REQUEST FOR PROPOSAL
P-112111-01-JR
FOR
PHARMACY BENEFIT MANAGEMENT (PBM) SERVICES
RFP Release Date: November 21, 2011
Proposal Due Date: January 3, 2012
Submit Proposals To:
Name: Judy Rengert
Title: Senior Procurement Agent
University of Michigan
Procurement Services
7071 Wolverine Tower
3003 S. State Street
Ann Arbor, MI 48109
Phone: 734-615-8762
Email: jrengert@umich.edu
RFP P-112111-01-JR Pharmacy Benefit Management Services
TABLE OF CONTENTS
RFP Section
Topic
Page #
1.0
2.0
3.0
4.0
5.0
Proposal Invitation
Planned Procurement Schedule
Background
RFP Requirements
Submission Directions
Rights Reserved by the University and Restrictions on RFP
Process
Evaluation Criteria
Proposal Submission Format
3
3
4
7
7
Program Data
General Services Agreement – HIPPA Business Associate
14
20
File Name
Input Required
Intent to Respond
Supplier’s Question Form
Supplier Information & RFP Questionnaire
Signature Page
For completion
For completion
For completion
For completion
6.0
7.0
8.0
Appendix
A
B
RFP Attachments
(Separate Files)
C
D
E
F
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9
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RFP P-112111-01-JR Pharmacy Benefit Management Services
1.0
PROPOSAL INVITATION
The University of Michigan (“University”) intends to establish an Agreement for Pharmacy
Benefit Management (PBM) Services. The University’s intention is to award one Agreement for
Pharmacy Benefit Management services but retains the right to award multiple Agreements.
The University has retained the services of Pharmaceutical Strategies Group (PSG) as consultants
to assist the University in evaluation of proposals.
The proposal must be comprehensive by including all services and costs necessary to meet the
business and technical requirements of the University as outlined in this RFP. In addition, the
proposal must specify a detailed approach/methodology, supplier and University staffing
requirements, and any other assumptions to complete the proposed work.
The University is not liable in any manner or to any extent for any cost or expense incurred by the
supplier in the preparation, submission, presentation or any other action connected with proposing
or otherwise responding to this RFP. Such exemption from liability applies whether such costs
are incurred directly by the supplier or indirectly through the supplier’s agents, employees,
assigns or others, whether related or not to the supplier.
In submitting a proposal, Supplier agrees that all materials associated with, attached to, or
referenced by the submitted proposal will become the property of the University and may be
incorporated into a subsequent contractual agreement between the successful supplier and the
University in an order of precedence as follows: (1) Contract Terms and Conditions; (2)
Statement of Work; and (3) RFP.
The University expects to enter into an agreement with the successful supplier for a three (3) year
period with an option to extend for an additional two one year extensions for PBM services as
mutually agreed upon between the University and the supplier. The anticipated Agreement
period will begin September 1, 2012 and continue through December 31, 2015Response to this
RFP confirms an understanding that this is not a contract or offer of business by the University.
The University’s standard terms and conditions will apply to the contract as a result of this RFP,
and are included in Attachment D – General and Professional Services Agreement.
2.0
PLANNED PROCUREMENT SCHEDULE
The planned procurement schedule is as follows:
Milestones
RFP issue date
Pre-Bid conference call
phone number (877) 273-4202 # 4860560
Submission of written questions from supplier
Supplier to submit questions to jrengert@umich.edu
Submission of Intent to Respond Form
Written response to questions
responses forwarded to all Suppliers via email
Proposal Due Date
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Dates / Details
November 21, 2011
November 29, 2011
2:00 p.m. (EST)
November 30, 2011
November 30, 2011
December 3, 2011
January 3, 2012
COB 4:00 p.m. (EST)
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RFP P-112111-01-JR Pharmacy Benefit Management Services
Selected suppliers may be required to make oral presentations. Failure of a supplier to conduct a
presentation on the date scheduled may result in rejection of the supplier’s proposal. In addition,
the University may decide to make site visits to the selected suppliers’ reference sites or other
sites provided by the supplier.
The University reserves the right to change this schedule as needed and all information provided
by the University in this RFP is offered in good faith. Individual items are subject to change at
any time. The University makes no certification that any item is without error.
3.0
BACKGROUND ON THE UNIVERSITY
The mission of the University is to serve the people of Michigan and the world through
preeminence in creating, communicating, preserving and applying knowledge, art, and academic
values, and in developing leaders and citizens who will challenge the present and enrich the
future. The University has over 42,000 under-graduate and graduate students enrolled at 19
schools and colleges on the Ann Arbor campus. The College of Engineering, LS&A (Literature,
Science and the Arts) College, and the Ross School of Business are the schools with the highest
enrollments.
The University of Michigan Health Center is a major non-profit medical center and teaching
hospital comprising the Medical School and its Faculty Group Practice (FGP), three University of
Michigan Hospitals and community health centers (HHC), 120 outpatient clinics and the
Michigan Health Corporation. In addition to the Alfred Taubman Health Care Center, the central
facility for outpatient activity, the University of Michigan Hospitals and Health Centers owns and
operates a growing number of satellite clinics located throughout Michigan. Operation statistics
for HHC include 913 licensed beds, more than 43,000 admissions (excluding deliveries), 80,000
ER/urgent care visits, 45,000 surgical cases, 3,900 deliveries, and 1.6 million clinic visits yearly.
In addition, the FGP has 1,600 physician members from 19 clinical departments.
PROJECT SCOPE AND REQUIREMENTS
3.1
Scope of Opportunity:
The primary service area for the RFP is Southeastern Michigan, however access to
services are required nationwide.
3.2
Background of Project
The University of Michigan is a premier educational institution located in Ann Arbor,
Michigan with other regional campuses at Dearborn and Flint, Michigan. It has been at
the forefront of developing innovative and industry leading benefits for its employees and
their families. The University of Michigan Prescription Drug Plan is a self-funded and
self-administered program covering approximately 94,000 lives. The Benefits
Administration Office employs a staff of 2.0 FTE Clinical Pharmacists, 1 FTE Manager,
1 FTE Compliance Coordinator, and 0.5 FTE Data Analyst solely for the purpose of
administering the UM Prescription Drug Plan.
Based on extensive study of prescription drug benefits and cost, the University
consolidated all prescription drug administration in 2003. The Prescription Drug Plan is
self-administered and self-funded for outpatient drugs and covers 94,000 members
(faculty, staff, retirees and their dependents) with an annual drug spend of over $85
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RFP P-112111-01-JR Pharmacy Benefit Management Services
million. The plan functions with a three tier open formulary, internal pharmacy
committee support, and strong cost containment strategies. Past PBM agreements have
provided maximum flexibility, control, and in-sourcing of special drug plan functions to
meet the University’s goals for cost containment and quality clinical programming.
Since 2003, the University of Michigan Prescription Drug Plan has adopted many
pharmacy management programs and activities that maintain its quality, reduce
inappropriate use, and provide “best value” medication choices using evidence-based
decisions. Through such programs, the University of Michigan has been able to control
cost trend at a level below the national average and keep employee contributions at levels
below their peers since 2003. The University of Michigan Prescription Drug Plan is
supported by two physician-led committees, which includes physicians, pharmacists, and
other campus-wide representation of the university’s interests. The Pharmacy Benefits
Advisory Committee (PBAC) functions as an internal pharmacy and therapeutics
(“P&T”) committee, and provides guidance for the drug plan’s formulary, preferred drug
classes, drug tier placements, utilization management, and clinical programs. The
Pharmacy Benefits Oversight Committee (PBOC) provides oversight for the drug plan,
including review of new programs, and addresses privacy, university impact, and member
satisfaction. The current UM PBM contract is with informedRx, a SXC Health Solutions
company, and is set to expire September 31, 2012. The University contracts separately
with NoviXus Pharmacy Services for mail order prescriptions and Wellpartner, Inc to
dispense a select set of specialty drugs. The majority of specialty drugs, as defined by the
UM Prescription Drug Plan, are dispensed through UM pharmacies under a 340B
arrangement. Mail order and specialty pharmacy services are outside the scope of this
request although the PBM will process claims for both. Additionally, the UM
Prescription Drug Plan has a 340B pricing arrangement with its hospitals and health
centers and has developed a 340B multiple contract pharmacy network to expand its
340B discount program. The annual estimated savings from the expanded and current
340B program will be approximately $10 million when fully implemented in 2012.
Rebate contracting and administration will be provided by the PBM for all claims except
where 340B discounts have been applied. Consideration will be given in 2012 to adopt
“own use” pricing under a Group Purchasing Organization (GPO) arrangement as the
University of Michigan is a non-profit organization and has obtained a favorable Federal
Trade Commission opinion letter to operate a multiple contract pharmacy network for
“own use” pricing for claims not within the 340B program.
A complete description of the University of Michigan Prescription Drug Plan, including
coverage, exclusions, formulary, preferred and specialty drug lists, quantity and supply
limits, prior authorizations, and key reports can be found on the University of Michigan
Benefits Administration Office Web Site at
http://benefits.umich.edu/plans/drugs/index.html.
The University of Michigan seeks to evaluate the services available from the PBM
industry to meet its long term goals in prescription drug benefit management, as stated in
this RFP. It is the University’s intention to operate its drug plan with maximum
flexibility and direct ability to implement customized, innovative programs that will meet
the University’s goals for clinical quality, and best value. The ability to conduct research
from claims data and implement innovative programs and plan design aligned with the
academic and research culture of the University is vital in the PBM services and all
aspects of the relationship.
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RFP P-112111-01-JR Pharmacy Benefit Management Services
3.3
Key Services to be Provided by PBM
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Claims Processing (including member submitted paper claims)
Retail Network Management Services
o Contract a custom local network (Michigan) with a National wrap
o Provide optional 90 Day Supply at Retail Network
o Invoice and pay pharmacies
o Receive and resolve pharmacy calls
o Audit, credential, and perform other due diligence activities
Integration of mail order and specialty pharmacy services from multiple providers
Prior Authorization
o Administer custom PA criteria
o Work with members and prescribers for efficient handling of PA process
o Report on PA activity, cost and savings
Make initial benefit determinations and 1st level appeals, and 2nd level medical
necessary independent reviews.
Facilitate State of Michigan’s Patient’s Right to Independent Review Act (PRIRA)
Appeal Process (3rd level) using appropriate physician specialists for level 2 review.
Fulfill member and physician communications regarding formulary/benefit changes
on a regular basis that maintain member privacy.
Fulfill adhoc member and physician communications for important market events
(for example, product recalls, new safety information, etc.) as requested by UM.
Rebate Management
o Contracting and invoicing of manufacturers for mail, retail and specialty
claims.
Reporting
o Provide read-only access to all areas of the claims processing system
affecting benefit setup and how claims process and to research individual
claims while protecting member privacy.
o Provide access to encrypted member information from data warehouse
o Provide direct access to the data warehouse for routine and adhoc client built
queries of claims data elements and other data elements that affect benefit
design or claims processing such as drug codes, package size, pharmacy
network participation, etc.
o Provide query and report building tool for Client to create customize d
reports.
o Provide standard reports as agreed upon with Client.
Access to pricing files including AWP and Maximum Allowable Cost (MAC) list
administration (e g, provide monthly MAC list access with pricing.
Call Center – Provide Member, Pharmacy, Physician 24/7/365 call center services
with pharmacist availability at all times
Support 340B Program and own use pricing and interact with the University-selected
replenishment administrator(s).
Support for Retiree Drug Subsidy
o Provide claims extract quarterly with year-to-date claim detail for all claims.
Provide invoiced quarterly rebate reports by NDC for allocation to subsidy
claims at an NDC-11 detail level.
o Provide rebate recovery data at an NDC-11 detail level on an annual basis for
RDS reconciliation.
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RFP P-112111-01-JR Pharmacy Benefit Management Services
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Produce and disseminate member ID cards
Provide member access to website that provides the following:
o Pharmacy locator
o Prospective claim pricing for members
o Show and print claims history for individual members
o Availability to print forms off website
o Capability to inform members of alternative lower costs therapies
Note: for details on these requirements, refer to the UM website at:
http://benefits.umich.edu/plans/drugs/index.html
Provide Custom Programming in Support of Initiatives and Research Projects
o Facilitation of Diabetes Program
o Identification of members for ad hoc studies from encrypted IDs
o Fulfillment of letters to members
o Exclusion/inclusion of members from multiple programs
o Facilitation of copays based on program design
Provide clinical data and drug information support on regular and ad hoc basis to
support formulary decisions, utilization management, and member services
Provide formulary publishing tool for member and provider access
Please refer to Appendix A for Program Data
4.0
RFP REQUIREMENTS
The following requirements must be met when responding to this RFP:
5.0
4.1
A comprehensive solution to achieve the objectives listed above.
4.2
A statement acknowledging the supplier’s understanding of the scope of this RFP.
4.3
The supplier must provide a comprehensive price proposal that outlines costs of
products or services, rates by individual, travel expenses and any other costs incurred
as well as all assumptions.
4.4
The supplier must warrant its services to the requirements and objectives in this RFP.
4.5
The supplier is expected to complete all content and documents in the format
described in Section 9.0 of this document, “Proposal Submission Format”.
4.6
Suppliers submitting a proposal agree to work with the University to develop a
detailed Statement of Work that will be part of the contract at no cost to the
University.
SUBMISSION DIRECTIONS
5.1
Intent to Respond. The “Intent to Respond” Form, Attachment C, must be completed
and received by Procurement Services by the date specified in Section 2.0 of this
document (RFP P-112111-01-JR). Suppliers who fail to submit the “Intent to Respond”
form on time risk disqualification from the RFP process. Receipt of the form will allow
the University to also notify the supplier of any additional information or addenda. The
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RFP P-112111-01-JR Pharmacy Benefit Management Services
fully completed form must be faxed or e-mailed to the Procurement Services
representative on the cover of this RFP.
5.2
A supplier may withdraw a proposal prior to the closing time on the due date. After the
closing time, submitted proposals constitute an offer by the supplier and shall remain
irrevocable for a period of 120 days.
5.3
Faxed and/or late responses will not be accepted.
5.4
A legally authorized representative of the supplier must sign the proposal.
5.5
The ability of the University to “open” all electronic information submitted must be
verified by the University Procurement Services prior to being accepted.
5.6
The proposal must be submitted as follows to the address on the front cover:
5.7
6.0
5.6.1
Two (2) electronic copies on a flash drive or cd of the entire proposal test
submitted in Adobe PDF format. All Excel attachments must also be submitted
in Excel format.
5.6.2
One (1) signed printed original
5.6.3
Six (6) printed copies of the proposal should be mailed or delivered to the
University to the individual and address on the front cover of this RFP.
Any questions regarding this RFP must be directed to the primary UM contact noted on
the cover of this RFP utilizing the template provided in “Attachment D – Supplier’s
Question Form”. All questions must be submitted by email as per the timetable in
Section 2.0 Planned Procurement Schedule of this RFP. Questions submitted after this
deadline may not receive a response by the University.
RIGHTS RESERVED BY THE UNIVERSITY AND RESTRICTIONS ON RFP PROCESS
6.1
The University reserves the right to reject any or all proposals, including by way of
example only and without limitation, any proposal that does not contain all the requested
information.
6.2
The University reserves the right to negotiate with any supplier considered qualified or to
make an award without further discussions. The University highly recommends that a
supplier’s initial proposal reflect supplier’s terms most favorable to the University.
6.3
The University retains the right to select, request further information from, and negotiate
with respondents it deems qualified for this program. The University also reserves the
right to reject any quotations submitted and to terminate negotiations at any time without
incurring liability.
6.4
The University reserves the right to select the most responsive Supplier(s) without further
discussion, negotiation, or prior notice.
6.5
The University may presume that any proposal is a best-and-final offer.
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RFP P-112111-01-JR Pharmacy Benefit Management Services
7.0
6.6
The University reserves the rights to award in part, in whole, or not at all.
6.7
Suppliers who offer prices on all items may be given preference; however, the University
reserves the right to delete specific line items in order to provide a basis for an evaluation
of the prices quoted by all suppliers.
6.8
The University will not pay for any information requested nor is it liable for costs
incurred by the supplier in responding to this request.
6.9
Any discussions with University personnel, other than as listed above, regarding this RFP
while the RFP is in progress (from the time supplier receives this RFP until final award is
made) are strictly prohibited. Such contact and discussion may result in disqualification
of Supplier’s proposal.
6.10
The University is the sole owner of all data and information contained within the RFP
document and accompanying attachments.
Supplier shall use this information
exclusively to prepare a proposal. Supplier should not disclose this information to any
other firm or use it for any other purpose unless required by law or legal process.
6.11
Supplier proposals will be opened and reviewed at the convenience of the University;
there is no public opening.
6.12
All proposals submitted become the property of the University; they will not be returned
and may be subject to disclosure under the STATE OF MICHIGAN FREEDOM OF
INFORMATION ACT (“FOIA”) or other legal process. As such, proposal may be
released to third parties, without prior notice to Supplier, as required to comply with legal
requirements.
EVALUATION CRITERIA
Proposals will be evaluated on the basis of the most competitive offer considering quality of
services offered, cost, responsiveness to the RFP requirements, and the most responsiveness in
meeting those requirements.
The major criteria that will be used to evaluate proposals will include, but not be limited to the
following:
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Supplier’s ability to meet the functional requirements of this RFP.
Supplier’s financial stability.
Supplier’s willingness to comply with the proposed agreement with no objections.
Supplier’s commitment and experience in successfully performing similar agreements.
Supplier’s cost for performing the requirements of the RFP.
Supplier’s compliance to the schedule of events including participation in pre-bid conference,
RFP review meeting and walk through if applicable.
Acceptability of product/services to the internal customer.
Cost data (price, price protection and total cost of ownership).
Ability to supply complete product line.
Value added proposals.
Demonstrated compliance with Code of Conduct.
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RFP P-112111-01-JR Pharmacy Benefit Management Services
8.0
PROPOSAL SUBMISSION FORMAT
The following table is a summary of the required proposal submission format for this RFP.
Please structure your proposal submission per the content and sequence below. Where noted
under “Template for Submission”, utilize the attachments provided with this RFP for inputting
your responses.
Proposal
Section
PreProposal
Intro
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
10.0
11.0
Section Title
Intent to Respond
Questions on the RFP
Title Page
Table of Contents
Letter of Transmittal
Executive Summary
Scope of Proposed Solution
Comprehensive List of Assumptions
Company Background/Customer List
Supplier Code of Conduct
Supplier Relationships or Potential
Conflicts with the University
Template for Submission
Attachment C – Intent to Respond Form
Attachment D – Supplier’s Question
Form
Open-Ended Responses
(see proposal response guidelines below
for overview of content required)
Exceptions to the University’s Terms and
Conditions
Appendix B – General Services
Agreement / HIPPA Business Associates
Agreement
Project Staffing/Resumes
Response to Supplier Information & RFP
Questionnaire
Cost Proposal
Signature Page
Attachment E – Supplier Information &
RFP Questionnaire
Attachment E – Pricing Spreadsheet
Attachment F – Signature Page
An overview of the proposal response guidelines are below for your review. Detailed instructions
have also been included within all attachments.
PROPOSAL RESPONSE GUIDELINES
The following are detailed guidelines for the format and content of your proposal submission.
Please review the guidelines below in full prior to beginning your proposal.
Letter of Transmittal (Maximum Length=1 page)
The letter should briefly list the name of the company, address of corporate headquarters, contact
information of account executive, confirm major components of the work being proposed,
validity of proposal (i.e., 120 days) and be signed by an individual that is authorized to bind the
firm.
Proposal Section 1.0 – Executive Summary (Maximum Length=3 pages)
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RFP P-112111-01-JR Pharmacy Benefit Management Services
This part of the response to the RFP should be limited to a brief narrative highlighting the
supplier’s proposal. The summary should contain as little technical jargon as possible and should
be oriented toward non-technical personnel. The summary should describe the following:
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Key differentiators in service offerings, account management, and value added services
proposed by your company.
Your understanding of the scope of requirements and the level to which your proposal has
met the requirements.
The summary should also specify the names of similar sized higher education/healthcare and
other comparably sized clients that have used the services being proposed.
High level project execution plan.
Risk management considerations.
Cost by service type.
Value and outcomes delivered to University.
Proposal Section 2.0 - Scope of Proposed Solution (Maximum Length=5 pages)
Provide a description of the overall solution or methodology for providing PBM services.
Include a high level description of the steps of how the services will be provided and any
associated value added services solution that meets the requirements. Confirm that the solution
being provided is comprehensive as defined in Section 4.0 of the Request for Proposal (Project
Scope and Requirements). In addition, describe the methodology for solution delivery. Finally,
describe the client relationship management approach (e.g., steering committee, status reporting).
Proposal Section 3.0 - Comprehensive List of Assumptions (Maximum length = 2 pages)
Rather than have assumptions be scattered throughout the proposal, University requires that all
assumptions be listed and explained in this section. Please ensure that all assumptions listed
reference the appropriate section of the RFP and/or associated services.
Proposal Section 4.0 - Company Background/Customer List (Maximum Length=5 pages)
Supplier must provide the following information about its company so that the University can
evaluate the supplier’s financial stability and ability to support the commitments set forth in
response to the RFP.
The supplier should describe the company’s background, including:
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How long the company has been in business.
A brief description of the company size and organizational structure as it relates to services
proposed.
How long the company has been working with a) higher education clients; b) government
clients; and c) commercial clients.
Most recent industry analyst reports about your firm’s services (this information would not
count against the page limit)
Describe any current lawsuits, legal actions or governmental investigations against your
company including, but not limited to, parties of dispute, any equipment affected, cause of
action, jurisdiction and date of legal complaint.
Proposal Section 5.0 -Supplier Code of Conduct
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RFP P-112111-01-JR Pharmacy Benefit Management Services
The University of Michigan has a longstanding commitment to sound, ethical and socially
responsible practices. To ensure that such practices are codified for the University's suppliers, the
President’s Task Force on Purchasing Ethics and Policies has developed a Code of Conduct for
University of Michigan Suppliers.
To promote socially responsible purchasing, UM and suppliers will aspire to follow the Code of
Conduct. The Code of Conduct is not a contractual document but preference may be given to
suppliers, when all other criteria are equal, who demonstrate compliance with the Code.
University employees are prohibited from accepting any gifts, services or gratuities from
suppliers or potential suppliers. Respondent and supplier conformance to this standard is
expected.
Please confirm in your proposal that you have read and agree to the University’s Supplier Code of
Conduct.
Proposal Section 6.0 - Supplier Relationships or Potential Conflicts with the University
Describe any business relations that Supplier currently has or has had with the University; include
relationships any parent, subsidiary, or other affiliate company may have with the University.
Please indicate if any employees, officers, directors, members, agents or consultants of Supplier
are also an employee of the University. Please refer to the University’s Conflict of Interest Policy
available on the Procurement Services Website.
Proposal Section 7.0 - Exceptions to the University’s Terms and Conditions (No maximum
page length)
This RFP and any subsequently offered contracts will be governed by the laws of the State of
Michigan. Any and all applicable valid executive orders, Federal, State or local laws, ordinances
or rules or regulations shall apply to any contract if and when offered and are deemed
incorporated herein.
While it is the University’s preference that the supplier sign the standard template “as is” and in
fact the University may consider extensive changes to the agreement as a reason to exclude a
supplier from further consideration; Suppliers may take select exception to terms and conditions
(Appendix B) General Services Agreement). The supplier must clearly set forth each exception
in its proposal, referencing the affected RFP section, paragraph and page. The supplier must set
forth the reason(s) for the exception and indicate what (if any) alternative is being offered by the
supplier. University shall determine (in its sole discretion) the acceptability of any proposed
exception(s).
Due to the services being provided the University may entertain signing the awarded
supplier’s agreement. Provide a sample of your proposed Agreement for Pharmacy
Benefit Management for the University’s review labeled under Section 7.0. The
University reserves the right to make modifications to any proposed Agreement.
Proposal Section 8.0 – Project Staffing/Resumes (Maximum Length = 10 pages)
Describe your proposed Project Organization Chart and provide resumes for the Project Manager
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RFP P-112111-01-JR Pharmacy Benefit Management Services
and all proposed staff on the Organization Chart. University will require interviews for Key
Personnel prior to project start. Each resume should not exceed two pages.
Note: Since project staffing/resumes will be evaluated across suppliers, it is in the supplier’s
interest to customize the resumes/staffing to the skill sets and experiences required to do this
work. Individuals proposed will be required to be available to do the work in the time period that
we have provided in this RFP.
Proposal Section 9.0 – Response to Supplier Information & RFP Questionnaire
Please refer to the RFP Template Attachment E – Supplier Information & RFP Questionnaire.
The Supplier Information tab is for capturing general information about your company, including
RFP contact information and supplier diversity programs. This tab also includes a template for
entering client reference information. Please enter your responses in the space provided (blue
cells). Note that completion of all content on this tab is required as part of your proposal
submission.
The questions on the General and Professional Services RFP Questionnaire tab relate specifically
to your qualifications and proposed solution for fulfilling the requirements of this RFP initiative.
Please enter your responses in the space provided.
Proposal Section 10.0 – Cost Proposal (Maximum length = 5 pages)
Please refer to the RFP Template Attachment E – Supplier Information and RFP questionnaire
and provide your responses in the space provided.
Proposal Section 11.0 – Signature Page
Please refer to the RFP Template Attachment F– Signature Page and provide your responses in
the space provided.
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RFP P-112111-01-JR Pharmacy Benefit Management Services
APPENDIX A:
Program Data
A comprehensive set of key drug plan statistics that reflect current cost and utilization metrics
will be posted on the University FTP site as the “UM Prescription Drug Plan Dashboard”.
Historical metric data may be found in the document “2010 Prescription Drug Plan Annual
Report” on the U-M FTP site.
2011 Prescription Drug Plan Co-Pays
Group
Drug Type
Retail
Pharmacy
Co-Pay1,2,3,4
(up to a 34day supply)
NoviXus Pharmacy
Services
Co-Pay1,2,3,4
(up to a 90-day
supply)
Generic Drugs/Tier 1
$5
$10
Brand Name/Tier 2
$15
$30
Non-Preferred Brand
Name Drugs/Tier 3
$35
$70
$5
$10
Active Employees
(except those covered by
a collective bargaining
agreement)
Generic Drugs/Tier 1
AFSCME
Active and LTD members
(per contract)
Brand Name/Tier 2
$15
$30
$30
$60
Non-Preferred Brand
Name Drugs/Tier 3
Generic Drugs/Tier 1
$5
GEO, Medical School
Students & GradCare
Members
$10
Brand Name/Tier 2
$15
$30
$30
$60
Non-Preferred Brand
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RFP P-112111-01-JR Pharmacy Benefit Management Services
2011 Prescription Drug Plan Co-Pays
Name Drugs/Tier 3
Generic Drugs/Tier 1
$5
IUOE
Active and LTD members
(per contract)
$10
Brand Name/Tier 2
$15
$30
$30
$60
Non-Preferred Brand
Name Drugs/Tier 3
Generic Drugs/Tier 1
$5
TRADES
Active and LTD members
(per contract)
$10
Brand Name/Tier 2
$15
$30
$30
$60
Non-Preferred Brand
Name Drugs/Tier 3
$14
MNA
Active and LTD members
(per contract)
Generic Drugs/Tier 1
$7
Brand Name/Tier 2
$15
$30
$30
$60
Non-Preferred Brand
Name Drugs/Tier 3
1
If the retail price of a covered medication is less than the tier co-pay, you pay only the cost of the
medication. If the cost of the covered medication is more than the co-pay, you pay only the co-pay. The
member always pays the full cost for prescriptions that are not covered by the plan.
2
Catastrophic coverage for prescription drugs goes into effect after the annual out-of-pocket maximum of
$2,500 per individual coverage or $5,000 per family per year is met. Catastrophic coverage applies only
to covered prescription drugs and does not include infertility medications, generic drug incentive or
medical plan expenses such as doctor office visits.
3
Member cost may be higher than the co-pay if a brand name drug is selected when a generic equivalent
is available.
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RFP P-112111-01-JR Pharmacy Benefit Management Services
4
Co-pays for union members may differ based on their collective bargaining agreement.
*90 day supply at retail is also available for 3x the retail co-pay.
*Member pays the lesser of U&C or co-pay.
Plan Exclusions
Certain drugs and supplies are excluded from the plan. The list includes the items listed below.
These exclusions apply to both the retail and mail service program.
• Topical acne medications for individuals age 40 and older
• Anorexiants, CNS stimulants (such as Adipex-P, phenteramine, Bontril,)
• Blood products
• Cosmetic products, or any drug used for cosmetic purposes (such as Rogaine, Renova, Propecia,
Avage, Botox, Latisse)
• Experimental, investigational or unproven drugs, or one that is being used for a treatment that
has not been approved by the FDA
• Injectable medications, except those listed in this website as covered, injections that must be
administered by a health care professional are not covered
•In general, new drugs and medicines that have not been reviewed by the plan
•Prescription products that offer no additional clinical benefit over existing available therapies or
existing therapeutically equivalent products in the drug class. Examples include Staxyn, Edarbi)
•Prescription products that are the main active metabolite, the racemic form, or an alteration of an
existing product where no added clinical benefits have been shown by published, scientific peerreviewed head-to-head comparative studies. Examples include Toviaz, Dexilant.
•Brand prescription products where three therapeutically equivalent products are available in the
class and where the brand manufacturer has entered into a collusive agreement to delay or prevent
generic market entry.
• Diabetic supplies (injection devices, alcohol swabs, testing strips, lancets, and blood glucose
testing monitors). These products are covered under the medical insurance plan.
•Most over-the-counter (OTC) medications, any prescription medication that contains the same
active ingredient(s) as an existing OTC medication, or kits that are packaged with an OTC
medication. Examples include Lac-Hydrin, Mentax, Zaditor, MiraLAX, Lovaza, benzoyl
peroxide products, Vimovo, and Xolegel Carepak Kit.•Medical foods, examples include Limbrel,
Deplin, FolTx, Metanx, Folbee Plus Cz, Diatx Zn, Cerefolin, Neevo and Neevo DHA, and
Vanchol • Vitamins, other than prenatal vitamins and injectable B-12, D and K (potassium)
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RFP P-112111-01-JR Pharmacy Benefit Management Services
• Therapeutic devices, appliances or medical equipment, support garments, or ostomy supplies.
UM medical plan benefits may cover certain medical equipment and supplies and/or injectables
administered by the health care provider.
Plan Limitations (QL)
Some drugs are subject to quantity limits (QL) on the amount of the medication that can be
received (number of days’ supply, quantity limits, frequency of refills, etc.). Please visit the
online formulary on the UM Prescription Drug Plan website for more information:
http://www.umich.edu/~benefits/plans/drugs/index.htm
• Fertility agents (oral and injectable medications) are covered up to a lifetime family maximum
of $5,000. In addition, prior authorization (PA) is required for participants age 45 and older.
• One month extra refill of prescriptions for vacations or travel overseas can be requested.
Prior Authorization Drugs (PA)
Certain drugs require prior authorization from the plan. Drugs that require prior authorization
from the plan are indicated on the online formulary available on the UM Presciption Drug Plan
website.
Dose optimization program
The University of Michigan maintains within its Prescription Drug Plan a dose optimization or
dose consolidation program for selected medications. The purpose of the program is to change
multiple dose medications to a single daily dose where appropriate. The program applies when all
of these criteria are met:
• The patient is taking an established medication for a chronic condition
• The medication is available in multiple strengths
• There is an opportunity for a member to change from multiple units per day dosing to a once
daily dose of the same medication
• The physician supports the drug interchange as clinically appropriate for the patient
• Significant pharmacy cost savings can be achieved by the Prescription Drug Plan
The PBM will notify a retail and/or mail-order pharmacist when there appears to be an
opportunity for dose optimization. The pharmacist may contact the prescribing physician for
approval of the dosage conversion.
Step therapy
The plan may select a number of specific drug categories in which drugs will be covered in a
progression. Selected drug classes are reviewed and based on medical evidence and cost.
Physicians must verify the patient’s trial and failure with a particular drug in the therapeutic class
before permitted coverage for another drug (step drug progression) or provide medical
documentation that the patient should be dispensed a drug out of sequence
Pill-Splitting and MTIP
UM provides its members a voluntary pill splitting program that was developed by internally
conducted and published research. This program allows members to receive a 50% reduction in
co-pay for statin medications and receive one free pill per year. The medications that qualify for
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RFP P-112111-01-JR Pharmacy Benefit Management Services
this program are: simvastatin (10, 20, 40, 80 mg), lovastatin (20, 40 mg), pravastatin (20, 40 mg),
Lipitor (20, 40, 80 mg), and Crestor (10, 20, 40 mg)
In addition, U-M provides a tobacco program where generic copays are assigned to Over the
Counter smoking cessation products and reduced copays for prescription smoking products.
The PBM must emulate and confirm they will accommodate the current plan design, formulary,
and pharmacy network as provided and described, as well as any changes made during the
contract term. The PBM must describe any limitations, and provide disruption reports as
necessary that may impact UM formulary and / or proposed network changes. In addition, please
provide PBM capabilities in the following areas:
The 11/1/2010-10/31/2011 data for University of Michigan
Please see the NPI listing below for the following:
1.
2.
3.
4.
5.
University of Michigan owned pharmacies
Mail order pharmacies (the University switched vendors within the data period provided).
Specialty pharmacy (non-340B claims through Wellpartner)
Specialty pharmacy (340B claims through owned pharmacies)
340B network pharmacies
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RFP P-112111-01-JR Pharmacy Benefit Management Services
University of Michigan Owned, 340B Network, Mail and Specialty
Pharmacies
Pharmacy Type
U of Michigan owned
NPI
1508197419
Pharmacy Name
KEC PHARMACY
U of Michigan owned
1366484933
EAST ANN ARBOR PHARMACY
U of Michigan owned
1003967035
AMBULATORY CARE PHARMACY
U of Michigan owned
1790891026
UNIVERSITY OF MI HEALTH SERVICE PHCY
Novixus Mail
1639310600
NOVIXUS PHARMACY SERVICES
WAG Mail
1164437406
WALGREEN DRUG STORE 3397
Specialty
1356325583
WELLPARTNER
340B Network
1639310600
NOVIXUS PHARMACY SERVICES
340B Network
1003821133
WALGREEN DRUG STORE 5398
340B Network
1013922152
WALGREEN DRUG STORE 5842
340B Network
1043322969
CVS PHARMACY 08006
340B Network
1083764385
MEIJER PHARMACY 173
340B Network
1093827933
CVS PHARMACY # 08088
340B Network
1114066008
MEIJER PHARMACY 027
340B Network
1235241159
CVS PHARMACY 08003
340B Network
1265575179
WENKS PRESCRIPTION SHOP
340B Network
1356481352
CVS PHARMACY 01758
340B Network
1366550733
SAVON PROOS SAVMOR PHARMACY 54
340B Network
1417059700
CVS PHARMACY # 08216
340B Network
1457385213
KROGER PHARMACY 18688
340B Network
1528160819
CVS PHARMACY # 08083
340B Network
1538277900
VILLAGE SAVMOR APOTHECARY 40
340B Network
1609897636
DEXTER PHARMACY 2
340B Network
1679589972
RITE AID PHARMACY 04530 04530
340B Network
1710977129
VILLAGE PHARMACY II
340B Network
1720190663
CVS PHARMACY # 08089
340B Network
1770517518
KROGER PHARMACY 18605
340B Network
1811037112
MEIJER PHARMACY 064
340B Network
1851307151
RITE AID PHARMACY 04519 04519
340B Network
1861408163
RITE AID PHARMACY 04510 04510
340B Network
1861594103
CVS PHARMACY # 08097
340B Network
1922062439
CHELSEA PHARMACY
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RFP P-112111-01-JR Pharmacy Benefit Management Services
APPENDIX B:
AGREEMENT FOR GENERAL SERVICES
BETWEEN
THE REGENTS OF THE UNIVERSITY OF MICHIGAN
AND
XX
This AGREEMENT FOR XX SERVICES is made between THE REGENTS OF THE UNIVERSITY
OF MICHIGAN (“University”), a Michigan Constitutional Corporation, Ann Arbor, Michigan, and
XX (“Supplier”).
The following terms and conditions shall be observed. Any Supplier terms and conditions included with
Supplier’s invoice or any other document provided by Supplier shall be of no effect.
1.0
Description of Services. Supplier hereby agrees to provide XX Services, “Services” defined in
Exhibit A and to comply with all “Specifications”, which may be included in the Services
description at Exhibit A. The University shall use reasonable efforts to direct applicable request
of such Services to Supplier under this Agreement. Unless otherwise expressly stated herein, this
Agreement does not confer on Supplier the right to be the exclusive provider of the Services to
the University.
2.0
Term. The initial term of this Agreement will begin on XX and end on XX or until satisfactory
completion of services, whichever occurs first. At the end of the initial term, this Agreement will
be evaluated. If the parties agree that it is a mutually beneficial relationship, the Agreement may
be extended in writing for up to XX additional years. Time is of the essence in this Agreement.
3.0
Performance Standard. Supplier agrees to perform the Services described in this Agreement to
the satisfaction of the University and with the standard of care and skill of an expert regularly
rendering Services of the type required by this Agreement, and in conformance with all
applicable federal, state, local and University law, regulation, ordinance and license.
4.0
Warranties and Representations of Supplier. Supplier acknowledges that the University is relying
on these representations and warranties as essential elements to this Agreement, representing as
they do, material inducements, without which the University would not have entered into this
Agreement.
4.1
General Services Warranty. Supplier warrants that all Services provided shall conform to
the level of quality performed by experts regularly rendering this type of Service.
Supplier warrants for ninety (90) days after accepted completion of a requested Service
that its Services are fully satisfactory to the University and will repair, replace or redo at
no additional cost to the University any unsatisfactory Services.
4.2
Qualifications. Supplier warrants that it, as well as its employees, agents and
subcontractors engaged to provide items or Services under this Agreement (collectively
“Supplier Personnel”), has and will maintain all the skills, experience, and qualifications
necessary to provide the Services contemplated by this Agreement, including any
required training, registration, certification or licensure.
The required qualifications, by way of example only and without limitation, shall
expressly include (a) all qualifications identified in Exhibit A.
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4.3
Conflict of Interest. Supplier warrants that to the best of Supplier’s knowledge, there
exists no actual or potential conflict between Supplier and the University, and its Services
under this Agreement, and in the event of change in either Supplier’s private interests or
Services under this Agreement, Supplier will inform the University regarding possible
conflict of interest which may arise as a result of the change. Supplier also affirms that,
to the best of Supplier’s knowledge, there exists no actual or potential conflict between a
University employee and Supplier.
4.4
Nondiscrimination. Supplier warrants that Supplier is an equal opportunity employer and
that, during the performance of this Agreement, it will comply with Federal Executive
Order 11246, as amended, The Rehabilitation Act of 1973, as amended, and the
respective regulations thereunder, and the Michigan Civil Rights Act of 1976.
4.5
Good Standing. Supplier warrants that Supplier is a legally organized entity in good
standing under the laws of the state of its organization and, where required, in good
standing under the laws of the State of Michigan.
4.6
Noninfringement. Supplier warrants that the Supplier’s Services and/or the University’s
use of products, processes, techniques and methodologies provided by Supplier or
developed by Supplier shall not infringe upon the copyright, patent or other proprietary
rights of others.
4.7
Not Excluded. Supplier warrants that neither Supplier, nor, to the best of Supplier’s
knowledge, Supplier Personnel, is excluded from participating in the Medicare or
Medicaid program nor currently debarred or suspended or listed on the General Services
Administration’s (“GSA”) List of Parties Excluded from Federal Procurement or
Nonprocurement Programs in accordance with Executive Orders 12549 and 12689,
“Debarment and Suspension”. Supplier shall immediately notify the University if it
becomes debarred or suspended during the term of this Agreement.
Supplier further represents that no adverse action by the federal government that will or
may result in exclusions from a federal health care program has occurred or is pending or
threatened against Supplier or its affiliates, or to the best of its knowledge, against any
Supplier Personnel. Supplier agrees that it shall not perform any act that shall cause
Supplier to be excluded from a federal health care program or debarred, suspended or
listed in the GSA’s List of Parties Excluded from Federal Procurement or
Nonprocurement Programs during the term of this Agreement.
4.8
Bonded. Supplier warrants that it is bonded as may be required by law for the Services.
5.0
Financial Arrangement. The detailed financial arrangement is in Exhibit B.
6.0
Termination.
6.1
Termination for Breach. Either party may terminate this Agreement upon breach by the
other party of any material provision of this Agreement, provided the breach continues
for thirty (30) calendar days (“Cure Period”) after receipt by the breaching party of
written notice of the breach from the non-breaching party. Cure of the breach within the
Cure Period shall continue the Agreement in full force and effect, provided however three
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RFP P-112111-01-JR Pharmacy Benefit Management Services
(3) breaches of a material provision are an independent material breach not subject to
cure.
6.2
Immediate Termination. The University shall have the right to terminate this Agreement
immediately upon notice to Supplier should any of the following situations occur:
6.2.1
6.2.2
6.2.3
6.2.4
6.2.5
6.2.6
7.0
Supplier or Supplier Personnel do anything to harm the business reputation of the
University;
Supplier or any Supplier Personnel is excluded from a federal health care
program;
If any warranty or representation of the Supplier in this Agreement is or becomes
false or untrue;
A person’s health or safety is or may be in imminent and serious danger due to
the actions or inaction of Supplier or Supplier Personnel;
There may be imminent and serious harm to the environment or the University
property from Supplier’s acts or inactions or those of Supplier Personnel; or
The University reasonably determines Supplier has violated a law in providing
the Services.
6.3
Effect of Termination. Upon notice of termination for any reason, Supplier shall cease all
activity. Upon termination of this Agreement, Supplier has sixty (60) days from the date
of termination to submit final invoices for final satisfactory Services under this
Agreement. University will have no obligation to assist in billing issues or issue payment
under the terms of this Agreement for invoices submitted after the sixty (60) day period.
6.4
Without Cause Termination. It is expressly understood and agreed that either party may
terminate this Agreement, with or without cause, by providing at least ninety (90)
calendar days advance written notice of the termination date to the other party.
6.5
Change in Law. If, subsequent to the execution of this Agreement, it is determined by
either party’s legal counsel that this Agreement or any of its provisions may violate or
does violate any law, rule, or regulation, the parties agree to renegotiate the provision(s)
so that it (they), as well as this entire Agreement, complies with the law, rule or
regulation. If the parties are unable to come to an agreement within thirty (30) calendar
days, either party may, without further notice, immediately terminate this Agreement.
Compliance with Laws, Policies & Procedures. Supplier is advised that the University has
established a compliance program to assure compliance with applicable laws and University
policies designed to prevent and detect fraud, waste, and abuse. To the extent applicable to the
Services, Supplier shall fully comply with all federal, state, local, and University laws, rules,
regulations, ordinances, policies and licenses, including applicable building policies and
procedures,
the
University’s
Ordinances
(reference
website
http://www.umich.edu/~regents/ordinance.html) and any standards of the Centers for Medicare
and Medicaid Services (“CMS”), Michigan Department of Community Health (“MDCH”) and
The Joint Commission , all as may be amended from time to time. Supplier acknowledges that
Information about (1) the UMHS Compliance Program, (2) UMHS policies and procedures, (3)
federal and state false claims and false statements laws, as well as (4) information about
whistleblower protection under these laws, is available at http://www.med.umich.edu/vendors/.
Supplier agrees to further disseminate information about applicable University policies, as
necessary, to ensure that all Supplier Personnel and subcontractors, as applicable, involved in
performing the Services are aware of the existence and location of applicable University policies
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RFP P-112111-01-JR Pharmacy Benefit Management Services
as well as how and where to make reports to the University regarding any compliance concerns.
To the extent that University policies provide for reviews or audits of claims or services arising
from this Agreement, Supplier agrees to participate in such audit insofar as it is relevant and
applicable to Supplier and Supplier Personnel’s interaction with University. If Supplier identifies
potential non-compliance with any applicable laws, regulations or policies in connection with the
provision of the Services, Supplier shall promptly contact the University of Michigan Compliance
Hotline at 866-990-0111 and provide details concerning the suspected wrongdoing sufficient to
facilitate an investigation by University.
Supplier shall be solely responsible for insuring that any recommendations made in connection
with the Services comply with all applicable federal, state, local and University laws, rules,
regulations, policies and procedures. Unless otherwise expressly provided for in this Agreement,
Supplier shall obtain and comply with all permits, licenses and similar authorizations that are
necessary to provide the Services. By executing this Agreement, Supplier warrants and
represents that it has all legally required licenses and permits needed to perform the Services.
8.0
Patents, Copyright, Data and Documents.
8.1
Whenever any invention or discovery is made or conceived by Supplier in the course of
or in connection with this Agreement, Supplier shall furnish to the University, within
thirty (30) days of the creation or conception, the complete information with respect to
such invention or discovery and the University shall have the sole power to determine
whether and where a patent application shall be filed and to determine the disposition of
title to and all rights under any application or patent that may result. Supplier shall, at the
University’s expense, execute (or cause to be executed) all documents and do (or cause to
be done) all things necessary or proper with respect to such patent application, including
causing Supplier Personnel to do the same.
8.2
All materials conceived or prepared by Supplier under this Agreement including but not
limited to any and all notes, designs, drawings, memoranda, reports, computer programs
and code (including supporting data), and the technical data, if any, furnished by Supplier
pursuant to this Agreement or developed by the Supplier in connection with the
performance of Services (“Work Product”) shall be the property of the University. All
Work Product shall be delivered to the University upon demand, and the University shall
have the right to use Work Product for any purpose that it may deem desirable without
the necessity of further compensating Supplier or any other person or persons for their
use.
Supplier hereby grants to the University all rights, title and interest in and to all Work
Product, and Supplier agrees that Work Product shall be considered “works made for
hire” made exclusively for the University under U.S. copyright laws. Supplier shall
execute all documents and do all things necessary or proper to give full effect to the
provisions of this section. In the event any Work Product shall not be a work for hire
under the U.S. copyright laws, Supplier and Supplier Personnel hereby assign to the
University all rights, title and interest in the work and agree to execute whatever
assignment of copyright and ancillary and confirmatory documents as may be required or
appropriate to transfer exclusive title in the Work Product and any copyright in it to the
University.
8.3
If this Agreement is funded under a Government Prime Contract or Grant, which
provides a different disposition for 8.1 and 8.2 above, the latter will govern.
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9.0
Insurance Coverage and Levels. Unless more specific insurance provisions are attached, Supplier
shall, at Supplier’s expense, obtain and maintain the following coverages:
 Commercial general liability insurance, including contractual products and completed
operations insurance ($1 million per occurrence/$3 million annual aggregate).
 Professional Liability/Errors and Omissions Insurance with limits not less than $1 million per
occurrence and $2 million annual aggregate if the activity is deemed professional in nature or
performed by someone with a professional designation and is excluded from the Commercial
General Liability Insurance.
 Worker’s Compensation at statutory limits in accordance with the appropriate State of
jurisdiction including Employer’s liability (with minimum $500,000).
 Automobile liability for owned, non-owned and hired vehicles minimum limit ($1 million
each accident).
 Supplier agrees to have the Regents of the University of Michigan added as additional
insured with respect to Commercial General Liability Insurance for purposes of contract
performance and incidents arising out of Agreement.
 Supplier agrees to provide the University with thirty (30) days prior written notice of any
reduction in limits or cancellation of any of the above insurance.
 If any of the required insurance is on a “claims made” basis and is cancelled during the term
of this agreement, Supplier agrees to purchase tail coverage or prior acts coverage so that
such insurance is in effect from the date the Agreement is executed to three (3) years after its
termination.
 Supplier shall provide the University with a certificate of the above insurance coverages and
amounts. Compliance with the foregoing requirements as to carrying insurance and
furnishing evidence of it will not relieve the Supplier of its liabilities and obligations under
this Agreement.
10.0
Indemnity. Each party shall defend, indemnify and hold harmless the other party, its board
members, officers, employees, agents and students (if the University) from and against any costs,
losses, damages, liabilities, expenses, demands and judgments, including court costs and attorney
fees, which may arise out of the other party’s acts or omissions under this Agreement for which
the indemnifying party would be liable in law or equity.
The indemnifying party shall keep the other reasonably apprised of the continuing status of the
claim, including any proceedings resulting from it, and shall permit the other party, at its expense,
to participate in the defense or settlement of the claim. When a claim is resolved by the
indemnifying party’s payment of money, it shall have final authority regarding defense and
settlement. When a claim resolution requires equitable relief against the non-indemnifying party
or the indemnifying party has not or will not pay the money required for resolution, the parties
shall cooperate regarding defense and settlement.
11.0
Audit. The Supplier is responsible for keeping accurate and reasonable records related to its
performance and obligations under this Agreement. In particular, records will be kept
documenting any price, cost or budget computations required under the Agreement. The Supplier
agrees that the University or its duly authorized representative has the right to audit any directly
pertinent books, documents, papers and records related to transactions and/or performance of the
terms and conditions of the Agreement. The Supplier shall make available to the University or its
agents all such records and documents for audit on the Supplier’s premises during regular and
reasonable working hours within ten (10) business days of a written request for availability.
Supplier agrees to either (a) allow the University to make and retain copies of those documents
useful for documenting the audit activity and results or (b) sequester the original or copies of
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RFP P-112111-01-JR Pharmacy Benefit Management Services
those documents the University identifies for later access by the University. The Supplier further
agrees to disclose within ninety (90) days of receipt any independent auditors’ reports, which bear
directly on the performance or administration of this Agreement.
The right to audit shall include periodic examinations of records throughout the term of the
Agreement and for a period of three (3) years after its termination. The right to audit shall also
apply to agents and subcontractors hired by the Supplier for the purpose of fulfilling the
Agreement.
In the event that audits discover substantive findings related to fraud,
misrepresentation or non-performance, the University may recoup the costs of the audit work
from the Supplier.
12.0
Confidentiality. Supplier shall keep confidential and not disclose to third parties any information
developed or created under this Agreement or provided by the University or by private
individuals, organizations or public agencies pursuant to this Agreement, including protected
financial information under Gramm-Leach-Bliley Act, unless Supplier has received the prior
written consent of the University to make the disclosure or unless required by law or legal
process. Only Supplier Personnel with a need to know may have access to or use University
information.
This obligation of confidentiality does not extend to information that is or shall become through
no fault of Supplier available to the general public.
13.0
Removal of Supplier Personnel. If any Supplier Personnel repeatedly fails, in the University’s
sole discretion, to perform in a competent manner, and the University notifies Supplier in writing
that the Supplier Personnel is no longer acceptable to the University, citing the grounds and
specific supporting facts, then, after written notification from the University, Supplier shall no
longer schedule the Supplier Personnel to provide or support Services for the University under
this Agreement or any other Agreement with the University. The University, in its sole
discretion, may modify this prohibition upon presentation in writing by Supplier of adequate
reasons and facts for modifying the prohibition.
14.0
Operational Matters.
14.1
On-site Supplier Personnel shall follow and adhere to the University policies and
procedures applicable to the provision of the Services including, by way of example only
and without limitation (a) sign-in procedures, (b) identification badges, (c) executing
confidentiality statements, (d) participation in any required training, parking regulations.
Supplier acknowledges receipt of The University of Michigan Health System Policy 0104-008 “Vendor Visitation and Interaction” and agrees to abide by the applicable terms
and
conditions
of
the
policy.
For
policy
see
website
link
http://www.med.umich.edu/vendors/policies/VendorVisitation.htm
14.2
Except as otherwise expressly provided in this Agreement, Supplier shall be responsible
for payment of all business expenses incurred while providing the Services.
14.3
Supplier agrees to timely cooperate and assist with any applicable performance
improvement and quality assurance activities of the University as they may relate to the
Services.
14.4
Supplier Cooperation. Supplier shall cooperate and make adjustments as necessary in the
methods and timing for provision of Services under this Agreement so that other
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Suppliers and University personnel can perform their independent obligations to the
University.
14.5
Limitation on Supplier Personnel. Supplier agrees that unless otherwise approved by the
University in writing in advance, no Supplier Personnel shall provide services if any of
the following have occurred: (a) any applicable registration, certification, licensure
(including where applicable, Medicare/Medicaid provider status) of Supplier Personnel,
in any state, is or has been threatened with limitation, suspension, revocation or
exclusion; (b) any applicable registering, certifying, or licensing board reprimands,
sanctions or otherwise disciplines Supplier Personnel; or (c) a negligence or malpractice
claim related to the provision of the Services or similar services has been asserted against
Supplier Personnel.
14.6
Access to Books and Records. The parties agree that if this Agreement is subject to the
Medicare statutes and regulations governing access to books and records of
subcontractors (Section 952 of the Medicare and Medicaid provisions of the Omnibus
Reconciliation Act of 1980, which amends section 1861(V) (1) of the Social Security
Act), Supplier shall retain and, for four (4) years after Services are furnished by Supplier,
shall allow the authorized representatives of the Comptroller General, the University, and
the Department of Health and Human Services access to this Agreement and to the
books, records, and other documents of Supplier that are necessary to verify the nature
and extent of the costs of the Services. In the event Supplier receives a request for
access, Supplier agrees to notify the University immediately and to consult with the
University regarding what response will be made to the request. This Agreement to
provide access shall continue for four (4) years after the Services are terminated.
If Supplier carries out any responsibilities under this Agreement through the use of a
subcontractor, including any organization related by ownership or control with Supplier,
when the subcontract is worth or costs $10,000 or more over a twelve (12) month period,
Supplier shall obtain and forward to the University the subcontractor’s written promise to
be bound as Supplier is under this same access Agreement.
15.0
Duties of the University. Except as otherwise expressly provided in this Agreement, the
University will furnish Supplier with the space, facilities and accommodations, the University
deems reasonably necessary to support Supplier in the provision of the Services contemplated by
this Agreement.
16.0
Miscellaneous.
16.1
Use of the University Name and Marks. The University acknowledges Supplier’s right to
make, without the consent of the University, public statements regarding the existence of
the contract, its terms and conditions and an accurate description of the products or
services being supplied. However, except as permitted by the previous sentence,
Supplier may never make any public statement (for example a press release or any form
of advertisement) describing the University’s relationship with Supplier or implying or
stating the University’s endorsement of Supplier or Supplier’s product or services
without the prior written consent of the University’s Office of Communications. The
University may withhold its consent in its absolute discretion. Supplier acknowledges
that the University will require ten (10) business days to consider any request for consent.
Supplier may not under any circumstances use any University Trademark.
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16.2
Use of Premises or the University Property. Supplier shall neither use nor allow Supplier
Personnel to use any part of the University premises or property for any purpose other
than the performance of the Services under this Agreement. Without limiting the
generality of the statement above, Supplier shall not use the University in any manner
that might jeopardize the Medicare provider status of the University or the tax
exemptions or casualty insurance of the University.
16.3
Independent Contractor Status of Parties. It is expressly understood that Supplier is an
independent contractor and not the agent, partner, or employee of the University.
Supplier and Supplier Personnel are not employees of the University and are not entitled
to tax withholding, Worker’s Compensation, unemployment compensation, or any
employee benefits, statutory or otherwise. Supplier shall not have any authority to enter
into any contract or agreement to bind the University and shall not represent to anyone
that Supplier has such authority.
16.4
Assignment. Supplier may not subcontract, assign or transfer this Agreement or any
interest or claim under this Agreement without prior written approval of the University.
Notwithstanding any consent by the University to any assignment, Supplier shall at all
times remain bound to all warranties, certifications, indemnifications, promises and
performances, however described, as are required of it under the Agreement unless
specifically released from the requirements, in writing, by the University. The Supplier
shall retain the right to pledge payment(s) due and payable under this Agreement to third
parties.
16.5
Notices. Any notice to either party must be in writing, signed by the party giving it, and
served to the addresses indicated on the Signature page (or to such other addressee as
may be later designated by written notice) by personal delivery, recognized overnight
courier service, or by the United States mail, first-class, certified or registered, postage
prepaid, return receipt requested. All such notices shall be effective when received, but
in no event later than three (3) days after mailing.
16.6
Entire Agreement, Amendment. This Agreement and its Exhibits constitute the entire
understanding between the parties with respect to the subject matter and may not be
amended except by an agreement signed by Supplier and an authorized representative of
the University. Any handwritten changes on the face of this document shall be ignored
and have no legal effect unless initialed by both parties.
16.7
Severability. The terms of this Agreement are severable. If any term or provision is
declared by a court of competent jurisdiction to be illegal, void, or unenforceable, the
remainder of the provisions shall continue to be valid and enforceable.
16.8
Governing Law, Construction and Venue. This Agreement shall be governed by and
construed under the laws of the State of Michigan without regard for principles of choice
of law. Any claims, demands, or actions asserted against The Regents of the University
of Michigan shall be brought in the Michigan Court of Claims. Supplier, its successors
and assigns, consent to the jurisdiction of the Washtenaw County Circuit Court for the
State of Michigan with respect to any claims arising under this Agreement.
16.9
Headings. The paragraph headings in this Agreement are inserted for convenience only
and shall not be construed to limit or modify the scope of any provision of this
Agreement.
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16.10
Waiver. No delay or omission by either party to exercise any right or remedy under this
Agreement shall be construed to be either acquiescence or the waiver of the ability to
exercise any right or remedy in the future.
16.11
Survivability. Provisions surviving termination or expiration of this Agreement are those
which on their face affect rights and obligations after termination or expiration and also
include provisions concerning indemnification, confidentiality, warranty and choice of
law and venue.
16.12
Execution. This Agreement may be executed in duplicate, each of which when executed
and delivered shall be an original. The parties acknowledge and agree that this
Agreement has been mutually discussed, negotiated, and drafted by the parties.
16.13
No Third Party Rights. Nothing in this Agreement shall be construed as creating or
giving rise to any rights in third parties or persons other than the named parties to this
Agreement.
16.14
Force Majeure. Neither Supplier nor the University shall be liable for failure to perform
its respective obligations under the Agreement when failure is caused by fire, explosion,
water, act of God, civil disorder or disturbances, strikes, vandalism, war, riot, sabotage,
weather and energy related closings, or like causes beyond the reasonable control of the
party (“Force Majeure Event”). In the event that either party ceases to perform its
obligations under this Agreement due to the occurrence of a Force Majeure Event, the
party shall: (a) as soon as practicable notify the other party in writing of the Force
Majeure Event and its expected duration; (b) take all reasonable steps to recommence
performance of its obligations under this Agreement as soon as possible, including, as
applicable, abiding by the disaster plan in place for the University. In the event that any
Force Majeure Event delays a party’s performance for more than thirty (30) calendar
days following notice by the delaying party pursuant to this Agreement, the other party
may terminate this Agreement immediately upon written notice.
16.15
Tax Exempt Status. Supplier acknowledges that the University is a tax-exempt
institution, granted such status by authorized taxing units of State of Michigan, and is
exempt from Federal Excise Tax and Michigan General Sales Tax (see Michigan Public
Act 167 of 1933.Section 4 as amended).
16.16
Dispute Resolution. Supplier and the University will attempt to settle any claim or
controversy arising from this Agreement through consultation and negotiation in good
faith and a spirit of mutual cooperation. The dispute will be escalated to appropriate
higher-level managers of the parties, if necessary.
16.17
Freedom of Information Act. Nothing in this Agreement shall in any way limit the ability
of the University to comply with any laws or legal process concerning disclosures by
public bodies. The parties acknowledge that any responses, materials, correspondence or
documents provided to the University are subject to the State of Michigan Freedom of
Information Act (“Act”) and may be released to third parties in compliance with that Act
or any other law will not constitute a breach or threatened breach of this Agreement.
16.18
Supplier Damage to the University Property. Without regard to any other section of the
Agreement, Supplier shall be responsible for the costs to return to “as was” condition
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from any damage caused to the building, grounds, or other equipment and furnishings
caused in whole or part by Supplier Personnel while performing activities arising under
this Agreement. Supplier shall immediately report in writing the occurrence of any
damage to the Building/Project Manager.
16.19
17.0
Supplier Clean-up. Supplier will remove all packing materials, rubbish and dirt from the
University premises associated with Supplier’s provision of Services under this
Agreement.
Confidentiality of Health Information.
[OPTION 1]
The parties agree that Supplier’s provision of the Services under this Agreement does not qualify
Supplier as a “Business Associate” of the University as defined in regulations promulgated under
the Health Insurance Portability and Accountability Act of 1996, (which act and regulations as
amended, restated and superseded from time to time are collectively referred to as “HIPAA”).
Supplier will take all necessary steps to ensure Supplier Personnel do not seek or obtain access to
protected health information created, maintain or received by the University. In the event the
scope of Supplier’s Services changes or HIPAA changes (including governmental guidance
offered on HIPAA) such that the University concludes the Agreement must be amended or further
documents executed to ensure the University’s compliance with HIPAA, the parties agree to
promptly take all actions necessary to ensure the University compliance with HIPAA.
[OPTION 2]
The parties acknowledge that Supplier has previously executed a Business Associate Agreement
with the University dated XXXXXXXX (“BA Agreement”). The terms and conditions and
obligations of Supplier under that BA Agreement are incorporated into this Agreement where
Supplier acts in the capacity as the University’s “Business Associate” as defined in regulations
promulgated under the Health Insurance Portability and Accountability Act of 1996, (which act
and regulations as amended, restated and superseded from time to time, are collectively referred
to as “HIPAA”).
[OPTION 3]
17.1
HIPAA Obligations and Activities of Supplier. Insofar as Supplier or Supplier Personnel
(a) has access to or has been provided with “protected health information or “PHI”, (as
defined by regulations promulgated under the Health Insurance Portability and
Accountability Act of 1996, which act and regulations as amended, restated and
superseded from time to time, are collectively referred to as “HIPAA”), created or
received by the University through its health care providers, health plans and contractors
and (b) Supplier acts in the capacity as a “Business Associate” as defined by HIPAA and
as implemented in the University’s HIPAA policies and procedures, Supplier shall sign a
separate Business Associate Agreement with the University (“BA Agreement”) that
provides all the protections required by HIPAA. The terms and conditions and
obligations of Supplier under that BA Agreement are incorporated into this Agreement
where Supplier acts in the capacity as the University’s “Business Associate”.
17.2
In the event the scope of Supplier’s Services changes or HIPAA changes (including
governmental guidance offered on HIPAA) such that the University concludes the
Agreement must be amended or further documents executed to ensure the University’s
compliance with HIPAA, the parties agree to promptly take all actions necessary to
ensure the University compliance with HIPAA.
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18.0
Federal Grant OR Contract Terms & Conditions.
[OPTION 1 GRANT]
The University is the recipient of a INSERT SPONSOR NAME grant for support of a project
entitled “XXXXXX”, and Supplier agrees to participate in the project as set forth in this
Agreement for the consideration stated herein. And as such, this Agreement is subject to the
terms and conditions dictated by the funding agency, which may be accessed electronically at
http://www.finance.umich.edu/procurement/supplierinfo/purchase-terms. The cited references
carry the same force and effect as if given in full text. All references to granting agency in the
regulations cited are understood to refer to University; all references to grantee or recipient are
understood to refer to Supplier.
[OPTION 2 CONTRACT]
The University is the recipient of a INSERT SPONSER NAME contract for support of a project
entitled “XXXXXX”, and Supplier agrees to participate in the project as set forth in this
Agreement for the consideration stated herein. And as such, this Agreement is subject to the
terms and conditions dictated by the funding agency, which may be accessed electronically at
http://www.finance.umich.edu/procurement/supplierinfo/purchase-terms. The cited references
carry the same force and effect as if given in full text. All references to granting agency in the
regulations cited are understood to refer to University; all references to grantee or recipient are
understood to refer to Supplier.
19.0
MIOSHA Record Keeping Compliance. If any Supplier Personnel (a) receives direct “day-to-day
supervision” from a University employee and (b) becomes injured in the course and scope of
his/her work assignment, then the incident must be reported to the University’s
Work~Connections Program. For particular injuries, an Illness/Injury Report Form (download
from: http://www.umich.edu/~connect/forms.htm) must be completed and faxed to the
University’s Work~Connections office at (734) 936-1913, with seven (7) calendar days of the
Supplier Personnel reporting his/her injury or illness.
For purposes of this section, “day-to-day supervision” means the University supervises not only
the output, product, or result to be accomplished by Supplier Personnel, but also the details,
means, methods, and processes by which the work objective is accomplished. Supplier agrees to
timely cooperate with the University in completing any required MIOSHA reporting. By way of
example only and without limitation, Suppliers who meet the above criteria (by providing
Supplier Personnel who receive direct day-to-day supervision from a University employee and
become injured in the course and scope of his/her work assignment), agree to provide to the
University information as follows: (a) the total number of Supplier Personnel placed at the
University during the calendar year, and (b) the total hours worked by such Supplier Personnel
during the calendar year. This information needs to be faxed to Work~Connections by January
15 for the preceding calendar year.
This Agreement becomes binding when signed by both parties.
SUPPLIER:
FOR
THE
REGENTS
OF
UNIVERSITY OF MICHIGAN:
By:_____________________________________
By:____________________________________
Printed Name: ____________________________
Printed Name: ___________________________
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Title: ___________________________________
Title: __________________________________
Date of Signature: _________________________
Address (for notices):
Date of Signature: ________________________
Address (for notices):
________________________________________
_______________________________________
________________________________________
_______________________________________
________________________________________
_______________________________________
________________________________________
_______________________________________
Federal Tax ID: ___________________________
____________________________________
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EXHIBIT A
SCOPE OF SERVICES
General Services
1.0
Scope of Services to be Provided.
Paste in Services description.
2.0
Changes, Alterations and Modifications to Services. The University may at any time by a written
order change the extent of the Services covered by this Agreement, the drawing, specifications or
other description, or the time of completion. Promptly upon receipt of the details of any change,
Supplier shall either advise the University that the change will not affect its costs, or furnish: (a)
a breakdown of estimated cost and changes to the Financial Arrangement of Exhibit B resulting
from the requested change and (b) a statement of any necessary changes in the time of
completion. Supplier’s failure to advise the University within ten (10) days of the effect of any
change in cost or completion time shall constitute Supplier’s consent to conform to the change
without change to the Financial Arrangement, or without change in other terms and conditions of
this Agreement. If the change causes a material increase or decrease in costs, then an equitable
adjustment of the Financial Arrangement to be paid to Supplier shall promptly be negotiated by
the University and Supplier and incorporated as an amendment to this Contract.
3.0
Reporting.
3.1
In performing the Services under this Agreement, Supplier shall report to XX.
3.2
Reports Format. [Insert description of any required reports-Examples Below]
After the execution of this Agreement, Supplier will consult with the University for the
purpose of designing financial and operating reports which can be generated periodically
by Supplier’s accounting system and operating systems and which are satisfactory to the
University. These reports can be either printed documents or Excel spreadsheets. The
Supplier will provide these reports at no cost to the University.
Examples of these written reports include but are not limited to:
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EXHIBIT B
FINANCIAL ARRANGEMENT
General Services
The University will pay fees to Supplier for Services performed under this Agreement as follows:
1.0
Supplier Fee.
 Supplier Fee. The total Supplier fee is to be paid on reasonable actual hours worked for
acceptable work performed at rates shown.
Insert rates.
Notwithstanding the above, the parties agree that Supplier’s fee shall not exceed
_____________________.
 Fixed Supplier Fee. The total Supplier fee is __________________ per month.
The first [monthly] payment will be due on _________________.
2.0
Expenses.
2.1
Travel Expenses. Travel expenses must be itemized separately; actual and reasonable
expenses according to the University policy as indicated in the Standard Practice Guide
relating to travel expenses will be reimbursed with Supplier’s invoice. See website
http://www.finance.umich.edu/procurement/travelexpense
Travel costs are estimated to be __________________. Expenses in excess of this
estimate require [prior] [written] approval from the University.
2.2
Other Expenses. All reimbursable expenses, such as photocopies, supplies, photography,
communication expenses and reproduction shall be billed at cost.
2.3
University Expenses. The University will be responsible for the following expenses:
[Insert if any]
3.0
Invoicing. The invoice must detail the Services performed, the dates the Services were completed
and shall detail expenses apart from the Supplier Fees. Any discounts, rebates or other credits
and the basis and calculation for each should also be included. Supplier must submit to the
University all invoices related to this Agreement within ninety (90) days from the date that
Products are delivered or services rendered. The University is not obligated to pay any invoices
submitted after this time frame.
4.0
Payment Terms. Payment will be made within [thirty (30)] [forty-five (45)] days after the
University’s receipt of an invoice from Supplier.
5.0
Taxes. The fees, expenses and costs payable under this Agreement include all applicable taxes
and shall not be changed as the result of the Supplier’s failure to include any applicable tax, or as
a result of any change in the Supplier’s tax liabilities.
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6.0
7.0
Withhold Payment. The University, at its discretion, may withhold the whole or part of any
payments to Supplier to the extent appropriate to set off University losses or costs to protect the
University from loss, due to, but not limited to the following causes:
6.1
Defective work not corrected.
6.2
Damage to personnel or property of the University or third party caused by act, omission
or negligence of Supplier, or its agents or employee.
Discount/Rebate Information. Supplier agrees to (a) fully and accurately report discounts and
rebates to the Buyer on the invoice, coupon or statement submitted to Buyer; (b) provide, upon
the Buyer’s request, the documentation or assistance necessary to allow Buyer to meet its
reporting obligations to the government; and (c) refrain from doing anything that would impede
Buyer from meeting its reporting obligations.
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HIPAA BUSINESS ASSOCIATE AGREEMENT
THIS HIPAA BUSINESS ASSOCIATE AGREEMENT (the "BAA") is entered into effective
the
day of
, 20
(the “Effective Date”), by and between the Regents of the University of
Michigan, a Michigan constitutional corporation on behalf of its affiliates (“UM”) and
, ("Business
Associate"). UM is a hybrid entity under the Health Insurance Portability and Accountability Act of 1996,
its amendments and implementing regulations ("HIPAA"). UM has designated most of its health care
providers and all of its health plans as covered entity components under HIPAA (individually and
collectively, the "Covered Entity").
Business Associate may perform functions or activities on behalf of Covered Entity involving the use
and/or disclosure of protected health information received from Covered Entity, or created by Business
Associate on behalf of Covered Entity. Therefore, Business Associate agrees to the following terms and
conditions set forth in this HIPAA Business Associate Agreement (“BAA”).
1.
Definitions. For purposes of this BAA, any terms used herein, unless otherwise defined, shall have
the same meanings as used in the Privacy and Security Standards of HIPAA, as amended by the
Health Information Technology for Economic and Clinical Health Act (Title XIII of the American
Recovery and Reinvestment Act of 2009) and its implementing regulations ("HITECH").
2.
Scope and Interpretation. The terms and conditions of this BAA shall supplement and amend all
agreements and relationships between the parties (“Base Agreement” or collectively “Base
Agreements”) which provide for Business Associate’s receipt, transmission, maintenance, creation,
Use and Disclosure of PHI, in any form or medium, including electronic PHI, in Business
Associate’s capacity as a “Business Associate” to the Covered Entity. Any ambiguity in this BAA
shall be resolved to permit Covered Entity to comply with HIPAA. In case of any inconsistency or
conflict between the Base Agreement(s) and the terms and conditions of this BAA, the terms and
conditions of this BAA shall control. Except as supplemented and/or amended, the terms of the
Base Agreement(s) shall continue to apply and effect to govern the matters addressed in the Base
Agreement(s).
3.
Compliance with Applicable Law. Beginning with the relevant effective dates, to the extent
Business Associate meets the definition of a “Business Associate” of Covered Entity as such term
is defined under HIPAA, Business Associate shall comply with its obligations under this BAA and
with all obligations of a business associate under HIPAA, HITECH and other related laws, for so
long as Business Associate uses, possesses, accesses or maintains Protected Health Information
(“PHI”).
4.
Permissible Use and Disclosure of Protected Health Information. In addition to the uses and
disclosures permitted by the Base Agreement, Business Associate may use and disclose PHI (i) for
its own proper management and administration, and (ii) to carry out its legal responsibilities. If
Business Associate discloses PHI to a third party for either reason above, prior to making any such
disclosure, Business Associate shall obtain: (a) reasonable assurances from the receiving party that
such PHI will be held confidential and be disclosed only as Required By Law in accordance with
HIPAA or for the purposes for which it was disclosed to such receiving party; and (b) an agreement
from such receiving party to immediately notify Business Associate of any known breaches of the
confidentiality of the PHI.
5.
Limitations on Uses and Disclosures of PHI. Business Associate shall not, and shall ensure that
its directors, officers, employees, and agents do not, use or disclose PHI in any manner that is not
permitted or required by the Base Agreement or this BAA, or as Required By Law. All uses and
disclosures of, and requests by Business Associate for, PHI are subject to the Minimum Necessary
rule of the Privacy Standards and shall be limited to the information contained in a Limited Data
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Set, to the extent practical, unless additional information is needed to accomplish the intended
purpose, or as otherwise permitted in accordance with Section 13405(b) of HITECH, and any other
subsequently adopted guidance.
6.
Required Safeguards To Protect PHI. Business Associate agrees that it will implement
appropriate safeguards in accordance with the Privacy Standards to prevent the use or disclosure of
PHI other than pursuant to the terms and conditions of this BAA.
7.
Reporting of Improper Use and Disclosures of PHI. Business Associate shall report to Covered
Entity, within five (5) business days of discovery, a use or disclosure of PHI not provided for in
this BAA by Business Associate, its officers, directors, employees, or agents, or by a third party to
whom Business Associate disclosed PHI.
8.
Reporting of Breaches of Unsecured PHI. Business Associate shall report to Covered Entity,
within five (5) business days of discovery, a breach of unsecured PHI in accordance with the
requirements set forth in 45 C.F.R. §§ 164.400-414. Business Associate shall fully cooperate with
Covered Entity's breach notification and mitigation activities, and shall be responsible for all costs
incurred by Covered Entity for those activities.
9.
Mitigation of Harmful Effects. Business Associate agrees to mitigate, to the extent practicable,
any harmful effect of a use or disclosure of PHI by Business Associate in violation of the
requirements of this BAA, including, but not limited to, compliance with any state law or
contractual data breach requirements.
10.
Agreements by Third Parties. Business Associate shall enter into an agreement with any agent or
subcontractor of Business Associate that will have access to PHI hereunder. Pursuant to such
agreement, the agent or subcontractor shall agree to be bound by the same restrictions, terms, and
conditions that apply to Business Associate under this BAA with respect to such PHI.
11.
Access to Information. To the extent applicable, within ten (10) business days of a request by
Covered Entity for access to PHI about an individual contained in a Designated Record Set,
Business Associate shall make available to Covered Entity such PHI for so long as such
information is maintained by Business Associate in the Designated Record Set, as required by 45
C.F.R. § 164.524. In the event any individual delivers a request for access to PHI directly to
Business Associate, Business Associate shall, within five (5) business days, forward such request
to Covered Entity.
12.
Availability of PHI for Amendment. Within ten (10) business days of receipt of a request from
Covered Entity for the amendment of an individual's PHI or a record regarding an individual
contained in a Designated Record Set (for so long as the PHI is maintained in the Designated
Record Set), Business Associate shall provide such information to Covered Entity for amendment
and incorporate any such amendments in the PHI as required by 45 C.F.R. § 164.526. In the event
any individual delivers directly to Business Associate a request for amendment to PHI, Business
Associate shall, within five (5) business days, forward such request to Covered Entity.
13.
Documentation of Disclosures. Business Associate agrees to document uses and disclosures of
PHI and information related to such uses and disclosures as required for Covered Entity to respond
to a request by an individual for an accounting of disclosures of PHI in accordance with 45 C.F.R.
§ 164.528.
14.
Accounting of Disclosures. Within ten (10) business days of notice by Covered Entity to Business
Associate that Covered Entity has received a request for an accounting of disclosures of PHI
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regarding an individual during the six (6) year period prior to the date on which the accounting was
requested, Business Associate shall make available to Covered Entity information to permit
Covered Entity to respond to the request for an accounting of disclosures of PHI, as required by 45
C.F.R. § 164.528. In the case of an electronic health record maintained or hosted by Business
Associate on behalf of Covered Entity, the accounting period shall be three (3) years and the
accounting shall include disclosures for treatment, payment and health care operations, in
accordance with the applicable effective date of Section 13402(a) of HITECH. In the event the
request for an accounting is delivered directly to Business Associate, Business Associate shall
forward such request to Covered Entity within five (5) business days of receipt.
15.
Restrictions. Business Associate shall comply with any restrictions on disclosure of PHI
requested by an individual and agreed to by Covered Entity in accordance with 45 C.F.R.
§164.522.
16.
Security. To the extent that Business Associate creates, receives, maintains or transmits electronic
PHI on behalf of Covered Entity, Business Associate shall:
a. Comply with the security provisions found at 45 C.F.R. §§164.308, 310, 312, and 316 in
the same manner as such provisions apply to Covered Entity, pursuant to Section
13401(a) of HITECH, and otherwise implement administrative, physical and technical
safeguards that reasonably and appropriately protect the confidentiality, integrity and
availability of electronic PHI;
b. Ensure that any agent to whom Business Associate provides electronic PHI agrees to
implement reasonable and appropriate safeguards in writing to protect such PHI; and
c. Report to Covered Entity within five (5) business days any Security Incident of which
Business Associate becomes aware and which results in a use or disclosure of electronic
PHI in violation of the Base Agreement or this BAA. For those Security Incidents that
do not result in a use or disclosure of electronic PHI in violation of the Base Agreement
or this BAA, reports may be made in the aggregate on at least quarterly basis. In this
context, the term “Security Incident” shall have the same meaning as such term as
defined in 45 CFR 164.304.
17.
Judicial and Administrative Proceedings. In the event Business Associate receives a subpoena,
court or administrative order or other discovery request or mandate for release of PHI, Business
Associate shall notify Covered Entity in writing prior to responding to such request to enable
Covered Entity to object. Business Associate shall notify Covered Entity of the request as soon as
reasonably practicable, but in any event within two (2) business days of receipt of such request.
18.
Availability of Books and Records. Business Associate hereby agrees to make its internal
practices, books, and records relating to the use and disclosure of PHI available to the Secretary of
the Department of Health and Human Services for purposes of determining Covered Entity's
compliance with the Privacy Standards.
19.
Breach of Contract by Business Associate. In addition to any other rights Covered Entity may
have in the Agreement, this BAA or by operation of law or in equity, Covered Entity may, upon a
breach or violation of this BAA, provide a reasonable opportunity for Business Associate to cure or
end any such violation within the time specified by Covered Entity. If cure is not possible or if the
Business Associate does not cure such breach or violation, Covered Entity may immediately
terminate the Agreement. Covered Entity's option to have a breach cured shall not be construed as
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a waiver of any other rights Covered Entity has in the Agreement, this BAA or by operation of law
or in equity.
20.
Effect of Termination of Agreement. Upon the termination of the Agreement or this BAA for
any reason, Business Associate shall return all PHI created by Business Associate or received from
Covered Entity to Covered Entity or, at Covered Entity's direction, destroy all PHI received from
Covered Entity that Business Associate maintains in any form, recorded on any medium, or stored
in any storage system. This provision shall apply to PHI that is in the possession of Business
Associate, its agents and subcontractors. Business Associate shall retain no copies of the PHI.
Business Associate shall remain bound by the provisions of this BAA, even after termination of the
Agreement or BAA, until such time as all PHI has been returned or otherwise destroyed as
provided in this Section.
21.
Injunctive Relief. Business Associate stipulates that its unauthorized use or disclosure of PHI
while performing services pursuant to this BAA would cause irreparable harm to Covered Entity,
and in such event, Covered Entity shall be entitled to institute proceedings in any court of
competent jurisdiction to obtain damages and injunctive relief.
22.
Indemnification. Business Associate shall indemnify and hold harmless Covered Entity and its
officers, trustees, employees, and agents from any and all claims, penalties, fines, costs, liabilities
or damages, including but not limited to reasonable attorney fees, incurred by Covered Entity
arising from a violation by Business Associate of its obligations under this BAA.
23.
Owner of PHI. Under no circumstances shall Business Associate be deemed in any respect to be
the owner of any PHI of Covered Entity.
24.
Obligations of the Covered Entity. Covered Entity shall: (i) notify BA of any limitation(s) in
Covered Entity’s Notice of Privacy Practices in accordance with 45 C.F.R. § 164.520, to the extent
such limitations affect BA’s Use or Disclosure of PHI; (ii) notify BA of any changes in, or
revocation of, permission by an Individual to Use or Disclose PHI, if and to the extent such
changes affect BA’s Use and Disclosure of PHI; and (iii) notify BA of any restriction on the Use or
Disclosure of PHI that covered entity has agreed to in accordance with 45 C.F.R. § 164.522, to the
extent such restriction may affect BA’s Use or Disclosure of PHI.
25.
Third Party Rights. The terms of this BAA do not grant any rights to any third parties.
26.
Independent Contractor Status. For the purposed of this BAA, Business Associate is an
independent contractor of Covered Entity, and shall not be considered an agent of Covered Entity.
27.
Changes in the Law. The parties shall amend this BAA to conform to any new or revised
legislation, rules and regulations to which Covered Entity is subject now or in the future including,
without limitation, HIPAA, HITECH, the Privacy Standards, Security Standards or Transactions
Standards.
This Agreement becomes binding when signed by authorized representatives of both parties.
THE REGENTS OF THE UNIVERSITY OF MICHIGAN:
By:
380.03-10 Request for Proposal Template General and Professional Services Ver. 10.11
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RFP P-112111-01-JR Pharmacy Benefit Management Services
Name:
Title:
Date:
BUSINESS ASSOCIATE:
By:
Name:
Title:
Date:
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