Resolution No. 8909
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RESOLUTION NO. 8909
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A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
VERNON APPROVING AND RATIFYING THE ELECTRONIC
FILING OF AN APPLICATION FOR FEDERAL SUBSIDIES FOR
MEDICARE DRUG PURCHASES AND APPROVING AND
AUTHORIZING THE EXECUTION OF AN AGREEMENT FOR
MEDICARE PART D IMPLEMENTATION SERVICES BY AND
BETWEEN THE CITY OF VERNON AND PART D ADVISORS,
INC.
8 WHEREAS, the City of Vernon maintains one or more group
9 health plans under which eligible individuals are able to obtain
10 certain prescription drug benefits; and
11 WHEREAS, under the Medicare Modernization Act of 2003, a
12 Medicare Part D Prescription Drug Program (as described in 42 CFR
13 423.880 through 888) (the "Program") was created for the benefit of
14 seniors under which the federal government also makes available a 28
15 percent subsidy for employers who continue to provide prescription drug
16 coverage rather than abandoning the benefit and shifting the full
17 responsibility to the federal government; and
18 WHEREAS, under the 28 percent subsidy option, Medicare would
19 subsidize 28 percent of drug prescription expenses between $250 and
20 $5,000 per year, per person, and the estimated average subsidy is
21 approximately $600 per retiree, per year, depending upon the retiree's
22 drug costs; and
23 WHEREAS, the Acting Risk Manager submitted an electronic
24 application to the Center for Medicare and Medicaid Services on or
25 about November 8, 2005, Application No. 11930, in order to meet the
26 filing deadline under the Program, subject to ratification by the City
27 Council; and
28 WHEREAS, the Acting Risk Manager applied for the 28 percent
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1 subsidy under Medicare Part D for the purpose of protecting retirees,
2 reducing the City's long-term liability and shifting costs to the
3 federal government; and
4 WHEREAS, the City's insurance broker, Arthur J. Gallagher &
5 Co. Insurance Brokers of California, Inc., recommended the retention
6 of Part D Advisors, Inc. to assist the City with the requirements and
7 opportunities in the Program; however, the City still acts as the
8 administrator, fiduciary and primary decision maker respecting the
9 Program; and
10 WHEREAS; the Acting Risk Manager has requested that his
11 actions in electronically applying for the 28 percent subsidy,
12 retaining the services of Part D Advisors, Inc. and authorizing payment
13 to implement the 28 percent subsidy, be approved and ratified; and
14 WHEREAS, the City Council desires to approve and ratify the
15 actions taken by the Acting Risk Manager and/or his designee and the
16 payment in accordance therewith; and
17 WHEREAS, the City Council of the City of Vernon has
18 determined that, pursuant to the provisions of subsection (a) of
19 Section 2.27 of the Vernon City Code, it is in the public interest and
20 necessity to ratify the actions taken in applying for the 28 percent
21 subsidy and retaining the services of Part D Advisors, Inc.
22 NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
23 CITY OF VERNON AS FOLLOWS:
24 SECTION 1: The City Council of the City of Vernon hereby
25 finds and determines that the recitals contained hereinabove are true
26 and correct.
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SECTION 2:
The City Council of the City of Vernon hereby
2 approves and ratifies the electronic submittal of Application No. 11930
3 by the Acting Risk Manager on behalf of the City of Vernon. A copy of
4 the submitted application is attached hereto as Exhibit A and
5 incorporated by reference.
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SECTION 3:
The City Council of the City of Vernon hereby
7 approves the Agreement for Medicare Part D Implementation Services
8 with. Part D Advisors, Inc., a copy of which is attached hereto as
9 Exhibit B and incorporated by reference.
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SECTION 4:
The City Council of the City of Vernon hereby
11 authorizes the Mayor to execute said Agreement for, and on behalf of,
12 the City of Vernon and the Acting City Clerk is hereby authorized to
13 attest thereto.
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SECTION 5:
The City Council of the City of Vernon hereby
15 authorizes the Acting City Clerk, or his designee, to execute any and
16 all documents necessary for the purpose of obtaining funds from the
17 federal government for the subsidy and to implement and carry out the
18 purposes specified in the 28 percent subsidy application for, and on
19 behalf of, the City of Vernon.
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SECTION 6:
The City Council of the City of Vernon hereby
21 directs the Acting City Clerk, or his designee, to send two executed
22 Agreements to:
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Part D Advisors, Inc.
Attn. David Vaillancourt
409 Plymouth Road, Suite 260
Plymouth, Michigan 48170
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SECTION 7:
The Acting City Clerk of the City of Vernon
2 shall certify to the passage of this resolution, and thereupon and
3 thereafter the same shall be in full force and effect.
4 APPROVED AND ADOPTED this 16th day of November, 2005.
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/~ LEQNIS C. MAl BURG, ayor
ATTEST:
BRUCE V.' MALKENHORST, JR.
Acting City Clerk
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1 STATE OF CALIFORNIA
ss
COUNTY OF LOS ANGELES
I, BRUCE V. MALKENHORST, JR., Acting City Clerk of the City
of Vernon, do hereby certify that the foregoing Resolution, being
Resolution No. 8909, was duly adopted by the City Council of the City
of Vernon at a regular meeting of the City Council duly held on
Wednesday, November 16, 2005, and thereafter was duly signed by the
Mayor of the City of Vernon.
~
BRUCE V. MALKENHORST, JR.
Acting City Clerk
(SEAL)
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EXHIBIT
A
Application Statu~
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AppUcation Status
Application Number: 111930"
Plan Sponsor ID: 9609
Company: City of Vernon
Authorized Representative: Willard Yamaguchi
Account Manager: David Vaillancourt
Application ID: 11930
Plan Name: City of Vernon Employee Benefits Plan
Plan Start: Sep 01, 2005 Plan End: Aug 31, 2006
Application Start Date: Oct 31, 2005
Application Submitted:
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I Application Section
Application Number'Assigned
Assign Designe.e(sl(QJ)tiQDal)
eenefit QptiQn(s)
AssJg n Act119rv(sJ
Attest9tiQn .Symm9IY
I;lectrQnic Fu.. n. ps Transfer (EFT) Info
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P9YJDent. freqvency
Retiree.. LIst ..SYbmissjQn,!'!I~tb.QP
Plan Sponsor Agreement
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Approved OMB-0938-0957 Form CMS-I0156
I Status
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Plan Sponsor Agreement
The Authorized Representative of the Plan Sponsor MUST read each clause, agree to all of
the conditions by completing the Check to Approve box, and answer the security questions
provided.
1. Compliance: In order to receive subsidy payment(s), Sponsor agrees to
comply with all of the terms and conditions for obtaining the retiree drug
subsidy and as outlined in 42 C.F.R. 423.880 et. seq., (Subpart R) and in
other gUidance issued by CMS, including the conditions for submission of
cost data for obtaining payment and the record retention requirements.
2. Notice of Creditable Coverage: Sponsor certifies that it has provided
or will provide prior to the beginning of the plan year, creditable
coverage notices in accordance with 42 C.F.R. 423.56 to Part D eligible
individuals covered under the Sponsor's plan.
3. Written Agreement: Sponsor certifies that it has executed a written
agreement with its health insurance issuer or group health plan
regarding disclosure of information to CMS, and the issuer or plan agrees
to disclose to CMS, on behalf of the Sponsor, the information necessary
for the Sponsor to comply with the requirements of the RDS Program.
(For year one of the RDS program Sponsor certifies that it will execute
the written agreement prior to January 1, 2006.)
4. Use of Records: Sponsor understands and agrees that officers,
employees and contractors of the Department of Health and Human
Services, including the Office of Inspector General (OIG), may use
information collected under the RDS Program only for the purposes of,
and to the extent necessary in, carrying out their responsibilities under
42 C.F.R. Subpart R including, but not limited to, determination of
payments and payment-related oversight and program integrity
activities, or as otherwise required by law. This restriction does not limit
OIG authority to conduct audits and evaluations under 42 C.F.R. Subpart
R or other authority.
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Plan Sponsor Agr~ement.
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5. Obtaining Federal Funds: Sponsor acknowledges that the information
furnished in its retiree drug subsidy application is being provided to
obtain Federal funds. Sponsor certifies that it requires all subcontractUt'S,
including plan administrators, to acknowledge that information provided
in connection with the subcontract is used for purposes of obtaining
Federal funds. Sponsor acknowledges that payment of a subsidy is
conditioned on the submission of accurate information. Sponsor agrees
that it will not knowingly present or cause to be presented a false or
fraudulent claim. Sponsor acknowledges that any overpayment made to
the Sponsor under the RDS program may be recouped by CMSjRDS
Contractor. Sponsor will promptly notify CMS of any changes to the
information submitted in its Plan Sponsor Agreement.
6. Data Security: Sponsor agrees to establish and implement proper
safeguards against unauthorized use and disclosure of the data
exchanged under this RDS Application. Sponsor recognizes that the use
and disclosure of protected health information is governed by the. Health
Insurance Portability and Accountability Act (HIPAA) and accompanying
regulations. Plan Sponsor certifies that its retiree group health plan(s)
has established and implemented appropriate safeguards in compliance
with 45 C.F.R. Parts 160, 162 and 164 (HIPAA administrative
simplification, privacy and security rule) in order to prevent unauthorized
disclosure of such information or data. Sponsor also agrees that if it
participates in the administration of the pJan(s),then it has also'
established and implemented the same safeguards in compliance with
the above HIPAA citations. Any and all Sponsor personnel interacting
with this data shall be advised of (1) the confidential nature of the
information; (2) safeguards required to protect the information, and (3)
the administrative, civil and criminal penalties for noncompliance
contained in applicable Federal laws.
7. Depository Information: Sponsor hereby authorizes CMS to initiate
payment, credit entries and other adjustments, including offsets and
requests for payment, in accordance with the provisions of 42 C.F.R.
Subpart R to the account at the financial institution (hereinafter the
"Depository") indicated in Part IV(A)(l) of the Plan Sponsor Application.
When Sponsor know of, and agrees to, an overpayment it must pay that
amount back to CMS. Sponsor agrees to promptly notify CMS of any
changes in its Depository information and submit an update EFT
Authorization.
8. Change of Ownership: The Sponsor shall provide written notice to
CMSjRDS Contractor at least 60 days prior to a change in ownership.
When a change of ownership results in a transfer of the liability for
https:llwww.rds.cms.hhs.gov/rdslPlanSponsorAgreement.do ?PlanSponsorId=47 55&ADDld... 11/&/200')
.Plan Sponsor Agr~ement.
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. prescription drug costs, this Plan Sponsor Agreement is automatically
assigned to the new owner, who shall be subject to the terms and
conditions of this Plan Sponsor Agreement.
I, the undersigned Authorized Representative of Sponsor, declare that I have examined
this Application and Plan Sponsor Agreement. My signature legally binds the Sponsor to
the laws, regulations, and other gUidance applicable to the RDS program (including 42
C.F.R. Subpart R) and all other applicable laws and regulations. I certify that the
information contained in this Application and Plan Sponsor Agreement is true, accurate
and complete to the best of my knowledge and belief, and I authorize CMS/RDS
Contractor to verify this information. I understand that, because payment of a subsidy will
be made from Federal funds, any false statements, documents, or concealment of a
material fact is subject to prosecution under any applicable Federal and/or State law. If I
become aware that information in this application is not (or is no longer) true, accurate
and complete, I agree to notify CMS/RDS Contractor promptly of this fact.
Signature of Plan Sponsor Authorized Representative
Check to approve
*Security Question 1
r
What was the name of your favorite teacher?
*Answer 1 ,
*Security Question 2
What is your father's middle name?
*Answer 2 I
https:/ /www.rds.cms.4hs.gov/rdslPlanSponsorAgreement.do?PlanSoonsorId=4 755&A nn T iI
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ApplIcatIon Status.
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Application Status
Application Number: 111930 jJ
Plan Sponsor ID: 9609
Company: City of Vernon
Authorized Representative: Willard Yamaguchi
Account Manager: David Vaillancourt
Application ID: 11930
Plan Name: City of Vernon Employee Benefits Plan
Plan Start: Sep 01, 2005 Plan End: Aug 31, 2006
Application Start Date: Oct 31, 2005
Application Submitted: Nov 08, 2005
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Application Number Assigned
Assign Designee(s) (optional)
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Att~statiQn. Summary
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Approved OMB-0938-0957 Form CMS-I0156
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11/8/2005
EXHIBIT
B
AGREEMENT FOR MEDICARE PART D
IMPLEMENTATION SERVICES
This AGREEMENT FOR MEDICARE PART D IMPLEMENTATION SERVICES (this "Agreement") is
entered into by and between Part D Advisors, Inc., a Michigan corporation (hereinafter referred to as "PDA")
and The City of Vernon. California (hereinafter referred to as the "Plan Sponsor") and shall be effective as of
November 16,2005 (the "Effective Date").
RECITALS
WHEREAS, the Plan Sponsor maintains one or more group health plans (hereinafter referred to as the
"Plan(s)"), under which eligible individuals are able to obtain certain prescription drug benefits; and
WHEREAS, the Plan Sponsor wishes to engage PDA to assist the Plan Sponsor with the requirements and
opportunities specified herein with respect to the new Medicare Part D Prescription Drug Program (the "Part D
Program") under the Medicare Modernization Act of 2003, and PDA desires to provide such assistance,
subject to the terms and conditions as set forth herein; and
WHEREAS, Plan Sponsor (or its designee(s) other than PDA) shall serve as the administrator, fiduciary and
primary decision maker for the Planes), with all of the rights and responsibilities for administering the Planes)
in connection with the Part D Program, and PDA shall have no such authority or responsibility except as may
be specifically provided herein.
NOW THEREFORE, in consideration of the mutual covenants and agreements herein contained, the parties
agree as follows:
SECTION 1
DEFINITIONS
1.01 "Member" shall mean an individual enrolled for prescription drug coverage under the Planes),
including an individual continuing coverage in accordance with the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended ("COBRA").
1.02 "Plan Document(s)" shall mean generally the written description of the benefits provided by the
Plane s), the terms and conditions under which the Plane s) are operated and the standards and rules governing
the payment of benefits under the Planes).
1.03 "Part D Eligible Individuals" shall mean a Member who has the right to elect get drug coverage
under Medicare Part D, whether or not they have so elected. The determination of whether a Member is a Part
D Eligible Individual shall be made monthly, provided, however, that for purposes of calculating PDA's fee for
Notice Services, PDA shall each year make a good faith estimate of the number of Part D Eligible Individuals
there will be during the upcoming calendar year.
SECTION 2
PDA SERVICES
2.0 I PDA Services - Generally. PDA shall provide the following services, as more specifically detailed in
Sections 2.02 through 2.06 below:
(a) Notices. Assist the Plan Sponsor in preparing and distributing notices of creditable (or non-
creditable) coverage to Part D Eligible Individuals in connection with the Plan(s), as required
under the Part D Program (as described in 42 CFR 423.56) (the "Part D Notices"); and
(b) Drug Subsidy. Assist the Plan Sponsor in applying for, the Medicare drug subsidy as
maybe available under the Part D Program in connection with the Plan(s) (as described in 42
CFR 423.880 through 888) (the "Drug Subsidy").
2.02 Specific PDA Services - Part D Notices. PDA shall provide any or all of the following services as
may be necessary to assist the Plan Sponsor in preparing and dis~buting the Part D Notices:
(a) Assist in the identification of all relevant Plan(s) for purposes of the Part D Program;
(b) Assist in the identification of each relevant "benefit option" (within the meaning of the Part
D Program) under each Plan (each "Benefit Option") and identification of actual and potential
enrollees in each Benefit Option;
(c) Assist in determining whether a Benefit Option is "creditable" or "non-creditable" within the
meaning of the Part D Program;
(d) Assist in the identification of all Part D Eligible Individuals;
(e) Assist in the preparation and distribution of Part D Notices to all individuals as required
under the Part D Program; and
(f) Assist in the design and establish a system for the proper retention of relevant data as may be
proper and necessary for compliance with the Part D Program and any audits by CMS in
connection with the Part D Notices.
2.03 Specific PDA Services - Drug Subsidy. PDA shall provide any or all of the following services as may
be necessary to assist the Plan Sponsor with respect to the Drug Subsidies:
(a) General consultation regarding the Part D Program and assist in determining the magnitude of
potential Drug Subsidies as may be available to the Plan Sponsor;
(b) Provide an actuarial attestation by an actuary enrolled in the American Academy of Actuaries
of the value of prescription drug coverage under the Plan(s) (projected gross and net values)
(the "Coverage Values") for comparison with benefits under the Medicare Part D Program;
(c) To the extent requested, make suggestions for alternate plan designs that may better qualify
for the Drug Subsidies;
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(d) Assist in the identification of all Part D Eligible Individuals who have not eleeted_
coverage under Medicare Part D;
(e) Obtaining, compiling and documenting detailed drug expenditure information (inc~'"
way of illustration only, the types of information listed in Exhibit B attached hereto) tom
pharmacy benefit managers and other sources;
(f) Assist in the preparation of an application to the Center for Medicare and Medicaid Services
(CMS) for the Drug Subsidies, and assistance with follow-up tasks as may be required by
CMS; and
(g) Design and establish a system for the proper retention of relevant data as may be proper and
necessary for compliance with the Part D Program and any audits by CMS in connection with
the Drug Subsidies.
2.04 Specific PDA Services - Ongoing Services. PDA shall provide the following ongoing services:
(a) Maintain and update, during the term of this Agreement, a database containing the eligibility
of each Part D Eligible Individual for prescription drug coverage under thePlan(s) and/or
under the Part D Program;
(b) Establish and maintain a telephone bank to receive and respond to inquiries from Part D
Notice recipients regarding the Planes) in respect of the Part D Program;
(c) Maintain, during the term of this Agreement, other appropriate records regarding the Plane s)
in respect of the Part D Program as may be required by federal law; and
(d) Assist the Plan Sponsor with submission of or access to the records in PDA' s database as may
be required for CMS regulatory, audit, and/or other business purposes.
2.05 Additional Services. Additional services by PDA, if any, shall be provided under this Agreement as
set forth in Paragraph 3 of Exhibit A for the additional service fees specified therein; provided, however, that
any such additional services shall not be initiated without written permission of the Plan Sponsor.
2.06 Sources of Information. In performance of the above described services, PDA shall rely on any
communication and/or data reasonably believed by it to be genuine, including necessary information received
from the Plan Sponsor, Members, providers, and any other source in a timely-manner and in good order. For
purposes hereof, "timely manner" means a reasonable period of time for sorting, processing, entering and
posting of data received.
SECTION 3
RESPONSIBILITIES OF PLAN SPONSOR
3.01 Preparation of Eligibility List and Planes) Information. The Plan Sponsor shall:
(a) Prepare a complete and accurate set of current enrollment records for all Members under the
Planes). Such records shall be delivered to PDA in an electronic format acceptable to PDA no
less than N/A days prior to the date PDA shall begin rendering services hereunder.
Thereafter, the Plan Sponsor shall promptly update such enrollment records in an electronic
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format acceptable to PDA, notifying PDA of any and all changes in Member status, imlh.....
the addition of new Members, termination or layoff, changes in dependent status or lilY other
changes that may affect the eligibility of a Member;
(b) Make available, or cause to be made available to PDA certain reports and information to
which the Plan Sponsor has access, as may be reasonably requested by PDA. Such reports
and information may include, butshall not be limited to: (i) certification that a Member is
eligible for benefits under the Plan(s); (ii) a description and identification of the types ()f drng
benefits to which a Member is entitled; and (iii) date of a Member's eligibility. Upon request,
the Plan Sponsor shall provide PDA with any other reasonable and necessary information
regarding Members.
(c) Plan Documentation. The Plan Sponsor shall provide PDA with a complete copy of all Plan
Document( s).
(d) Changes in Information. The Plan Sponsor shall be solely responsible to inform PDA of any
changes in the information it previously supplied PDA.
3.02 Cooperation. The Plan Sponsor shall provide its full and good-faith cooperation in the procurement,
access and/or review of such other reasonable information as may be determined by PDA to be reasonably
necessary in order to perform its services hereunder.
3.03 Compensation.. In consideration for the Plan(s) Sponsor shall pay PDA the compensation and
applicable reimbursements as set forth on Exhibit A; provided, however, that any additional services provided
pursuant to Paragraph 3 of Exhibit A shall not be initiated without written permission of the Plan Sponsor.
SECTION 4
RELATIONSHIP OF THE PARTIES
4.01 Independent Contractor. In performing services under this Agreement, PDA performs all acts as an
independent contractor and not as an officer, employee or agent ofthe Plan Sponsor, administrator(s) (if other
than the Plan Sponsor), or the Plan(s). Nothing in this Agreement shall be construed to mean that the Plan
Sponsor (or any of its agents) retains any control over the manner and means of how PDA performs the
services provided for herein, but only a right to review the results of the work performed.
4.02 Not a Fiduciary or Insurer. Plan Sponsor or its designee (other than PDA) is the named fiduciary
and/or primary decision maker of the Plan(s). As fiduciary and/or decision maker, the Plan Sponsor, or the
person designated by Plan Sponsor (other than PDA), maintains discretionary authority and responsibility in
the administration and operation of the Plan(s), including, but not limited to, the determination of covered
services, interpretation of the terms of the Plan( s), and the determination of eligibility for and entitlement to
benefits under the Plan( s) in accordance with the terms of the Plan( s). PDA does not assume any responsibility
for any act, omission or breach by any fiduciary, and assumes responsibility solely for its own acts or omissions
and as may be otherwise required by law.
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SECTION 5
TERM AND TERMINATION
5.01 Term. This Agreement shall be in effect for a period of two (2) years from the Effective Date (the
"Initial Term") and shall thereafter renew automatically from year to year thereafter unless otherwise
terminated in accordance with Section 5.02.
5.02 Termination. Subject to continuing obligations under Section 5.03, this Agreement may be terminated
as specified below:
(a) During the Initial Term by either party with cause which remains uncured upon thirty (30)
days' prior written notice;
(b) Following the Initial Term by either party with or without cause upon thirty (30) days' prior
written notice;
(c) By and at the election ofPDA, upon Plan Sponsor's failure to provide timely and adequate
payment of service fees to PDA in accordance with the provisions of this Agreement;
(d) By and at the election ofPDA as of the date the Plan Sponsor is determined insolvent by its
governing board or by other governmental authority; or
(e) By mutual written agreement of the parties.
5.03 Obligations After Contract Termination: Survival. All responsibilities of either party under this
Agreement shall terminate upon the termination of this Agreement, except that the following rights and
liabilities of the parties shall survive the termination of this Agreement for the specified time period as
provided below or as otherwise agreed by the parties hereto:
(a) Plan Sponsor's duty to pay PDA for amounts due to PDA hereunder, until such amounts are
paid in full.
(b) Plan Sponsor's and PDA' s respective duties hereunder that are predicated on, or reasonably
contemplates continuation beyond, the termination of this Agreement, including, but not
limited to, this Section 5.03 and Sections 5.04, 5.05, 5.06, and 7.09. Notwithstanding the
foregoing, such duties shall not survive beyond the duration of any applicable statute of
limitations.
5.04 Outstanding Fees: Records. Upon termination of this Agreement, the Plan Sponsor agrees to remitto
PDA any outstanding balances due under this Agreement. Without limiting other available remedies, PDA
shall have the right to retain all records in its possession with regard to its services pursuant to this Agreement
until receipt of all outstanding monies due. Subject to the foregoing provisions of this Section 5.04 and
Section 2.04(c) hereof, PDA shall, if so instructed by Plan Sponsor upon termination of this Agreement,
destroy all records received from Plan Sponsor and any of its agents and designees and retain no copies.
5.05 Cooperation with Successor. In the event the Plan Sponsor appoints a successor to PDA for any or all
ofPDA's services described herein, PDA shall cooperate as reasonably necessary in transferring files, records,
reports and the like, and PDA shall be entitled to reasonable compensation for its services in connection
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therewith. Notwithstanding any provision of this Agreement (including any exhibit or addendum hereto) to the
contrary, PDA shall not be obligated to assist a successor to PDA or otherwise take or continue any action at
any time to the extent such assistance or action may reasonably constitute action of a fiduciary with respect to
the Planes) in any manner.
5.06 Access to Information. The Plan Sponsor shall have the right, upon providing reasonable notice, to
periodically review, at its own expense, any records of PDA relating to the services provided herein; any
examination of such records shall be carried out in a manner mutually agreeable to PDA and the Plan Sponsor
and to the extent permitted by applicable law.
SECTION 6
ARBITRATION
This Agreement shall be governed by the laws of the State of California. The parties agree that any and all
disputes arising out of or in relation to this Agreement, including without limitation any action in tort, shall be
resolved exclusively, finally and conclusively by arbitration in Los Angeles County, California under the
auspices of and pursuant to the rules of the Judicial Arbitration & Mediation Services Inc. (JAMS). Each party
will select an arbitrator. Those two arbitrators will then select a third. The three member panel will make the
final decision. All decisions of the arbitrators shall be in writing, and the arbitrators shall provide written
reasons for their decision. The arbitration decision shall be final and binding on the parties. Notwithstanding
the foregoing, the parties shall be permitted to access the court system to enforce any arbitration award or to
obtain injunctive relief. The exclusive jurisdiction and venue for any such action shall be the Superior Court of
California, Los Angeles County.
SECTION 7
GENERAL PROVISIONS
7.01 Amendment: Assignment. This Agreement may not be amended without the express written consent
of both parties. No assignment by either party pertaining to this Agreement shall be valid without the express
written consent of the other party, which consent will not be unreasonably withheld.
7.02 Confidentiality. PDA recognizes that it shall be provided with personal information regarding
Members ofPlan(s) in the course of providing services under this Agreement. PDA shall safeguard such
information to ensure that no person who does not need to know such information has access to such
information. To the extent required by law, PDA will enter into a Business Associate Agreement with each
applicable Plan, provided that no such Business Associate Agreement shall alter or amend the rights and
responsibilities of the parties under this Agreement.
7.03 Consultation with Planes) Sponsor. PDA shall consult with and obtain prior approval from Plan
Sponsor and/or legal counsel designated by Plan Sponsor when legal matters regarding the Planes) arise.
7.04 Entire Agreement. The entire agreement between the parties concerning the subject matter hereof is
incorporated into this document and any exhibits or addenda hereto; this Agreement (including any exhibits or
addenda hereto) supersedes all previous agreements whether oral or written between the parties concerning the
subject matter hereof
7.05 Governing Law. To the extent not preempted by federal law, including ERISA, this Agreement shall
be governed in accordance with the laws of the State of California.
6
'" 11 I 1
7.06 Headings. The headings of this Agreement are solely for the convenience of the parties and do not
effect the meaning or interpretation of any provision of this Agreement.
7.07 Notice. Any notice required to be given hereunder between the parties shall be written, effective upon
receipt and shall be served by facsimile or by personal delivery or certified mail, return receipt requested to the
address cited in the signature block of this Agreement or to such other address as shall be specified by like
notice by either party.
7.08 Other Service Providers: No Legal or Tax Advice. PDA may seek the services of others in performing
its duties and obligations under this Agreement. The Plan Supervisor acknowledges and agrees that PDA's
services pursuant to this Agreement are in the nature of consulting, logistical and non-discretionary
administerial. services and are not intended, and shall not be construed or characterized as, the provision of
legal or tax advice or professional fiduciary services.
7.09 Successor and Assigns: Waiver. Subject to the requirements of Section 7.01 above, this Agreement
shall be binding upon and inure to the benefit of and be enforceable against the parties hereto and their
respective successors and assigns. Failure to enforce any provision of this Agreement shall not affect the rights
of the parties to enforce such provision in another circumstance or their right to enforce any other provision of
this Agreement at any time. If any provision of this Agreement is determined to be unenforceable or invalid,
such determination shall not affect the validity of the. other provisions contained in this Agreement.
7.10 Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be
deemed to be an original and all of which together shall constitute a single agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed, effective
as of the Effective Date, by their duly authorized officers.
PART D ADVISORS, INe.
THE CITY OF VERNON, CALIFORNIA
,
I
By: i
I
Namef
I
I
I
Title: i
Addr9ss:
I
By:
Name: Leonis C. Malburg
Title: Mayor
Address: 4305 Santa Fe Avenue
Vernon. CA 90058
I
i
Date: ~
I
I
APPRpVED AS TO FORM:
i
I
ERIC t. FRBSCH, City Attorney
Date: November 16. 2005
ATTEST:
BRUCE V. MALKENHORST, JR.
Acting City Clerk
7
.' ,
EXHffiIT A
THE CITY OF VERNON, CALIFORNIA
Effective November 16,2005
COMPENSATION
PDA's compensation for the services provided pursuant to the Agreement shall be:
1. Part D Notice Services. For Part D Notice services and the Maintenance services as described
in Sections 2.02 and 2.04 of the Agreement, the fee shall be an amount equal to $-0- per Part D Eligible
Individual per each month during the term of this Agreement, plus actual cost for postage incurred by PDA.
PDA shall send a monthly invoice to the Plan Sponsor for the current month's fees. Payment shall be due
upon receipt of invoice. Calculation of the Individualized Fee shall be determined on a monthly basis, based
, on the number of Part D Eligible Individuals for which computerized records are maintained by the Plan(s) or
PDA. The Plan Sponsor must notify PDA in writing within thirty (30) days of the Plan Sponsor's receipt of
each regular monthly invoice of any discrepancy, otherwise, PDA's fee shall be as reflected in the invoice.
2. Drug Subsidy Services. For Drug Subsidies services as described in Section 2.03, the fee for
such services shall be an amount equal to twenty five percent (25%) of each Drug Subsidies payment received
by the Plan Sponsor from CMS as a result of any Drug Subsidies application for which PDA provided services
pursuant to this Agreement. Payment of this fee shall become automatically due within ten (10) days of the
receipt from CMS of any Drug Subsidies. Upon reasonable prior notice, PDA shall have the right to access the
Plan Sponsor's records to verify the timing and amount of Drug Subsidies received.
3. General Consulting Services. In the event the Plan Sponsor requests PDA to provide
consulting services that are in addition to the Part D Notice services or the Drug Subsidy services, such
services shall be provided based on the time spent at the following hourly rates:
a. $200/hour for professional staff of PDA
b. $ 125/hour for para-professional staff of PDA
c. $50/hour for all other staff of PDA
; provided, however, that any such additional consulting services shall not be initiated without written
permission of the Plan Sponsor
GENERAL PROVISIONS
4. Travel Reimbursement. Upon prior authorization and in addition to the fees described above,
the Plan Sponsor agrees to reimburse PDA for reasonable expenses incurred for travel, meals and lodging of
PDA's representative( s) while performing its duties and responsibilities under the terms of this Agreement or
at the request ofPlan(s) Sponsor.
5. Delinquent Accounts. Accounts and invoices not paid by the later of the end of the month, or
within 30 days of billing, are considered delinquent and are subject to a service charge of 1.5% per month.
. .
.. ..1 "
. .
, , .
6. Retainer. Upon execution of this Agreement, Plan Sponsor shall pay a one-time only payment
in the amount ofTen Thousand Dollars ($10,000) to PDA as a retainer, to be applied against compensation due
PDA under the terms of this Agreement. In the event Plan Sponsor terminates this Agreement before PDA has
earned $10,000 under the terms of this Agreement, PDA shall be entitled to retain the balance of the retainer.
ACKNOWLEDG~NTANDAPPROVAL
The undersigned duly authorized officer of the Plan Sponsor hereby acknowledges, understands, and
agrees, on behalf of the Plan Sponsor, to this Exhibit A, which shall, upon execution of the parties hereto,
become an integral part of the Agreement for Part Dlmplementation Services made by and between PDA and
the Plan Sponsor as currently in effect.
PART D ADVISORS, INe.
THE CITY OF VERNON, CALIFORNIA
By:
By:
Name:
Name: Leonis C. Malburg
Title:
Title: Mayor
Date:
Date: November 16.2005
ATTEST:
BRUCE V. MALKENHORST, JR.
Acting City Clerk
APPROVED AS TO FORM:
ERIC T. FRESCH, City Attorney
A-2
. I .
ill . J "
- ..
I l .
EXHffiIT B
THE CITY OF VERNON, CALIFORNIA
ILLUSTRATIVE LIST OF INFORMATION
REQUIRED FROM
PHARMACY BENEFIT MANAGERS
(Non-Exhaustive)
Billing Transactions
Patient Gender
Prescriber ID Qualifier
Prescriber ID
Patient Date of Birth
Product ID National Drug Code
Compound Code
DA W/Product Selection Code
Quantity Dispensed
Days Supply
Fill Number
Date of Service
Service Provider ID
Prescription Number
Ingredient Cost Paid
Dispensing Fee Paid
Sales Tax (if applicable)
Patient Pa Amount
Contract Number
Plan Benefit Package (PBP) ill
Health Insurance Claim Number HIC#)
Drug Coverage Status
Adjustment/Deletion Flag
Out of Network Flag
Catastrophic Coverage Fla
Gross Drug Cost Below Catastrophic Cap
Gross Drug Cost Above Catastrophic Cap
Low-Income Cost-Sharing Subsidy Amount (LICS)
Secondary/Other Payer Amount
Sup lemental Cost Share Amount
Response Transactions
CMS Data Elements Identifiers
Indicators
Cost/Payment Fields
SUPPORTING
DOCUMENTS
AGREEMENT FOR MEDICARE PART D
IMPLEMENTATION SERVICES
This AGREEMENT FOR MEDICARE PART D IMPLEMENTATION SERVICES (this "Agreement") is
entered into by and between Part D Advisors, Inc., a Michigan corporation (hereinafter referred to as "PDA")
and The City of Vernon. California (hereinafter referred to as the "Plan Sponsor") and shall be effective as of
November 16.2005 (the "Effective Date").
RECITALS
WHEREAS, the Plan Sponsor maintains one or more group health plans (hereinafter referred to as the
"Planes)"), under which eligible individuals are able to obtain certain prescription drug benefits; and
WHEREAS, the Plan Sponsor wishes to engage PDA to assist the Plan Sponsor with the requirements and
opportunities specified herein with respect to the new Medicare Part D Prescription Drug Program (the "Part D
Program") under the Medicare Modernization Act of 2003, and PDA desires to provide such assistance,
subject to the terms and conditions as set forth herein; and
WHEREAS, Plan Sponsor (or its designee(s) other than PDA) shall serve as the administrator, fiduciary and
primary decision maker for the Planes), with all of the rights and responsibilities for administering the Planes)
in connection with the Part D Program, and PDA shall have no such authority or responsibility except as may
be specifically provided herein.
NOW THEREFORE, in consideration of the mutual covenants and agreements herein contained, the parties
agree as follows:
SECTION 1
DEFINITIONS
1.01 "Member" shall mean an individual enrolled for prescription drug coverage under the Planes),
including an individual continuing coverage in accordance with the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended ("COBRA").
1.02 "Plan Document(s)" shall mean generally the written description of the benefits provided by the
Plane s), the terms and conditions under which the Plane s) are operated and the standards and rules governing
the payment of benefits under the Planes).
1.03 "Part D Eligible Individuals" shall mean a Member who has the right to elect get drug coverage
under Medicare Part D, whether or not they have so elected. The determination of whether a Member is a Part
D Eligible Individual shall be made monthly, provided, however, that for purposes of calculating PDA' s fee for
Notice Services, PDA shall each year make a good faith estimate ofthe number of Part D Eligible Individuals
there will be during the upcoming calendar year.
. '
SECTION 2
PDA SERVICES
2.01 PDA Services - Generally. PDA shall provide the following services, as more specifically detailed in
Sections 2.02 through 2.06 below:
(a) Notices. Assist the Plan Sponsor in preparing and distributing notices of creditable (or non-
creditable) coverage to Part D Eligible Individuals in connection with the Plan( s), as required
under the Part D Program (as described in 42 CFR 423.56) (the "Part D Notices"); and
(b) Drug Subsidy. Assist the Plan Sponsor in applying for, the Medicare drug subsidy as
maybe available under the Part D Program in connection with the Plan(s) (as described in 42
CFR 423.880 through 888) (the "Drug Subsidy").
2.02 Specific PDA Services - Part D Notices. PDA shall provide any or all of the following services as
may be necessary to assist the Plan Sponsor in preparing and distributing the Part D Notices:
(a) Assist in the identification of all relevant Plan(s) for purposes of the Part D Program;
(b) Assist in the identification of each relevant "benefit option" (within the meaning of the Part
D Program) under each Plan (each "Benefit Option") and identification of actual and potential
enrollees in each Benefit Option;
(c) Assist in determining whether a Benefit Option is "creditable" or "non-creditable" within the
meaning of the Part D Program;
(d) Assist in the identification of all Part D Eligible Individuals;
(e) Assist in the preparation and distribution of Part D Notices to all individuals as required
under the Part D Program; and
(f) Assist in the design and establish a system for the proper retention of relevant data as may be
proper and necessary for compliance with the Part D Program and any audits by CMS in
connection with the Part D Notices.
2.03 Specific PDA Services - Drug Subsidy. PDA shall provide any or all of the following services as may
be necessary to assist the Plan Sponsor with respect to the Drug Subsidies:
( a) General consultation regarding the Part D Program and assist in determining the magnitude of
potential Drug Subsidies as may be available to the Plan Sponsor;
(b) Provide an actuarial attestation by an actuary enrolled in the American Academy of Actuaries
of the value of prescription drug coverage under the Plan( s) (projected gross and net values)
(the "Coverage Values") for comparison with benefits under the Medicare Part D Program;
(c) To the extent requested, make suggestions for alternate plan designs that may better qualify
for the Drug Subsidies;
2
(d) Assist in the identification of all Part D Eligible Individuals who have not elected drug
coverage under Medicare Part D;
(e) Obtaining, compiling and documenting detailed drug expenditure information (including, by
way of illustration only, the types of information listed in Exhibit B attached hereto) from
pharmacy benefit managers and other sources;
(f) Assist in the preparation of an application to the Center for Medicare and Medicaid Services
(CMS) for the Drug Subsidies, and assistance with follow-up tasks as may be required by
CMS; and
(g) Design and establish a system for the proper retention of relevant data as may be proper and
necessary for compliance with the Part D Program and any audits by CMS in connection with
the Drug Subsidies.
2.04 Specific PDA Services - Ongoing Services. PDA shall provide the following ongoing services:
(a) Maintain and update, during the term of this Agreement, a database containing the eligibility
of each Part D Eligible Individual for prescription drug coverage under the Plan(s) and/or
under the Part D Program;
(b) Establish and maintain a telephone bank to receive and respond to inquiries from Part D
Notice recipients regarding the Plan(s) in respect of the Part D Program;
(c) Maintain, during the term of this Agreement, other appropriate records regarding the Plan( s)
in respect of the Part D Program as may be required by federal law; and
(d) Assist the Plan Sponsor with submission of or access to the records in PDA's database as may
be required for CMS regulatory, audit, and/or other business purposes.
2.05 Additional Services. Additional services by PDA, if any, shall be provided under this Agreement as
set forth in Paragraph 3 of Exhibit A for the additional service fees specified therein; provided, however, that
any such additional services shall not be initiated without written permission of the Plan Sponsor.
2.06 Sources of Information. In performance of the above described services, PDA shall rely on any
communication and/or data reasonably believed by it to be genuine, including necessary information received
from the Plan Sponsor, Members, providers, and any other source in a timely manner and in good order. For
purposes hereof, "timely manner" means a reasonable period of time for sorting, processing, entering and
posting of data received.
SECTION 3
RESPONSffilLITIES OF PLAN SPONSOR
3.01 Preparation of Eligibility List and Planes) Information. The Plan Sponsor shall:
(a) Prepare a complete and accurate set of current enrollment records for all Members under the
Plan(s). Such records shall be delivered to PDA in an electronic format acceptable to PDA no
less than N/ A days prior to the date PDA shall begin rendering services hereunder.
Thereafter, the Plan Sponsor shall promptly update such enrollment records in an electronic
3
format acceptable to PDA, notifying PDA of any and all changes in Member status, including
the addition of new Members, termination or layoff, changes in dependent status or any other
changes that may affect the eligibility of a Member;
(b) Make available, or cause to be made available to PDA certain reports and information to
which the Plan Sponsor has access, as may be reasonably requested by PDA. Such reports
and information may include, but shall not be limited to: (i) certification that a Member is
eligible for benefits under the Plan( s); (ii) a description and identification of the types of drug
benefits to which a Member is entitled; and (iii) date of a Member's eligibility. Upon request,
the Plan Sponsor shall provide PDA with any other reasonable and necessary information
regarding Members.
( c) Plan Documentation. The Plan Sponsor shall provide PDA with a complete copy of all Plan
Document(s).
(d) . Changes in Information. The Plan Sponsor shall be solely responsible to inform PDA of any
changes in the information it previously supplied PDA.
3.02 Cooperation. The Plan Sponsor shall provide its full and good-faith cooperation in the procurement,
access and/or review of such other reasonable information as may be determined by PDA to be reasonably
necessary in order to perform its services hereunder.
3.03 Compensation. In consideration for the Plan(s) Sponsor shall pay PDA the compensation and
applicable reimbursements as set forth on Exhibit A; provided, however, that any additional services provided
pursuant to Paragraph 3 of Exhibit A shall not be initiated without written permission of the Plan Sponsor.
SECTION 4
RELATIONSHIP OF THE PARTIES
4.01 Independent Contractor. In performing services under this Agreement, PDA performs all acts as an
independent contractor and not as an officer, employee or agent of the Plan Sponsor, administrator(s) (if other
than the Plan Sponsor), or the Plan(s). Nothing in this Agreement shall be construed to mean that the Plan
Sponsor (or any of its agents) retains any control over the manner and means of how PDA performs the
services provided for herein, but only a right to review the results of the work performed.
4.02 Not a Fiduciary or Insurer. Plan Sponsor or its designee (other than PDA) is the named fiduciary
and/or primary decision maker of the Plan(s). As fiduciary and/or decision maker, the Plan Sponsor, or the
person designated by Plan Sponsor (other than PDA), maintains discretionary authority and responsibility in
the administration and operation of the Plan( s), including, but not limited to, the determination of covered
services, interpretation of the terms of the Plan( s), and the determination of eligibility for and entitlement to
benefits under the Plan(s) in accordance with the terms of the Plan(s). PDA does not assume any responsibility
for any act, omission or breach by any fiduciary, and assumes responsibility solely for its own acts or omissions
and as may be otherwise required by law.
4
SECTION 5
TERM AND TERMINATION
5.01 Term. This Agreement shall be in effect for a period of two (2) years from the Effective Date (the
"Initial Term") and shall thereafter renew automatically from year to year thereafter unless otherwise
terminated in accordance with Section 5.02. .
5.02 Termination. Subject to continuing obligations under Section 5.03, this Agreement may be terminated
as specified below:
(a) During the Initial Term by either party with cause which remains uncured upon thirty (30)
days' prior written notice;
(b) Following the Initial Term by either party with or without cause upon thirty (30) days' prior
written notice;
(c) By and at the election ofPDA, upon Plan Sponsor's failure to provide timely and adequate
payment of service fees to PDA in accordance with the provisions of this Agreement;
(d) By and at the election of PDA as of the date the Pla,n Sponsor is determined insolvent by its
governing board or by other governmental authority; or
(e) By mutual written agreement of the parties.
5.03 Obligations After Contract Termination: Survival. All responsibilities of either party under this
Agreement shall terminate upon the termination of this Agreement, except that the following rights and
liabilities of the parties shall survive the termination of this Agreement for the specified time period as
provided below or as otherwise agreed by the parties hereto:
(a) Plan Sponsor's duty to pay PDA for amounts due to PDA hereunder, until such amounts are
paid in full.
(b) Plan Sponsor's and PDA's respective duties hereunder that are predicated on, or reasonably
contemplates continuation beyond, the termination of this Agreement, including, but not
limited to, this Section 5.03 and Sections 5.04, 5.05, 5.06, and 7.09. Notwithstanding the
foregoing, such duties shall not survive beyond the duration of any applicable statute of
limitations.
5.04 Outstanding Fees: Records. Upon termination of this Agreement, the Plan Sponsor agrees to remitto
PDA any outstanding balances due under this Agreement. Without limiting other available remedies, PDA
shall have the right to retain all records in its possession with regard to its services pursuant to this Agreement
until receipt of all outstanding monies due. Subject to the foregoing provisions of this Section 5.04 and
Section 2.04(c) hereof, PDA shall, if so instructed by Plan Sponsor upon termination of this Agreement,
destroy all records received from Plan Sponsor and-any of its agents and designees and retain no copies.
5.05 Cooperation with Successor. In the event the Plan Sponsor appoints a successor to PDA for any or all
ofPDA's services described herein, PDA shall cooperate as reasonably necessary in transferring files, records,
reports and the like, and PDA shall be entitled to reasonable compensation for its services in connection
5
therewith. Notwithstanding any provision of this Agreement (including any exhibit or addendum hereto) to the
contrary, PDA shall not be obligated to assist a successor to PDA or otherwise take or continue any action at
any time to the extent such assistance or action may reasonably constitute action of a fiduciary with respect to
the Plan(s) in any manner.
5.06 Access to Information. The Plan Sponsor shall have the right, upon providing reasonable notice, to
periodically review, at its own expense, any records of PDA relating to the services provided herein; any
examination of such records shall be carried out in a manner mutually agreeable to PDA and the Plan Sponsor
and to the extent permitted by applicable law.
SECTION 6
ARBITRATION
This Agreement shall be governed by the laws of the State of California. The parties agree that any and all
disputes arising out of or in relation to this Agreement, including without limitation any action in tort, shall be
resolved exclusively, finally and conclusively by arbitration in Los Angeles County, California under the
auspices of and pursuant to the rules of the Judicial Arbitration & Mediation Services Inc. (JAMS). Each party
'will select an arbitrator. Those two arbitrators will then select a third. The three member panel will make the
final decision. All decisions of the arbitrators shall be in writing, and the arbitrators shall provide written
reasons for their decision. The arbitration decision shall be final and binding on the parties. Notwithstanding
the foregoing, the parties shall be permitted to access the court system to enforce any arbitration award or to
obtain injunctive relief. The exclusive jurisdiction and venue for any such action shall be the Superior Court of
California, Los Angeles County.
SECTION 7
GENERAL PROVISIONS
7.01 Amendment: Assignment. This Agreement may not be amended without the express written consent
of both parties. No assignment by either party pertaining to this Agreement shall be valid without the express
written consent of the other party, which consent will not be unreasonably withheld.
7.02 Confidentiality. PDA recognizes that it shall be provided with personal information regarding
Members ofPlan(s) in the course of providing services under this Agreement. PDA shall safeguard such
information to ensure that no person who does not need to know such information has access to such
information. To the extent required by law, PDA will enter into a Business Associate Agreement with each
applicable Plan, provided that no such Business Associate Agreement shall alter or amend the rights and
responsibilities of the parties under this Agreement.
7.03 Consultation with Planes) Sponsor. PDA shall consult with and obtain prior approval from Plan
Sponsor and/or legal counsel designated by Plan Sponsor when legal matters regarding the Plan(s) arise.
7.04 Entire Agreement. The entire agreement between the parties concerning the subject matter hereof is
incorporated into this document and any exhibits or addenda hereto; this Agreement (including any exhibits or
addenda hereto) supersedes all previous agreements whether oral or written between the parties conceming the
subject matter hereof.
7.05 Governing Law. To the extent not preempted by federal law, including ERISA, this Agreement shall
be governed in accordance with the laws of the State of California.
6
"
7.06 Headings. The headings of this Agreement are solely for the convenience of the parties and do not
effect the meaning or interpretation of any provision of this Agreement.
7.07 Notice. Any notice required to be given hereunder between the parties shall be written, effective upon
receipt and shall be served by facsimile or by personal delivery or certified mail, return receipt requested to the
address cited in the signature block of this Agreement or to such other address as shall be specified by like
notice by either party.
7.08 Other Service Providers: No Legal or Tax Advice. PDA may seek the services of others in performing
its duties and obligations under this Agreement. The Plan Supervisor acknowledges and agrees that PDA's
services pursuant to this Agreement are in the nature of consulting, logistical and non-discretionary
administerial services and are not intended, and shall not be construed or characterized as, the provision of
legal or tax advice or professional fiduciary services.
7.09 Successor and Assigns: Waiver. Subject to the requirements of Section 7.01 above, this Agreement
shall be binding upon and inure to the benefit of and be enforceable against the parties hereto and their
respective successors and assigns. Failure to enforce any provision of this Agreement shall not affect the rights
of the parties to enforce such provision in another circumstance or their right to enforce any other provision of
this Agreement at any time. If any provision of this Agreement is determined to be unenforceable or invalid,
such determination shall not affect the validity of the other provisions contained in this Agreement.
7.10 Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be
deemed to be an original and all of which together shall constitute a single agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed, effective
as of the Effective Date, by their duly authorized officers.
PART D ADVISORS, INC.
THE CITY OF VERNON, CALIFORNIA
BY~~~~~'
N a7JjfAl C71~"'~
Title: Ifled,cleAJT
Address: ~~~ ~~y~p.~A/
JVJ -;Ie. ~
~~~tl7H- M.T ~;/A::::>
. /'
Date: /3;f?~~
Name: Leonis C. Malburg
Title: Mayor
Address: 4305 Santa Fe Avenue
Vernon, CA 90058
Date: November 16, 2005
ERIC T. FRESC
ATIE%-----
BRUCE V. MALKENHORST, JR.
Acting City Clerk
APPROVED AS TO FO
C
7
EXHIBIT A
THE CITY OF VERNON, CALIFORNIA
Effective November 16, 2005
COMPENSATION
PDA's compensation for the services provided pursuant to the Agreement shall be:
1. Part D Notice Services. For Part D Notice services and the Maintenance services as described
in Sections 2.02 and 2.04 of the Agreement, the fee shall be an amount equal to $-0- per Part D Eligible
Individual per each month during the term of this Agreement, plus actual cost for postage incurred by PDA.
PDA shall send a monthly invoice to the Plan Sponsor for the current month's fees. Payment shall be due
upon receipt of invoice. Calculation of the Individualized Fee shall be determined on a monthly basis, based
on the number of Part D Eligible Individuals for which computerized records are maintained by the Plan( s) or
PDA. The Plan Sponsor must notify PDA in writing within thirty (30) days of the Plan Sponsor's receipt of
each regular monthly invoice of any discrepancy, otherwise, PDA's fee shall be as reflected in the invoice.
2. Drug Subsidy Services. For Drug Subsidies services as described in Section 2.03, the fee for
such services shall be an amount equal to twenty five percent (25%) of each Drug Subsidies payment received
by the Plan Sponsor from CMS as a result of any Drug Subsidies application for which PDA provided services
pursuant to this Agreement. Payment of this fee shall become automatically due within ten (10) days of the
receipt from CMS of any Drug Subsidies. Upon reasonable prior notice, PDA shall have the right to access the
Plan Sponsor's records to verify the timing and amount of Drug Subsidies received.
3. General Consulting Services. In the event the Plan Sponsor requests PDA to provide
consulting services that are in addition to the Part D Notice serVices or the Drug Subsidy services, such
services shall be provided based on the time spent at the following hourly rates:
a. $200/hour for professional staff ofPDA
b. $ 125/hour for para-professional staff ofPDA
c. $50/hour for all other staff ofPDA
; provided, however, that any such additional consulting services shall not be initiated without written
permission of the Plan Sponsor
GENERAL PROVISIONS
4. Travel Reimbursement. Upon prior authorization and in addition to the fees described above,
the Plan Sponsor agrees to reimburse PDA for reasonable expenses incurred for travel, meals and lodging of
PDA's representative(s) while performing its duties and responsibilities under the terms of this Agreement or
at the request ofPlan(s) Sponsor.
5. Delinquent Accounts. Accounts and invoices not paid by the later of the end of the month, or
within 30 days of billing, are considered delinquent and are subject to a service charge of 1.5% per month.
6. Retainer. Upon execution of this Agreement, Plan Sponsor shall pay a one-time only payment
in the amount ofTen Thousand Dollars ($10,000) to PDA as a retainer, to be applied against compensation due
PDA under the terms of this Agreement. In the event Plan Sponsor terminates this Agreement before PDA has
earned $10,000 under the terms of this Agreement, PDA shall be entitled to retain the balance of the retainer.
ACKNOWLEDGMENT AND APPROVAL
The undersigned duly authorized officer of the Plan Sponsor hereby acknowledges, understands, and
agrees, on behalf of the Plan Sponsor, to this Exhibit A, which shall, upon execution of the parties hereto,
become an integral part of the Agreement for Part D Implementation Services made by and between PDA and
the Plan Sponsor as currently in effect.
PART D ADVISORS, INC.
THE CITY OF VERNON, CALIFORNIA
Jo
Title: jJl'~l&~
Date: 1~3/0~
B~~~~'
Name: Leonis C. Malburg
Title: Mayor
Date: November 16. 2005
ATIE~
BRUCE V. MALKENHORST, JR.
Acting City Clerk
APPROVED AS TO FORM:
~#(
. ERIC T. FRESCH, City Attorney
A-2
.
EXBmIT B
THE CITY OF VERNON, CALIFORNIA
ILLUSTRATIVE LIST OF INFORMATION
REQillRED FROM
PHARMACY BENEFIT MANAGERS
(Non-Exhaustive)
Cost/Payment Fields
Patient Gender
Prescriber ID Qualifier
Prescriber ID
Patient Date of Birth
Product ID National Drug Code
Compound Code
DA W/Product Selection Code
Quantity Dispensed
Days Supply
Fill Number
Date of Service
Service Provider ID
Prescription Number
Ingredient Cost Paid
Dispensing Fee Paid
Sales Tax (if applicable)
Patient Pay Amount
Contract Number
Plan Benefit Package (PBP) ID
Health Insurance Claim Number (HIC#)
Drug Coverage Status
Adjustrnent/Deletion Flag
Out of Network Flag
Catastrophic Covera e Flag
Gross Drug Cost Below Catastrophic Cap
Gross Drug Cost Above Catastrophic Cap
Low-Income Cost-Sharing Subsidy Amount (LICS)
Secondary/Other Payer Amount
Sup lemental Cost Share Amount
Billing Transactions
Response Transactions
CMS Data Elementsldentijiers
Indicators
SUPPORTING
DOCUMENTS
ATTACHMENT C
The City of Vernon. California
AUTHORIZATION AND REQUEST
FOR RELEASE
OF DOCUMENTS AND DATA
To:
J!JV7VItt. of oMHA~
(data or document source)
The Citvof Vernon. California (the "Plan Sponsor"), sponsor of the The City of Vernon
Health Plan (the "Plan") is a participant in the Medicare Retiree Drug Subsidy (RDS) program,
administered by the Centers for Medicare for Medicaid Services (CMS) pursuant to the Medicare
Modernization Act of2003 and implementing regulations.
As part of the Plan Sponsor's participation in the RDS program, federal regulations (at 42 CFR
Part 423.884(b)) require the Plan Sponsor to obtain, analyze and/or disclose to CMS various documents
and information, including documents and information relating to (i) the individual participants and
beneficiaries under the Plan, (ii) such individuals' premium contributions, including such amounts
allocable to prescription drug benefits, and (iii) such individuals' utilization of prescription drugs benefits
(together, the "Documents and Data").
Part D Advisors, Inc. ("PDA") has been retained by the Plan Sponsor to assist with the Plan
Sponsor's participation in the RDS program. The Plan and PDA have entered into a Business Associate
Agreement as required by the Health Insurance.Portability and Accountability Act (HIPAA) in order to
safeguard the confidentiality of protected health information and to prevent unauthorized access to such
information.
This Authorizat)l for !jftase Of1nfow,ation and Docum. ents is the Plan Sponsor and Plan's
formal request to you, f/'1TI OJ:. tJ1I1A A (data or document source)
to immediately provide all Plan-related documents and data (whether in written, electronic or other
format) in your possession or control, as may be requested by PDA. Under PDA's written agreement
with the Plan Sponsor and Plan, all documents and data received by PDA will be used solely for the
purpose of assisting the Plan Sponsor with the RDS program. Your full and prompt cooperation in this
important matter is requested.
You will soon be contacted by PDA with details of the types and nature of Documents and Data
that PDA (or its designee) will need to receive on behalf of the Plan Sponsor. If you have any questions,
please do not hesitate to contact Linda Burbank at 734-459-8940.
This Authorization may be revoked at any time by written notice from the Plan Sponsor. Unless
otherwise revoked, this Authorization expires 12 months after the date of my signing this form
The Ci
(
By. Bruce V. Malkenhorst. Jr.
Title. Acting City Clerk
The City of Vernon Health Plan
By:
Title:
Doc & Data v3
7/29/05