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Envision Pharmacy Benefit Services Agreement
ORIGINAL DOCUMENTS CHECKLIST & ROUTING SLIP TO ACCOMPANY ALL ORIGINAL DOCUMENTS SENT TO THE BOARD OF COUNTY COMMISSIONERS OFFICE FOR SIGNATURE Print on pink paper. Attach to original document. The completed routing slip and original documents are to be forwarded to the County Attorney Office at the time the item is placed on the agenda. All completed routing slips and original documents must be received in the County Attorney Office no later than Monday preceding the Board meeting. **NEW**ROUTING SLIP Complete routing lines#1 through#2 as appropriate for additional signatures,dates,and/or information needed. If the document is already complete with the exception of the Chairman's signature,draw a line through routing lines#1 through#2,complete the checklist,and forward to the Coun Attorney Office. Route to Addressee(s) (List in routing order) Office Initials Date 1. 2. 3. Colleen M. Greene, ACA County Attorney Office 0 4. BCC Office Board of County Gkk ( tom r Commissioners /57 AZSV� 5. Minutes and Records Clerk of Court's Office 17(Y\ `O*3 3 PRIMARY CONTACT INFORMATION Normally the primary contact is the person who created/prepared the Executive Summary. Primary contact information is needed in the event one of the addressees above,may need to contact staff for additional or missing information. Name of Primary Staff Jeff Walker,Risk Mgt.Director Phone Number 252-8906 Contact/ Department Agenda Date Item was September 24,2013 f Agenda Item Number 11G Approved by the BCC Type of Document Pharmacy Benefit Management Services Number of Original 2 Attached Agreement Documents Attached PO number or account n/a number if document is to be recorded INSTRUCTIONS & CHECKLIST Initial the Yes column or mark"N/A"in the Not Applicable column,whichever is Yes N/A(Not appropriate. (Initial) Applicable) 1. Does the document require the chairman's original signature? CMG 2. Does the document need to be sent to another agency for additional signatures? If yes, N/A provide the Contact Information(Name;Agency;Address;Phone)on an attached sheet. 3. Original document has been signed/initialed for legal sufficiency. (All documents to be CMG signed by the Chairman,with the exception of most letters,must be reviewed and signed by the Office of the County Attorney. 4. All handwritten strike-through and revisions have been initialed by the County Attorney's N/A Office and all other parties except the BCC Chairman and the Clerk to the Board 5. The Chairman's signature line date has been entered as the date of BCC approval of the CMG document or the final negotiated contract date whichever is applicable. 6. "Sign here"tabs are placed on the appropriate pages indicating where the Chairman's CMG signature and initials are required. 7. In most cases(some contracts are an exception),the original document and this routing slip N/A should be provided to the County Attorney Office at the time the item is input into SIRE. Some documents are time sensitive and require forwarding to Tallahassee within a certain time frame or the BCC's actions are nullified. Be aware of your deadlines! 8. The document was approved by the BCC on 09/24/13 and all changes made CMG during the meeting have been incorporated in the attached document. The County Attorney's Office has reviewed the changes,if applicable. 9. Initials of attorney verifying that the attached document is the version approved by the CMG BCC,all changes directed by the BCC have been made,and the document is ready for the Chairman's signature. (� I:Forms/County Forms/BCC Forms/Original Documents Routing Slip WWS Original 9.03.04,Revised 1.26.05,Revised 2.24.05;Revised 11/30/12 • MEMORANDUM Date: October 29, 2013 To: Jeff Walker, Director Risk Management Department From: Martha Vergara, Deputy Clerk Minutes & Records Department Re: Pharmacy Benefit Management Services Agreement Attached for your records is one (1) original copy of the resolution referenced above, (Item #11G) adopted by the Board of County Commissioners on Tuesday, September 24, 2013. The Minutes and Record's Department has held the original document for the Official Record of the Board. If you have any questions, please contact me 252-7240. Thank you. Attachment PHARMACY BENEFIT MANAGEMENT SERVICES AGREEMENT This Pharmacy Benefit Management Services Agreement (hereinafter this "Agreement") is entered into by and between Envision Pharmaceutical Services, Inc., an Ohio Corporation (hereinafter "Envision"), and Collier County Board of Commissioners, a Florida county government (hereinafter "Plan Sponsor"). This Agreement is effective January 1st, 2014 (hereinafter the"Effective Date"). BACKGROUND Envision is a URAC accredited Pharmacy Benefit Management (PBM) company providing comprehensive pharmacy benefit management services nationwide to various employers, unions, and Plan Sponsors that establish and fund health benefit plans covering outpatient prescription medications. Plan Sponsor has established one or more health benefit plans providing coverage for prescription medications to covered individuals and desires to engage Envision to provide pharmacy benefit management services in accordance with the terms and conditions of this Agreement. NOW, THEREFORE, in consideration of the mutual promises and agreements herein contained, Plan Sponsor and Envision hereby agree as follows: 1. DEFINITIONS 1.1 "Administrative Fee" means the amount that Envision charges Plan Sponsor for included services under this Agreement as set forth in Exhibit 1. 1.2 "Annual Average Effective Rate" means, for the category of drugs being reviewed, the result calculated by the following formula: (IC/AWP)-1,where IC ("Ingredient Cost")is the sum of all amounts paid by Plan Sponsor for the ingredient cost of the Covered Drugs dispensed during the calendar year, and AWP is the sum of the Average Wholesale Price amounts associated with the same Covered Drugs. 1.3 "Average Wholesale Price" or "AWP" shall mean the average wholesale price of a Covered Drug indicated on the most current pricing file provided to Envision by Medi-Span®(or other applicable industry standard reference on which pricing hereunder is based) for the actual drug dispensed using the 11 digit National Drug Code(NDC)number provided by the dispensing pharmacy. Envision uses a single source for determining AWP and updates the AWP source file at least once weekly. 1.4 `Benefit Plan" means the group Plan Sponsor, insurance plan, prescription drug plan, or other benefit plan established and funded by Plan Sponsor that covers the cost of Covered Drugs dispensed to Covered Individuals. 1.5 "Benefit Specification Form" or "Benefit Specification Change Form" means the forms, as modified from time to time, that are completed by Plan Sponsor that specify the terms and provisions of the Benefit Plan and the configuration of System edits, such as which Prescription \PBMSA(frm062413) ®Envision Pharmaceutical Services,Inc. Page 1 of 35 Drugs are covered by Plan Sponsor, any limitations or exclusions, the Benefit Plan's tier structure and Cost Share requirements, and any conditions associated with the specific services to be rendered by Envision under this Agreement (i.e. Clinical Prior Authorizations, Drug Therapy Management, etc.). 1.6 "Brand Drug" means a Prescription Drug where the Medi-Span multisource ("MONY") code attached to the 11 digit NDC for such drug indicates an "N" (a single-source brand name drug product available from one pharmaceutical manufacturer and is not available as a generic), an"M"(a branded drug product that is co-branded and not considered generic, nor is it available as a generic, and is generally considered a single-source drug product despite multiple pharmaceutical manufacturers), or an "0" (an original branded drug product available from one or more pharmaceutical manufacturers as a generic). A drug is classified as a Brand Drug at the Point-of-Sale based on the MONY code assigned by Medi-Span and shall not be reclassified for any purposes hereunder. 1.7 "Claim" means an invoice or transaction (electronic or paper) for a Covered Drug dispensed to a Covered Individual that has been submitted to Envision by the dispensing pharmacy or a Covered Individual (including transactions where the Covered Individual paid 100%of the cost). A"340B Claim" is a Claim which has been processed under Section 340B of the Public Health Service Act. 1.8 "Claims Adjudication System" or "System" means Envision's on-line computerized claims processing system. 1.9 "Compound Drug" means a medication that requires compounding by a pharmacist because it is not available from a pharmaceutical manufacturer in the prescribed form or strength. Compound Drugs consist of two or more solid, semi-solid or liquid ingredients,at least one of which is a Prescription Drug. 1.10 "Contract Year" means the complete twelve month period commencing on the Effective Date and each consecutive complete twelve month period thereafter that this Agreement remains in effect. 1.11 "Cost Share" means the amount of money that a Covered Individual must pay to the Participating Pharmacy to obtain a Covered Drug in accordance with the terms of the Benefit Plan. The Cost Share may be a fixed amount(co-payment) or a percentage of the drug cost(co- insurance), or a deductible that must be satisfied before drugs are covered under the Benefit Plan. 1.12 "Covered Drug" means a Prescription Drug or other permitted drug (OTC), medical supplies (e.g. diabetic testing strips), or a medical device (e.g. blood glucose monitoring device) which is dispensed to a Covered Individual and meets the requirements for coverage under the Benefit Plan as communicated to Envision by Plan Sponsor. 1.13 "Covered Individual" or "Member" means each individual (including the Eligible Employee and each of his or her dependents) who has been identified by Plan Sponsor on the Eligibility File as being eligible to receive Covered Drugs. \PBMSA(frm062413) ®Envision Pharmaceutical Services,Inc. Page 2 of 35 f 1 1.14 "Eligibility File" means that electronic communication supplied to Envision by Plan Sponsor (or Plan Sponsor's agent) which identifies the Covered Individuals covered under Plan Sponsor's Benefit Plan, along with other eligibility information necessary for Envision to provide PBM Services hereunder. Plan Sponsor acknowledges that eligibility begins on the first day the Covered Individual is reported by Plan Sponsor (or its designee) to be effective and continues through the last day the Covered Individual appears on the Eligibility File. 1.15 "Eligible Employee" means an active employee or a retiree of Plan Sponsor covered under Plan Sponsor's funded Benefit Plan. For purposes of calculating the Administrative Fee, the Per Employee, per month (PEPM) amount stated in Exhibit 1 includes the Eligible Employee's/retiree's eligible dependents. If, however, a dependent is also an Eligible Employee of Plan Sponsor, such dependent shall be deemed to be an Eligible Employee for purposes of calculating the total Administrative Fee. 1.16 "Formulary" means an index of Prescription Drugs, which have been compiled by Envision and reviewed by Envision's Pharmacy & Therapeutics Committee for safety and efficacy (using evidence-based evaluation criteria), that is used, in conjunction with the Benefit Plan,as a guide in the selection of Covered Drugs. The Formulary may be modified by Envision from time to time as new medications and/or new clinical information become available. 1.17 "Generic Drug" means a Prescription Drug where the Medi-Span multisource code attached to the 11 digit NDC for such drug indicates a "Y" (a generic drug product available from one or more pharmaceutical manufacturers). A drug is classified as a Generic Drug at the Point-of-Sale based on the MONY code assigned by Medi-Span and shall not be reclassified for any purposes hereunder. 1.18 "HIPAA" means the Health Insurance Portability and Accountability Act of 1996, as amended. 1.19 "Mail Order Pharmacy"means the Mail Order Pharmacy specified in Exhibit 1. 1.20 "Manufacturer Derived Revenue" means rebates, discounts, administrative fees, and any other revenue earned by Plan Sponsor for Claims which comply with the utilization and benefit design requirements of pharmaceutical manufacturer contracts with Envision and otherwise meet the terms and conditions hereunder. 1.21 "MAC List"means a proprietary list of Prescription Drugs for which Envision establishes a maximum price ("MAC Price") payable to the dispensing pharmacy. Envision maintains one commercial MAC List per Participating Pharmacy which is used to both determine the negotiated price payable to the dispensing pharmacy and the price charged to Plan Sponsor. Plan Sponsor will be charged the exact negotiated amount payable by Envision to the dispensing pharmacy without any markup or spread. Envision updates the MAC List from time-to-time as Prescription Drugs come on the market or come off the market, or as their availability changes due to market circumstances. \PBMSA(frm062413) ®Envision Pharmaceutical Services,Inc. Page 3 of 35 �a•�• • MIL 1.22 "Participating Pharmacy" means a pharmacy (including the designated Mail Order or Specialty Pharmacy) that has entered into a negotiated pricing agreement with Envision to dispense Covered Drugs to Covered Individuals. 1.23 "Plan Sponsor" means the entity (identified above as Plan Sponsor) which (i) has established and underwrites the Benefit Plan on behalf of its Covered Individuals; (ii) has determined the rules by which the Benefit Plan is to be administered; and (iii) is financially responsible for the payment of Administrative Fees, Fees for Additional Services and Miscellaneous Expenses (as set forth in Exhibit 1), and Covered Drugs dispensed to Covered Individuals hereunder. 1.24 "Point-of-Sale" means the location and time that a Covered Drug is dispensed to a Covered Individual, and the corresponding Claim is submitted by the dispensing pharmacy for adjudication by the Claims Adjudication System. 1.25 "Prescriber" means a licensed Doctor of Medicine (M.D.), Doctor of Osteopathy (D.O.), Doctor of Podiatry (D.P.M.), Doctor of Dentistry (D.D.S.), or other licensed health practitioner with independent prescribing authority in the state in which the dispensing pharmacy is located. 1.26 "Prescription Drug"means a substance intended for use in the diagnosis,cure,mitigation, treatment, or prevention of disease which is dispensed by a duly licensed pharmacy and required by federal law to be dispensed only upon the authorization of a Prescriber. For purposes of this Agreement, over-the-counter medications, medical supplies, and medical devices are not Prescription Drugs,whether or not ordered by a Prescriber. 1.27 "Retail Pharmacy" means a state licensed retail community pharmacy that dispenses prescription medications at its physical location. A Retail Pharmacy does not include a pharmacy that dispenses medications to patients primarily through mail, nursing home pharmacies, long-term care facility pharmacies, hospital pharmacies, or clinics, unless such pharmacy is a Participating Pharmacy listed by Envision as a Retail Pharmacy. 1.28 "Specialty Drug" means a high-cost (i.e. costs more than $600.00 per month or per fill) biotech, injectable, infused, oral, or inhaled Prescription Drug that may require special storage, handling, or is available only through limited distribution channels, and/or requires close monitoring of the patient's drug therapy (including a few products, such as intrauterine devices [IUDs]). Specialty Drugs are identified on the Envision Specialty Drug List, as modified from time to time. 1.29 "Specialty Pharmacy" means a non-Retail Pharmacy that primarily dispenses Specialty Drugs and performs special ordering,handling and/or patient intervention services. 1.30 "Usual and Customary Price" or "U&C Price" means the retail amount the pharmacy charges its cash paying customers for the drug dispensed, as reported to Envision by the dispensing pharmacy. \PBMSA(frm062413) ®Envision Pharmaceutical Services,Inc. Page 4 of 35 d.� • r 2. STANDARD PBM SERVICES Envision shall perform the following pharmacy benefit management services ("PBM Services"). Unless otherwise noted, the PBM Services specified below are included in the Administrative Fee. 2.1 Welcome Kit: If requested by Plan Sponsor, Envision shall provide an initial "Welcome Kit" which may include, at Plan Sponsor's option, (i) a welcome letter; (ii)plastic identification card ("ID Card"),up to two per family; (iii) a pocket Formulary; and(iv)mail order brochure, as specified in the Benefit Specification Form. The standard Welcome Kits will be mailed to Plan Sponsor or, at its option, directly to Covered Individuals. For any materials mailed directly to Covered Individuals, Plan Sponsor shall reimburse Envision for its cost of postage. Additional ID Cards or replacement ID Cards (i.e. for lost or stolen ID Cards) will be provided at a cost as specified in Exhibit 1. If Plan Sponsor desires to re-design and/or re-issue ID Cards, or for special graphic requests, additional charges may apply. 2.2 Claims Processing: During the term of this Agreement, Envision shall accept, process, and adjudicate Claims for Covered Drugs (i) submitted electronically by Participating Pharmacies; (ii) submitted by Covered Individuals as Direct Member Reimbursements (DMRs, as defined below); or (iii) received from third parties, such as Medicaid, for reimbursement by Plan Sponsor. Claims shall be checked for eligibility, benefit design, Cost Share requirements, and exclusions to determine which Claims are successfully processed, pended for prior authorization, or rejected for ineligibility or other factors in accordance with Plan Sponsor's specifications as set forth in Plan Sponsor's Benefit Specification Form (incorporated herein by this reference). For Claims that must be processed manually or require special handling, including, without limitation, (i) DMRs or (ii) Claims received from third parties, such as Medicaid, for reimbursement by Plan Sponsor for ineligible payments, Plan Sponsor will be charged a Manual Claims Processing fee as set forth in Exhibit 1. After termination of this Agreement,Envision shall process Claims received for dates of service on or before the effective date of termination for a period of ninety(90) days ("Run-Out Period"), subject to the following. Plan Sponsor shall deposit and maintain, with Envision, an amount equal to the last Claims invoice prior to termination. At the end of the Run-Out Period, the balance of the deposit shall be promptly refunded to Plan Sponsor and, thereafter, any Claims received by Envision shall be rejected. 2.2.1 Direct Member Reimbursement(DMR): Envision shall provide,via its website, a form for use by Covered Individuals to obtain reimbursement for amounts paid out-of-pocket (other than Cost Share) for Covered Drugs (e.g. Covered Drugs dispensed at a non-Participating Pharmacy) ("DMR Form"). Envision shall accept, process, and adjudicate DMR Claims within ten(10)business days of receipt of the DMR form,but shall not be liable to reimburse a Covered Individual until Plan Sponsor provides funds for such purpose. 2.2.2 Claims Adjudication System Edits: Plan Sponsor's Benefit Plan may contain additional rules which determine the way in which Claims are to be adjudicated. These rules may include coverage limitations or exclusions, application of clinical intervention (e.g. step therapy, drug therapy management), application of dispensed as written (DAW) codes (e.g. to \PBMSA(frm062413) C Envision Pharmaceutical Services,Inc. Page 5 of 35 7G ; / J determine what portion of a Claim is payable by Plan Sponsor and what portion is payable by Members), and administrative overrides to authorize the dispensing of Covered Drugs in certain circumstances (e.g. requests for lost or stolen drugs, vacation supplies, certain package sizes, dosage changes, invalid days' supply). For this purpose, Envision shall program edits into the Claims Adjudication System which are applied to Claims during the adjudication process as specified in the Benefit Specification Form. The Claims Adjudication System will provide the dispensing pharmacy with the appropriate messaging to advise the pharmacy of the applicable limitation,program,rule, or override. Envision shall also program edits into the Claims Adjudication System which are applied to Claims during the adjudication process to identify the following drug utilization conditions: duplicate prescriptions; over-utilization/refill too soon; under-utilization; drug interactions; pediatric warnings; geriatric warnings; acute/maintenance dosing; therapeutic duplication; drug inferred health state; drugs exceeding maximum dose; and drugs below minimum daily dosage, as specified in the Benefit Specification Form. The Claims Adjudication System will provide the dispensing pharmacy with the appropriate messaging to advise the pharmacy of drug utilization issues. 2.3 Clinical Services 2.3.1 Clinical Prior Authorizations (Initial Coverage Determinations): If Plan Sponsor has elected to receive Clinical Prior Authorization services from Envision, for those Covered Drugs and circumstances specified by Plan Sponsor in the Benefit Specification Form, Envision shall contact the prescriber and verify that the requested drug is appropriate for the diagnosis in the judgment of the prescriber. Plan Sponsor will be charged for Clinical Prior Authorizations as specified in Exhibit 1. If additional internal appeals (redeterminations) and/or the services of an Independent Review Organization are to be provided under this Agreement, such services shall be included in an attached Coverage Determination and Appeals Process Addendum. 2.3.2 Drug Therapy Management (DTM) Programs: Envision offers clinical programs such as Drug Therapy Care Gap Management and Medication Adherence and Persistency. If clinical programs are to be provided under this Agreement, such services and any additional charges shall be set forth in an attached Clinical Services Addendum. 2.4 Pharmacy Network: Envision shall arrange for the dispensing of Covered Drugs to Covered Individuals pursuant to contracts with one or more networks of Participating Pharmacies (referred to herein as a"Network"). The Network designated for Plan Sponsor to be used by Covered Individuals hereunder shall be named in Exhibit 1 and specified in the Benefit Specification Form. Plan Sponsor acknowledges that the pharmacies participating in a Network may change from time to time, including the designated Mail Order Pharmacy and/or Specialty Pharmacy provider. The list of Participating Pharmacies is constantly updated to reflect any changes in the Network, including pharmacy addresses and telephone numbers, and is accessible via Envision's website. Plan Sponsor acknowledges that(i)orders exceeding a thirty day supply are not available at all Retail Pharmacies; (ii) Covered Drugs shall not be dispensed to Covered Individuals without a prescription order by a Prescriber; and (iii) the availability of drugs are subject to market conditions and that Envision cannot, and does not, assure the availability of \PBMSA(frm062413) ®Envision Pharmaceutical Services,Inc. Page 6 of 35 �y any drug from any Participating Pharmacy. 2.5 Customer Service: Envision shall maintain and operate a customer service center with toll-free customer service numbers and adequately staffed with trained personnel 24 hours a day, 7 days a week, 365 days a year, for the use of Plan Sponsor, Covered Individuals, Prescribers, and Participating Pharmacies. 2.6 Records: Envision shall maintain such business records as may be required by applicable law or regulation, or as may be necessary to properly document the delivery of, and payment for, Covered Drugs and the provision of services by Envision under this Agreement. Plan Sponsor agrees to reimburse Envision for any cost incurred from the transfer of files from or to any vendor or pharmacy at any time during this Agreement and, upon request of Plan Sponsor, at the termination of this Agreement. 2.7 Reports: Envision shall provide Plan Sponsor with access to a web-based report generator through which Plan Sponsor may create and download a variety of standard and customized reports. Envision shall provide training for a Plan Sponsor designated individual on the capabilities of Envision's web-based reporting program. Plan Sponsor represents that the designated individual has received training and has knowledge of the HIPAA privacy and security regulations. Any reports that are to be provided by Envision to Plan Sponsor without cost (other than those available from Envision's web-based reporting program) shall be mutually determined prior to the configuration of Plan Sponsor's Benefit Plan in the Claims Adjudication System and shall be specified in the Benefit Specification Form. Plan Sponsor shall be charged a fee for any other reports requested by Plan Sponsor. Included in the web-based reports described above, or provided separately, Envision shall supply Plan Sponsor with reports of retrospective reviews to determine the drug utilization patterns of Members (e.g. high cost/high utilization of a particular drug class, therapeutic appropriateness of drug for a particular disease state). 2.8 Retiree Drug Subsidy (RDS)Reports: For Plan Sponsors which submit requests for drug subsidies under the Medicare RDS program, Envision shall provide Plan Sponsor with quarterly reports summarizing Claims paid by Plan Sponsor for Medicare Part D drugs dispensed to Covered Individuals who Plan Sponsor has identified on the appropriate form as Medicare eligible retirees. Plan Sponsor acknowledges that any estimated earned Manufacturer Derived Revenue which has been passed-through to Plan Sponsor will have been deducted from the Claim amounts reported. Unless otherwise specified herein or included under an addendum to this Agreement, Envision shall not be responsible or liable to Plan Sponsor for any RDS services or subsidies. Any assistance requested by Plan Sponsor and/or provided by Envision shall be solely consultative and shall not be deemed to be an acceptance by Envision of any responsibility or liability for the completion or submission of any RDS application or request for subsidies under Medicare Part D. 2.9 Business Associate Agreement: Envision shall execute a HIPAA Business Associate Agreement, attached as Exhibit 2. \PBMSA(frm062413) C Envision Pharmaceutical Services,Inc. Page 7 of 35 0 CP -r r 2.10 Additional Services: Any services to be rendered under this Agreement which are not included in the Administrative Fee as specified in this Section 2 shall be itemized in the Exhibits and Addendums hereto along with any associated costs or charges. 2.11 Performance Guarantees: Envision shall provide PBM Services in accordance with the Performance Guarantees specified in Exhibit 3. Unless otherwise stated, targets will be measured on a Contract Year basis. The total amount of penalties payable by Envision in any Contract Year shall not exceed ten percent(10%) of Envision's Administrative Fee paid by Plan Sponsor during applicable Contract Year. Unless otherwise stated, payment of penalties will be credited towards future Administrative Fees. Failure to meet Performance Guarantees shall not be deemed to be a breach of this Agreement. 3. PRICING AND PASS-THROUGH METHODOLOGY 3.1 Pass-Through of Discounts and Dispensing Fees: Envision has negotiated discounted drug prices and dispensing fees with Participating Pharmacies. Envision shall pass-through to Plan Sponsor one hundred percent(100%)of the negotiated discount for the drug dispensed(plus any applicable dispensing fee) without any reclassification, mark-up or spread by Envision. The amount invoiced to Plan Sponsor shall be the exact drug ingredient cost and applicable dispensing fee which is paid to the dispensing pharmacy,in accordance with the following: 3.1.1 For Ingredient Cost: Envision shall invoice Plan Sponsor the lower of: (a) The calculated negotiated amount payable to the Participating Pharmacy based on the 11 digit NDC number of the drug dispensed; or (b) If included on the then current Envision MAC List,the MAC Price for the drug dispensed; or (c) The Participating Pharmacy's U&C Price (except for drugs dispensed by the Mail Order or Specialty Pharmacy); less any applicable earned Manufacturer Derived Revenue and/or any applicable Covered Individual Cost Share. 3.1.2 For Dispensing Fees: Envision shall invoice Plan Sponsor the actual dispensing fee amount payable to the Participating Pharmacy. 3.1.3 Drug Pricing and Dispensing Fees Guarantee: Within four months after the end of each Contract Year, Envision shall provide Plan Sponsor with a report showing the actual Annual Average Effective Rates and Annual Average Dispensing Fees paid by Plan Sponsor for the Contract Year. If the amounts paid by Plan Sponsor during the Contract Year for all Claims in any category in Exhibit 1 with a specified rate (i.e. 30 Day Retail Brand Drug; 30 Day Retail Brand Drug Dispensing Fee; 30 Day Retail Generic Drug; 30 Day Retail Generic Drug Dispensing Fee; 90 Day Retail Brand Drug; 90 Day Retail Generic Drug; 90 Day Mail Brand Drug; 90 Day Mail Generic Drug) are less favorable than the Annual Average Effective Rates and Average Dispensing Fees stated in Exhibit 1, Envision shall credit Plan Sponsor with the difference for that category. Plan Sponsor understands and agrees that if, after the Effective Date of this Agreement, there is a substantial change in drug utilization patterns of Covered \PBMSA(frm062413) ®Envision Pharmaceutical Services,Inc. Page 8 of 35 r r Individuals, or Benefit Plan setup parameters such as copay, pharmacy participation, or rules governing the application of the Formulary, which adversely affect any guaranteed Annual Average Effective Rate or Average Dispensing Fee, such guarantee shall be adjusted to account for such changes. Envision shall demonstrate to Plan Sponsor the factors upon which any such adjustment is based and the methodology used to make such adjustment. Nothing in this Section 3.1.3 shall affect Envision's obligation to pass through to Plan Sponsor 100% of all negotiated discounts and dispensing fees for Plan Sponsor's Claims. Envision shall not be liable to Plan Sponsor for guaranteed Annual Average Effective Rates or Annual Average Dispensing Fees if (i) Plan Sponsor makes a change to the Benefit Plan which affects the utilization or distribution of Covered Drugs; (ii) the specifications provided by Plan Sponsor on the initial Benefit Specification Form are inconsistent with the specifications provided to Envision prior to the execution of the initial Benefit Specification Form; or (iii) the utilization data provided by Plan Sponsor (or Plan Sponsor's agent) upon which the calculation of guarantees were based is inaccurate. Plan Sponsor is urged to submit any proposed changes to the Benefit Plan to Envision before such changes become effective so that Envision may advise Plan Sponsor if any changes will affect Drug Pricing or Dispensing Fees Guarantees. Plan Sponsor acknowledges that it has no right of offset to withhold any payment due Envision under this Agreement for any amounts owed Plan Sponsor for financial guarantees. 3.2 Manufacturer Derived Revenue 3.2.1 Pass-Through of Manufacturer Derived Revenue: Envision has negotiated contracts with pharmaceutical manufacturers to obtain Manufacturer Derived Revenue for eligible Prescription Drugs, and shall pass through to Plan Sponsor one hundred percent (100%) of all earned Manufacturer Derived Revenue paid to Envision by contracted pharmaceutical manufacturers for Plan Sponsor's eligible Claims that comply with the terms of this Agreement. Prescription Drugs eligible for Manufacturer Derived Revenue are included in the Formulary provided by Envision. Plan Sponsor acknowledges that its yield of earned Manufacturer Derived Revenue is dependent on certain factors including, without limitation, the following: (i) the effect of terms and conditions of Plan Sponsor's Benefit Plan on the application of the Formulary; (ii) the structure of Plan Sponsor's Benefit Plan, including but not limited to Cost Share requirements and coverage rules such as Prior Authorizations, Quantity Limits, and Step Therapy (as defined in the Benefit Specification Form); and (iii) the drug utilization patterns of Covered Individuals. Plan Sponsor further acknowledges that Plan Sponsor's portion of market share rebates is based on(i)Plan Sponsor's ability to meet and earn market share rebate levels by pharmaceutical manufacturer and (ii) the ratio of Plan Sponsor's Claims for a particular rebated drug to the total number of Claims for such drug for all Envision clients, as adjusted for the effect of Plan Sponsor's Benefit Plan (e.g. tier structure and Cost Share differentials) on the overall yield of market share rebates. Claims paid entirely by Covered Individuals (e.g. a Claim occurring while the Covered Individual has not yet met his or her deductible), 340B Claims,and Claims for which Envision has not been paid in full, are ineligible for Manufacturer Derived Revenue, and no Manufacturer Derived Revenue shall be payable to Plan Sponsor for such Claims. 3.2.2 Pass-Through Methodology: Manufacturer Derived Revenue shall be advanced to Plan Sponsor by adjusting the Claim for an eligible Prescription Drug by the estimated earned \PBMSA(frm062413) C Envision Pharmaceutical Services,Inc. Page 9 of 35 (q( Manufacturer Derived Revenue using Envision's patented Point-of-Sale Technology. Envision's Point-of-Sale Technology generates a Claim that will be invoiced to Plan Sponsor at the net price after applying credit for estimated earned Manufacturer Derived Revenue. (Plan Sponsor acknowledges that, unless otherwise indicated by Plan Sponsor on the Benefit Specification Form, if a Covered Individual pays a percentage of the drug cost (i.e. co-insurance) under the Benefit Plan, a proportional amount of the Manufacturer Derived Revenue will be passed on to the Covered Individual at the Point-of-Sale). 3.2.3 Sole Source: Plan Sponsor represents and warrants to Envision that, at no time during or after the term of this Agreement, is Plan Sponsor receiving rebates and other revenues from pharmaceutical manufacturers other than through Envision, either directly or indirectly (through a Group Purchasing Organization, drug wholesaler, or otherwise) for Claims processed by Envision under this Agreement. Plan Sponsor agrees that it shall not, at any time, submit Claims which have been transmitted to Envision to another pharmacy benefit manager or carrier for the collection of rebates and other revenues from pharmaceutical manufacturers or create a situation which would cause a pharmaceutical manufacturer to decline payments to Envision. Envision reserves the right to recover from Plan Sponsor, and Plan Sponsor shall refund to Envision, any Manufacturer Derived Revenue, including any related penalties and fees, advanced to Plan Sponsor by Envision which is connected with any Claims for which Plan Sponsor received rebates and other revenues from pharmaceutical manufacturers from any other source or for amounts advanced to Plan Sponsor by Envision which have been withheld by a pharmaceutical manufacturer as a result of such Claims not meeting conditions for rebates, the ineligibility of Claims for Manufacturer Derived Revenue (i.e. 340B Claims), or breach of this Agreement by Plan Sponsor. 3.2.4 Manufacturer Derived Revenue Guarantee: Nine months after the end of each Contract Year, Envision shall provide Plan Sponsor with a report reconciling Manufacturer Derived Revenue amounts advanced to Plan Sponsor and Manufacturer Derived Revenue amounts earned by Plan Sponsor for eligible Claims (including market share based amounts) during the Contract Year. (a) If the Manufacturer Derived Revenue advanced to Plan Sponsor for the Contract Year is, overall, lower than the overall Manufacturer Derived Revenue earned by Plan Sponsor for the Contract Year,Envision shall pay the difference to Plan Sponsor. (b) If the Manufacturer Derived Revenue earned by Plan Sponsor for the Contract Year is, overall, lower than the annual average earned Manufacturer Derived Revenue guaranteed amounts specified in Exhibit 1,Envision shall pay the difference to Plan Sponsor. Notwithstanding anything herein to the contrary, Envision shall not be liable to Plan Sponsor for guaranteed earned Manufacturer Derived Revenue if: (i) Plan Sponsor makes a change to the Benefit Plan which affects the application of the Formulary(e.g. tier differentials),the conditions for rebates of pharmaceutical manufacturer contracts; or otherwise affects earned Manufacturer Derived Revenue yields; (ii) there is a substantial change in the drug utilization patterns of Covered Individuals; (iii)the utilization data provided by Plan Sponsor(or Plan Sponsor's agent) upon which the calculation of guarantees were based is inaccurate; (iv) there is a loss of rebates due to pharmaceutical manufacturer drug patent expirations, manufacturer bankruptcy, or removal of a drug from the market; (v) there are changes in pharmaceutical manufacturer rebate \PBMSA(frm062413) C Envision Pharmaceutical Services,Inc. Page 10 of 35 A contracting terms or policies; (vi) Plan Sponsor fails to meet and earn market share rebate levels; (vii) if Plan Sponsor has been excluded by a manufacturer; or (viii) there is any governmental regulation, ruling, or guidance that impacts Envision's ability to maintain current earned Manufacturer Derived Revenue yields. Plan Sponsor acknowledges that it has no right of offset to withhold any payment due Envision under this Agreement for any amounts owed Plan Sponsor for financial guarantees. 4. PLAN SPONSOR RESPONSIBILITIES 4.1 Implementation: No later than thirty (30) days prior to the Effective Date, Plan Sponsor shall provide Envision with an executed Benefit Specification Form and such data as reasonably necessary for Envision to set up the Claims Adjudication System and commence the provision of PBM Services as of the Effective Date. Such data includes, without limitation, prior utilization reports, pharmacy transfer files, and eligibility. For the first month of the Agreement only, Envision will credit Plan Sponsor an implementation credit of$0.50 per Eligible Employee. 4.2 Eligibility Data: Plan Sponsor shall provide Envision (either directly or through an authorized third party administrator)with an Eligibility File, at least monthly, in the HIPAA 834 standard transaction code set format, or such other format as has been previously agreed to by Envision. Plan Sponsor shall provide timely eligibility updates (for example, additions, terminations,change of address or personal information,etc.)to ensure accurate determination of the eligibility status of Covered Individuals. Plan Sponsor acknowledges and agrees that (i) Envision provides such eligibility data to the Participating Pharmacies and understands that Envision and Participating Pharmacies will act in reliance upon the accuracy of data received from Plan Sponsor; (ii) Envision will continue to rely on the information provided by Plan Sponsor until Envision receives notice that such information has changed; and (iii) Envision shall not be liable to Plan Sponsor for any Claims or expense resulting from the provision by Plan Sponsor (or its designee) of inaccurate, erroneous, or untimely information. In addition, if Envision must create or update eligibility by manually entering Covered Individual data, Plan Sponsor will be charged a data entry fee as specified in Exhibit 1. In lieu of the Eligibility File, Plan Sponsor may provide eligibility information by updating the Claims Adjudication System directly (except for the initial Eligibility File, which must be provided to Envision during the initial implementation), provided Plan Sponsor continues to meet Envision's conditions and specifications for direct eligibility updates. 4.3 Benefit Plan: Plan Sponsor shall provide Envision with complete information concerning the Benefit Plan. Plan Sponsor understands and agrees that Envision shall rely on the terms and provisions provided by Plan Sponsor on the Benefit Specification Form. The Benefit Specification Form may be changed from time to time by Plan Sponsor by providing Envision with a replacement Benefit Specification Form or a Benefit Specification Change Form; provided, however, that the form must be signed by Plan Sponsor to be effective and the form provided to Envision at least thirty (30) days before any such change shall be implemented. The most recent executed Benefit Specification Form shall supersede any prior dated form. Plan Sponsor shall have sole authority to determine the terms of the Benefit Plan and the coverage of benefits thereunder, however, Plan Sponsor understands and agrees that any change in the Benefit Plan or System configuration (e.g. mandatory generic program, coverage of over-the- \PBMSA(frm062413) C Envision Pharmaceutical Services,Inc. Page 11 of 35 N �J ----- counter drugs or medications, source of Covered Drugs,use of Plan Sponsor Owned pharmacies, etc.) may affect yields in earned Manufacturer Derived Revenue and/or average drug pricing. Plan Sponsor agrees that Envision shall not be liable to Plan Sponsor for a reduction of such yields or increase in pricing which result from any such change, or for any failure of Envision to meet financial guarantees which are affected by such change. 4.4 Formulary: Plan Sponsor shall adopt and adhere to the Formulary provided by Envision. Any customization of the Formulary by Plan Sponsor or use by Plan Sponsor of an alternate Formulary must be approved, in writing, by Envision. Plan Sponsor acknowledges that adherence to the Formulary is necessary to maximize yields in earned Manufacturer Derived Revenue. Envision shall not be liable to Plan Sponsor for any reduction in yields of earned Manufacturer Derived Revenue, or for any failure of Envision to meet financial guarantees resulting from Plan Sponsor's failure to adhere to the Formulary or a change to the Benefit Plan that affects the application of the Formulary. 4.5 Payment: Plan Sponsor shall timely pay, or cause its designee to timely pay,Envision for services rendered hereunder in accordance with Section 4 below and Exhibit 1. 4.6 Cooperation: Plan Sponsor shall promptly provide Envision with all information (both verbal and written) that is requested by Envision and reasonably necessary for Envision to complete its obligations hereunder. Any information required to be provided by Plan Sponsor in order for Envision to perform a function under this Agreement shall be deemed to be untimely if not received by Envision at least five (5) business days prior to its due date. Further, Plan Sponsor shall not obfuscate,delay, impede,or otherwise fail to cooperate with Envision. 5. TERMS OF PAYMENT 5.1 Fees and Rates: Plan Sponsor hereby accepts the fees and rates specified in Exhibit 1 and acknowledges the drug pricing amounts and annual average earned Manufacturer Derived Revenue guarantees specified in Exhibit 1 are conditioned upon Plan Sponsor's adherence to certain conditions under this Agreement. The actual annual average discounts and earned Manufacturer Derived Revenue will depend on Plan Sponsor's drug utilization and mix of Participating Pharmacies. 5.2 Payments for Claims: Envision shall invoice Plan Sponsor twice each month for Claims incurred. Plan Sponsor shall pay Envision's invoices no later than 12:00 p.m. Eastern time on the tenth (10th) calendar day from receipt of said invoices. Invoices shall be deemed to have been received by Plan Sponsor upon the earliest delivery of the invoice by mail, e-mail, fax, or courier. 5.3 Payment of Administrative Fee: Beginning with the first month under this Agreement, Envision shall provide Plan Sponsor with an invoice of Administrative Fees on or about the first day of each month. Administrative Fees are due within seven (7) calendar days of receipt of Envision's invoice. The monthly Administrative Fee is calculated by multiplying the number of Eligible Employees who are eligible to receive services hereunder at any time during the prior month (as reflected in the Claims Adjudication System) by the Administrative Fee amount set \PBMSA(frm062413) ®Envision Pharmaceutical Services,Inc. Page 12 of 35 V forth in Exhibit 1 (except for the initial invoice which is based on Plan Sponsor's initial Eligibility File). 5.4 Fees for Additional Services and Miscellaneous Expenses: Plan Sponsor agrees to reimburse Envision for Additional Services and Miscellaneous Expenses (e.g. postage) specified in Exhibit 1 hereunder,within seven(7)calendar days of receipt of an invoice. 5.5 Retroactive Disenrollment or Termination: Retroactive termination or disenrollment of a group, Eligible Employee, or Covered Individual shall not release Plan Sponsor of its obligation to pay Claims incurred, at any time, on behalf of a Covered Individual or Administrative Fees due to Envision for a Covered Individual during any period for which services were renderable hereunder based on the then current eligibility. Further, termination of coverage of prescription drugs or the entering into a policy of insurance that covers prescription drugs shall not constitute a permitted termination of this Agreement. 5.6 Taxes, Assessment or Fees: Any sales or use taxes for Covered Drugs sold to Covered Individuals shall be charged, collected, and paid to state and local taxing authorities by the dispensing pharmacy. As part of the reimbursement for a Claim, Plan Sponsor shall reimburse Envision for such taxes payable by the dispensing pharmacy. These sales or use taxes will be added to the overall amount of the Claim and invoiced to Plan Sponsor and/or Member, in accordance with the Benefit Plan. Further, Plan Sponsor shall reimburse Envision for any assessments or related fees required to be paid under state or federal regulations for Plan Sponsor's Claims. 5.7 Financial Responsibility: Plan Sponsor shall be and remain responsible for the payment of all invoices for Administrative Fees, Additional Services, Miscellaneous Expenses, and Claims (along with any associated Cost Share not timely paid by Members, dispensing fees, and taxes). Plan Sponsor acknowledges that Envision will not pay pharmacies for Plan Sponsor's Claims, nor be obligated to pay pharmacies for Claims, unless and until adequate funds are received from Plan Sponsor. 5.7.1 Untimely Payments: If Plan Sponsor should fail to timely pay any amounts due Envision hereunder for any reason, including, but not limited to, insolvency, bankruptcy, termination of business, sale, or rebuff,Envision reserves the right to (i) suspend the provision of services; (ii) offset such amounts owed to Envision by any amounts owed by Envision to Plan Sponsor and/or (iii) collect from Plan Sponsor, in addition to such unpaid amounts, interest at a rate of 1.5% per month on the outstanding balance (or, if lower, the rate of interest permitted under the law of Plan Sponsor's state of domicile). If Envision suspends the provision of services, Covered Individuals will be required to pay 100% of the drug cost and any dispensing fees (or the U&C Price, if lower) to receive Covered Drugs. In addition, as a condition of continuing to perform services under this Agreement, Envision may require Plan Sponsor to deposit with Envision additional amounts to ensure the timely payment of future invoices and/or discontinue advancing earned Manufacturer Derived Revenue to Plan Sponsor. Plan Sponsor further agrees that Envision shall not be liable for any consequences resulting from the untimely payment of Participating Pharmacies due to the failure of Plan Sponsor to timely pay Envision as required under this Agreement. Further, if Plan Sponsor should fail to pay any amounts due \PBMSA(frm062413) C Envision Pharmaceutical Services,Inc. Page 13 of 35 CD + r Envision hereunder for drugs dispensed to Covered Individuals, Envision reserves the right to pursue payment from such Covered Individuals to the extent permitted by law. 5.7.2 Financial Viability: Plan Sponsor acknowledges that Envision will periodically conduct a credit check of Plan Sponsor. If such credit check reasonably indicates that Plan Sponsor is not financially viable, Envision may require Plan Sponsor to deposit with Envision a reasonable amount to ensure the timely payment of future invoices. 5.8 Financial Audit by Plan Sponsor: Within twelve months after the end of each Contract Year hereunder, Plan Sponsor, at its sole expense, may audit Envision's records of Claims adjudicated during the prior Contract Year. Envision shall make available to Plan Sponsor's auditor, any and all financial records containing Plan Sponsor's information and such other records as reasonably necessary for auditor to confirm that the amounts paid by Plan Sponsor are the cost to Envision on the day the Covered Drug was dispensed. Plan Sponsor agrees to not use as its auditors, any person or entity which, in the sole discretion of Envision, is a competitor of Envision, a pharmaceutical manufacturer representative, or any other person or entity which has a conflict of interest with Envision. Plan Sponsor understands that Envision's contracts with pharmaceutical manufacturers, Participating Pharmacies, and other third parties may contain non-disclosure provisions, and hereby agrees to comply with such non-disclosure provisions. Plan Sponsor's auditor shall execute a conflicts of interest disclosure and confidentiality agreement with Envision prior to the audit. Audits shall only be made during normal business hours following thirty (30) days written notice, be conducted without undue interference to Envision's business activity, and in accordance with reasonable audit practices. Plan Sponsor's auditor may inspect Envision's contracts with Participating Pharmacies and pharmaceutical manufacturers at Envision's offices only, and no copies of such contracts may be removed from Envision's offices. Plan Sponsor agrees to disclose the findings and methodologies of a completed audit, and provide Envision with a reasonable period of time to respond to such findings and methodologies, before a demand is made by Plan Sponsor for amounts it believes are due from Envision. 5.9 Financial Audit by Envision: Envision may, at reasonable intervals,request Plan Sponsor to provide records for Envision's inspection which provide support for the information contained in the Eligibility File. In addition, and if warranted, Envision may, at its own expense, inspect and audit, or cause to be inspected and audited, once annually,the books and records of Plan Sponsor directly relating to the existence and number of Covered Individuals. Audits shall only be made during normal business hours following thirty (30) days written notice, be conducted without undue interference to Plan Sponsor's business activity, and in accordance with reasonable audit practices. Envision agrees to execute a confidentiality agreement with Plan Sponsor prior to the audit. 6. TERM AND TERMINATION 6.1 Term: The term of this Agreement shall commence on the Effective Date and shall remain in full force and effect for an initial term of two (2) years ("Initial Term") unless earlier terminated as provided herein. Upon the expiration of the Initial Term, and each subsequent renewal term, this Agreement shall renew automatically for an additional term of one year; 1 \PBMSA(frm062413) ®Envision Pharmaceutical Services,Inc. Page 14 of 35 v r • unless, at least ninety (90) days prior to the end of such term, either party hereto notifies the other,in writing,that this Agreement will terminate at the end of the current term. 6.2 Termination: This Agreement may be terminated as follows: 6.2.1 For Cause: By either party hereto in the event the other party breaches any of its material obligations hereunder;provided,however,that the defaulting party shall have thirty(30) days to correct such breach after written notice is given by such non-breaching party specifying the alleged breach; 6.2.2 Insolvency: By either party hereto in the event the other party (i) is adjudicated insolvent, under state and/or federal regulation, or makes an assignment for the benefit of creditors; (ii)files or has filed against it, or has an entry of an order for relief against it, in any voluntary or involuntary proceeding under any bankruptcy, insolvency, reorganization or receivership law, or seeks relief as therein allowed, which filing or order shall not have been vacated within sixty (60) calendar days from the entry thereof; (iii) has a receiver appointed for all or a substantial portion of its property and such appointment shall not be discharged or vacated within sixty (60) calendar days of the date thereof; (iv)is subject to custody, attachment or sequestration by a court of competent jurisdiction that has assumed of all or a significant portion of its property; or (v)ceases to do business or otherwise terminates its business operations, is declared insolvent or seeks protection under any bankruptcy, receivership, trust deed,creditors arrangement or similar proceeding; 6.2.3 Failure to Pay: By Envision, in addition to any other remedy available to Envision hereunder, in the event Plan Sponsor fails to pay Envision according to terms of this Agreement. 6.3 Notices: All notices required in this Section 6 shall be reasonably specific concerning the cause for termination and shall specify the effective date and time of termination. 6.4 Effect of Termination: Termination of this Agreement for any reason shall not release any party hereto from obligations incurred under this Agreement prior to the date of termination. Except as otherwise agreed, in writing, no services shall be provided by Envision after the effective date of termination. Envision reserves the right to suspend advancing earned Manufacturer Derived Revenue to Plan Sponsor upon Plan Sponsor's notification of termination. 7. CONFIDENTIAL INFORMATION 7.1 Confidentiality: Except as otherwise stated herein or required by law, neither party hereto shall disclose any information of, or concerning the other party which has either been provided by one party to the other or obtained by a party in connection with this Agreement (including this Agreement and the terms of this Agreement) or related to the services rendered under this Agreement, all of which information is deemed confidential information. All data, information, and knowledge supplied by a party hereto shall be used by the other party exclusively for the purposes of performing this Agreement. Upon termination of this Agreement, each party shall return to the other party or destroy (if such destruction is certified) \PBMSA(frm062413) ®Envision Pharmaceutical Services,Inc. Page 15 of 35 dJ all confidential information provided including, without limitation, all copies and electronic magnetic versions thereof. Notwithstanding any of the foregoing to the contrary, "confidential information" shall not include any information which was known by a party prior to receiving it from the other party, or that becomes rightfully known to a party from a third party under no obligation to maintain its confidentiality,or that becomes publicly known through no violation of this Agreement. 7.2 Protected Health Information: Plan Sponsor will have access to Protected Health Information(PHI) (as defined by HIPAA) contained in reports provided by Envision or accessed by Plan Sponsor via Envision's website. Plan Sponsor agrees, for itself and its employees, that PHI shall not be used for any impermissible purpose, including, without limitation, the use of PHI for disciplinary or discriminatory purposes, and any user names and passwords assigned to designated individuals shall not be shared with non-designated individuals. In addition, Plan Sponsor, for itself and its Covered Individuals, authorizes Envision to use and share PHI as necessary to carry its obligations hereunder. 8. INDEMNIFICATION 8.1 Limited Indemnification by Envision: Envision hereby agrees to indemnify, hold harmless, and defend Plan Sponsor and its employees, officers, directors, trustees, shareholders, and agents from and against any and all liabilities, actions, claims, damages, costs, losses and expenses (including without limitation, reasonable costs of investigation and attorneys' fees) caused by or arising out of(i) any act or omission by Envision in the performance of the services provided under this Agreement; or (ii) any breach of any representation, covenant, or other agreement of Envision contained in this Agreement. 8.2 Limited Indemnification by Plan Sponsor: To the extent allowable by law, Plan Sponsor hereby agrees to indemnify, hold harmless, and defend Envision and its employees, officers, directors, shareholders, affiliates and agents from and against any and all liabilities, actions, claims, damages, costs, losses and expenses (including without limitation, reasonable costs of investigation and attorneys' fees) caused by or arising out of(i)the provision by Plan Sponsor or its designee of untimely, incomplete, or erroneous information; or (ii) Plan Sponsor's failure to comply with state or federal law in the operation of its Benefit Plan. 8.3 Limitation of Liability: Except for the indemnification obligations set forth above (i) each party's liability to the other hereunder will in no event exceed the actual proximate losses or damages caused by breach of this Agreement; and (ii)in no event will either party or any of their respective affiliates, directors, employees or agents, be liable for any indirect, special, incidental, consequential, exemplary or punitive damages, 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. 8.4 Survival: This Section 8 shall survive the expiration or termination of this Agreement for any reason. 9. RELATIONSHIP WITH CONTRACTED PHARMACIES \PBMSA(frm062413) ®Envision Pharmaceutical Services,Inc. Page 16 of 35 (53 Plan Sponsor acknowledges that Envision is neither an operator of pharmacies nor exercises control over the professional judgment used by any pharmacist when dispensing drugs or medical supplies to Covered Individuals. Nothing in this Agreement shall be construed to usurp the dispensing pharmacist's professional judgment with respect to the dispensing or refusal to dispense any drugs or medical supplies to Covered Individuals. Plan Sponsor agrees that it shall not hold Envision responsible, nor shall Envision be liable to Plan Sponsor or Covered Individuals, for any liability arising from the dispensing of drugs or medical supplies to Covered Individuals by any pharmacy. 10. GENERAL 10.1 Standards of Performance: Envision shall perform its obligations under this Agreement with care, skill, prudence, and diligence, and in accordance with the standards of conduct applicable to a fiduciary. Envision shall disclose all administrative fees and drug costs charged to Plan Sponsor, disclose all earned Manufacturer Derived Revenue collected by Envision for Plan Sponsor's Claims, and permit Plan Sponsor to audit such fees, costs, and revenues, as set forth in this Agreement. Envision shall also disclose to Plan Sponsor any activity, policy, or practice that presents a conflict of interest with the performance of its obligations hereunder. Notwithstanding anything to the contrary, Plan Sponsor retains the sole responsibility for the terms and provisions of the Benefit Plan; its compliance with applicable law, including, without limitation, any federally mandated requirements; and the interpretation and determinations of coverage under the Benefit Plan. Unless otherwise agreed in writing, Plan Sponsor shall also be responsible for the disclosing or reporting of information regarding the Benefit Plan or changes in the Benefit Plan(e.g., calculation of co-payments, deductibles; or creditable coverage) as may be required by law to be disclosed to governmental agencies or Covered Individuals. 10.2 Independent Contractors: Envision and Plan Sponsor are independent contractors. Notwithstanding anything herein to the contrary, neither party hereto, nor any of its respective employees, shall be construed to be the employee, agent, or representative of the other for any reason, or liable for any acts of omission or commission on the part of the other. Plan Sponsor acknowledges that, notwithstanding anything herein to the contrary, Envision negotiates contracts with pharmacies, pharmaceutical manufacturers, and vendors on its own behalf and not specifically or exclusively for Plan Sponsor. 10.3 Exclusivity: During the term of this Agreement, Envision shall be the sole provider of PBM Services to Plan Sponsor, including, without limitation, the exclusive contractor of rebates with pharmaceutical manufacturers for Plan Sponsor's Claims. 10.4 Assignment: Except as follows, this Agreement may not be assigned by either party hereto without the express written consent of the other party, which may not be unreasonably withheld. Envision may assign this Agreement to a commonly controlled subsidiary or affiliate company, or a controlling parent company. \PBMSA(frm062413) ©Envision Pharmaceutical Services,Inc. Page 17 of 35 bJ 10.5 Binding Effect: This Agreement and the exhibits and schedules attached hereto shall be binding upon and inure to the benefit of the respective parties hereto and their respective successors and assigns. 10.6 Intellectual Property: Each party hereto reserves the right to and control of the use of their names, symbols, trademarks or service marks presently existing or hereafter established, and no party may use any names, symbols, trademarks or service marks of any other party without the owner's written consent. 10.7 Waiver: Neither the failure nor any delay on the part of either party hereto to exercise any right, power or privilege hereunder will operate as a waiver thereof, nor will any single or partial exercise of any such right, power or privilege preclude any other or further exercise thereof, or the exercise of any other right, power or privilege. In the event any party hereto should waive any breach of any provision of this Agreement, it will not be deemed or construed as a waiver of any other breach of the same or different provision. 10.8 Severability: The invalidity or unenforceability of any term or provision of this Agreement shall in no way affect the validity or enforceability of any other term or provision. 10.9 Change in Law or Market Conditions: If any law,regulation, or market condition(e.g. an applicable industry standard reference on which pricing hereunder is based, changes the methodology for determining drug price in a way that materially changes the pricing or economics of this Agreement), either now existing or subsequently occurring, affects the ability of either party hereto to carry out any obligation hereunder (a"Material Change"), Envision and Plan Sponsor shall renegotiate the affected terms of this Agreement, in good faith,to preserve, to the extent possible, the relative positions of the parties that existed prior to such Material Change. Either party may notify the other party of a Material Change. If a successful renegotiation is not achieved within thirty (30) days after notification of a Material Change, any failure of the affected party to meet its obligations hereunder due to the effect of such Material Change shall not be deemed to be a breach of this Agreement; however, if continuation of this Agreement without modification is in violation of any law or regulation, or makes it impracticable for the affected party to meet its obligations hereunder, either party may terminate this Agreement with sixty(60)days prior written notice. 10.10 Headings: The section or paragraph headings contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement. 10.11 Entire Agreement: This Agreement shall constitute the entire agreement between Envision and Plan Sponsor with respect to the subject matter herein and supersede any prior understanding or agreements of any kind preceding this Agreement with respect to such subject matter. Any modification or amendment to this Agreement, or additional obligation assumed by Envision or Plan Sponsor in connection with this Agreement, shall be binding only if evidenced in a writing signed by both parties hereto. No term or provision of this Agreement shall establish a precedent for any term or provision in any other agreement. 10.12 Acceptance of Offer: Notwithstanding anything herein to the contrary, this Agreement \PBMSA(frm062413) ®Envision Pharmaceutical Services,Inc. Page 18 of 35 e shall not be binding upon the parties hereto unless and until this Agreement is signed and executed by a duly authorized officer of each of the parties. The signing of this Agreement by Plan Sponsor constitutes an offer only until the same has been accepted by Envision. 10.13 Dispute Resolution 10.13.1 Mediation: Prior to the initiation of any action or proceeding permitted by this Agreement to resolve disputes between the parties, the parties shall make a good faith effort to resolve any such disputes by negotiation. The negotiation shall be attended by representatives of Envision with full decision-making authority and by Plan Sponsor's designated representative who would make the presentation of any settlement reached during the negotiations to the Plan Sponsor's Board of County Commissioners for approval. Failing resolution, and prior to the commencement of depositions in any litigation between the parties arising out of this Agreement, the parties shall attempt to resolve the dispute through Mediation before an agreed-upon Circuit Court Mediator certified by the State of Florida. The mediation shall be attended by representatives of Envision with full decision-making authority and by Plan Sponsor's designated representative who would make the presentation of any settlement reached at mediation to the Plan Sponsor's Board of County Commissioners for approval. Should either party fail to submit to mediation as required hereunder, the other party may obtain a court order requiring mediation under Florida Statutes, section 44.102. 10.14 Choice of Law and Forum: This Agreement shall be construed, interpreted, and governed according to the laws of the State of Florida, without regard to its conflicts of laws rules, except to the extent such laws are preempted by applicable Federal Law. Any suit or action brought by either party to this Agreement against the other party relating to or arising out of this Agreement must be brought in the appropriate federal or state courts in and for Collier County, Florida,which courts have sole and exclusive jurisdiction on all such matters. 10.15 Force Majeure: Neither Envision nor Plan Sponsor will be deemed to have breached this Agreement or be held liable for any failure or delay in the performance of all or any portion of its obligations under this Agreement if prevented from doing so by a cause or causes beyond its control. Without limiting the generality of the foregoing, such causes include acts of God or the public enemy, fires, floods, storms, earthquakes, riots, strikes, boycotts, lock-outs, acts of terrorism, acts of war, war-operations, restraints of government, power or communications line failure or other circumstances beyond such party's control, or by reason of the judgment, ruling or order of any court or agency of competent jurisdiction, or change of law or regulation (or change in the interpretation thereof) subsequent to the execution of this Agreement. The party claiming force majeure must provide the other party with reasonable written notice. However,as soon as the cause preventing performance ceases, the party affected thereby shall fulfill its obligations as set forth under this Agreement. This Section 10.15 shall not be considered to be a waiver of any continuing obligations under this Agreement, including, without limitation, the obligation to make payments. 10.16 Fax Communications: Plan Sponsor agrees that Envision may communicate with Plan Sponsor via fax, and by doing so, such fax is not a violation of the Telephone Consumer Protection Act,47 U.S.C. §227. \PBMSA(frm062413) ®Envision Pharmaceutical Services,Inc. Page 19 of 35 S 10.17 Notices: All notices required under this Agreement shall be in writing, signed by the party giving notice and shall be deemed sufficiently given immediately after being delivered by hand, or by traceable overnight delivery service, or by registered or certified mail (return receipt requested), to the other party at the address set forth below or at such address as has been given by proper notice. 10.18 Representations: Plan Sponsor represents and warrants that(i)it is self-insured; (ii)the entering into this Agreement for PBM Services is not in violation of any other agreement; (iii) has no undisclosed conflicts of interest; and(iv) it maintains,and shall continue to maintain throughout the term of this Agreement,any and all licenses,governmental authority,or other authorization required to operate an entity of its type. Envision represents that there are no organizational arrangements that could potentially create a conflict of interest that affects clinical or financial decisions. In addition,each signatory named below represents and warrants that he or she (i)has read this Agreement, Exhibits,and other attachments,and fully understands and agrees to the content therein; (ii)has entered into this Agreement voluntarily; (iii)has not transferred or assigned or otherwise conveyed in any manner or form any of the rights, obligations or claims which are the subject matter of this Agreement; and(iv)has the full power and authority to execute this Agreement. This Agreement is not binding unless executed by all signatories below. [SIGNATURE PAGE FOLLOWS] \PBMSA(frm062413) C Envision Pharmaceutical Services,Inc. Page 20 of 35 PHARMACY BENEFIT MANAGEMENT SERVICES AGREEMENT SIGNATURE PAGE IN WITNESS WHEREOF, Envision and Plan Sponsor have executed this Agreement as of the Effective Date above. For ENVISION: For PL• SPONSOR: F 1 By: rry --r,e�y By: B I. Katz,R. Ph.,President Geor_ I er, Chairwoman a�2y Envision Pharmaceutical Services,Inc. I sir r Is • ty Board of Commissioners Address: Address: Envision Pharmaceutical Services,Inc. Collier County Board of Commissioners 2181 East Aurora Road 3299 Tamiami Trail East Twinsburg, OH 44087 Naples,FL 34112-4901 PH: 330-405-8080 PH: 239-252-8906 FX: 330-405-8081 FX:239-252-8048 E-MAIL: AliceToppe @colliergov.net FEIN: 59-6000558 1 : , ATTEST: Y Thomas . Wel D '• t E.Brock,Clerk of Courts Chief F nanci. •fficer � � Envisio ' •. aceutical Services,Inc. By: 1f4 .`: fa■ •i Attest as o ft r9::' signature only. I• �ved as to fo , . d I� �ega�ty: 10 11`1 13 By: u • Scott R. Teach Deputy County Attorney \PBMSA(frm062413) ®Envision Pharmaceutical Services,Inc. Page 21 of 35 • EXHIBIT 1 DRUG PRICING AND FEES Designated Pharma "Ns twokic w,n �� J .a,, - ,«... g .� a yeas n Broad Network Drug.Pricing and Dispensing Fees(A) Supply/Source BRAND GENERIC For Contract Year Drug Price(B) " Dispensing Drug Price(C) Dispensing 2014 (Annual Average Fee N) (Annual Average Fee(D) (based on 2 year Effective Rate (Annual Effective Rate (Annual Guarantee) Average Guarantee) Average Agreement) Guarantee) Guarantee) Retail Pharmacy AWP minus 15.15% $1.40 AWP minus $1.50 77.50% Mail Order Pharmacy (at Orchard AWP minus 20.50% N/A AWP minus N/A Pharmaceutical 77.75% Services) Specialty Pharmacy(at Orchard (Pass-Through of Contract Rate with Dispensing Pharmacy) Pharmaceutical Services) Supply/Source BRAND GENERIC Drug Price tBi Dispensing Drug Price f � Dispensing For Contract Year (Annual Average Fee(D) (Annual Average Fee(D) 2015 Effective Rate (Annual Effective Rate (Annual Guarantee) Average Guarantee) Average Guarantee) Guarantee) Retail Pharmacy AWP minus 15.25% $1.40 AWP minus $1.50 77.75% Mail Order Pharmacy (at Orchard AWP minus 20.50% N/A AWP minus N/A Pharmaceutical 78.00% Services) Specialty Pharmacy(at Orchard (Pass-Through of Contract Rate with Dispensing Pharmacy) Pharmaceutical Services) (A)Calculated price using the applicable negotiated contract rate(i.e.AWP or MAC rate,or U&C Price)for \BAA-Plan Sponsor[Rev.08-08-2013] 22 ,(1.) the designated Network. The AWP discounts shown in the table above are Annual Average Effective Rates using current Medi-Span published values. If the calculated price is lower than the allowable amount under any state Medicaid "Favored Nations" rule, Envision shall pass-through, and Plan Sponsor shall pay, the Medicaid allowable amount. (B) Annual Average Effective Rate for Brand Drugs is calculated using the actual price paid by Envision (before deducting earned Manufacturer Derived Revenue) to Participating Pharmacies in the designated Network,plus any Cost Share,(the Ingredient Cost)for all Brand Drug Claims(including Claims paid at the U&C Price) during a Contract Year, excluding (i) Compound Drugs; (ii) drugs dispensed at a Specialty Pharmacy; (iii) Claims from non-Participating Pharmacies, LTC pharmacies, or government owned or operated pharmacies(e.g. Veterans Administration); (iv) Claims paid at government required amounts (e.g. Medicaid); (v) 340B Claims; (vi) non-Prescription Drugs; and (vii) Claims from Plan Sponsor's owned pharmacies,if any. (C) Annual Average Effective Rate for Generic Drugs is calculated using actual price paid by Envision to Participating Pharmacies in the designated Network, plus any Cost Share, (the Ingredient Cost) for all Generic Drug Claims (including Claims paid at the U&C Price) during a Contract Year, excluding (i) Compound Drugs; (ii) drugs dispensed at a Specialty Pharmacy; (iii) Claims from non-Participating Pharmacies,LTC pharmacies,or government owned or operated pharmacies(e.g.Veterans Administration); (iv) Claims paid at government required amounts (e.g. Medicaid); (v) 340B Claims; (vi) non-Prescription Drugs;and(vii)Claims from Plan Sponsor's owned pharmacies,if any. (D)Annual Average Dispensing Fee is the average per Claim fee for all Claims by Envision to Participating Pharmacies in the designated Network(including Claims paid at the U&C Price)during a Contract Year, excluding(i)Compound Drugs;(ii)drugs dispensed at a Specialty Pharmacy;(iii)Claims from non- Participating Pharmacies,LTC pharmacies,or government owned or operated pharmacies(e.g.Veterans Administration);(iv)Claims paid at government required amounts(e.g.Medicaid);(v)non-Prescription Drugs;and(vi)Claims from Plan Sponsor's owned pharmacies,if any. Annual Average Earned Manufacturer Derived Revenue Guarantee(E)4F1(G) For Contract Year 2014: • For Brand Drugs at a Retail Pharmacy-$12.85 per paid Brand Drug Claim • For Brand Drugs at the Mail Order Pharmacy-$34.95 per paid Brand Paid Claim For Contract Year 2015: • For Brand Drugs at a Retail Pharmacy- $13.30 per paid Brand Drug Claim • For Brand Drugs at the Mail Order Pharmacy- $35.65 per paid Brand Paid Claim (E) Earned Manufacturer Derived Revenue guarantees are stated as annual average amounts per Contract Year. (F)Guarantees require Plan Sponsor to maintain a Benefit Plan that has a tier structure with a minimum $20 differential in Cost Share between preferred Brand Drugs and non-preferred Brand Drugs. (o) 340B Claims, Claims paid entirely by Covered Individuals, and Claims processed from Plan Sponsor's owned pharmacies,if any,shall be excluded from the calculation of the guarantees above. Administrative Fee (Payable to.Envision, not including fees payable to Plan Sponsor's TPAs, consultants,or brokers, if any) For Contract Year 2014: $3.80 Per Employee,Per Month(PEPM) For Contract Year 2015: $3.90 PEPM \BAA-Plan Sponsor[Rev.08-08-2013] 23 Fees for Additional Services and Miscellaneous Expenses 1. Replacement by Envision of lost or stolen ID $1.00 per card plus $0.15 per packet and Cards cost of postage 2. Manual Claims Processing(including DMRs) $1.50 per Claim processed 3. Claim Adjustment Checks (charged to Plan Sponsor for reimbursements made to Covered Individuals for Claim adjustments requested by Plan Sponsor.) $8.50 per check 4. Manually create or update the Eligibility File $1.00 per Covered Individual data entry 5. Ad Hoc Computer or Report Programming $150.00 per hour 6. Clinical Prior Authorizations(Initial Coverage Determinations) $8.00 per authorization 7. Drug Therapy Care Gap Management $0.55 per Member,per month 8. Medication Adherence and Persistency(up to three disease states) $0.55 per Member,per month \BAA-Plan Sponsor[Rev.08-08-2013] 24 e EXHIBIT 2 BUSINESS ASSOCIATE AGREEMENT This BUSINESS ASSOCIATE AGREEMENT (the "Agreement") is effective the ls` day of January, 2014 (the "Effective Date"), by and between Envision Pharmaceutical Services, Inc. ("Business Associate") and Collier County Government ("Plan Sponsor"), each referred to individually herein as a"Party"or collectively as the"Parties". RECITALS A. Plan Sponsor sponsors a health benefit plan that provides coverage for prescription medications and supplies to covered members. Plan Sponsor has entered into a service agreement with Business Associate to provide certain administrative services to, or on behalf of,Plan Sponsor. B. In order for Business Associate to provide services to Plan Sponsor, Plan Sponsor may disclose certain Protected Health Information ("PHI") (as defined in Article 1 of this Agreement) of Plan Sponsor's members to Business Associate and anticipates that Business Associate will create, receive, maintain or transmit PHI on behalf of Plan Sponsor. C. The Parties desire to protect the privacy and security of all PHI in compliance with the Health Insurance Portability and Accountability Act ("HIPAA"), as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 ("the HITECH Act"), and the regulations promulgated there under. The purpose of this Agreement is to ensure such compliance. D. This Agreement incorporates provisions 42 U.S.C. § 17931(a) and 42 U.S.C. § 17934(a) of the HITECH Act. NOW, THEREFORE, the Parties, in consideration of the mutual agreements herein contained, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged,do hereby agree as follows: Article 1: Definitions For the purposes of this Agreement, the following defined terms shall have the following definitions. Except as otherwise stated herein, the defined terms used in this Agreement shall have the meanings given them under HIPAA and the regulations thereunder, including any amendments thereto. 1.1 "Breach" shall mean the acquisition, access, use, or disclosure of PHI in a manner not permitted under Subpart E of 45 C.F.R. Part 164, which compromises the security or privacy of the PHI. "Breach"excludes: \BAA-Plan Sponsor[Rev.08-08-2013] 25 GQ' .f (1) Any unintentional acquisition, access, or use of PHI by an employee or a person acting under the authority of Business Associate, if such acquisition, access, or use was made in good faith and within the scope of the authority, and does not result in further g P use or disclosure in a manner not permitted under Subpart E of 45 C.F.R. Part 164. (2) Any inadvertent disclosure of PHI by a person authorized to access PHI at Business Associate to another person authorized to access PHI at Business Associate, and the information received as a result of the disclosure is not further used or disclosed in a manner not permitted under Subpart E of 45 C.F.R. Part 164. (3) A disclosure of PHI in which Business Associate has a good faith belief that an unauthorized person to whom PHI is disclosed would not reasonably have been able to retain the information. 1.2 "Designated Record Set"shall have the meaning prescribed to it in 45 C.F.R. § 164.501. 1.3 "HHS"shall mean the U. S. Department of Health and Human Services. 1.4 "HIPAA Standards" shall mean the standards for privacy and security of Individually Identifiable Health Information found at 45 C.F.R. Parts 160 and 164. 1.5 "Individual" shall have the same meaning as the term"individual" in 45 C.F.R. § 160.103 and shall include a person who qualifies as a personal representative in accordance with 45 C.F.R. § 164.502(g). 1.6 "Individually Identifiable Health Information" shall have the meaning prescribed to it in 45 C.F.R. § 160.103. 1.7 "Protected Health Information" shall have the meaning prescribed to it in 45 C.F.R. § 160.103, limited to Individually Identifiable Health Information transmitted or maintained in any form or medium that Business Associate creates or receives from or on behalf of Plan Sponsor. 1.8 "Required by Law" shall have the same meaning as the term "required by law" in 45 C.F.R. § 164.103. 1.9 "Secretary"shall mean the Secretary of HHS or his or her designee. 1.10 "Security Incident" shall mean the attempted or successful unauthorized access, use, disclosure, modification, or destruction of information or interference with system operations in an information system. 1.11 "Unsecured PHI" shall mean PHI that is not rendered unusable, unreadable, or indecipherable to unauthorized persons through the use of technology or methodology specified by the Secretary in the guidance issued under section 13402(h)(2) of Public Law 111-5. Article 2: Business Associate Use and Disclosure of PHI \BAA-Plan Sponsor[Rev.08.08-2013] 26 0 2.1 Purpose. As further described above under Recitals, Business Associate performs certain administrative services for Plan Sponsor. 2.2 Receipt and Use of PHI. Performance of administrative services by Business Associate requires that Business Associate receive and use PHI obtained from or on behalf of Plan Sponsor, or that Business Associate create, receive, maintain, or transmit PHI on behalf of Plan Sponsor. To perform these administrative services, Business Associate may use or disclose PHI provided such use or disclosure would not violate the HIPAA Standards if done by Plan Sponsor. However, Business Associate may use PHI internally to carry out its legal responsibilities and for its proper management, internal auditing, and administration, and at the request of Plan Sponsor,to provide data aggregation services to Plan Sponsor as permitted by the HIPAA Standards. 2.3 Disclosure of PHI. Performance of administrative services by Business Associate may require that Business Associate disclose PHI to agents or subcontractors of Business Associate. Business Associate may disclose PHI to third parties with which it contracts to assist in providing administrative services, and to its agents to carry out Business Associate's legal responsibilities, for proper management, internal auditing, and administration, only if(a) Business Associate obtains reasonable assurances from such third parties or agents that the PHI will be held by them confidentially and used or further disclosed only as Required by Law or for the purpose for which it was disclosed to them, (b) such third parties or agents agree to implement reasonable and appropriate safeguards to protect the confidentiality, integrity, and availability of PHI, and (c) such third parties or agents agree to notify Business Associate of any instance of which they are aware that the confidentiality of the information has been breached or that a Security Incident has occurred. Notwithstanding the foregoing, Business Associate will be permitted to exchange PHI freely with any Business Associates of the Plan Sponsor with which the Plan Sponsor has executed a Business Associate Agreement/Addendum. 2.4 Satisfactory Assurances. Plan Sponsor may not transfer or transmit PHI to Business Associate or permit Business Associate to create, receive, or transmit PHI on behalf of Plan Sponsor without satisfactory assurances from Business Associate that it will appropriately safeguard the information. Article 3: Duties of Business Associate 3.1 Limitations on Use of PHI. Business Associate shall not use PHI except as permitted or required by this Agreement or as Required by Law. Business Associate shall only use PHI in a manner that is consistent with the HIPAA Standards. 3.2 Limitations on Disclosure of PHI. Business Associate shall not disclose PHI except as permitted or required by this Agreement or as Required by Law. Business Associate shall only disclose PHI in a manner that is consistent with the HIPAA Standards. 3.3 Minimum Necessary. Business Associate shall request, use and disclose the minimum amount of PHI necessary to accomplish the purpose of the request, use or disclosure, in accordance with 42 U.S.C. § 17935(b). \BAA-Plan Sponsor[Rev.08-08-2013] 27 0 3.4 Safeguarding PHI. Business Associate shall use appropriate safeguards,and comply with Subpart C of 45 CFR Part 164, to prevent the use or disclosure of PHI other than as provided for by this Agreement. Business Associate shall comply with the provisions of 45 C.F.R. §§ 164.308, 164.310, 164.312 and 164.316 in the same manner that such provisions apply to Plan Sponsor, and implement administrative, physical, and technical safeguards that reasonably and appropriately protect the confidentiality, integrity, and availability of the PHI that it creates, receives, maintains, or transmits on behalf of Plan Sponsor as required by the HIPAA Standards. 3.5 Third Party Agreements. Business Associate may need to enter into agreements with third parties, including agents or subcontractors, in order to satisfy its obligations to Plan Sponsor. In accordance with 45 C.F.R. § 164.502(e)(1)(ii) and 164.308(b)(2), should third parties, agents, or subcontractors create, receive, maintain, or transmit PHI on behalf of Business Associate,Business Associate shall require such third parties or agents to agree, in writing,to (a)be bound by the same restrictions,conditions,and requirements that apply to Business Associate with respect to such information, and (b) implement reasonable and appropriate administrative, technical and physical safeguards to protect PHI and the confidentiality, integrity and availability of PHI. Notwithstanding the foregoing, Business Associate will be permitted to exchange PHI freely with any Business Associates of the Plan Sponsor with which the Plan Sponsor has executed a Business Associate Agreement/Addendum. 3.6 Reporting of Security Incidents. Business Associate shall identify and respond to Plan Sponsor any suspected or known Security Incidents, mitigate, to the extent practicable, harmful effects of Security Incidents that are known to Business Associate,and document Security Incidents and their outcomes. 3.7 Reporting of Unauthorized Uses and Disclosures. If Business Associate becomes aware that Unsecured PHI has been, or is reasonably believed to have been accessed, acquired, used, or disclosed as a result of a Breach by Business Associate, its employees, officers, or other agents, except as provided in 45 C.F.R. § 164.412, Business Associate shall notify Plan Sponsor of the Breach, in writing, without unreasonable delay, and no later than thirty (30) calendar days after discovering the Breach. Business Associate is deemed to have discovered the Breach on the first day Business Associate knows about the Breach, or by exercising reasonable diligence, would have been known to any person, other than the person committing the Breach, who is an employee, officer, or other agent of Business Associate. 3.8 Content of Notification. To the extent possible, Business Associate's notice to Plan Sponsor shall include the identification of each Individual whose Unsecured PHI has been, or is reasonably believed to have been, accessed, acquired, used, or disclosed during the Breach. At the time of notification or soon thereafter as information becomes available, Business Associate shall provide the following information to Plan Sponsor: (a) A brief description of what occurred, including the date of the Breach and the date of discovery of the Breach,if known; \BAA-Plan Sponsor[Rev.08-08-2013] 28 (b) A description of the types of Unsecured PHI involved in the Breach; (c) Steps Individuals should take to protect themselves from potential harm resulting from the Breach; (d) A brief description of what Business Associate is doing to investigate the Breach, to mitigate harm to Individuals, and to protect against any further Breaches;and (e) Contact procedures for Individuals to ask questions or learn additional information, including a toll-free telephone number, an e-mail address, website or postal address. 3.9 Burden of Proof. Business Associate shall have the burden of demonstrating that it made all notifications to Plan Sponsor, including evidence showing the necessity of any delay, or that the use or disclosure did not constitute a Breach. 3.10 Mitigation of Disclosure of PHI. Business Associate agrees to mitigate, to the extent practicable, any harmful effect that is known to Business Associate of a use or disclosure of PHI by Business Associate in violation of the requirements of this Agreement. 3.11 Access to PHI. Within ten(10)business days of Plan Sponsor's written request,Business Associate shall provide Plan Sponsor or an Individual who is the subject of the PHI with access to PHI in Business Associate's possession, if Business Associate's information consists of a Designated Record Set in order for Plan Sponsor to comply with 45 C.F.R. § 164.524. 3.12 Availability of PHI for Amendment. The Parties acknowledge that the HIPAA Standards permit an Individual who is the subject of PHI to request certain amendments of his or her records. Within ten (10) business days of Plan Sponsor's written request, Business Associate shall make PHI contained in a Designated Record Set in Business Associate's possession available for amendment and shall incorporate any amendments in accordance with 45 C.F.R. § 164.526. 3.13 Accounting of Disclosures. Business Associate agrees to document disclosures of PHI, and to make available, within ten (10) business days of Plan Sponsor's written request, information to Plan Sponsor concerning Business Associate's disclosure of PHI for which Plan Sponsor needs to provide an Individual with an accounting of disclosures as required by 45 C.F.R. § 164.528. Should an accounting of the PHI of a particular Individual be requested more than once in any twelve (12) month period, Business Associate may charge Plan Sponsor a reasonable,cost-based fee. 3.14 Compliance with Subpart E of 45 C.F.R. Part 164. To the extent Business Associate carries out Plan Sponsor's obligations under Subpart E of 45 C.F.R. Part 164, Business Associate shall comply with the requirements of Subpart E that apply to Plan Sponsor in the performance of such obligations. 3.15 Availability of Books and Records. For purposes of determining compliance of Plan Sponsor with the HIPAA Standards, Business Associate agrees to make available to the \BAA-Plan Sponsor[Rev.08-08-20131 29 • Secretary its internal policies and procedures, books and records relating to the use and disclosure of PHI received from, or created or received by Business Associate on behalf of,Plan Sponsor. 3.16 Treatment of PHI at Termination. With respect to PHI received from Plan Sponsor, or created, maintained, or received by Business Associate on behalf of Plan Sponsor, upon termination of this Agreement for any reason, Business Associate, shall: (a) Retain only that PHI which is necessary for Business Associate to continue its proper management and administration or to carry out its legal responsibilities; (b) Return to Plan Sponsor or, if agreed to by Plan Sponsor, destroy the PHI that is not retained by the Business Associate under(a)above; (c) Continue to use appropriate safeguards and comply with Subpart C of 45 CFR Part 164 to prevent use or disclosure of the PHI, other than as provided for in this Agreement,for as long as Business Associate retains the PHI; (d) Not use or disclose the PHI retained by Business Associate other than for the purposes for which such PHI was retained and subject to the same conditions set out at in Section 2.2 and Section 2.3 which applied prior to termination; and (e) Return to Plan Sponsor or, if agreed to by Plan Sponsor, destroy the PHI retained by Business Associate when it is no longer needed by Business Associate for its proper management and administration or to carry out its legal responsibilities. Article 4: Duties of Plan Sponsor 4.1 Limitations in Notice of Privacy Practices. Plan Sponsor shall notify Business Associate of any limitations in the notice of privacy practices of Plan Sponsor under 45 C.F.R. § 164.520, to the extent that such limitation may affect Business Associate's use or disclosure of PHI. 4.2 Changes in Permission. Plan Sponsor shall notify Business Associate of any changes in, or revocation of, the permission by an Individual to use or disclose his or her PHI, to the extent that such changes may affect Business Associate's use or disclosure of PHI. 4.3 Restriction on Use or Disclosure of PHI. Plan Sponsor shall notify Business Associate of any restriction on the use or disclosure of PHI that Plan Sponsor has agreed to or is required to abide by under 45 C.F.R. § 164.522, to the extent that such restriction may affect Business Associate's use or disclosure of PHI. Article 5: Term and Termination 5.1 Term. The term of this Agreement shall be effective as of the Effective Date stated above, and shall terminate on the date Business Associate discontinues the provision of c4 \BAA-Plan Sponsor[Rev.08-08-2013] 30 services to or on behalf of Plan Sponsor, or on the date Plan Sponsor terminates for cause as authorized in Section 5.2, whichever is sooner. 5.2 Termination for Cause. Business Associate authorizes termination of this Agreement by Plan Sponsor, if Plan Sponsor reasonably determines that Business Associate has violated a material term of the Agreement and Business Associate has not cured the breach or ended the violation within the time specified by Plan Sponsor or ten (10) business days, whichever is greater. Plan Sponsor shall provide Business Associate notice of such breach or violation, in writing, with sufficient specificity as to reasonably permit Business Associate to cure such breach or violation. Plan Sponsor understands that, upon termination of this Agreement, Business Associate will no longer be authorized to create, receive, or transmit PHI on behalf of Plan Sponsor, except as otherwise provided herein. 5.3 Survival of Certain Rights and Obligations. The respective rights and obligations of Business Associate under Section 3.16 of this Agreement shall survive the termination of this Agreement. Article 6: Miscellaneous 6.1 Regulatory References. A reference in this Agreement to a section in the HIPAA Standards means the section as in effect or as amended. 6.2 Amendment. The Parties to this Agreement agree to take such action as is necessary to amend this Agreement from time to time as is necessary to comply with the requirements of the HIPAA Standards and any other applicable law. 6.3 Prior Business Associate Agreements or Addenda. This Agreement shall supersede any prior Business Associate Agreement or Business Associate Agreement Addenda. 6.4 Interpretation. Any ambiguity in this Agreement shall be interpreted to permit compliance with the HIPAA Standards. 6.5 HIPAA. Business Associate will comply with all requirements under HIPAA that apply to business associates. IN WITNESS WHEREOF, the Parties have, by their duly authorized representatives, executed this Agreement to be effective as of the date first above written. - PLAN SPONSOR: BU .' E.. SSOCIATE: BY By: � 1411" Print Name and Title Print Name n. e C c-e-r- \BAA-Plan Sponsor[Rev.08-08-2013] 31 EXHIBIT 3 PERFORMANCE GUARANTEES r E Pass-hough Stand } �44, a� 100%of MDR received from pharmaceutical Manufacturer Derived o manufacturers is passed Revenue(MDR) 100%Pass-through $10,000.00 through to Plan Sponsor,in accordance with the Agreement. 100%of network discounts and dispensing fees are Network Discounts o passed through to Plan Network Dispensing Fees 100%Pass-through $10,000.00 Sponsor upon the effective date of any negotiated change. !Syste lasE d � k " 4 Calculated as the amount of System Availability 99.5% time the Claims Adjudication $10,000.00 System is available to process Claims. Calculated as the time commencing immediately after receipt of the last System Response time <4 seconds character of a transaction submitted by a pharmacy $10,000.00 until the first character of the response is sent to the pharmacy. Should adjudication of a Claim be delayed due to a malfunction of Envision's Adjudication Delay One(1)business day System,Envision shall correct the malfunction and $2,500.00 per occurrence inform the affected Covered Individual within one(1) day. Retall • and Mail Claims Processing Aec iragy Based on PBM's internal quality review. Calculated as Percent of all claims paid >99.98%Retail all claims audited and found with no errors >99.98%Mail to be without error of any $10,000.00 form,divided by all claims audited. PBM stomer S ice ; alcul to per Contract ear' } '4 t p EE, \BAA-Plan Sponsor[Rev.08-08-2013] 32 I __ i+ r iprryix � v r �$1� �* t�? � a � ; ,��q"a The amount of time that elapses between when a call is received into the customer service queue and the time Percent of calls that will be 95%answered in an average the phone is answered by a answered within 30 seconds of 30 seconds or less Customer Service $10,000.00 Representative(CSR). Measurement and target determination will be based on an annual average. Percentage of calls that are not answered by a CSR (caller hangs up before call is answered). Calculated as the number of calls that are not Percent of calls abandoned <5% answered divided by the $10,000.00 number of calls received. Measurement and target determination will be based on an annual average. err Percentage of all calls made to Envision that were resolved by initial CSR. Percent of calls with Calculated as the total calls resolution at end of first call to Envision minus total (i.e.no further inquiry by >90% number of unresolved calls caller required to obtain divided by the total number $10,000.00 requested information or of calls received. action) Measurement and target determination will be based on an annual average. Percent of written inquiries Response time for all written responded to by paper within inquiries will be based on the 10 business days or 99% number of business days $10,000.00 responded to electronically subtracting the date received ' within 2 business days at Envision from the date the response was sent. Based on network pharmacy Pharmacy Network Access >95% access within, 10 miles for $10,000.00 Plan Sponsor's Covered Individuals. 7tesoy t -s '� ` y a` Account Management Initial client inquiries will be Responsiveness Two(2)business days acknowledged and responded $10,000.00 to within two business days. \BAA-Plan Sponsor[Rev.08-08-2013] 33 q W __.. '��� Eligibility information i bsubmitted of ecome effto ective within wAssumes 2 ll Enrollment Processing Two(2)business days business date receipt.days followEnvision ing the $10,000.00 comp informatilete n andi s sent to accurate Envision.o Program Implementation December 20th,2013 Date of implementation $10,000.00 Distribution of ID Cards December 20�,2013 Date of distribution $10,000.00 ' z 63 tp ' a .41.-'' 1 5 3 €�?` 't, Claims Ita , 4 _-� �r � ��� � �� ���� , � .� �-mss. t 1 , � � .�;� Acceptable monthly claims By the 15�' of the close of data extracts provided to each month for prior month Verisk and other firms that as agreed upon in the final $10,000.00 1.the School Board may contract designate �ienCric F1��4 lat ' I � ' sr i 6 .;P 7 ,: T S; � Y� K For the applicable Pharmacy Channel,If Actual GDR— Guaranteed GDR<0,Then Generic efficiency rates for Retail 75.50% the(GDR X(Total claims— $10,000.00 entire contract period Mail 72.25% Total Generic Claims)) X (Avg Brand Plan Paid Amount-Avg Generic Plan Paid Amount) °Re ort 1 ve � " i ' Quarterly and annual reports will be delivered,in hard Quarterly and year end copy,to CCHCC within 30 $10,000.00 reports delivery time frame business days of the close of the quarter and contract year, respectively. rail Qrde� ess ` a '.t- _�( r,; More than 95%of all prescriptions requiring no intervention will be processed within two(2) Turnaround Time business days. $10,000.00 More of prescriptions 98%requiring administrative or clinical intervention will process 0 \BAA-Plan Sponsor[Rev.08-08-2013] 34 ■ 41ABOX reM�h ayj � within five(5)business days. Turnaround time will be measured by time and date stamp and will be defined as the time the prescription is received in the facility to the time it ships. n 3d...L. p •. ,`te Dloct. m y j eleltt / Envision shall accept, process,and adjudicate DMR Claims within ten(10) business days of receipt of Turnaround Time Ten(10)business days the DMR form,but shall not $2,500.00 per occurrence be liable to reimburse a Covered Individual until Plan Sponsor provides funds for such purpose. ' a -c- i (3 p�.._,. § irk! f "' �� `^ �� Corn�ound Precrttion�dtt�IGtop Claims for compound drug Claims from participating compounding pharmacies that are delayed due to an act Turnaround Time Ten(10)business days or or omission of Envision shall earlier be electronically adjudicated $2,500.00 per occurrence at the compounding pharmacy within ten(10) business days,or processed as a DMR as set forth herein. al e r�aE&Ct 4'11 � � �'r € If a Covered Individual does not receive a Specialty Drug that was previously shipped by the Specialty Pharmacy Emergency Fill Twenty four(24)hours for any reason shall receive $2,500.00 per occurrence that Specialty Drug within twenty four(24)hours of authorization from Plan Sponsor. *Exclusions from GDR calculation include products such as OTC's,Vaccines,Compounds,Specialty drugs,DAWS(0,3,4,5,6,9) and branded generics for purposes of marketing. \BAA-Plan Sponsor[Rev.08-08-2013] 35 a