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HomeMy WebLinkAboutContract 49935 y61 g 910 �r r?q a CITY SECRETARY l CIO 1vEp CONTRACT N0. ev RECE ; NOv 201 PROFESSIONAL SERVICESAGREEMENT a ov ofF35w�� Trion Group, a division of Marsh &McLennan Agency LLC 5V SECR� a�[ OFESSIONAL SERVICES AGREEMENT ("Agreement") is made and entered into Q 4 een the CITY OF FORT WORTH (the "City" or "Client"), a home rule municipal corporation of the State of Texas, acting by and through its duly authorized Assistant City Manager, and Trion Group, a division of Marsh & McLennan Agency LLC, a Delaware limited liability company ("Consultant," "MMA" or"Trion"), acting by and through its duly authorized Vice President of Sales & Marketing. City and Trion are each individually referred to as a "party" and collectively referred to as the"parties." CONTRACT DOCUMENTS: The Contract documents shall include the following: 1. This Agreement for Professional Services 2. Exhibit A—Statement of Work plus any amendments to the Statement of Work 3. Exhibit B—Price Schedule 4. Exhibit C—Signature Verification Form 5. Exhibit D—Compensation 'sclosure 6. Appendix 1: Business Associat eement 1. ,SCOL PY SERVICES. Consultant hereby agrees to provide comprehensive consulting services regarding the City's Pharmacy Benefits Program. Core services include, but are not limited to: preparing plan specifications, soliciting qualified providers, negotiating agreements, evaluating and monitoring plan performance, preparing actuarial studies, performing strategic planning, recommending plan-structure changes to maximize plan savings, monitoring compliance requirements, ensuring market competitiveness for the City's health and welfare pharmacy plans. Attached hereto and incorporated for all purposes incident to this Agreement is Exhibit "A," Statement of Work, more specifically describing the services to be provided hereunder. 2. TERM. This Agreement shall commence on November 1, 2016 and shall expire on October 31, 2019, unless terminated earlier in accordance with the provisions of this Agreement (the "Initial Term"). This Agreement may be extended for up to two(2)additional periods of one year each by signed,written mutual agreement of the parties(each a"Renewal Term"). 3. COMPENSATION. During the Initial Term, Consultant shall be compensated in accordance with the provisions of this Agreement and the Payment Schedule attached as Exhibit L°B," which is incorporated for all purposes herein. Consultant shall not perform any additional services for the City not specified by this Agreement unless the City requests and approves in writing the additional costs for such services. The City shall not be liable for any additional expenses of Consultant not specified by this Agreement unless the City first approves such expenses in writing. In the event this Agreement is extended for one or more Renewal Terms, 'tf e0MCjAUqjERWft Consultant shall earn commissions as full and complete compensation for Core S rft kslog-agT Pharmacy Benefits Consulting FT.WOWo Mo renewal process, the parties will negotiate and agree to a not-to-exceed amount for Special Services to be provided during each Renewal Term. 4. TERMINATION. 4.1 Notwithstanding anything to the contrary in this Agreement, this Agreement may only be terminated as follows: a) Non-Renewal. If the City or Trion gives notice of its intention not to renew at least sixty (60) days prior to the end of the then-current term, this Agreement shall automatically terminate on the last day of such term. b) Breach. In the case of a material breach of the Agreement, the non-breaching party may provide the breaching party with sixty (60) days prior written notice specifying the nature of the alleged breach. If the breach is not cured to the reasonable satisfaction of the non-breaching party within sixty (60) days of the date of such notice, the non-breaching party may, at its option immediately terminate this Agreement in its entirety by providing written notice to the breaching party. C) Bankruptcy. Either party may terminate this Agreement immediately upon written notice to the other party in the event the other party becomes insolvent or enters into bankruptcy or other reorganization proceedings. d) Non-appropriation of Funds. In the event no funds or insufficient funds are appropriated by the City in any fiscal period for any payments due hereunder, City will notify Consultant of such occurrence, and this Agreement shall terminate on the last day of the fiscal period for which appropriations were received without penalty or expense to the City of any kind whatsoever, except as to the portions of the payments herein agreed upon for which funds shall have been appropriated. 4.2 Obligations on Termination or Expiration Generally. In the event that this Agreement is terminated prior to the Expiration Date, the City shall pay Consultant for services actually rendered up to the effective date of termination, and Consultant shall continue to provide the City with services requested by the City and in accordance with this Agreement up to the effective date of termination. Within sixty(60)days following the effective date of termination,Trion shall return to the City or destroy all City Information(as defined below). 4.3 Obligations on Termination for Breach. Upon termination of this Agreement by Trion due to a breach, the City shall immediately pay Trion any and all fees or other amounts due under this Agreement including (A) any agreed upon deferred fees, commissions and carrier paid fees earned through the effective date of the termination and (B) the amount that would have been due from the termination date through the end of the then-current term. The foregoing shall not limit in any way any other remedies available to Trion pursuant to this Agreement or applicable law. Upon termination of this Agreement by the City due to a breach,Trion shall no longer be entitled to any fees, commission, or carrier paid fees on or after the effective date of termination. The foregoing shall not limit in any way any other remedies available to the City pursuant to this Agreement or applicable law. Pharmacy Benefits Consulting Page 2 of 20 5. DISCLOSURE OF CONFLICTS AND CONFIDENTIAL INFORMATION. Consultant hereby warrants to the City that Consultant has made full disclosure in writing of any existing or potential conflicts of interest related to Consultant's services under this Agreement. In the event that any conflict of interest arises after the execution of this Agreement, Consultant hereby agrees immediately to make full disclosure to the City in writing. Consultant, for itself and its officers, agents and employees, further agrees that it shall treat all information provided to it by the City as confidential (City Information) and shall not disclose any such information to a third party without the prior written approval of the City. Consultant shall store and maintain City Information in a secure manner and shall not allow unauthorized users to access, modify, delete or otherwise corrupt City Information in any way. Consultant shall notify the City promptly if the security or integrity of any City Information has been compromised or is believed to have been compromised. 6. RIGHT TO AUDIT. Consultant agrees that the City shall, until the expiration of three (3) years after final payment under this Agreement, have access to and the right to examine at reasonable times any directly pertinent books, documents, papers and records of the consultant involving transactions relating to this Agreement at no additional cost to the City. Consultant agrees that the City shall have access during normal working hours to all necessary Consultant facilities and shall be provided adequate and appropriate work space in order to conduct audits in compliance with the provisions of this section. The City shall give Consultant reasonable advance notice of intended audits. 7. INDEPENDENT CONTRACTOR. It is expressly understood and agreed that Consultant shall operate as an independent contractor as to all rights and privileges granted herein, and not as agent, representative or employee of the City. Subject to and in accordance with the conditions and provisions of this Agreement, Consultant shall have the exclusive right to control the details of its operations and activities and be solely responsible for the acts and omissions of its officers, agents, servants, employees, contractors and subcontractors. Consultant acknowledges that the doctrine of respondeat superior shall not apply as between the City, its officers, agents, servants and employees, and Consultant, its officers, agents, employees, servants, contractors and subcontractors. Consultant further agrees that nothing herein shall be construed as the creation of a partnership or joint enterprise between City and Consultant. 8. LIABILITY AND INDEMNIFICATION. CONSULTANT SHALL BE LIABLE AND RESPONSIBLE FOR ANY AND ALL PROPERTY LOSS, PROPERTY DAMAGE AND/OR PERSONAL INJURY(INCLUDING DEATH) TO ANY AND ALL PERSONS, OF ANY KIND OR CHARACTER, WHETHER REAL OR ASSERTED, TO THE EXTENT CAUSED BY THE GROSS NEGLIGENT ACT(S) OR OMISSION(S), MALFEASANCE OR INTENTIONAL MISCONDUCT OF CONSULTANT, ITS OFFICERS, AGENTS,SERVANTS OR EMPLOYEES. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY INDIRECT, SPECIAL, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES OR FOR ANY LOST PROFITS ARISING OUT OF OR RELATING TO ANY SERVICES PROVIDED BY MMA OR ITS AFFILIATES. THE AGGREGATE LIABILITY OF MMA, ITS AFFILIATES AND ITS AND THEIR EMPLOYEES TO THE CITY FOR DAMAGES ARISING OUT OF OR RELATING TO THE PROVISION OF SERVICES BY MMA OR ITS AFFILIATES SHALL NOT EXCEED ONE TIMES (IX) THE ANNUAL REVENUE RECEIVED BY MMA FROM OR ON Pharmacy Benefits Consulting Page 3 of 20 ACCOUNT OF THE CITY. THIS PROVISION APPLIES TO THE FULLEST EXTENT PERMITTED BYAPPLICABLE LA WAND TOALL CAUSES OFACTION. CONSULTANT COVENANTS AND AGREES TO, AND DOES HEREBY, INDEMNIFY, HOLD HARMLESS AND DEFEND THE CITY, ITS OFFICERS, AGENTS, SERVANTS AND EMPLOYEES, FROM AND AGAINST ANY AND ALL CLAIMS OR LAWSUITS FOR EITHER PROPERTY DAMAGE OR LOSS (INCLUDING ALLEGED DAMAGE OR LOSS TO CONSULTANT'S BUSINESS AND ANY RESULTING LOST PROFITS) AND/OR PERSONAL INJURY(INCLUDING DEATH) TO ANYAND ALL PERSONS, OFANY KIND OR CHARACTER, WHETHER REAL OR ASSERTED, ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT, TO THE EXTENT CAUSED BY THE NEGLIGENT ACTS OR OMISSIONS OR MALFEASANCE OF CONSULTANT,ITS OFFICERS,AGENTS,SERVANTS OR EMPLOYEES. 9. RESPONSIBILITIES OF THE CLIENT. The City shall be solely responsible for the accuracy and completeness of information and other documents the City furnishes to Consultant. The City recognizes and agrees that all services and deliverables provided by Consultant are based on data and information furnished by the City. Consultant will be under no obligation to investigate or verify the completeness or accuracy of any such data or information, nor will Consultant have any liability for any errors, deficiencies or omissions in any services, deliverables, evaluations, reports or recommendations provided to, or any insurance coverages placed on behalf of, the City that are based on such inaccurate or incomplete data or information. 10. ASSIGNMENT AND SUBCONTRACTING. Consultant shall not assign or subcontract any of its duties, obligations or rights under this Agreement without the prior written consent of the City. If the City grants consent to an assignment, the assignee shall execute a written agreement with the City and the Consultant under which the assignee agrees to be bound by the duties and obligations of Consultant under this Agreement. The Consultant and Assignee shall be jointly liable for all obligations under this Agreement prior to the assignment. If the City grants consent to a subcontract, the subcontractor shall execute a written agreement with the Consultant referencing this Agreement under which the subcontractor shall agree to be bound by the duties and obligations of the Consultant under this Agreement as such duties and obligations may apply. The Consultant shall provide the City with a fully executed copy of any such subcontract. 11. INSURANCE. Consultant shall provide the City with certificate(s) of insurance documenting policies of the following coverage limits that are to be in effect prior to commencement of any work pursuant to this Agreement: 11.1 Coverage and Limits (a) Commercial General Liability $1,000,000 Each Occurrence $2,000,000 Aggregate (b) Automobile Liability $1,000,000 Each accident on a combined single limit basis or $250,000 Bodily injury per person $500,000 Bodily injury per occurrence Pharmacy Benefits Consulting Page 4 of 20 $100,000 Property damage Coverage shall include any auto used by the Consultant, its employees, representatives in the course of the providing services under this Agreement. "Any auto"shall be any auto owned,hired and non-owned. (c) Workers' Compensation Statutory limits Employer's liability $100,000 Each accident/occurrence $100,000 Disease-per each employee $500,000 Disease - policy limit This coverage may be written as follows: Workers' Compensation and Employers' Liability coverage with (i) limits consistent with statutory benefits outlined in the law of the state in which the services are being provided with respect to the Workers' Compensation Law and (ii) minimum policy limits for Employers' Liability of $100,000 each accident/occurrence, $500,000 bodily injury disease policy limit and $100,000 per disease per employee. (d) Professional Liability(Errors&Omissions) $1,000,000 Each Claim Limit $1,000,000 Aggregate Limit Professional Liability coverage may be provided through an endorsement to the Commercial General Liability (CGL) policy, or a separate policy specific to Professional E&O. Either is acceptable if coverage meets all other requirements. Coverage shall be claims-made, and maintained for the duration of the contractual agreement and for two(2)years following completion of services provided. 11.2 Certificates. Certificates of Insurance evidencing that the Consultant has obtained all required insurance shall be delivered to the City prior to Consultant proceeding with any work pursuant to this Agreement. One or more certificates of insurance evidencing on-going coverage in accordance with this Agreement shall be submitted to the City annually upon request. The Commercial General Liability and Automobile Liability insurance policies shall be endorsed to include the City as an additional insured thereon, with respect to their vicarious liability arising from Consultant's provision of services pursuant to this Agreement. The Commercial General Liability and Automobile Liability insurance policies shall contain a Waiver of Subrogation for the benefit of the City of Fort Worth. Waiver of subrogation shall also be provided under the Workers' Compensation insurance policy for injuries resulting from Consultant's performance of the work or operations under the contract, excluding the recklessness, negligence, and willful misconduct of the City. The term City shall include its employees, officers, and officials, in respect to the contracted services. Any failure on the part of the City to request required insurance documentation shall not constitute a waiver of the insurance requirement. A minimum of thirty(30)days' notice of cancellation Pharmacy Benefits Consulting Page 5 of 20 or material reduction in limits of coverage shall be provided to the City by Consultant upon receipt of such notice. Ten(10) days' notice shall be acceptable in the event of non-payment of premium. Notice and copies of all insurance related documents shall be sent to the Risk Manager, City of Fort Worth, 200 Texas Street, Fort Worth, Texas 76102, with copies to the City Attorney at the same address. 12. COMTLIANCE WITH LAWS.ORDINANCES,R S AND REGULATIONS. Consultant agrees to comply with all applicable federal, state and local laws, ordinances, rules and regulations. If the City notifies Consultant of any violation of such laws, ordinances, rules or regulations,Consultant shall immediately desist from and correct the violation. 13. NON-DISCRIMINATION COVENANT. Consultant, for itself, its personal representatives, assigns, subcontractors and successors in interest, as part of the consideration herein, agrees that in the performance of Consultant's duties and obligations hereunder, it shall not discriminate in the treatment or employment of any individual or group of individuals on any basis prohibited by law. If any claim arises from an alleged violation of this non- discrimination covenant by Consultant, its personal representatives, assigns, subcontractors or successors in interest, Consultant agrees to assume such liability and to indemnify and defend the City and hold the City harmless from such claim. 14. NOTICES. Notices required pursuant to the provisions of this Agreement shall be conclusively determined to have been delivered when (1) hand-delivered to the other party, its agent, employee, servant or representative, (2) delivered by facsimile with electronic confirmation of the transmission, or (3) received by the other party by United States Mail, registered, return receipt requested, addressed as follows: To The CITY: To CONSULTANT: City of Fort Worth Trion Group, a division of Marsh & McLennan Agency LLC Attn: Brian Dickerson Attn: Ma beth Gray, Consultant 200 Texas Street 2300 Renaissance Boulevard Fort Worth TX 76102-6311 King of Prussia,PA 19406 Facsimile: (817)392-8654 Facsimile: (484)288-6678 15. SOLICITATION OF EMPLOYEES. Neither the City nor Consultant shall, during the term of this Agreement and additionally for a period of one year after its termination, knowingly solicit for employment or employ, whether as employee or independent contractor, any person who is or has been employed by the other party during the term of this Agreement, without the prior written consent of the person's employer, which consent shall not be unreasonably withheld. This provision shall apply only to the Consultant solicitation activities for employment located at 2300 Renaissance Boulevard,King of Prussia, PA 19406, and not all of Marsh&McLennan Agency LLC. Pharmacy Benefits Consulting Page 6 of 20 16. GOVERNMENTAL POWERS. It is understood and agreed that by execution of this Agreement, the City does not waive or surrender any of its governmental powers. 17. NO WAIVER. The failure of the City or Consultant to insist upon the performance of any term or provision of this Agreement or to exercise any right granted herein shall not constitute a waiver of the City's or Consultant's respective right to insist upon appropriate performance or to assert any such right on any future occasion. 18. GOVERNING LAW/VENU This Agreement shall be construed in accordance with the internal laws of the State of Texas. If any action, whether real or asserted, at law or in equity, is brought on the basis of this Agreement, venue for such action shall lie in state courts located in Tarrant County, Texas or the United States District Court for the Northern District of Texas, Fort Worth Division. 19. SEVERABILITY. If any provision of this Agreement is held to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired. 20. FORCE MAJEURE. The City and Consultant shall exercise their best efforts to meet their respective duties and obligations as set forth in this Agreement, but shall not be held liable for any delay or omission in performance due to force majeure or other causes beyond their reasonable control (force majeure), including, but not limited to, compliance with any government law, ordinance or regulation, acts of God, acts of the public enemy, fires, strikes, lockouts, natural disasters, wars, riots, material or labor restrictions by any governmental authority,transportation problems and/or any other similar causes. 21. HEADINGS NOT CONTROLLING. Headings and titles used in this Agreement are for reference purposes only and shall not be deemed a part of this Agreement. 22. REVIEW OF COUNSEL. The parties acknowledge that each party and its counsel have reviewed and revised this Agreement and that the normal rules of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement or exhibits hereto. 23. AMENDMENTS/MODIFICATIONS/EXTENSIONS. No extension, modification or amendment of this Agreement shall be binding upon a party hereto unless such extension, modification, or amendment is set forth in a written instrument, which is executed by an authorized representative and delivered on behalf of such party. Pharmacy Benefits Consulting Page 7 of 20 24. SIGNATURE AUTHORITY. The person signing this Agreement hereby warrants that he/she has the legal authority to execute this Agreement on behalf of the respective party, and that such binding authority has been granted by proper order, resolution, ordinance or other authorization of the entity. The other party is fully entitled to rely on this warranty and representation in entering into this Agreement. 25. INFORMAL DISPUTE RESOLUTION. Except in the event of termination on the basis of breach, if either City or Contractor has a claim, dispute, or other matter in question for breach of duty, obligations, services rendered or any warranty that arises under this Agreement, the parties shall first attempt to resolve the matter through this dispute resolution process. The disputing party shall notify the other party in writing as soon as practicable after discovering the claim, dispute, or breach. The notice shall state the nature of the dispute and list the party's specific reasons for such dispute. Within ten (10) business days of receipt of the notice, both parties shall commence the resolution process and make a good faith effort, either through email, mail, phone conference, in person meetings, or other reasonable means to resolve any claim, dispute, breach or other matter in question that may arise out of, or in connection with this Agreement. If the parties fail to resolve the dispute within sixty (60) days of the date of receipt of the notice of the dispute, then the parties may submit the matter to non-binding mediation in Tarrant County, Texas, upon written consent of authorized representatives of both parties in accordance with the Rules of the American Arbitration Association or other applicable rules governing mediation then in effect. The mediator shall be agreed to by the parties. Each party shall be liable for its own expenses, including attorneys' fees; however, the parties shall share equally in the costs of the mediation. If the parties cannot resolve the dispute through mediation,then either party shall have the right to exercise any and all remedies available under law regarding the dispute. 26. WAIVER OF JURY TRIAL; LIMITATION OF RIGHT TO SUE. Each party, on behalf of itself and its affiliates, to the fullest extent permitted by law, knowingly, voluntarily, and intentionally waives its right to a trial by jury in any action or other legal proceeding arising out of or relating to this Agreement or any services provided by Consultant or its affiliates. The waiver applies to any action or legal proceeding, whether sounding in contract, tort or otherwise. Each party, on behalf of itself and its affiliates, also agrees not to include any employee, officer or director of the other party or its affiliates as a party in any such action or proceeding. 27. DISCLAIMERS. The form of Consultant's compensation, whether by commission, fee, or both, shall not affect Consultant's role as advisor or the scope of the Services to be provided by Consultant. The City agrees that all decisions regarding the amount, type or terms of coverage shall be the City's ultimate responsibility. While Consultant may provide advice and recommendations, the City must decide the specific coverage that is appropriate for its particular circumstances and financial position. Consultant's service obligations to the City are solely contractual in nature. The City acknowledges that, in performing services, Consultant and its affiliates(i) are not acting as a fiduciary for the City except to the extent required by applicable law and(ii)do not have a fiduciary or other enhanced duty to the City. 28. COMPENSATION DISCLOSURE. Attached as Exhibit D is a "Compensation Disclosure" addressing other payments that may be received by Consultant. By execution of this Agreement, Consultant affirms that such information is Pharmacy Benefits Consulting Page 8 of 20 complete and accurate as of the date listed below. In the event of any change to the information contained in Exhibit D, Consultant shall provide City with an updated Exhibit D as soon as reasonably possible and in any event no later than sixty (60) days after the effective date of such change. In the context of the compensation disclosure,the terms"we"and"our"refer to Consultant and the terms"you" and"your"reference the City. 29. ENTIRETY OF AGREEMENT. This Agreement, including the schedule of exhibits attached hereto and any documents incorporated herein by reference, contains the entire understanding and agreement between the City and Consultant, their assigns and successors in interest, as to the matters contained herein. Any prior or contemporaneous oral or written agreement is hereby declared null and void to the extent in conflict with any provision of this Agreement. INNESS HEREOF,the parties hereto have executed this Agreement in multiples this day of CITY OF FORT WORTH: TRION GROUP, A DIVISION OF MARSH & MCLENNAN AGENCY LL By: By: Sus n nis IF Jef ly Assistant City Manager ViKe Presidents�&Marketing Date: (�o 3.0 17 Date: ATTE T: ATTEST: B L By: N,5SA kbCity Secretary APPROVED AS TO FORM AND LEGALITY: By: 14X�� - Assi ant City Attrney CONTRACT, AUTHORIZATION: M&C: i ) I 7N1 Date Approved: 1295 Form Certification No. OFFICIAL RECORD CITY SECRETARY FT.WORTH,TX Pharmacy Benefits Consulting a e 9 of 20 EXHIBIT A: STATEMENT OF WORK Prescription Drug Consulting Consultant shall provide a two-phase engagement. The first objective is to evaluate the terms and pricing of the City's current agreement with its Pharmacy Benefits Manager, Envision. The object is to use Consultant's leverage to establish better terms while ensuring minimal change to program design, funding, and program delivery. The evaluation will focus on a short Request for Proposal (RFP) process and negotiations in regards to the pharmacy programs outlined below. Phase One: EvisionRx Negotiations • Trion will utilize its financial evaluation and market leverage (namely its coalition pricing) to negotiate more competitive financial terms with the City's current PBM, Envision, with respect to the administration of the prescription drug benefits offered under the self-insured group health plans maintained by The City of Fort Worth; and all applicable groups contained within the City's current program. Consultant will provide the following services: Ongoing;PBM Management Services and Program Performance Reviews under Current Contract(2017) • Quarterly review of utilization report results for the City • Coordinating, as necessary, with PBM clinicians and financial analysts in reviewing utilization results and developing consultative advice for the City • Quarterly monitoring of discounts and dispensing fees achieved versus PBM's pricing guarantees • Semi-annual review of rebates shared with the City versus PBM's pricing guarantees • Assistance with escalation of issues with PBM Annual Year-End Program Reviews • Review of year-end utilization results with the City • Preparation of annual performance summaries for the City • Identify cost management opportunities (e.g., cost-share structures, cost management programs, etc.)and provide benchmarking data • Coordinate, as necessary, with PBM clinicians and financial analysts in reviewing utilization results and developing consultative advice for the City • Review of PBM's performance guarantee results • Meetings with the City's team to present year-end utilization results and potential future savings opportunities Pharmacy Benefits Consulting Page 10 of 20 Phase Two: PBM Procurement This second phase of consulting work begins with a full evaluation or financial and other provisions to compare the price and terms of the City's current pharmacy agreements with the Trion Coalition to reestablish the financial enhanced pricing and terms for the City. Consultant's coalition (the "Collective") is a collective arrangement for participants to use their combined purchasing power to secure a highly competitive prescription drug pricing model while retaining autonomy and control over their benefit plan structure,financing arrangement and contract terms. The value includes, on average, a reduction of 10% to 15% or more in total Rx costs through lower administrative costs, higher discounts and guaranteed greater rebates. Additional, ongoing savings are achievable through longer-term cost and trend management, bundled pricing for clinical programs, and "built-in" savings escalators as the consortium grows in size/volume. Trion has coalitions with the two of the largest PBM's,Express Scripts(ESI)and OptumRx. The following scope of services will be provided by Consultant in order to evaluate alternative PBM solutions: Discovery The Discovery Phase will begin with the receipt of all healthcare benefit cost and utilization, as well as plan design and demographic data. In the Discovery Phase,Consultant undertakes a multi-step process that includes the following objectives: • Develop a "current state" of the City's specific plan design and costs, coupled with demographic and eligibility data. • Create a specific baseline that illustrates not only historical information, but also a projection of future costs and utilization under a"do nothing"approach. The Discovery Phase, and resulting proposed healthcare design/program, is used in constructing the healthcare vendor RFP to ensure that the City's business objectives are aligned with its future healthcare vendor. Comparison of the current program to the Trion Coalition Pricing Consultant will begin to draft the prescription drug RFP concurrently with the facilitation of the Discovery phase. The RFP will take into account and reflect the City's • Ability to meet plan design and funding requirements. • Comparison of network discounts: — Potential network savings, based on combination of differences in negotiated pricing arrangements and utilization management controls, will be evaluated. The evaluation will compare the bidding vendors' discounts by type of prescription (e.g., retail, mail, brand, generic, etc.) with the City's actual utilization to determine which discount model best Pharmacy Benefits Consulting Page 11 of 20 aligns with the City's usage history and anticipated need. Trion will ensure a discount guarantee is included by the PBM for the recommended product; if the guaranteed discount is not achieved by the vendor, the City may receive a dollar-for-dollar reimbursement from the PBM • Comparison of rebates: — The evaluation focuses on overall level of guaranteed rebates per prescription. Trion will compare City's current rebate arrangements to those offered by the bidding vendors and recommend the one that achieves the highest level of guaranteed rebates. • Administration Fee comparison: — Administration fees are evaluated at the both the plan and per-script level (i.e., dispensing fee) with a goal of achieving a competitive dispensing fee and no administration fee at the plan level. Trion will compare the City's current administration fee arrangements with those offered by bidding vendors and provide an analysis of the projected savings/costs for each. • Analysis of provider networks and formularies: — A primary consideration during the vendor selection process is the breadth of a vendor's provider networks. Formulary disruption will also be analyzed to the extent that the City experiences changes to its preferred list of drugs. • Clinical management program analysis: — The City may or may not offer clinical management programs (e.g., step therapy, prior authorization, etc.). Consultant's analysis will focus on a comparison of the imbedded programs compared to the bidding vendors, as well as the cost associated with the programs. • Proposed costs and services in relation to projected baseline costs and current services provided. — Trion will analyze the costs and services offered by each proposer and show how they compare to the City's current arrangements. • Performance guarantees: — Trion shall identify and highlight differences in performance metrics of each bidder. In addition, Trion will construct and negotiate a comprehensive set of performance metrics and resulting guarantees that are specific to the City's needs and objectives. Summary of Findings Once the detailed plan components are evaluated as part of the formal RFP process,Consultant will develop and illustrate the overall financial impact by producing an estimated annual cost that utilizes projected claims,coupled with the discount,rebates and retention factors proposed by the bidding vendors. Pharmacy Benefits Consulting Page 12 of 20 This analysis will constitute the basis for highlighting the "hard dollar" potential cost savings associated with changing or aggregating vendors. In addition, Consultant will illustrate the "soft dollar" opportunity based on the more comprehensive capabilities (e.g., services and tools) available through the alternative vendors. Upon completion of the formal RFP analysis, Consultant will prepare a comprehensive report of marketing results and findings, including projected program costs and savings, finalist recommendations and potential areas of negotiation. Consultant will meet with assigned City staff to review the marketing evaluation report and select finalists (if applicable). If finalist meetings are warranted, Consultant will schedule the finalist interviews/on-site visits and develop agendas for finalist meetings. In addition, Trion representatives will attend all finalist meetings and assist in final negotiations of prescription drug pricing, vendor service, and performance standards/guarantees. The Summary of Findings phase will conclude with the City's approval of the prescription drug vendor. Trion will notify all bidders of the City's decision. Implementation Support Depending on the outcome of the prescription drug vendor marketing, the following out of scope services may be needed as part of the Implementation phase. If a prescription drug vendor change is warranted, Consultant is prepared to facilitate the implementation tasks on behalf the City to ensure the successful implementation of the agreed-upon services. As part of implementation management Trion will work with the City to make sure the vendor(s) live up to its proposal(s) and the City's expectations in the administration and management of the benefit programs. Consultant will work closely with the City and its vendor(s) to ensure that benefit components that Consultant developed and negotiated are accurately reflected in the contract. In addition, Consultant will attend vendor meetings("kick-off meeting,weekly progress updates, etc.) and be available for daily support throughout the implementation process. Service costs for the above services will be covered by either service fees paid by the Client, commissions received in respect to the Client's benefit plans for which Trion Group, a Marsh&McLennan Agency LLC company is the broker of record, or a combination of both and to the extent available and subject to applicable law.This arrangement is not offered as an inducement to purchase insurance of any type, but rather to help demonstrate that the services Trion Group, a Marsh&McLennan Agency LLC company provides are commensurate with the overall compensation Trion Group,a Marsh&McLennan Agency LLC company receives. Service costs are outlined in greater detail on Exhibit B hereto. Pharmacy Benefits Consulting Page 13 of 20 EXHIBIT B: PRICING SCHEDULE For the period from November 1, 2016 through September 30, 2017, the City shall pay Consultant a fee for the Services of$86,862.50. Thereafter, should the City join the Collective, Consultant will receive revenue from the Collective fees only. However, if the City does not join the Collective,the City shall pay an annual fee of$86,862.50 billed to the City monthly over twelve (12) months. Payment shall be due within thirty (30)days from the invoice date. Prescription Drug Guaranteed Savings Definition: Trion will guarantee that the Net Annual Cost (i.e., final paid claims resulting from the contractual pricing guarantees+base administrative fees—guaranteed rebates shared with the City)derived from the Trion Rx Coalition will yield at least $3,000,000 in savings as long as there are not substantial changes to the population of eligible City participants. Measurement: The savings will be calculated based on the 2017 pricing guarantees as outlined in the City's 2016 renewal addendum with EnvisionRx (i.e., the baseline period pricing guarantees) compared to the pricing guarantee terms of the Trion Rx Coalition for the most recent twelve (12) months (i.e., the guarantee period). The actual utilization experience results(e.g., script counts and pre-discounted AWP per script, by drug type and channel) achieved during the guarantee period will be used to develop the Net Annual Cost results that would have been generated under the EnvisionRx contract addendum's pricing terms, as well as the Net Annual Cost results under the Trion Rx Coalition. Provided that the enrollment, claims and utilization mix are consistent with those applied in the final cost and savings analysis prepared for the City prior to their decision to move from EnvisionRx to the Trion Rx Coalition,the guarantee period will yield at least$3,000,000 in savings to the City. Penalty: The demonstration of$3,000,000 in savings based on the results of the Trion's analysis (i.e., the measurement methodology) will constitute successful achievement of the performance standard. If the savings between the baseline period and guarantee period do not yield a minimum of$3,000,000, Trion will pay a penalty (i.e., reduction in commissions) based on the following achieved savings range for the guarantee period: • Savings: $0-$1,499,999; Penalty: 100%reduction of commissions • Savings: $1,500,000- $1,999,999;Penalty: 75%reduction of commissions • Savings: $2,000,000- $2,499,999;Penalty: 50%reduction of commissions • Savings: $2,500,000- $3,000,000;Penalty: 25%reduction of commissions Any penalty shall be enforced in the subsequent fiscal year. For instance, if the City achieves only $1,000,000 in savings in fiscal year 2018 based on the criteria list above, Consultant shall not receive any commissions from OptumRx for fiscal year 2019. Consultant shall sign a written agreement with OptumRx detailing this penalty provision and provide a signed copy to City. Pharmacy Benefits Consulting Page 14 of 20 EXHIBIT C: SIGNATURE VERIFICATION FORM Full Legal Name of Company: Trion Group, a Marsh& McLennan Agency LLC company Legal Address: 2300 Renaissance Boulevard, King of Prussia, PA 19406 Services to be provided: PBM Consultant Execution of this Signature Verification Form ("Form") hereby certifies that the following individuals and/or positions have the authority to legally bind the Company and to execute any agreement, amendment or change order on behalf of Company. Such binding authority has been granted by proper order, resolution, ordinance or other authorization of Company. The City is fully entitled to rely on the warranty and representation set forth in this Form in entering into any agreement or amendment with Company. Company will submit an updated Form within ten (10) business days if there are any changes to the signatory authority. The City is entitled to rely on any current executed Form until it receives a revised Form that has been properly executed by the Company. 1. Na� �e: Andrevv,Neary Position: Practice a r Signatu 2. Name: Position: Signature 3. Name: Position: Signature Name: Signature r ident/ Other Title: VP Date: Pharmacy Benefits Consulting Page 15 of 20 EXHIBIT D: COMPENSATION DISCLOSURE Marsh & McLennan Agency ("MMA") prides itself on being an industry leader in the area of transparency and compensation disclosure. We believe you should understand how we are paid for the services we are providing to you. We are committed to compensation transparency and to disclosing to you information that will assist you in evaluating potential conflicts of interest. As a professional insurance services provider, MMA and its subsidiaries facilitate the placement of insurance coverage on behalf of our clients. In accordance with industry custom, we are compensated either through commissions that are calculated as a percentage of the insurance premiums charged by insurers, or fees agreed to with our clients. MMA receives compensation through one or a combination of the following methods: • Retail Commissions—A retail commission is paid to MMA by the insurer(or wholesale broker) as a percentage of the premium charged to the insured for the policy. The amount of commission may vary depending on several factors, including the type of insurance product sold and the insurer selected by the client. Retail commission rates can vary from transaction to transaction. • Client Fees—Some clients may negotiate a fee for MMA's services in lieu of, or in addition to, retail commissions paid by insurance companies. Fee agreements are in writing, typically pursuant to a Client Service Agreement, which sets forth the services to be provided by MMA, the compensation to be paid to MMA, and the terms of MMA's engagement. The fee may be collected in whole, or in part, through the crediting of retail commissions collected by MMA for the client's placements. • Contingent Commissions—Many insurers agree to pay contingent commissions to brokers who meet set goals for all or some of the policies the brokers place with the insurer during the current year. The set goals may include volume, profitability, retention and/or growth thresholds. Because the amount of contingent commission earned may vary depending on factors relating to an entire book of business over the course of a year, the amount of contingent commission attributable to any given policy typically will not be known at the time of placement. • Supplemental Commissions—Certain insurers and wholesalers agree to pay supplemental commissions, which are based on a broker's performance during the prior year. Supplemental commissions are paid as a percentage of premium that is set at the beginning of the calendar year. This percentage remains fixed for all eligible policies written by the insurer during the ensuing year. Unlike contingent commissions, the amount of supplemental commission is known at the time of insurance placement. Like contingent commissions, they may be based on volume, profitability, retention and/or growth. • Wholesale Broking Commissions—Sometimes MMA acts as a wholesale insurance broker for certain transactions. In these placements, MMA is engaged by a retail agent that has the direct relationship with the insured. As the wholesaler, MMA may have specialized expertise, access to surplus lines markets, or access to specialized insurance facilities that the retail agent does not have. In these transactions, the insurer typically pays a commission that is divided between the retail and wholesale broker pursuant to arrangements made between them. • Other Compensation—From time to time MMA may be compensated by insurers for providing administrative services to clients on behalf of those insurers. Such amounts are typically calculated as a percentage of premium or are based on the number of insureds. Additionally, from time to time, insurers may sponsor certain MMA training programs and/or events. We will be pleased to provide you additional information about our compensation and information about alternative quotes upon your request. For more detailed information about the forms of compensation we receive please refer to our Marsh & McLennan Agency Compensation Guide at http://res.cloudinM.com/mma/image/upload/vl473800190/MMA Compensation Guide for Clients rev 9.6.16 wghfvy_pdf Pharmacy Benefits Consulting Page 16 of 20 r b APPENDIX 1:HEALTH INSURANCE PORTABILITY AND ACCOUNTABILITY ACT (HIPAA) BUSINESS ASSOCIATE AGREEMENT This Business Associate Agreement (the "Agreement") is made and entered into as of the I` day of November, 2016(hereinafter the "Date")by and between City of Fort Worth, on behalf of the prescription drug plans (hereinafter "Covered Entity"), and Trion Group, a Marsh & McLennan Agency LLC Company(hereinafter"Business Associate"). Recitals WHEREAS, the Department of Health and Human Services ("HHS") has promulgated regulations at 45 C.F.R. Parts 160-164, implementing the privacy and electronic security requirements set forth in the Administrative Simplification provisions of the Health Insurance Portability and Accountability Act of 1996, Public Law 104-191, as amended by American Recovery and Reinvestment Act of 2009 (P.L. 111-5, ARRA) ("HIPAA"); WHEREAS, Business Associate acknowledges that certain provisions of HIPAA have been amended in ways that directly regulate Business Associate's obligations and activities with respect to PHI; WHEREAS, HIPAA provides, among other things, that Covered Entity is permitted to disclose Protected Health Information (as defined below) to Business Associate and allow Business Associate to obtain and receive Protected Health Information, if Covered Entity obtains satisfactory assurances in the form of a written contract that Business Associate will appropriately safeguard the Protected Health Information; and WHEREAS, Business Associate will create, receive, maintain or transmit certain Protected Health Information in conjunction with the services being provided by Business Associate to Covered Entity pursuant to the Professional Services Agreement entered into by the parties as of November 1, 2016 (the "Services Agreement"), thus necessitating a written agreement that meets the applicable requirements of HIPAA. Both parties have mutually agreed to satisfy the foregoing regulatory requirements through this Agreement. NOW THEREFORE, Covered Entity and Business Associate agree as follows: 1 Definitions; Applicability. (a)All terms not defined herein shall have the meaning ascribed to them in HIPAA. (b) This Agreement shall apply only with respect to and to the extent that Business Associate creates,receives,maintains or transmits PHI for or on behalf of Covered Entity. 2 Obligations and Activities of Business Associate (a)Business Associate agrees to not use or further disclose Protected Health Information other than as permitted or required by this Agreement or as Required by Law. (b)Business Associate agrees to use commercially reasonable and appropriate safeguards to prevent use or disclosure of the Protected Health Information other than as provided for by this Agreement. (c) Business Associate agrees to report to Covered Entity any use or disclosure of the Protected Health Information not provided for by this Agreement of which it becomes aware. In event of a Breach of Unsecured PHI by Business Associate or any of its officers, directors, employees, or subcontractors, Business Associate shall promptly notify Covered Entity in accordance with 45 C.F.R. 164.410. Pharmacy Benefits Consulting Page 17 of 20 (d) Business Associate and Covered Entity agree to mitigate, to the extent practicable, any harmful effect that is known to it arising out of a use or disclosure of Protected Health Information in violation of the requirements of this Agreement. (e) Business Associate agrees to ensure that any subcontractors that create, receive, maintain, or transmit Protected Health Information on behalf of Business Associate agrees to substantially similar restrictions and conditions that apply through this Agreement to Business Associate with respect to such information. (f) Business Associate agrees to provide access to Protected Health Information in a Designated Record Set, in the time and manner Required by Law, to Covered Entity or, as directed by Covered Entity, to an Individual, in order to meet the requirements under 45 C.F.R. 164.524. Business Associate may impose a reasonable cost-based fee for the provision of copies of PHI in a Designated Record Set in accordance with 45 C.F.R. 164.524(c)(4). (g) Business Associate agrees to make any amendment(s) to Protected Health Information in a Designated Record Set pursuant to 45 C.F.R. 164.526 at the request of Covered Entity or an Individual, and in the time and manner Required by Law. (h) Business Associate agrees to make internal practices, books, and records relating to the use and disclosure of Protected Health Information received from, or created or received by Business Associate, on behalf of Covered Entity, available to the Secretary, for purposes of the Secretary determining Covered Entity's or Business Associate's compliance with HIPAA. (i) Business Associate agrees to document such disclosures of Protected Health Information and information related to such disclosures as would be required for Covered Entity to respond to a request by an Individual for an accounting of disclosures of Protected Health Information in accordance with 45 C.F.R. 164.528. 0) Business Associate agrees to provide to Covered Entity, upon request and in the time and manner Required by Law, an accounting of disclosures of an Individual's Protected Health Information, collected in accordance with Section 2(i) of this Agreement, to permit Covered Entity to respond to a request by an Individual for an accounting of disclosures of Protected Health Information in accordance with 45 C.F.R. 164.528. If Covered Entity requests an accounting of an Individual's Protected Health Information more than once in any twelve (12) month period, Business Associate will impose a reasonable fee for such accounting in accordance with 45 C.F.R. 164.528(c). (k) Business Associate agrees to comply, where applicable, with Subpart C of 45 CFR Part 164 to maintain the security of the Electronic Protected Health Information and to prevent unauthorized uses or disclosures of such Electronic Protected Health Information. Business Associate shall report to the Covered Entity any Security Incident that results in the unauthorized use or disclosure of Protected Health Information of which it becomes aware. 3 Permitted Uses and Disclosures by Business Associate (a) Business Associate may use or disclose Protected Health Information to perform its obligations and services to Covered Entity,provided that such use or disclosure would not violate HIPAA if done by Covered Entity. (b) Business Associate may use Protected Health Information for the proper management and administration of the Business Associate or to carry out the legal responsibilities of the Business Associate Pharmacy Benefits Consulting Page 18 of 20 h or as otherwise permitted by HIPAA. (c) Business Associate may disclose Protected Health Information for the proper management and administration of the Business Associate, provided that disclosures are Required by Law, or Business Associate obtains reasonable assurances from the person to whom the information is disclosed that it will be held confidential and used or further disclosed only as Required by Law or for the purpose for which it was disclosed to the person, and the person notifies the Business Associate of any instances of which it is aware in which the confidentiality of the information has been breached. (d) Business Associate may use Protected Health Information to provide data aggregation services to Covered Entity. 4 Obligations of Covered Entity. 4.1 Provisions for Covered Entity to Inform Business Associate of Privacy Practices and Restrictions (a) Covered Entity shall provide Business Associate with the notice of privacy practices that Covered Entity produces in accordance with 45 C.F.R. § 164.520,as well as any changes to that notice. (b) Covered Entity shall provide Business Associate with any changes in, or revocation of, permission by Individual to use or disclose Protected Health Information, if such changes affect Business Associate's permitted or required uses and disclosures. (c) Covered Entity shall notify Business Associate, in writing, of any restriction to the use or disclosure of Protected Health Information that Covered Entity has agreed to in accordance with 45 C.F.R. § 164.522. (d) Covered Entity warrants and represents that it shall provide to, or request from, the Business Associate only the minimum Protected Health Information necessary for Business Associate to perform or fulfill a specific function required or permitted hereunder. (e) If Protected Health Information is transmitted by electronic transfer or sent in physical media by or on behalf of Covered Entity, Covered Entity shall transmit all such Protected Health Information to Business Associate in an encrypted format,to be mutually agreed by the parties. 4.2 Permissible Requests by Covered Entity. Covered Entity represents and warrants that it has the right and authority to disclose Protected Health Information to Business Associate for Business Associate to perform its obligations and provide services to Covered Entity, and Covered Entity shall not request Business Associate to use or disclose Protected Health Information in any manner that would violate HIPAA, other applicable laws or Covered Entity's privacy notice, if done by Covered Entity. Pharmacy Benefits Consulting Page 19 of 20 5 Term and Termination (a) Term. The provisions of this Agreement shall take effect as of the Date (such date, the "Effective Date"),and shall continue for the term of the Services Agreement. (b) Termination for Cause.Upon the parties mutual agreement that there has been a material breach by Business Associate which does not arise from any breach by Covered Entity, Covered Entity shall provide an opportunity for Business Associate to cure the breach or end the violation and terminate this Agreement if Business Associate does not cure the breach or end the violation within a mutually agreeable time, or immediately terminate this Agreement if cure of such breach is not possible. (c)Effect of Termination. (1)Except as provided in paragraph(2)of this section,upon termination of this Agreement, for any reason, Business Associate shall return or destroy all Protected Health Information received from Covered Entity, or created or received by Business Associate on behalf of Covered Entity. Business Associate shall request, in writing, Protected Health Information that is in the possession of subcontractors of Business Associate. (2)In the event the Business Associate determines that returning or destroying the Protected Health Information is infeasible, Business Associate shall extend the protection of this Agreement to such Protected Health Information and limit further uses or disclosures to those purposes that make the return or destruction infeasible,for so long as Business Associate maintains such Protected Health Information. 6 Miscellaneous (a) Re ug latory References. A reference in this Agreement to a section in HIPAA means the section as in effector as amended,and for which compliance is required. (b) Amendment. Upon the enactment of any law or regulation affecting the use or disclosure of Protected Health Information, or the publication of any decision of a court of the United States or any state relating to any such law or the publication of any interpretive policy or opinion of any governmental agency charged with the enforcement of any such law or regulation, the parties agree to negotiate in good faith to amend the Agreement as necessary to comply with such law or regulation. (c) Survival. The obligations of Business Associate under section 5(c)(2) of this Agreement shall survive the termination of this Agreement. (d) Interpretation. Any ambiguity in this Appendix shall be resolved in favor of a meaning that permits both parties to comply with HIPAA. (e) No third party beneficiary. Nothing express or implied in this Agreement is intended to confer, nor shall anything herein confer, upon any person other than the parties and the respective successors or assigns of the parties, any rights,remedies, obligations,or liabilities whatsoever. Pharmacy Benefits Consulting Page 20 of 20