HomeMy WebLinkAboutRXBENEFITS INC - CONTRACT - AGREEMENT MISC - RXBENEFITS INC(9/2016 Version)
ADMINISTRATIVE SERVICES AGREEMENT
by and between
RxBenefits, Inc.
and
City of Fort Collins
EFFECTIVE AS OF: January 1, 2017
DocuSign Envelope ID: 65EE6C19-9F57-445B-A6EC-BC44D59C7381
(9/2016 Version)
ADMINISTRATIVE SERVICES AGREEMENT
THIS ADMINISTRATIVE SERVICES AGREEMENT, dated effective as of 12:01 a.m. local time in
Birmingham, Alabama on January 1, 2017 (“Effective Date”), is made and entered by and between RxBenefits,
Inc., an Alabama corporation (“Administrator”), and City of Fort Collins, a Colorado home rule municipality
(“Client”). Administrator and Client are sometimes referred to herein individually as a “Party” and collectively as
the “Parties.”
Recitals
A. Client has indicated a desire to enter into a contractual relationship with Administrator in order to
procure the administration of prescription drug benefits to Client’s Members (defined below) by Client’s execution
of this Agreement (defined below), including without limitation the Client application attached to this Agreement
and incorporated herein by reference as Exhibit A (the “Client Application”);
B. Administrator desires to administer the prescription drug benefits specified in Client’s Plan
described herein in a ministerial capacity, subject to all the terms and conditions thereof; and
C. Administrator has entered into an agreement with an independent, third-party pharmacy benefit
manager, Express Scripts, Inc. (hereinafter referred to as “PBM” or “ESI”), for the purpose of being able to provide
a network of pharmacies and related pharmacy benefit management programs and services for utilization by Client
and its Members as administered through Administrator working in conjunction with Client, all as more fully
provided for in this Agreement.
Agreement
NOW, THEREFORE in consideration of the mutual covenants, duties and obligations made by the Parties
herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the
Parties, intending to be legally bound, hereby agree as follows:
ARTICLE I – CERTAIN DEFINITIONS
A. The initially capitalized terms below in this Section A of Article I shall have the following meanings when
used in this Agreement. In addition, there are other initially capitalized terms that are defined in other parts
of this Agreement and such terms shall have the meanings ascribed to them in such other parts of this
Agreement whenever they are used in this Agreement.
“Agreement” means this Administrative Services Agreement between Administrator and Client, the Client
Application and all other exhibits, supplements, amendments, addenda and/or schedules to this
Administrative Services Agreement.
“Ancillary Supplies, Equipment, and Services” or “ASES” means ancillary supplies, equipment, and
services provided or coordinated by ESI Specialty Pharmacy in connection with ESI Specialty Pharmacy’s
dispensing of Specialty Products. ASES may include all or some of the following: telephonic and/or in-
person training, nursing/clinical services, in-home infusion and related support, patient monitoring,
medication pumps, tubing, syringes, gauze pads, sharps containers, lancets, test strips, other supplies, and
durable medical equipment. The aforementioned list is illustrative only (not exhaustive) and may include
other supplies, equipment, and services based on the patient’s needs, prescriber instructions, payer
requirements, and/or the Specialty Product manufacturer’s requirements.
“Average Wholesale Price” or “AWP” means the average wholesale price of a prescription drug as
identified by drug pricing services such as Medi-Span or other source recognized in the retail prescription
drug industry selected by ESI (the “Pricing Source”). The applicable AWP shall be the 11-digit NDC for
the product on the date dispensed, and for prescriptions filled in Participating Pharmacies, Mail Service
Pharmacy and ESI Specialty Pharmacy. Actual package size will be used for dispensing. PBM will not
charge Client a higher AWP price based on repackaged products and actual package size will be used for
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dispensing at Participating Pharmacies (retail), Mail Service Pharmacy and ESI Specialty Pharmacy. AWP
used to calculate the Prescription Drug Claim is the current, post-settlement AWP. If the Pricing Source
discontinues the reporting of AWP or materially changes the manner in which AWP is calculated, then ESI
reserves the right to make an equitable adjustment as necessary to maintain the parties’ relative economics
and the pricing intent of this Agreement.
“Brand/Generic Algorithm” or “BGA” means ESI’s standard and proprietary brand/generic algorithm
utilized by ESI, a copy of which may be made available for review by Client upon request. The purposes
of the algorithm are to utilize a comprehensive and logical algorithm to determine the brand or generic
status of products in the ESI master drug file using a combination of industry standard attributes, to
stabilize products “flipping” between brand and generic status as may be the case when a single indicator is
used from industry pricing sources, and to reduce Client, Member and provider confusion due to
fluctuations in brand/generic status.
“Brand Drug” means a prescription drug identified as such in ESI’s master drug file using indicators from
First Databank (or other source nationally recognized in the prescription drug industry used by ESI for all
clients) on the basis of a standard Brand/Generic Algorithm utilized by ESI for all of its clients, a copy of
which may be made available for review by Administrator, Client, or its Auditor upon
request. Notwithstanding the foregoing, certain prescription drug medications that are licensed and then
currently marketed as brand name drugs, where there exists at least one (1) competing prescription
medication that is a generic equivalent and interchangeable with the marketed brand name drug, may
process as “Generic Drugs” for Prescription Drug Claim adjudication and Member Copayment purposes.
“Business Days” or “business days” means all days except Saturdays, Sundays, and federal holidays. All
references to “day(s)” are to calendar days unless “business day” is specified.
“Contract Quarter” means the full three (3) month period commencing on the Effective Date, and each full
consecutive three (3) month period thereafter that this Agreement remains in effect.
“Contract Year” means the full twelve (12) month period commencing on the Effective Date and each full
consecutive twelve (12) month period thereafter that this Agreement remains in effect.
“Copayment” means that portion of the charge for each Covered Drug dispensed to the Member that is the
responsibility of the Member (e.g., copayment, coinsurance and/or deductible) as indicated on the Set-Up
Forms.
“Cost Share” means the amount which a Member is required to pay for a prescription or authorized refill in
accordance with the Plan Design, which may be a deductible, a percentage of the prescription price, a fixed
amount and/or other charge or penalty.
“Covered Drug(s)” means those prescription drugs, supplies, Specialty Products (if selected on the Set-Up
Forms) and other items that are covered under the Prescription Drug Program, each as indicated on the Set-
Up Forms.
“Dispensing Fee” means the amount payable by Client as a dispensing fee per prescription or authorized
refill to a Member as set forth on Exhibit A to this Agreement.
“Eligibility Files” means the list submitted by Client to Administrator in reasonably acceptable electronic
format indicating persons eligible for drug benefit coverage services under the Client’s Plan.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the regulations
promulgated thereunder.
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“ESI National Plus Network” means ESI’s broadest Participating Pharmacy network.1
“ESI Specialty Pharmacy” means CuraScript, Inc., Accredo Health Group, Inc., Express Scripts Specialty
Distribution Services, Inc., or another pharmacy or home health agency wholly-owned or operated by ESI
or one or more of its affiliates that primarily dispenses Specialty Products or provides services related
thereto; provided, however, that when the Mail Service Pharmacy dispenses a Specialty Product, it shall be
considered an ESI Specialty Pharmacy hereunder.
“Fees” means, with respect to Client, all the fees specified on the applicable Exhibits attached hereto and
all other amounts due by Client hereunder, which Client (or, if applicable, any Member) is required to pay
pursuant to the terms and conditions of this Agreement. In the event ESI, Administrator and Client agree
upon a modification of the Fees from time to time, Client shall be responsible for timely communicating
such changes to Members and for obtaining the necessary consents, if any, required from Client and/or
Members in order to implement the new pricing.
“Formulary” means the list of FDA-approved prescription drugs and supplies developed by ESI’s
Pharmacy and Therapeutics Committee and/or customized by Client, and which is selected and/or adopted
by Client. The drugs and supplies included on the Formulary will be modified by ESI from time to time as
a result of factors, including, but not limited to, medical appropriateness, manufacturer Rebate
arrangements, and patent expirations. Additions and/or deletions to the Formulary are hereby adopted by
Client, subject to Client’s discretion to elect not to implement any such addition or deletion through the
Set-Up Form process, which such election shall be considered a Client change to the Formulary.
“Generic Drug” means a prescription drug, whether identified by its chemical, proprietary, or non-
proprietary name, that is therapeutically equivalent and interchangeable with drugs having an identical
amount of the same active ingredient(s) and approved by the FDA and which is identified as such in ESI’s
master drug file using indicators from First Databank (or other source nationally recognized in the
prescription drug industry used by ESI for all clients) on the basis of a standard Brand/Generic Algorithm
utilized by ESI for all of its clients, a copy of which may be made available for review by Administrator,
Client or its Auditor upon request.
“HIPAA” means the Health Insurance Portability and Accountability Act of 1996, as amended, and the
regulations promulgated thereunder.
“Losses” means any and all liabilities, damages, claims, causes of action, judgments, demands, penalties,
fines, assessments, costs, expenses, fees (including without limitation reasonable attorneys’ fees and other
reasonable professional fees) and other losses of any kind or nature whatsoever.
“MAC” or “Maximum Allowable Cost” consists of a list of off-patent drugs subject to maximum allowable
cost payment schedules developed or selected by ESI. The payment schedules specify the maximum unit
ingredient cost payable by or on behalf of Client and its Members for drugs on the MAC List. The MAC
List and payment schedules are frequently updated.
“MAC List” means a list of off-patent prescription drugs or supplies subject to maximum reimbursement
payment schedules developed or selected by ESI.
“Mail Service Pharmacy” means a pharmacy wholly-owned or operated by ESI or one or more of its
affiliates, other than an ESI Specialty Pharmacy, where prescriptions are filled and delivered to Members
via mail delivery service.
1 The ESI National Plus Network was historically referred to as the “EN50 Network” in ESI’s network provider agreements with
Participating Pharmacies, and is subject to future name change.
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“Manufacturer Administrative Fees” means those administrative fees paid by manufacturers to, ESI
pursuant to a contract between ESI and the manufacturer in connection with ESI’s administering, invoicing,
allocating and collecting the Rebates under the Rebate program.
“Maximum Reimbursement Amount” or “MRA” means the maximum unit ingredient cost payable by
payor for a drug on the MAC List based on maximum reimbursement payment schedule(s) developed or
selected by ESI. The application of MRA pricing may be subject to certain “dispensed as written” (DAW)
protocols and Client defined plan design and coverage policies.
“Member” means each person who is eligible to receive prescription drug benefits as indicated by or on
behalf of Client in the Eligibility Files.
“Member Submitted Claim” means a paper claim submitted by a Member for Covered Drugs dispensed by
a pharmacy for which the Member paid cash.
“Pass-Through” means the actual ingredient cost and dispensing fee amount paid by ESI for the
Prescription Drug Claim when the claim is adjudicated to the Participating Pharmacy, as set forth in the
specific Participating Pharmacy remittances related to Client’s claims.
“PDL” means the PBM Performance Drug List, which is a list of preferred pharmaceutical products,
created and maintained by PBM, as amended from time to time, which: (a) has been approved by PBM’s
pharmacy and therapeutics committee; and (b) reflects PBM’s recommendations as to which
pharmaceutical products should be given favorable consideration by plans and their participants.
“Participating Pharmacy” means any licensed retail pharmacy with which ESI or one or more of its
affiliates has executed an agreement to provide Covered Drugs to Members, but shall not include any mail
order or specialty pharmacy affiliated with any such Participating Pharmacy. Participating Pharmacies are
independent contractors of ESI.
“Plan” means the self-funded prescription drug benefit plan(s) administered and/or sponsored by Client.
“Plan Administrator” means the Plan sponsor or committee designated by the Plan sponsor with respect to
the Plan, as contemplated by Section 3(16)(A) of ERISA.
“Plan Design” means drug coverage, days’ supply limitation, Cost Share, Formulary (including Formulary
drug selection and relative cost indication) and other Prescription Drug Program specifications applicable
to the Prescription Drug Program designated for Client as set forth in this Agreement or otherwise
documented between the Parties.
“PMPM” means per Member per month fee, if applicable, as determined by Administrator from the
Eligibility Files.
“Prescribing Guide” means the PBM’s Prescribing Guide, as modified and published from time to time,
which has been approved by PBM’s pharmacy and therapeutics committee.
“Prescription Drug Claim” means a Member Submitted Claim, Subrogation Claim or claim for payment
submitted to ESI by a Participating Pharmacy, Mail Service Pharmacy or ESI Specialty Pharmacy as a
result of dispensing Covered Drugs to a Member.
“Prescription Drug Program” means the specific pharmacy benefit management services and benefit design
adopted by, and applicable to, Client under this Agreement.
“Primary Member” means each Member, excluding Members who are qualified dependents.
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“Protected Health Information” or “PHI” shall have the meaning given such term by HIPAA, but limited to
that information created or received by PBM in its capacity as a subcontractor to Administrator or by
Administrator in its capacity as a business associate to the Plan.
“Rebates” mean retrospective formulary rebates that are paid to ESI pursuant to the terms of a formulary
rebate contract negotiated independently by ESI with a pharmaceutical manufacturer and directly
attributable to the utilization of certain Covered Drugs by Members. Rebates do not include Manufacturer
Administrative Fees; product discounts or fees related to the procurement of prescription drug inventories,
ESI Specialty Pharmacy or the Mail Service Pharmacy; fees received by ESI from pharmaceutical
manufacturers for care management or other services provided in connection with the dispensing of
products; or other fee-for-service arrangements whereby pharmaceutical manufacturers generally report the
fees paid to ESI or its affiliates for services rendered as “bona fide service fees” pursuant to federal laws
and regulations (collectively, “Other Pharma Revenue”). Such laws and regulations, as well as ESI’s
contracts with pharmaceutical manufacturers, generally prohibit ESI from sharing any such “bona fide
service fees” earned by ESI, whether wholly or in part, with any ESI client. ESI represents and warrants
that it will not enter into any agreement with a pharmaceutical manufacturer for Other Pharma Revenue
with the intent to reduce Rebates.
“Representatives” of a Party means such Party’s directors, officers, managers, employees, agents and other
representatives.
“Set-Up Forms” means any standard Administrator or PBM document or form, which when completed and
signed by or on behalf of Client (electronic communications from Client indicating Client’s approval of a
Set-Up Form shall satisfy the foregoing), will describe the essential elements adopted by Client for its
Prescription Drug Program, including implementation rules, coverage and benefit designs, and clinical and
trend programs, as may be amended by Client from time to time.
“Single Source Products” means a prescription medication that is: (i) approved by the FDA under a generic
drug ANDA application and is licensed and then currently marketed by only one generic drug
manufacturers under separate ANDA applications; or (ii) subject to patent litigation.
“Specialty Product List” (for those Clients that are non-Exclusive) means the standard list of Specialty
Products and their reimbursement rates under the applicable (exclusive or open) option, maintained and
updated by ESI from time to time. The Specialty Product List is available to Client upon request.
“Specialty Products” means those injectable and non-injectable drugs on the Specialty Product List.
Specialty Products typically have one or more of several key characteristics, including frequent dosing
adjustments and intensive clinical monitoring to decrease the potential for drug toxicity and increase the
probability for beneficial treatment outcomes; intensive patient training and compliance assistance to
facilitate therapeutic goals; limited or exclusive product availability and distribution; specialized product
handling and/or administration requirements and/or cost in excess of $500 for a 30 day supply.
“Subrogation Claim” means subrogation claims submitted by any state or a person or entity acting on
behalf of a state under Medicaid or similar United States or state government health care programs, for
which Client is deemed to be the primary payor by operation of applicable federal or state laws.
“Term” shall mean the time period between the Effective Date and termination of this Agreement,
including the Initial Term, as extended by any Renewal Term (as such terms are defined in Article VI.A).
“Usual and Customary Price” or “U&C” means the retail price charged by a Participating Pharmacy for the
particular drug in a cash transaction on the date the drug is dispensed as reported to ESI by the Participating
Pharmacy.
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ARTICLE II – ADMINISTRATIVE SERVICES PROVIDED
A. Administrator shall administer the prescription drug benefits provided by the Client’s Plan, subject to all of
the terms and conditions of this Agreement, as the same may be amended from time to time.
B. Administrator shall provide such assistance as may reasonably be necessary to Client’s personnel in
enrollment of eligible employees and former employees and dependents eligible under the Plan.
Administrator shall maintain up-to-date eligibility status records on all enrolled Members as submitted by
Client for purposes of appropriate adjudication of Prescription Drug Claims under the Plan.
C. Administrator shall issue (or cause to be issued) prescription drug cards to each Member-employee who is
enrolled in Client’s Plan and who is declared eligible by Client, as evidence of such Member-employee’s
entitlement to prescription drug card benefits under the Plan.
D. Upon reasonable request, Administrator shall provide Client with costs projections and analyses of
Prescription Drug Claims and such other statistical data as may reasonably be requested by Client in
connection with Client’s management, oversight and control of the Plan.
E. Administrator shall invoice Client for the Prescription Drug Claims due to be paid and shall collect
Prescription Drug Claims due, plus monthly Transaction Fees and any other fees payable by Client under
Article IV hereof and/or the Client Application.
ARTICLE III – DUTIES OF CLIENT
A. Client shall be solely responsible for determining the eligibility of its employees and their dependents to
participate and receive benefits under the Plan.
B. Administrator has established and shall maintain a website located at www.rxbenefits.com (the “Website”)
through which Client shall have the ability to access, revise and update the eligibility and enrollment
information of Client’s Members. Client agrees that it shall be solely responsible for effecting timely
revisions and updates to the enrollment information through the Website (or, in the alternative, through a
secure file transfer protocol (ftp) site or via secure electronic data file in a format acceptable to
Administrator delivered to Administrator via electronic mail) and shall be responsible for the accuracy of
the enrollment information and any and all revisions and updates to the enrollment information. Upon
becoming aware of errors in the enrollment information, Client shall promptly correct the information as
necessary through the Website or via other acceptable alternative means provided for above in this Article
III.B. Administrator shall not be responsible for Prescription Drug Claims payments made to Members or
ineligible and former employees of Client who are no longer or, if applicable, should never have been
Members, based on information that is or was inaccurate, was not updated or not updated on a timely basis,
or otherwise revised as required by Client or this Agreement. Administrator agrees that revisions and
updates to the enrollment or other applicable Member or Prescription Drug Claim information made as
described above will be considered for purposes of this Agreement revised and updated within 48 hours of
receipt by Administrator of written notice from Client of such revision or update. For emergency revisions
and updates that need to be effective on the same day and not the next business day, Client must call in or
fax such revisions and updates to Administrator during Administrator’s normal business hours and follow
up with Administrator as appropriate to ensure such revisions and updates become effective on the same
day to the extent reasonably possible. In addition, to the extent such emergency revisions are
communicated by Client to Administrator orally (e.g., via telephone), Client agrees (and it shall be Client’s
sole responsibility) to provide Administrator with a written description in reasonable detail setting forth the
emergency revisions and/or updates within 48 hours after such emergency revisions/updates were orally
communicated by Client to Administrator.
C. Administrator will provide unique alphanumeric passwords (“Passwords”) to Client that will permit Client
to access, revise, and update the enrollment information on the Website. Client will distribute the
Passwords to the individuals named on the list of authorized users (the “Users”), which is included in
Section A of the Client Application. Client is responsible for all uses of the Passwords, whether or not
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authorized by Client. Client is responsible for maintaining the confidentiality of the Passwords and
ensuring that the Users maintain such confidentiality also. Client agrees to immediately notify
Administrator of any unauthorized use of the Passwords of which Client becomes aware or has a
reasonable basis to believe to have occurred. Administrator shall not be responsible for Losses resulting
from, arising out of or relating to any unauthorized use or access, except where such Losses result solely
from the willful or intentional act or misconduct or negligence of Administrator. To amend the list of
Users, Client must notify Administrator in writing of such amendment(s). Within one (1) business day
after the business day on which Administrator receives such amendment(s) in writing from Client,
Administrator will deactivate the Password(s) issued to any deleted User(s) and will activate and issue new
Password(s) for any new User(s) identified by Client. Notwithstanding anything in this Agreement to the
contrary, Administrator shall not (and Client acknowledges and understands that Administrator shall not)
be liable or otherwise held responsible for fraudulent Prescription Drug Claims submitted by any Member,
other third party acting or purporting to act on any Member’s behalf or any unauthorized party using any
Member’s prescription drug card, information or otherwise.
D. Client expressly understands, acknowledges and agrees that any and all information, data, documentation
or software disclosed by Administrator and/or PBM in the course of conducting its business and performing
administrative and related services for Members and/or Client are confidential and proprietary to, and a
valuable trade secret of, Administrator and/or PBM and that any disclosure or unauthorized use - that is,
any use other than to evaluate Administrator’s performance under this Agreement - will cause irreparable
harm and damage to Administrator and/or PBM. Client shall not, directly or indirectly, release or disclose
or otherwise use or attempt to use any patient-specific prescription information, trade secrets, proprietary
software and technical processing, financial, pricing or other confidential information of Administrator
and/or PBM obtained by Client from Administrator and/or PBM (regardless of the reason such information
was provided or obtained) to any other party or for the benefit of any other party without the prior written
consent of Administrator and/or PBM, which consent may be withheld by Administrator and/or PBM in
their sole and absolute discretion. The foregoing in this Section (D) notwithstanding and subject to Article
VIII.I of this Agreement, the Parties agree that (1) Client, as a Colorado municipality, is subject to the
requirements of the Colorado Open Records Act, C.R.S. §§ 24-72-200.1, et seq. (the “CORA”), and (2) as a
result, this Agreement (or certain portions of it) shall be subject to disclosure under the CORA as a public
record.
E. Client expressly represents and warrants that (i) it has provided notice to its employees and their
dependents regarding participation in the Plan and Client’s disclosure or anticipated disclosure of employee
or dependent confidential information to Administrator in connection with the Plan and applicable law, and
(ii) it has obtained all required consents and/or other approvals or authorizations (either in writing or
through opt-out procedures) from each Primary Member or, if applicable, each dependent Member or other
applicable party, regarding such disclosures to Administrator for purposes of this Agreement and the
services provided to Client and Members hereunder, and relating to the use and disclosure of information
by Administrator or other applicable parties, including without limitation PHI under HIPAA as permitted
under this Agreement or as otherwise reasonably necessary to effect and/or carry out the purposes and
intent of this Agreement and the services to be performed and rendered by Administrator, PBM, Client or
other applicable third parties with respect to this Agreement. Further, to the extent applicable, Client
hereby authorizes PBM to contract with pharmaceutical companies for Rebates as a group purchasing
organization for the Plan. PBM and/or Administrator may use, disclose, reproduce or adapt information
obtained in connection with this Agreement, including Prescription Drug Claims as well as eligibility
information, which is not identifiable on a Member basis. PBM and/or Administrator shall maintain the
confidentiality of this information to the extent required by applicable law, and may not use the information
in any way prohibited by applicable law.
F. Should Client identify erroneous, mistaken or incorrect Prescription Drug Claims payments made by
Administrator, refunds in the amount of any such erroneous Prescription Drug Claims payments to Client
shall be made by Administrator within 30 days after receipt by Administrator of written notice from Client
identifying such errors and providing reasonable documentation to support them. Client acknowledges,
covenants and agrees that such refunds made by Administrator as provided in this Article III.F shall be the
sole and exclusive remedy of Client and any Member against Administrator, its Representatives or any
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third party (including PBM) resulting from any such erroneous, mistaken or incorrect Prescription Drug
Claims payments made by or to Administrator. The Parties acknowledge that Administrator may seek to
recover any overpayments from the Members, the providers of service or any other party unjustly enriched
as a result of such overpayments at any time after notice or awareness of any such error.
G. Without limiting the generality or scope of any other provision of this Agreement, Administrator shall not
be held responsible or liable for any performance standard or obligation required of it hereunder if Client
(or Client’s designee(s)) or any Member fails to provide Administrator with accurate, timely and complete
information as necessary and/or required to meet any such performance standard or obligation under this
Agreement or otherwise.
ARTICLE IV – FINANCIAL ARRANGEMENT
A. Administrator will invoice Client every two (2) weeks for the applicable Fees payable for the previous two
(2) weeks. Administrator will invoice Client for the Transaction Fees, as applicable and regardless of the
amount of Prescription Drug Claims activity, if any. All invoices will be due and payable seven (7)
business days from receipt by Client2. Refer to Article V, below, for rules applicable to late payment of
invoices. Client shall not (and acknowledges that it shall not) have any right to offset any disputed amounts
or amounts due and/or payable or purported to be due and/or payable from Administrator and/or PBM from
any payments of Client except as specifically approved in writing by Administrator.
B. Administrator may charge Client administration fees (a) per Member-employee per calendar month payable
on a monthly basis, and/or (b) per Prescription Drug Claim made by Members payable on a bi-weekly basis
(collectively, the “Transaction Fees”). The Transaction Fees to be paid by Client to Administrator under
this Agreement are as specified in the Client Application.
C. Client acknowledges and understands that PBM, through its contractual arrangement with Administrator,
guarantees certain Rebates as set forth in the Client Application. The Parties further acknowledge and
understand that no Rebates or similar discounts or payments will be paid to the Parties with respect to any
Prescription Drug Claims reimbursed on a unit basis by Medicaid agencies or other federal or state
healthcare programs. Client acknowledges that Administrator may receive Rebates from PBM associated
with certain Prescription Drug Claims of Members under Client’s Plan.
D. Client acknowledges and is aware that Administrator, pursuant to its contractual agreement with PBM, is
paid by PBM an administrative services credit payment per mail and retail Prescription Drug Claim
administered by Administrator on behalf of each Member in the Plan (the “PBM Service Credit”); and (b)
may also receive from PBM a one-time per Member implementation and marketing credit payment
designed to reimburse Administrator for actual expenses and out-of-pocket costs incurred by Administrator
to market and implement PBM products and services and transition Client (and its Members) to PBM’s
benefit offerings (the “Implementation Credit”). It shall be Administrator’s responsibility to obtain and
collect such PBM Service Credit and the Implementation Credit directly from PBM and Client shall have
no responsibility (payment or otherwise) with respect to such credit due to Administrator. The Parties
acknowledge and agree that (1) Administrator shall be responsible for any and all transition and
implementation costs it incurs (exclusive of any Implementation Credit received by it as described above)
with respect to the marketing and transition of Client (and its Members) to benefit offerings administered
by Administrator for Client, and (2) Client shall be responsible for any and all transition and
implementation costs it incurs with respect to the transition and implementation of such benefit offerings.
To the extent applicable to the Parties, it is the Parties’ intention that, for purposes of the Federal Anti-
Kickback Statute and any required government reporting, the PBM Service Credit and Implementation
Credit shall constitute and shall be treated by Administrator and Client as a discount against the price of
drugs within the meaning of 42 U.S.C. § 1320a-7b(b)(3)(A). By executing this Agreement, each of
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Administrator and Client hereby agrees that the PBM Service Credit and any Implementation Credit shall
be so treated and reported, as and to the extent applicable to each such Party.
E. Client acknowledges that Administrator may, in its sole discretion, compensate brokers and/or third-party
consultants from monies received or due to be received by Administrator pursuant to the provisions of this
Agreement.
F. Client expressly acknowledges, agrees, understands and confirms that (i) Administrator receives or may
receive fees, Rebates, commissions, payments and other remuneration from and through various sources,
including Client and PBM, (ii) Administrator has disclosed to Client herein that it receives or may receive
such fees, Rebates, commissions, payments and other remuneration from such sources, and (iii) upon
reasonable advance written request by Client through its authorized Representative, Administrator agrees to
provide Client with any additional information or data within Administrator’s possession or control,
including without limitation specific payment or financial information, relating to this Agreement and the
terms hereof, both in connection with the execution of this Agreement by the Parties as of the Effective
Date and thereafter during the Term of this Agreement, whether or not in connection with any filing with
respect to Client’s Plan or otherwise required of Client or the Plan under applicable law, provided that such
information will be made available by Administrator at mutually convenient and reasonable times, intervals
and places and at no out-of-pocket cost or expense to Administrator. In the event any information
requested by Client pursuant to sub-section (iii) of this Article IV.F is subject to an obligation or covenant
of confidentiality, Administrator agrees to exercise commercially reasonable efforts (provided, however,
that such efforts shall not require Administrator to incur any material out-of-pocket cost or expense) to
obtain permission or consent to disclose to Client any such information in Administrator’s possession
and/or control, subject to Client’s execution of a confidentiality agreement with Administrator and any
other applicable party in a form reasonably acceptable to Client, Administrator and any such other
applicable party. Administrator may pay Client’s benefit advisor a service fee which may be in the form of
a commission, marketing fee, incentive or other allowance. Notwithstanding any provision of this
Agreement to the contrary, Administrator shall only be responsible for payment of Rebates to Client
pursuant to the terms of this Agreement if such Rebates are actually received by Administrator during the
Term of this Agreement.
ARTICLE V – LATE PAYMENT
A. If the Fees for Prescription Drug Claims, the Transaction Fees or any other applicable payments specified
or provided for in this Agreement are not paid by Client and received by Administrator by the due date of
the applicable invoice, then Client shall pay Administrator a service charge equal to five percent (5%) (or
the maximum amount allowable under applicable law if such amount is less than 5%) of all then past due
amounts. In addition to such service charge, any past due amounts (inclusive of service charges) will incur
interest beginning on the due date and continuing thereafter until fully paid at a rate of ten percent (10%)
per annum (or the maximum amount allowable under applicable law if such amount is less than ten percent
(10%)).
B. Furthermore, if payment of the Fees for Prescription Drug Claims, the Transaction Fees or any other
applicable payments payable by Client are not received by the due date of the applicable invoice,
Administrator may, at its option, provided that Administrator has provided Client with written notice of
such payment deficiency, delivered certified or registered mail return postage prepaid, and ten (10)
business days from Client’s receipt to cure such deficiency, cease or suspend the provision of
administrative services provided by Administrator under this Agreement, and deactivate all prescription
drug cards issued to the Members. Consult Article VI for Administrator’s option and right to terminate this
Agreement at any time if Client fails to make full and timely payment of such charges and fees (including
any applicable service charges and interest) to Administrator.
C. If at any time Administrator reasonably determines that Client may have difficulty meeting its financial
commitments under this Agreement, Administrator may request from Client financial information,
reasonable assurances, or both, reasonably satisfactory to Administrator as to Client’s ability to timely and
fully meet its commitments and responsibilities hereunder. Such assurances may include, without
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limitation, Administrator requiring Client to make a deposit in such amount reasonably sufficient in
Administrator’s judgment to secure Client’s payment obligations. If Client provides Administrator with
such a deposit, Administrator may apply the deposit to past due balances and shall return the remaining
deposit, if any, after the termination of this Agreement and the payment of all amounts payable to
Administrator hereunder. Any deposit made by Client hereunder shall not be deemed a Plan asset.
D. Administrator’s failure to charge or collect a service charge and/or interest from Client shall not waive or
otherwise limit in any respect any future right of Administrator under this Agreement to charge or collect a
service charge and/or interest from Client.
ARTICLE VI – TERM AND TERMINATION
A. The initial term of this Agreement shall commence on the Effective Date and shall continue in effect,
unless sooner terminated as provided herein, for a period of one (1) year after the Effective Date (the
“Initial Term”). Unless either Party gives the other Party written notice of its intention to terminate (given
in the manner prescribed in Article VIII.B below) at least ninety (90) days in advance of the expiration of
then applicable Initial Term or Renewal Term (as the case may be), the Term of this Agreement shall, at the
City’s option, automatically renew and extend for additional one (1) year renewal terms (each, a “Renewal
Term”), not to exceed four (4) additional one (1) year Renewal Terms, without any additional act on the
part of either Party (unless sooner terminated as provided herein and subject to the consequences of any
such termination). Administrator may terminate this Agreement at any time if its contractual arrangement
with PBM terminates by giving at least ninety (90) days prior written notice of the termination of this
Agreement to Client.
B. To the extent this Agreement or any provision in it constitutes a multiple fiscal year debt or financial
obligation of the Client, it shall be subject to annual appropriation by City Council as required in Article V,
Section 8(b) of the City Charter, City Code Section 8-186, and Article X, Section 20 of the Colorado
Constitution. Neither Client nor Administrator shall have an obligation to continue this Agreement in any
fiscal year for which no such supporting appropriation has been made.
C. Either Party may terminate this Agreement upon written notice to the other Party if, as a result of any
change in law, the rights or obligations of the requesting Party would be materially and adversely affected.
Any such termination shall be effective on the day immediately preceding the effective date of such change
in law, subject to the provisions of immediately following sentence. Notwithstanding the foregoing
sentence, the Parties hereby agree to use prompt, good faith efforts to renegotiate the terms of this
Agreement. If the Parties successfully conclude such negotiations prior to the effective date of the change
in law, this Agreement shall not terminate and shall be amended to reflect the negotiated terms mutually
agreed upon by the Parties. In the event the Parties are unable to successfully conclude and reach mutual
agreement through such good faith negotiations, this Agreement shall terminate as provided above and
herein.
D. On and after the date of termination of this Agreement, Administrator shall be obligated to complete such
administrative services provided for in this Agreement as have been commenced prior to the date of
termination. Therefore, Prescription Drug Claims incurred or reported after the date of termination are the
sole responsibility of Client and are not the responsibility of Administrator. Furthermore, termination of
this Agreement shall not relieve Client of its obligation to pay Administrator for any outstanding
Prescription Drug Claims, charges, fees (including without limitation any applicable service charges),
interest and reasonable collection costs and reasonable attorneys’ fees incurred by Administrator associated
with such collections. Upon termination of this Agreement, (i) Administrator will assist and cooperate with
transition of Claims files and/or histories or other necessary information to Client’s new prescription
benefit manager or any other third party designated by Client in writing after such Claims files, histories
and/or information have been scrubbed to remove cost, pricing, financial and other confidential,
proprietary, or trade secret information of Administrator and PBM, in a standard format reasonably
requested by Client; and (ii) Administrator will provide any other reasonably necessary transition services
as the Parties may mutually agree upon in writing. Administrator shall provide said Claims files, histories
and/or information within ten (10) business days of Client’s request. Subject to the foregoing in this
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Article VI.D, Administrator will provide the Claims file, summary of benefits and prior authorization
reports in connection with such transition at no cost to Client. Transition data maintained and provided by
PBM (e.g. prior authorization files) and/or transferred from pharmacy to pharmacy (e.g. open mail order
refill files) will include the charge from PBM or pharmacy and such charge will be passed-through to
Client, if and as applicable, and only after Client’s pre-approval of said charges.
E. Administrator may, in its sole and absolute discretion, suspend performance or terminate this Agreement at
any time without giving any advance notice, written or otherwise, to Client (or to any other party) and
without penalty or liability for any Losses if (1) Client fails to make timely payment within the ten (10)
business day notice period in Article V.B hereof of the Fees for Prescription Drug Claims, the Transaction
Fees or any other applicable payments owed to Administrator in accordance with the terms and conditions
of this Agreement or, if requested, does not provide a deposit to Administrator as provided in Article V.C
above, (2) Client makes an assignment for the benefit of creditors, (3) Client is the subject of a voluntary or
involuntary petition for bankruptcy or is adjudicated insolvent or bankrupt, or (4) a receiver or trustee is
appointed for any portion of Client’s property.
F. Termination of this Agreement shall not terminate either Party’s rights and obligations under Article III.C,
Article III.D, Article IV (Financial Arrangement), Article V (Late Payment), Article VI.C, Article VII
(Indemnification), Article VIII.B (Notices), Article VIII.C (Applicable Law), Article VIII.D (Entire
Agreement; Construction), Article VIII.F (Relationship of the Parties), Article VIII.I (Confidential and
Proprietary Information), Article IX (ERISA, COBRA & HIPAA Duties) and the Client Application (as
amended, if applicable), and all such rights and obligations shall expressly survive any such termination.
ARTICLE VII – INDEMNIFICATION
A. Except as otherwise provided in this Agreement, Administrator agrees to hold harmless and to indemnify
Client and its Representatives from and against any Losses arising out of or related to Administrator’s
negligence, gross negligence, willful misconduct, and breach or violation of this Agreement.
B. Client acknowledges that: (1) Administrator and its Representatives do not bear any liability for Losses
under the Plan; (2) Administrator and its Representatives do not insure nor underwrite the liability of Client
under the Plan; and (3) Administrator’s execution of this Agreement shall not be deemed as the assumption
by Administrator or its Representatives of any responsibilities, obligations or duties other than those
required of Administrator pursuant to the express terms and conditions of this Agreement.
C. Client is responsible for its own negligence and that of its officers and employees. Client agrees to release
Administrator and its Representatives from any claims that Client may have arising out of the negligent
acts or omissions of Client, its officers or employees under this Agreement. Administrator and its
Representatives shall not be liable for Losses arising out of or in connection with (1) Client’s default in the
performance of any duty, requirement or obligation of Client under this Agreement, the Plan or otherwise
owed to Client’s employees and their dependents (whether or not in relation to this Agreement or the Plan),
(2) the acts or omissions of any Representative of Client (whether or not in relation to this Agreement or
the Plan) or (3) any representations, warranties, covenants or statements, whether written, oral or otherwise,
made by Client to its Representatives and/or their dependents.
D. Each Party’s liability to the other Party and its Representatives hereunder shall not exceed the actual
proximate Losses caused by or arising from the other Party’s breach or violation of, or failure to perform,
any term or provision of this Agreement. In no event whatsoever shall either Party or any of its
Representatives be liable for any indirect, special, incidental, consequential, exemplary or punitive
damages (in each case, to the fullest extent that such damages may be waived by contract under applicable
law), or any damages for lost profits relating to a relationship with a third party, however caused or arising,
whether or not they have been informed of the possibility of their occurrence.
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ARTICLE VIII – GENERAL PROVISIONS
A. Changes in Agreement. This Agreement may be amended at any time, without prior notice to any
Member, by mutual written agreement executed by Administrator (through its duly authorized
Representative) and Client (through its duly authorized Representative). No employee, agent or other
Representative of Administrator or Client is authorized to amend or vary the terms and conditions of this
Agreement or to make any agreement or promise not specifically contained herein or to waive any
provision hereof other than by the means prescribed above in this Article VIII.A.
B. Notices. Any notices to be given hereunder shall be deemed sufficiently given when in writing and (1)
actually delivered to the Party to be notified or (2) placed in an envelope directed to the Party to be notified
at the following addresses and deposited in the United States mail by certified or registered mail, postage
prepaid:
If to Administrator at: RxBenefits, Inc.
Attn: Lauren Simmons
3500 Blue Lake Drive
Suite 200
Birmingham, AL 35243
If to Client at: City of Fort Collins
Attn: Joaquin Garbiso, Benefits Manager
215 N Mason Street
Fort Collins, CO 80522
City of Fort Collins
Attn: Director of Purchasing
215 N Mason Street
Fort Collins, CO 80522
City of Fort Collins
Attn: City Attorney’s Office
P.O. Box 580
Fort Collins, CO 80522
Such addresses may be changed by either Party by written notice as to the new notice address given to the
other Party as provided in this Article VIII.B. Client shall act as agent of its employees (and such
employees’ dependents, as and whenever applicable) to receive all notices to them hereunder and to notify
the employees and their participating dependents affected thereby. It also shall be the responsibility of
Client to notify all employees (and their dependents) of the expiration or termination of this Agreement by
a Party pursuant to Article VI or otherwise. In the case of changes in, or termination of, the Agreement,
notice to or by Client shall be deemed to constitute notice to all employees of Client and their dependents,
and no further notice need be given by Administrator to any employee or dependent in order to effectuate
any change in, or termination of, this Agreement or the benefits or coverage provided for herein or made
available hereby.
C. Applicable Law. This Agreement shall be governed by, and construed and interpreted in accordance with,
the internal laws of the State of Colorado without regard to conflicts of law principles thereof.
D. Entire Agreement; Construction.
1. This Agreement (as defined in Article I (Certain Definitions)) constitutes the entire agreement and
understanding of the Parties and supersedes any prior oral or written communication between the
Parties with respect to the subject matter hereof. All Recitals to this Agreement set forth above
and all Exhibits attached hereto are hereby incorporated into and made a part of this Agreement.
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2. In the event any provision of this Agreement shall be determined invalid or unenforceable, such
invalidity or unenforceability shall not invalidate or render unenforceable the entire Agreement,
but rather this Agreement shall be construed as if not containing the particular invalid or
unenforceable provision or provisions and the rights and obligations of the Parties shall be
construed and enforced accordingly, subject to the terms and conditions of Article VIII.G.1 hereof.
3. The Parties hereto agree that no provisions of this Agreement shall be construed for or against or
interpreted to the advantage or disadvantage of any Party hereto by any court or otherwise by
reason of any Party’s having or being deemed to have structured or drafted such provision, each
Party hereby expressly acknowledging its participation and/or its right and ability to participate, in
the structuring and drafting hereof. The Parties further acknowledge that: (i) this Agreement is the
product of good faith, arm’s length negotiations between them; (ii) such Parties possess
substantially equal bargaining power; and (iii) each Party has had the opportunity to obtain the
advice of legal counsel regarding the negotiations and execution of this Agreement.
4. This Agreement is not a third party beneficiary contract, nor shall this Agreement create (or be
construed or deemed to create) any rights or remedies, whether legal, equitable or otherwise, on
behalf of Members or any other third parties as against Administrator or Client.
5. This Agreement is not a contract of insurance and Administrator is not an insurer or underwriter of
Client’s liability under, or with respect to, the Plan. Except as otherwise provided in this
Agreement, Client has and will retain the ultimate responsibility for payment of Prescription Drug
Claims and other expenses under the Plan.
6. The article and section headings contained in this Agreement are solely for the purpose of
reference, are not part of the agreement of the parties and shall not in any way affect the meaning
or interpretation of this Agreement.
E. Authority; Counterparts. The signatories to this Agreement each represents and warrants that he/she has
full corporate or company authority to sign this Agreement on behalf of his/her respective Party and to
legally bind and obligate such Party by so signing. Additionally, upon such signature by such authorized
signatory(ies) of Client in each signature block of this Agreement (and the Client Application and the
Business Associate Agreement made a part of this Agreement), Client represents, warrants, covenants and
agrees that it has the necessary power and authority, corporate, company or otherwise (and that all
necessary action has been taken for Client), to enter into this Agreement and such other agreements and to
consummate the transactions provided for herein and therein. This Agreement (including the exhibits
hereto) may be executed simultaneously in any number of counterparts, each of which shall be deemed an
original, but all of which shall constitute one and the same instrument. Facsimile signatures or signatures
transmitted by electronic mail shall be deemed to be original signatures for all purposes.
F. Relationship of the Parties.
1. Administrator and Client are, and shall at all times be, solely independent contractors. Neither
Party nor its Representatives is, nor shall such Party or its Representatives be construed to be, by
any Party to this Agreement or by any third party, an employee, joint venturer, partner, principal,
agent, master, servant, fiduciary or other Representative of the other Party. Neither Party is
authorized to assume or create any obligations, duties or liabilities, express or implied, on behalf
of or in the name of the other Party, except as otherwise expressly provided to the contrary in this
Agreement. Furthermore, Client acknowledges, agrees and understands that Administrator, on the
one hand, and PBM and any other contracting parties of Administrator, on the other hand, are
unaffiliated entities and independent parties who are solely independent contractors of one
another.
2. Client acknowledges that: (i) Client shall be responsible, in its sole discretion, for the selection of
any consultants or experts to provide advice to Client as to liabilities under the Plan or duties or
obligations of the Plan or Client under applicable law or otherwise; and (ii) Client is not
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contracting hereunder with Administrator for the provision of any such advice by Administrator.
To the contrary, the Parties expressly acknowledge that Administrator will not provide such
advice to Client, and that neither Party has any obligation or responsibility to advise the other
Party about such other Party’s compliance or noncompliance with any law, regulation, statute, rule
or otherwise (including without limitation under ERISA, the Internal Revenue Code, the Public
Health Services Act and/or any regulation with respect to the any of the foregoing).
3. Client expressly acknowledges and agrees that: (i) Administrator is not (nor shall it be deemed to
be at any time) a “fiduciary” for any purpose under ERISA, the Internal Revenue Code and/or the
Public Health Services Act (and any regulations thereunder), applicable state law, common law or
otherwise; (ii) Administrator is not (nor shall it be deemed to be at any time) the administrator of
the Plan for any purpose; (iii) Client (and not Administrator) possesses and expressly retains at all
times during this Agreement and thereafter the sole and absolute authority and responsibility to
design, amend, terminate, modify, in whole or in part, all or any portion of the Plan, including
without limitation the sole and absolute authority to control and administer the Plan and any assets
of the Plan, and such authority and responsibility cannot be delegated to Administrator; and (iv)
Client (and not Administrator) has 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 Prescription Drug Claims or provision of benefits, to review denied
Prescription Drug Claims and to resolve complaints by Members.
G. Compliance with Laws; Force Majeure.
1. Each Party hereby certifies and shall perform its duties and obligations under this Agreement in a
manner that complies with all federal, state, local and other laws and regulations applicable to
such Party and its performance hereunder, including without limitation the federal anti-kickback
statute set forth at 42 U.S.C. § 1320a-7b(b) (“Anti-Kickback Statute”), the Public Contracts Anti-
Kickback Statute, and/or the federal “Stark Law” set forth at 42 U.S.C. § 1395nn (“Stark Law”),
as and to the extent applicable to each such Party. Each Party is responsible for obtaining its own
legal advice concerning its compliance with applicable laws. If Administrator’s performance of its
duties and obligations under this Agreement is made materially more burdensome or expensive
due to a change in federal, state or local laws or regulations or the interpretation or enforcement
thereof, the Parties shall negotiate promptly and in good faith an appropriate adjustment to the
fees, costs, expenses and/or charges paid to Administrator hereunder or other amendment to this
Agreement reasonably necessary in light of the change in law or regulation or the interpretation or
enforcement thereof. If the Parties cannot agree on such adjusted amounts or amended terms, then
either Party may terminate this Agreement upon thirty (30) days prior written notice to the other
Party.
2. Neither PBM nor Administrator shall be obligated at any time to provide the prescription drug
benefit and related services identified in this Agreement to Client or Client’s Members if Client or,
if applicable, Members, are located in a state requiring a prescription benefit manager to be a
fiduciary to Client or Members, in any capacity, contrary to or inconsistent with the terms and
conditions specifically identified in this Agreement. In the event any state law or regulation
requires PBM or Administrator to be a fiduciary to Client or a Member contrary to or inconsistent
with the terms and conditions identified in this Agreement, Administrator may elect not to provide
such prescription drug benefit and related services identified in this Agreement to the impacted
Members upon thirty (30) days prior written notice to Client.
3. Each Party, upon giving prompt written notice thereof to the other Party, shall not be liable for
delay or failure to perform hereunder, if such delay or failure is due to a cause or causes beyond
the reasonable control of such Party (a “Force Majeure Event”). For purposes of this Agreement,
a Force Majeure Event may include, but shall not be limited to, acts of God or the public enemy,
fire, flood, storms, explosion, earthquake, war, terrorism, malicious mischief, accident,
transportation tie-up, riot or civil insurrection, embargo, boycott, lock-out, strike or labor
disturbance, slowdown or labor stoppage of any kind or act of any government, foreign or
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domestic. Each Party shall have the option, but not the obligation, to terminate this Agreement in
its entirety if the other Party fails to perform any material obligation of this Agreement because of
the occurrence of a Force Majeure Event and either (i) the other Party does not cure such breach
within thirty (30) days after the occurrence of the Force Majeure Event, or (ii) such failure is not
reasonably subject to cure within such period. The non-breaching Party must provide written
notice of termination to the breaching Party.
H. Access to Information; Audit Rights; Government Agency Submitted Claims.
1. Administrator and Client will allow each other reasonable access at reasonable times to
administrative information relating to this Agreement and the Parties’ respective duties,
obligations and benefits described herein, upon the giving of reasonable advance notice by the
requesting Party (subject to any limitations with respect to information that is not in the possession
or control of Administrator or is otherwise subject to a covenant of confidentiality in favor of a
third party). The requesting Party agrees to execute a confidentiality agreement in form and
content reasonably satisfactory to both Parties as a condition precedent to being permitted such
access to such information.
2. Client, or a mutually acceptable independent, third party auditor retained by Client, may conduct,
with at least sixty (60) days prior written notice and at Client’s sole cost and expense, an annual
Prescription Drug Claims audit of Administrator’s data that directly relates to Prescription Drug
Claims billings for the prior Agreement year. The scope and manner of such a Prescription Drug
Claims audit (including applicable guidelines and timelines) shall be as reasonably determined by
Administrator and communicated to Client sufficiently in advance of any such audit. Any such
audit shall be conducted in accordance with PBM’s audit protocol then in place (a copy of which
will be provided to Client upon request therefor). Client agrees that it will execute (and shall
cause any mutually acceptable independent, third party auditor taking part in any such audit to
execute) a confidentiality agreement in form and content reasonably acceptable to Client,
Administrator and PBM prior to conducting any such audit. Any request by Client to permit an
auditor to perform an audit will constitute Client’s direction and authorization to Administrator
and PBM to disclose PHI to auditor. In the event of an audit by a mutually acceptable
independent third party, Administrator and Client shall be provided with a copy of any proposed
audit report or other written materials documenting such audit and Administrator will have a
reasonable opportunity to comment on any such report or written materials documenting such
audit before such are finalized. Upon finalization of audit results and agreement between Client
and Administrator on any identified adjustments or discrepancies, if any, the period under review
will be considered closed by the Parties and such agreed upon adjustment payments, if any, shall
be paid by the appropriate party within thirty (30) days of execution by the Parties of an
appropriate release document covering the audit period. Client acknowledges that it shall not be
entitled to audit documents that Administrator is barred from disclosing by applicable law or
pursuant to an obligation of confidentiality to a third party or that are not under the direction or
control of Administrator. Administrator will make 100% of claims available to the Client or a
mutually acceptable third party retained by Client to audit the processing contract.
3. Client acknowledges that government agencies, including without limitation federal and state
governmental payors, may seek eligibility or similar data from Administrator or PBM regarding
Members and may submit to Administrator or PBM claims for reimbursement for prescription
drug benefits provided to such government agencies (or their agents) to Members (“Government
Claims”). Client authorizes (a) Administrator and PBM to provide such data as requested by
government agencies, including without limitation federal and state governmental payors, or their
authorized agents and further authorizes Administrator and/or PBM to process such Government
Claims. Client acknowledges that Administrator may advance payment for Government Claims on
behalf of Client during the Term of this Agreement. Client shall reimburse Administrator, in
accordance with Client’s payment obligations under this Agreement, for all amounts advanced by
Administrator for payment of Government Claims. Client acknowledges that Government Claims
submitted by or on behalf of a state Medicaid Agency or other governmental payor shall be paid if
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submitted within three (3) years from the original date of fill unless a longer period is required by
applicable law. In addition, Government Claims submitted by or on behalf of a state Medicaid
agency or other governmental payor may not be denied on the basis of the format of the
Government Claim or failure to present proper documentation at the point-of-sale. Client shall
also reimburse Administrator for any adjustments or reconciliations to previously processed
Government Claims that may be payable to government agencies in accordance with applicable
laws and regulations. The administrative fee for processing Government Claims shall be invoiced
at the paper submitted claim rate already agreed to by the Parties or as otherwise agreed upon in
writing by Administrator and Client. Administrator reserves the right to (a) terminate these
services upon ninety (90) days prior notice to Client, or (b) delegate these services to a third party
claims processor other than PBM. Notwithstanding any provision of this Agreement to the
contrary, Client acknowledges and agrees that Client shall be solely responsible for processing and
making payment of any Government Claims applicable to Client and its Members received after
the effective date of the termination or expiration of this Agreement.
I. Confidential and Proprietary Information.
1. The term “Confidential Information” includes, but is not limited to, this Agreement or any
information of either Client or Administrator (including without limitation its designees) (whether
oral, written, electronic, visual or fixed in any tangible medium of expression) relating to either
party’s services, operations, systems, programs, inventions, techniques, suppliers, customers and
prospective customers, contractors, costs and pricing data, trade secrets, know-how, processes,
plans, designs and other information of or relating to either party’s business. Confidential
Information does not include Protected Health Information, the use and disclosure of which is
governed by Article IX.C (including Exhibit B) of this Agreement. Without limiting the foregoing
in any way, Client acknowledges and agrees, for itself and its Representatives, that the following
financial fields constitute Confidential Information of Administrator for purposes of this
Agreement and shall not be disclosed by Client to any third parties without the express, prior
written consent of Administrator: (a) total AWP; (b) ingredient cost; (c) dispensing fees; (d) drug
cost; (e) patient amount paid; (f) total amount paid; (g) sales tax; (h) U&C charges; (i) specialty
indicator; and (j) brand/generic indicator (collectively, the “Proprietary Financial Fields”).
Administrator further represents that: (A) the Proprietary Financial Fields and the pricing and
pricing terms included in Exhibit A hereto (collectively, the “Exempt Information”) are
Confidential Information that is provided to Client and its Representatives by Administrator under
a claim by Administrator that such Exempt Information (i) is proprietary, confidential and trade
secret in nature, (ii) if disclosed or otherwise made public, would cause competitive harm to
Administrator and PBM and their respective businesses, (iii) is exempt from disclosure under the
Colorado Open Records Act, C.R.S. §§ 24-72-200.1, et seq (the “CORA”) or other applicable law
(collectively, “Sunshine Law”) (including without limitation § 24-72-204(3)(a)(IV) of the CORA),
and (iv) must at a minimum be redacted or otherwise removed in a manner satisfactory to
Administrator prior to any disclosure or dissemination by Client or its Representatives under
Sunshine Law or otherwise, subject to Article VIII.I.5; (B) Administrator considers the Exempt
Information to constitute valuable trade secrets of Administrator pursuant to the Colorado
Uniform Trade Secrets Act (C.R.S. §§ 7-74-101 through 7-74-110) and other applicable law from
which Administrator derives independent economic value from not being known to and readily
ascertainable by proper means by third parties who can obtain economic value from its disclosure
or use; (C) Administrator’s efforts to maintain the confidentiality and secrecy of this Confidential
Information have been reasonable and diligent in light of the Parties’ relationship created by this
Agreement; and (D) misappropriation or disclosure of this Confidential Information other than as
permitted pursuant to the terms and conditions of this Agreement and applicable law will result in
substantial economic harm to Administrator and PBM and their respective business opportunities
and prospects.
2. Administrator and Client shall not disclose or make use of any Confidential Information without
the prior written consent of the non-disclosing party, which consent may be conditioned upon the
execution of a mutually agreeable confidentiality agreement except as (a) permitted under this
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Agreement, or (b) as required by law. Each party may disclose Confidential Information of the
other party only to its authorized Representatives who have a need to know the Confidential
Information in order to accomplish the purpose of this Agreement and who (i) have been informed
of the confidential and proprietary nature of the Confidential Information; and (ii) with respect to
Representatives, have agreed in writing not to disclose it to others and to treat it in accordance
with the requirements of this Section. Administrator or Client, as applicable, shall be responsible
to the other Party for any breach of this Agreement by its respective Representatives.
3. The foregoing shall not apply to such Confidential Information to the extent: (i) the information is
or becomes generally available or known to the public through no fault of the receiving party; (ii)
the information was already known by or available to the receiving party prior to the disclosure by
the other party on a non-confidential basis; (iii) the information is subsequently disclosed to the
receiving party by a third party who is not under any obligation of confidentiality to the disclosing
party; (iv) the information has already been or is hereafter independently acquired or developed by
the receiving party without violating any confidentiality agreement or other similar obligation; or
(v) the information is required to be disclosed pursuant to a court order or applicable law. Except
in accordance with the requirements of this Article VIII.I.3, neither Party nor its Representatives
may disclose, or permit to be disclosed, Confidential Information of the other party as an expert
witness in any proceeding, or in response to a request for information by oral questions,
interrogatories, document requests, subpoena, civil investigative demand, formal or informal
investigation by any government agency, judicial process or otherwise. If either Party, or any of its
respective Representatives, is requested to disclose the Confidential Information of the other party
for any of the reasons described in the preceding sentence such Party shall give prompt prior
written notice to the other Party to allow the other party to seek an appropriate protective order or
modification of any requested disclosure. The receiving party agrees to reasonably cooperate with
the disclosing party in any action by the disclosing party to obtain a protective order or other
appropriate remedy. If the receiving party is ultimately legally compelled to disclose such
Confidential Information, the receiving party shall disclose only the minimum required pursuant to
and in order to comply with the court order or other legal compulsion.
4. Without limiting any other rights and remedies available under this Agreement or otherwise, any
unauthorized disclosure or use of Confidential Information would cause Administrator or Client,
as applicable, immediate and irreparable injury or loss that may not be adequately compensated
with money damages. Accordingly, if either Party fails to comply with this Article VIII.I, the
other Party will be entitled to seek to obtain specific performance including immediate issuance of
a temporary restraining order or preliminary injunction enforcing this Agreement, and to judgment
for Losses caused by the breach, and to seek to obtain any other remedies provided by law or in
equity.
5. Notwithstanding anything to the contrary in this Agreement, Administrator acknowledges that
certain Confidential Information disclosed to Client by Administrator may potentially be subject
to disclosure under Sunshine Law. Upon receipt of any request or demand by any person or entity
seeking release of Confidential Information and/or prior to any release or disclosure of
Confidential Information to any person or entity (whether by written, oral, electronic or other
means), in any case, that Client or its Representatives deem necessary or required under Sunshine
Law, other applicable law or otherwise, Client shall immediately notify Administrator in writing
of such request, demand or obligation (a “Sunshine Law Disclosure Request”). Administrator
shall have two (2) Business Days following receipt of such Sunshine Law Disclosure Request to
provide comments and feedback to Client regarding such request, such comments and feedback to
include any redactions that Administrator deems appropriate to protect Exempt Information from
disclosure to a third party. If Administrator does not provide its feedback within two (2) Business
Days, Client may disclose such Confidential Information without breaching this Agreement.
Client will consider Administrator’s comments and feedback and will make Administrator’s
requested redactions prior to Client’s release of the materials sought in the Sunshine Law
Disclosure Request, provided that Client reasonably determines that there is a good faith basis or
argument for such redactions. Administrator will indemnify and hold harmless Client against (a)
DocuSign Envelope ID: 65EE6C19-9F57-445B-A6EC-BC44D59C7381
(9/2016 Version)
any action or complaint brought by a third party to compel compliance with Sunshine Law as a
result of any redactions included in Client’s response to a Sunshine Law Disclosure Request and
(b) any out-of-pocket expenses, including, but not limited to, court costs, all other costs of
litigation, attorney’s fees, fines, and statutory damages, to the extent arising from or related to
Client’s disclosure of the requested materials subject to the Sunshine Law Disclosure Request in a
redacted form reasonably acceptable to the Parties.
J. Assignment. Neither party may assign this Agreement without the prior written consent of the other party,
provided such consent will not be unreasonably withheld. However, Administrator may assign this
Agreement or delegate the duties to be performed by or behalf of Administrator under this Agreement
without the consent of Client as part of the sale of all, or substantially all, of the assets of Administrator or
similar sale or disposition of Administrator that would, upon consummation, be deemed to constitute an
assignment of this Agreement under applicable law.
K. Disclosure of Client Information to Third Parties; Confidentiality. Client acknowledges, understands
and agrees that it may be necessary or desirable for Administrator to disclose information obtained from,
provided by or otherwise regarding or relating to Client, Client’s Plan, and/or Client’s employees and
Members (excluding any information that constitutes PHI under HIPAA) to certain vendors, consultants,
brokers or other third parties in connection with Administrator’s services, duties and/or obligations
rendered by, or required of, Administrator under this Agreement or otherwise relating to its performance
hereunder.
ARTICLE IX – ERISA, COBRA AND HIPAA DUTIES
A. ERISA. If Client’s offering of the Prescription Drug Program provided for in this Agreement constitutes
part of a “welfare plan” within the meaning of Section 3(1) of the ERISA, it is understood and agreed that
the duties of Client and Administrator are as follows:
1. Plan and Summary Description: It shall be the duty of Client (and not the duty of Administrator)
to furnish any Plan, summary plan description or summary of material modifications to Members
and beneficiaries as required by ERISA and any regulations under it. It shall be the duty of
Administrator to provide Client, upon request, with a summary of benefits available under the
Plan for use in conjunction with the summary plan description and summary of material
modifications.
2. Annual and Summary Annual Reports: It shall be the duty of Client to furnish any annual reports
to participants and/or governmental agencies as required by ERISA, the Internal Revenue Code
and any regulations thereunder. It shall be the duty of Administrator to send to Client, upon
Client’s reasonable request, such information which Administrator has within its possession as
will permit Client to make the annual reports. It shall be the duty of Client to provide the
Members with summary annual reports as required by ERISA and any regulations under it.
3. Plan Administrator: It is expressly understood and agreed by the Parties to this Agreement that
any and all duties assigned by ERISA and any regulations thereunder to the Plan Administrator
including, but not limited to, those duties specified in the Plan shall be deemed for purposes of this
Agreement as duties of Client and not those of Administrator.
B. Continuation Coverage. It is also expressly understood and agreed by the Parties to this Agreement that
the compliance with continuation coverage requirements imposed on group health plans by ERISA, the
Internal Revenue Code and the Public Health Service Act (including the regulations thereunder) shall be
the sole obligation of Client under this Agreement and not the obligation of Administrator. Further,
Administrator will not accept payment directly from any employee or former employee (or dependent of
such employee or former employee) that is eligible for continuation coverage under the Plan. It shall be the
responsibility of Client (and not Administrator), or such other third party administrator handling the group
health plan of which the Prescription Drug Program is a part, to collect the premiums due from the
DocuSign Envelope ID: 65EE6C19-9F57-445B-A6EC-BC44D59C7381
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employee or former employee (or dependent of such employee or former employee) for continuation
coverage and to satisfy any and all other COBRA duties and responsibilities relating thereto.
C. HIPAA and Privacy and Security.
1. Client shall be solely responsible for any and all duties and responsibilities applicable to Client
under HIPAA and similar state law that may apply to the Prescription Drug Program offered under
this Agreement at any time, including but not limited to those provisions applicable to Client
relating to portability, non-discrimination, privacy and security. The Parties will cause a HIPAA
Business Associate Agreement in the form attached hereto as Exhibit B.
2. Prescription Drug Claims, as well as eligibility information, which is de-identified in accordance
with HIPAA and other applicable law, and which is not identifiable on a Member basis, may be
used, disclosed, reproduced, adapted or sold by PBM and/or Administrator. Such de-identified
data may be provided to nationally recognized data integration firms to support appropriate
administration of PBM’s drug management programs as this benchmarking data enables PBM to
compare against other drug population sets and seek to improve programs and services for clients
or otherwise.
[Signature Pages Follow]
DocuSign Envelope ID: 65EE6C19-9F57-445B-A6EC-BC44D59C7381
(9/2016 Version)
IN WITNESS WHEREOF, Administrator and Client have caused this Agreement to be executed and
delivered by their respective authorized Representatives as of the Effective Date.
Administrator: Client:
RxBenefits, Inc. City of Fort Collins
By: ______________________________________ By:______________________________________
Printed Name: Printed Name:_____________________________
Its: Its:______________________________________
ATTEST:
__________________________
APPROVED AS TO FORM:
__________________________
DocuSign Envelope ID: 65EE6C19-9F57-445B-A6EC-BC44D59C7381
Lauren Simmons
Director - Compliance and Legal
Assistant City Attorney
Purchasing Director
Gerry Paul
City Clerk
(9/2016 Version)
[Exhibit A (Client Application) Follows]
DocuSign Envelope ID: 65EE6C19-9F57-445B-A6EC-BC44D59C7381
(9/2016 Version)
EXHIBIT A
CLIENT APPLICATION
[IMPORTANT – PLEASE READ CAREFULLY: Client should carefully review Sections A, B and C of
this Exhibit A below which have been completed by Administrator in order to ensure the accuracy and
completeness of such information. Client shall promptly notify Administrator of any inaccuracy or omission
with respect to such terms and conditions, if applicable (including, without limitation, the Client Information
in Section A). Client should also carefully review and complete Section D of this Exhibit A below.]
A. INFORMATION ABOUT CLIENT
Client Name:
City of Fort Collins
HR/Primary Contact:
Joaquin Garbiso
Phone:
(970) 416-4365
Mail Address:
215 N Mason Street
HR Contact Email:
jgarbiso@fcgov.com
Fax: ____________
City/State/Zip:
Fort Collins, CO 80522
Billing Contact:
Phone:
Main Phone:
Billing Contact Email:
Fax: ____________
Send Invoices and Confidential Standard Reports to:
Authorized Website Users of Client (User’s Name and E-mail Address): ______________________
_______________________________________________________________________________________
_______________________________________________________________________________________
* Note: Client may add or delete Authorized Website Users by providing written notice of such changes to
Administrator pursuant to the notice provisions of Article VIII.B of the Agreement.
B. PLAN DESIGN; MEMBER COST SHARE
Member Cost Share:
Please see current Summary of Benefits.
Client represents and warrants that the design of Client’s Plan as reflected in a Plan Design document for Client
(“PDD”), accurately reflects the applicable terms of Client’s Plan for purposes of this Agreement. Client shall
provide Administrator with ninety (90) days prior written notice of any proposed changes to the design of Client’s
Plan (including the PDD), which changes shall be consistent with the scope and nature of the services to be provided
by Administrator under this Agreement. Client agrees that it is responsible for Losses resulting from any failure to
implement Plan Design changes which are not communicated in writing to Administrator. In addition, Client shall
notify Members of any Plan Design changes prior to the effective date of any such changes.
C. SERVICES; FORMULARY; PRICING GUARANTEES.
1. Base Administrative Services: The following services are the base administrative services made available
to Client and its Members pursuant to the Agreement (including this Exhibit A) (the “Base Administrative
Services”), as applicable:
• Administration of eligibility submitted via tape or telecommunication
• Eligibility maintenance
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• Client support system for on-line access to current eligibility
• Administration of Client’s Plan Design
• In-network claims adjudication via on-line claims adjudication system
• Designated Account Team
• Client clinical and plan consulting, analysis and cost projections
• Annual analysis of program utilization and impact of plan design and managed care
interventions
• Welcome Package and ID Cards for new Members
• Standard Member communications
• Toll-free telephone access to customer service for the program for use by Members and Client’s
benefits personnel and Representatives
2. Additional Administrative Services: Client will pay for additional administrative services (the
“Additional Administrative Services”) beyond those included in the Base Administrative Services that are
requested by Client and provided or made available by Administrator under the program as follows:
2.1 Administrative Fees
PBM Services – No Additional Fee
Customer service for Members Electronic claims processing
Electronic/on-line eligibility submission Plan setup
Standard coordination of benefits (COB)
(reject for primary carrier)
Software training for access to our on-line system(s)
FSA eligibility feeds
Network Pharmacy Services
Pharmacy help desk Pharmacy reimbursement
Pharmacy network management Network development (upon request)
Home Delivery Services
Benefit education Prescription delivery – standard
Reporting Services
Web-based client reporting – Annual Strategic Account Plan report
Ad-hoc desktop parametric reports Billing reports
Claims detail extract file electronic (NCPDP format) Inquiry access to claims processing system
Load 12 months claims history for clinical reports and
reporting
Website Services
Express-Scripts.com — access to reporting tools,
eligibility update capability, contact directory, sales and
marketing information, and benefit and enrollment
support secured through Risk Base Authentication
Express PreviewSM enrollment option — available
during open enrollment to enable Members to evaluate
prescription benefit plan options
Express-Scripts.com for Members — access to benefit,
drug, health and wellness information; prescription
ordering capability; and customer service
Implementation Package and Member Communications
New Member packets (includes two standard resin ID
cards)
Member replacement cards printed via web
Implementation support
Clinical
Concurrent Drug Utilization Review (DUR)
Prior Authorization – Administrative
a. Non-clinical Prior Authorization
b. Lost/stolen overrides
c. Vacation supplies
Included at no charge
DocuSign Envelope ID: 65EE6C19-9F57-445B-A6EC-BC44D59C7381
(9/2016 Version)
PBM Services Fees
Transaction Fees Payable for Administrative Services
(per Article IV.B of the Agreement)
$0.65 per Prescription Drug Claim made by Members
payable on a bi-weekly basis
Member-submitted paper claims processing fee
Medicaid subrogation claims fee
$2.50/claim
$2.50/claim
Network Pharmacy Services
Network Pharmacy Audit Program 20% of audit recoveries
Reviews and Appeals Management
Initial Determinations (i.e. coverage reviews) and Level
One Appeals for the Coverage Authorization Program,
consisting of:
Prior Authorization
Step Therapy
Drug Quantity Management
Included in the existing utilization management PMPM
charge
OR
Included in the existing PA charge of $55 per review
Initial Determinations and Level One Appeals for the
Benefit Review Program, consisting of reviews known
as:
Plan Design Related Requests
Plan Exclusion Reviews (clinical or administrative
reviews of non-Covered Drugs)
Copay Reviews
Plan Limit Reviews (e.g. age, gender, days’ supply
limits)
Plan Rule/Administrative Reviews/Non-clinical
Reviews
Clinical Benefit Reviews
Direct Claim Reject Reviews
$55 per review
Final and Binding Appeals – Level Two Appeals * and/or
Urgent Appeals**
*Level One for clients with only one level of appeal
** Appeals can be urgent at Level One or Level
Two and decisions are final and binding.
$0.00 per review* (incremental to PMPM fees or the per
review fees above)
* This additional fee is applied to each initial
determination.
External Reviews by Independent Review Organizations -
for non-grandfathered plans
$800 per review
Comprehensive Consumer Driven Health (CDH)
Solution
Consumer Choice Plan
Technical
Bi-directional data exchange; dedicated operations; 24-
hour a day, seven-days a week monitoring and quality
control; performance reporting; and analytics
Member Advocacy
Dedicated CDH member services, open enrollment tools
and Member communications library, robust online
features, and preventive care
(9/2016 Version)
PBM Services Fees
Part D Subsidy standard service (ESI sends reports to
Client)
A. Notice of Creditable Coverage
$0.62 PMPM for Medicare-qualified Members with a
minimum annual fee of $5,000
$1.35/letter + postage
3. Pricing. The financial terms set forth are conditioned on such exclusive arrangement and all other
specified conditions set forth in Exhibit A of the Agreement. Client will pay to Administrator the amounts set forth
below, net of applicable Copayments. The application of Brand Drug and Generic Drug pricing below may be
subject to certain “dispensed as written” (DAW) protocols and Client defined plan design and coverage policies for
adjudication and Member Copayment purposes. Sales or excise tax or other governmental surcharge, if any, will be
the responsibility of Client.
Members will always pay based on the logic below:
Retail: Lowest of (i) the U&C price, (ii) Plan copayments/coinsurance, or (iii) discounted AWP (including
MAC price, when MAC pricing is applicable).
Mail Order: Lower of (i) Plan copayments/coinsurance or (ii) discounted AWP (including MAC price, when
MAC pricing is applicable).
3.1 Pricing Guarantees.
(a) Ingredient Cost Guarantee. ESI will guarantee an average aggregate annual discount as reflected
below on Client utilization to be calculated as follows:
[1-(total discounted AWP ingredient cost (excluding dispensing fees and claims with ancillary
charges, and prior to application of Copayments) of applicable Prescription Drug Claims for the
annual period divided by total undiscounted AWP ingredient cost (both amounts will be calculated
as of the date of adjudication) for the annual period)].
Notwithstanding anything herein to the contrary: (i) a Prescription Drug Claim that processes at
the Brand rates (Participating Pharmacy Reimbursement Rates) and (Mail Pharmacy
Reimbursement Rates), as indicated on the ingredient cost field of the Prescription Drug Claim’s
data record, shall be reconciled as part of the Brand guarantee below; and (ii) a Prescription Drug
Claim that processes at the Generic Drug rates (Participating Pharmacy Reimbursement Rates) and
(Mail Pharmacy Reimbursement Rates) above, as indicated on the ingredient cost field of the
Prescription Drug Claim’s data record, shall be reconciled as part of the Generic Drug guarantee
below. The only Prescription Drug Claims that shall be excluded from the reconciliation of the
pricing guarantees are as identified in the “Claims Excluded” column of the table below. All other
Prescription Drug Claims shall be included in the reconciliation of the guarantees.
Type of
Guarantee
Participating
Pharmacy
Retail
Maintenance
Network
(84-90 Days’
Supply)
Mail
Service
Pharmacy
Claims Excluded
Brand
AWP –
17.00%
AWP –
19.50%
AWP –
24.75%
OTC, compounds, Member Submitted
Claims, Subrogation Claims, vaccines,
Specialty Products, biosimilar products,
long term care pharmacy claims and
(9/2016 Version)
pharmacies (if applicable)
(b) Dispensing Fee. ESI will guarantee a maximum average aggregate annual per claim dispensing
fee on Client utilization to be calculated as follows:
[total dispensing fee of applicable claims for the annual period divided by total claims for the
annual period].
Type of
Guarantee
Participating
Pharmacy
Mail
Service
Pharmacy*
Claims Excluded
Generic Drug
Dispensing
Fee/Claim
$0.82
$0.00
OTC, compounds, Member
Submitted Claims, Subrogation
Claims, vaccines, Specialty Products,
biosimilar products, long term care
pharmacy claims and products filled
through in-house or 340b pharmacies
(if applicable)
Brand
Dispensing
Fee/Claim
$0.82
$0.00
OTC, compounds, Member
Submitted Claims, Subrogation
Claims, vaccines, Specialty Products,
biosimilar products, long term care
pharmacy claims and products filled
through in-house or 340b pharmacies
(if applicable)
* Dispensing Fees are inclusive of shipping and handling. If carrier rates (i.e., U.S. mail and/or applicable
commercial courier services) increase by more than $0.05 during the Term of this Agreement, the
Dispensing Fee guarantees will be increased to reflect such increase(s).
Guarantees will be measured and reconciled on an annual basis within 180 days of the end of each Contract
Year. To the extent Client changes its benefit design or Formulary during the Term of the Agreement, the
guarantee will be equitably adjusted if there is a material impact on the discount achieved. Subject to the
remaining terms of this Agreement, ESI will pay the difference of Client’s cost for any shortfall between
the actual result and the guaranteed result. Guarantees for pricing components are measured and reconciled
in the aggregate across all pricing components. Any dollar savings generated in excess of one component
may be used to offset a short fall for any other component.
Notwithstanding anything in this Agreement to the contrary, the Generic average annual ingredient cost
discount guarantees set forth above will include only those Prescription Drug Claims that processed to
Client for payment where the underlying prescription drug product was identified by Medi-Span as having
a Multi-Source Indicator code identifier of “Y” on the date dispensed (or was identified by Medi-Span as
having a Multi-Source Indicator identifier of an “M,” “N,” or “O” on the date dispensed, but was
substituted and dispensed by the Mail Service Pharmacy as its “house generic”), unless such Prescription
Drug Claim is otherwise excluded above. The Brand average annual ingredient discount guarantees set
forth above will include only those Prescription Drug Claims that processed to Client for payment where
the underlying prescription drug product was identified by Medi-Span as having a Multi-Source Indicator
code identifier of “M”, “N”, or “O” on the date dispensed (except in cases where the underlying
prescription drug product was substituted and dispensed by the Mail Service Pharmacy as its “house
generic”), unless such Prescription Drug Claim is otherwise excluded above.
(9/2016 Version)
rates shown below. Upon ESI Specialty Pharmacy acquisition of limited distribution products, Members will obtain
prescriptions through ESI Specialty Pharmacy.
Ingredient Cost Dispensing Fee
Exclusive ESI Specialty
Pharmacy
See Exclusive Specialty Product List
$0.00
Participating Pharmacy
Specialty Products
Participating Pharmacy Specialty Product
List
$0.82
(b) Pricing for ASES is as follows:
(i) For Specialty Products needing an additional charge to cover costs of all ASES required
to administer the Specialty Products, the following standard per diem and nursing fee
rates shall apply. Exceptions to the standard per diem and nursing rates are set forth in
(ii), below, which list may be updated from time to time by ESI. Pricing for home
infusion supplies and services provided at Participating Pharmacies (for example, limited
distribution products not then available through ESI Specialty Pharmacy or overrides)
will be pass through.
Standard Per Diem $65/dose
Standard Nursing Fee/ First 2 Hours $150
Standard Nursing Hourly $75
(ii) Additional exceptions to AWP Discount Rates and Standard Per Diem & Nursing Fees
Brand Name
AWP
Discount Per Diem
EPOPROSTENOL 1.0% $65/day
REMODULIN 5.0% $65/day
The AWP discount includes Phone Support Nursing, Supplies, Pump, first two training
visits, and Coordination of In-Person Nursing. In-home nursing that is requested/needed
beyond the first two training visits will be charged at a rate of $150 for the first two hours
and $75 for every hour after.
(c) Specialty Products will be excluded from the non-specialty price guarantees set forth in the
Agreement. In no event will the Mail Service Pharmacy or Participating Pharmacy pricing terms specified in the
Agreement, including, but not limited to, the annual average ingredient cost discount guarantees, apply to Specialty
Products.
(d) Unless otherwise set forth in an agreement directly between ESI Specialty Pharmacy and Client, if
a Specialty Product dispensed or ASES provided by ESI Specialty Pharmacy is billed to Client directly by ESI
Specialty Pharmacy instead of being processed through ESI and Administrator, Client agrees to timely pay ESI
Specialty Pharmacy for such claim pursuant to the rates above and within thirty (30) days of Client’s, or its
designee’s, receipt of such electronic or paper claim from ESI Specialty Pharmacy. ESI Specialty Pharmacy shall
have 360 days from the date of service to submit such electronic or paper claim.
(e) SPECIALTY NET EFFECTIVE DISCOUNT GUARANTEE - ESI guarantees that the overall
annual net effective discount for the products listed on the Specialty Products List will be at least AWP (-) minus
18.50% for Client. Within one hundred and eighty (180) days following the end of each Contract Year, ESI will
calculate the actual net effective discount for the products listed on the Specialty Products List that were dispensed
through the mail order channel to determine if the guarantee has been met. If the actual overall net effective
discount is less than the guaranteed net effective discount ESI will reimburse Client the full dollar amount of the
difference between the actual and guaranteed net effective discounts. Client will retain any amount that the actual
net effective discount exceeds the guaranteed net effective discount. The calculation for the actual net effective
discount will be as follows: ((Total Ingredient Cost for the products listed on the Specialty Products List) divided by
DocuSign Envelope ID: 65EE6C19-9F57-445B-A6EC-BC44D59C7381
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(Total AWP for the products listed on the Specialty Products List)) minus 1. This guarantee is contingent on
Client’s participation in the National Preferred Formulary and an exclusive specialty arrangement.
3.3 Influenza and Other Vaccinations. Vaccinations shall adjudicate at the lower of:
(a)
Participating Pharmacy
INFLUENZA
Participating Pharmacy
OTHER VACCINES
Ingredient
Cost
+
Participating Pharmacy Ingredient Cost as set
forth in the Agreement
Participating Pharmacy Ingredient Cost as set forth
in the Agreement
Dispensing
Fee
+
Participating Pharmacy Dispensing Fee as set
forth in the Agreement
Participating Pharmacy Dispensing Fee as set forth
in the Agreement
Professional
Service Fee
(PSF); cost
for
pharmacist
to administer
the vaccine
Pass-Through
(capped at $15 per vaccine claim)
Pass-Through
(capped at $20 per vaccine claim)
Vaccine
Program Fee
*
$2.50
per vaccine claim
$2.50
per vaccine claim
* The Vaccine Program Fee will be billed separately to Client as part of the administrative invoice according to
the billing frequency set forth in the Agreement. This Vaccine Program Fee will apply to any vaccine claims,
whether at contracted rates or U&C, and is in addition to any per Prescription Drug Claim administrative fee set
forth in the Agreement.
OR
(b) the combined ingredient cost, dispensing fee (if any) and professional service fee (if any) that the
Participating Pharmacy generally charges an individual paying cash, without coverage for prescription drug
benefits, plus the Vaccine Program Fee set forth above.
Coverage is subject to Plan provisions. No vaccine claims will be included in any guarantees set forth in
the Agreement and/or amendments thereto.
D. REBATES
1. Rebate Amounts. Subject to: (i) the conditions set forth in Sections 2 through 4 below and elsewhere in
this Agreement; and (ii) Client meeting the Plan Design conditions identified in the table below, the following
guaranteed amounts will be payable to Client during the Term of this Agreement:
Formulary:
ESI National Preferred
National Plus
Network
Retail Maintenance
(9/2016 Version)
(1) Certain Participating Pharmacies have agreed to participate in the extended (84 – 90) day supply network
(“Maintenance Network”) for maintenance drugs. Rebate Amounts in the 84 – 90 Days’ Supply column in the table
set forth above are applicable only if Client implements a Plan Design that requires Members to fill such days’
supply at a Maintenance Network Participating Pharmacy (i.e., Client must implement a Plan Design whereby
Members who fill extended days’ supply prescriptions at a Participating Pharmacy other than a Maintenance
Network Participating Pharmacy do not receive benefit coverage under the Plan for such prescription). If no such
Plan Design is implemented, Rebate Amounts for such days’ supply will be the same as for Prescription Drug
Claims for less than an 84 days’ supply, and Rebate Amounts for an 84 – 90 days’ supply in the table set forth above
shall not apply, even if a Maintenance Network Participating Pharmacy is used.
2. Exclusions. Member Submitted Claims, Subrogation Claims, biosimilar products, OTC products, claims
older than 180 days, claims through Client-owned or 340b pharmacies, and claims pursuant to a 100% Member
Copayment plan are not eligible for the guaranteed Rebate amounts set forth in Section 1. above.
3. Rebate Payment Terms. Subject to the conditions set forth in this Agreement, the guaranteed amounts set
forth in Section 1 above will be payable to Client within approximately one hundred and eighty (180) days
following the end of each calendar quarter for utilization occurring during such quarter.
4. Conditions
4.1. ESI contracts with pharmaceutical manufacturers for Rebates on its own behalf and for its own benefit,
and not on behalf of Client. Accordingly, ESI retains all right, title and interest to any and all actual
Rebates received from manufacturers. ESI will pay Client amounts equal to the Rebate amounts
allocated to Client, as specified above, from ESI’s general assets (neither Client, its Members, nor
Client’s Plan retains any beneficial or proprietary interest in ESI’s general assets). Client
acknowledges and agrees that neither it, its Members, nor its Plan will have a right to interest on, or the
time value of, any Rebate payments received by ESI during the collection period or moneys payable
under this Section. No amounts for Rebates will be paid until this Agreement is executed by Client.
ESI will have the right to apply Client’s allocated Rebate amount to unpaid Fees.
4.2 Client acknowledges that it may be eligible for Rebate amounts under this Agreement only so long as
Client, its affiliates, or its agents do not contract directly or indirectly with anyone else for discounts,
utilization limits, Rebates or other financial incentives on pharmaceutical products or formulary
programs for Prescription Drug Claims processed by ESI pursuant to the Agreement, without the prior
written consent of ESI. In the event that Client negotiates or arranges with a pharmaceutical
manufacturer for Rebates or similar discounts for any Covered Drugs hereunder, but without limiting
ESI’s right to other remedies, ESI may immediately withhold any Rebate amounts earned by, but not
yet paid to, Client as necessary to prevent duplicative Rebates on Covered Drugs. To the extent Client
knowingly negotiates and/or contracts for discounts or Rebates on claims for Covered Drugs without
prior written approval of ESI, such activity will be deemed to be a material breach of this Agreement,
entitling ESI to suspend payment of Rebate amounts hereunder and to renegotiate the terms and
conditions of this Agreement.
4.3 Under its Rebate program, ESI may implement ESI’s Formulary management programs and controls,
which may include, among other things, cost containment initiatives, and communications with
Members, Participating Pharmacies, and/or physicians. ESI reserves the right to modify or replace
such programs from time to time. Guaranteed Rebate amounts, if any, set forth herein, are conditioned
on adherence to various Formulary management controls, benefit design requirements, claims volume,
and other factors stated in the applicable pharmaceutical manufacturer agreements, as communicated
by ESI to Client from time to time. If any government action, change in law or regulation, change in
the interpretation of any law or regulation, or any action by a pharmaceutical manufacturer has an
adverse effect on the availability of Rebates, then ESI may make an adjustment to the Rebate terms
and guaranteed Rebate amounts, if any, hereunder.
4.4 Rebate Acknowledgment; No Representation; Rebate Limitations. Client acknowledges that
Administrator is not making any representation, warranty or guaranty of any kind or nature, either
express, implied or otherwise, regarding the amount of Rebates to be paid or remitted to Client
pursuant to this Agreement, except as specifically set forth in writing herein. In addition, Client
waives, releases and forever discharges PBM and Administrator from any Losses arising from a
pharmaceutical company’s (a) failure to pay Rebates; (b) breach of an agreement related to Rebates; or
DocuSign Envelope ID: 65EE6C19-9F57-445B-A6EC-BC44D59C7381
(9/2016 Version)
(c) negligence or misconduct. Client acknowledges that whether and to what extent pharmaceutical
companies are willing to provide Rebates to Client may depend upon a variety of factors, including the
content of the PDL, the Plan’s design features, Client meeting criteria for Rebates, and the extent of
participation in PBM’s formulary management programs, as well as PBM/Administrator receiving
sufficient information regarding each Claim for submission to pharmaceutical companies for Rebates.
Client acknowledges and agrees that PBM may, but shall not be required to, initiate any collection
action to collect any Rebates from a pharmaceutical company. In the event PBM does initiate
collection action against a pharmaceutical company to collect Rebates, PBM may offset any reasonable
costs, including reasonable attorneys’ fees and expenses, arising from any such action.
Notwithstanding any provision of this Agreement to the contrary, Administrator shall only be
responsible for payment of Rebates to Client pursuant to the terms of this Agreement if such Rebates
are actually received by Administrator during the Term of this Agreement.
5. Rebate amounts paid to Client pursuant to this Agreement are intended to be treated as “discounts”
pursuant to the federal anti-kickback statute set forth at 42 U.S.C. §1320a-7b and implementing regulations. Client
is obligated if requested by the Secretary of the United States Department of Health and Human Services, or as
otherwise required by applicable law, to report the Rebate amounts and to provide a copy of this notice. ESI will
refrain from doing anything that would impede Client from meeting any such obligation.
E. PBM’S INFLATION PROTECTION PROGRAM
1. IP Program. The Inflation Protection Program (“ESI IP Program”) may be elected by Client upon its prior
written request to Administrator, subject to the terms and conditions of the ESI IP Program set forth in Section 2
below. Subject to the terms and conditions set forth below, under the ESI IP Program Administrator will pay to
Client $2.00 per Formulary Brand Drug claim (“Client Inflation Payment”). Subject to the terms and conditions set
forth herein, under the ESI IP Program, Administrator will pay Client the Client Inflation Payment within
approximately one hundred and eighty (180) days following the end of each calendar quarter for utilization
occurring during such calendar quarter. All non-Formulary claims and Generic Drug claims shall be excluded.
2. Terms and Conditions of ESI’s IP Program.
2.1 Exclusions. The following claims will be excluded from all calculations related to ESI’s IP Program:
▪ Medicare claims, Medicaid claims and any other government health care program claims
▪ OTCs, member submitted claims, subrogation claims, compounds, Generic Drugs, claims
submitted by Client-owned, in-house, or on-site pharmacies, 340B claims, claims submitted
through a 100% Member cost-share program, biosimilars, drugs where the quantity or packaging
has been changed by the manufacturer from the prior year, and drugs for which there was no
utilization in the calendar year prior to the calendar year for which the Client Inflation Payment is
being determined.
2.2 ESI’s Right of Equitable Adjustment. If Client makes material changes to its Formulary or benefit
design that negatively impact PBM’s ability to control inflation relative to Client’s Formulary drug
mix, then Client acknowledges that PBM or Administrator reserves the right in PBM’s discretion to
make an equitable adjustment to the Client Inflation Payment.
2.3 The ESI IP Program, and the underlying economics, is separate and apart from rebates and
manufacturer administrative fees, and the amounts described above in this Section F will be paid to
Client in addition to any rebate payments to which Client is entitled pursuant to the terms of this
Agreement. Client will not be entitled to receive any amounts related to drug price inflation or a
related guarantee other than as set forth above in this Section F of this Exhibit A (Client Application).
2.4 No payments will be made to Client unless Client has an executed this Agreement.
F. EXECUTION BY CLIENT
Client hereby represents and warrants that the information contained in Section A of this Client Application
is true and correct in all respects and Client hereby agrees to the specific terms, conditions and financial
arrangements set out in Sections B, C, D and E of this Client Application. Client agrees that if any
information in Section A changes, Client will give Administrator prompt notice of such changes.
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Furthermore, Client understands that this Client Application (Exhibit A) is a part of the Administrative
Services Agreement between Client and Administrator to which it is attached and incorporated into by
reference and that Client is bound by all terms and conditions of such Administrative Services Agreement.
All capitalized terms used in this Client Application but not specifically defined herein shall have the
meanings given to such terms in the Administrative Services Agreement to which this Client Application is
attached and made a part of.
[Signature Page Follows]
DocuSign Envelope ID: 65EE6C19-9F57-445B-A6EC-BC44D59C7381
(9/2016 Version)
IN WITNESS WHEREOF, Client has caused this Client Application (Exhibit A to the Agreement) to be
executed as of the Effective Date. In the event this Client Application is amended by the Parties after the Effective
Date, the Parties may substitute such amended Client Application for the former Client Application, provided the
Parties set forth the date from and after which such amended Client Application shall be effective (the “date” line at
the bottom of the Administrator’s acknowledgment signature block on an amended Client Application shall be such
new effective date with respect to such amended Client Application). The Parties further agree that they will attach
such amended Client Application to this Agreement and provide a copy of this Agreement with the amended Client
Application (Exhibit A) to Administrator and Client for their respective records. Any such amended Client
Application must be signed by Client’s authorized representative and acknowledged, agreed to, accepted and dated
by Administrator’s authorized representative.
CLIENT:
City of Fort Collins
By: ____________________________________________
Printed Name: ___________________________________
Its: ____________________________________________
Acknowledged, agreed to and accepted by:
ADMINISTRATOR:
RxBenefits, Inc.
By: ____________________________________________
Printed Name: _____________________________________
Its: ______________________________________________
ATTEST:
__________________________
APPROVED AS TO FORM:
__________________________
DocuSign Envelope ID: 65EE6C19-9F57-445B-A6EC-BC44D59C7381
Director - Compliance and Legal
Lauren Simmons
Assistant City Attorney
Purchasing Director
Gerry Paul
City Clerk
(9/2016 Version)
EXHIBIT B
BUSINESS ASSOCIATE AGREEMENT
THIS BUSINESS ASSOCIATE AGREEMENT (this “Agreement”), by and between City of Fort
Collins’s Health Plan (the “Plan”) and City of Fort Collins (the “Company”) (the Plan and the Company
are collectively referred to herein as the “Company”), and RxBenefits, Inc. (the “Business Associate”), is
effective as of January 1, 2017.
RECITALS
WHEREAS, due to the services (the “Services”) performed by the Business Associate with
respect to the Plan, Protected Health Information (“PHI”) and Electronic Protected Health Information
subject to the Privacy Regulations and the Security Regulations, promulgated by the United States
Department of Health and Human Services (“HHS”) under the Health Insurance Portability and
Accountability Act of 1996 (the “Regulations”), may be transmitted, created, received, and/or maintained;
and
WHEREAS, to the extent required by the Regulations, the Business Associate and the Company
desire to comply with the “Business Associate” requirements of the Regulations and to memorialize their
agreements with respect to such compliance.
AGREEMENT
NOW, THEREFORE, for and in consideration of the mutual covenants and conditions set forth
herein, and other good and valuable consideration, the receipt and adequacy of which hereby are
acknowledged, the Business Associate and the Company agree as follows:
1. Definitions. Unless otherwise defined herein, capitalized terms shall have the same
meanings as set forth in the Regulations.
2. Restrictions on Use and Disclosure of PHI. The Business Associate may Use PHI only to
perform the permitted and required Uses and Disclosures as provided by this Agreement or as Required
By Law. The Business Associate shall make reasonable efforts to limit PHI that is subject to this
Agreement to the minimum amount that is necessary to accomplish the intended purpose of a required or
permitted Use or Disclosure under this Agreement. To the extent practicable, Business Associate agrees
that each use, disclose, or request of PHI shall be limited to PHI in a limited data set, as that term is
defined at 45 C.F.R. § 164.514(e)(2). The Business Associate shall not Use or Disclose PHI received
from the Company or any participant in the Plan in any manner that would constitute a violation of the
Regulations if the Company made the same Use or Disclosure, except that the Business Associate may
Use or Disclose such PHI for the Business Associate's proper management and administration and legal
responsibilities.
The Business Associate may Disclose PHI for the purposes described in this Section 2 only in the
following circumstances: such Disclosure is Required By Law; or the Business Associate obtains
reasonable assurances from the person to whom the PHI is Disclosed that it will be held confidentially
and Used or further Disclosed only as Required By Law or for the purpose for which it was Disclosed to
the person, and the person agrees to notify the Business Associate of any instances of which it is aware in
which the confidentiality of the PHI has been breached.
3. Agents and Subcontractors Bound by Agreement. If any agent or subcontractor of the
Business Associate (other than the Business Associate’s Workforce) will have access to PHI that is
received from, or created or received by the Business Associate on behalf of the Company, then the
Business Associate will enter into an agreement with such agent or subcontractor whereby the agent or
subcontractor agrees to be bound by the terms of this Agreement with respect to PHI.
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4. Safeguards for Protection of PHI; Report of Unauthorized Use or Disclosure. The
Business Associate agrees that it will implement and use appropriate safeguards to prevent any Use or
Disclosure of PHI in violation of this Agreement. The Business Associate agrees that it will report to the
Company any Use or Disclosure of PHI, of which the Business Associate becomes aware, that is in
violation of this Agreement. The Business Associate agrees to 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 this Agreement.
5. Cooperation by the Business Associate. The Business Associate agrees to cooperate
with the Company in providing an accounting of Disclosures of PHI received under this Agreement as
requested by an individual to whom it relates, except to the extent the Regulations provide otherwise. In
the event that Business Associate uses or maintains an electronic health record, Business Associate agrees
that such accounting shall include disclosures made to carry out treatment, payment, and health care
operations through the use of such electronic health record. Upon receiving a request for an accounting of
disclosures directly from an individual who has received an accounting of disclosures from Company,
which provided a list of all business associates acting on behalf of the Plan, including Business Associate,
Business Associate agrees to provide an accounting of its disclosures of PHI to such individual as
required by the Privacy Regulations. In response to such a request from an individual, Business
Associate may elect to provide either (i) an accounting of disclosures that includes disclosures of
subcontractors and/or agents acting on behalf of Business Associate or (ii) an accounting of disclosures
that are made by the Business Associate as well as a list of all subcontractors and/or agents acting on
behalf of Business Associate, including contact information such as mailing address, phone, and email
address. The Business Associate shall respond to requests from the Company for the information
described in this Section 5 and make available such information to the Company within a reasonable
period of time to enable the Company to timely respond to any request.
The Company agrees that the Business Associate will not maintain any Designated Record Sets
on its behalf and that the Business Associate assumes no responsibility to respond to individuals’ requests
for access or amendments as provided in Sections 164.524 and 164.526 of the Regulations.
Business Associate agrees that the requirements of the Privacy Regulations shall be applicable to
Business Associate in the performance of its obligations pursuant to the Agreement.
Business Associate agrees that it shall not directly or indirectly receive remuneration in exchange
for any PHI, unless a valid authorization, as that term is defined at 45 C.F.R. § 164.508, is obtained or the
purpose of the exchange meets one of the exceptions set forth in 45 C.F.R. 164.502(a)(5)(ii).
6. Documenting Disclosures. In order to cooperate with the Company in accordance with
Section 5 above, the Business Associate agrees to document all Disclosures of PHI and information
related to such Disclosures as would be required for the Company to respond to an individual’s request
for an accounting of Disclosures of PHI under Section 164.528 of the Regulations. Such documentation
shall include: (a) the date of the Disclosure; (b) the name of the entity or person who received the PHI
and, if known, the address of such entity or person; (c) a brief description of the PHI Disclosed; and (d) a
brief statement of the purpose of the Disclosure (which would reasonably inform an individual of the
basis for the Disclosure).
7. HHS. The Business Associate agrees to make its internal practices, books and records
relating to the Use and Disclosure of PHI received from or created or received by the Business Associate
on behalf of the Company available to the Company and the Secretary of HHS for purposes of
determining the Company’s compliance with the Regulations. Notwithstanding this Section 7, no
attorney-client privilege or other privilege shall be deemed waived by the Company or the Business
Associate.
DocuSign Envelope ID: 65EE6C19-9F57-445B-A6EC-BC44D59C7381
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8. Termination. Company and Business Associate shall each have the right to immediately
terminate this agreement upon the violation by the other of a material term of this Agreement or of the
Regulations, including violations relating specifically to the permitted and required Uses and Disclosures
of PHI by the Company or Business Associate; provided, however, that the breaching party shall be
provided the opportunity to cure the breach to the satisfaction of the other within a reasonable period of
time. If the beaching-party does not cure the default, the non-breaching party shall be entitled to terminate
this Agreement or if it is not feasible to terminate this Agreement, report the problem to the Secretary of
HHS.
Upon termination of this Agreement, the Business Associate and the Company agree to determine
whether the return or destruction of PHI received from, or created or received by the Business Associate
under this Agreement is feasible. If such return or destruction is mutually determined to be feasible, the
Business Associate shall promptly return or destroy all such PHI received from or created or received by
the Business Associate under this Agreement. If such return or destruction is mutually determined to not
be feasible, the protections of this Agreement shall continue to apply to such PHI after termination
(including the Business Associate’s obligations in Section 5), and further Uses and Disclosures of such
PHI shall be restricted to only those purposes that make the return or destruction of the information
infeasible. If mutual agreement is not made as to the feasibility of any return or destruction of PHI, the
parties agree to use mediation to resolve this issue.
9. Term of Agreement. The term of this Agreement shall be such period of time as the
Business Associate is performing the Services. In the event that such Services are terminated, this
Agreement also shall terminate, except that the provisions of Sections 8 and 15 shall survive any
termination of this Agreement.
10. Notice. All written communications, demands, and notices between the parties hereto
must be posted by first class mail, postage paid or express mail to the following addresses:
To the Business Associate: To the Company:
RxBenefits, Inc.
Attn: Lauren Simmons
3500 Blue Lake Drive, Suite 200
Birmingham, Alabama 35243
City of Fort Collins
Attn: Benefits Manager
215 N Mason Street
Fort Collins, CO 80522
City of Fort Collins
Attn: Director of Purchasing
215 N Mason Street
Fort Collins, CO 80522
City of Fort Collins
Attn: City Attorney’s Office
P.O. Box 580
Fort Collins, CO 80522
11. Entire Agreement. This Agreement supersedes all previous contracts and constitutes the
entire agreement of whatever kind or nature existing between the parties with respect to the subject matter
hereof, and no party shall be entitled to benefits other than those specified herein. As between the parties,
no oral statement or prior written material not specifically incorporated herein shall be of any force and
effect; and the parties specifically acknowledge that in entering into and executing this Agreement, the
parties rely solely upon the representations and agreements contained in this Agreement and no others.
This Agreement may be amended only by an instrument in writing executed by the parties hereto and may
be supplemented only by documents delivered in accordance with the express terms hereof.
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12. Counterparts. This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original, but which together shall constitute one and the same instrument.
13. No Third Party Beneficiaries. Nothing express or implied in this Agreement is intended
to confer, nor shall anything herein or therein confer, upon any person other than the Company and the
Business Associate and their respective successors or assigns in interest, any rights, remedies, obligations,
or liabilities whatsoever.
14. Modification For Change in Law. Upon the occurrence of changes or amendments to the
Regulations or other law that affect the legality of or any provision in this Agreement, the Company and
the Business Associate agree to modify this Agreement to comport with such changes or amendments.
Any such modification of this Agreement shall be in writing and signed by the Company and the Business
Associate.
15. Indemnification. The Business Associate hereby agrees to indemnify, defend, and hold
harmless the Company (including, but not limited to, its directors, employees, officers, and agents) from
and against any and all claims, causes of action, liabilities, damages, costs, or expenses (including, but not
limited to, attorneys’ fees) (“Losses”) incurred by the Company as a result of the Business Associate’s (or
any party acting by or through the Business Associate), negligence, gross negligence or willful
misconduct or failure to perform any of its duties or obligations under this Agreement. Notwithstanding
the foregoing, (a) the Business Associate shall have no liability for any Losses that result from the
Company’s (or any party acing by or through the Company) negligence, gross negligence or willful
misconduct or failure to perform any of its duties or obligations under this Agreement and (b) Losses
otherwise indemnifiable by the Business Associate hereunder shall be reduced to the extent that such
Losses were incurred as a result of the Company’s (or any party acing by or through the Company) gross
negligence or willful misconduct or failure to perform any of its duties or obligations under this
Agreement.
16. Security. The Business Associate shall:
(a) Implement administrative, physical, and technical safeguards that reasonably and
appropriately protect the confidentiality, integrity, and availability of the Electronic Protected Health
Information that it creates, receives, maintains, or transmits on behalf of the Company as required by the
Regulations;
(b) Ensure that any agent, including any subcontractor, to whom the Business Associate
provides such Electronic Protected Health Information agrees in writing to implement reasonable and
appropriate safeguards to protect it;
(c) Report to the Company any security incident of which the Business Associate becomes
aware;
(d) Make its policies and procedures and documentation required by the Regulations relating
to such administrative, physical, and technical safeguards, available to the Company and the Secretary of
HHS for purposes of determining the Company’s compliance with the Regulations;
(e) Acknowledge its obligation to comply with the Security Regulations in using and
disclosing Electronic Protected Health Information, including but not limited to 45 C.F.R. §§ 164.308
(Administrative safeguards), 164.310 (Physical safeguards), 164.312 (Technical safeguards), and 164.316
(Policies and procedures and documentation requirements) of the Security Regulations.
(f) Notify the Company without unreasonable delay in writing of the occurrence of a breach,
as that term is defined at 45 C.F.R. § 164.402, of which Business Associate becomes aware. Business
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Associate shall also promptly provide Company such other information required to be provided to
individuals under 45 C.F.R. § 164.404(c) as it becomes available after such breach.
17. Governing Law. This Agreement shall be governed by and construed under the laws of
the State of Colorado without regard to the principles of conflicts of laws of said state.
[Signature Page Follows]
DocuSign Envelope ID: 65EE6C19-9F57-445B-A6EC-BC44D59C7381
(9/2016 Version)
IN WITNESS WHEREOF, the parties herein have caused this Business Associate Agreement to
be executed by their duly authorized representatives as of the date first written above.
PLAN: City of Fort Collins’ Health Plan
By: _________________________________
Its: _________________________________
COMPANY: City of Fort Collins
By:_________________________________
Its:_________________________________
BUSINESS ASSOCIATE: RxBenefits, Inc.
By:_________________________________
Its: _________________________________
ATTEST:
__________________________
APPROVED AS TO FORM:
__________________________
DocuSign Envelope ID: 65EE6C19-9F57-445B-A6EC-BC44D59C7381
Director - Compliance and Legal
Assistant City Attorney
Purchasing Director
Purchasing Director
City Clerk
Network
(84-90 Days’ Supply)
Home Delivery
Products Specialty Products
Rebates per Brand Rx
Client will
receive the
greater of 80%
of Rebates
earned or
$90.00 per
brand claim
Client will receive the
greater of 80% of
Rebates earned or
$225.00 per brand claim
Client will receive
the greater of 80% of
Rebates earned or
$270.00 per brand
claim.
$500.00 -
(Dispensed through
Accredo)
$60.00 - (Dispensed
through National
Plus Network)
DocuSign Envelope ID: 65EE6C19-9F57-445B-A6EC-BC44D59C7381
Any claim that is considered a single source generic will be included in the generic reconciliation.
3.2 Specialty Products
(a) Exclusive Care. ESI Specialty Pharmacy is the exclusive provider of Specialty Products for the
reimbursement rates shown on the Exclusive ESI Specialty Pharmacy Specialty Product List. Any Specialty
Product dispensed at a Participating Pharmacy (for example, limited distribution products not then available through
ESI Specialty Pharmacy or overrides) will be reimbursed at the standard Participating Pharmacy Specialty Product
DocuSign Envelope ID: 65EE6C19-9F57-445B-A6EC-BC44D59C7381
products filled through in-house or 340b
pharmacies (if applicable)
Generic
AWP –
77.50%
AWP –
77.50%
AWP –
82.75%
OTC, compounds, Member Submitted
Claims, Subrogation Claims, vaccines,
Specialty Products, biosimilar products,
long term care pharmacy claims and
products filled through in-house or 340b
DocuSign Envelope ID: 65EE6C19-9F57-445B-A6EC-BC44D59C7381
Health Choices
Medication Adherence Monitoring and Outreach and
proactive, personalized Member communications
Drug Choices
Benefit Coaching, Prescription Benefit Review
Statements, proactive, personalized Member
communications
All services: $0.65 PMPM
Technical and Member Advocacy: $0.35 PMPM
Health Choices and Drug Choices: $0.30 PMPM
*these charges would be in addition to any pricing
adjustments if greater than ten percent of Client’s total
utilization for all Plans is attributable to a CDHC.
Medicare Part D – Retiree Drug Subsidy (RDS)
Part D subsidy enhanced service (ESI sends reports to
CMS on behalf of Client)
(i) Notice of Creditable Coverage
$1.12 PMPM for Medicare-qualified Members with a
minimum annual fee of $7,500
$1.35/letter + postage
DocuSign Envelope ID: 65EE6C19-9F57-445B-A6EC-BC44D59C7381