HomeMy WebLinkAboutContract 63302CSC No. 63302
PRESCRIPTION DRUG BENEFIT ADMINISTRATION AGREEMENT
This Prescription Drug Benefit Administration Agreement ("Agreement"), effective January 1, 2025
("Effective Date"), is between City of Fort Worth ("Client' or "City''), and Optum Rx, Inc., a California
corporation ("Optum Rk').
PRESCRIPTION DRUG BENEFIT SERVICES
1.1 Engagement. Client engages Optum Rx as its exclusive provider of the prescription drug
benefit services set forth in this Agreement, including the attached Exhibits (the "Services'j.
TERM AND TERMINATION
2.1 Term. The initial term of this Agreement begins on the Effective Date and expires on December
31, 2025 ("Initial Term").
2.2 Termination. This Agreement may be terminated as set forth in this section or as specified
elsewhere in this Agreement.
2.2.1 For Cause. Either party may terminate this Agreement following a material breach by the
other party. The non -breaching party shall notify the breaching party of the breach and
the breaching party shall have thirty (30) days (the "Cure Period') to cure the breach. If
the breaching party fails to cure the breach within the Cure Period, then the non -
breaching party may terminate the Agreement upon written notice to the breaching party.
2.2.2 For Convenience. Either party may terminate this Agreement at any time by giving a
minimum of ninety (90) days' written notice to the other party prior to the end of the Term.
2.2.3 By Mutual Agreement. This Agreement may be terminated by either Party by mutual
written agreement.
2.2.4 Termination due to Non -Appropriation. Optum Rx acknowledges and agrees that the City is
a Texas municipal governmental entity and that as such, the City cannot legally commit
funds beyond the current fiscal year, which such year begins on October 1 and ends on
September 30. In the event no funds or insufficient funds are appropriated by City in any
fiscal period for any payments due hereunder, then upon providing Optum Rx with ninety
(90) days' notice after the City Council decision, the City may terminate this Agreement
effective as of the last day for which funds have been appropriated without any penalty or
liability beyond payment of funds owed through the end of the fiscal year for which funds
have been appropriated.
2.3 Effect of Termination. Termination of this Agreement will not affect the rights and obligations
of the parties arising out of any transactions occurring before the effective date of the
termination, except as follows: (a) if Client improperly terminates this Agreement or if Optum
Rx terminates this Agreement for default by Client prior to the end of the Initial Term or any
Renewal Term, then Optum Rx will retain all pending or future Rebates payable under this
Agreement; or (c) as otherwise specified in Exhibit C (Compensation).
2.4 Transition Assistance Following Termination. Upon notice of termination of this Agreement,
Optum Rx will, to the extent applicable, provide Client or its designee with up to twelve (12)
transmissions, in the aggregate, of the following files in Optum Rx's standard format: (a)
existing Home Delivery Pharmacy or Specialty Pharmacy open refill transfer files for Members,
based upon Client's most current eligibility files; (b) Client's Claims history file; (c) Client's prior
authorization files; and (d) Client's accumulator files. Optum Rx shall only be responsible to
process those Claims that are for Prescription Drugs dispensed before the termination date
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Optum Rx PROPRIETARY AND CONFIDENTIAL OFFICIAL RECORD
Agreement No.: 01433858.0 CITY SECRETARY
FT. WORTH, TX
and received by Optum Rx from Network Pharmacies no later than thirty (30) days after the
termination date and from Members no later than sixty (60) days after the termination date.
COMPENSATION AND BILLING
3.1 Compensation. The parties agree to the rates, fees, reimbursements and guarantees set forth
on Exhibit C (Compensation) for the Services. In addition to the Compensation, Client will pay
Optum Rx any additional compensation that is authorized elsewhere in this Agreement.
3.2 Payment Terms. Optum Rx will invoice Client for Prescription Claims (with supporting detail)
and for administrative fees at semi-monthly billing cycles that run from the 1st through the 15th
and from the 16th through the end of the month. Client will pay Optum Rx all undisputed
invoiced amounts, via electronic fund transfer or other reliable means, no later than two (2)
business days after Client receives the invoice and supporting Claims detail file ("Payment
Due Date").
3.3 Invoice Dispute. Client may dispute any amounts on invoices that Client believes in good faith
to be in error no later than sixty (60) days after the date of the disputed invoice. If Client fails to
dispute an invoice within such time period, Client will be deemed to have accepted such
charges. This section will not preclude Client's right to audit described in section 4.2 (Client
Audits).
3.4 Payment Default.
3.4.1 Late Pavments and Late Fees. Any undisputed amounts Client owes under this
Agreement that are not paid by the Payment Due Date will bear interest from the
Payment Due Date until paid in full at the annual rate of interest equal to the lesser of
two (2) percentage points above the prime interest rate determined by the U.S. Federal
Reserve Bank or the maximum interest rate then permitted by law.
3.4.2 Pavment Default Remedies. If Client fails to pay any amount due on a validly submitted
invoice for which no objection is filed in good faith in accordance with section by the
Payment Due Date (Invoice Dispute) within five (5) business days after Optum Rx's
notice to Client of such non-payment (which notice may occur via email and/or telephone
call), then Optum Rx, in its sole discretion, shall have the non-exclusive and cumulative
options in addition to its remedies under this Agreement, at law or in equity, to: (i)
suspend performance of any or all of Optum Rx's obligations under or in connection with
this Agreement, including processing of Prescription Claims, (ii) require Client to pre -
fund a pharmacy spend account in the amount of two (2) times the average monthly
prescription drug spend of Client, (iii) utilize available deposited or escrowed funds, or
(iv) immediately terminate this Agreement upon notice to Client.
3.5 Right of Recoupment. Optum Rx may withhold, deduct, net or recoup from future amounts
owed or reimbursable to Client under this Agreement any undisputed amounts Client owes to
Optum Rx that are outstanding beyond their applicable Payment Due Date.
3.6 Payment from Members. Except as permitted by Laws, Optum Rx will not seek payment from
a Member for Covered Prescription Services or amounts due to Optum Rx from Client, other
than Cost -Sharing Amounts, returned check fees or collection costs. Optum Rx will
contractually require each Network Pharmacy to comply with the requirements of this section.
4. MAINTENANCE OF RECORDS; AUDITS
4.1 Records. Each party will retain records directly related to the performance of the Services for
a period of ten (10) years following the date of their creation or for a longer time period, if
required by Laws.
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4.2. Client Audits.
4.2.1. Client, at its own expense, may audit Optum Rx once each contract year to determine
whether Optum Rx is fulfilling the terms of this Agreement. Client must notify Optum
Rx in writing of its intent to audit and such notice constitutes authorization for Optum
Rx to disclose Client -specific information, including Member information and PHI, to
the auditor. The place, time, type, scope, and duration of all audits must be mutually
agreed upon by the parties. No audits will be initiated or conducted during December
or January because of the demands of the annual renewal and implementation period.
The audit scope will cover a period not to exceed twelve (12) months, unless the audit
relates to a financial guarantee for a period exceeding twelve (12) months, in which
case the audit scope will be limited to the term of the financial guarantee. Requests for
an audit must be submitted within six (6) months of the end of the period to be audited
including with respect to any post termination audit. Once Client has performed an
audit for a particular audit period (whether limited or full scope), that audit period will
be closed, and Client may not perform any further audits for that audit period. Client
may audit Optum Rx through a mutually agreed upon audit firm, so long as the auditor
does not have a conflict of interest (including not having consulting responsibilities),
executes a nondisclosure agreement with Optum Rx and is not compensated on a
contingency fee basis.
4.2.2. Optum Rx will provide Client's auditor with access to all relevant Client -specific
information reasonably necessary to conduct the audit, including all applicable
Prescription Claims, and, in the case of a Rebate audit, access to Optum Rx's top five
(5) rebate agreements or rebate agreements that account for at least 75% of the
Client's total rebate revenue generated per year, whichever is less. Any audit of Rebate
agreements must be conducted on -site by a mutually agreed upon third party auditor
and Client's auditor may not copy (through handwritten notes or otherwise) or retain
contracts or related documents provided by Optum Rx during such audit. Client's
auditor may take and retain notes to the extent necessary to document any identified
errors, and such notes are subject to review by Optum Rx to ensure compliance with
this section.
4.2.3. Client or its auditor may send Optum Rx up to three hundred (300) suspected
erroneous Prescription Claims for Optum Rx to perform additional research prior to
providing Optum Rx with its audit report. Client or its auditor shall provide an audit
report in writing to Optum Rx within forty-five (45) calendar days after the end of the
audit. Such audit report will contain a representative sample of Prescription Claims
suspected to be erroneous or the entire suspected error population, as well as the
dollar amount associated with any suspected errors. If Client or its auditor provides
Optum Rx with the entire suspected error population then Optum Rx will review a
statistically valid sample of the Prescription Claims and provide Client or its auditor with
its response within thirty (30) calendar days of Optum Rx's receipt of the audit report.
Client or its auditor shall have thirty (30) calendar days to respond to Optum Rx's
response. If Client or its auditor fails to provide an initial audit report to Optum Rx within
forty five (45) calendar days of the end of the audit or fails to respond to Optum Rx's
response to the audit report within thirty (30) calendar days, then the audit will be
considered closed. Any payment made, whether by Optum Rx or Client, based upon
audit findings will be made within thirty (30) days following Client and Optum Rx
agreeing to the audit results, as reflected in an executed audit settlement agreement.
DATA PROTECTION AND OWNERSHIP
5.1 Data Ownership. Client owns and will continue to own Client Information and Optum Rx owns
and will continue to own Optum Rx Information, despite data use or possession by the other
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party or its subcontractor or vendor. Despite any contrary provisions in this Agreement, during
the Term and for a reasonable period after termination of this Agreement, Client grants Optum
Rx the right to use and disclose to third parties Member drug and related medical data to
perform Optum Rx's responsibilities under this Agreement and to use in Optum Rx's research,
cost analyses, and cost comparison studies. All research, cost analyses, cost comparisons and
other similar studies or reports Optum Rx conducts or prepares, either directly or through any
of its affiliates, will be Optum Rx's sole and exclusive property. Optum Rx may aggregate this
information with that of other clients and de -identify it to protect Client and Member
confidentiality and more generally for use in research and other permitted uses. Intellectual
Property shall be the sole property of the party developing such Intellectual Property.
5.2 Use of Name. The parties agree not to use each other's name, logo, service marks, trademarks
or other identifying information without the written permission of the other, except for use to the
extent necessary for Optum Rx to carry out its obligations under this Agreement.
5.3 Confidentiality
5.3.1 Definitions.
5.3.1.1. "Confidential Information" means: (a) the terms of this Agreement and all
Client Information and Optum Rx Information; (b) all non-public information of
Discloser which Recipient knows or should reasonably be expected to know is
confidential or proprietary to Discloser; (c) any information that Discloser
designates as confidential or proprietary; and (d) any non-public business
plans, marketing plans and strategies, financial and operational plans,
business methods and practices, customer or prospect information, supplier
or vendor information, financial information, personnel information as well as
software, technology, inventions (whether or not patentable) that Discloser
owns, licenses or uses. Confidential Information will not include information
that: (i) is already known to Recipient prior to the date of this Agreement; (ii) is
generally available to the public, other than as a result of a breach of this
Agreement; (iii) becomes available to Recipient from a third party source
legally permitted to disclose the information to Recipient without restriction on
the disclosure; or (iv) is independently developed by Recipient without
reference to, or use of, any of the Discloser's Confidential Information.
5.3.1.2. "Discloser" means each party that provides Confidential Information pursuant
to this Agreement.
5.3.1.3. "Recipient" means each party that receives Confidential Information pursuant
to this Agreement.
5.3.1.4. "Representatives" means directors, officers, employees, agents, contractors,
or advisors of the Recipient.
5.3.2 Confidentiality Obligations. Recipient will: (i) hold Confidential Information in
confidence and protect it as confidential and proprietary utilizing no less than the
degree of care Recipient uses to protect its own similar confidential information; (ii)
disclose Confidential Information only to Representatives of Recipient with a legitimate
need to know the Confidential Information for the purposes of performing Recipient's
obligations pursuant to this Agreement, and who are made aware of this Agreement
and bound by appropriate confidentiality obligations; (iii) use Discloser's Confidential
Information only as specifically permitted by this Agreement or as otherwise necessary
to perform Recipient's obligations pursuant to this Agreement, which, in the case of
Optum Rx as the Recipient, may include disclosures to comply with Rebate reporting
or other data collection, maintenance, security or submission requirements; and (iv)
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not reverse engineer, disassemble, decompile or create derivative works using
Discloser's Confidential Information. Each party is and will remain solely and
completely liable and responsible for -any breach of this Agreement by its
Representatives and will promptly notify the other party if becomes aware of any
breach and use reasonable efforts to minimize the damage from the breach. Each
party to this Agreement may act at times as a Discloser or as a Recipient, and the
terms of this section shall apply accordingly.
5.3.3 Exceptions to Confidentialitv Obliaations. Notwithstanding the foregoing, Recipient may
disclose Confidential Information to the extent required or compelled by Laws or a
Governmental Authority with competent jurisdiction, on the conditions that Recipient will: (i)
give prompt notice to Discloser after learning of the need to disclose (if allowed by Laws);
(ii) disclose only that portion of Discloser's Confidential Information that Recipient's legal
counsel advises is legally necessary to comply with the Laws or Governmental Authority
order; and (iii) reasonably cooperate with Discloser if it objects to the disclosure. For
avoidance of doubt, by execution of this Agreement, Optum Rx acknowledges that the City
is subject to the Texas Public Information Act (the "Act"), and that under such law, the City's
information, including this Agreement, is generally required to be released to the public,
subject to the protections afforded Optum Rx's trade secret and confidential information
under the Act. In the event there is a request for information marked Confidential or
Proprietary, City shall promptly notify Optum Rx. It will be the responsibility of Optum Rx to
submit reasons objecting to disclosure. A determination on whether such reasons are
sufficient will not be decided by City, but by the Office of the Attorney General of the State
of Texas or by a court of competent jurisdiction.
5.4 Return of Confidential Information. Upon Discloser's request, Recipient will use
commercially reasonable efforts to promptly return or destroy Discloser's Confidential
Information within Recipient's possession or control. If Recipient determines that return or
destruction of Confidential Information is not feasible, Recipient will notify Discloser and may
retain the Confidential Information, on condition that the Confidential Information remains
subject to the terms of this section. Recipient may retain a copy of Discloser's Confidential
Information for archival purposes or as otherwise required by Laws.
5.5 Protected Health Information. The parties will comply with the Business Associate
Agreement in Exhibit D (Business Associate Agreement), which outlines the parties'
obligations for use and disclosure of PHI. If there is any conflict between the terms of this
Agreement and those in the Business Associate Agreement, the Business Associate
Agreement will govern.
5.6 Equitable Relief. The parties acknowledge that it would be difficult to measure damages
resulting from any breach of their respective obligations in this section, injury from this breach
would be impossible to calculate and money damages would be an inadequate remedy.
Consequently, in addition to any other rights or remedies available under this Agreement, the
parties may seek injunctive and other equitable relief, without bond or other security, for a
party's actual or threatened breach of this section. The obligations, rights and remedies of the
parties under this section are cumulative and in addition to, and not in lieu of, all obligations,
rights or remedies at law or in equity.
6. INDEMNIFICATION; LIMITATION OF LIABILITY; INSURANCE
6.1 Indemnification. To the extent allowed by law, each party ("Indemnitol") will defend,
indemnify and hold harmless the other party, its affiliates and their respective directors, officers,
employees, representatives, agents, successors, successors -in -interest and assigns
("Indemnitee") from and against all third party claims, legal or equitable causes of action, suits,
litigation, or other process for settling disputes or disagreements, including any of the foregoing
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processes or procedures in which injunctive or equitable relief is sought (an "Indemnification
Claim") against Indemnitee to the extent arising or resulting from, or attributable to,
Indemnitor's material breach of this Agreement or its negligence or intentional misconduct
(including fraud), except to the extent the liability results from Indemnitee's negligence,
intentional misconduct or breach of this Agreement. Indemnitee will provide prompt notice to
Indemnitor upon learning of any occurrence or event that may reasonably be expected to result
in an obligation of Indemnitor under this section. Indemnitee's failure to provide prompt notice
will not relieve Indemnitor of its obligations under this section, except to the extent that the
omission results in a failure of actual notice to Indemnitor and Indemnitor suffers damages
because of the failure to notify. Indemnitee will provide Indemnitor with reasonable information
and assistance for Indemnitor to defend such Indemnification Claim, demand, or cause of
action.
6.2 Limitation of Liability and Claims. The parties will have no liability under this Agreement for
any consequential, special, indirect, incidental or punitive damages or lost profits, even if they
are aware of the possibility of the loss or damages. Optum Rx will not be responsible for any
claims, losses, or damages sustained because of the actions, or failure(s) to act, by any
Network Pharmacy, Drug Manufacturer or other pharmaceutical providers or other third party
not under control of Optum Rx pursuant to this Agreement.
6.3 Insurance Requirements. Each party will maintain: (a) during and for a reasonable period of
time after the Term, reasonable and customary insurance (whether through third party carriers
or self -insured arrangements or retentions), as to type, policy limits and other coverage terms,
to cover the risks of loss faced by companies similar to the party in size, industry and business
operations; and (b) all insurance coverage, bonds, security and financial assurances as Laws
may require from time -to -time. Optum Rx will maintain sufficient insurance coverage to enable
it to meet its obligations created by this Agreement and by Laws. Optum Rx acknowledges that
City is a governmental entity under the laws of the state of Texas and pursuant to Chapter 2259
of the Texas Government Code, entitled "Self -Insurance by Governmental Units," is self -
insured and therefore is not required to purchase insurance. City will provide a letter of self -
insured status as requested by Optum Rx.
MISCELLANEOUS
7.1 Subcontractors. Optum Rx may use its affiliates, vendors or subcontractors to perform the
Services. Optum Rx will be responsible for the Services to the same extent that Optum Rx
would have been had it performed those services without the use of an affiliate, vendor or
subcontractor.
7.2 Notices. All notices and other communications required or permitted under this Agreement will
be in writing and sent to the addresses set forth below (or at other addresses as specified by
a notice). All notices will be deemed to have been received either: (a) when delivered, if
delivered by hand or commercial courier, sent by United States registered or certified mail
(return receipt requested); or (b) on the next business day, if sent by a nationally recognized
commercial overnight courier.
If to OptumRx:
OptumRx, Inc.
1600 McConnor Parkway
Schaumburg, IL 60173-6801
Attn: Vice President, Client Management
If to Client:
City of Fort Worth
100 Fort Worth Trail
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Optum Rx PROPRIETARY AND CONFIDENTIAL
Agreement No.: 01433858.0
Copy to:
OptumRx, Inc.
1600 McConnor Parkway
Schaumburg, IL 60173-6801
Attn: General Counsel
Copy to:
City of Fort Worth
100 Fort Worth Trail
Fort Worth, Texas 76102 Fort Worth, Texas 76102
Attn: Assistant City Manager for HR Attn: Attorney for HR/Benefits
7.3 Amendment. Except as may otherwise be specified in this Agreement, this Agreement may
be amended only by a dated written instrument executed by a duly authorized person of each
party.
7.4 Waiver; Severability. The invalidity or unenforceability of any term or provision of this
Agreement shall in no way affect the validity or enforceability of any other term or provision.
The waiver by either party of a breach of any provision of this Agreement shall not operate as
or be construed as a waiver of any subsequent breach of such provision
7.5 Assignment. A party may not assign or transfer this Agreement without the prior written
consent of the other party, except that Optum Rx may assign this Agreement to any affiliate
upon thirty (30) day notice to Client. This Agreement will bind the parties and their respective
successors and assigns and will inure to the benefit of the parties and their respective permitted
successors and assigns.
7.6 Governing Law. This Agreement will be governed by and construed in accordance with the
laws of Texas, without giving effect to conflicts of law principles.
7.7 Force Majeure. If any party is unable to perform any of its obligations under this Agreement
because of any cause beyond the reasonable control of and not the fault of the party invoking
this section, including any act of God, fire, casualty, flood, earthquake, war, strike, lockout,
epidemic, destruction of production facilities, riot, insurrection or material unavailability, and if
the non -performing party has been unable to avoid or overcome its effects through the exercise
of commercially reasonable efforts, this party will give prompt notice to the other party, its
performance will be excused, and the time for its performance will be extended for the period
of delay or inability to perform due to such occurrences; provided however, that this clause may
not be invoked to excuse a party's payment obligations. Optum Rx shall not be deemed to have
failed to meet a performance standard to the extent and proportion that such failure is due to
circumstances caused by Client, CMS or other third party and/or is otherwise not within Optum
Rx's reasonable control. Optum Rx will maintain commercially reasonable business continuity
and disaster recovery plans.
7.8 Relationship of the Parties; No Third -Party Beneficiaries. The sole relationship between
the parties is that of independent contractors. This Agreement will not create a joint venture,
partnership, agency, employment or other relationship between the parties. Except for the
indemnification and arbitration obligations in this Agreement, nothing in this Agreement will be
construed to create any rights or obligations except among the parties and no person or entity
will be regarded as a third -party beneficiary of this Agreement.
7.9 Survival. Any term of this Agreement that contemplates performance after termination of this
Agreement will survive expiration or termination and continue until fully satisfied, including
section 5 (Data Protection and Ownership), which will survive so long as the information is
Confidential Information or the data is proprietary to either party or its successors, successors -
in -interest or assigns, and section 6.1 (Indemnification); and section 6.2 (Limitation of Liability),
which will survive indefinitely.
7.10 Dispute Resolution. If a dispute occurs between the parties, the complaining party shall
provide written notice of the dispute. The parties, through their respective executive officers
shall then meet to attempt to resolve the dispute in good faith before pursuing arbitration,
except for matters subject to preliminary injunctive relief pursuant to the American Arbitration
Association's ("AAA's procedures for emergency relief. If the parties' executive officers do not
resolve the dispute within thirty (30) days after the written notice, then arbitration may be
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commenced.
Any dispute arising out of or related to this Agreement not resolved informally as provided
above may be resolved by arbitration. Unless otherwise agreed to in writing by the parties, the
arbitration shall be administered by the AAA pursuant to the then applicable AAA Commercial
Arbitration Rules and Mediation Procedures and shall be conducted before a single arbitrator.
In no event may the arbitrator award any damages of any nature inconsistent with the terms of
this Agreement. The arbitrator shall have authority to resolve any dispute relating to the
interpretation, applicability, enforceability or formation of the agreement to arbitrate. The
arbitrator must follow the rule of law, and the award of the arbitrator will be final and binding on
the parties. Any such arbitration must be conducted in Fort Worth, Texas and Client agrees to
such jurisdiction, unless otherwise agreed by the parties in writing. Each party shall be
responsible for its own expenses related to the arbitration, including attorneys' fees and shall
equally share the cost of the arbitration.
All disputes are subject to arbitration on an individual basis, not on a class or representative
basis, or through any form of consolidated proceedings, unless the parties agree in writing to
proceed on a class, consolidate or other representative basis. Except as may be required by
law, neither party nor the arbitrator may disclose the existence, content, or results or any
dispute or arbitration under this Agreement without the prior written consent of all parties. This
agreement to arbitrate is made pursuant to a transaction involving interstate commerce and
shall be governed by the Federal Arbitration Act.
Nothing herein precludes the parties from filing an action at law or in equity and from having
any dispute covered by this Agreement heard by a judge or jury.
7.11 Compliance with Laws. Each party will comply with all Laws applicable to its respective
business and the performance of its obligations under this Agreement. Each party will maintain
all necessary licenses and permits required in connection with the performance of the Services
under this Agreement or will arrange for the provision of such Services by others that maintain
such licenses and permits. If any Governmental Authority or Laws require that this Agreement
be amended, including to incorporate specific required terms, Optum Rx may amend this
Agreement to comply with this requirement by providing thirty (30) days prior notice to Client.
This amendment will become effective at the end of the thirty (30) day notice period or a shorter
period if necessary to comply with the requirement, unless Client can demonstrate conclusively
in writing that the amendment is not necessary to comply with the Governmental Authority or
Laws. Client acknowledges that Optum Rx does not provide legal, regulatory or tax advice to
Client. Client further acknowledges that Optum Rx is neither an insurer nor a consultant.
7.12. Government Program Reporting. To the extent applicable, the parties acknowledge and
agree that any discount, rebate, Manufacturer Administrative Fee, credit or allowance provided
to Client under this Agreement and any rebate retained by Optum Rx under this Agreement
shall constitute and shall be treated as a discount, within the meaning of 42 U.S.C. §1320a-
7b(b)(3)(A), provided to Client against the price of Prescription Drugs provided under this
Agreement. To the extent required by Laws or contractual commitment, Client agrees to fully
and accurately disclose and report any such discount, rebate, Manufacturer Administrative
Fee, credit or allowance to Medicare, Medicaid or other government health care programs as
a discount against the price of the Prescription Drugs provided under this Agreement. Upon
Client's request, Optum Rx will provide additional information necessary to support Client's
government reporting requirements.
7.13. Taxes and Assessments.
7.13.1. Payment of Taxes and Expenses. If any Taxes are assessed against Optum Rx as
a claim administrator in connection with the Services, Client will reimburse Optum Rx
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for the Client's proportionate share of the Taxes (but not Taxes on Optum Rx s net
income). "Tax' means a charge imposed, assessed or levied by any federal, state,
local or other governmental entity. Optum Rx has the authority and discretion to
reasonably determine whether the Tax should be paid or disputed. Client also will
reimburse Optum Rx for a proportionate share of any cost or expense reasonably
incurred by Optum Rx in disputing the Tax, including costs and reasonable attorneys'
fees and any interest, fines or penalties relating to the Tax, unless caused by Optum
Rx's unreasonable delay or determination to dispute the Tax.
7.13.2. Tax Reporting. If the reimbursement of any benefits to Members in connection with
this Agreement is subject to Benefit Plan or employer -based tax reporting
requirements, Client will comply with these requirements.
7.13.3. State and Federal Surcharges, Fees and Assessments. The Benefit Plan will
remain responsible for state or federal surcharges, assessments or similar Taxes
imposed on the Benefit Plan or Optum Rx, including those imposed pursuant to The
Patient Protection and Affordable Care Act of 2010.
7.14. Integrated Agreement; Interpretation; Execution. This Agreement, with its exhibits,
constitutes the final and complete expression of the terms of the agreement between the parties
regarding the subject matter of this Agreement. This Agreement replaces any prior written or
oral communications or agreements between the parties regarding its subject matter. The
language in this Agreement will be construed in accordance with its fair meaning, as if prepared
by all parties and not strictly for or against any party. When approval of a party is required under
this Agreement, the approval will not be unreasonably withheld or delayed. For all terms in this
Agreement, unless otherwise specified: (a) a term has the meaning assigned to it in Exhibit A
(Schedule of Definitions) or defined elsewhere in this Agreement; (b) "or" is not exclusive; (c)
"including" means including without limitation; (d) "party" and "parties" refer only to a named
party to this Agreement; (e) any reference to an agreement, instrument or statute means that
agreement, instrument or statute as from time -to -time amended, modified or supplemented and
any applicable corresponding provisions of successor statutes or regulations; and (f) all
remedies available to a party under this Agreement, at law or in equity are cumulative and (g)
an electronic signature of this Agreement, or a signature on a copy of this Agreement that a
party receives by facsimile, email or other means, is binding as an original, and the parties will
treat an electronic or photo copy of this signed Agreement as an original. The headings in this
Agreement are provided for convenience only and do not affect its meaning. The parties may
sign this Agreement in two (2) or more counterparts, and as so signed this Agreement will
constitute one and the same Agreement binding on the parties.
[signature page follows)
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Agreement No.: 01433858.0
The undersigned duly authorized representatives have executed this Agreement as of the date
indicated below.
OptumRx, Inc. City of Fort Worth
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Print Name:
Matthew Vesledahl Print Name: Dianna Giordano
Title: CFO Title:
Date: May 5, 2025 Date: 05/19/2025
Agreement Number: 01433858.0
Exhibits. The Exhibits listed below and attached to this Agreement are incorporated into and made part of
this Agreement:
Exhibit A, Schedule of Definitions
Exhibit B, PBM Services
Exhibit C, Compensation
Exhibit D, Business Associate Agreement
Page 10 of 31
Optum Rx PROPRIETARY AND CONFIDENTIAL
Agreement No.: 01433858.0
ACCEPTED AND AGREED:
CITY:
City of Fort Worth Contract Compliance Manager:
By signing I acknowledge that I am the person
responsible for the monitoring and administration
of this contract, including ensuring all
By: DiannaGior�o(nay�508:54CDT) performance and reporting requirements.
Name: Dianna Giordano
Title: Assistant City Manager
Date: 05/19/2025 By:
Name: Joanne Hinton
Approval Recommended: Title:
Approved as to Form and Legality:
By. 2"ch d ,1011 d
VENDOR:
Richard Jones (Mav 16. 2025 10 12 CDTI
Name:
Richard Jones
Title:
Assistant Director of Human
Resources
By:
Name: Jessika J. Williams
Attest:
Title: Assistant City Attorney
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Contract Authorization:
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M&C:
By:
Name:
Jannette Goodall
Title:
City Secretary
By:
Name:
Title:
Date:
OFFICIAL RECORD
CITY SECRETARY
FT. WORTH, TX
EXHIBIT A
SCHEDULE OF DEFINITIONS
Capitalized terms used in this Agreement are defined below or elsewhere in this Agreement.
"Authorized Brand Alternative Drug" means a drug with a unique NDC that is the bioequivalent
of a Brand Drug that is under patent and which is manufactured by the patent holder or affiliate or a third
party under a license, whether or not identified as a Brand Drug or Generic Drug by the manufacturer or
Pricing Source.
"AWP" means the average wholesale price, as reflected on the Pricing Source, of a Prescription
Drug or other pharmaceutical products or supplies based on the eleven (11) digit National Drug Code (NDC)
of the Prescription Drug on the date dispensed. Optum Rx will rely on the Pricing Source as updated by
Optum Rx no less frequently than every seven (7) days to determine AWP for purposes of establishing the
pricing provided to Client under this Agreement. Optum Rx will not establish AWP, and Optum Rx will have
no liability to Client arising from use of the Pricing Source.
"Benefit Plan(s)" means the benefit plan(s) indicated on the Plan Specifications that are
sponsored by Client and that include the Covered Prescription Services for which Optum Rx has agreed to
provide the Services under this Agreement.
"Brand Drug" means a Covered Prescription Drug designated by Optum Rx as a "Brand Drug"
based upon factors including indicators included in the Pricing Source.
"Client Information" means (a) all information Client provides to Optum Rx, including information
about Benefit Plan(s), Plan Specifications, Members and Client's other services, products and plans; (b)
any information provided to Optum Rx by a Governmental Authority or other third party about Client or
Benefit Plan(s); (c) information Optum Rx generates that relates directly to Optum Rx performing Services
for Client under this Agreement, exclusive of information Optum Rx generates for use in its business
generally or for use with multiple clients; and (d) all Client Intellectual Property and related derivative works.
Client Information means information in any form. Client Information does not include information that is:
(i) generated by or relates to Optum Rx or its business, operations or activities; (ii) relates to another Optum
Rx client or contractor; (iii) generated or used by Optum Rx other than in performing Services under this
Agreement; or (iv) licensed by Optum Rx from a Pricing Source vendor; or (v) information disclosed, sold,
or otherwise provided to third parties where the Client Information cannot be identified and has been
aggregated with other client information.
"Clinical Documentation Form" means the document describing the clinical services elected by
Client to be provided by Optum Rx as mutually agreed to by the parties. Optum Rx may update standard
clinical programs from time to time.
"Compound Prescription Drug" means a Prescription Drug that is prepared by a pharmacist who
mixes or adjusts one (1) or more Prescription Drugs to customize a medication to meet a Member's
individual medical needs.
"Cost -Sharing Amount" means the coinsurance, copay, or other cost -sharing amount that a
pharmacy may collect from a Member for Covered Prescription Services in accordance with the Member's
Benefit Plan.
"Covered Prescription Services" means Prescription Drugs or other pharmaceutical products,
services or supplies dispensed by a pharmacy to a Member for which coverage is provided in accordance
with the Member's Benefit Plan.
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Optum Rx PROPRIETARY AND CONFIDENTIAL
Agreement No.: 01433858.0
"Drug Manufacturer" means an entity that manufactures, sells, markets or distributes Prescription
Drugs; provided "Drug Manufacturer" shall not include wholesalers engaged in the sale and distribution of
Prescription Drugs.
"ER/SA" means the Employee Retirement Income Security Act, as amended, 29 U.S.C. § 1001 et
seq
"FDA" means the United States Food and Drug Administration or any successor Governmental
Authority.
"Formulary" means the list of Prescription Drugs or other pharmaceutical products, services or
supplies as developed by Optum Rx, approved by Optum Rx's P&T Committee, and adopted by Client for
use with and as covered by the Benefit Plan(s).
"Generic Drug" means a covered Prescription Drug, whether identified by its chemical, proprietary
or non-proprietary name, that is therapeutically equivalent and interchangeable with a Prescription Drug
having an identical amount of the same active ingredient(s). The Optum Rx designated Generic Drug
determination is made based upon factors including indicators included in the Pricing Source.
"Governmental Authority" means the Federal government or any state or local government or
any department, agency, authority, or instrumentality thereof (including any court) that regulates the
applicable party's activities or operations.
"Home Delivery Pharmacy" means a facility that is duly licensed to operate as a pharmacy and
dispense Prescription Drugs via postal or commercial courier delivery to individuals, including Members
and which typically dispense ninety (90) day prescriptions. Home Delivery Pharmacy includes pharmacies
that Optum Rx, or its affiliates, owns or operates.
"House Generic" means a Claim dispensed with a DAW Code of 5. House Generics shall be
considered Generic Drugs and shall be priced in accordance with the Generic Drug pricing, including
Generic Drug guarantees, set forth in the compensation exhibit of this Agreement.
"Intellectual Property" means any patent, invention, discovery, know-how, moral, technology,
software, copyright, authorship, trade secret, trademark, trade dress, service mark, confidentiality,
proprietary, privacy, intellectual property or similar rights (including rights in applications, registrations,
filings and renewals) that are protected or legally enforceable under state or federal common laws or
statutory laws or laws of foreign jurisdictions.
"Laws" means all applicable common law and any and all state, federal or local statutes,
ordinances, codes, rules, regulations, orders, procedures, standards, directives, guidelines, instructions,
bulletins, policies or requirements enacted, promulgated, or applied by any Governmental Authority, as
amended, replaced, interpreted or enforced by any Governmental Authority.
"Limited Distribution Drugs" (LDDs) means a Covered Prescription Drug available at a limited
number of pharmacies or commercial providers as a result of direct manufacturer contracting with the
pharmacy or provider. LDD's exist where the applicable manufacturer requires the dispensing pharmacy
or provider to be specifically contracted with such manufacturer to be allowed to dispense the LDD. Unless
otherwise agreed upon, LDD's are excluded from financial guarantees.
"MAC" means the maximum allowable cost of a Prescription Drug as specified on a list established
by Optum Rx. Optum Rx may have multiple MAC lists, each of which is subject to Optum Rx's periodic
review and modification in its sole discretion.
"Manufacturer Administrative Fees" means the administrative fees paid by Drug Manufacturers
to Optum Rx, if any, for Optum Rx's provision of Rebate administration services in connection with invoicing,
allocating, and collecting Rebates under the Rebate program.
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Optum Rx PROPRIETARY AND CONFIDENTIAL
Agreement No.: 01433858.0
"Member" means an individual who is eligible to receive Covered Prescription Services as
identified in Client's eligibility data.
"NCPDP" means that National Council for Prescription Drug Programs.
"NDC" means the eleven (11) digit National Drug Code that is the identifying Prescription Drug
number maintained by the FDA.
"Network Pharmacy" means a retail pharmacy, Home Delivery Pharmacy, Specialty Pharmacy
or other facility that is duly licensed to operate as a pharmacy and is owned or operated by Optum Rx (or
an affiliate) or has entered into a Network Pharmacy Agreement.
"Network Pharmacy Agreement' means the agreement between a Network Pharmacy and
Optum Rx or Client to provide Covered Prescription Services.
"Optum Rx Information" means: (a) all information Optum Rx provides to Client regarding Optum
Rx or its P&T Committee, Optum Rx's formularies, Network Pharmacies or Pharmacy Network, services or
products Optum Rx offers directly or indirectly, and all information generated in Optum Rx's business,
including information licensed from subcontractors, vendors and/or affiliates and information received or
generated by Optum Rx's Home Delivery or Specialty Pharmacies in connection with dispensing
Prescription Drugs; and (b) all Optum Rx Intellectual Property and related derivative works. Optum Rx
Information means information in any form. Optum Rx Information does not include information that relates
exclusively to Client or its business.
"P&T Committee" means the pharmacy & therapeutics committee formed by Optum Rx or Client
that reviews a legend drug for inclusion on the Formulary and creates criteria, policies and procedures for
such inclusion including, but not limited to, clinically appropriate quantity restrictions, step therapies and
prior authorizations.
"Plan Specifications" means the Benefit Plan elements and coverage rules adopted by Client as
provided to Optum Rx using the Optum Rx benefit design template and approved in writing by both parties.
The Optum Rx benefit design template as so approved shall constitute a "plan document" that is a
constituent component of Client's Benefit Plan.
"Prescription Claim" or "Claim" means a single request for payment for a Covered Prescription
Service.
"Prescription Drug" means an FDA approved drug required to be dispensed or administered only
by prescription from a licensed health care professional in accordance with Laws.
"Pricing Source" means the Medi-Span Master Drug Database File or another nationally
recognized pricing source determined by Optum Rx.
"Protected Health Information" or "PHr shall be defined as set forth in Exhibit D (Business
Associate Agreement).
"Rebate" means any retrospective formulary rebate payment or price protection that Optum Rx
receives from Drug Manufacturers, pursuant to the terms of a rebate contract independently negotiated by
Optum Rx on its own behalf, that is contingent upon and directly related to the use of a valid Prescription
Drug by a Member during the Term. "Rebate" does not include Manufacturer Administration Fee any
discount, price concession or other direct or indirect compensation the Optum Rx Specialty Pharmacy,
Home Delivery Pharmacy, or a group purchasing organization receives for the purchase of Prescription
Drug inventories or for the provision of any product, service, (including clinical services, care management,
or other services tied to the dispensing of products) or tool, including analytical services used in the review
of data.
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Optum Rx PROPRIETARY AND CONFIDENTIAL
Agreement No.: 01433858.0
"Specialty Drug List" means the list(s) of Specialty Drugs. The Specialty Drug List is maintained
and updated by Optum Rx from time to time. The Specialty Drug List(s) applicable to the Plan shall be
provided to Client upon request.
"Specialty Drugs" means a drug on the Specialty Drug List, as maintained by OptumRx, which is
a Covered Prescription Drug that typically: (i) is a biotechnology drug; (ii) has a drug formulation that is high
cost as defined by CMS specialty cost thresholds; (iii) is a drug requiring on -going frequent patient
management, monitoring or focused, in-depth Member education; (iv) is a drug that requires specialized
coordination, handling and distribution services for appropriate medication administration; (v) is an infused
or injectable drug professionally administered by a healthcare professional or in a healthcare setting
(excluding supplies or the cost of administration); (vi) is a drug therapy requiring management or care
coordination by a healthcare provider specializing in the Member's condition; or (vii) is a drug indicated for
a condition in which specialty medications are often prescribed and a business decision is made to include
within the therapeutic category or market basket. Specialty Drugs shall not include any Prescription Drugs
that require nuclear pharmacy sourcing or are preventive immunizations.
"Specialty Pharmacy" means a facility that is duly licensed to operate as a pharmacy and
primarily dispense Specialty Drugs. Specialty Pharmacy includes only pharmacies that Optum Rx, or its
affiliates, own or operate.
"Usual and Customary Charge" or "U&C" means the price, including all applicable customer
discounts that a cash paying customer pays a Network Pharmacy for Prescription Drugs as reported to
Optum Rx by such Network Pharmacy.
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Optum Rx PROPRIETARY AND CONFIDENTIAL
Agreement No.: 01433858.0
EXHIBIT B
PBM SERVICES
Client has engaged Optum Rx and Optum Rx has agreed to provide the Services set forth in this Exhibit.
CORE PRESCRIPTION DRUG BENEFIT SERVICES
1.1 Administrative Support
1.1.1 General. Optum Rx will provide administrative services to and support the Benefit
Plan(s) in accordance with Client's most recent Plan Specifications and as set forth in
this Agreement.
1.1.2 Reoortinq. Optum Rx will make available to Client Optum Rx's standard online reports.
1.1.3 Client Benefit Plan Responsibility. Client retains complete and exclusive discretionary
authority over, and is ultimately responsible for, all aspects of the administration,
management and operation of the Benefit Plan(s), including the authority to delegate
such responsibility to one or more third party service providers, and Client does so
delegate such responsibilities to Optum Rx as set forth in this Agreement. Client or its
delegate (and not Optum Rx) is the "administrator" (as defined in ERISA, to the extent
applicable) of the Benefit Plan(s) and will comply fully with ERISA, if applicable.
1.1.4 Optum Rx Benefit Plan Responsibility. Client acknowledges that except as set forth in
section 1.4.3 (Appeals), neither Optum Rx nor any of its affiliates will: (a) be named as
a "plan fiduciary" for purposes of ERISA (with respect to claims under a Benefit Plan
that is subject to ERISA); (b) have any discretionary authority or control respecting
management or administration of the Benefit Plan(s); or (c) exercise any authority or
control respecting the management or disposition of the assets of the Benefit Plan(s).
Except as set forth in Section 1.4.3 (Appeals), Client retains all discretionary authority
and control with respect to the management and administration of the Benefit Plan(s)
and the management or disposition of all plan assets. Upon reasonable notice, Optum
Rx will have the right to terminate PBM Services to the Benefit Plan(s) (or, if applicable,
Members of the Benefit Plan(s) located in a specific state) to the extent applicable state
law would require Optum Rx to act as a fiduciary with respect to Client, such Benefit
Plan(s), or a Member in any capacity.
1.1.5 Contraceptive Coverage. Client represents that it has not invoked a waiver to exclude
contraceptive coverage under its Plan Specifications pursuant to Public Health Service
Act section 2713 and any related regulations. If Client has the right to opt out of
providing contraceptive coverage, and elects to do so, Optum Rx may terminate this
Agreement upon notice to Client.
1.1.6. Benefit Plan Eliqibilitv Data. Client will provide Optum Rx with electronic eligibility data
in NCPDP format, or another format agreed to by the parties, as well as Member
personal address, phone number and email and work email, for all Members. Optum
Rx will load correctly formatted Member eligibility within twenty-four (24) hours of
receipt. Optum Rx is not liable for any Prescription Claims processed for any ineligible
persons due to incorrect, incomplete or untimely eligibility data provided by Client to
Optum Rx.
1.1.7. Member Notification. Client will make available to Members the type, scope,
restrictions, limitations and duration of Covered Prescription Services to which
Members are entitled. Client will provide and distribute, as appropriate, ID cards, a list
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Optum Rx PROPRIETARY AND CONFIDENTIAL
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of Network Pharmacies, Home Delivery brochures, the Formulary and other pharmacy
benefit related materials to Members, providers and other appropriate third parties.
1.1.8. Plan Specifications. Client will provide Optum Rx with the technical assistance and
information (and maintenance of such information) Optum Rx reasonably needs to
perform the Services, including information regarding Members, Benefit Plan(s) and
Plan Specifications. Client will provide Optum Rx with the Plan Specifications no later
than forty-five (45) days before the Effective Date, unless the parties otherwise agree.
Client's failure to provide the Plan Specifications within the time periods stated in this
section may delay Optum Rx's implementation of the Services and guarantees. Client
is responsible for the accuracy, completeness and timeliness of all Plan Specifications
and conformity of all Plan Specifications with other constituent plan documents
pursuant to which the Benefit Plan(s) was established and is maintained, and
acknowledges Optum Rx's right to rely on the Plan Specifications as a constituent
document of the Benefit Plan(s) in providing Services under this Agreement.
1.2 Pharmacy Network Administration
1.2.1 Pharmacv Network. Optum Rx will establish and maintain a network of pharmacies to
provide the Services to Client ("Pharmacy Network'). Upon request, Optum Rx will
make available to Client a current list of Network Pharmacies in the Pharmacy Network.
Optum Rx may add or remove Network Pharmacies from the Pharmacy Network.
Optum Rx will retain cash management responsibilities to help support prompt
payment of Network Pharmacies.
1.2.2 Network Pharmacv Credentialino. Optum Rx will establish and maintain a reasonable
process for credentialing Network Pharmacies.
1.2.3 Standard Pharmacv Audit Services. Optum Rx will, in accordance with its standard
audit program and as required by Laws, for the fees set forth in Exhibit C
(Compensation), conduct real-time and retrospective desk audits and selected on -site
audits of the Network Pharmacies to determine whether the Network Pharmacies are
submitting appropriate billings for payment by Client or Members. Optum Rx will report
the final audit results to Client. Optum Rx will pay Client, or apply as a credit to Client's
invoices, the amounts Optum Rx recovers from these audits as specified in Exhibit C
(Compensation). If Client requests additional audits of specific Network Pharmacies,
then Client will be financially responsible for all expenses incurred in connection with
such audits. Optum Rx will use commercially reasonable efforts to collect amounts
owing as a result of pharmacy audits. Optum Rx may, but is not required to, initiate
collection action against a Network Pharmacy. If Optum Rx initiates a collection action,
Optum Rx may offset against any recovered amounts owing to Client any reasonable
costs, including reasonable attorneys' fees and expenses, arising from any such
action.
1.3 Claims Processor Fees. Optum Rx may retain any Claims processor or other fees received
from Network Pharmacies in connection with the Prescription Drugs dispensed to Members
under the Benefit Plan(s), including: (a) a per Claim communications charge for on-line
electronic Claims processing by point -of -service communication; (b) a charge for each Claim
submitted to Optum Rx via paper, tape or a medium other than point -of -service communication;
(c) surcharges for canceled or reversed Claims; (d) a charge if a Network Pharmacy requests
an evidence of benefits report in a tape medium; and (e) charges for marketing and
administrative services.
1.4 Claims Process
1.4.1 Claims Adiudication. Optum Rx will adjudicate, process and pay Prescription Claims
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Optum Rx PROPRIETARY AND CONFIDENTIAL
Agreement No.: 01433858.0
for Covered Prescription Services in accordance with the Plan Specifications. Optum
Rx will pay in accordance with Plan Specifications and applicable Laws, only
Prescription Claims (a) that are prepared in accordance with the NCPDP-promulgated
standard format that contains all information necessary for processing of a Prescription
Claim and are submitted by the Network Pharmacies in a timely manner (no later than
one hundred eighty (180) days after the date or service, or a longer period of time if
required by Laws) through Optum Rx's point -of -service system; and (b) properly
submitted by Members as requests for reimbursement for Covered Prescription
Services.
1.4.2 Subroqated Claims Processinq.
1.4.2.1 Governmental Subroqated Claims: Client acknowledges that Medicaid
agencies and other programs operated by Governmental Authorities have
legal rights and obligations to pursue Claims reimbursement
("Governmental Subrogated Claims' and confirm eligibility from
applicable third parties. As such, Optum Rx will cooperate with
Governmental Authorities in connection with such matters and Client will
reimburse Optum Rx for Subrogated Claims in accordance with Laws.
Client agrees to provide Optum Rx with the information necessary for
Optum Rx to comply with Optum Rx's reporting obligations under Section
111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007.
1.4.2.2 Commercial Subroqated Claims: Client and OptumRx agree that Optum
Rx will process commercial subrogated claims requests ("Commercial
Subrogated Claims") in accordance with Plan Specifications and confirm
eligibility from applicable third parties. Client will reimburse Optum Rx for
Commercial Subrogated Claims in accordance with this Agreement.
1.4.3 Appeals. Client has elected for Optum Rx to provide appeals services in connection
with denied Claims for benefits for the fees set forth in the Clinical Documentation
Form. To the extent the Benefit Plan(s) are subject to ERISA, Client hereby delegates
fiduciary responsibility pursuant to section 405(c)(1) of ERISA to Optum Rx to make
final benefit determinations with respect to such delegated appeals. In all cases,
Optum Rx will exercise such responsibility in accordance with Plan Specifications, the
ERISA claims and appeals regulations set forth in 29 C.F.R. § 2560.503-1 as modified
by § 2590.715-2719 (the "Claims Rules"), if applicable, and this section. Client agrees
that Optum Rx may perform such services itself or through an independent third party
contracted by Optum Rx ("Appeals Vendor'l and that Optum Rx is authorized to
delegate such fiduciary responsibility to the Appeals Vendor. In resolving all such
appeals, Optum Rx or its Appeals Vendor are hereby delegated full and complete
discretion to determine eligibility for benefits under the Benefit Plan(s) and to interpret
the terms of the Benefit Plan(s). Optum Rx or its Appeals Vendor will perform up to
two (2) levels of internal appeals as elected by Client, which will include a review of
benefit coverage, as well as a review of medical necessity, as necessary. To the extent
the Benefit Plan(s) are subject to ERISA, Optum Rx agrees to accept fiduciary status
solely with respect to its performance of any internal appeal. The review of benefit
coverage will be based on the Plan Specifications, including the plan design document
provisions and criteria approved by Client. The decision of Optum Rx or the Appeals
Vendor at the last level of internal appeal shall be final, subject to a Member's right to
External Review (as defined below) orjudicial review with the standard of review being
the abuse of discretion standard.
If an appeal requires external review services (as defined in the Patient Protection and
Affordable Care Act of 2010 and its implementing regulations or applicable state Law,
such services are referred to "External Review'J, Optum Rx shall arrange for the
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Optum Rx PROPRIETARY AND CONFIDENTIAL
Agreement No.: 01433858.0
assignment of an independent review organization ("IRO' through the appropriate
regulatory agency. In accordance with applicable Law, the decision of the IRO shall be
final and binding on Client and the Member, subject only to any right of judicial review.
1.5 Benefits Administration and Support
1.5.1. Clinical Services. In addition to the clinical services set forth on the Clinical
Documentation Form, Optum Rx will provide the following clinical services to Client:
1.5.1.1. Utilization Management Development and Support. Client will implement
Optum Rx's standard utilization management programs for the Benefit
Plan(s) designed to promote cost-effective drug utilization management and
to discourage Prescription Drug over and under -utilization. For Optum Rx's
standard utilization management program, Optum Rx will administer the
program. Neither Client nor any vendor of client will administer utilization
management programs. Optum Rx will not make its utilization management
criteria available for use by Client or a third -party vendor of Client. Client
may choose to implement custom utilization management programs
however, all customizations are subject to approval by Optum Rx's P&T
Committee, unless Client maintains its own P&T Committee. Additional
administrative fees may apply for non-standard utilization management
programs requested by Client and agreed to by Optum Rx, and such
customizations may impact the financial terms in this Agreement.
1.5.1.2. Prior Authorization Services. At Client's request, Optum Rx shall administer
a prior authorization program applying rules and conditions applicable to the
Benefit Plan(s). Client shall have discretionary authority to establish prior
authorization criteria, provided that non-standard criteria are subject to
Optum Rx's P&T Committee oversight or Client's own P&T Committee.
Optum Rx will not provide Optum Rx prior authorization criteria for use by
Client or Client's third -party vendor. Client will not overturn any clinical
decisions delegated to and made by Optum Rx unless Client maintains its
own P&T Committee.
1.5.1.3. Changes Due to Shortages, Recall or Public Health and Safetv Concern. In
the event of a Prescription Drug shortage or recall or public health and/or
other material safety concerns impacting or related to the distribution or
dispensing of Prescription Drugs, Optum Rx is authorized by Client to make
temporary clinically appropriate changes to the Formulary status and/or
tiering of Prescription Drugs, days' supply limitations, Pharmacy Network
access, utilization management programs or similar programs or initiatives
to address such concerns. Prescriptions Drugs impacted by such changes
shall be excluded from all financial and performance guarantees.
1.5.1.4. Member Communication. Upon Client's request, Optum Rx will
communicate Client's utilization program requirements to Members through
Client -approved information and outreach materials. Optum Rx may, on
behalf of Client: (a) communicate with Members to describe health -related
products or services (or payment for the products or services) included in
the Benefit Plan(s), including communications about Network Pharmacies,
replacement or enhancement to the Benefit Plan(s), and health -related
products or services available only to Members that add value to and are not
part of the Benefit Plan; (b) conduct population -based activities relating to
improving the health of Members and reducing their healthcare costs; and
(c) contact Members with health education information and information
about Prescription Drugs, treatment alternatives, and related functions.
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Optum Rx will endeavor to communicate with Members digitally, except
whether otherwise specified by Law or for Members who opt out of digital
communications annually.
1.6. E-Prescribing. Upon Client's request, Optum Rxwill provide prescriberswith electronic access
to Member Benefit Plan information, including: (a) Member eligibility status: (b) Member
medication history; (c) Formulary status of the Prescription Drug being prescribed; (d) listing of
Generic Drug or Brand Drug Formulary alternative medications; (e) Member coverage
information where applicable; (f) applicable Cost -Sharing Amount; and (g) drug classification
information required by the Centers for Medicare & Medicaid Services or successor
Governmental Authority.
1.7. Formulary
1.7.1. Formulary Adoption. Client will adopt as the Formulary one (1) or more of Optum Rx's
Formularies, as updated from time to time, and as designated in Exhibit C
(Compensation). Any requested customization of an Optum Rx Formulary shall be
subject to the provisions of Section 1.7.3 (Formulary Changes).
1.7.2. Formulary Manaqement. Optum Rx will make the Formulary available to Client, or
other appropriate parties. Except as provided in this Agreement, Client will not copy,
distribute, sell or otherwise provide Optum Rx's formularies, including the Formulary,
to another party without Optum Rx's prior written approval. Provided that Optum Rx
agrees, Client may post the Formulary on Client's Member health care website.
1.7.3. Formulary Changes. Optum Rx will include in the Formulary new Prescription Drugs
or other pharmaceutical products, services or supplies as specified in the Plan
Specifications according to the following schedule: (a) if an open formulary, new
Prescription Drugs or other pharmaceutical products, services or supplies will be
included in the Formulary upon publication in the Pricing Source and loading into
Optum Rx's systems; or (b) if a closed formulary, new Covered Prescription Drugs or
other pharmaceutical products, services or supplies (Formulary only) may be included
in the Formulary after review by Optum Rx's P&T Committee. Following changes to
the Formulary, Optum Rx, at Client's request, will provide or make available
appropriate notifications of negative Formulary changes to Client, Members,
prescribers, and state pharmaceutical assistance programs as required by Laws and
agreed by the parties. Any requested customization of an Optum Rx Formulary must
comply with the Optum Rx P&T Committee oversight with respect to drugs that must
be included or excluded from formulary for clinical safety and appropriateness. Any
customizations shall be subject to additional administrative fees and may impact the
financial terms in this Agreement.
1.7.4. P&T Committee. Optum Rx's P&T Committee will develop and maintain Optum Rx's
Formularies, which, in general, may include selecting Prescription Drugs to include in
Optum Rx's formularies and making recommendations on associated utilization
management and other clinical programs. Unless Client has established its own P&T
Committee, Optum Rx's P&T Committee will be the Client designated P&T Committee
and Client shall abide by the Optum Rx P&T Committee decisions regarding the
Formulary, associated utilization management and other clinical programs and
clinically appropriate therapy access regardless of whether the Formulary is
customized.
1.7.5. No Endorsement. Optum Rx's development and maintenance of its formularies will not
be construed as an endorsement of any prescription drug product or Drug
Manufacturer. Optum Rx's P&T Committee is an external advisory committee and
Optum Rx will not be responsible for any actions or omissions of its P&T Committee or
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Optum Rx PROPRIETARY AND CONFIDENTIAL
Agreement No.: 01433858.0
any adverse consequences that may relate, directly or indirectly, to Client's or a
Member's reliance on Optum Rx's P&T Committee.
1.8. Rebate Management
1.8.1. Rebate Eligibility. Client will be eligible to receive Rebates subject to: (i) the terms set
forth in Exhibit C (Compensation); and (ii) Client's Benefit Plan(s), Formulary and
Prescription Claim utilization satisfying the Drug Manufacturer's Rebate contract
criteria. Client authorizes Optum Rx to contract directly or indirectly with Drug
Manufacturers for Rebates as a group purchasing organization. Client acknowledges
that Optum Rx negotiates Rebates with Drug Manufacturers based on Optum Rx's
book of business and not on a client specific basis. Client understands that not all
Brand Drugs and not all Prescription Drugs are eligible for Rebates, and Optum Rx is
not obligated to submit Rebates for Prescription Claims that it does not believe are
eligible to receive Rebates.
1.8.2. Rebate Guarantees. Except for any Rebate guarantees described in Exhibit C
(Compensation), Optum Rx has no obligation to obtain any particular amount of
Rebates for Client. Rebate guarantees are subject to the terms and conditions
described in this section 1.8 (Rebate Management) and Exhibit C (Compensation).
1.8.3. Collection. Optum Rx will use commercially reasonable efforts to process, invoice and
collect Rebates. Optum Rx will not be responsible for any non -payments or partial
payments of amounts owing under an agreement for Rebates. Optum Rx may, but is
not required to, initiate action to seek to collect Rebates from a Drug Manufacturer. If
Optum Rx initiates such a collection action, Optum Rx may offset against the Rebates
any reasonable costs, including reasonable attorneys' fees and expenses, arising from
any such action. To the extent of any overpayment or erroneous payment to Client by
Optum Rx, Client will refund the payment or Optum Rx may recoup the payment from
other sums due Client in accordance with section 3.5 (Right of Recoupment) of this
Agreement.
1.8.4. Disbursement. Provided Client is compliant with the terms of this Agreement, Optum
Rx will reconcile, allocate and credit or disburse all Rebates in accordance with this
Agreement. Client acknowledges that it has no right to receive a payment of Rebates
until such reconciliation and allocation has been completed and agrees that it does not
have a right to interest on any Rebate payments received by Optum Rx. Client's first
Rebate payment will be remitted no later than ninety (90) days after the end of the
incurred quarter following implementation, based on actual amounts received.
Thereafter, Rebate payments are made quarterly, which will include true ups on all
prior quarters to actual amounts collected from Drug Manufacturers. An annual
aggregate reconciliation will be performed one hundred and eighty (180) days after the
end of each contract year. Rebate reporting will be provided at the time of payment.
1.8.5. Other Pharmaceutical Relationships. Nothing in this Agreement shall preclude Optum
Rx from pursuing, directly or indirectly, other sources of revenue from Drug
Manufacturers or engaging in other revenue -producing relationships with Drug
Manufacturers. Optum Rx and its affiliates may receive and retain payments from Drug
Manufacturers for items and services provided, including, without limitation,
manufacturer administrative fees of up to six and one half percent (6.5%) of the
Wholesale Acquisition Cost (WAC) of the products dispensed or administered.
Additionally, Optum Rx or its affiliates, acting as a Home Delivery Pharmacy or a
Specialty Pharmacy, purchase Prescription Drugs from Drug Manufacturers and
receive certain discounts and purchase rebates from Drug Manufacturers in
connection with these purchases. Optum Rx retains these discounts and purchase
rebates and does not pass them on to Client.
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1.8.6. Client Rebate Contractinq Prohibited. If Client, or its affiliates, contracts with or
receives payment from another party, including a Drug Manufacturer, for a discount,
utilization limit, rebate or other incentive associated with the utilization of a Prescription
Drug, Client will be in material breach of this Agreement. Upon such breach, Optum
Rx, in its sole discretion, may adjust or eliminate any guarantees described in Exhibit
C (Compensation). Upon request, Client will cooperate fully with Optum Rx or a Drug
Manufacturer to verify Client's participation in any Rebate program and that all Rebate -
related payments were made solely for Covered Prescription Services to eligible
Members.
HOME DELIVERY PHARMACY SERVICES
2.1. Home Delivery Services. Home Delivery Pharmacies will provide Covered Prescription
Services to Members in accordance with the Plan Specifications for the Compensation
established in Exhibit C (Compensation). Home Delivery Pharmacies will provide customer
service support for Members who use Home Delivery Pharmacy Services. Optum Rx will make
Home Delivery forms available online to Members.
2.2. Control by Optum Rx. Optum Rx's Home Delivery Pharmacies and their duly authorized
personnel will exclusively supervise and control the provision of Home Delivery Covered
Prescription Services provided by Optum Rx's Home Delivery Pharmacies. The relationship
between a Member and a Home Delivery Pharmacy will be subject to the Laws, limitations and
privileges incident to the pharmacist -patient relationship. Optum Rx may exclude from
coverage by a Home Delivery Pharmacy under this Agreement a Prescription Drug that cannot
be dispensed under Optum Rx's Home Delivery pharmacy dispensing protocols or requires
special record -keeping procedures.
2.3. Home Delivery Rates. Specialty Drug pricing guarantees and terms apply to Specialty Drugs,
even if dispensed by a Home Delivery Pharmacy. If Client or Members request or require
expedited or alternative shipping methods other than Optum Rx's standard method, Client will
be solely responsible for those costs. If shipping rates increase, Optum Rx may pass these
cost increases on to Client.
3. SPECIALTY PHARMACY SERVICES
3.1. Specialty Services. Optum Rx will provide Client with Specialty Drug Covered Prescription
Services as set forth in Exhibit C (Compensation).
3.2. New Specialty Drugs. When a new Prescription Drug is identified and categorized by Optum
Rx as a Specialty Drug ("New Specialty Drud'), Optum Rx will make available the New
Specialty Drug to Members as part of the Specialty Drug Covered Prescription Services. Client
will compensate Optum Rx for the New Specialty Drug at the default rate for New Specialty
Drugs specified in Exhibit C (Compensation) until Optum Rx determines a revised rate.
3.3. Specialty Drug Administration. Optum Rx shall designate the drugs to be included in the
Specialty Drug List. Upon request, Optum Rx will make available to Client the Specialty Drug
List. Client requested changes to the Specialty Drug List must be mutually agreed upon and
may be subject to additional fees.
3.4. Optum Rx Control. Optum Rx's Specialty Pharmacies and their duly authorized personnel will
exclusively supervise and control the provision of Specialty Pharmacy Covered Prescription
Services provided by Optum Rx's Specialty Pharmacies. The relationship between a Member
and a Specialty Pharmacy will be subject to the Laws, limitations and privileges incident to the
pharmacist -patient relationship.
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EXHIBIT C
COMPENSATION
1. CREDIT AND ALLOWANCES
1.1. Pharmacy Management Allowance. Client shall receive a pharmacy management allowance
(PMA) of up to $5.00 per Member annually, which must be utilized within the applicable year and will
not carry over to the following year. This PMA allowance is to be used by Client to offset the cost of
actions intended to maximize the value of the pharmacy program. Funds may be used for items
including, but not restricted to, programming for customization, design and implementation of clinical
or other programs, communications, documented expenses related to staff education and industry
conference attendance, auditing, data integration and analytics, consulting fees (excluding market
checks), and engagement of relevant vendors that impact the pharmacy program strategy and results.
Client will be required to submit documentation to support the expenses for which it seeks
reimbursement. If Client terminates this Agreement for any reason before the end of the Initial Term,
Client shall refund to Optum Rx within 30 days after the effective date of such termination the full PMA
allowance applicable to the year of termination. It is the intention of the parties that, for the purposes
of the Federal Anti -Kickback Statute, this PMA allowance shall constitute and shall be treated as a
discount against the price of drugs within the meaning of 42 U.S.C. 1320a-7b(b)(3)(A). To the extent
required by Laws or contractual commitment, Client agrees to fully and accurately disclose and report
any such discount to Medicare, Medicaid or other government health care programs as a discount
against the price of the Prescription Drugs provided under this Agreement.
2. FINANCIAL TERMS
2.1. General Pricing Terms
2.1.1. Reconciliation Less Than 12 Months. The financial guarantees herein are annual
guarantees, Optum Rx will have no obligation to Client for any financial commitment associated
with any partial contract year (i.e. a period of time that is less than12-months).
2.1.2. Generic Drug MAC Logic - without UNC. The effective overall Generic Drug discount
rate includes U&C, MAC, and non -MAC Generic Drug Claims subject to the discount and
dispensing fee guarantee exclusions set forth herein.
2.1.3. Discount & Dispensing Fee Guarantee Exclusions. Compound Prescription Drug
Claims, 340B Claims, OTC's, Indian health services and tribal Claims, direct member
reimbursement Claims, coordination of benefit Claims, long term care Claims, infusion Claims,
Claims with ancillary charges such as vaccines, New to Market Limited Distribution Products,
Claims filled at in-house or Client -owned pharmacies, fraudulent Claims, covid test kits, and covid
anti-virals, Claims subject to State mandated minimum pharmacy reimbursement requirements,
and Claims filled outside the Optum Rx Pharmacy Network will be excluded from the discount
and dispensing fee guarantees. Additionally, claims in Puerto Rico, Guam, Northern Mariana
Islands, Virgin Islands, Hawaii, Massachusetts, and Alaska will be excluded from the guarantees.
2.1.4. U&C Exclusion. Usual & Customary Claims are excluded in the discount guarantees.
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2.1.5. Zero Balance Claim Exclusion. Zero balance Claims are included in the discount
guarantees prior to the application of Member Cost -Sharing Amount.
2.1.6. Compound Drugs. Compound Prescription Drugs shall be adjudicated using the
standards in the most recent version of NCPDP guidelines which includes individual multi -
ingredient pricing, the lower of U&C, MAC, or AWP minus and a dispensing fee of $10. Multi -
ingredient Compound Prescription Drugs filled through NCCP approved providers may also be
charged a level of effort (LOE) compounding fee based on the Claim's LOE code.
2.1.7. Retain Reimbursements. Optum Rx may, from time to time, receive and retain
reimbursement from pharmacies for its costs in connection with transmitting Claims and discounts
on its own behalf from wholesalers and Drug Manufacturers as a purchaser of pharmaceutical
products for its Home Delivery and Specialty Pharmacies.
2.1.8. Guarantee Conditionality. The financial guarantees set forth in this exhibit are subject to
all of the terms contained in this exhibit.
2.1.9. Exhibit Discrepancy. In the event of a discrepancy between this Exhibit and other
provisions in this Agreement, the terms of this Exhibit will prevail.
2.1.10. Multi Pack Divy Dose. Claims filled at multi -pack pharmacies, including Optum affiliated
multi -pack pharmacies, are included in the Retail 30 guarantee.
2.1.11. Pricing Conditions/Reservation of Rights/Market Events. Client Directed Change: At
any time between the date of the RFP and the Effective Date or during the Term or the
Agreement, Optum Rx may adjust affected financial provision (effective as of the date of the
change) for Client or Client's customer(s), if any of the following occur: (a) Client or Client's
customer makes any change to its formulary, utilization management or clinical programs, Benefit
Plan, Cost Share, exclusions, or makes a change that impacts a pharmacy network guarantee;
(b) any unexpected releases of Generic Drugs to market or the withdrawal or recall of existing
Brand Drugs; (c) formulary changes initiated by Optum Rx that promote overall lower net costs,
but reduce Rebates; (d) there is a change impacting the availability or amount of Rebates offered
by Drug Manufacturers, including changes related to the elimination or material modification of a
Drug Manufacturer's historic models or practices related to the provision of Rebates, which may
include changes in historic practices regarding rejection of Claims submitted by Optum Rx for
Rebates; or (e) either (i) more than ten percent (10%) of the Rebate value of Claims submitted
by Optum Rx to Drug Manufacturers for Rebates are denied by Drug Manufacturers for reasons
that such Claims are subject to any federal discount program (e.g., 340B, ITU, etc. ("Federal
Discount Program Discounts"); or (ii) Client adopts any formulary, utilization or optimization
program for Claims subject to Federal Discount Program Discount that impacts the availability or
amount of Rebates.
2.1.12. Pricing Conditions/Reservation of Rights/Client Directed Change. Market Event:
Optum Rx reserves the right to modify or amend the financial provisions of this Agreement in the
event of an external event or industry change impacting Optum Rx's performance under the
Agreement, including but not limited to: (a) any government imposed change in federal, state of
local laws or interpretation thereof or industry wide change that makes Optum Rx's performance
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of its duties hereunder materially more burdensome or expensive, including changes to the AWP
benchmark or methodology; or (b) the unexpected movement of a branded product to off -patent
or if Generic Drugs, Authorized Brand Alternative Drugs, low priced Brand Drugs or over-the-
counter substitutes become available; or (c) if there is a change impacting the availability or
amount of Rebates offered by Drug Manufacturers, including changes related to the elimination
or material modification of a Drug Manufacturer's historic models or practices related to the
provision of Rebates. The pricing guarantees included in Optum Rx's offer account for the known
rebate impacts of the Inflation Reduction Act's AMP Cap provision. Accordingly, as of the
Effective Date, the actual Drug Manufacturer Rebate related reductions in affected classes (i.e.
insulin & products) is underwritten into the pricing in this Agreement. Any subsequent Drug
Manufacturer action occurring after the Effective Date, may require equitable adjustment of the
pricing guarantees.
2.1.13. Pricing Conditions/Reservation of Rights/Change in Scope. Change in Scope:
Optum Rx reserves the right to modify or amend the financial provisions of this Agreement if any
of the following occur: (i) a change in the scope of services to be performed under this Agreement,
including, but not limited to, a change in the Plan Specifications or the exclusion of a service line
(i.e. retail & Home Delivery) from Client's service selection; (ii) a change of greater than 30% in
the total number of Members from the number provided to Optum Rx during pricing negotiations;
(iii) any substantive change in Client's formulary, Member Cost Share, Benefit Plan design,
exclusions, utilization management programs, or administrative edits; or (iv) Optum Rx is no
longer the exclusive Specialty Pharmacy provider. For modifications or amendments made
pursuant to (i), (ii), (iii), or (iv) above, Client agrees to provide Optum Rx at least ninety (90) days'
notice prior to making any changes. In the event the pricing needs to be modified, Optum Rx
shall provide Client with notification of any pricing modifications 45 days prior to implementation.
2.1.14. Walgreens90 Saver Plus: Forthe Walgreens90 Saver Plus Network, Members may only
obtain retail 90 Prescription Drugs at a Walgreens Pharmacy or Optum Rx Home Delivery
Pharmacy, with the exception that up to 2 (two) retail 30 Prescription Drug Claims ("Grace Fills")
may be filled at any Network Pharmacy. Members shall be incentivized to use the Walgreens90
Saver Plus Network through copay design, with the exception of Grace Fills. Members shall pay
100 percent of the cost of any retail maintenance Prescription Drug Claims filled outside of a
Walgreens or Optum Rx's Home Delivery Pharmacy, with the exception of Grace Fills. All pricing
guarantees for Walgreens90 Saver Plus are contingent upon OptumRx's Home Delivery
Pharmacy acting as the exclusive mail service provider. Maintenance status of a Claim is defined
by the Pricing Source maintenance indicator.
2.1.15. Premium Rebates. Premium Rebates: The Guaranteed Rebate Amount is contingent
upon Client's adoption, without deviation, of Optum Rx's Formulary, exclusions and utilization
management programs. Clients must have a Rebate qualifying benefit design which includes [a
minimum of $10 difference in member cost between preferred and non -preferred drugs, and that]
Members, after the deductible phase, must not be responsible for more than 50 percent of the
ingredient cost (e.g. a 50% or more co-insurance plan).
2.1.16. Single Source Generics. "Single Source Generic Drugs" are Generic Drugs that have
either recently come off patent and do not generate discounts traditionally delivered by Generic
Drugs or have an exclusive Drug Manufacturer. "Non -MAC Generic Drugs" are Generic Drugs
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where market conditions do not allow for MAC prices to be used. MAC Generic Drugs, Single
Source Generic Drugs and Non -MAC Generic Drugs will be included in the overall Generic Drug
guarantee.
2.1.17. Guaranteed Rebate Amount. The Guaranteed Rebate Amount is reconciled in the
aggregate annually.
2.1.18. Rebate Terms. Upon request Optum Rx offers 100% pass -through prescription drug and
rebate pricing options in accordance with applicable law.
2.2. General Terms
2.2.1. Pricing Model (Traditional). Under the Traditional Pricing Model, Client shall pay the
effective retail pharmacy rates as set forth above. These rates may differ from the amounts paid
to the retail pharmacies and Optum Rx may retain the difference.
2.2.2. Member Pay Logic. The Member will pay the lower of (i) Member Cost -Sharing Amount,
(ii) Client contracted rate, plus dispensing fee; or (iii) the pharmacy's Usual and Customary charge
for the product.
2.2.3. Ingredient Cost. Discounted ingredient costs are based upon: (i) published AWP and (ii)
the actual 11 digit National Drug Code, specific to the quantity dispensed submitted by a Network
Pharmacy at the time of adjudication.
2.2.4. Retail 90 Days Supply. Retail 90 pricing applies to retail Claims with greater than 83 days'
supply.
2.3. Guarantee Reconciliation
2.3.1. Discount and Dispensing Fee Reconciliation. Discount and dispensing fee guarantees
apply to Network Pharmacies that adjudicate covered Prescription Drugs in accordance with
Optum Rx's lower of logic (i.e. lesser of MAC, U&C, submitted cost, or contracted discount rate)
and contracted dispensing fee rates. Discount and dispensing fee guarantees are reconciled at
the component level and are effective average annual rates. Such discount and dispensing fee
guarantees are not reconciled on an individual Claim basis. Excess discounts in one line -item
category cannot be credited to another category for purposes of satisfying the guarantee
applicable to the other category, however, retail 30/90 generic guarantees will be reconciled
together as one component. Any credits due to Client relating to the discount guarantees set
forth above shall be issued ninety (90) days after the measurement period. Retail discounts will
be reconciled in aggregate for clients who choose to implement Optum Rx's Walgreens90 or
program.
2.4. Home Delivery Pharmacy
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2.4.1. Minimum at Home Delivery. Home Delivery pricing guarantees require an average days'
supply of greater than 83 days in the aggregate. A minimum charge of $7.99 shall apply for all
Home Delivery orders.
2.4.2. Limited Distribution for Specialty Guarantees. Specialty guarantees include Claims
filled at Optum Specialty Pharmacy and retail pharmacies.
2.4.3. Non -Specialty Claims at OptumRx Specialty Pharmacy. Non -specialty Claims filled at
Optum Specialty Pharmacy are reconciled under the retail guarantees.
2.5. Specialty Pharmacy
2.5.1. Specialty Arrangement. Optum Specialty Pharmacy shall be the exclusive specialty
providers under this Agreement and Members will receive Specialty Drug Covered Prescription
Services only from Optum Specialty Pharmacy and not any other retail, Home Delivery, or
specialty pharmacy. Notwithstanding the foregoing, Limited Distribution Drugs not dispensed by
Optum Specialty Pharmacy may be obtained from other Network Pharmacies. Under an exclusive
arrangement, grace fills at retail will not be allowed. The Specialty Drug List will be provided to
Client upon request and may be updated from time to time.
2.5.2. Specialty Exclusion from Standard Guarantees. Retail and Home Delivery guarantees
exclude Specialty Drug Claims. Retail guarantees include Specialty Drug Claims.
2.6. Rebate Terms
2.6.1. Rebate Exclusions Language. Calculation of the Guaranteed Rebate Amount excludes
ineligible Claims, Claims where the plan is not the primary payer; Vaccines; Non -FDA approved
claims, Formulary exclusion claims, House generic Claims (DAW 5); Devices with exception of
insulin pumps; Over the counter products with the exception of diabetic test strips; Compounds;
direct member reimbursement Claims; 340B Claims, Claims from long term care or federal
government pharmacies; Consumer card or discount card program Claims; Covid test kits, and
Covid anti-virals, Smart Fill & Split Claims, claims greater than 180 days, Re -Packaged Claims.
The Guaranteed Rebate Amount is reconciled in the aggregate annually.
2.6.2. Rebate Percentage Allocation/Rebate Remittance. Optum Rx will remit to Client 100%
of the Rebates received by Optum Rx. Optum Rx guarantees that the Rebates remitted to Client
during a contract year shall not be less than the Per Net Paid Brand Drug Claim (PNPBDC)
Rebate amounts specified in the Rebate table above ("Guaranteed Rebate Amount"). In the
event that the Rebates paid to Client during a contract year are less than the Guaranteed Rebate
Amount, Optum Rx shall pay to Client, as an additional rebate from Optum Rx, the amount of
such deficiency within 180 days following the end of the contract year. Optum Rx may withhold
Rebates until this Agreement is signed.
2.6.3. Rebate Credit. Rebate Credit: As determined by Optum Rx, when reconciling Guaranteed
Rebate Amounts, Optum Rx may add Rebate Credit. "Rebate Credit" is a credit applied towards
the achievement of the Guaranteed Rebate Amount. The Rebate Credit applies whenever there
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Agreement No.: 01433858.0
is a change impacting the level of Rebates expected as a result of the availability of clinically
comparable lower rebated drugs. The Rebate Credit is calculated as the difference between the
expected Rebate revenue associated with the original rebated product or high WAC alternative
(e.g. an originator brand drug, originator biologic, or high WAC product) and the actual Rebate
amount received. A Rebate Credit eligible reduction in Rebates may result from: (i) the
introduction of a biosimilar or authorized brand alternative; (ii) WAC reduction on a brand drug
subject to rebates; (iii) WAC change of a biosimilar; (iv) utilization shifts between biosimilars, the
originator biologic, or a low WAC alternative; or (v) the launch of a lower cost non -Generic Drug.
The Rebate Credit does not apply to Generic Drugs that launch after the Brand Drug no longer
has patent protection.
2.6.4. Rebate Change Effective Date. The effective date of any changes to Rebate
arrangements shall be effective as of the date of the change.
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EXHIBIT C -1
1. SERVICE FEES
Client will pay Optum Rx for the services provided herein pursuant to the below tables.
Term of Contract
Period Timespan
Period 1 01/01/2025 to 12/31/2025
Fees
Base Admin Fee (applies to all channels)
Period 1 $0.00 per Net Paid Claim
Pricina Guarantees
Brand Drugs
Period 1 AWP minus 20.00% plus $0.45 dispensing fee
Effective overall Generic Guarantees (ingredient cost)
Period 1 AWP minus 87.00% plus $0.45 dispensing fee
Brand Drugs
Period 1 AWP minus 20.00% plus $0.00 dispensing fee
Effective overall Generic Guarantees (ingredient cost)
Period 1 AWP minus 90.00% plus $0.00 dispensing fee
Brand Drugs
Period 1 AWP minus 26.80% plus $0.00 dispensing fee
Effective overall Generic Guarantees (ingredient cost)
Period 1 AWP minus 89.00% plus $0.00 dispensing fee
Brand Drugs
Period 1 AWP minus 18.00% plus $0.00 dispensing fee
Generic Drugs
Period 1 AWP minus 68.00% plus $0.00 dispensing fee
Brand/Generic combined
Period 1 AWP minus 12.00% plus $0.00 dispensing fee
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Agreement No.: 01433858.0
Rebate Guarantees: Premium Formulary
Client Estimated Share Greater of 100% or
Retail 30: Shared with minimum guarantees
Period 1 $375.00 Per Net Paid Brand Claim
90 Day Retail Partnership - Walgreens 90 Saver Plus: Shared with minimum guarantees
Period 1 $1,100.00 Per Net Paid Brand Claim
Home Delivery: Shared with minimum guarantees
Period 1 $900.00 Per Net Paid Brand Claim
Specialty: Shared with minimum guarantees
Period 1 $3,250.00 Per Net Paid Brand Claim
2. ADDITIONAL SERVICES
Certain services as indicated below are not included in the standard Administrative Fee and are
available for an additional charge. This is not an inclusive list. OptumRx may charge for any products
or services not specifically represented herein. Clinical Services are listed in the most recently
executed Clinical Documentation Form.
PreCheck MyScript
Custom Mailings
Retail Pharmacy Audit Administration
Investigatory Audit
Variable Copay Program
Client Website Additional Users
Direct Member Reimbursement (DMR)
Ad -hoc Reporting
Manual Eligibility Maintenance
ID cards - Subsequent mailings,
replacements, or additional
Explanation of Benefits (EOB)
Advanced Pharmacy Audit Services
(10,000 - 24,999 lives)
Advanced Pharmacy Audit Services
(25,000 - 49,999 lives)
Advanced Pharmacy Audit Services
(50,000 - 99,999 lives)
Advanced Pharmacy Audit Services
(100,000 - 199,999 lives)
Advanced Pharmacy Audit Services
(200,000 - 399,999 lives)
Advanced Pharmacy Audit Services
(400,000 - 599,999 lives)
Included in Standard Services
Production plus postage, shipping and handling
No administrative or retention fees
25% of recovered amount
$150.00 per impacted Rx
$400.00 per year per user. First five included
$2.50 per processed paper claim plus the
Administrative Fee
$150.00 per hour, with a minimum of $500
$0.50 per record
$2.00 per ID card plus postage, shipping and
handling
$2.00 per EOB plus postage, shipping and
$0.10 per Net Paid Claim
$0.09 per Net Paid Claim
$0.085 per Net Paid Claim
$0.08 per Net Paid Claim
$0.075 per Net Paid Claim
$0.065 per Net Paid Claim
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Advanced Pharmacy Audit Services
(600,000 - 999,999 lives)
Advanced Pharmacy Audit Services
(1,000,000 - 2,000,000 lives)
Advanced Pharmacy Audit Services
(2,000,001 - Unlimited)
RxTRACK License Fee
RDS Support Services
Integrated Accumulator - Near Real
Time Method
$0.06 per Net Paid Claim
$0.055 per Net Paid Claim
$0.05 per Net Paid Claim
$500.00 per seat annual fee
$1.25 per Member per month
$0.15 per Member per month
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EXHIBIT D
BUSINESS ASSOCIATE AGREEMENT
The Business Associate Agreement previously executed by between City of Fort Worth and OptumRx,
Inc. as of May 14, 2018 is incorporated herein by reference.
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Agreement No.: 01433858.0
DocuSign Envelope ID: FBCC342F-8AEF-4411-9872-E36B7B61B526
EXHIBIT B - BUSINESS ASSOCIATE AGREEMENT
This Business Associate Agreement ("BAK) is incorporated into and made part of the services agreements
(collectively, the "Agreement"), by and between OptumRx, Inc., on behalf of itself and its subsidiaries and
affiliates ("Business Associate"), and Participating Group ("Covered Entity"), that involve the use or
disclosure of PHI (as defined below). The parties agree as follows.
DEFINITIONS
1.1 All capitalized terms used in this BAA not otherwise defined herein have the meanings
established for purposes of the Health Insurance Portability and Accountability Act of 1996
and its implementing regulations, as amended and supplemented (collectively, "HIPAA").
1.2 "Breach" means the acquisition, access, use or disclosure of PHI in a manner not
permitted by the Privacy Rule that compromises the security or privacy of the PHI,
subject to the exclusions in 45 C.F.R. § 164.402.
1.3 "PHI" means Protected Health Information, as defined in 45 C.F.R. § 160.103, and is limited
to the Protected Health Information received from, or received, created, maintained or
transmitted on behalf of, Covered Entity.
1.4 "Privacy Rule" means the federal privacy regulations, and "Security Rule" means the federal
security regulations, as amended, issued pursuant to HIPAA and codified at 45 C.F.R. Parts
160 and 164 (Subparts A, C & E).
1.5 "Services" means the services provided by Business Associate to Covered Entity to the
extent they involve the receipt, creation, maintenance, transmission, use or disclosure of
PHI.
2. RESPONSIBILITIES OF BUSINESS ASSOCIATE.
With regard to its use and/or disclosure of PHI, Business Associate agrees to:
2.1 not use and/or further disclose PHI except as necessary to provide the Services, as
permitted or required by this BAA and in compliance with the applicable requirements of 45
C.F.R. § 164.504(e), or as Required by Law; provided that, to the extent Business Associate
is to carry out Covered Entity's obligations under the Privacy Rule, Business Associate will
comply with the requirements of the Privacy Rule that apply to Covered Entity in the
performance of those obligations.
2.2 implement and use appropriate administrative, physical and technical safeguards and
comply with applicable Security Rule requirements with respect to ePHI, to prevent use or
disclosure of PHI other than as provided for by this BAA.
2.3 without unreasonable delay, report to Covered Entity (i) any use or disclosure of PHI not
provided for in this BAA and/or (ii) any Security Incident of which Business Associate
becomes aware in accordance with 45 C.F.R. § 164.314(a)(2)(i)(C). For the purposes of
reporting under this BAA, a reportable "Security Incident" shall not include unsuccessful or
inconsequential incidents that do not represent a material threat to confidentiality, integrity or
availability of PHI (such as scans, pings, or unsuccessful attempts to penetrate computer
networks).
2.4 report to Covered Entity within ten business days: (i) any Breach of Unsecured PHI of which
it becomes aware in accordance with 45 C.F.R. § 164.504(e)(2)(ii)(C). Business Associate
shall provide to Covered Entity a description of the Breach and a list of Individuals
affected (unless Covered Entity is a plan sponsor ineligible to receive PHI). Business
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Associate shall provide required notifications to Individuals and the Media and Secretary,
where appropriate, in accordance with the Privacy Rule and with Covered Entity's
approval, not to be unreasonably withheld, of the notification text. Business Associate
shall pay for the reasonable costs associated with those notifications and with credit
monitoring, if appropriate.
2.5 in accordance with 45 C.F.R. § 164.502(e)(1)(ii) and 45 C.F.R. § 164.308(b)(2), ensure that
any subcontractors of Business Associate that create, receive, maintain or transmit PHI on
behalf of Business Associate agree, in writing, to the same restrictions on the use and/or
disclosure of PHI that apply to Business Associate with respect to that PHI, including
complying with the applicable Security Rule requirements with respect to ePHI.
2.6 make available its internal practices, books and records relating to the use and disclosure of
PHI to the Secretary for purposes of determining Covered Entity's compliance with the
Privacy Rule, in accordance with 45 C.F.R. § 164.504(e)(2)(ii)(1).
2.7 within ten business days after receiving a written request from Covered Entity or an
Individual, make available to Covered Entity or an Individual information necessary for an
accounting of disclosures of PHI about an Individual, in accordance with 45 C.F.R.
§ 164.528.
2.8 provide access to Covered Entity or an Individual, within ten business days after receiving a
written request from Covered Entity or an Individual, to PHI in a Designated Record Set
about an Individual, sufficient for compliance with 45 C.F.R. § 164.524.
2.9 to the extent that the PHI in Business Associate's possession constitutes a Designated
Record Set, make available, within ten business days after a written request by Covered
Entity or an Individual, PHI for amendment and incorporate any amendments to the PHI
as requested in accordance with 45 C.F.R. § 164.526.
3. RESPONSIBILITIES OF COVERED ENTITY.
Covered Entity:
3.1 shall identify the records it furnishes to Business Associate that it considers to be PHI for
purposes of the Agreement, and provide to Business Associate only the minimum PHI
necessary to accomplish the Services.
3.2 in the event that the Covered Entity honors a request to restrict the use or disclosure of
PHI pursuant to 45 C.F.R. § 164.522(a) or makes revisions to its notice of privacy
practices of Covered Entity in accordance with 45 C.F.R. § 164.520 that increase the
limitations on uses or disclosures of PHI or agrees to a request by an Individual for
confidential communications under 45 C.F.R. § 164.522(b), Covered Entity agrees not to
provide Business Associate any PHI that is subject to any of those restrictions or
limitations, unless Covered Entity notifies Business Associate of the restriction or
limitation and Business Associate agrees in writing to honor the restriction or limitation.
3.3 shall be responsible for using administrative, physical and technical safeguards to
maintain and ensure the confidentiality, privacy and security of PHI transmitted to
Business Associate pursuant to the Agreement, in accordance with the requirements of
H I PAA.
3.4 shall obtain any consent or authorization that may be required by applicable federal or
state laws prior to furnishing Business Associate the PHI for use and disclosure in
accordance with this BAA.
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3.5 if Covered Entity is an employer sponsored health plan, Covered Entity represents that to
the extent applicable, it has ensured and has received certification from the applicable
Plan Sponsor that the Plan Sponsor has taken the appropriate steps in accordance with
45 C.F.R. § 164.504(f) and 45 C.F.R. § 164.314(b) to enable Business Associate on
behalf of Covered Entity to disclose PHI to Plan Sponsor, including but not limited to
amending its plan documents to incorporate the requirements set forth in 45 C.F.R. §
164.504(f)(2) and 45 C.F.R. § 164.314(b). Covered Entity shall ensure that only
employees authorized under 45 C.F.R. § 164.504(f) shall have access to the PHI
disclosed by Business Associate to Plan Sponsor.
4. PERMITTED USES AND DISCLOSURES OF PHI.
Business Associate may:
4.1 use and disclose PHI as necessary to provide the Services to Covered Entity.
4.2 use and disclose PHI for the proper management and administration of Business
Associate or to carry out the legal responsibilities of Business Associate, provided that
any disclosures are Required by Law or any third party to which Business Associate
discloses PHI provides written assurances that: (i) the information will be held
confidentially and used or further disclosed only for the purpose for which it was
disclosed to the third party or as Required by Law; and (ii) the third party promptly will
notify Business Associate of any instances of which it becomes aware in which the
confidentiality of the information has been breached, in accordance with 45 C.F.R. §
164.504(e)(4).
4.3 De -identify any PHI received or created by Business Associate under this BAA in
accordance with the Privacy Rule.
4.4 provide Data Aggregation services relating to the Health Care Operations of the
Covered Entity in accordance with the Privacy Rule.
4.5 use PHI for Research projects conducted by Business Associate, its Affiliates or third
parties, in a manner permitted by the Privacy Rule, by obtaining documentation of
individual authorizations, an Institutional Review Board, or a privacy board waiver that
meets the requirements of 45 C.F.R. § 164.512(i)(1), and providing Covered Entity with
copies of such authorizations or waivers upon request.
4.6 make PHI available for reviews preparatory to Research in accordance with the Privacy
Rule at 45 C.F.R. § 164.512(i)(1)(ii).
4.7 use the PHI to create a Limited Data Set ("LDS") and use or disclose the LDS for the
health care operations of the Covered Entity or for Research or Public Health purposes
as provided in the Privacy Rule.
4.8 use and disclose PHI for Covered Entity's health care operations purposes in
accordance with the Privacy Rule.
5. TERMINATION
5.1 Covered Entity may terminate this BAA and the Agreement if Business Associate
materially breaches this BAA, Covered Entity provides written notice of the breach to
Business Associate, and Business Associate fails to cure the breach within the
reasonable time period set by Covered Entity.
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5.2 Within thirty (30) days after the expiration or termination for any reason of the
Agreement and/or this BAA, Business Associate shall return or destroy all PHI, if
feasible to do so, including all PHI in possession of Business Associate's
subcontractors. In the event that return or destruction of the PHI is not feasible,
Business Associate may retain the PHI subject to this Section 5.2. Business Associate
shall extend any and all protections, limitations and restrictions contained in this BAA to
Business Associate's use and/or disclosure of any PHI retained after the expiration or
termination of the Agreement and/or this BAA, and shall limit any further uses and/or
disclosures solely to the purposes that make return or destruction of the PHI infeasible.
6. MISCELLANEOUS
6.1 The terms of this BAA shall be construed to allow Covered Entity and Business
Associate to comply with HIPAA. Nothing in this Addendum shall confer upon any
person other than the parties and their respective successors or assigns, any rights,
remedies, obligations or liabilities whatsoever. Sections 4 and 5.2 shall survive the
expiration or termination of this BAA for any reason.
NOTICES.
7.1 Notwithstanding the notice provision in the Agreement, all notices given in connection
with this BAA shall be made to the following:
To Covered Entity:
Address: City of Fort Worth
200 Texas Street
Fort Worth, Texas 76102
Phone Number: (817) 392-8058
Email Address: margaret.wise@fortworthtexas.gov
To Business Associate
Address: OptumRx, Inc.
1600 McConnor Parkway, Schaumburg, IL 60173-6801
Phone Number: 877-598-3646
Email Address: orivacv cDoDtum.com
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK. SIGNATURE PAGE FOLLOWS]
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OPTUMRx PROPRIETARY AND CONFIDENTIAL #00347239.0
DocuSigriEnvelope ID: FBC0342F-8AEF-4411-9872-E36B7B61B526
The parties have accepted and agreed to this BAA.
PARTICIPATING GROUP
By:
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Name: 5
Title: �55/Sfq c� P'll�np�( Lr
Date: 5' 15F--19
OPTUMRx, INC.
By:
Name:
Title:
Date:
Page 21
�DocuSigned by:
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Jeff Grosklags
CFO
5/10/2018
OPTUMRx PROPRIETARY AND CONFIDENTIAL #00347239.0
City of Fort Worth_ORX_PSA_1-1-2025
Final Audit Report 2025-05-05
Created: 2025-05-02
By:
Tracey Piepenbrink (tracey.nguyen@optum.com)
Status:
Signed
Transaction ID:
CBJCHBCAABAAWSm-AMZPDgDAXpQ3x-rlyT84TCFjp07J
Documents:
(4) City of Fort Worth_ORX_PSA_5-2-2025_Execution Version (w BAA).pdf (36 pages)
Number of Documents:
1
Document page count:
36
Number of supporting files:
0
Supporting files page count:
0
"City of Fort Worth_ORX_PSA_1-1-2025" History
c'J Document created by Tracey Piepenbrink (tracey.nguyen@optum.com)
Documents: (4) City of Fort Worth_ORX_PSA_5-2-2025_Execution Version (w BAA).pdf
2025-05-02 - 6:02:34 PM GMT- IP address: 155.226.157,255
c� Document emailed to matthew.vesledahl@optum.com for signature
2025-05-02 - 6:03:33 PM GMT
Email viewed by matthew.vesledahl@optum.com
2025-05-05 - 12:53:27 PM GMT- IP address: 170.85.9.32
Wi Agreement viewed by matthew.vesledahl@optum.com
Documents: (4) City of Fort Worth_ORX_PSA_5-2-2025_Execution Version (w BAA).pdf
2025-05-05 - 12:53:28 PM GMT- IP address: 170.85.9.32
6a Signer matthew.vesledahl@optum.com entered name at signing as Matthew Vesledahl
2025-05-05 - 12:53:50 PM GMT- IP address: 170.85.9.32
dQ Document e-signed by Matthew Vesledahl (matthew.vesledahl@optum.com)
Documents: (4) City of Fort Worth_ORX_PSA_5-2-2025_Execution Version (w BAA).pdf
Signature Date: 2025-05-05 - 12:53:52 PM GMT - Time Source: server- IP address: 170.85.9.32
® Agreement completed.
2025-05-05 - 12:53:52 PM GMT
Powered by
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Acrobat Sign
n
5/15/25, 12:18 PM M&C Review
ACITY COUNCIL AGEND
Create New From This M&C
DATE: 4/22/2025 REFERENCE NO.: **M&C 25-0358 LOG NAME
CODE: C TYPE: CONSENT PUBLIC
HEARING:
Official site of the City of Fort Worth, Texas
FoRTWoRn
140PTUMUPDATE
SUBJECT: (ALL) Authorize Execution of an Agreement with OptumRx Inc. for Administration of the
City's Pharmacy Benefits Management for a One -Year Term in an Amount Up to
$237,000.00
RECOMMENDATION:
It is recommended that the City Council authorize the execution of an agreement with OptumRx
Inc. for administration of the City's pharmacy benefits management for a one-year term in an amount
up to $237,000.00.
DISCUSSION:
The Human Resources Department is requesting City Council approval to enter into a one-year
contract with OptumRx Inc. for administration of the City's pharmacy benefits management.
In 2022, Mayor and Council Communication (M&C) No. 22-0551 approved a one year contract with
two (2) one year renewal options with OptumRX. The contract with OptumRx was facilitated with the
City's pharmacy benefits consultant, Trion. The pricing agreed upon was based on participating in a
cooperative agreement organized by Trion. In 2024, the City went out to bid for a new pharmacy
benefits consultant. Prism Health was awarded the contract in December 2024 (M&C 24-1064). As a
result of this consultant change, rather than entering into the final renewal option authorized under
M&C 22-0551, this requires that the City enter into a new contract with OptumRX. The Human
Resources Department is requesting that City Council extend the authority to enter into a final one-
year term with OptumRX provided for under M&C 22-0551 to this new agreement. In order to abide by
the terms of M&C 22-0551, no renewal terms will be authorized.
Funding is budgeted in the Claims Administration Expense account of the Group Health Insurance &
Retiree Healthcare Trust Funds for the Human Resources Department.
DVIN-BE:This solicitation was reviewed by The Business Equity Division for available business equity
prospects according to the City's Business Equity Ordinance. There were limited business equity
opportunities available for the services/goods requested, therefore, no business equity goal was
established.
AGREEMENT TERMS - Upon City Council approval, this agreement shall begin on January 1, 2025
and expire December 31, 2025.
RENEWAL TERMS: There are no renewal terms for this contract.
ADMINISTRATIVE CHANGE ORDER: An administrative change order or increase may be made by
the City Manager up to the amount allowed by relevant law and the Fort Worth City Code and does not
require specific City Council approval as long as sufficient funds have been appropriated.
FISCAL INFORMATION/CERTIFICATION:
The Director of Finance certifies that funds are available in the current operating budgets, as
previously appropriated, in the Retiree Healthcare Trust and the Group Health Insurance Funds to
support the approval of the above recommendation and execution of the contract. Prior to any
expenditure being incurred, the Human Resources Department has the responsibility to validate the
availability of funds.
apps.cfwnet.org/council_packet/mc_review.asp? I D=33221 &cou ncildate=4/22/2025 1 /2
5/15/25, 12:18 PM M&C Review
TO
Fund Department Account Project Program ' Activity Budget Reference # Amount
ID ID Year (Chartfield 2)
FROM
Fund Department Account Project Program Activity Budget Reference # Amount
ID ID Year (Chartfield 2)
Submitted for City Manager's Office by_ Richard Zavala ()
Originating Department Head: Dianna Giordano (7783)
Additional Information Contact:
ATTACHMENTS
14 OptumUpDate funds avail.docx (CFW Internal)
140ptumupdate FID change.xlsx (CFW Internal)
25-TBD3272025 (RFP Optum Update) CC.pdf (CFW Internal)
apps.cfwnet.org/council_packet/mc_review.asp?ID=33221 &councildate=4/22/2025 2/2