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City Clerk Document No.
City Council Meeting Date:
September 23, 2021
CALENDAR YEAR 2022 AMENDMENT TO CITY OF CHANDLER AGREEMENT
GROUP MEDICAL AND PHARMACY PROGRAM AND
COBRA ADMINISTRATION ADMINISTRATIVE SERVICE AGREEMENT AND
MAXIMUM AGGREGATE AND SPECIFIC LIABILITY AGREEMENT
CITY OF CHANDLER AGREEMENT NO. HR5-948-3502
THIS CALENDAR YEAR 2022 AMENDMENT (CY 2022 Amendment) to the Administrative Service Agreement and
the Maximum Aggregate and Specific Liability Agreement is entered by and between the City of Chandler, an Arizona
municipal corporation (City), and Blue Cross Blue Shield of Arizona, Inc. (Contractor), (City and Contractor may
individually be referred to as Party and collectively referred to as Parties) and made this
, 20
(Effective Date).
RECITALS
WHEREAS, the Parties entered into agreements, dated September 24, 2015, for Group Medical and Pharmacy Program
and COBRA Administration and the Maximum Aggregate and Specific Liability Agreement (collectively, “the
Agreement”) with an initial term of January 1, 2016, through December 31, 2016, with the option to renew for six
additional one-year terms; and
WHEREAS, the Parties have extended the Agreement annually subject to the terms and conditions of the original
Agreement as modified by the terms of each annual Amendment; and
WHEREAS, the Parties wish to extend the Agreement, as amended, for a one-year period, from January 1, 2022, through
December 31, 2022, and to amend certain rates, terms, and information set forth in the Agreement.
AGREEMENT
NOW THEREFORE, the Parties agree as follows:
1.
The recitals are accurate and are incorporated and made a part of the Agreement by this reference.
2.
The terms of the Administrative Service Agreement and the Maximum Aggregate and Specific Liability
Agreement are amended to extend the Agreement for a one-year period from January 1, 2022, through
December 31, 2022.
3.
The Agreement is amended by the Administrative Service Agreement and Maximum Aggregate and Specific
Liability Agreement Amendment, and associated documents, effective January 1, 2022, through December 31,
2022 (CY 2022), attached hereto as Exhibit 1.
4.
The Administrative Service Agreement and Maximum Aggregate and Specific Liability Agreement are further
amended to replace the City of Chandler PPO Red Medical Option Benefit Plan for CY 2021, City of Chandler
PPO Blue Medical Option Benefit Plan for CY 2021, and City of Chandler HSA White Medical Option Benefit
Plan for CY 2021 with the respective Red, Blue, and White Medical Option Benefit Plan Documents for CY
2022 in their final form, and said documents shall be incorporated by reference as Exhibits to the Agreement.
DocuSign Envelope ID: E6B73EC6-F58A-4023-BD84-02062E1BC749
5.
All other terms and conditions of the Agreement, as amended through CY 2021, remain unchanged and in full
force and effect. If a conflict or ambiguity arises between this CY 2022 Amendment and the Agreement, the
terms and conditions of this CY 2022 Amendment shall prevail and control.
IN WITNESS WHEREOF, the Parties have entered into this Amendment on the Effective Date.
FOR THE CITY
FOR THE CONTRACTOR
By: _________________________________________
By:_________________________________________
_ Michael Groeger
Its: Mayor
Its: VP – Sale & Specialty Products
APPROVED AS TO FORM:
By: _______________________________________
City Attorney
ATTEST:
By: _________________________________________
City Clerk
DocuSign Envelope ID: E6B73EC6-F58A-4023-BD84-02062E1BC749
APPROVED AS TO FORM BCBSAZ Legal Division
By:_____________________________
Date:___________________________
8/18/2021 | 11:21 AM PDT
Administrative Service Agreement (ASA)
Name of the Group Health Plan: CITY OF CHANDLER GROUP HEALTH PLAN
Legal Name of Group: City Of Chandler
Effective Date: 01/01/2022 - 12/31/2022
Group Number(s): 028399
Current Date: 7/29/2021
Strategic Rel. Executive: Christie Thomas
Funding: 12/24 Incurred ASC with Medical and Pharmacy
Days Notice: 210
Underwriter: Brian Cohen
Total Enrollment: 1,682
Specific Stop Loss Limit: $350,000
Broker: SEGAL COMPANY ARIZONA INC: RACHEL MARIE CALISI
Aggregate Stop Loss Limit: 125%
Commission: 0.000%
Commission (% of Billed Rate): 0.000%
SOLD BENEFITS
Benefit Descriptions
Grandfathered Status
N: Non-Grandfathered
N: Non-Grandfathered
N: Non-Grandfathered
Red Medical Option
Enrollment
Admin
SSL $350K
ASL 125%
Commission
Other
Fixed Cost
ICAP
Exp Liab
Max Liab
Employee
170
$34.88
$67.57
$2.36
$0.00
$0.00
$104.81
$1,014.40
$916.33
$1,119.21
Employee + Spouse
164
$34.88
$67.57
$2.36
$0.00
$0.00
$104.81
$1,749.43
$1,504.35
$1,854.24
Employee + Child(ren)
91
$34.88
$67.57
$2.36
$0.00
$0.00
$104.81
$1,541.00
$1,337.61
$1,645.81
Employee + Family
225
$34.88
$67.57
$2.36
$0.00
$0.00
$104.81
$2,561.92
$2,154.35
$2,666.73
Total Plan 1
650
$22,672
$43,921
$1,534
$0
$0
$68,127
$1,176,018
$1,008,941
$1,244,144
Blue Medical Option
Enrollment
Admin
SSL $350K
ASL 125%
Commission
Other
Fixed Cost
ICAP
Exp Liab
Max Liab
Employee
35
$34.88
$67.57
$2.36
$0.00
$0.00
$104.81
$993.48
$899.59
$1,098.29
Employee + Spouse
16
$34.88
$67.57
$2.36
$0.00
$0.00
$104.81
$1,713.38
$1,475.51
$1,818.19
Employee + Child(ren)
7
$34.88
$67.57
$2.36
$0.00
$0.00
$104.81
$1,509.26
$1,312.22
$1,614.07
Employee + Family
19
$34.88
$67.57
$2.36
$0.00
$0.00
$104.81
$2,509.16
$2,112.14
$2,613.97
Total Plan 2
77
$2,686
$5,203
$182
$0
$0
$8,070
$120,425
$104,410
$128,495
White Plan
Enrollment
Admin
SSL $350K
ASL 125%
Commission
Other
Fixed Cost
ICAP
Exp Liab
Max Liab
Employee
295
$34.88
$67.57
$2.36
$0.00
$0.00
$104.81
$783.30
$731.45
$888.11
Employee + Spouse
158
$34.88
$67.57
$2.36
$0.00
$0.00
$104.81
$1,350.89
$1,185.52
$1,455.70
Employee + Child(ren)
102
$34.88
$67.57
$2.36
$0.00
$0.00
$104.81
$1,189.94
$1,056.76
$1,294.75
Employee + Family
400
$34.88
$67.57
$2.36
$0.00
$0.00
$104.81
$1,978.28
$1,687.43
$2,083.09
Total Plan 3
955
$33,310
$64,529
$2,254
$0
$0
$100,094
$1,357,200
$1,185,851
$1,457,294
Sold CDH Account Pricing PEPM (Not Included Above)
PEPM Account Fee
White Plan
$2.70
CDH Annual Account Setup Fee (Not Included Above)
# of Accounts
Annual Fee
Annual account setup fee is billed by CDH and is based on the total number of HRA and FSA plans.
0 - 499
$250
500 - 2,999
$500
3,000 +
$1,500
One-Time Fee /
Sharecare Account Summary
Effective Date
Non-Enrollees
Employee
EE + Spouse
EE + Child(ren)
EE + Family
Non-Enrollees
Basic
1/1/2022
No
$0.00
$0.00
$0.00
$0.00
$0
Minimum Monthly Attachment Level:
$2,388,278
(Based on 90% Minimum Attachment Point.)
Mayo Provider Included In-Network:
No
Consumer-Directed Healthcare Integration:
Yes
Rider(s) with Annual Amount: Misc Trust & Wellness $80,000; On-Site Wellness Consultant $100,000
(This ASA document is Exhibit C and Exhibit C-1 to the Maximum Aggregate and Specific Liability Agreement only if the Employer has BCBSAZ stop loss coverage.)
Sold Rates Effective 01/01/2022
Red Medical Option
Blue Medical Option
White Plan
INET: Ded $1,750/$3,500; 85%; OOP $3,500/$7,000; OV/ER/UC Ded+85%; Rx $10/$30/$50/$100 2x MOD;
ONET: Ded $5,000/$10,000; 60%; OOP $10,000/$20,000
INET: Ded $750/$1,500; 80%; OOP $2,750/$5,500; OV/UC Ded+80%; ER $100 Ded+80%; Rx $10/$30/$50/$100 2x MOD;
ONET: Ded $1,750/$3,500; 50%; OOP $6,500/$13,000
INET: Ded $500/$1,000; 85%; OOP $2,500/$5,000; OV $25/$40; ER $100 Ded+85%; UC $50; Rx $10/$30/$50/$100 2x MOD;
ONET: Ded $1,000/$2,000; 60%; OOP $5,000/$10,000
Monthly PEPM Fees
Proposed administration assumes BCBSAZ will retain Rx Rebates. In exchange for retaining Rx Rebates, BCBSAZ has adjusted the Admin PEPM by the Rx Rebate Credit. Rx Rebate Credit (PEPM) = $24.50
Employers selecting Consumer-Directed Healthcare (CDH) Account Administration (including integration), for account types; HSA, HRA, FSA, DCFSA & LPFSA, hereby direct BCBSAZ to collect the
administration fees and forward the proportional fees to HealthEquity for services, along with the required personal health information. BCBSAZ collects CDH Account administration fees and is not
responsible for any reconciliation, recoupment or adjustments to payments received and forwarded to on behalf of Employer.
Employer agrees to pay for charges for CDH administration services. For HSA and HRAs, these charges apply to all employees enrolled in a health plan the group has paired with a CDH account. For FSAs,
those charges apply to any employee for whom an FSA election has been sent to BCBSAZ by the employer.
Health Savings Account
Page 1 of 7
028399 - 5
EXHIBIT 1
Administrative Service Agreement (ASA)
Name of the Group Health Plan: CITY OF CHANDLER GROUP HEALTH PLAN
Legal Name of Group: City Of Chandler
Effective Date: 01/01/2022 - 12/31/2022
Group Number(s): 028399
Current Date: 7/29/2021
Strategic Rel. Executive: Christie Thomas
Funding: 12/24 Incurred ASC with Medical and Pharmacy
Days Notice: 210
Underwriter: Brian Cohen
Total Enrollment: 1,682
Specific Stop Loss Limit: $350,000
Broker: SEGAL COMPANY ARIZONA INC: RACHEL MARIE CALISI
Aggregate Stop Loss Limit: 125%
Commission: 0.000%
Commission (% of Billed Rate): 0.000%
(This ASA document is Exhibit C and Exhibit C-1 to the Maximum Aggregate and Specific Liability Agreement only if the Employer has BCBSAZ stop loss coverage.)
Performance Guarantees:
Yes
Network Discount Guarantees:
Yes
BCBSAZ reserves the right to adjust these premium rates retroactive to the first day of any billing month in which enrollment varies by more than fifteen percent (15%) from that listed above.
7/29/2021
BCBSAZ Representative
Date
Group Representative Signature
Group Representative Title
Date
This Rate Acceptance Form must be signed and returned prior to BCBSAZ issuing ID Cards. If any information on this Form is inaccurate, please provide the correct information on this Form.
All information from the exhibit Assumptions IASC-2022-028399-5, Administrative Summary, Guarantees, 100+ Employer Application (Exhibit 1) and Disclosure of 'Eligible Indirect Compensation' (Exhibit 2)
are incorporated herein by reference.Employer acknowledges electronic receipt of the Uniform Summaries of Benefits and Coverage (SBCs) for plans selected and the SBCs are incorporated herein by
reference. As of the effective date on page 1, this amends and is made part of the Employer's Group Master Contract (GMK) with BCBSAZ. All provisions in the GMK not modified by this Amendment
remain in full force and effect.
The ACA prohibits waiting periods in excess of 90 days. By signing below you represent that you do not impose a waiting period which is longer than 90 days and that you have made all necessary changes
to bring all waiting periods for your plan into compliance with the ACA requirements. You agree to promptly advise BCBSAZ of any change which may impact the accuracy of this representation. You agree to
provide BCBSAZ with timely and accurate information regarding enrollee effective dates and shall ensure such effective dates comply with applicable laws.
Page 2 of 7
028399 - 5
City Of Chandler
Group Number(s):
028399
Renewal Period:
01/01/2022 - 12/31/2022
Assumption: IASC-2022-028399-5
GENERAL
*
* BCBSAZ may adjust rates if the following requirements are not met:
Where the employer does not contribute 100%, BCBSAZ requires 70% of all eligible employees to participate.
BCBSAZ requires a minimum of 50% of all full-time eligible employees in the group to be enrolled in the employer's group plan.
Employer must contribute a minimum of 50% of the employee's health premium.
Payroll deduction for employee contribution is required.
*
*
* BCBSAZ reserves the right to re-evaluate the rates if there is a significant change in the rating assumptions (e.g. enrollment).
*
*
*
*
*
*
PHARMACY
Rates and coverage are contingent upon BCBSAZ’s right to assess an amount against the group for late payment of any premium, fee and/or other
amounts due to BCBSAZ in an amount equal to twelve percent (12%) per annum of the outstanding balance for which the payment or any portion of the
payments is past due. In addition, if two (2) or more payments are received untimely by BCBSZ in any twelve month period, BCBSAZ may assess a late
fee of 0.75% on the outstanding balance or any portion of the balance that is past due.
BCBSAZ reserves the right to re-evaluate and change the rates if City Of Chandler adds or deletes a benefit eligible class that will have BCBSAZ
medical coverage.
Rates assume BCBSAZ is the sole medical and Rx carrier.
Beginning in 2015 the Affordable Care Act provides that certain large employers will be subject to a penalty if they fail to offer full-time employees and
certain dependents health coverage which satisfies both a 60% minimum value standard and an affordability requirement and a full-time employee
obtains a subsidy on the health insurance marketplace. Groups subject to these requirements and seeking to avoid a penalty are responsible for the
ultimate determination of whether the minimum value and affordability requirements are satisfied. Using the minimum value calculator made available by
HHS and the IRS, BCBSAZ estimates that the minimum value of Red Medical Option, Blue Medical Option, White Plan plans do meet the minimum
value standard. It is important that you independently review and confirm these results as they may be impacted by information not available to us (for
example, benefits not provided by BCBSAZ, non-standard benefits not suited for the calculator and certain HSA contributions or HRA funds). BCBSAZ
has included its conclusion(s) about minimum value in the plan(s) SBC(s) that BCBSAZ provides to Group. Any changes that Group makes to that
conclusion based on Group’s independent analysis will also affect the minimum value statement(s) in the SBC.
BCBSAZ will create the Uniform Summaries of Coverage (SBC) for coverage provided by BCBSAZ. BCBSAZ will not create SBCs for any coverage the
Group provides through a third-party or for health reimbursement arrangements, flexible spending accounts or health savings accounts provided by the
Group. Unless directed by the Group, BCBSAZ will provide SBCs to Subscribers, as required by PPACA, except that the Group is solely responsible for
delivering SBCs in accordance with PPACA: (i) to Subscribers during open enrollment; (ii) to newly eligible individuals; and (iii) to special enrollees.
BCBSAZ reserves the right to decline to provide coverage for residents of any state other than Arizona, if in BCBSAZ's sole opinion, such coverage
would be inconsistent with state or federal law.
Blue Cross Blue Shield of Arizona (BCBSAZ) Assumptions
Where the employer contributes 100% of the employee cost, BCBSAZ requires 100% participation of all eligible employees, excluding
those with other qualifying medical coverage.
Notwithstanding any provision of A.R.S. section 12-341.01, in any action to enforce the terms of this Agreement, the successful party, defined as the net
winner considering all claims and counterclaims actually adjudicated, shall be entitled to an award of its reasonable attorney's fees and costs. The award
of reasonable attorney fees shall be made to mitigate the burden of the expense of litigation to establish a just claim or a just defense. It need not equal
or relate to the attorney fees actually paid or contracted, but the award may not exceed the amount paid or agreed to be paid. In a judicial action, any
award of fees shall be made by the court and not by a jury.
Group acknowledges that it is solely responsible for determining eligibility for coverage in accordance with applicable laws and regulations under any
BCBSAZ policy issued to Group. Group represents and warrants that: (1) neither it nor the Plan is a multiple employer welfare arrangement (MEWA),
and (2) it will not include individuals in the Plan coverage if doing so will transform the Plan into other than a single employer sponsored group health
plan.
We have not included premium tax on this account, based on the assumption that all premiums are paid with the employer's funds, and the employer is
a municipality.
Page 3 of 7
028399 - 5
City Of Chandler
Group Number(s):
028399
Renewal Period:
01/01/2022 - 12/31/2022
Assumption: IASC-2022-028399-5
*
FUNDING
*
* BlueCard fees are included in the Attachment Point rate (if applicable) and are charged on the monthly invoice as a claim expense.
* The Specific Stop Loss level is $350,000 per person per policy year.
*
*
*
* The group will be billed each month prospectively for the Fixed Expenses.
DISCLOSURE
* Costs for covered services provided by a chiropractor to PPO, EPO, HMO and indemnity members, including an allowance for BCBSAZ to maintain this
arrangement, will be paid by the Employer to BCBSAZ on a per member per month (PMPM) basis. The PMPM rate each Employer pays BCBSAZ will
differ from the capitated fee BCBSAZ negotiated with the chiropractic administrator. BCBSAZ negotiated the fee that BCBSAZ pays the chiropractic
administrator on the basis of BCBSAZ’s entire book of business, without regard to any individual Plan. The PMPM rate BCBSAZ charges the employer is
subject to change by BCBSAZ upon 60 days prior written notice. The PMPM rate for chiropractic services applicable to this Employer is $2.93 PMPM.
Any difference between this amount and the amount paid to the chiropractic administrator will be reflected on the employers Form 5500 Information (if
BCBSAZ provides one). The fee BCBSAZ pays may be adjusted at any time as a result of modifications to the contract between BCBSAZ and
chiropractic provider. Additionally, the fee may be decreased in a given year if a set claims to capitation ratio is not achieved. Neither of these
adjustments to the fee BCBSAZ pays would result in adjustment to the fee applicable to Employer.
Stop Loss quotes are firm for 180 days from the date of 05/01/2021. If applicable, this includes the rate for Specific Stop Loss (SSL), the Attachment
Point amounts and the fee for Aggregate Stop Loss (ASL). BCBSAZ reserves the right to revise and rerate Stop Loss quotes if the proposed Stop Loss
rates are not accepted within 180 days from 05/01/2021.
Rates assume BCBSAZ is the sole Specific and Aggregate Stop Loss carrier.
PBM PRICING MODEL: Pharmacy Network discounts are negotiated between BCBSAZ and our pharmacy benefit manager (PBM) over BCBSAZ’s
entire book of business and not on behalf of any group customer. You have selected the pass through PBM pricing model effective 1/1/2022. The pass
through PBM pricing model allows you to pay the same discounted prices for prescription drugs that the PBM actually pays the pharmacies. Prices for
the same drug may differ at different pharmacies. The Pass Through PBM pricing model passes on to you 100% of the specific pharmacies' network
discount. However, it does not allow the PBM to lower the prices for expensive drugs by applying savings realized elsewhere. Any projected savings
discussed with you that may result from this pricing are only estimates. Your actual savings may vary from these estimates.
If the Group Participant with the redacted ID number xxxxxx971-01 terminates coverage under Group's plan (including ceasing any elected COBRA
coverage), BCBSAZ agrees to re-rate Group's specific stop-loss premium for the remaining months of the 2022 policy period to factor in that change.
BCBSAZ will continue to process claims incurred during the renewal term of the Agreement (January 1, 2022 - December 31, 2022) for a period of 24
months after the end of the renewal term. Stop loss coverage will apply to claims incurred during the renewal term and paid during the renewal term or
within 24 months aftter the end of the Renewal Term. If the Agreement is terminated before December 31, 2022, the foregoing 24 month periods shall
start on the effective date of the termination of the Agreement. BCBSAZ's obligations are contingent upon Employer satisfying its payment obligations.
The Plan Sponsor is responsible for design of the Plan, including any modification or termination of the Plan, and retains sole and complete control to
select and change the formularies for its Plan.
BCBSAZ is able to receive rebate payments from pharmaceutical manufacturers. BCBSAZ maintains some direct contracts for medically billed drug
claims and is able to obtain other rebates indirectly through our PBM contract. BCBSAZ or our PBM (depending on the claim type) enters into contracts
with pharmaceutical manufacturers to receive rebate payments based on factors such as preferred drug list placement and the volume and/or market
share of pharmaceutical products used by Participants in this Plan, participants in other group plans, and BCBSAZ subscribers (“rebate contracts”). The
rebate contracts are negotiated based on BCBSAZ’s entire book of insured and administered business, and not on behalf of any specific individual or
group benefit plan. BCBSAZ reserves the right to negotiate, enter into and terminate existing or future rebate contracts with pharmaceutical
manufacturers at any time, and in its sole and absolute discretion.
If BCBSAZ receives any rebates attributable to pharmaceutical products covered under the terms and conditions of this Agreement, and used by
Participants of Employer’s Plan, BCBSAZ shall retain any such rebates and shall not remit any rebate payments to Employer.
At Employer’s request, the parties have agreed that BCBSAZ will provide Employer with an administrative fee credit, in the amount specified [on the rate
sheet]. Employer acknowledges that it has negotiated this administrative fee credit as part of this Agreement and that it and its group health plan have no
right to, or legal interest in, any rebates provided by pharmaceutical manufacturers to BCBSAZ. The Employer consents to BCBSAZ’s retention of any
and all such rebates.
Page 4 of 7
028399 - 5
City Of Chandler
Group Number(s):
028399
Renewal Period:
01/01/2022 - 12/31/2022
Assumption: IASC-2022-028399-5
*
* BCBSAZ Value Based Programs
a.
b.
Inter-Plan Arrangements Fees:
BlueCard Program Fees
Access Fees:
ꞏ
2.21% in 2022 for 1,000–9,999 Blue PPO, EPO (Self-Funded Group Health Plans Only) or traditional enrolled contracts
ꞏ
Professional - $4.00 per claim
ꞏ
Institutional - $9.75 per claim
ꞏ
Non-Participating Provider $3.00 per claim
ꞏ
Medicare related claims $1.00 per claim
ꞏ
*
*
* Out-of-Network Shared Savings
Use any surplus in funds in the variance account to fund Value-Based Program payments or reconciliation amounts in the next measurement
period.
NATIONAL - Value Based Services will also apply to your members who reside in other states/geographical locations served by other Blue Cross Blue
Shield Plans. A full description of these arrangements will be described in your contract.
NOTE: If an ASC Group terminates its BCBSAZ contract, that Employer will neither receive a refund nor a charge to reflect any variance between what
BCBSAZ charged the Employer in Value Based Charges and what BCBSAZ paid the providers for Value Based Services.
If Employer receives confidential information belonging to the Blue Cross Blue Shield Association or another Blue Plan (Blue Confidential Information),
Employer agrees that it shall: (1) use the Blue Confidential Information strictly for the purposes for which it was disclosed, (2) not resell it or commingle it,
(3) not de-aggregate it to identify BCBSAZ, another Blue Plan or another Blue Plan’s members, and (4) return or destroy the Blue Confidential
Information when no longer required for the purpose for which it was disclosed.
Third Parties: BCBSAZ charges a per member per month (PMPM) or other specified amount for certain services provided by third-parties which
includes an allowance for BCBSAZ to maintain these arrangements. This PMPM or other amount may be different than the amount BCBSAZ pays the
third-party and BCBSAZ will retain any difference as reasonable compensation for services provided. In some cases, the amount retained by BCBSAZ
and received by the third-party is a percentage of the savings or recoveries generated by the third-party services. Certain of these third-party contractual
arrangements may involve reconciliation processes or other adjustments which may further change the amount paid to the third-party or retained by
BCBSAZ. The rate BCBSAZ charges the employer is subject to change by BCBSAZ upon 60 days prior written notice. The fee BCBSAZ pays may be
adjusted at any time due to modifications of the contract between BCBSAZ and the third-party. BCBSAZ negotiates the fees it pays these third-parties on
the basis of BCBSAZ’s entire book of business, without regard to any individual plan.
The Employer recognizes that an impending natural disaster, natural disaster or state of emergency may disrupt access to services under this
Agreement. If a disaster or emergency occurs or is imminent, the Employer authorizes BCBSAZ to make appropriate business decisions to implement
and act (e.g. authorize early pharmacy refills, waive preauthorization, etc.) in accordance with the threat or risk. The Employer agrees to reimburse
BCBSAZ for services provided to the Plan’s Participants during this period, even if not consistent with the Benefit Plan or this Agreement.
Value-Based Program (VBP) is outcome-based payment arrangement and/or a coordinated care model facilitated with one or more local providers that
is evaluated against cost and quality metrics/factors and is reflected in provider payment.
LOCAL - BCBSAZ pays some of its contracted medical providers an amount to manage the medical care of members diagnosed with certain medical
conditions if the provider demonstrates to BCBSAZ it has satisfied BCBSAZ’s criteria for effectively managing the care (“Value Based Services”).
With respect to BCBSAZ group members residing and receiving Value Based Services in Arizona under a BCBSAZ value based program, BCBSAZ will
estimate at the beginning of the contract year the amount BCBSAZ projects it will pay BCBSAZ’s contracted providers for members who receive Value
Based Services throughout the upcoming year in the form of a PMPM or PEPM charge (“PMPM Charge”). BCBSAZ will charge BCBSAZ’s self-insured
(“ASC”) Groups via the Employer’s Claims Invoice this PMPM Charge beginning January 1, 2016.
On an aggregate basis for the entire Value Based Program, the amounts used to calculate PMPM charge are fixed amounts estimated to be
necessary to finance the cost of a particular Value-Based Program. Because amounts are estimates, there may be positive or negative differences
based on actual experience, and such differences will be accounted for in a variance account maintained by BCBSAZ until the end of the applicable
Value-Based Program payment and/or reconciliation measurement period. The amounts needed to fund a Value-Based Program may be changed
before the end of the measurement period if it is determined that amounts being collected are projected to exceed the amount necessary to fund the
program or if they are projected to be insufficient to fund the program.
Address any deficit in funds in the variance account through an adjustment to the PMPM billing amount or the reconciliation billing amount for the
next measurement period.
Non-standard negotiated fees can range from either $5.48 to $18.70 per claim or $9.13 to $31.16 per contract per month depending on the
negotiated arrangement and/or the health plan product.
Reduced Administrative Expense Allowances (AEAs) – To be considered for reduced fees, the Employer must exceed 1,000 PPO, EPO (Self-Funded
Group Health Plans Only) or traditional enrolled Blue contracts:
On an aggregate basis for the entire Value Based Program, at the end of the Value-Based Program payment and/or reconciliation measurement
period for these arrangements, BCBSAZ do one of the following:
Page 5 of 7
028399 - 5
City Of Chandler
Group Number(s):
028399
Renewal Period:
01/01/2022 - 12/31/2022
Assumption: IASC-2022-028399-5
*
ALLOTMENTS
*
*
GUARANTEES
*
BCBSAZ developed and maintains a proprietary fee schedule and utilizes claim editing software to calculate the Allowed Amount. Costs for calculating
the Allowed Amount for Out-of-Network Services will be paid by the Employer to BCBSAZ on a percentage of claims savings basis. The cost for this
service is 0% of claims savings with $0 cap per claim. This cost will not be applied to Group's ASL and/or SSL. BCBSAZ has hired a third party to
attempt negotiation of reimbursement and member protection from balance billing for Out-of-Network Services. When the third party negotiation is
successful, BCBSAZ will pay the vendor’s fees with no additional charge to the Employer.
BCBSAZ's proposal includes a Misc Trust & Wellness allowance of $80,000 for the 01/01/2022 - 12/31/2022 policy period. Any portion of the misc trust &
wellness not used during the referenced policy period will be retained by BCBSAZ and applied to misc trust & wellness programs for subsequent policy
period(s). Upon termination of the group contract, BCBSAZ will pay any unused portion of the misc trust & wellness allowance to Group.
BCBSAZ proposal includes a Network Discount Guarantee. The Network Discount Guarantee is in place for 1/1/2022 - 12/31/2022 ONLY. Please see
the Network Discount Guarantee document for details.
Sharecare: For certain Sharecare programs that Employer has specifically elected to purchase, BCBSAZ charges an amount per person which may be
based upon employee count, member count or program participation depending on the specific program purchased. These charges will be included in
the monthly claims invoice and may be different than the amount BCBSAZ pays Sharecare. BCBSAZ will retain any difference as reasonable
compensation for services provided. For the Sharecare Incentive Reward Program, BCBSAZ will charge Employer the amount of the award plus any
applicable administrative fees and include this charge in the monthly claims invoice. The rates BCBSAZ charges Employer for the Sharecare programs
are subject to change by BCBSAZ upon 60 days’ prior written notice. BCBSAZ negotiates fees with Sharecare on the basis of BCBSAZ’s entire book of
business, without regard to any individual plan. The one-time setup fees are built into the admin rate as a PMPM (per member per month) charge.
BCBSAZ's proposal includes a On-Site Wellness Consultant allowance of $100,000 for the 01/01/2022 - 12/31/2022 policy period. Any portion of the on-
site wellness consultant not used during the referenced policy period will be retained by BCBSAZ and applied to on-site wellness consultant programs for
subsequent policy period(s). Upon termination of the group contract, BCBSAZ will pay any unused portion of the on-site wellness consultant allowance to
Group.
Page 6 of 7
028399 - 5
Group Name:
City of Chandler
Group Number:
28399
NETWORK DISCOUNT GUARANTEE
*Guaranteed Period: 1/1/2022 - 12/31/2022
I. In-Network Medical only
Administrative Charge
Administrative Charge
Total Discount Savings %*
at Risk PEPM
at Risk Annual
57.0% or more
$0.00
-
$
55.0% - 56.9%
$0.50
10,092
$
53.0% - 54.9%
$1.00
20,184
$
51.0% - 52.9%
$1.50
30,276
$
less than 52.0%
$2.00
40,368
$
Network Savings Guarantee:
*Discount savings % will be based on incurred claims 1/01/22-12/31/22 (paid through 3/31/2023)
2. Enroll Assumption (Employees):
1,682
3. This discount applies only to the following policy period:
01/01/2022-12/31/2022
At the end of said contract period the discount savings percentage will be calculated to determine if any money will be returned to group.
If money is due, the final amount will be calculated using actual enrollment during the applicable policy period.
4. The incurred claims used for the contract period will include In-Network Medical only claims. The discount does not apply
to out-of-network Medical claims nor to pharmacy claims.
5. The proposed Network Discount Guarantee does NOT include Mayo as an in-network provider.
6. The proposed Network Discount Guarantee is subject to re-rate retroactive to the first day of any billing month in which the
enrollment varies by more than +/- 15% from the enrollment as of:
April-21
.
7. Notwithstanding any other provisions in this rate proposal, if the government imposes a new tax or fee on insurers the rates set forth in this
rate proposal may be adjusted to include, even retroactively, such taxes and fees. BCBSAZ reserves the right to change its rate if a change in
administration is required due to legislative or regulatory change.
8. This agreement is null and void if group terminates prior to the end of the guaranteed policy period.
1. BCBSAZ has agreed to put a portion of the administrative fees at risk based on actual network discount savings (Eligible Billed Charges minus Eligible
Allowed Charges) realized by group.
®
®
BCBSAZ Confidential
8/5/2021
1
Rev: 06/17/2021
Administrative Summary
Implementation Meeting Schedule
Frequency
Day of the Week
Time
TBD
General Information
Client Name / Number
Legal Account Name
Doing Business As
Legal Entity Type
Type of Business
BCBSAZ Group Number(s)
Group Health Plan Name (if applicable)
City of Chandler
City of Chandler, Arizona
Municipality
City
028399
City of Chandler DBA City of Chandler, Arizona Group
Health Plan
Client Address
175 S. Arizona Avenue
Chandler, AZ 85225
Group Benefit Administrator (GBA)
Name/Title/Contact Information
Fernanda Osgood
Benefits and Compensation Manager
175 S. Arizona Avenue
Chandler, AZ 85225
480-782-2359
fernanda.osgood@chandleraz.gov
Rae Lynn Nielsen
Director of Human Resources
175 S. Arizona Avenue
Chandler, AZ 85225
480-782-2353
raelynn.nielsen@chandleraz.gov
Billing Contact
Name/Title/Contact Information
Carol Osterhaus
Benefits Analyst
P.O. Box 4008, Mail Stop 703
Chandler, AZ 85244
480-782-2371
carol.osterhaus@chandleraz.gov
Billing Address
Same as physical address
Other
P.O. Box 4008, Mail Stop 703
Chandler, AZ 85244
2
Rev: 06/17/2021
Group Executive
Name/Title/Contact Information
Rae Lynn Nielsen
Director of Human Resources
175 S. Arizona Avenue
Chandler, AZ 85225
480-782-2353
raelynn.nielsen@chandleraz.gov
Additional Authorized Group Contact(s)
Name/Title/Contact Information
Joshua Wright
City Manager- CEO
175 S. Arizona Avenue
Chandler, AZ 85225
480-782-2211
Joshua.wright@chandleraz.gov
Carol Osterhaus
Benefits Analyst
175 S. Arizona Avenue
Chandler, AZ 85225
480-782-2371
carol.osterhaus@chandleraz.gov
Dawn Lang
Management Services Director- CFO
175 S. Arizona Avenue
Chandler, AZ 85225
480-782-2255
dawn.lang@chandleraz.gov
Denise Hooker
Human Resources Specialist
P.O. Box 4008, Mail Stop 703
Chandler, AZ 85244
480-782-2376
dee.hooker@chandleraz.gov
Broker/Consultant
Name/Title/Contact Information
NPN
Segal Company Arizona, Inc.
Rachel Calisi
rcalisi@segalco.com
602-381-4027
Funding Arrangement
12/24 Incurred Medical ASC with Medical and Pharmacy
Headquartered State
Incorporated State
Arizona
Arizona
Effective Date
January 1, 2022
Renewal Days Notice
210
Grandfather Status
Non-grandfathered
Tax ID Numbers
Federal
State
86-6000238
07004582
3
Rev: 06/17/2021
Product Information
Accumulation Periods
Calendar
Plan
Mayo In-Network
Yes No
HealthEquity Integration
Health Reimbursement Account Plan(s) or standalone
Health Savings Account Plan (s) or standalone
Flexible Spending Account Plan(s) or standalone
Dependent Care Reimbursement Account or
standalone
Yes No
__________________
X-White Plan________
__________________
__________________
HealthEquity Sections
Non-integrated HDHP sections
Yes, set up non-integrated HDHP products
No, all HDHP members will be integrated with
HealthEquity
Not applicable; no HealthEquity integrated HDHP
products
4
Rev: 06/17/2021
Eligibility
Employee Effective Date
First of month
Odd effective
Employee Termination Date
End of month
Date of loss of eligibility
Dependent (26) Termination Date
End of birth month
Birthday
Eligibility Submission Options
834
Excel (BCBSAZ will email format)
Paper applications
BCBSAZ portal online
Eligibility Vendor details
Vendor:
No change from current
Contact Phone:
Primary: Carol Osterhaus
Secondary: Dee Hooker
Contact email:
carol.osterhaus@chandleraz.gov
dee.hooker@chandleraz.gov
Transmission
frequency:
weekly
Newborn/Adoptions/ Processing Options
Newborn automatically added; member must request
disenrollment
Newborn automatically added for the first 31 days,
but member application required to retain newborn
after 31 days.
Newborn is not automatically added; member must
positively enroll newborn within 31 days of birth
Newborn Deductible
(not applicable to HDHP plan)
Newborn deductible applies
Newborn deductible waived
5
Rev: 06/17/2021
Retroactive Termination
Retroactivity is limited to thirty-one (31) days from the
date notice was provided to BCBSAZ by the group for
terminations, changes and reinstatements.
Leave of Absence
90 days
Other: Please refer to City of Chandler Statement of
Eligibility as approved by Resolution No. 4995.
Retiree Coverage
Yes No
If Yes:
Under 65 65 and older
Minimum years of service: _____
Retiree dependents coverage
Yes No
Domestic Partnership
Same Sex Only
Opposite Sex Only
Both
BCBSAZ Standard Criteria
Client Specific Criteria
Not Covered
Maternity Provisions
Maternity coverage will be extended to dependent
daughters.
Note: Grandchildren are not eligible dependents.
6
Rev: 06/17/2021
Open Enrollment
Open Enrollment Period
From: November 1, 2021
To: November 19, 2021
Open Enrollment Meetings
Support Needed
Packets/Materials Needed
Yes No – Benefit Fair on 10/26
Yes No
Translated SBCs
*Vendor requires 7-10 business day turnaround
after the English version is approved*
Yes No
Open Enrollment Eligibility Transmission
Method
Date
834__________________
12/3/2021
*Files must be received no later than December 3, 2021 to
ensure ID cards are mailed before January/1/2022*
Financial Information
Wellness Fund
Yes No
If yes:
Amount:
1.
$80,000 Miscellaneous Trust & Wellness
allowance
2.
$100,000 On-site Wellness consultant
allowance
Plan Year
Roll Over of Unused Funds
Implementation/General Fund(s)
Yes No
If yes:
Amount: __________________
Plan Year
Roll Over of Unused Funds
Prescription Rebates
BCBSAZ retains rebates; group receives admin credit
Group receives rebates
7
Rev: 06/17/2021
Financial Information - Invoicing
Premium Statements
Premium statements or “admin” statements are billed on a
prospective basis. Each statement will account for fixed
expenses for the upcoming calendar month.
BCBSAZ Premium Statement Delivery
Statements are generated and mailed monthly
15 business days prior to the due date.
Statements are also available to view and
adjust online at azblue.com
Statements include a full listing of each
enrollee, a summary and total by section.
Any discrepancies can be addressed with the
assigned Membership and Billing
Representative.
Due date is the first of the month.
The contract has a grace period of forty-five
(45) days for premium payments. If a
premium is not paid on or before the date it is
due, it may be paid during the grace period.
BCBSAZ will mail hard copies
Hard copies will be suppressed
Detailed Claims Report Format
De-identified (group section, plan, date of service,
paid date, paid amount and claim type)
Minimum-necessary* (group section, plan, member
name, member date of birth, relationship date of
service, paid date, paid amount and claim type)
*signed supplemental terms and conditions required
Detailed Claims Report Recipient(s)
Name/Email
TO: Carol Osterhaus- carol.osterhaus@chandleraz.gov
CC: Jeanna Carlton- jcarlton@segalco.com
CC: Andrew McDonald- amcdonald@segalco.com
8
Rev: 06/17/2021
Benefit Information
Pharmacy – 90-day supply at in-network retail
Excluded
Covered
All Contracted Retail Pharmacies
Copay the same as Mail Order; or
Different multiplier:_________________
All Covered Medications; or
Maintenance Medications only
HSA Preventive Drugs
Deductible waived
Covered at 100%
Covered as any other drug
Not Applicable; no HDHP plan offered
Medication Synchronization
Included
Excluded
Cancer Parity Medications
Included
Excluded
Emergency Claims (Out-of-Network) Pricing
The Qualifying Payment Amount, as defined by
federal law, is the allowed amount.
Gender Transition Medications and Surgery
Covered*
Excluded; please consult legal counsel
*Groups who elect to cover these services, but carve
out prescription medications, BCBSAZ will administer
the medical benefit only.
Arizona State Mandated Telemedicine Services
Covered
Excluded
Telehealth Coverage
Covered through BlueCareAnywhere; see SBCs for
details
Excluded
Other
Arizona Senate Bill 1305
Group must comply with SB1305; prescribed
abortion benefit will be administered
Group is not subject to SB1305
Abortion*
*See Arizona Senate Bill 1305 Section
Non-elective abortions covered
Elective abortions covered
All abortions excluded
Autism
Covered
Excluded
Specialized Utilization Management Program
Included
Not included
Complications of Non-Covered Breast/Pectoral
Implant
Covered
Excluded
9
Rev: 06/17/2021
Administration
Allowed Amount
The allowed amount is the total amount of reimbursement allocated to a covered service and includes both
the BCBSAZ payment and the member cost-share payment.
Generally, BCBSAZ calculates deductible and coinsurance based on the allowed amount, less any access fees
or precertification charges. BCBSAZ applies deductible, coinsurance, copays and access fees toward any out-
of-pocket maximum that applies to the member’s benefit plan. The allowed amount does not include any
balance bills from noncontracted providers. The allowed amount is neither tied to, nor necessarily reflective
of, the amounts providers in any given area usually charge for their services.
The table below shows how BCBSAZ determines the allowed amount.
Type of Provider
Type of Claim
Basis for Allowed Amount
Providers contracted with BCBSAZ
Emergency and
Non-emergency
Generally, the lesser of the provider’s billed
charges or the applicable BCBSAZ fee
schedule, with adjustments for any negotiated
contractual arrangements and certain claim
editing procedures and pricing guidelines
Providers contracted with a vendor
Emergency and non-
emergency
Generally, the lesser of the provider’s billed
charges or the vendor’s fee schedule, with
adjustments for any negotiated contractual
arrangements
Providers contracted with another
Blue Cross or Blue Shield Plan
(“Host Blue”)
Emergency and non-
emergency
Lesser of the provider’s billed charges or the
price the Host Blue plan has negotiated with
the provider
Noncontracted providers in Arizona
Non-emergency
claims and emergency
ground ambulance
claims
Lesser of the provider’s billed charges or the
applicable BCBSAZ fee schedule, with
adjustments for certain claim editing
procedures and pricing guidelines. For
emergency ground ambulance claims, the
allowed amount is generally based upon the
ambulance provider’s billed charges.
Noncontracted providers outside
Arizona
Non-emergency
claims and emergency
ground ambulance
claims
Lesser of the provider’s billed charges or the
Host Blue nonpar pricing. For emergency
ground ambulance claims, the allowed
amount is generally based upon the
ambulance provider’s billed charges.
Refer to Ancillary Services Received Out-of-
State section below for additional information.
Noncontracted providers (in Arizona
and out-of-state)
Emergency
Refer to Emergency Claims (Out-of-Network)
Pricing Option
10
Rev: 06/17/2021
Coordination of Benefits (COB)
Commercial: The combined payments by the primary
payer and BCBSAZ will not exceed the
greater of the primary payer or BCBSAZ’s
allowed amount.
Medicare: BCBSAZ pays up to the Medicare allowed
amount except if the provider does not
accept Medicare assignment, in which case
BCBSAZ pays up to the billed charges.
When your group health plan is the secondary payer,
BCBSAZ utilizes the COB methodology that applies to
your group health plan (and not the ACA
methodology) to adjudicate claims for emergency
services provided by non-contracted providers.
Pre-Certification
Unless otherwise noted at right, BCBSAZ will
determine the list of services requiring
precertification.
In-network, penalty applies to provider for
failure to pre-certify
Out-of-network, penalty applies to member
for failure to pre-certify
BCBSAZ Standard List of Services
BCBSAZ determines services requiring pre-
certification.
Penalty amount $500
Other (please specify):
Out-of-Network Reimbursement
Generally, BCBSAZ pays the member directly for
covered services provided by non-contracted providers
in Arizona. For covered services provided by
noncontracted providers outside Arizona, the Blue
Cross and Blue Shield plan outside Arizona generally
determines whether to pay the member or the
provider directly. If the member receives payment
directly, the member is responsible for paying the
noncontracted provider for the covered services.
11
Rev: 06/17/2021
Ancillary Services Received Out-of-State
If the provider submitting a non-emergent
laboratory, DME/medical supply, and/or specialty
pharmacy claim has a PPO contract with BCBSAZ or
one or more out-of-state Blue Cross and/or Blue
Shield plans, but does not have a PPO contract with
the Blue Cross and/or Blue Shield plan to which the
claim must be submitted under Blue Cross and Blue
Shield Association requirements, those claims will be
processed based on the selection made in the
column at right.
As an out-of-network claim based on the allowed
amount. Members are responsible for out-of-network
cost-share and any applicable balance bill. Note that
this does not apply to fully insured EPO or HMO plans.
As an in-network claim based upon billed charges.
Members are responsible for in-network cost-share.
Balance bill does not apply because the claim is paid
upon billed charges.
Cost share for ancillary services provided by an out-of-
network provider at an in-network facility will be
based on the Qualifying Payment Amount, as defined
by federal law. All out-of-network cost share for these
ancillary services will be counted toward any in-
network deductible and cost-share limits.
Mental Health Parity Exemption Filing
Yes
No
Not applicable; not eligible to opt-out
Massachusetts Employees
BCBSAZ will not issue 1099HC or complete electronic
filing with MA
BCBCAZ will prepare and distribute annually 1099-
HC forms to Massachusetts Participants and make the
electronic filing with the Massachusetts regulators. The
Employer will timely provide any and all authorizations
required by Massachusetts law or by Massachusetts
regulators to enable BCBSAZ to perform the mailing
and/or electronic filing(s). If the Employer fails to
timely provide such authorization(s), BCBSAZ will have
no duty to make the filing and/or mailing.
If in BCBSAZ’s opinion the Employer’s coverage meets
the Massachusetts Minimum Creditable Coverage
(MMCC) requirements, BCBSAZ agrees to reflect the
coverage as creditable in its electronic filing and 1099-
HC mailings. If in BCBSAZ’s opinion the Employer’s
coverage does not meet the MMCC requirements,
Employer may choose to either: (a) state the coverage
is not creditable in its electronic filing and 1099-HC
mailings; or (b) direct BCBSAZ to not make the
electronic filing and provide the uncompleted 1099-HC
forms to Employer.
Appeals
BCBSAZ generally administers Level 1, Level 2 and
External Review appeals.
BCBSAZ administers all levels of appeal review.
BCBSAZ administered Level 1. Level 2/IRO is sent to
the client for decision.
Notes: ______________________
12
Rev: 06/17/2021
Subrogation (using BCBSAZ Vendor)
Yes No
COBRA Vendor
Contact
Additional Information
Self-administered
Section 125
Yes No
If yes, loss of coverage effective date:
date of loss
first of month following date of loss
NYHCRA
BCBSAZ will complete required filing upon
submission of required forms. Current or prior elector
status with the NY Pools may impact which
documentation is required to elect and provide
BCBSAZ with consent to perform this action on
behalf of an elector.
Elect Non-elect
Notes
•
Dedicated Customer Service line: 1-865-595-5993
•
Enrollment will have separate sections for Temporary employees
•
Plan Sponsor: Rae Lynn Nielsen, Director of Human Resources
Page 1 of 2
Exhibit 2 to Administrative Service Agreement -
PERFORMANCE GUARANTEES
Please fill in your proposed penalty amount to each of the following performance guarantees.
Performance guarantees should total an equivalent of a minimum aggregate total of $100,000 per
year. Should you not be able to commit to any of the following, please identify each exception in
the Deviation section of your proposal response, referencing the comment by letter and proposing
an alternative commitment with your penalty amount. Please note performance guarantees are
to be in place not only during the initial term of the contract, but for each subsequent renewal
term(s).
Description of
Service
Performance
Standards
Required
Performance
Guarantee
Describe the
Method of Reporting
Performance to the
CITY
List the
Frequency for
which you will
Report Status
on each
Measurement
Annual Dollar
Value of
Administrative
Fees at Risk
Paid to the
CITY
Customer/ Member Service
1
Customer/Member
overall satisfaction
- the satisfaction
level conveyed by
CITY members.
95% or greater
in year one;
98% or greater
in subsequent
years
See Deviations
Implementation
2
Group
Structure
and Benefit Plan
Design
The initial group
structure and
benefit plan
design will be
entered into the
system 60
business days
prior to the
implementation
date. This
guarantee is
dependent on
receiving final
sign-off from the
City on the
benefit plan
design and
summary
documents 75
business days
prior to the start
date.
Measured group
specific
N/A
$20,000
Page 2 of 2
Description of
Service
Performance
Standards
Required
Performance
Guarantee
Describe the
Method of Reporting
Performance to the
CITY
List the
Frequency for
which you will
Report Status
on each
Measurement
Annual Dollar
Value of
Administrative
Fees at Risk
Paid to the
CITY
3
Client’s Overall
Satisfaction With
Implementation
Process
All deadlines are
met, cards are
distributed to the
correct
addresses on
time,
communication
materials are
created and
distributed as
indicated and
agreed to, the
benefit is set up
to adjudicate
claims according
to the
documentation
provided to and
agreed upon by
the City.
Measured group
specific
We will work with the
City to develop a
mutually agreed upon
implementation plan.
N/A
$20,000
Client Services and Account Management
4
Monthly Eligibility
Reconciliation
60 business
days or less
Measured group
specific
Quarterly
$20,000
5
Claims Processing
Accuracy:
Accurate
processing
includes payment
amount;
communication to
claimant or
provider; data
entry errors
affecting current
or future benefit
determinations
and management
reports.
97% of all claims
will be
processed
accurately.
Measured non-group
specific
Percentage of claims
processed incorrectly
vs. correctly, based on
BCBSAZ standard
auditing procedures.1
Quarterly
$20,000
BCBSAZ Notes:
• Total of all risk measures cannot exceed $100,000.
• The above stated performance guarantees will be effective for the contract period 1/1/2022-12/31/2022.
• The Performance Guarantee payout does not include stop loss premiums, claims reimbursement amounts,
vendor interface fees, capitated claim payments, etc.
• BCBSAZ will determine the sample size of audited claims.
• BCBSAZ will evaluate performance 90 days after the end of the 4th quarter of the performance period. Any
penalties due to the group would be payable annually on the 15th of the month following the 90-day period.
BCBSAZ will not be required to pay a penalty for Performance Guarantees if the group is in default of its contract
with BCBSAZ and/or has not paid all claims and premiums by the date due.
1 If BCBSAZ fails to perform in accordance with these Guarantee(s) for two (2) consecutive reporting periods after
the Guarantee(s) are effective, BCBSAZ will refund or credit the group up to the amount at risk per measure during
the time period which BCBSAZ did not meet the performance guarantee(s).
Page 1 of 10
Performance Guarantees
The City will require specific performance guarantees. All guarantees shall be set and measured
annually, and must have the ability to measure performance separately based on its experiences
with the chosen PBM. Measurement of performance guarantees may be based on internal self-
reporting, subject to independent audit.
Performance guarantees offered below are for the first contract year. For each subsequent year,
BCBSAZ will verify the performance guarantees and amounts at-risk as part of the renewal process.
Generally, we can offer initial guarantees for the entire multi-year duration of a client’s contract.
Should any modifications be required, BCBSAZ will work with the City to offer mutually-agreeable
standards.
BCBSAZ is submitting a bundled quote including medical and pharmacy administration. As such, many
of our performance guarantees are based on overall performance (including medical and pharmacy).
Measurement of performance guarantees is based on internal self-reporting. BCBSAZ does not offer
independent audit of reporting results at this time. BCBSAZ wishes to note that, while we are unable to
offer independent auditing for performance guarantees, we offer clients robust audit rights in other
areas, as detailed within the Audit Rights section of the sample contract in Section 10A.
1. The City is looking for flat dollar ($) performance guarantee amounts. Indicate the amount
you are willing to place at risk for each item listed in the table below. In addition, you may
provide other guarantees designed to differentiate your program.
Standard
Measurement
Criteria
(BOB or City
specific)
Penalty
Dollars at
Risk
Timing of
Payments
Implementation
Clean
Implementation
No systems errors, ID card
delays, and the City online
access to all tools prior to
effective date
Not proposed
separately.
BCBSAZ agrees
as part of
overall
implementation,
provided clean
pharmacy
benefits and
eligibility are
received by the
BCBSAZ
Pharmacy
department at
least 45 days
prior to the
effective date.
BCBSAZ will
discuss and
mutually agree
upon tools for
Please see
Medical
performance
guarantees.
BCBSAZ is
not placing a
separate
amount at-
risk for PBM.
n/a
Page 2 of 10
Standard
Measurement
Criteria
(BOB or City
specific)
Penalty
Dollars at
Risk
Timing of
Payments
online access.
Implementation
Timeline
Implementation team will be
assigned and introduced to
the City at least 3 months in
advance of effective date
Not proposed
separately.
BCBSAZ agrees
as part of
overall
implementation.
After award,
Client
Implementation
Manager Mary
Echtinaw will
meet with the
City to develop
a mutually
agreed upon
implementation
plan.
Please see
Medical
performance
guarantees.
BCBSAZ is
not placing a
separate
amount at-
risk for PBM.
n/a
Implementation
Team
Implementation team
members will not change and
will be responsible for the
accurate installation of all
administrative, clinical and
financial parameters for the
City’s program
Not proposed
separately.
Client
Implementation
Manager Mary
Echtinaw will
oversee
implementation.
Please see
Medical
performance
guarantees.
BCBSAZ is
not placing a
separate
amount at-
risk for PBM.
n/a
Implementation
Satisfaction
Scorecard
Assigned Account Executive
will work with the City prior to
the start of implementation to
agree on terms of a
satisfaction scorecard to be
issued to the City after
effective date for completion
Not proposed
separately.
Please see
Medical
performance
guarantees.
BCBSAZ is
not placing a
separate
amount at-
risk for PBM.
n/a
Payment Accuracy & System Performance
Protected Health
Information
PBM guarantees no incidents
in violation of HIPAA Security
Rules which results in a
transmission of electronic PHI
for the City’s covered
Not proposed.
We have
standards and
monitoring in
place to comply
n/a
n/a
Page 3 of 10
Standard
Measurement
Criteria
(BOB or City
specific)
Penalty
Dollars at
Risk
Timing of
Payments
members
with
government
rules and
regulations.
Plan
Administration
Accuracy
Implementation of all plan
design changes will be 100%
accurate
Not proposed.
n/a
n/a
Pricing Change
Accuracy
Implementation of all pricing
changes will be 100%
accurate
Not proposed.
n/a
n/a
Financial
accuracy
(electronic and
paper claims)
Percentage of claim
payments made without error
relative to the total dollars
paid will be at least 99%
Not proposed.
Pricing
guaranteed are
offered instead,
as documented
in PBM RFP
response.
n/a
n/a
Dispensing
Accuracy – Mail
Order
The mail service pharmacy
shall guarantee dispensing
accuracy of at least 99.995%
(correct participant name,
correct participant address,
correct drug, correct dosage
form, and correct strength)
Book of
Business
Modification
offered: At least
99.95%
prescription
dispensing
accuracy.
$500 per
quarter
Measured
quarterly
Paid
annually
System
Downtime
At least 99.5% access to its
systems by all the retail
pharmacies in PBM’s network
24 hours a day, 7 days a
week, 365 days a year
Book of
Business
Modification
offered:
Average of at
least 98%
availability
(excluding
scheduled
downtimes).
$500 per
quarter
Measured
quarterly
Paid
annually
Invoicing Errors
All invoicing errors will be
credits back to the City by
next billing cycle or PBM will
pay interest
Not proposed.
n/a
n/a
Claims Eligibility
Data
Eligibility loads not to exceed
24-hours after receipt
Book of
$500 per
Measured
Page 4 of 10
Standard
Measurement
Criteria
(BOB or City
specific)
Penalty
Dollars at
Risk
Timing of
Payments
Business
quarter
quarterly
Paid
annually
Eligibility Data
Error Reporting
Eligibility file error reporting
on all eligibility file updates
will be provided to the City
within 2 business days
City-specific
$2,000 per
year
Measured
annually
Paid
annually
Eligibility Error
Rate Audits
Error rate identified through
quarterly audits shall not
exceed, on an average basis,
2%
Not proposed.
n/a
n/a
Retail Pharmacy
Audit
PBM will perform an on-site
audit of 3% or more of their
retail pharmacies which
dispense greater than 500
claims a year
City-specific
Results will be
provided within
90 days of the
close of the
calendar year.
$500 per
year
Measured
annually
Paid
annually
Retail Pharmacy
Turnover
Less than 5% of retail
pharmacies will leave the
retail network
Not proposed.
n/a
n/a
Claims Detail
File
All claims detail files sent to
external vendors will be
provided within 8 days of
request or scheduled delivery
date
Not applicable.
Our pharmacy
benefit
management
program is only
offered when
medical
administration
is selected.
n/a
n/a
Account Management
City Approval of
Member
Communications
100% of all member
communications will be
approved by the City –
exceptions for drug recalls
and urgent patient safety
communications
Not proposed.
n/a
n/a
Delivery of
Standard
Reports
Within 30 days of end of
reporting quarter
City-specific
Our clients can
obtain
$2,000 per
year
Measured
annually
Paid
Page 5 of 10
Standard
Measurement
Criteria
(BOB or City
specific)
Penalty
Dollars at
Risk
Timing of
Payments
pharmacy
reporting
through
BlueInsightSM.
BlueInsight, our
online reporting
tool, is available
24 hours a day,
seven days a
week. It is
updated on the
20th of each
month.
annually
Accuracy of
Standard
Reports
All standard reports provided
will be 100% accurate
City-specific
Our clients can
obtain
pharmacy
reporting
through
BlueInsightSM.
BlueInsight is an
integrated
reporting tool,
with
information
aggregated
directly from
our claims and
eligibility
system.
$2,000 per
year
Measured
annually
Paid
annually
Pharmacy Audit
Resolution
48 hours after receipt of
findings
Not proposed.
n/a
n/a
PBM Account
Team’s
Performance
The City may assess a
penalty after the first Contract
Year and each successive
Contract Year, the City’s
benefits staff do not rate PBM
account team’s performance
for such Contract Year an
average of 3 or better on a
scale of 1 to 5 (5 being the
best based on a range of
performance criteria agreed
to between the City and PBM
at the beginning of such
City-specific
Overall score of
3 (satisfied) or
better on the
annual BCBSAZ
Medical
Account
Management
Score Card
(annual Group
Benefit
$5,000 per
year
Measured
annually
Paid
annually
Page 6 of 10
Standard
Measurement
Criteria
(BOB or City
specific)
Penalty
Dollars at
Risk
Timing of
Payments
Contract Year)
Administrator
survey).
Categories
include:
effective
support for
open
enrollment
events, timely
client
notification of
issues impacting
members,
response to
client issues and
questions in
timely,
comprehensive
manner,
effective
coordination to
resolve open
issues,
accessibility,
and delivery of
agreed-upon
reports on time.
BCBSAZ Account
Management
Score Card
(annual) – see
attached.
Account
Management
Turnover
Account team members will
remain constant for at least
the first 18 months of the
contract period, unless a
change in account
management staff is
requested by the City
Not proposed.
BCBSAZ will
make every
effort to comply
and will advise
the City of any
unforeseen
circumstances
relating to
Account
Management
n/a
n/a
Page 7 of 10
Standard
Measurement
Criteria
(BOB or City
specific)
Penalty
Dollars at
Risk
Timing of
Payments
team.
Member Services
Mail Turnaround
– Prescriptions
not requiring
intervention
95% of prescriptions
dispensed within average of 2
business days and 100%
within average of 3 business
days
Book of
Business
Modification
offered:
Average of 90%
of prescriptions
not subject to
intervention will
be dispensed
within two (2)
business days
and prescription
subject to
intervention
within two
business days
after resolution
of intervention.
$500 per
quarter
Measured
quarterly
Paid
annually
Mail Turnaround
– Prescriptions
requiring
intervention
95% of prescriptions
dispensed within average of 4
business days and 100%
within average of 5 business
days
Not proposed
separately; see
guarantee
above.
n/a
n/a
Paper Claims
Turnaround
95% of prescriptions
reimbursed within average of
10 business days and 100%
within average of 14 business
days
Book of
Business
Modification
offered:
Average of 95%
within an
average of ten
(10) business
days after
receipt by
Catamaran.
$500 per
quarter
Measured
quarterly
Paid
annually
ID Cards Mailing
98% of all ID cards are sent
within 5 business days of
receipt of eligibility. 100%
mailed within 10 business
days.
City-specific
99% of ID Cards
issued within 10
business days
after receipt of
finalized
$5,000 per
year
Measured
annually
Paid
annually
Page 8 of 10
Standard
Measurement
Criteria
(BOB or City
specific)
Penalty
Dollars at
Risk
Timing of
Payments
benefits and
account
structure,
authorized
signature
documents and
complete and
accurate
information in a
format agreed
upon between
the City and
BCBSAZ.
Mailing Member
Materials
All applicable member
materials (for example, mail
order forms) will be mailed at
least 10 days prior to the
effective date and will be
100% accurate (provided that
eligibility file was received at
least 30 days prior to the
effective date).
Not proposed.
n/a
n/a
Phone Average
Speed of
Answer
100% of calls to the City-
specific toll free line shall be
answered within 20 seconds
(excluding IVR)
Book of
Business
Modification
offered:
Average of 30
seconds or less.
$500 per
quarter
Measured
quarterly
Paid
annually
Phone
Abandonment
Rate
100% of calls to the City-
specific toll free line shall be
answered with an
abandonment rate of 3% of
less
Book of
Business
Modification
offered: Equal
to or less than
3% after 30
seconds.
$500 per
quarter
Measured
quarterly
Paid
annually
Written Inquiry
Answer Time
95% of inquiries responded to
in 5 business days – 100% in
20 business days
Not proposed.
n/a
n/a
Member
Satisfaction
Survey
The PBM agrees to conduct a
Member Satisfaction Survey
for each contract year and
that the Satisfaction Rate will
be 90% or greater. A penalty
Not proposed
separately.
BCBSAZ’s
pharmacy
Please see
Medical
performance
guarantees.
n/a
Page 9 of 10
Standard
Measurement
Criteria
(BOB or City
specific)
Penalty
Dollars at
Risk
Timing of
Payments
may be assessed against the
PBM for failure to meet this
standard. “Member
Satisfaction Rate” means (i)
the number of Eligible
Persons responding to PBM
annual standard Patient
Satisfaction Survey as being
satisfied with the overall
performance under the
Integrated Program divided
by (ii) the number of Eligible
Persons responding to such
annual Patient Satisfaction
Survey; the City must provide
timely approvals and
responses, and a minimum of
20% of surveys must be
returned for the Performance
standard to be applicable.
benefits
administration
(PBM) quote is
contingent upon
selection of
BCBSAZ medical
coverage.
This
performance
guarantee is
addressed
within the
medical
performance
guarantees.
BCBSAZ is
not placing a
separate
amount at-
risk for PBM.
Issue
Resolution:
Verbal Inquiries
PBM will resolve 99% of all
telephone issues at the first
point of contact (the number
of telephone inquiries
completely resolved at the
time of initial contact divided
by the total number of calls)
Book of
Business
Modification
offered: First
call resolution:
93% or greater
of calls related
to pharmacy
matters will be
resolved on first
call.
$500 per
quarter
Measured
quarterly
Paid
annually
Issue
Resolution:
Written Inquiries
PBM will resolve 98% of all
written inquiries within 10
business days of receipt of
inquiry
Not proposed.
n/a
n/a
Issue
Resolution: the
City Staff
Involvement /
Escalation
When the City contacts you
with an elevated claim issue
via phone, email or through
their Consultant, you will
respond within 24 hours and
provide progress reports
every 48 hours until the issue
is resolved.
Not proposed
separately.
Responsiveness
measure will be
included in
annual medical
Account
Management
Scorecard, as
proposed in the
n/a
n/a
Page 10 of 10
Standard
Measurement
Criteria
(BOB or City
specific)
Penalty
Dollars at
Risk
Timing of
Payments
“PBM Account
Team’s
Performance”
guarantee,
above.
BCBSAZ Notes:
• Total of all risk measures cannot exceed $100,000.
• The above stated performance guarantees will be effective for the contract period 1/1/2022-12/31/2022.
• The Performance Guarantee payout does not include stop loss premiums, claims reimbursement amounts,
vendor interface fees, capitated claim payments, etc.
• BCBSAZ will determine the sample size of audited claims.
• BCBSAZ will evaluate performance 90 days after the end of the 4th quarter of the performance period. Any
penalties due to the group would be payable annually on the 15th of the month following the 90-day period.
BCBSAZ will not be required to pay a penalty for Performance Guarantees if the group is in default of its contract
with BCBSAZ and/or has not paid all claims and premiums by the date due.
1 If BCBSAZ fails to perform in accordance with these Guarantee(s) for two (2) consecutive reporting periods after
the Guarantee(s) are effective, BCBSAZ will refund or credit the group up to the amount at risk per measure during
the time period which BCBSAZ did not meet the performance guarantee(s).
EMPLOYER APPLICATION
REQUESTED EFFECTIVE
DATE (MM/DD/YYYY)
GROUP #
NEW
PRIOR CARRIER
PRIOR FUNDING TYPE:
SELF-FUNDED
FULLY-INSURED
LEVEL-FUNDED
CHANGE TO EXISTING GROUP
SECTIONS OF FORM TO BE CHANGED:
I
II
III
PLEASE FULLY COMPLETE ALL SECTIONS OF THIS APPLICATION EVEN IF SPECIFIC PROVISIONS REMAIN UNCHANGED.
SECTION I – EMPLOYER GROUP INFORMATION
LEGAL COMPANY NAME
DBA
LEGAL ENTITY
CORP
LLC
MUNICIPALITY
NON PROFIT
PARTNERSHIP
POLITICAL SUBDIVISION
TRUSTS
UNIONS
OTHER
GROUP HEALTH PLAN NAME (IF DIFFERENT THAN LEGAL COMPANY NAME)
EXCHANGE (IF APPLICABLE)
BENEFIT STARTER
OTHER
ARIZONA LOCATION STREET ADDRESS
CITY
AZ
ZIP CODE PLUS FOUR
BILLING ADDRESS
SAME AS STREET ADDRESS
CITY, STATE
ZIP CODE PLUS FOUR
COUNTY
FEDERAL TAX ID NUMBER
ARIZONA STATE TAX ID NUMBER
PLAN YEAR ANNIVERSARY MONTH
IF BLANK, BCBSAZ WILL
ASSUME MONTH OF
EFFECTIVE DATE.
HEADQUARTERS STATE (LEGAL ENTITY)
INCORPORATED STATE
TYPE OF BUSINESS
GROUP EXECUTIVE
TITLE
E-MAIL
PHONE NUMBER
FAX
CHIEF FINANCIAL OFFICER
TITLE
E-MAIL
PHONE NUMBER
FAX
CHIEF EXECUTIVE OFFICER
TITLE
E-MAIL
PHONE NUMBER
FAX
GROUP BENEFIT ADMINISTRATOR
BILLING CONTACT
TITLE
E-MAIL
PHONE NUMBER
FAX
OTHER CONTACT PERSON
BILLING CONTACT
ATTACHED SHEET FOR ADDITIONAL CONTACTS
TITLE
E-MAIL
PHONE NUMBER
FAX
SECTION II – ADDITIONAL INFORMATION
1) DOMESTIC PARTNERS TO BE COVERED?
YES
NO
2) EMPLOYEE TERMINATION DATE
END OF BILLING MONTH
DATE OF LOSS OF ELIGIBILITY
3) NEW GROUP ENROLLMENT REGULATIONS
EMPLOYER’S ENROLLMENT WAITING PERIODS WILL BE WAIVED AT THE NEW GROUP’S INITIAL ENROLLMENT
YES
NO
4) RETIREE COVERAGE: DOES NOT APPLY TO GROUPS CONSIDERED SMALL FOR PURPOSES OF THE AFFORDABLE CARE ACT OR APPLICABLE STATE LAW (ACCOUNTABLE HEALTH PLAN).
RETIREMENT
ELIGIBILITY
RETIREES TO
BE COVERED?
YES
NO
IF YES:
UNDER 65
65 AND OLDER
RETIREES DEPENDENTS
TO BE COVERED?
YES
NO
OTHER THAN NEWBORNS, ETC. FOR WHICH COVERAGE MAY BE MANDATED UNDER APPLICABLE ARIZONA LAW
5) RETIREMENT PARTICIPATION REQUIREMENTS
A) RETIREE MUST COMPLETE __________ YEARS OF SERVICE PRIOR TO RETIREMENT
B) RETIREE IS ELIGIBLE FOR COVERAGE ONLY THROUGH END OF BILLING PERIOD IN WHICH RETIREE REACHES AGE ___________
C) OTHER: SEE ATTACHED
01/01/2022
028399
City of Chandler
City of Chandler, Arizona
City of Chandler DBA City of Chandler, Arizona Group Health Plan
175 S. Arizona Avenue
Chandler
85225
P.O.Box 4008 Mail Stop 703
Chandler, AZ
85244-4008
Maricopa
86-6000238
07004582
January
Arizona
Arizona
Municipality
Rae Lynn Nielsen
Director of Human Resources
raelynn.nielsen@chandleraz.gov
(480) 782-2353
Dawn Lang
Management Services Director
dawn.lang@chandleraz.gov
(480) 782-2255
Joshua Wright
City Manager
joshua.wright@chandleraz.gov
(480) 782-2211
Fernanda Osgood
Benefits and Compensation Manager
fernanda.osgood@chandleraz.gov
480-782-2359
Carol Osterhaus
Benefits Analyst
carol.osterhaus@chandleraz.gov
480-782-2371
SECTION III – BROKER/CONSULTANT
BROKER
CONSULTANT
LAST NAME
FIRST NAME
MI
AGENCY NAME
SUITE NO.
STREET ADDRESS
CITY, STATE
ZIP CODE PLUS FOUR
PHONE NUMBER
FAX NUMBER
E-MAIL
NPN
GENERAL AGENT NAME (IF APPLICABLE)
SECTION IV – IMPORTANT - READ CAREFULLY
As the authorized representative of Company, I certify that the Company is the sole employer of the employees to be enrolled under this proposed
contract for health insurance or services to administer the group health plan identified on this application. I also certify that the information provided
on this Employer Application and all other applicable documents submitted in connection with this Application, is complete and accurate. I agree
that Company shall promptly notify Blue Cross Blue Shield of Arizona (BCBSAZ) of any changes in this information that may affect the eligibility of
employees or their dependents, including the addition of dependents, and the termination date of any enrolled employee or dependent.
I understand and agree that BCBSAZ may, in its sole discretion, verify information with or through outside sources, including third party investigative
firms, as BCBSAZ deems necessary or appropriate for finalizing its decision on this Application. I agree that if the information contained in this
Application or other supporting documentation is incomplete, inaccurate, materially misleading, false, or fraudulent, that BCBSAZ has the right
to (a) retroactively adjust the Company’s rates and/or administrative fees if such information would have affected the rate/fee calculation; and (b)
invalidate, or withdraw any rate/fee proposal, or terminate coverage for any group to the extent permitted by law. I understand and agree that this
Application is not accepted until approved by BCBSAZ and that BCBSAZ’s acceptance shall be based on information supplied by the Group, the
requested benefits, and any other information obtained from outside sources. BCBSAZ’s acceptance shall be evidenced by the execution of this
Application by an authorized representative of BCBSAZ, at which time this Application shall become binding upon BCBSAZ and the group. Upon
acceptance, this Application shall be attached to and shall become a part of the Group Master Contract or Administrative Services Agreement With/
Without Stoploss (the “Contract”), as applicable. If the Company is enrolling outside the Open Enrollment period, I understand that the Company
must contribute a minimum of 50% of the employee’s health premium. To the extent permitted by applicable law, BCBSAZ may terminate the
Contract in accordance with the Contract terms, including the Group’s failure to meet certain obligations under the Contract such as failure to pay
premium/fees or comply with coverage requirements.
The Group agrees that it is solely responsible for: (i) determining employee and dependent eligibility for coverage and coverage effective and
terminations dates (including application of required open and special enrollment periods), (ii) complying with applicable laws in establishing
eligibility and coverage effective and termination dates, and (iii) providing BCBSAZ with timely and accurate eligibility and coverage effective and
termination date information. Additionally, Company represents and warrants that it does not impose a waiting period which exceeds 90 days.
Company will promptly advise BCBSAZ of any change in this representation. Company understands and agrees that federal law requires Company
to provide dependent coverage for children under age 26, and prohibits Company from imposing pre-existing condition waiting periods.
By including my e-mail address on the reverse side, I authorize BCBSAZ to send me information via e-mail. I also understand I may change my e-mail
address or rescind this permission at any time by contacting BCBSAZ through azblue.com.
COMPANY AUTHORIZED OFFICER / OWNER / PARTNER
SIGNATURE
X
PRINT NAME
TITLE
DATE
STREET ADDRESS
CITY, STATE
ZIP CODE PLUS FOUR
BCBSAZ AUTHORIZED SIGNATURE
X
PRINT NAME
TITLE
DATE
27958 02/21
720221-21
Calisi
Rachel
Segal Company Arizona Inc.
370
1501 W Fountainhead Parkway
Tempe
85282-0000
(602) 381-4027
rcalisi@segalco.com
Michael Groeger
Vice President, Group Commercial & Specialty Sales
For informational Purposes Only - NO Action Required
Re: 2021 Form 5500 Schedule C Service Provider Information – Disclosure of “Eligible
Indirect Compensation” -
Dear Sir or Madam:
Blue Cross Blue Shield of Arizona (“BCBSAZ”) is required to provide Employers with information
regarding certain indirect compensation (“Eligible Indirect Compensation” or “EIC”) paid by
BCBSAZ to other Service Providers during 2020.
Under your contract with BCBSAZ, one of the benefits your employees and their dependents
("Participants") receive is access to healthcare services outside the geographic area BCBSAZ
serves under a program known as BlueCard. Typically, in that situation, Participants obtain care
from healthcare providers that have a contractual agreement with the local Blue Cross and/or Blue
Shield Licensee in that other geographic area (the "Host Blue"). Within that arrangement, BCBSAZ
is referred to as the "Home Blue." The BlueCard Program is established and operated pursuant to
policies established and enforced by the Blue Cross and Blue Shield Association.
A plan sponsor's reporting requirements for a self-funded plan on Schedule C are significantly
streamlined for EIC about which a service provider has shared certain information. As such, below
is a list of EIC that has been and/or is likely to be received in connection with the BlueCard Program.
Note that the fees and compensation subject to disclosure under the Department of Labor rules
include amounts that are not necessarily passed on to your ERISA Plan or your Participants. The
financial terms of the BlueCard Program passed on to your ERISA plan, and additional details
about the BlueCard Program, are described in your Agreement with BCBSAZ.
The following is a list of EIC:
1.
BlueCard Access Fees: The Access Fee is charged by the Host Blue to us for making its
applicable provider network available to your members. The Access Fee will not apply to
nonparticipating provider claims. The Access Fee is charged on a per-claim basis and is
charged as a percentage of the discount/differential we receive from the applicable Host
Blue subject to a maximum of $2,000 per claim. When charged, we pass the Access Fee
directly on to you.
2.
Administrative Expense Allowances (AEA): The AEA is a fixed per-claim dollar amount
charged by the Host Blue to us for administrative services the Host Blue provides in
processing claims for your members. The dollar amount is normally based on the type of
claim (e.g. institutional, professional, international, etc.) and can also be based on the size
of your group enrollment. When charged, we pass the AEA fee directly on to you.
Note: To be considered for reduced BlueCard PPO fees, the claim must be for an account
whose total Blue PPO enrollment exceeds 1,000 contracts
3.
Use of Estimated or Average Pricing by Host Blues. As described in your administrative
service agreement, some Host Blues use estimated or average prices to determine the
negotiated price that is made available to BCBSAZ when plan participants access the Host
Blue's participating provider network. This may result in a difference (positive or negative)
between the price you pay on a specific claim and the actual amount paid to the provider
by the Host Blue.
The following describes the formulas used for determining an estimated or average price:
Estimated: A percentage is used to modify the claim price for covered services.
This percentage (either positive or negative) allows Host Blues to incorporate
adjustments and actuarial projections prospectively into the final price. The
percentage is determined by calculating the aggregate cost to the Host Blue over
For informational Purposes Only - NO Action Required
a look-back period less any initial payments made to providers divided by the total
payments initially made to providers. The aggregate cost in the numerator includes
all provider retrospective settlements, anti-fraud and abuse recoveries, provider
refunds not applied on a claim-specific basis, performance-related bonuses or
incentives, interest, other non-claim transactions and any positive or negative
balance in the variance account. The percentage is then actuarially adjusted for
anticipated changes in claims expenses for the prospective period. As of
December 31, 2020 the modifying percentage applied to claims from those Host
Blues that use estimated pricing ranged from (1.225%) to +17.60% the rate of
payment to the provider at the point of the claims. The modifying percentages
applied to claims from those Host Blues that will be used for estimated pricing have
not been calculated as of the date of this letter.
Average: An average price is determined for a defined category of provider (e.g.,
institutional, professional, etc.) of a Host Blue in a given geographic area. The
average is determined as follows:
Total amount paid to such providers over a look-back period, including
initial payments as well as applicable claim and non-claim related
transactions, which may include but are not limited to provider
retrospective settlements, anti-fraud and abuse recoveries, provider
refunds not applied on a claim-specific basis, performance-related
bonuses or incentives, interest, etc., and any positive or negative balance
in the variance account
divided by
Total amount of such providers' corresponding charges for covered
services over the same look-back period (claims for non-covered services
are not included in the calculation)
This result is an average price that is applied to each claim for the defined category
of provider of the Host Blue in the geographic area and presented as the negotiated
price.
The Host Blue determines whether it will use an actual, estimated or average price. The
use of estimated or average pricing may result in a difference (positive or negative)
between the price you pay on a specific claim and the amount the Host Blue pays to the
provider. However, the BlueCard Program requires that the amount paid by the member
and you is the final price; no future price adjustment will result in increases or decreases
to the pricing of past claims.
Any positive or negative differences in estimated or average pricing are accounted for
through variance accounts maintained by the Host Blue and are incorporated into future
claim prices. As a result, the amounts charged to you will be adjusted in a following year,
as necessary, to account for over- or underestimation of the past years’ prices. The Host
Blue will not receive compensation from how the estimated price or average price
methods, described above, are calculated. Because all amounts paid are final, neither
positive variance account amounts (funds available to be paid in the following year), nor
negative variance amounts (the funds needed to be received in the following year), are
due to or from you. If you terminate, you will not receive a refund or charge from the
variance account.
Variance account balances are small amounts relative to the overall paid claims amounts
and will be liquidated or drawn down over time. The timeframe for their liquidation
depends on variables, including, but not limited to, overall volume/number of claims
processed and variance account balance. Variance account balances may earn interest
For informational Purposes Only - NO Action Required
at the federal funds or similar rate. Host Blues may retain interest earned on funds held in
variance accounts.
4.
BlueCard Global Core Program. The BlueCard Global Core Program provides members
with access to an international network of inpatient, outpatient and professional providers.
The Blue Cross and Blue Shield Association (BCBSA) utilizes GeoBlue for Medical
Assistance and Claims support Services. The fees paid by the Home Blue are as
follows:
Medical Assistance
Fee (in dollars)
General Inbound Calls
$28.00 / Call
Provider Inquiry/Referral (non-medical situation)
$22.00 / Call
Cashless access/Guarantee of Payment (GOP)
$110.00 / GOP
Telephone Translation
$62.50 / Call
Fulfillment
$9.50 / Call
Provider/medical assistance information provided by a
nurse
$95.00 / Call
Misrouted Calls
$22.00 / Call
Medical Monitoring
$290.00 / Case
Claims Support Services
Fee (in dollars)
Claim preparation, processing and/or payment (includes
translation, coding, currency conversion)
$39.00 / Claim
Misrouted claim (for example, domestic)
$9.50 / Claim
Claim Status inquiry
$22.00 / per call/member ID
Medical records translation
At Cost
Currency conversion gains/losses
At Cost
Wire/ACH fees
At Cost
Additional Services
Fee (in dollars)
Medical Evacuation coordination
$1,250.00 / Case
Medical Repatriation coordination
$1,250.00 / Case
Repatriation of Remains coordination
$600.00 / Case
Medical travel coordination
$290.00 / Case
5. Negotiated Arrangements: With respect to one or more Host Plans, instead of using the
BlueCard Program, BCBSAZ may process your Participant claims for Covered Services
through Negotiated Arrangements.
Non-Standard negotiated AEA fees for 2019/2020:
Non-standard negotiated fees can range from either $5.48 to $15.75 per claim, or
$9.13 to $26.25 per contract per month depending on the negotiated arrangement
and/or the health plan product
Under regulations related to the 2009 Form 5500 Schedule C - Service Provider Information,
BCBSAZ is required to provide information regarding certain indirect compensation (referred to in
this letter as “Eligible Indirect Compensation” or “EIC”) paid by BCBSAZ to other Service
Providers during 2020 related to your contract with BCBSAZ.
For informational Purposes Only - NO Action Required
The following Service Providers received EIC from BCBSAZ during 2020:
Name of Service Provider Receiving EIC from BCBSAZ: Exela Technologies
Address: 369 Inverness Parkway, Suite 300, Englewood, CO 80112
Service Provided: Claims Edit Resolution
Basis of Compensation: $0.38 to $1.75 per Claim Edit for low complexity, $0.43 to $2.25 for medium
complexity, and $0.59 to $3.06 for high complexity.
Name of Service Provider Receiving EIC from BCBSAZ: Sutherland Global Services, Inc.
Address: 2 Brighton Rd., Suite 300 Clifton, NJ 07012
Service Provided: Data entry for provider data, assistance with credentialing
Basis of Compensation: $9.00 per provider recredentialing completed and $30.68 per initial credentialing
unit completed
Name of Service Provider Receiving EIC from BCBSAZ: Change Healthcare
Address: P.O. Box 572490, Murray Utah 84157-2490
Service Provided: Fee for the Recovery of Overpayments
Basis of Compensation: 21.5% of the Recovered Amount
Name of Service Provider Receiving EIC from BCBSAZ: OptumRx.1
Address: 1600 McConnor Parkway, Schaumburg, IL 60173-6801
Service Provided: Pharmacy Claims Processing and select PBM services
Basis of Compensation: for electronic claims only
Pass-Thru Pricing Model = $0.75 per net paid claim
1 BCBSAZ paid compensation to OptumRx.only for groups who used BCBSAZ to manage their pharmacy
benefits.
Pharmacy Rebates – BCBSAZ receives rebates from certain Pharmaceutical Manufacturers for certain
drugs. Subject to the terms of your BCBSAZ Administrative Services Agreement your Group may be eligible
for a Pharmacy Rebate. BCBSAZ may earn interest income on Pharmacy Rebates during the period after
the Rebate is paid to BCBSAZ and prior to payment to your Group.
Name of Service Provider Receiving EIC from BCBSAZ: Inpharmative
Address: 8717 W. 110th St., Overland Park, KS 66210
Service Provided: Pharmacy Rebate Processing
Basis of Compensation: $0.04 per Claim Processed
Name of Service Provider: Ciox Health, LLC
Address: 925 North Point Parkway, Alpharetta, GA, 30005
Services Provided: Medical record retrieval, Coding Review
Basis of Compensation: $22.50 - $25.00 per retrieved chart, plus $3.50 per chase; $11.80 - $21.50 per
reviewed chart
BCBSAZ’s list of affiliated Service Providers receiving EIC will be updated as necessary.
If you have any questions, please contact your BCBSAZ Account Manager.
Sincerely,
Alan Lunde
Alan Lunde
Senior Manager, Financial Operations