hereto and incorporated herein as Exhibit B. 11.210 Exhibits. All exhibits to this Agreement are attached hereto and incorporated herein by reference. 11.2,1 Prohibitions on Government Contracts. As used in this Section 1.1.21,the term undocumented individual will refer to those individuals from foreign countries not legally within the United States as set Eagle County Government 18 P a g e forth in C.R.S. 8-17.5-101, et. seq. If KPP ("Consultant")has any employees or subcontractors, Consultant shall comply with C.R.S. 8-17.5-101,et. seq., and this Agreement. By execution of this Agreement, Consultant certifies that it does not knowingly employ or contract with an undocumented individual who will perform under this Agreement and that Consultant will participate in the E-verify Program or other Department of Labor and Employment program("Department Program") in order to confirm the eligibility of all employees who are newly hired for employment to perform Services under this Agreement. a. Consultant shall not: i. Knowingly employ or contract with an undocumented individual to perform Services under this Agreement; or ii. Enter into a subcontract that fails to certify to Consultant that the subcontractor shall not knowingly employ or contract with an undocumented individual to perform work under the public contract for services. b. Consultant has confirmed the employment eligibility of all employees who are newly hired for employment to perform Services under this Agreement through participation in the E-Verify Program or Department Program,as administered by the United States Department of Homeland Security. Information on applying for the E-verify program can be found at: ;,,f1,-;;\ ,Ths y otThr, < ?nst:c ; ._. !07kI.' (.i c. Consultant shall not use either the E-verify program or other Department Program procedures to undertake pre-employment screening of job applicants while the public contract for services is being performed. d. If Consultant obtains actual knowledge that a subcontractor performing work under the public contract for services knowingly employs or contracts with an undocumented individual, Consultant shall be required to: i. Notify the subcontractor and County within three (3) days that Consultant has actual knowledge that the subcontractor is employing or contracting with an undocumented individual; and ii. Terminate the subcontract with the subcontractor if within three days of receiving the notice required pursuant to subparagraph (i) of the paragraph (d) the subcontractor does not stop employing or contracting with the undocumented individual; except that Consultant shall not terminate the contract with the subcontractor if during such three (3) days the subcontractor provides information to establish that the subcontractor Eagle County Government 19 I P a g e has not knowingly employed or contracted with an undocumented individual. e. Consultant shall comply with any reasonable request by the Department of Labor and Employment made in the course of an investigation that the department is undertaking pursuant to its authority established in C.R.S. 8-17.5-102(5). f. If Consultant violates these prohibitions, County may terminate the Agreement for breach of contract. If the Agreement is so terminated specifically for breach of this provision of this Agreement, Consultant shall be liable for actual and consequential damages to County as required by law. g. County will notify the Colorado Secretary of State if Consultant violates this provision of this Agreement and County terminates the Agreement for such breach. The provisions of this Agreement shall bind and inure to the benefit of the parties hereto and their heirs, legal representatives, successors and assignees. This Agreement constitutes the entire understanding between the parties hereto. KRbGER PRESCRIPTION PLANS EAGLE COUNTY GOVERNMENT y y By: Print Name: Matthew Feltman Print Name: Print Title: General Manager of KPP Print Title: _ Date: u` Date: Eagle County Government 20 IPage EXHIBIT A I. SERVICES A. Claims Processing Eligibility Management: KPP will process eligibility files received from the Plan or its designee and will refresh and update eligibility files on a mutually agreed upon schedule. Electronic eligibility files will be processed within a monthly average of two business days of receipt. KPP will terminate coverage as detailed during implementation planning; will add coverage for new members joining the plan within 24 hours of receipt of eligibility data; update member information(e.g. address changes)within 48 hours of receipt of eligibility data; notify appropriate party(ies)of eligibility issues within 24 hours of processing of eligibility data. (i) Claims Processing Services. KPP shall provide the claims processing services related to Claims for prescriptions dispensed on or after the Effective Date of this Agreement. KPP agrees to process Claims received from Participating Pharmacies and Eligible Members, determine whether such Claims qualify for reimbursement in accordance with the terms of the Benefit Plan, and determine the payment applicable to them. KPP further agrees to process Claims within National Council for Prescription Drug Programs (NCPDP) adopted by the HIPAA Regulations for Electronic Transactions. KPP shall process Claims within the time frames established by applicable state and federal law and corresponding to the industry standards. Upon termination of this Agreement, KPP shall be solely responsible to process only those Claims which are for prescriptions dispensed before the termination date and which are received by KPP within thirty (30) days of the termination date. (ii) Claims from Participating Pharmacies. The following services to be provided upon receipt of a prescription Claim: Verification that the patient for which the claim was submitted is an Eligible Member and is entitled to Prescription Drug Services; If applicable, verification that the prescriber is an authorized prescriber under the Benefit Plan; and Verification that the product dispensed is a Prescription Drug Service. (iii) Collection of Deductible or Copayment by Participating Pharmacies. Prior to providing to an Eligible Member any of the Prescription Drug Services to which the Eligible Member is entitled under the Benefit Plan, the Participating Pharmacy shall be required to collect from Eligible Member the amount of any Copayment. Additionally, Participating Pharmacies shall not recover from Eligible Members any unpaid balances due Participating Pharmacies. Eagle County Government 21 ( P a g e r (iv): Submission. The Plan acknowledges that KPP shall require the Participating Pharmacies to send to KPP, at the expense of the Participating Pharmacies, Claims via on-]line point-of-sale terminals ("POS"). If such a media is not available at the Participating Pharmacy, then the pharmacy shall provide the completed Claims on the Universal Claim Form ("UCF"), and/or magnetic tapes or diskettes containing claims information. Incorrect Claims will be denied. The Claims form information shall be sent to air address designated by KPP. (v)RxVIEWTM. The Plan shall have access to RxVIEW for the charge listed in Exhibit I. RxVIEW is a web-based user interface to RxCLAIM with limited functionality that is primarily related to eligibility. B. Retail Participating Pharmacy Network. KPP shall provide, maintain, and manage a national network of Participating Pharmacies. For the national network, KPP shall negotiate reimbursement rates, Maximum Allowable Cost for multi-sourced product and corresponding programs according to the needs of the Plan. The Plan acknowledges that KPP shall negotiate with Participating Pharmacies at various reimbursement rates and methodologies throughout the term of the contract. The Plan acknowledges that KPP may retain any differential between the negotiated rates in agreements with network pharmacies and the negotiated rates set forth in Exhibit A herein. KPP management of the networks includes, but is not limited to, auditing and repenting on network functions; ensuring network compliance with all applicable contract terms; reviewing pharmacy licensure; and providing education and ongoing coma unication with pharmacies. KPP agrees that the Plan may, with reasonable justification, require the termination of a specific retail pharmacy for good cause including quality of care issues and loss of appropriate licensure. The Plan further agrees that KPP may, with reasonable justification, terminate a specific retail pharmacy. KPP shall notify the Plan of any terminations material to the Plan in the Participating Pharmacy network. Payments to Participating Phaunacies. KPP agrees to pay to the Participating Pharmacies, on behalf of the Plan, reimbursement as may be agreed upon by Participating Pharmacies and KPP for provisions of Prescription Drug Services to Eligible Members. Payment shall be made within the industry standard after receipt of funds from the Plan for this purpose. C.Rebate Program (i)Participation in Program. Subject to the provisions of this Section, and upon qualifying to participate in the rebate program, the Plan will be eligible to receive rebates from certain Pharmaceutical Manufacturers for prescription drugs dispensed to Eligible Members who are covered by the Plan or by plans that utilize the Plan which meet the following criteria: Eagle County Government 22 ) P a g e The Plan develops, publishes, presents and distributes a drug formulary or other preferred drug list consistent with KPP's recommended drug formulary and/or the Plan's customized formulary,including all subsequent revisions; and The Plan meets the eligibility inclusion criteria of each of the respective Pharmaceutical Manufacturers for the Plan's applicable agreements. KPP will provide the Plan updated formulary document templates in a mutually agreeable format on an annual basis and no later than twenty (20) days prior to the beginning of each calendar year. KPP will provide an electronic version of the formulary at no cost to the Plan. If KPP provides formulary booklets, the Plan agrees to reimburse KPP for the expenses incurred in the production of the formulary booklets. (ii) Full Disclosure. KPP shall provide documentation to the Plan to provide full rebate disclosure and verify all monies billed and recovered. Moreover, should KPP receive any fees or other compensation from manufacturers for services provided under this Agreement, including administrative fees and fees for property provided or certain services rendered to a manufacturer, KPP agrees to disclose and pass through 100 % of such fees to the Plan as dictated in Exhibit A. (iii)Payment of Rebates. Subject to the terms and conditions of this Agreement, on behalf of the Plan, KPP will receive the rebates paid by manufacturers to the Plan. KPP shall pay to the Plan the amount received from pharmaceutical manufacturers for all rebate programs as applied to those eligible Claims, attributable to the Plan utilizing the Plan's Eligible Members' prescriptions. KPP shall direct payment to the Plan every calendar quarter all such monies received from pharmaceutical companies for eligible prescriptions. KPP shall calculate all amounts at the close of the calendar quarter in accordance with its standard rebate calculation and disbursement methods and policies. (iv) Eligible Rebate Data. Drug utilization generated from any program for providing pharmacy discounts in the absence of satisfactory pharmacy coverage underwritten by the Plan shall not be eligible to participate in the rebate program. Drug utilization which has been submitted by any entity other than KPP including, but not limited to the following government entities: Medicaid; Medicare; or other state or federal health care program which receives rebates, discounts, or other forms of price reduction directly or indirectly from pharmaceutical manufacturers, shall not be eligible to participate in this Program. The Plan shall clearly identify to KPP all members whose drug utilization or claims have been otherwise submitted to pharmaceutical manufacturers or whose claims have been or will be filed for reimbursement with government entities, including Medicaid, Medicare, or any state or federal health care program. If the Plan fails to identify such known members, pharmacies or claims and any pharmaceutical manufacturer's audit of its rebate program reveals improperly calculated rebates involving such members or claims, then the Plan shall be solely responsible for the reimbursement of any rebates improperly made or calculated and any corresponding refunds associated with the audit. Eagle County Government 23 P a g e (v) Rebate Limitations. Except where KPP has caused any of the above or been a party to such failure, loss, cost or expenses,the Plan waives,releases, and forever discharges KPP from any claims, demands, losses,attorneys' fees, costs, expenses, or liabilities of any nature,whether known or unknown, arising from(i)a Pharmaceutical Manufacturer's breach of an agreement related to this Agreement; or(ii) a Pharmaceutical Manufacturer's negligence or misconduct. The Plan acknowledges that rebates will not be paid with respect to claims submitted by Medicaid agencies. (vi) Other Pharmaceutical Relationships. Nothing in this Agreement shall preclude KPP from pursuing other, independent sources of revenue from pharmaceutical manufacturers, and engaging in other revenue-producing relationships with pharmaceutical manufacturers. D. Clinical Services. Clinical services will be provided under this Agreement so long as the Plan elects to participate in the KPP clinical and formulary programs. Clinical programs shall include: (i) Concurrent Drug Utilization Review. KPP agrees to provide concurrent on-line drug utilization review to Participating Pharmacies for all claims submitted via on-line POS terminals. This information is intended to assist the pharmacist in identifying drug interactions and other issues that may be indicative of inappropriate drug use. (ii) Prior Authorization. KPP shall, at the Plan's request, perform prior authorization services. Specifically, KPP shall administer rules and conditions established and/or approved by the Plan under which certain drugs or drug classes or categories may be approved as a covered benefit. (iii) Formulary Management. KPP shall provide a recommended drug Formulary or preferred drug list to the Plan. The Plan may, at its discretion, provide an additional clinical review, but without such review agrees to implement, administer, and adhere to the Formulary. (iv) Benefit Plan Administration. KPP shall provide support in pharmacy benefit plan development, set-up and administration on behalf of the Plan. KPP will set up and mai tain plans via plan implementation documents provided by the Plan to KPP. The Pla and KPP shall mutually agree on the format of the implementation documents; how ver, the Plan will have the ultimate responsibility for approving any pharmacy ben fit design. Additionally, the Plan acknowledges that nothing in this Agreement shall be d erred to confer upon KPP the status of named fiduciary as defined in the Employee Retirement Income Security Act of 1974, as amended, or any responsibility for the terms or validity of the Plan. (v) Member Appeals. KPP shall, at the Plan's request, administer first and second level prior authorization appeal services. Specifically, KPP, at the Plan's request, shall administer a member prior authorization appeal process including rules and conditions Eagle County Government 24 1 P a g e established and/or approved by the Plan under which members may formally request an appeal review for prior authorization denials for certain drugs or drug classes or categories. The KPP Appeal Services are defined in Exhibit D: E.Account Management. KPP shall provide trained, experienced account service resources to serve as a liaison between the Plan and KPP for the purpose of facilitating operational activities,resolving issues, and providing consultative support. On an annual basis, an onsite review will occur between KPP and the Plan prior to the Plan's annual benefit planning period. F. Call Center Support KPP shall provide a toll-free call center to the Plan and all Participating Pharmacies during regular hours of business. These hours shall be Monday through Friday, 8:00 am to 7:30 pm, Eastern Time. These hours are subject to change and do not include national holidays. It is agreed, however, that the Plan shall be notified of any material changes to schedule of business hours, KPP shall provide member call center services for the Plan's Eligible Members and Participating Pharmacies. The hours of service shall be seven days per week twenty-four hours a day. G. Ancillary Services. In the event that the Plan requests additional or ancillary services other than those described herein, including consultative services, KPP shall attempt to accommodate the Plan at a mutually agreed upon rate set forth in writing and signed by the parties prior to the performance of the services. II. PRESCRIPTION DRUG SERVICES The Plan will be utilizing the National Network. All rates are quoted in Pre-Settlement AWP, Charges related to Prescription Drug Services provided by all Kroger-owned retail pharmacies as relates to traditional days supply (i.e., '30 days') limits, the lesser of: • Brand: AWP 18.5%+ $1.00 Dispensing Fee or U&C • Generic Net Effective Rate: 78% • Generic Dispensing Fee: $1.00 Eagle County Government 25 I P a g e Charges related to Prescription Drug Services provided by all non-Kroger retail network pharmacies as relates to traditional days supply (i.e., '30 days')limits,the lesser of: • Brand: AWP— 17.5%+$1.35 Dispensing or U&C • Generic Net Effective Rate: 75% ■ Generic Dispensing Fee: $1.35 Charges related to Option90TM Prescription Drug Services provided by all Kroger- owned retail pharmacies,the lesser of: • Brand:AWP—23%+$0 Dispensing Fee or U&C • Generic Net Effective Rate: 78% • Generic Dispensing Fee: $0 Charges related to Retail 90 Prescription Drug Services provided by Eagle Pharmacy ONLY in Eagle, CO-NAIIP: 0603921, the lesser of: (*These rates will be effective February 15,2015). ■ Brand: AWP—20.4%+$0 Dispensing Fee or U&C* • Generic Net Effective Rate: 76%* • Generic Dispensing Fee: $0* Charges related to Pharmacy Services provided by Kroger's mail order service: • Brand: AWP 23%+$0 Dispensing Fee • Generic Net Effective Rate: 78% • Generic Dispensing Fee: $0 Charges related to Pharmacy Services provided by Kroger Specialty Pharmacy service: • Brand& Generic: AWP— 17%+$0 Dispensing Fee III. ADMINISTRATIVE FEES For the compensation provided herein, KPP agrees to provide the following services to the Plan as defined within the Agreement: A. General Services 1. Claims Processing Services including: Eligibility Management; Eligibility Verification; On-line Electronic Claims Processing/Administration; and Direct Member Reimbursement; 2. A National Pharmacy Network Services including: Negotiation of the Network Pharmacy Discount Contracts; Administration of the National Pharmacy Network; Management and Administration of Maximum Allowable Cost(MAC)List; Eagle County Government 26 I P a g e Pharmacy Reimbursement; and Pharmacy Help Desk; 3. Pharmaceutical Manufacturer Rebate Services including: Negotiation Pharmaceutical Manufacturer Rebate contracts; Management and Administration of Pharmaceutical Rebate program; 4. Client and Member Services including; Member Help Desk; Account Management; and Implementation Support; 5. Custom KPP Reporting Package; 6. Access to Clinical Programs; and 7. Account Management For the Services provided herein, The Plan agrees to compensate KPP as follows: (i). GENERAL FEES A. Administrative Services Fee General Services $ 0.00 per paid claim Paper Claims Processing(per adjudicated $2.50 claim) On-line Claims Data Access Included Benefit Plan/group set up Fees Included Member Communication—Printing At Cost Clinical Prior Authorization Service $50.00 per each intervention Administrative over-rides Included RxVIEWTM Included B. Manual Entry KPP Data Entry: Pharmacy Reimbursement UCF On-Line Txn Fee+$2.50 Other On-Line Txn Fee+$5.00 The Plan Data Entry: On-Line Txn Fee C. Batch Entries Batch (History, Submission, Data Analysis) 12 months included KPP Forniat $0.05 per Txn for additional D. ID Cards Initial ID Card(s) At Cost Eagle County Government 27 I P a g e a5 ID Cards after implementation At Cost E. Rebate Retention The Plan acknowledges that KPP shall retain 40% of Pharmaceutical Manufacturer Rebates as part of the negotiated Plan administrative fees. F. Explanation of Benefits Explanation of Benefits $2.50 per EOB plus postage G. Claims Processing: Miscellaneous Services (i) Connectivity Service Provider Charges VPN (Virtual Private Network) Included User Security for Operational Databases TBD On-Line User IDs Included (ii)Data Retention Operational On-Line 18 Months Included Each Additional Month $0.005 per Txn (iii) Informational Base Extract On-Line 18 Months Included Each Additional Month $0.005 per Txn Off-Line 6 Years Included Restore Archived Data Once per Contract Year Included Each Additional Restore $500 Custom Mutually Agreed Consulting Rate H. 'ostage and Mailings (i)All Pharmacy Reimbursements/Check-runs Current United States Postal Service Rates (ii) Eligible Member-specific mailings Time&Materials Eagle County Government 28 P a g e EXHIBIT B BUSINESS ASSOCIATE ADDENDUM This Business Associate Addendum(the"Addendum")is entered into by and between Kroger Prescription Plans, Inc. ("KPP"or the"Business Associate") and Eagle County Gover Bent(the"Covered Entity") and is effective upon the date this Addendum has been signed by the Covered Entity. This Addendum shall supplement the Services Agreement between the Covered Entity and the Business Associate("Services Agreement"). WHEREAS, the Business Associate and the Covered Entity have entered into a Services Agreement whereby the Business Associate provides certain services to or on behalf of the Covered Entity; WHEREAS, the Business Associate may receive from, or may create,receive,maintain or transmit on behalf of,the Covered Entity,PHI in order to provide services under the Services Agreement; and WHEREAS, to comply with the requirements of the privacy, security, breach notification and enforcement regulations under the Health Insurance Portability and Accountability Act of 1996, as amended (the"HIPAA Rules"),the Covered Entity and the Business Associate desire to enter into this Addendum documenting the permitted uses and disclosures of PHI by the Business Associate and other rights and obligations of each of the parties. NOW THEREFORE,for good and valuable consideration,receipt and sufficiency of which arc hereby acknowledged,the parties, intending to be legally bound, hereby agree as follows: A. Definitions. For the purposes of this Addendum, the following terms shall have the meanings as indicated below which are intended to be consistent with the definitions of such temrs as they are defined in the HIPAA Rules. Terms used, but not otherwise defined in this Addendum, shall have the same meanings as those terms are defined in the HIPAA Rules. 1. Breach. The term Breach shall have the same meaning as the term "breach"in 45 C.F.R.. §164.402, limited to breaches of PHI not rendered unusable,unreadable or indecipherable to unauthorized persons through the use of a technology or methodology specified by the Secretary in guidance issued under Section 13402(h) of Public Law 111-5. 2. Breach Notification Rule. The term Breach Notification Rule shall mean the Standards for Notification in the Case of Breach of Unsecured Protected Health Information at 45 C.F.R. Part 164, Subpart D. Eagle County Government 29 ' P a g e 3. Designated Record Set. The term Designated Record Set shall mean a group of Records maintained by or for the Covered Entity that is: a. Comprised of the medical and prescription Records and/or billing Records about Individuals; b. The enrollment,payment, claims adjudication, and case or medical management record systems maintained by or for a health plan; or c. Used, in whole or in part,by or for the Covered Entity to make decisions about Individuals. 4. Electronic Protected Health Information. The term Electronic Protected Health Information("EPHI")shall mean a subset of PHI that is transmitted or maintained in Electronic Media. 5. Individual. The term Individual shall have the same meaning as the term"individual"in 45 C.F.R. §164.103 and includes a person who qualifies as a personal representative in accordance with 45 C.F.R. §164.502(g). 6. Privacy Rule. The term Privacy Rule shall mean the Standards for Privacy of Individually Identifiable Health Information at 45 C.F.R. Part 160 and Part 164, Subparts A and E. 7. Protected Health Information. The term Protected Health Information or("PHI") shall have the same meaning as the term protected health information in 45 C.F.R. §160.103, limited to the information created,received, maintained, or transmitted by the Business Associate from or on behalf of the Covered Entity pursuant to this Addendum. 8. Record. The term Record shall mean any item, collection, or grouping of information that includes Protected Health Information and is maintained, collected,used or disseminated by or for the Covered Entity. 9. Required by Law. The term Required by Law shall have the same meaning as the term is defined in 45 C.F.R. §164.103. 10. Secretary. The term Secretary shall mean the Secretary of the Department of Health and Human Services or his or her designee. 11. Security Rule. The term"Security Rule" shall mean the Security Standards for the Protection of Electronic Protected Health Information at 45 C.F.R. Parts 160 and 164, Subparts A and C. 12. Unsecured PHI. The term Unsecured PHI shall have the meaning as the term is defined in 45 C.F.R. §164.402. Eagle County Government 30 P a g e B. Status of Parties. The Business Associate is an independent contractor of the Covered Entity. Nothing in this Addendum shall be construed to create a joint venture,partnership,or agency. No employee or agent of the Business Associate shall be deemed to be an employee or agent of the Covered Entity, and no employee or agent of the Covered Entity shall be deemed to be an employee or agent of the Business Associate. C. Business Associate Obligations. The Business Associate covenants and agrees that it shall: 1. Not use or disclose PHI other than as permitted or required under the Services Agreement,this Addendum or as Required by Law. 2. Use appropriate safeguards and comply with the Security Rule with respect to EPHI to prevent the use or disclosure of PHI other than as provided in this Addendum. 3. Mitigate,to the extent practicable, any harmful effect that is known to the Business Associate of a use or disclosure of PHI by the Business Associate in violation of the HIPAA Rules or in violation of the requirements of this Addendum. 4. Report to the Covered Entity any use or disclosure of PHI not provided for by this Addendum of which it becomes aware, including, but not limited to, any Breach and any Security Incident of which it becomes aware within ten(10) days after the Business Associate learns of such use, disclosure or Breach. However, if a delay is requested by a law enforcement official in accordance with 45 C.F.R. §164.412,the Business Associate may delay notifying the Covered Entity for the applicable time period. 5. Enter into a written contract with subcontractors that create, receive,maintain, or transmit PHI on behalf of the Business Associate in accordance with 45 C.F.R. §164.308(b)(2) and §164.502(e)(1)(ii). Such contract shall require that the subcontractor agree to the same restrictions and conditions that apply to the Business Associate with respect to PHI in this Addendum. 6. Provide access to an Individual's PHI in a Designated Record Set pursuant to 45 C.F.R. §164.524 within thirty(30) days of a written request from the Covered Entity or from an Individual to the extent that the Business Associate has a Designated Record Set for an Individual. The Business Associate's response shall be made to the Covered Entity. If the Business Associate is unable to provide the Covered Entity with access within the required time frame,the Business Associate shall notify the Covered Entity so the Covered Entity may request an extension from the Individual. If the request for access relates to PHI that is maintained electronically in a Designated Record Set in the Business Associate's control or custody,the Business Associate shall provide an electronic Eagle County Government 3 1 1 P a g e s.. copy in the form and format specified in the request if it is readily producible in such format. If the electronic copy is not readily producible in such format, the Business Associate shall work with the Covered Entity to meet its electronic access obligations under 45 C.F.R. §164.524. 7. Respond to requests for amendment(s)to an Individual's PHI in a Designated Record Set pursuant to 45 C.F.R. §164.526 within thirty(30)days of a written request from the Covered Entity or the Individual to the extent that the Business Associate has a Designated Record Set for an Individual. The Business Associate's response shall be made to the Covered Entity. If the Business Associate is unable to respond to the amendment request within the required time frame,the Business Associate shall notify the Covered Entity so the Covered Entity may request an extension from the Individual. 8. Make internal practices, books, and records,including policies and procedures relating to the use and disclosure of PHI, available to the Secretary for purposes of determining compliance with the HIPAA Rules. 9. Document certain disclosures of PHI and information related to such disclosures and provide an accounting of such information pursuant to 45 C.F.R. §164.528 within thirty(30) days of a written request from the Covered Entity or the Individual. The Business Associate's response shall be made to the Covered Entity. If the Business Associate is unable to provide an accounting within the required time frame,the Business Associate shall notify the Covered Entity so the Covered Entity may request an extension from the Individual. 10. Use and maintain computer software and hardware in compliance with the security provisions of the Privacy Rule as well as industry standards. 11. Comply with the requirements of the Privacy Rule that apply to the Covered Entity to the extent that the Business Associate agrees to carry out one or more of the Covered Entity's obligations under the Privacy Rule. To the extent that the Business Associate subcontracts one or more of the Covered Entity's obligations under the Privacy Rule, the Business Associate shall ensure in accordance with Section C.5 that the subcontractor agrees to comply with the requirements of the Privacy Rule that apply to the Covered Entity in the performance of these obligations. D. Permitted Uses and Disclosures. The Business Associate agrees that it shall not use or disclose PHI in any mariner, form, or in any means that is contrary to its obligations under the Services Agreement or this Addendum. Notwithstanding the foregoing,the parties agree that the Business Associate may: 1. Use or disclose PHI to perform functions, activities, or services for, or on behalf of,the Covered Entity as specified in the Services Agreement or in this Addendum,provided that such use or disclosure would not violate the Eagle County Government 32 P a g e Privacy Rule if done by the Covered Entity, except for the specific uses and disclosures set forth in sections D.4. and D.5. below. 2. Use or disclose PHI as Required by Law. 3. Use its professional judgment when making decisions about the minimum necessary uses, disclosures and requests of PHI while performing its obligations and activities specified in this Addendum, except that the Business Associate will not be obligated to comply with the minimum necessary limitation if neither the Business Associate nor the Covered Entity is required to limit its use, disclosure, or request to the minimum necessary under the HIPAA Rules. 4. Use PHI when necessary for the proper management and administration of the Business Associate or to carry out the legal responsibilities of the Business Associate. The Business Associate may disclose PIII when necessary for the proper management and administration of the Business Associate or to carry out the legal responsibilities of the Business Associate if the disclosure is Required by Law or the Business Associate obtains reasonable assurances from the person to whom the information is disclosed that(a) it will be held confidentially and used or further disclosed only as Required by Law or for the purpose for which it was disclosed and (b)the person notifies the Business Associate of any instances of which it is aware in which the confidentiality of the PHI has been breached. 5. Use PHI to provide data aggregation services relating to the health care operations of the Covered Entity. E. Covered Entity Obligations. The Covered Entity covenants and agrees that it shall: 1. Provide the Business Associate with a copy of the notice of privacy practices that the Covered Entity produces in accordance with the HIPAA Rules, as well as any changes to that notice. 2. Provide the Business Associate with any changes in, or revocation of,permission by an Individual to use or disclose PHI,to the extent that those changes affect the Business Associate's permitted or required uses and disclosures. 3. Notify the Business Associate of any restriction to the use or disclosure of PHI that the Covered Entity has agreed to or is required to abide by in accordance with the HIPAA Rules, to the extent that such restriction may affect the Business Associate's use or disclosure of PHI. Eagle County Government 33 1 P a g e 4, Not request the Business Associate to use or disclose PHI in any manner that would be impermissible under the Privacy Rule if used or disclosed by the Covered Entity. F. Term and Termination Provisions. 1. Term. This Addendum shall be effective as of the date signed by the Covered Entity and shall terminate upon the first to occur of the following: (a) the termination of the Services Agreement; or(b)the termination of this Addendum pursuant to Section F.2. below. The provisions of Section F.3. shall survive any termination of this Addendum. 2. Termination for Cause. Upon the Covered Entity's knowledge of a material breach by the Business Associate,the Covered Entity shall either: a. Provide an opportunity for the Business Associate to cure the breach and end the violation within a reasonable time designated by the Covered Entity(but not more than thirty(30) days), and terminate this Addendum and the Services Agreement if the Business Associate does not cure the breach or end the violation within the time specified by the Covered Entity; or b. Immediately terminate this Addendum and the Services Agreement if the Business Associate has breached a material term of this Addendum and the Covered Entity has determined that the cure is impossible. 3. Effect of Termination. a. Except as provided in Subsection F.3.b. below,upon termination of this Addendum for any reason,the Business Associate shall return all PHI to the Covered Entity or destroy PHI to the extent the Covered Entity does not request its return. This provision shall apply to PHI that is in the possession of subcontractors or agents of the Business Associate. The Business Associate shall retain no copies of PHI. b. In the event that the Business Associate reasonably determines that returning or destroying the PHI is not feasible,the Business Associate shall provide to the Covered Entity written notification of the conditions that make return or destruction not feasible. Upon the mutual agreement of the Business Associate and the Covered Entity that return or destruction of PHI is not feasible,the Business Associate shall extend the protections of this Addendum to such PHI and limit further uses and disclosures of PHI to those purposes that make the return or destruction not feasible, for so long as the Business Associate maintains the PHI. Eagle County Government 34 ! Page rr G. Miscellaneous. The parties further agree: 1. Regulatory References.A reference in this Addendum to a section in the HIPAA Rules shall have the same meaning as in effect or as amended. 2. Amendment. The parties agree to take such action as is necessary to amend this Addendum from time to time as is necessary for the Covered Entity to comply with the requirements of the HIPAA Rules. This Addendum may only be amended in a writing signed by both parties. 3. Interpretation.Any ambiguity in the Services Agreement or in this Addendum shall be resolved in favor of a meaning that permits the Covered Entity to comply with the HIPAA Rules. 4. Governing Agreement. The terms and conditions of this Addendum shall supersede all conflicting terms and conditions of all prior agreements, including the Services Agreement,with respect to the subject matter set forth herein. 5. SeverabiIity. The invalidity or unenforceability of any provisions of this Addendum shall not affect the validity or enforceability of any other provision of this Addendum, which shall remain in full force and effect. 6. Construction and Interpretation. The section headings contained in this Addendum are for reference purposes only and shall not in any way affect the meaning or interpretation of this Addendum. 7. Entire Agreement. This Addendum constitutes the entire agreement between the parties with respect to its subject matter and constitutes and supersedes all prior agreements,representations and understandings of the parties,written or oral, with regard to this same subject matter. IN WITNESS WHEREOF,the parties hereto have duly executed this Addendum as of the date first written below by the Covered Entity. (signatures on following page) Eagle County Government 35IPage 11■1111■11■■• KROGER PRESCRIPTION PLANS,INC. EAGLE COUNTY GOVERNMENT ("Business Associate") ("Covere, Entity") By:1 By: Ittd.di AlL(466 Print N6me: Matthew Feltman Print Name: Print Title: General Manager of KPP Print Title: (1,0 kt(L. Date: Date: 4/ Lk( IC Eagle County Government 36 P a g e EXHIBIT C KPP APPEAL SERVICES Administrative Appeals If an Eligible Member has a concern regarding an administrative plan benefit edit, the Eligible Member may contact the KPP member services helpdesk. Working with client- approved guidelines, the KPP member service representative can resolve most Eligible Member administrative benefit issues quickly and satisfactorily. If an Eligible Member feels that the issue has not been resolved after speaking with the KPP member services representative or feels the plan guidelines are inappropriate, the Eligible Member is directed to contact their respective Plan's Benefit Services department to discuss their concern with the specific plan benefit edit in question. Medication Prior Authorization (PA)Appeals A member or their physician on the member's behalf may submit a written appeal request for pre-service or post-service PA appeals due to a PA request denial. PA appeal forms are available from KPP for the Eligible Member or their physician to complete and submit to KPP to initiate an appeal review. Written PA appeal requests should be faxed or mailed to the following address: Kroger Prescription Plans,Inc. C/o Catamaran Health Solutions Attn: PA Department 2505 S. Finley Rd., Ste 110 Lombard,IL 60148 1-866-342-0935 (Fax) SUBMISSION TIMELINES FOR ELIGIBLE MEMBER PA APPEALS If an Eligible Member decides to file a PA appeal, they must submit the appeal within one hundred eighty (180) days from the date of the pre-service or post-service PA denial notice. A physician or other authorized representative of the Eligible Member may file an appeal on behalf of an Eligible Member. KPP shall work with the Eligible Member or their authorized representative or physician to resolve the appeal. If the Eligible Member is not satisfied with the determination of the first level appeal, they may file a written request for a second level appeal with KPP within ninety (90) calendar days of receipt of the first level appeal determination letter. FEES First Level Appeal $100 per appeal Second Level Appeal pp _.... .. ...._ _. _ $200-300 per appeal* *The Plan acknowledges that the appeal cost for the second level varies based upon the outside source utilized for the appeal. Eagle County Government 37 I P a g e