AMENDMENT NUMBER 4AMENDMENT NUMBER 4
This Amendment Number 4 is entered into and made effective this the 1St day of January 2022 by and
between CorVel Healthcare Corporation ("CorVel") and City of Clearwater FL ("Customer").
WHEREAS, CorVel and Customer entered into the Managed Care Services Agreement for Managed
Care Services with an effective date of January 1, 2017 as amended ("Services Agreement") pursuant to
which CorVel agreed to provide Customer certain managed care services; and
WHEREAS, CorVel and Customer each desire to amend the Services Agreement to revise the parties'
contractual arrangement; and
NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, the
parties agree to:
• Amend Section 8A ("Term") of the Agreement renewing the Agreement for a three (3) year
Renewal Term effective January 1, 2022 through December 31, 2024.
• Amend Exhibit B ("Fees") to the Agreement replacing the fees as defined hereunder
effective January 1, 2022 through December 31, 2024 as follows:
Case Mana s ement Services
Field Case Management*
Telephonic Case Management
Nurse File Review
$96.00 per hour
$96.00 per hour
$96.00 I er hour
*Plus Current IRS mileage rates
Bill Review Services
Description
Bill Review: Per Bill
Pricing
$7.54
+ Network Solutions includes:
Clinical Review, Implant Analysis, Line Item Bill Review,
Negotiations, PPO Network Access,
Substantive Denials, Technical Evaluation
Minimum Transaction Fee
28% of Savings
$6.03
Check Writing Fee Per Bill
$4.12
State EDI, Scanning/OCR, Initial 1099 Provider Notification
Letter
Included
City of Clearwater Amendment 4 (Renewal, Pricing and Updates) to Managed Care
Services Agreement 12-1-21 FINAL
Pharmac Benefit Mana ' ement
Retail — Brand
Retail — Generic
Mail Order - Brand
Mail Order - Generic
AWP - 8% + $3.00 Dis. ensin: Fee
AWP - 25% + $1.50 Dis. ensin: Fee
AWP - 12% + $1.50 Dis .ensin: Fee
AWP - 35% + $1.50 Dispensin: Fee
• Amend the Agreement adding the following added, revised and or modified
Description of Services: Bill Review Services; ClinicaUTechnical Services; CERiS Services;
Preferred Provider Network Access Services; Pharmacy Benefit Services) attached
hereunder as Exhibit A to this Amendment.
All other terms and conditions of the Services Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, CorVel and Customer have caused this Amendment to be executed by
the persons authorized to act in their respective names.
CITY OF CLEARWATER FL
rank V. Hibbard
V7 By: dei (0"�.
Jon P. Jennings
Mayor City Manager
A proved aro
Attest:
Michael P. no Rosemarie Call
Senior Assistant City Attorney City Clerk
CORVEL IIE,MaicARE CORPORATION
By
t*-OBEt , 9GB4Oirr. .
Brandon O'Brien
Print Naine:
Title:
CFO
Date Signed: 12/2/2021
City of Clearwater Amendment 4 (Renewal, Pricing and Updates) to Managed Care
Services Agreement 12-1-21 FINAL
EXHIBIT A
Bill Audit, Review and Payment Services
Terms and Conditions
1. DESCRIPTION OF SERVICES
(a) CorVel's proprietary bill review program enables an application of the appropriate
Standard Fee Schedules or usual and customary values, includes PPO, Technical and
Clinical Review, and CERiS, applied to provider bills.
2. DEFINITIONS
Bill (per Bill): Each transaction of a bill is considered a separate per bill count. CorVel
is able to logically link transactions across logical sequences, but each is its own bill
transaction.
Clean/Prepared Bill: When the provider charges are deemed to be an accurate
reflection of the services rendered based on the provider's documentation. Network
Solutions savings such as Clinical Review and Technical Evaluation and other review
types can be applied first to the bill for the bill to qualify for the Prepared Bill
status. Once at the prepared bill state Standard Fee Schedule savings can be applied.
Clinical Review: An additional level of review performed by nurses, system, or coding
experts to evaluate appropriateness, relatedness of submitted charges with provided
documentation.
Implant Analysis: Review of implant charges submitted to a proprietary pricing
database and documentation. Implant Analysis results are included as part of Clinical
Review.
Line Item Bill Review (LIBR):
Out of Network Line Item Bill Review:
Original charge data
U&C review by zip code
Fee re -bundling and error removal
Separation of charges by diagnosis/procedure
Facility to facility cost comparison
Individual facility chargemaster analysis and price trending
Fair and Reasonable - Universal Chargemaster: The Universal Chargemaster is a
compilation of individual hospital line item descriptions from over 85% of the nation's
hospitals. It is a virtual thesaurus of hospital billing terms, codes and abbreviations.
Specific, unique line item descriptions are defined by the Universal Chargemaster and
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appropriately compared to the same service or supply for other hospitals in the same
geographical area.
Minimum Transaction Fee (MTF): For each bill transaction if the fees on a bill
transaction instance do not meet the minimum transaction fee amount, the difference
between the fees and the min transaction fee will be automatically added to the fees.
Negotiations: A one time or ongoing agreement with the provider to accept a specific
payment amount.
PPO Network Access: A preferred provider organization (PPO) is a medical care
arrangement in which medical professionals and facilities provide services at a
negotiated/contracted rate. PPO medical and healthcare providers are called preferred
providers.
Provider Sendback: Sendbacks occuring when a bill instance does not have enough
supporting information from the provider to be a Prepared Bill. The bill is sent back to
the provider requesting further information.
Standard Fee Schedule: Savings defined as the amount reduced from the Prepared Bill
status to the jurisdictional state fee schedule amounts when those amounts are expressly
assigned a specific value, not through reference methodologies developed by a third party
or federal agency.
Substantive Denials: Sendbacks occur when a bill instance does not have enough
supporting information from the provider to be a Prepared Bill. The bill is sent back to
the provider requesting further information. If the provider does not provide the
necessary supporting information after 90 days of the sendback status all bill savings will
be considered Substantive Denial Savings and charged accordingly through an automatic
bill instance. If the bill is later submitted through another bill instance with further
information from the provider, another review will occur which may reverse all or part of
the Substantive Denial savings and fees.
Technical Evaluation: Applicable to bills when reimbursement is not fully addressed in
the jurisdictional fee schedule. State regulations may require payment to be made in
accordance with payment methodologies developed by a third party (typically the Centers
for Medicare and Medicaid Services (CMS)), often with exceptions or special exemptions
added by the state.
UCR: "UCR" is defined as :
• Usual — A charge is considered "Usual" if it is the fee that most providers in the area
charge for the same service.
• Customary — A charge is considered "Customary" if it is within the range of fees
that most providers who practice in the area charge.
• Reasonable — A charge is considered "Reasonable" if it is both usual and customary
or if it is justified by the Payor because of complexity. Payor, CorVel or its designees
use a nationally recognized third party database for UCR charges.
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In determining UCR prevailing rates, Payors, CorVel or their designees use either (a)
CorVel's Enhanced Bill Review database or other nationally recognized databases to provide
benchmarks for hospital charges in a hospital Health Care Provider's geographic area and (b)
databases provided by FAIR Health, Inc. or other nationally recognized databases to provide
benchmarks for charges by non -hospital Health Care Providers in the applicable geographic
area. The UCR prevailing rate is the 80th percentile of the relevant database benchmark for
the fees and charges in Provider's geographic area.
2. DELIVERY OF SERVICES
(a) Customer's Obligations
(i) During the term of this Agreement, unless agreed to otherwise by the parties in writing,
Customer shall utilize CorVel exclusively (even as to Customer) for audit, review and
repricing services for Bills related to workers' compensation claims. A breach of the
foregoing obligation shall constitute a material breach under this Agreement. Without
limiting any other remedies available under law, a breach of the foregoing obligation
with respect to PPO (as defined in Schedule 7) Provider Bills will result in immediate
termination of all PPO discounts provided by CorVel.
(b) CorVel's Obligations
(i) CorVel shall provide Bill Review Services described herein to Customer upon receipt
of specific requests from Customer. In the absence of instructions from Customer to
the contrary, which CorVel must approve, Bill Review Services shall be performed as
described herein.
(ii) Bill Review Services shall be completed within a reasonable period of time of CorVel's
receipt by CorVel of all necessary billing information from Customer ("Complete
Billing Information").
(iii) To facilitate timely processing CorVel shall process (A) each Provider Bill within a
reasonable period of time and within industry standards after CorVel's receipt thereof,
and (B) batches of Provider Bills on a daily basis or as volume dictates.
(iv) CorVel shall process PPO Provider reimbursements on behalf of Customer industry
standards from receipt of the corresponding Bill Review Audit analysis from CorVel.
(v) CorVel will be responsible for monitoring, "flagging" and returning to Customer
duplicate copies of a Bill ("Duplicates").
(vi) Any conflicts or complaints from medical providers ("Complaints") concerning Bill
Review Services completed by CorVel initially will be handled directly by CorVel.
CorVel will provide an initial response to a Complaint and will send a written response
to the complainant that summarizes the nature of the Complaint and the steps CorVel
has taken to resolve it. Customer may be asked to interject itself into a Complaint
between CorVel and a medical provider to resolve the Complaint in a manner
acceptable to Customer and as needed by CorVel. Notwithstanding the foregoing,
Customer shall retain full responsibility for payment of all benefits and any other
expenses or services required to be paid or provided under applicable policies or state
and federal workers' compensation laws.
(vii) CorVel agrees to supply Customer in the CorVel's standard format a transmission
reflecting the results of the Bill Review Services provided hereunder.
(c) Savings for the Fee schedule or usual and customary service shall be:
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(i) for states having a Standard Fee Schedule: (A) the medical provider's original bill
amount; less (B) the billed amount resulting from the allowance based on specified
conversion factor(s) multiplied by referenced value(s).
(ii) for states not having a state mandated Fee Schedule: (A) the medical provider's
original bill amount; less (B) the bill amount resulting from UCR.
(d) Scanning Services
(i) CorVel will provide Scanning Services and, when appropriate, Optical Character
Recognition ("OCR") Services. CorVel will timely and within industry standards, scan
all bills and attached medical notes delivered to CorVel necessary for providing Bill
Review services. Subject to applicable law and obtaining any required authorizations,
CorVel also shall provide Scanning Services for additional claim -related
documentation.
(ii) All material scanned by CorVel hereunder shall be accessible to Customer through CareMC.
Clinical and Technical Assessment Services
Terms and Conditions
1. DESCRIPTION OF SERVICES
(a) Clinical and Technical Assessment Services. CorVel provides this service to evaluate state
specific complex rules and verify coding by providers when appropriate and supported by
documentation. This can include clinical review to validate coding is correct for all
applicable Provider bills, Ambulatory Surgical Center bills, and all Hospital bills (inpatient
and outpatient) including:
(i) review and analysis of codes, charges, and billing structure for incorrect coding,
incorrect billing, bundling, and up -coding of procedures which affect Standard Fee
Schedule values;
(ii) review of bills, records, and documentation by a nurse and/or by a coder;
(iii) separation of charges not related to the compensable injury;
(iv) review and apply complex state specific rules;
(v) application of utilization review determinations and clinical edits;
(vi) diagnostic related group validation (i.e., verification that the diagnostic related group
billed is appropriate for the services rendered); and
(vii) cost shifting of revenue and CPT codes.
2. DELIVERY OF SERVICES
(a) CorVel will timely and within industry standards, complete Review Services and return the
reviewed Bills to Customer, with any adjustments to identified overcharges.
(b) Savings for the Review Services shall be:
(i) for states having a state mandated Standard Fee Schedule: (A) the bill amount in the
Fee Schedule; less (B) the bill amount resulting from the nurse review services.
(ii) for states not having a state mandated Standard Fee Schedule: (A) the medical
provider's original bill amount; less (B) the bill amount resulting from the nurse review
services.
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(iii) for states having a state mandated Standard Fee schedule (A) the medical provider's
original bill amount; less (B) the bill amount resulting from technical review services.
(iv) for states not having a state mandated Standard Fee Schedule: (A) the medical
provider's original bill amount; less (B) the bill amount resulting from the technical
review services.
(c) Customer Responsibilities
(i) Customer shall pay bills reviewed by CorVel in a timely manner in accordance with
all state guidelines, and agrees to waive any bill audit and/or other retrospective
reviews regarding all bills for which CorVel has secured a reduction from the original
billed charges.
(ii) If a medical provider submits an appeal, the bill will be reviewed again and, if any adjustment
is necessary, CorVel will provide that information on the Explanation of Review (EOR).
CERiS
(Hospital Bill Itemization Review Services; Negotiation Services; Implant Cost Review Service)
Terms and Conditions
1. DESCRIPTION OF SERVICES
(a) Hospital Line Itemization Review Services. (CERiS) performs its Services on Hospital
Bills (inpatient and outpatient) and consist of procurement of actual bill itemization, (i) a
line -by-line validation and comparison of the itemization description charges actually
billed by a particular hospital to what CMS billing guidelines allow to be separately billed
for in order to disallow inappropriate charges, and then will compare the valid itemization
descriptions to the average itemization description charges utilized by other hospitals
within a pre -designated geographic area, and and (ii) a review of charges that fall outside
of any pre -contracted discounts or fee schedules, and generates payment recommendations
in accordance with the Customer's "Payors Allowable" language. This service does not
itself include negotiation services nor Implant Cost Services.
(b) Negotiation Services. (CERiS) will provide negotiation services with respect to all
Hospital Bills (inpatient and outpatient). CorVel will contact the provider for agreement
of the negotiated rate. A signed agreement regarding such rates will be maintained by
CorVel. CorVel will use its commercially reasonable efforts to enter into an agreement
regarding negotiated rates in accordance with a mutually agreed upon schedule.
(c) Implant Cost Review Service. (CERiS) includes Implant Cost Review services with
respect to the applicability of the Customer's "Payors Allowable" plan or policy language
that specifically addresses implant payments. CorVel will identify and provide the
manufacturers implant cost through its proprietary repository of national implant invoice
data. CorVel then determines the recommended payment in accordance with the
Customer's "Payors Allowable". In the event there is insufficient implant invoice data for
the requested implant, CorVel will notify the Customer and CorVel shall not be responsible
for any costs, fees, damages or penalties for any such inability of CorVel to produce a cost
savings per Customer's request.
2. DELIVERY OF SERVICES
(d) When applicable CorVel will timely within industry standards, complete CERiS Services
and return the reviewed Hospital Bills to Customer, together with a written summary of
any adjustments to identified overcharges.
(e) Savings for the CERiS Services shall be:
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(i) for states having a state mandated Fee Schedule: (A) the bill amount in the Fee
Schedule; less (B) the bill amount resulting from CERiS Services.
(ii) for states not having a state mandated Fee Schedule: (A) the medical provider's
original bill amount; less (B) the bill amount resulting from the CERiS Services.
(f) Customer Responsibilities
(i) Customer shall pay bills reviewed by CorVel in a timely manner in accordance with
all state guidelines, and agrees to waive any bill audit and/or other retrospective
reviews regarding all bills for which CorVel has secured a reduction from the original
billed charges.
(ii) Customer will identify all bills that are not eligible for Enhanced Bill Review Services
due to: (A) compensability; (B) a pre -negotiated rate with Customer or other previously
established discount; (C) services that are "review only" due to litigation or other non-
payment issues; and (D) duplicate bills.
(g) If a medical provider questions the adjustment and/or balance bills the patient, and the
claim payor notifies CorVel of such communication, CorVel will provide documentation
of its findings. If the hospital provides corrective or qualifying information sufficient to
alter our original adjustments, CorVel will revise its report, advise the claim payor of the
new, corrected adjustment. Only in the event of a successful appeal of the reduction of the
bill by the medical provider shall Customer be entitled to receive a credit for the portion of
the fee previously charged for the amount of the adjustment successfully appealed.
Preferred Provider Network Access Services (PPO)
Terms and Conditions
I. DESCRIPTION OF SERVICES
(a) CorVel's preferred provider organization is a network of hospitals, physicians and other
providers ("Participating Providers") that offer services at pre -negotiated Provider rates
("PPO Network"). CorVel also provides state certified preferred provider organization
networks in states that maintain such networks.
II. DELIVERY OF SERVICES
(a) CorVel will provide Customer with access to its PPO Network provided it is the exclusive
preferred provider organization utilized by Customer. CorVel may at any time and in its
sole discretion add and/or terminate any provider to or from the PPO Network.
(b) CorVel will provide Customer with a web -based directory of its PPO Network providers.
(c) Customer agrees that, during the Term of this Agreement Customer will not contract
directly or indirectly with Participating Providers made known to Customer under this
Agreement.
(d) Customer will make reasonable effort to channel all Covered Persons to the Participating
Providers as are allowed under the laws of that service area or state.
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Pharmacy Benefit Program
Terms and Conditions
I. DESCRIPTION OF SERVICES.
(a) CorVel shall be the exclusive provider of a Pharmacy Program inclusive of a PBM and a
Provider Network representing Participating Pharmacy Providers that are obligated upon
and after identification of a participant within CorVel's PBM to:
i. Accept a contracted rate, and
ii. Apply mandated processes and CorVel's Formulary and Concurrent Drug
Utilization Review program at point -of -service before dispensing prescribed
medications.
II. DEFINITIONS.
(a) "AWP" shall mean the Average Wholesale Price for a Brand or Generic Drug Product.
CorVel bases Customer pricing off of the reported AWP value from Medi -Span and the
date of service.
(b) "AWP Discount" shall mean the PBM discounts CorVel applies, per Customer's
negotiated rates, to Covered Brand and Generic Drug Products, Compound Drugs and
Specialty Meds.
(c) "Brand Drug" shall mean a Covered Drug defined as a brand name drug in PBM
proprietary Generic Code Conversion ("GCC") logic.
(d) "Compound Drugs" shall be systematically identified when processing through the PBM
via the Formulary. Drug compounding is often regarded as the process of combining,
mixing, or altering ingredients to create a medication tailored to the needs of an individual
patient. Compounding includes the combining of two or more drugs. Compounded drugs
are not FDA -approved.
(e) "Concurrent Drug Utilization Review" ("DUR") shall mean the algorithm systematically
applied at a Participating Pharmacy before dispensing that considers the Presenting Drug's
safety and efficacy in context with other drugs that have been dispensed. In addition, the
algorithm includes applicable protocols and guidelines based on the Presenting Drug and
specific claim history, such as the time period from the last fill of the same Drug.
(f) "First Fill" shall mean a prescription filled by a Participating Pharmacy for a limited supply
of Covered Drugs for a claim that is not, at the time, eligible. First Fill transactions follow
CorVel's First Fill Formulary. The First Fill Formulary is for the immediate treatment of
injuries, including common exposure drugs/vaccines. The pharmacy is instructed to fill any
formulary prescription written by the treating physician, whether or not the claim is
accepted as a workers' compensation claim. Most claims are ultimately accepted.
(g) "Formulary" shall mean CorVel's Workers' Compensation Standard or state specific
drug/drug class and brand/generic specific triggers systematically applied at a Participating
Pharmacy before dispensing a Presenting Drug that prompts the pharmacy through its
adjudication system to either: dispense the Presenting Drug, convert from brand to generic,
attain approval to dispense,.
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(h) "Generic Drug" shall mean a Covered Drug, whether identified by its chemical,
proprietary, or non-proprietary name, that (i) is accepted by the FDA as therapeutically
equivalent and interchangeable with drugs having an identical amount of the same active
ingredient; and (ii) defined as a generic drug in PBM proprietary Generic Code
Conversion ("GCC") logic. In the adjudication process, CorVel applies Customer's
negotiated Generic Drug discount rate to the AWP value of Covered Generic Drugs.
(i) "GCC" refers to PBM proprietary Generic Code Conversion logic. GCC logic converts
Medi -Span codes to the brand and generic codes used for claims adjudication.
(j) "Good Samaritan (Emergency) Fill" shall mean a limited supply of Covered Drugs that are
outside of the Formulary and typically dispensed outside of normal business hours
(overnight, weekends or holidays) by a Participating Pharmacy without Customer's or
CorVel's approval in order to meet, in the pharmacist's professional judgment, an
immediate or urgent need. Customer is responsible for payment of drug charges processed
through Good Samaritan Fills; CorVel assumes no liability.
(k) "Mail Order Program" or "Home Deliver Program" shall mean the managed program from
which Covered Drugs are dispensed and billed through CorVel's PBM. A pharmacy's
status as a mail order pharmacy does not indicate participation in the CorVel PBM Mail
Order Program. Mail Order participation is limited to designated pharmacies operating
within the strict parameters of CorVel's Mail Order Program.
"Multi Source Brand" shall mean a Covered Drug specified as a brand name drug available
from more than one manufacturer as determined by CorVel primarily using a combination
of data fields provided to CorVel by Medi -Span (or another nationally available reporting
source that may be selected by CorVel). Multi Source Brand Drugs are eligible for
conversions to Generic Drugs at the Participating Pharmacy.
(m) "Multi Source Generic" shall mean a Covered Drug specified as a multi source generic
drug as determined by CorVel primarily using a combination of data fields provided to
CorVel by Medi -Span (or another nationally available reporting source that may by
selected by CorVel). Generic Drugs in their six month exclusivity period or limited supply
drugs may be excluded from Multi Source Generic Drugs.
(n) "PBM" shall mean Pharmacy Benefits Manager. CorVel performs as the PBM on behalf
of its Customers.
(1)
(o) "Presenting Drug" shall mean the drug ordered by the prescriber and presented on a signed
prescription to a Participating Pharmacy and processed through CorVel's PBM.
"Rate application exceptions," per Billing and Payments of Pharmacy Program (below)
sections (d) and (e), apply when either State Fee Schedule AWP Values or Customer's
Negotiated PBM AWP Discount rates are lower than CorVel's Acquisition Price. CorVel's
Acquisition Price reflects CorVel's cost of the Covered Drug plus a processing and
management fee.
(p)
(q)
"Single Source Brand" shall mean a Covered Drug specified as a brand name drug
available from only one manufacturer as determined by CorVel primarily using a
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combination of data fields provided to CorVel by Medi -Span (or another nationally
available reporting source that may by selected by CorVel). Single Source Brand Drugs
are not eligible for conversions to Generic Drugs.
(r) "Single Source Generic" shall mean a Covered Drug as determined by CorVel that may
not have been purchased by pharmacies at standard Multi Source Generic Drug rates
because of limited manufacturers, limited supply or exclusivity rights. In the adjudication
process, Customer's Brand Drug AWP Discount value may be applied to Single Source
Generic Drugs.
(s) "Specialty Medications" shall mean certain pharmaceuticals, biotech or biological drugs,
that are Covered Drugs used in the management of chronic or genetic disease, including
but not limited to, injectable, infused, or oral medications, or products that otherwise
require special handling. In the adjudication process, Customer's Claims Professional's
approval is required, and Customer's Brand Drug AWP Discount value and dispensing fee
may be applied irrespective of the Presenting Drug's GCC (Generic Code Conversion)
status.
III. DELIVERY OF SERVICES.
(a) CorVel shall provide its Pharmacy Program's PBM and Network for the benefit of
Customer.
(b) Eligibility, First Fill, Pharmacy Identification (ID) Cards, and Mail Order/Home Delivery.
Pharmacy ID cards contain the necessary data elements to enable a Participating Pharmacy
provider to electronically process through and transmit claim data to CorVel's PBM. The
electronic transmission that occurs at the point of sale is required for application of
Formulary, Concurrent Drug Utilization Review and contractual pricing.
i. Customer agrees to promptly provide CorVel all information needed to produce
and distribute Pharmacy ID cards to Eligible Claimants. Subject to applicable law,
Customer will instruct Eligible Claimants to use the Pharmacy ID cards at
participating network providers in order to facilitate the Pharmacy Program.
ii. Distribution of Pharmacy ID cards does not guarantee that Pharmacy ID cards will
be appropriately utilized by Eligible Claimants or Participating Pharmacies;
therefore, Customer understands that claims assigned by Pharmacies to third party
billers or paper bills submitted by the Pharmacies are not adjudicated through the
prospective PBM.
iii. CorVel, agrees to produce and distribute Pharmacy ID cards to Eligible Claimants
upon receipt of all necessary Eligible Claimant information from Customer.
CorVel will also send an introduction letter to the Eligible Claimant along with the
Pharmacy ID card.
iv. CorVel will provide access for Eligible Claimants to the PBM Mail Order
Program. CorVel will work with Customer to establish the parameters of the Mail
Order Program and the process which will be utilized to encourage Eligible
Claimant use of the Mail Order Program.
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(c) CorVel's PBM will present a proprietary or state mandated Formulary to Customer. Upon
presentation of identification to a Participating Pharmacy, the Formulary will trigger the
Participating Pharmacy's adjudication system to either:
i. Automatically dispense certain medications, or
Obtain Prior Authorization (PA) approval from claims professional to dispense,
(d) CorVel's PBM will implement a Concurrent Drug Utilization Review ("DUR") program
on behalf of Customer,. Concurrent DUR includes a review of the drug history at the time
the prescription is presented. Absent Customer's directions, DUR shall be performed in
accordance with CorVel's PBM's standard service model.
IV. BILLING AND PAYMENTS OF PHARMACY PROGRAM.
(i)
Financial obligations of parties.
(a) Customer shall be financially responsible for all drug charges incurred by
claimants for dispensed medications processed under CorVel's PBM. CorVel
assumes no liability for drug charges with the exceptions noted below in subsection
(b) If the CorVel claims professional determines, upon receipt of CorVel's PBM
invoice, that specific formulary and non -formulary drugs should not have been
dispensed, the CorVel claims professional should inform the PBM as soon as
possible.
• The PBM will request a reversal from the Participating Pharmacy. If
granted, CorVel will reverse the drug charges, however, if the Pharmacy
does not grant the PBM's request, Customer is responsible for payment of
the drug charges; CorVel assumes no liability for drug charges with the
exceptions noted below in subsection iii.
(c) Upon receipt of an invoice, CorVel claims professional may timely dispute charges
for drugs that were dispensed in error, triggering CorVel's PBM to reverse the drug
charges, by notifying CorVel for any of the following reasons:
• CorVel's PBM and/or the Participating Pharmacy's violation of
Formulary or Utilization Review Parameters set forth in Customer's DUR
program, or in the Claimant Level Formulary; or
• Duplicate or inadvertent entries or other clerical mistakes on a PBM
invoice.
(ii) Invoicing and Payment.
On a per Covered Drug basis CorVel will apply daily for all drug charges and fees
related to the PBM directly to the claim file.
CorVel shall invoice and bill directly all prescription fees to the specific claims file.
CorVel uses Medi -Span as our AWP data source. CorVel's Medi -Span database is
updated daily and AWP values are applied on the date of dispense.
In all states with the exception of California, Customer will be billed the lessor of the
state fee schedule AWP or the CorVel's negotiated rate.
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(iii) Both parties understand that pricing indices historically used (including under this
Agreement) for determining the financial components of pharmacy billing rates are outside
the control of CorVel and Customer. The parties also understand there are extra -market
industry, legal, governmental and regulatory activities which may lead to changes relating
to, or elimination of, these pricing indices that could alter the financial positions and
expectations of both parties as intended under this Agreement.
Both parties agree that, upon entering into this Agreement and thereafter, their mutual
intent has been and is to maintain pricing neutrality as intended and not to benefit one party
to the detriment of the other. Accordingly, to preserve this mutual intent, if pricing
neutrality does change and CorVel undertakes any or all of the following:
(a) Changes the AWP source, or other source if AWP is not applicable, across its book
of business (e.g., from Medi -Span to First Databank); or
(b) Maintains AWP, or other source if AWP is not applicable, as the pricing index
with an appropriate adjustment in the event the AWP, or other, methodology
and/or its calculation is changed, whether by the existing or alternative sources; or
(c) Transitions the pricing index from AWP, our other source if AWP in not
applicable, to another index or benchmark (e.g., to Wholesale Acquisition Cost);
Customer's negotiated PBM pricing will be modified as reasonably and equitably
necessary to maintain the pricing intent under this Agreement.
V. California Modification
On April 15, 2016, the State of California Department of Industry Relations applied the new
Federal Upper Limit (FUL) index to the California Pharmacy Workers' Compensation Fee
Schedule. The new FUL index has resulted in a need for CorVel to modify our current pricing
structure based on the fee schedule changes and our contract language.
The FUL's impact and the modification is limited to generic drugs; brand drug pricing will not
change. As per our contract, the modification will maintain "pricing neutrality" between both
parties.
City of Clearwater Amendment 4 (Renewal, Pricing and Updates) to Managed Care
Services Agreement 12-1-21 FINAL