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Contract 46250
i CITY SECRETARY s CONTRACT N®. _ PHARMACY BENEFIT MANAGEMENT SERVICES AGREEMENT This Pharmacy Benefit Management Services Agreement (hereinafter this "Agreement") is entered into by and between Envision Pharmaceutical Services, LLC, an Ohio Limited Liability Company (hereinafter "Envision"), and the City of Fort Worth, a Texas municipality (hereinafter "Plan Sponsor"). This Agreement is effective January 0, 2015 (hereinafter the "Effective Date"). BACKGROUND Envision is a URAC accredited Pharmacy Benefit Management (PBM) company providing comprehensive pharmacy benefit management services nationwide to various employers, unions, and Plan Sponsors that establish and fund health benefit plans covering outpatient prescription medications. Plan Sponsor has established one or more health benefit plans providing coverage for prescription medications to covered individuals and desires to engage Envision to provide pharmacy benefit management services in accordance with the terms and conditions of this Agreement. NOW, THEREFORE, in consideration of the mutual promises and agreements herein contained, Plan Sponsor and Envision hereby agree as follows: 1. DEFINITIONS 1.1 "Administrative Fee" means the amount that Envision charges Plan Sponsor for included services under this Agreement as set forth in Exhibit 1. 1.2 "Benefit Plan" means the Plan Sponsor's group insurance plan, prescription drug plan, or other benefit plan established and funded by Plan Sponsor that covers the cost of Covered Drugs dispensed to Covered Individuals. 1.3 `Benefit Specification Form" or "Benefit Specification Change Form" means the forms, as modified from time to time, that are completed by Plan Sponsor that specify the terms and provisions of the Benefit Plan and the configuration of System edits, such as which Prescription Drugs are covered by Plan Sponsor (including, for example Limited Distribution Drugs or Specialty Drugs), any limitations or exclusions, the Benefit Plan's tier structure and Cost Share requirements, and any conditions associated with the specific services to be rendered by Envision under this Agreement (i.e. Clinical Prior Authorizations, Drug Therapy Management, etc.). If there is any inconsistency between the terms of this Agreement and the Benefit Specification Form or any Benefit Specification Change Form submitted in connection with the services to be provided under this Agreement, then the provisions of the most recent signed Benefit Specification Form or Benefit Change Form shall control. 1.4 "Brand Drug" means a Prescription Drug designated as a branded drug product by Medi- Span as indicated by the multisource (i.e. MONY) code attached to the 11 digit NDC for such drug and adjusted by applicable modifiers, including those established by the FDA under 42 CFR 423.4 (i.e. NDA, ANDA, BLA, authorized generic, and/or bio-similar), the Medi-Span OccFFII//CIAL QQRppETTCeeOQQRyyD Tt.Worth PBM Services Agreement 062314(r2) FATLY i9L�ERlAC�1'3t�ty' es,LLC Page l of 26 FT.WORTH,TX RECEIVED DEC 15 P,M. Brand Code, and other criteria generally used in the industry to determine brand-generic drug status. The classification of a Covered Drug as a Brand Drug or Generic Drug will be determined at the Point-of-Sale and shall not be reclassified thereafter for any purposes under this Agreement. 1.5 "Claim" means an invoice or transaction (electronic or paper) for a Covered Drug dispensed to a Covered Individual that has been submitted to Envision by the dispensing pharmacy or a Covered Individual (including transactions where the Covered Individual paid 100% of the cost). A "34013 Claim" is a Claim which has been processed under Section 340B of the Public Health Service Act. 1.6 "Claims Adjudication System" or "System" means Envision's on-line computerized claims processing system. 1.7 "Compound Drug" means a medication that requires compounding by a pharmacist because it is not available from a pharmaceutical manufacturer in the prescribed form or strength. Compound Drugs consist of two or more solid, semi-solid or liquid ingredients, at least one of which is a Prescription Drug. 1.8 "Contract Year" means the complete twelve month period commencing on the Effective Date and each consecutive complete twelve month period thereafter that this Agreement remains in effect. 1.9 "Cost Share" means the amount of money that a Covered Individual must pay to the Participating Pharmacy to obtain a Covered Drug in accordance with the terms of the Benefit Plan. The Cost Share may be a fixed amount (co-payment) or a percentage of the drug cost (co- insurance), or a deductible that must be satisfied before drugs are covered under the Benefit Plan. 1.10 "Covered Drug" means a Prescription Drug or other permitted drug (OTC), medical supplies (e.g. diabetic testing strips), or a medical device (e.g. blood glucose monitoring device) which is dispensed to a Covered Individual and meets the requirements for coverage under the Benefit Plan as communicated to Envision by Plan Sponsor. 1.11 "Covered Individual" or "Member" means each individual (including the Eligible Employee and each of his or her dependents) who has been identified by Plan Sponsor on the Eligibility File as being eligible to receive Covered Drugs. 1.12 "Eligibility File" means that electronic communication supplied to Envision by Plan Sponsor (or Plan Sponsor's agent) which identifies the Covered Individuals covered under Plan Sponsor's Benefit Plan, along with other eligibility information necessary for Envision to provide PBM Services hereunder. Plan Sponsor acknowledges that eligibility begins on the first day the Covered Individual is reported by Plan Sponsor (or its designee) to be effective and continues through the last day the Covered Individual appears on the Eligibility File. 1.13 "Eligible Employee" means an active employee or a Retiree of Plan Sponsor covered under Plan Sponsor's funded Benefit Plan. For purposes of this Agreement, a Retiree is a retired \Ft.Worth PBM Services Agreement 062314(r2) ©Envision Pharmaceutical Services,LLC Page 2 of 26 individual who is covered, primarily, by Plan Sponsor and not Medicare Part D. For purposes of calculating the Administrative Fee, the Per Employee, per month (PEPM) amount stated in Exhibit 1 includes the Eligible Employee's/Retiree's eligible dependents. If, however, a dependent is also an Eligible Employee of Plan Sponsor, such dependent shall be deemed to be an Eligible Employee for purposes of calculating the total Administrative Fee. 1.14 "Formulary" means an index of Prescription Drugs, which have been compiled by Envision and reviewed by Envision's Pharmacy & Therapeutics Committee for safety and efficacy (using evidence-based evaluation criteria), that is used, in conjunction with the Benefit Plan, as a guide in the selection of Covered Drugs. The Formulary may be modified by Envision from time to time as new medications and/or new clinical information become available. 1.15 "Generic Drug"means a Prescription Drug that is not a Brand Drug. 1.16 "HIPAA" means the Health Insurance Portability and Accountability Act of 1996, as amended (including, but not limited to, modifications made by the Health Information Technology for Economic and Clinical Health Act ("HITECH Act")), and administrative regulations adopted pursuant thereto. 1.17 "Limited Distribution Drugs" means Prescription Drugs that are distributed by manufacturers through either one or a very limited number of pharmacies and wholesalers which have been selected by the manufacturer based on approved participation criteria. This group of drugs is usually used to treat conditions that only affect a small patient population and may have special and complex dosing requirements. 1.18 "Mail Order Pharmacy" means the pharmacy contracted directly or indirectly by Envision to be used by Plan Sponsor's Covered Individuals in obtaining Covered Drugs via U.S. Mail or commercial carrier service. 1.19 "Manufacturer Derived Revenue" means rebates, discounts, administrative fees, and any other revenue earned by Plan Sponsor for Claims which comply with the utilization and benefit design requirements of pharmaceutical manufacturer contracts with Envision and otherwise meet the terms and conditions hereunder. 1.20 "MAC List"means a proprietary list of Prescription Drugs for which Envision establishes a maximum price ("MAC Price") payable to the dispensing pharmacy. Envision maintains one commercial MAC List per Participating Pharmacy which is used to both determine the negotiated price payable to the dispensing pharmacy and the price charged to Plan Sponsor. Plan Sponsor will be charged the exact negotiated amount payable by Envision to the dispensing pharmacy without any markup or spread. Envision updates the MAC List from time-to-time as Prescription Drugs come on the market or come off the market, or as their availability changes due to market circumstances. 1.21 "Participating Pharmacy" means a pharmacy (including the designated Mail Order or Specialty Pharmacy) that has entered into a negotiated pricing agreement with Envision to dispense Covered Drugs to Covered Individuals. Tt.Worth PBM Services Agreement 062314(r2) 0 Envision Pharmaceutical Services,LLC Page 3 of 26 1.22 "Plan Sponsor" means the entity (identified above as Plan Sponsor) which (i) has established and underwrites the Benefit Plan on behalf of its Covered Individuals; (ii) has determined the rules by which the Benefit Plan is to be administered; and (iii) is financially responsible for the payment of Administrative Fees, Fees for Additional Services and Miscellaneous Expenses (as set forth in Exhibit 1), and Covered Drugs dispensed to Covered Individuals hereunder. 1.23 "Point-of-Sale" means the location and time that a Covered Drug is dispensed to a Covered Individual, and the corresponding Claim is submitted by the dispensing pharmacy for adjudication by the Claims Adjudication System. 1.24 "Prescriber" means a licensed health practitioner with independent prescribing authority in the state in which the dispensing pharmacy is located. 1.25 "Prescription Drug"means a substance intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease which is dispensed by a duly licensed pharmacy and required by federal law to be dispensed only upon the authorization of a Prescriber. For purposes of this Agreement, over-the-counter medications, medical supplies, and medical devices are not Prescription Drugs, whether or not ordered by a Prescriber. 1.26 "Retail Pharmacy" means a state licensed retail community pharmacy that dispenses prescription medications at its physical location. A Retail Pharmacy does not include a pharmacy that dispenses medications to patients primarily through mail, nursing home pharmacies, long-term care facility pharmacies, hospital pharmacies, or clinics, unless such pharmacy is a Participating Pharmacy listed by Envision as a Retail Pharmacy. 1.27 "Specialty Drug" means a Prescription Drug that is typically a high-cost biotech, injectable, infused, oral, or inhaled Prescription Drug, and/or a Prescription Drug that requires special storage, handling, and/or requires close monitoring of the patient's drug therapy to ensure appropriate use and clinical outcome. Specialty Drugs are typically dispensed at a Specialty Pharmacy, but may also be available from other Participating Pharmacies. For purposes of this Agreement, Specialty Drugs are not considered Limited Distribution Drugs. 1.28 "Specialty Pharmacy" means the non-retail Participating Pharmacy that primarily dispenses Specialty Drugs to Plan Sponsor's Covered Individuals and performs special ordering, handling and/or patient intervention services. 1.29 "Usual and Customary Price" or "U&C Price" means the retail amount the pharmacy charges its cash paying customers for the drug dispensed, as reported to Envision by the dispensing pharmacy. 2. STANDARD PBM SERVICES Envision shall perform the following pharmacy benefit management services ("PBM Services"). Unless otherwise noted, the PBM Services specified below are included in the Administrative \Pt.Worth PBM Services Agreement 062314(r2) ©Envision Pharmaceutical Services,LLC Page 4 of 26 Fee. 2.1 Welcome Kit: If requested by Plan Sponsor, Envision shall provide an initial "Welcome Kit" which may include, at Plan Sponsor's option, (i) a welcome letter; (ii) plastic identification card ("ID Card"), up to two per family; (iii) a pocket Formulary; and (iv) Mail Order Pharmacy brochure, as specified in the Benefit Specification Form. The standard Welcome Kits will be mailed to Plan Sponsor or, at its option, directly to Covered Individuals. For any materials mailed directly to Covered Individuals, Plan Sponsor shall reimburse Envision for its cost of postage. Additional ID Cards or replacement ID Cards (i.e. for lost or stolen ID Cards) will be provided at a cost as specified in Exhibit 1. If Plan Sponsor desires to re-design and/or re-issue ID Cards, or for special graphic requests, additional charges may apply. 2.2 Claims Processing: During the term of this Agreement, Envision shall accept, process, and adjudicate Claims for Covered Drugs (i) submitted electronically by Participating Pharmacies; (ii) submitted by Plan Sponsor's owned pharmacies or Plan Sponsor's contracted pharmacies, if any, (not including 340B Claims, unless such claims are included under a separate 340B Agreement); (iii) submitted by Covered Individuals as Direct Member Reimbursements (DMRs, as defined below); or (iv) received from third parties, such as Medicaid, for reimbursement by Plan Sponsor. Claims shall be checked for eligibility, benefit design, Cost Share requirements, and exclusions to determine which Claims are successfully processed, pended for prior authorization, or rejected for ineligibility or other factors in accordance with Plan Sponsor's specifications as set forth in Plan Sponsor's Benefit Specification Form (incorporated herein by this reference). For Claims that must be processed manually or require special handling, including, without limitation, (i) DMRs, (ii) Claims received from third parties, such as Medicaid, for reimbursement by Plan Sponsor for ineligible payments, or (iii) paper Claims, Plan Sponsor will be charged a Manual Claims Processing fee as set forth in Exhibit 1. After termination of this Agreement, Envision shall process Claims received for dates of service on or before the effective date of termination for a period of ninety (90) days ("Run-Out Period"), subject to the following. Plan Sponsor shall deposit and maintain, with Envision, an amount equal to the last Claims invoice prior to termination. At the end of the Run-Out Period, the balance of the deposit shall be promptly refunded to Plan Sponsor and, thereafter, any Claims received by Envision shall be rejected. 2.2.1 Direct Member Reimbursement (DMR): Envision shall provide, via its website, a form for use by Covered Individuals to obtain reimbursement for amounts paid out-of-pocket (other than Cost Share) for Covered Drugs (e.g. Covered Drugs dispensed at a non-Participating Pharmacy) ("DMR Form"). Envision shall accept and process DMR Claims within ten (10) business days of receipt of the DMR form, invoice Plan Sponsor for the Claim, and reimburse the Covered Individual upon receipt of funds from Plan Sponsor. 2.2.2 Claims from Non-Participating Pharmacies: Unless otherwise directed by Plan Sponsor, Envision shall accept and process Claims received from non-participating government owned or operated pharmacies (e.g. Veterans Administration). Tt.Worth PBM Services Agreement 062314(r2) 0 Envision Pharmaceutical Services,LLC Page 5 of 26 2.2.3 Claims Adjudication System Edits: Plan Sponsor's Benefit Plan may contain additional rules which determine the way in which Claims are to be adjudicated. These rules may include coverage limitations or exclusions, application of clinical intervention (e.g. step therapy, drug therapy management), application of dispensed as written (DAW) codes (e.g. to determine what portion of a Claim is payable by Plan Sponsor and what portion is payable by Members), and administrative overrides to authorize the dispensing of Covered Drugs in certain circumstances (e.g. requests for lost or stolen drugs, vacation supplies, certain package sizes, dosage changes, invalid days' supply). For this purpose, Envision shall program edits into the Claims Adjudication System which are applied to Claims during the adjudication process as specified in the Benefit Specification Form. The Claims Adjudication System will provide the dispensing pharmacy with the appropriate messaging to advise the pharmacy of the applicable limitation, program, rule, or override. Envision shall also program edits into the Claims Adjudication System which are applied to Claims during the adjudication process to identify the following drug utilization conditions: duplicate prescriptions; over-utilization/refill too soon; under-utilization; drug interactions; pediatric warnings; geriatric warnings; acute/maintenance dosing; therapeutic duplication; drug inferred health state; drugs exceeding maximum dose; and drugs below minimum daily dosage, as specified in the Benefit Specification Form. The Claims Adjudication System will provide the dispensing pharmacy with the appropriate messaging to advise the pharmacy of drug utilization issues. 2.3 Clinical Services 2.3.1 Clinical Prior Authorizations (Initial Coverage Determinations): If Plan Sponsor has elected to receive Clinical Prior Authorization services from Envision, for those Covered Drugs and circumstances specified by Plan Sponsor in the Benefit Specification Form, Envision shall contact the prescriber and verify that the requested drug is appropriate for the diagnosis in the judgment of the prescriber. Plan Sponsor will be charged for Clinical Prior Authorizations as specified in Exhibit 1. If additional internal appeals (redeterminations) and/or the services of an Independent Review Organization are to be provided under this Agreement, such services shall be included in an attached Coverage Determination and Appeals Process Addendum. 2.3.2 Drug Therapy Management (DTM) Programs:ams: Envision offers clinical programs such as Drug Therapy Care Gap Management and Medication Adherence and Persistency. If clinical programs are to be provided under this Agreement, such services and any additional charges shall be set forth in an attached Clinical Services Addendum. 2.4 Pharmacy Network: Envision shall arrange for the dispensing of Covered Drugs to Covered Individuals pursuant to contracts with one or more networks of Participating Pharmacies (referred to herein as a "Network"). The Network designated for Plan Sponsor to be used by Covered Individuals hereunder shall be specified in the Benefit Specification Form. Plan Sponsor acknowledges that the pharmacies participating in a Network may be changed from time to time by Envision, including the designated Mail Order Pharmacy and/or Specialty Pharmacy provider. The list of Participating Pharmacies is constantly updated to reflect any changes in the Network, including pharmacy addresses and telephone numbers, and is accessible Tt.Worth PBM Services Agreement 062314(r2) ©Envision Pharmaceutical Services,LLC Page 6 of 26 via Envision's website. Plan Sponsor acknowledges that (i) orders exceeding a thirty day supply are not available at all Retail Pharmacies; (ii) Covered Drugs shall not be dispensed to Covered Individuals without a prescription order by a Prescriber; and (iii) the availability of drugs are subject to market conditions and that Envision cannot, and does not, assure the availability of any drug from any Participating Pharmacy. 2.4.1 Plan Sponsor Owned Pharmacies. If Plan Sponsor desires to include one or more of its owned or affiliated pharmacies in the network of pharmacies authorized to dispense Covered Drugs to Plan Sponsor's Covered Individuals, it shall indicate same on the Benefit Specification Form. If Plan Sponsor desires its pharmacy to be available to other Envision clients using one or more of Envision's Networks, such pharmacy shall enter into an Envision Participating Pharmacy Agreement (PPA). If the pharmacy will be for the use of Plan Sponsor's employees only, such pharmacy shall complete an Envision-supplied form indicating the amounts to be invoiced to Plan Sponsor for Claims processed. In either case, the pharmacy shall submit all Claims to Envision for processing. Unless indicated otherwise in the Benefit Specification Form, Envision shall invoice Plan Sponsor for Claims received from Plan Sponsor's owned pharmacy. If the pharmacy is a Participating Pharmacy, Claims shall be adjudicated at the Network rates included in the PPA. 2.5 Customer Service: Envision shall maintain and operate a customer service center with toll-free customer service numbers and adequately staffed with trained personnel 24 hours a day, 7 days a week, 365 days a year, for the use of Plan Sponsor, Covered Individuals, Prescribers, and Participating Pharmacies. 2.6 Records: Envision shall maintain such business records as may be required by applicable law or regulation, or as may be necessary to properly document the delivery of, and payment for, Covered Drugs and the provision of services by Envision under this Agreement. Upon termination of this Agreement, Envision agrees to provide only industry-standard transfer files to a subsequent pharmacy benefit manager at Plan Sponsor's written request. Plan Sponsor agrees to pay or reimburse Envision for any cost charged by a vendor or pharmacy related to the transfer of files from or to such vendor or pharmacy at any time during this Agreement or connected with the termination of this Agreement. 2.7 Reports: Envision shall provide Plan Sponsor with access to a web-based report generator through which Plan Sponsor may create and download a variety of standard and customized reports. Envision shall provide training for a Plan Sponsor designated individual on the capabilities of Envision's web-based reporting program. Plan Sponsor represents that the designated individual has received training and has knowledge of the HIPAA privacy and security regulations. Any reports that are to be provided by Envision to Plan Sponsor without cost (other than those available from Envision's web-based reporting program) shall be mutually determined prior to the configuration of Plan Sponsor's Benefit Plan in the Claims Adjudication System and shall be specified in the Benefit Specification Form. Plan Sponsor shall be charged a fee for any other reports requested by Plan Sponsor. Included in the web-based reports described above, or provided separately, Envision shall supply Plan Sponsor with reports of retrospective reviews to determine the drug utilization patterns of \Ft.Worth PBM Services Agreement 062314(r2) ©Envision Pharmaceutical Services,LLC Page 7 of 26 Members (e.g. high cost/high utilization of a particular drug class, therapeutic appropriateness of drug for a particular disease state). 2.7.1 Access to Third Parties: If Plan Sponsor desires Envision to provide one or more third parties access to web-based or other reports, Plan Sponsor shall complete and submit an Envision provided authorization form. Plan Sponsor acknowledges that any reports to be provided to Plan Sponsor's authorized third parties which are not accessible via the web-based reports generator, shall be provided via a secure FTP server. 2.8 Retiree Drug Subsidy (RDS) Report s: For Plan Sponsors which submit requests for drug subsidies under the Medicare RDS program, Envision shall provide Plan Sponsor with quarterly reports summarizing Claims paid by Plan Sponsor for Medicare Part D drugs dispensed to Covered Individuals who Plan Sponsor has identified on the appropriate form as Medicare eligible retirees. Plan Sponsor acknowledges that any estimated Manufacturer Derived Revenue which has been passed-through to Plan Sponsor will have been deducted from the Claim amounts reported. Unless otherwise specified herein or included under an addendum to this Agreement, Envision shall not be responsible or liable to Plan Sponsor for any RDS services or subsidies. Any assistance requested by Plan Sponsor and/or provided by Envision shall be solely consultative and shall not be deemed to be an acceptance by Envision of any responsibility or liability for the completion or submission of any RDS application or request for subsidies under Medicare Part D. 2.9 Additional Services: Any services to be rendered under this Agreement which are not included in the Administrative Fee as specified in this Section 2 shall be itemized in the Exhibits and Addendums hereto along with any associated costs or charges. 2.10 Performance Measures: Envision shall provide PBM Services in accordance with the Performance Measures specified in Exhibit 2. 3. PRICING AND PASS-THROUGH METHODOLOGY 3.1 Pass-Through of Discounts and Dispensing Fees: Envision has negotiated discounted drug prices and dispensing fees with Participating Pharmacies. Envision shall pass-through to Plan Sponsor one hundred percent (100%) of the negotiated discount for the drug dispensed (plus any applicable dispensing fee) without any reclassification, mark-up or spread by Envision. The amount invoiced to Plan Sponsor shall be the exact drug ingredient cost and applicable dispensing fee which is paid to the dispensing pharmacy, in accordance with the following: 3.1.1 For Ingredient Cost: Envision shall invoice Plan Sponsor the lower of: (a) The calculated negotiated amount payable to the Participating Pharmacy based on the 11 digit NDC number of the drug dispensed; or (b) If included on the then current Envision MAC List, the MAC Price for the drug dispensed; or (c) The Participating Pharmacy's U&C Price (except for drugs dispensed by the Mail Order Pharmacy or Specialty Pharmacy); less Tt.Worth PBM Services Agreement 062314(r2) ©Envision Pharmaceutical Services,LLC Page 8 of 26 any applicable Manufacturer Derived Revenue and/or any applicable Covered Individual Cost Share. 3.1.2 For Dispensing: Envision shall invoice Plan Sponsor the actual dispensing fee amount payable to the Participating Pharmacy. 3.2 Manufacturer Derived Revenue 3.2.1 Pass-Through of Manufacturer Derived Revenue: Envision has negotiated contracts with pharmaceutical manufacturers to obtain Manufacturer Derived Revenue for eligible Prescription Drugs, and shall pass through to Plan Sponsor one hundred percent (100%) of all Manufacturer Derived Revenue earned by Plan Sponsor and paid to Envision by contracted pharmaceutical manufacturers for Plan Sponsor's eligible Claims that comply with the terms of this Agreement. Prescription Drugs eligible for Manufacturer Derived Revenue are included in the Formulary provided by Envision. Plan Sponsor acknowledges that the Manufacturer Derived Revenue earned by Plan Sponsor is dependent on certain factors including, without limitation, the following: (i) the effect of terms and conditions of Plan Sponsor's Benefit Plan on the application of the Formulary; (ii) the structure of Plan Sponsor's Benefit Plan, including but not limited to Cost Share requirements and coverage rules such as Prior Authorizations, Quantity Limits, and Step Therapy (as defined in the Benefit Specification Form); and (iii) the drug utilization patterns of Covered Individuals. Plan Sponsor further acknowledges that Plan Sponsor's portion of market share rebates is based on (i) Plan Sponsor's ability to meet and earn market share rebate levels by pharmaceutical manufacturer and (ii) the ratio of Plan Sponsor's Claims for a particular rebated drug to the total number of Claims for such drug for all Envision clients, as adjusted for the effect of Plan Sponsor's Benefit Plan (e.g. tier structure and Cost Share differentials) on the overall yield of market share rebates. No Manufacturer Derived Revenue shall be payable to Plan Sponsor for 340B Claims and other Claims not eligible for Manufacturer Derived Revenue, Claims from any Plan Sponsor owned or affiliated pharmacy which is not a Participating Pharmacy, and Claims for which Envision has not been paid in full. 3.2.2 Pass-Through Methodology: Manufacturer Derived Revenue shall be advanced to Plan Sponsor by adjusting the Claim for an eligible Prescription Drug by an estimated amount for applicable Manufacturer Derived Revenue using Envision's patented Point-of-Sale Technology. Envision's Point-of-Sale Technology generates a Claim that will be invoiced to Plan Sponsor at the net price after applying a credit for estimated Manufacturer Derived Revenue. (Plan Sponsor acknowledges that, unless otherwise indicated by Plan Sponsor on the Benefit Specification Form, if a Covered Individual pays a percentage of the drug cost (i.e. co- insurance) under the Benefit Plan, a proportional amount of the Manufacturer Derived Revenue will be passed on to the Covered Individual at the Point-of-Sale). 3.2.3 Sole Source: Plan Sponsor represents and warrants to Envision that, at no time during or after the term of this Agreement, is Plan Sponsor receiving rebates and other revenues from pharmaceutical manufacturers other than through Envision, either directly or indirectly (through a Group Purchasing Organization, drug wholesaler, or otherwise) for Claims processed by Envision under this Agreement. Plan Sponsor agrees that it shall not, at any time, submit Claims which have been transmitted to Envision to another pharmacy benefit manager or carrier Tt.Worth PBM Services Agreement 062314((2) ©Envision Pharmaceutical Services,LLC Page 9 of 26 for the collection of rebates and other revenues from pharmaceutical manufacturers or create a situation which would cause a pharmaceutical manufacturer to decline payments to Envision. Envision reserves the right to recover from Plan Sponsor, and Plan Sponsor shall refund to Envision, any Manufacturer Derived Revenue, including any related penalties and fees, advanced to Plan Sponsor by Envision which is connected with any Claims for which Plan Sponsor received rebates and other revenues from pharmaceutical manufacturers from any other source or for amounts advanced to Plan Sponsor by Envision which have been withheld by a pharmaceutical manufacturer as a result of such Claims not meeting conditions for rebates, the ineligibility of Claims for Manufacturer Derived Revenue (i.e. 340B Claims), or breach of this Agreement by Plan Sponsor. 4. PLAN SPONSOR RESPONSIBILITIES 4.1 Implementation: No later than thirty (30) days prior to the Effective Date, Plan Sponsor shall provide Envision with an executed Benefit Specification Form and such data as reasonably necessary for Envision to set up the Claims Adjudication System and commence the provision of PBM Services as of the Effective Date. Such data includes, without limitation, prior utilization reports, pharmacy transfer files, and eligibility. 4.2 Eligibility Data: Plan Sponsor shall provide Envision (either directly or through an authorized third party administrator) with an Eligibility File, at least monthly, in the HIPAA 834 standard transaction code set format, or such other format as has been previously agreed to by Envision. Plan Sponsor shall provide timely eligibility updates (for example, additions, terminations, change of address or personal information, etc.) to ensure accurate determination of the eligibility status of Covered Individuals. Plan Sponsor acknowledges and agrees that (i) Envision provides such eligibility data to the Participating Pharmacies and understands that Envision and Participating Pharmacies will act in reliance upon the accuracy of data received from Plan Sponsor; (ii) Envision will continue to rely on the information provided by Plan Sponsor until Envision receives notice that such information has changed; and (iii) Envision shall not be liable to Plan Sponsor for any Claims or expense resulting from the provision by Plan Sponsor (or its designee) of inaccurate, erroneous, or untimely information. In addition, if Envision must create or update eligibility by manually entering Covered Individual data, Plan Sponsor will be charged a data entry fee as specified in Exhibit 1. In lieu of the Eligibility File, Plan Sponsor may provide eligibility information by updating the Claims Adjudication System directly (except for the initial Eligibility File, which must be provided to Envision during the initial implementation), provided Plan Sponsor continues to meet Envision's conditions and specifications for direct eligibility updates. 4.3 Benefit Plan: Plan Sponsor shall provide Envision with complete information concerning the Benefit Plan. Plan Sponsor understands and agrees that Envision shall rely on the terms and provisions provided by Plan Sponsor on the Benefit Specification Form. The Benefit Specification Form may be changed from time to time by Plan Sponsor by providing Envision with a replacement Benefit Specification Form or a Benefit Specification Change Form; provided, however, that the form must be signed by Plan Sponsor to be effective and the form provided to Envision at least thirty (30) days before any such change shall be implemented. If, however, Plan Sponsor provides Envision with an unsigned Benefit Specification Form or Tt.Worth PBM Services Agreement 062314(r2) ©Envision Pharmaceutical Services,LLC Page 10 of 26 Benefit Specification Change Form, Envision shall not be bound by such form and Plan Sponsor shall hold, to the extent allowed under Texas law, harmless Envision for any consequences resulting from any changes not implemented. The most recent executed Benefit Specification Form shall supersede any prior dated form. Plan Sponsor shall have sole authority to determine the terms of the Benefit Plan and the coverage of benefits thereunder, however, Plan Sponsor understands and agrees that any change in the Benefit Plan or System configuration (e.g. mandatory generic program, coverage of over- the-counter drugs or medications, source of Covered Drugs, use of Plan Sponsor Owned pharmacies, etc.) may affect yields in Manufacturer Derived Revenue and/or average drug pricing. Plan Sponsor agrees that Envision shall not be liable to Plan Sponsor for any reduction of such yields or increase in pricing which result from any such change. Further, any change to the Benefit Plan that affects a material term of this Agreement will require an amendment hereto. Plan Sponsor agrees to execute an amendment, at Envision's request, before implementing the change to the Benefit Plan. 4.4 Formulary: Plan Sponsor shall adopt and adhere to the Formulary provided by Envision. Any customization of the Formulary by Plan Sponsor or use by Plan Sponsor of an alternate Formulary must be approved, in writing, by Envision. Plan Sponsor acknowledges that adherence to the Formulary is necessary to maximize yields in Manufacturer Derived Revenue. Plan Sponsor agrees that Envision shall not be liable to Plan Sponsor for any reduction in yields of Manufacturer Derived Revenue or increase in drug pricing resulting from Plan Sponsor's failure to adhere to the Formulary or a change to the Benefit Plan that affects the application of the Formulary. 4.5 Payment: Plan Sponsor shall timely pay, or cause its designee to timely pay, Envision for services rendered hereunder in accordance with Section 5 below and Exhibit 1. 4.6 Cooperation: Plan Sponsor shall promptly provide Envision with all information (both verbal and written) that is requested by Envision and reasonably necessary for Envision to complete its obligations hereunder. Any information required to be provided by Plan Sponsor in order for Envision to perform a function under this Agreement shall be deemed to be untimely if not received by Envision at least five (5) business days prior to its due date. Further, Plan Sponsor shall not obfuscate, delay, impede, or otherwise fail to cooperate with Envision. 5. TERMS OF PAYMENT 5.1 Fees and Rates: Plan Sponsor hereby accepts the fees and rates specified in Exhibit 1. 5.2 Payments for Claims: Envision shall invoice Plan Sponsor twice each month for Claims incurred. Plan Sponsor shall pay Envision's invoices no later than 12:00 p.m. Eastern time on the tenth (101`) calendar day from receipt of said invoices. Invoices shall be deemed to have been received by Plan Sponsor upon the earliest delivery of the invoice by mail, e-mail, fax, or courier to Plan Sponsor's designated recipient. 5.3 Payment of Administrative Fee: Beginning with the first month under this Agreement, Tt.Worth PBM Services Agreement 062314(r2) C Envision Pharmaceutical Services,LLC Page 11 of 26 Envision shall provide Plan Sponsor with an invoice of Administrative Fees on or about the first day of each month. Administrative Fees are due within seven (7) calendar days of receipt of Envision's invoice. The monthly Administrative Fee is calculated by multiplying the number of Eligible Employees who are eligible to receive services hereunder at any time during the prior month (as reflected in the Claims Adjudication System) by the Administrative Fee amount set forth in Exhibit 1 (except for the initial invoice which is based on Plan Sponsor's initial Eligibility File). 5.4 Fees for Additional Services and Miscellaneous Expenses: Plan Sponsor agrees to reimburse Envision for Additional Services and Miscellaneous Expenses (e.g. postage) specified in Exhibit 1 hereunder, within seven(7)calendar days of receipt of an invoice. 5.5 Retroactive Disenrollment or Termination: Retroactive termination or disenrollment of a Covered Individual shall not release Plan Sponsor of its obligation to pay Claims incurred, at any time, on behalf of a Covered Individual or Administrative Fees due to Envision during any period for which services were renderable hereunder based on the then current eligibility. Further, termination of coverage of prescription drugs or the entering into a policy of insurance that covers prescription drugs shall not constitute a permitted termination of this Agreement. 5.6 Taxes, Assessment or Fees: Any applicable sales or use taxes for Covered Drugs sold to Covered Individuals shall be charged, collected, and paid to state and local taxing authorities by the dispensing pharmacy. As part of the reimbursement for a Claim, Plan Sponsor shall reimburse Envision for such taxes payable by the dispensing pharmacy. These sales or use taxes will be added to the overall amount of the Claim and invoiced to Plan Sponsor and/or Member, in accordance with the Benefit Plan. Further, Plan Sponsor shall reimburse Envision for any assessments or related fees required to be paid under state or federal regulations for Plan Sponsor's Claims. 5.7 Financial Responsibility: Plan Sponsor shall be and remain responsible for the payment of all invoices for Administrative Fees, Additional Services, Miscellaneous Expenses, and Claims (along with any associated dispensing fees, taxes, assessments and fees, and Cost Share not ultimately paid by Members). Plan Sponsor acknowledges that Envision will not pay pharmacies for Plan Sponsor's Claims, nor be obligated to pay pharmacies for Claims, unless and until adequate funds are received from Plan Sponsor. 5.7.1 Untimely Payments: If Plan Sponsor should fail to timely pay any amounts due Envision hereunder for any reason, including, but not limited to, insolvency, bankruptcy, termination of business, sale, or rebuff, Envision reserves the right to (i) suspend the provision of services; (ii) offset such amounts owed to Envision by any amounts owed by Envision to Plan Sponsor and/or (iii) collect from Plan Sponsor, in addition to such unpaid amounts, interest at a rate of 1.5% per month on the outstanding balance (or, if lower, the rate of interest permitted under the law of Plan Sponsor's state of domicile). If Envision suspends the provision of services, Covered Individuals will be required to pay 100% of the drug cost and any dispensing fees (or the U&C Price, if lower) to receive Covered Drugs. In addition, as a condition of continuing to perform services under this Agreement, Envision may require Plan Sponsor to deposit with Envision additional amounts to ensure the timely payment of future invoices and/or Tt.Worth PBM Services Agreement 062314(r2) ©Envision Pharmaceutical Services,LLC Page 12 of 26 discontinue advancing Manufacturer Derived Revenue to Plan Sponsor. Plan Sponsor further agrees that Envision shall not be liable for any consequences resulting from the untimely payment of Participating Pharmacies due to the failure of Plan Sponsor to timely pay Envision as required under this Agreement. 5.7.2 Financial Viabilitv: Plan Sponsor acknowledges that Envision will periodically conduct a credit check of Plan Sponsor. If such credit check reasonably indicates that Plan Sponsor is not financially viable, Envision may require Plan Sponsor to deposit with Envision a reasonable amount to ensure the timely payment of future invoices. 5.8 Financial Audit by Plan Sponsor: Within twelve (12) months after the end of each Contract Year hereunder, including the twelve (12) months after the termination of this Agreement, , Plan Sponsor, at its sole expense, may audit Envision's records of Claims adjudicated during the prior Contract Year. Envision shall make available to Plan Sponsor's auditor, any and all financial records containing Plan Sponsor's information and such other records as reasonably necessary for auditor to confirm that the amounts paid by Plan Sponsor are the cost to Envision on the day the Covered Drug was dispensed. Plan Sponsor agrees to not use as its auditors, any person or entity which, in the sole discretion of Envision, is a competitor of Envision, a pharmaceutical manufacturer representative, or any other person or entity which has a conflict of interest with Envision. Plan Sponsor understands that Envision's contracts with pharmaceutical manufacturers, Participating Pharmacies, and other third parties may contain non-disclosure provisions, and hereby agrees to comply with such non-disclosure provisions. Plan Sponsor's auditor shall execute a conflicts of interest disclosure and confidentiality agreement with Envision prior to the audit. Audits shall only be made during normal business hours following thirty (30) days written notice, be conducted without undue interference to Envision's business activity, and in accordance with reasonable audit practices. Plan Sponsor's auditor may inspect Envision's contracts with Participating Pharmacies and pharmaceutical manufacturers at Envision's offices only, and no copies of such contracts may be removed from Envision's offices. Plan Sponsor agrees to disclose the findings and methodologies of a completed audit, and provide Envision with a reasonable period of time to respond to such findings and methodologies, before a demand is made by Plan Sponsor for amounts it believes are due from Envision. 5.9 Financial Audit by Envision: Envision may, at reasonable intervals, request Plan Sponsor to provide records for Envision's inspection which provide supporting documentation for the information contained in the Eligibility File and the data provided by Plan Sponsor (or its designate) upon which the financial terms herein were based. Plan Sponsor agrees to provide such supporting documentation to Envision within ten (10) business days of such request. In addition, and if warranted, Envision may, at its own expense, inspect and audit, or cause to be inspected and audited, once annually, the books and records of Plan Sponsor directly relating to the existence and number of Covered Individuals. Audits shall only be made during normal business hours following thirty (30) days written notice, be conducted without undue interference to Plan Sponsor's business activity, and in accordance with reasonable audit practices. Envision agrees to execute a confidentiality agreement with Plan Sponsor prior to the audit. Tt.Worth PBM Services Agreement 062314(r2) ©Envision Pharmaceutical Services,LLC Page 13 of 26 6. TERM AND TERMINATION 6.1 Term: The term of this Agreement shall commence on the Effective Date and shall remain in full force and effect for an initial term of three (3) years ("Initial Term") unless earlier terminated as provided herein. Upon the expiration of the Initial Term, and each subsequent renewal term, this Agreement shall renew automatically for an additional term of one year; unless, at least ninety (90) days prior to the end of such term, either party hereto notifies the other, in writing, that this Agreement will terminate at the end of the current term. 6.2 Termination: This Agreement may be terminated as follows: 6.2.1 For Cause: By either party hereto in the event the other party breaches any of its material obligations hereunder; provided,however, that the defaulting party shall have thirty (30) days to correct such breach after written notice is given by such non-breaching party specifying the alleged breach; 6.2.2 Insolvency: By either party hereto in the event the other party (i) is adjudicated insolvent, under state and/or federal regulation, or makes an assignment for the benefit of creditors; (ii) files or has filed against it, or has an entry of an order for relief against it, in any voluntary or involuntary proceeding under any bankruptcy, insolvency, reorganization or receivership law, or seeks relief as therein allowed, which filing or order shall not have been vacated within sixty (60) calendar days from the entry thereof; (iii) has a receiver appointed for all or a substantial portion of its property and such appointment shall not be discharged or vacated within sixty (60) calendar days of the date thereof, (iv) is subject to custody, attachment or sequestration by a court of competent jurisdiction that has assumed of all or a significant portion of its property; or (v) ceases to do business or otherwise terminates its business operations, is declared insolvent or seeks protection under any bankruptcy, receivership, trust deed, creditors arrangement or similar proceeding; 6.2.3 Failure to Pay: By Envision, in addition to any other remedy available to Envision hereunder, in the event Plan Sponsor fails to pay Envision according to terms of this Agreement. 6.2.4 Failure of Appropriation. By Plan Sponsor in the event no funds or insufficient funds are appropriated by the Fort Worth City Council in any fiscal period for any payments due hereunder. In such event, Plan Sponsor will notify Envisiion of such occurrence and this Agreement shall terminate on the last day of the fiscal period for which appropriations were received without penalty or expense to Plan Sponsor of any kind whatsoever, except as to the portions of the payments herein agreed upon for which funds shall have been appropriated. 6.3 Notices: All notices required in this Section 6 shall be reasonably specific concerning the cause for termination and shall specify the effective date and time of termination. 6.4 Effect of Termination: Termination of this Agreement for any reason shall not release any party hereto from obligations incurred under this Agreement prior to the date of termination. Except as otherwise agreed, in writing, no services shall be provided by Envision after the Tt.Worth PBM Services Agreement 062314(r2) ©Envision Pharmaceutical Services,LLC Page 14 of 26 effective date of termination. Envision reserves the right to suspend advancing Manufacturer Derived Revenue to Plan Sponsor upon Plan Sponsor's notification of termination. 7. CONFIDENTIAL INFORMATION 7.1 Confidentiality: Except as otherwise stated herein or required by law, neither party hereto shall disclose any information of, or concerning the other party which has either been provided by one party to the other or obtained by a party in connection with this Agreement (including this Agreement and the terms of this Agreement) or related to the services rendered under this Agreement, all of which information is deemed confidential information. All data, information, and knowledge supplied by a party hereto shall be used by the other party exclusively for the purposes of performing this Agreement. Upon termination of this Agreement, and to the extent permitted by law, each party shall return to the other party or destroy (if such destruction is certified) all confidential information provided including, without limitation, all copies and electronic magnetic versions thereof. Notwithstanding any of the foregoing to the contrary, "confidential information" shall not include any information which was known by a party prior to receiving it from the other party, or that becomes rightfully known to a party from a third party under no obligation to maintain its confidentiality, that becomes publicly known through no violation of this Agreement, or that a party is required to release under a court order or similar legal compulsion, including, but not limited to, a ruling from the Texas Attorney General in response to a request under the Texas Public Information Act, Tex. Govt. Code Ch. 552. 7.2 Protected Health Information: Plan Sponsor will have access to Protected Health Information (PHI) (as defined by HIPAA) contained in reports provided by Envision or accessed by Plan Sponsor via Envision's website. Plan Sponsor agrees, for itself and its employees, that PHI shall not be used for any impermissible purpose, including, without limitation, the use of PHI for disciplinary or discriminatory purposes, and any user names and passwords assigned to designated individuals shall not be shared with non-designated individuals. In addition, Plan Sponsor, for itself and its Covered Individuals, authorizes Envision to use and share PHI as necessary to carry its obligations hereunder. Envision and Plan Sponsor shall execute a HIPAA Business Associate Agreement. 8. INDEMNIFICATION 8.1 Limited Indemnification by Envision: Envision hereby agrees to indemnify, hold harmless, and defend Plan Sponsor and its employees, officers, directors, trustees, shareholders, and agents from and against any and all liabilities, actions, claims, damages, costs, losses and expenses (including without limitation, reasonable costs of investigation and attorneys' fees) caused by or arising out of(i) any act or omission by Envision in the performance of the services provided under this Agreement; or (ii) any breach of any representation, covenant, or other agreement of Envision contained in this Agreement. 8.2 Limited Indemnification by Plan Sponsor: Plan Sponsor hereby agrees, to the extent permitted under Texas law, to indemnify, hold harmless, and defend Envision and its employees, officers, directors, shareholders, affiliates and agents from and against any and all liabilities, Tt.Worth PBM Services Agreement 062314(r2) ©Envision Pharmaceutical Services,LLC Page 15 of 26 actions, claims, damages, costs, losses and expenses (including without limitation, reasonable costs of investigation and attorneys' fees) caused by or arising out of(i) the provision by Plan Sponsor or its designee of untimely, incomplete, or erroneous information; or (ii) Plan Sponsor's failure to comply with state or federal law in the operation of its Benefit Plan. 8.3 Limitation of Liability: Notwithstanding the indemnification obligations set forth above (i) each party's liability to the other hereunder will in no event exceed the actual proximate losses or damages caused by breach of this Agreement; and (ii) in no event will either party or any of their respective affiliates, directors, employees or agents, be liable for any indirect, special, incidental, consequential, exemplary or punitive damages, or any damages for lost profits relating to a relationship with a third party, however caused or arising, whether or not they have been informed of the possibility of their occurrence. 8.4 Survival: This Section 8 shall survive the expiration or termination of this Agreement for any reason. 9. RELATIONSHIP WITH CONTRACTED PHARMACIES Plan Sponsor acknowledges that Envision is neither an operator of pharmacies nor exercises control over the professional judgment used by any pharmacist when dispensing drugs or medical supplies to Covered Individuals. Nothing in this Agreement shall be construed to usurp the dispensing pharmacist's professional judgment with respect to the dispensing or refusal to dispense any drugs or medical supplies to Covered Individuals. Plan Sponsor agrees that it shall not hold Envision responsible, nor shall Envision be liable to Plan Sponsor or Covered Individuals, for any liability arising from the dispensing of drugs or medical supplies to Covered Individuals by any pharmacy so long as Envision exercised due care in selecting and retaining Participating Pharmacy. 10. GENERAL 10.1 Standards of Performance: Envision shall perform its obligations under this Agreement with care, skill, prudence, and diligence, and in accordance with the standards of conduct applicable to a fiduciary. Envision shall disclose all administrative fees and drug costs charged to Plan Sponsor, disclose all Manufacturer Derived Revenue earned by Plan Sponsor and paid to Envision by contracted pharmaceutical manufacturers for Plan Sponsor's eligible Claims, and permit Plan Sponsor to audit such fees, costs, and revenues, as set forth in this Agreement. Envision shall also disclose to Plan Sponsor any activity, policy, or practice of which Envision is aware that presents a conflict of interest with the performance of its obligations hereunder. Plan Sponsor agrees that it retains the sole responsibility for the terms and conditions of its Benefit Plan; its compliance with applicable law, and that of its Benefit Plan, including, without limitation, the interpretation and applicability of any state or federally mandated requirements; and determinations of coverage under the Benefit Plan; and shall not rely on any advice or recommendations of Envision as a substitute for obtaining its own independent accounting, tax, legal, or regulatory advice. Unless otherwise agreed in writing, Plan Sponsor shall also be responsible for the disclosing or reporting of information regarding the Benefit Plan or changes in the Benefit Plan (e.g., calculation of co-payments, deductibles; or \Ft.Worth PBM Services Agreement 062314(r2) ©Envision Pharmaceutical Services,LLC Page 16 of 26 creditable coverage) as may be required by law to be disclosed to governmental agencies or Covered Individuals. 10.2 Independent Contractors: Envision and Plan Sponsor are independent contractors. Notwithstanding anything herein to the contrary, neither party hereto, nor any of its respective employees, shall be construed to be the employee, agent, or representative of the other for any reason, or liable for any acts of omission or commission on the part of the other. Plan Sponsor acknowledges that, notwithstanding anything herein to the contrary, Envision negotiates contracts with pharmacies, pharmaceutical manufacturers, and vendors on its own behalf and not specifically or exclusively for Plan Sponsor. 10.3 Exclusivity: During the term of this Agreement, Envision shall be the sole provider of PBM Services to Plan Sponsor for all self-funded pharmacy benefits provided to Members other than Medicare-eligible retirees, including, without limitation, the exclusive contractor of rebates with pharmaceutical manufacturers for Plan Sponsor's Claims. This exclusivity shall not extend to fully insured pharmacy benefits provided to Plan Sponsor's Medicare-eligible retirees. 10.4 Assignment: Except as follows, this Agreement may not be assigned by either party hereto without the express written consent of the other party, which may not be unreasonably withheld. Envision may assign this Agreement to a commonly controlled subsidiary or affiliate company, or a controlling parent company. Envision shall make best efforts to provide Plan Sponsor with written notice of such assignment at least ninety (90) days prior to the date on which the assignment is to become effective. 10.5 Binding Effect: This Agreement and the exhibits and schedules attached hereto shall be binding upon and inure to the benefit of the respective parties hereto, and their respective successors and assigns. 10.6 Intellectual Propert y: Each party hereto reserves the right to and control of the use of their names, symbols, trademarks or service marks presently existing or hereafter established, and no party may use any names, symbols, trademarks or service marks of any other party without the owner's written consent, provided, however, that neither party shall be required to obtain permission to use the other party's name in general communications regarding the existence of the contractual relationship between the parties and the overall nature of the services. 10.7 Waiver: Neither the failure nor any delay on the part of either party hereto to exercise any right, power or privilege hereunder will operate as a waiver thereof, nor will any single or partial exercise of any such right, power or privilege preclude any other or further exercise thereof, or the exercise of any other right, power or privilege. In the event any party hereto should waive any breach of any provision of this Agreement, it will not be deemed or construed as a waiver of any other breach of the same or different provision. 10.8 Severability: The invalidity or unenforceability of any term or provision of this Agreement shall in no way affect the validity or enforceability of any other term or provision. \Ft.Worth PBM Services Agreement 062314(r2) ©Envision Pharmaceutical Services,LLC Page 17 of 26 10.9 Change in Law or Market Conditions: If any law, regulation, or market condition (e.g. an applicable industry standard reference on which pricing hereunder is based, changes the methodology for determining drug price in a way that materially changes the pricing or economics of this Agreement), either now existing or subsequently occurring, affects the ability of either party hereto to carry out any obligation hereunder (a "Material Change"), Envision and Plan Sponsor shall renegotiate the affected terms of this Agreement, in good faith, to preserve, to the extent possible, the relative positions of the parties that existed prior to such Material Change. Either party may notify the other party of a Material Change. If a successful renegotiation is not achieved within thirty (30) days after notification of a Material Change, any failure of the affected party to meet its obligations hereunder due to the effect of such Material Change shall not be deemed to be a breach of this Agreement; however, if continuation of this Agreement without modification is in violation of any law or regulation, or makes it impracticable for the affected party to meet its obligations hereunder, either party may terminate this Agreement with sixty (60) days prior written notice. 10.10 Headings: The section or paragraph headings contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement. 10.11 Entire Agreement: This Agreement (including the most recently completed and signed Benefit Specification Form, which is incorporated herein by reference) shall constitute the entire agreement between Envision and Plan Sponsor with respect to the subject matter herein and supersede any prior understanding or agreements of any kind preceding this Agreement with respect to such subject matter. Any modification or amendment to this Agreement, or additional obligation assumed by Envision or Plan Sponsor in connection with this Agreement, shall be binding only if evidenced in a writing signed by both parties hereto, provided, however, that changes in services or coverage effected by completion of a Benefit Specification Form shall be accomplished by incorporation of the most recently completed Benefit Specification Form on execution and submission. No term or provision of this Agreement shall establish a precedent for any term or provision in any other agreement. 10.12 Acceptance of Offer: Notwithstanding anything herein to the contrary, this Agreement shall not be binding upon the parties hereto unless and until this Agreement is signed and executed by a duly authorized officer of each of the parties. The signing of this Agreement by Plan Sponsor constitutes an offer only until the same has been accepted by Envision. 10.13 Dispute Resolution 10.13.1 Mediation: If either party to this Agreement should declare a breach of this Agreement, or if any dispute arises from this Agreement or the subject of this Agreement, the parties shall first submit the matter to non-binding mediation (not arbitration) and attempt to resolve the matter, in good faith, prior to the institution of any other legal action. The parties agree any other legal action may be initiated only after each party has presented its case to a qualified mediator associated with a professional mediation firm and such mediator has declared an impasse. Any statements made at such mediation shall be for settlement purposes only and shall not be construed to be an admission. A party demanding mediation shall be entitled to obtain a court order mandating mediation if the other party does not agree to commence \Pt.Worth PBM Services Agreement 062314(r2) C Envision Pharmaceutical Services,LLC Page 18 of 26 mediation within thirty (30) days after written demand. The fees and costs incurred by the party seeking such court order shall be reimbursed by the other party; otherwise, each party shall pay its own costs of mediation. All such mediation proceedings shall be conducted on a confidential basis. The mediation shall be conducted in Cleveland, Ohio. 10.14 Choice of Law: This Agreement shall be construed, interpreted, and governed according to the laws of the State of Texas, without regard to its conflict of laws rules, except to the extent such laws are preempted by applicable Federal law. 10.15 Force Majeure: Neither Envision nor Plan Sponsor will be deemed to have breached this Agreement or be held liable for any failure or delay in the performance of all or any portion of its obligations under this Agreement if prevented from doing so by a cause or causes beyond its control. Without limiting the generality of the foregoing, such causes include acts of God or the public enemy, fires, floods, storms, earthquakes, riots, strikes, boycotts, lock-outs, acts of terrorism, acts of war, war-operations, restraints of government, power or communications line failure or other circumstances beyond such party's control, or by reason of the judgment, ruling or order of any court or agency of competent jurisdiction, or change of law or regulation (or change in the interpretation thereof) subsequent to the execution of this Agreement. The party claiming force majeure must provide the other party with reasonable written notice. However, as soon as the cause preventing performance ceases, the party affected thereby shall fulfill its obligations as set forth under this Agreement. This Section 10.15 shall not be considered to be a waiver of any continuing obligations under this Agreement, including, without limitation, the obligation to make payments. 10.16 Fax Communications: Plan Sponsor agrees that Envision may communicate with Plan Sponsor via fax, and by doing so, such fax is not a violation of the Telephone Consumer Protection Act, 47 U.S.C. §227. 10.17 Notices: All notices required under this Agreement shall be in writing, signed by the party giving notice and shall be deemed sufficiently given immediately after being delivered by hand, or by traceable overnight delivery service, or by registered or certified mail (return receipt requested), to the other party at the address set forth below or at such address as has been given by proper notice. 10.18 Representations: Plan Sponsor represents and warrants that (i) it is self-insured; (ii) the entering into this Agreement for PBM Services is not in violation of any other agreement; (iii) has no undisclosed conflicts of interest; and (iv) it maintains, and shall continue to maintain throughout the term of this Agreement, any and all licenses, governmental authority, or other authorization required to operate an entity of its type. Envision represents that there are no organizational arrangements that could potentially create a conflict of interest that affects clinical or financial decisions. In addition, each signatory named below represents and warrants that he or she (i) has read this Agreement, Exhibits, and other attachments, and fully understands and agrees to the content therein; (ii) has entered into this Agreement voluntarily; (iii) has not transferred or assigned or otherwise conveyed in any manner or form any of the rights, obligations or claims which are the subject matter of this Agreement; and (iv) has the full power and authority to execute this Agreement. Tt.Worth PBM Services Agreement 062314(r2) ©Envision Pharmaceutical Services,LLC Page 19 of 26 10.19 Third Party Administrator: If Plan Sponsor uses the services of a Third Party Administrator (TPA), consultant, broker, or other third party to carry out any of Plan Sponsor's obligations under this Agreement, said entity(ies) shall be set forth in Exhibit 2 of this Agreement. IN WITNESS WHEREOF, Envision and Plan Sponsor have executed this Agreement as of the Effective Date above. For ENVISION: For PLAN SPONSOR: By: �— r�-- By Matthew A. Gibbs, Pharm D. I A lu o� Chief Commercial Officer Print Name & Title Address: Address: Envision Pharmaceutical Services, LLC The City of Fort Worth 2181 East Aurora Road 1000 Throckmorton Street Twinsburg, OH 44087 Fort Worth, TX 76102 PH: 330-405-8080 PH: 817-392-7783 FX: 330-405-8081 E-MAIL: brian @dickerson @fortworthtexas.gov FEIN: 73-6000528 APPROVED AS TO F^MM A E LITY: As I TAN ITY ATTORNEY Q� F0 0 00, v$ 'by. m a 9 004D000`. �i ecre E Mary J. Kayser, ty tary OFFICIAL RECORD CITY SECRETARY FT.WORTH,TX Tt.Worth PBM Services Agreement 062314(r2) ©Envision Pharmaceutical Services,LLC Page 20 of 26 EXHIBIT 1 FEES, DRUG PRICING, AND FINANCIAL GUARANTEES Administrative Fee (Payable to Envision; not including fees payable to Plan Sponsor's TPAs, consultants, or brokers, if any) For Contract Year 2015: $3.75 Per Employee, Per Month (PEPM) For Contract Year 2016: $4.00 PEPM For Contract Year 2017: $4.00 PEPM Fees for Additional Services and Miscellaneous Expenses 1. Replacement by Envision of lost or stolen ID $1.00 per card plus $0.15 per packet and Cards cost of postage 2. Manual Claims Processing (including DMRs) $1.50 per Claim processed 3. Claim Adjustment Checks (charged to Plan Sponsor for reimbursements made to Covered Individuals for Claim adjustments requested by Plan Sponsor.) $8.50 per check 4. Manually create or update the Eligibility File $1.00 per Covered Individual data entry 5. Ad Hoc Computer or Report Programming $150.00 per hour 6. Clinical Prior Authorizations (Initial Coverage Determinations) $8.00 per authorization 7. Drug Therapy Care Gap Management $0.55 per Member per month (PMPM) 8. Medication Adherence and Persistency(up to three disease states) $0.55 PMPM Drug Pricing and Dispensing Fees(A) Supply/Source BRAND GENERIC For Contract Year Drug Price(B) Dispensing Drug Price(B) Dispensing 2015 (Annual Average Fee(e) (Annual Average Fee(o) (based on 3 year Effective Rate (Annual Effective Rate (Annual Agreement) Guarantee) Average Guarantee) Average Guarantee) Guarantee) 30 Days' Supply at a AWP minus 15.35% $1.20 AWP minus $1.20 Retail Pharmacy 77.50% 84 Days' Supply (or greater) at a Retail AWP minus 20% N/A AWP minus 77% N/A Pharmacy (non-Mail Order) Tt.Worth PBM Services Agreement 062314(r2) ©Envision Pharmaceutical Services,LLC Page 21 of 26 Mail Order Pharmacy AWP minus 21.06% N/A AWP minus 80% N/A Specialty Pharmacy (Pass-Through of Contract Rate with Dispensing Pharmacy) Supply/Source BRAND GENERIC Drug Price(B) Dispensing Drug Price(B) Dispensing For Contract Year (Annual Average Fee(C) (Annual Average Fee(C) 2016 Effective Rate (Annual Effective Rate (Annual Guarantee) Average Guarantee) Average Guarantee) Guarantee) 30 Days' Supply at a AWP minus 15.45% $1.20 AWP minus 78% $1.20 Retail Pharmacy 84 Days' Supply(or greater) at a Retail AWP minus 20.10% N/A AWP minus N/A Pharmacy(non-Mail 77.50% Order) Mail Order Pharmacy AWP minus 21.06% N/A AWP minus N/A 80.50% Specialty Pharmacy (Pass-Through of Contract Rate with Dispensing Pharmacy) Supply/Source BRAND GENERIC Drug Price(B) Dispensing Drug Price(B) Dispensing For Contract Year (Annual Average Fee(C) (Annual Average Fee(C) 2017 Effective Rate (Annual Effective Rate (Annual Guarantee) Average Guarantee) Average Guarantee) Guarantee) 30 Days' Supply at a AWP minus 15.50% AWP minus Retail Pharmacy $1.20 78.50% $1.20 84 Days' Supply (or greater) at a Retail AWP minus 20.20% N/A AWP minus 78% N/A Pharmacy(non-Mail Order) Mail Order Pharmacy AWP minus 21.06% N/A AWP minus 81% N/A Specialty Pharmacy (Pass-Through of Contract Rate with Dispensing Pharmacy) (A)For purposes of this Agreement the "Average Wholesale Price" or"AWP" means the average wholesale price of a Covered Drug indicated on the most current pricing file provided to Envision by Medi-Span® (or other applicable industry standard reference on which pricing hereunder is based) for the actual drug dispensed using the 11 digit National Drug Code (NDC) number provided by the dispensing pharmacy. Envision uses a single source for determining AWP and updates the AWP source file at least once weekly. (B) For purposes of this Agreement, the "Annual Average Effective Rate" means, for the category of drugs Tt.Worth PBM Services Agreement 062314(r2) 0 Envision Pharmaceutical Services,LLC Page 22 of 26 being reviewed,the result calculated by the following formula: 1. (IC/AWP)-1, where IC (the "Ingredient Cost") is the sum of all amounts paid by Plan Sponsor for the ingredient costs of the Covered Drugs paid to Participating Pharmacies in the designated Network during the Contract Year, before deducting applicable Manufacturer Derived Revenue; and 2. AWP is the sum of the Average Wholesale Price amounts associated with the same Covered Drugs during the Contract Year. If the calculated price is lower than the allowable amount under any state Medicaid "Favored Nations" rule, Envision shall pass-through, and Plan Sponsor shall pay, the Medicaid allowable amount. Annual Average Effective Rate is calculated using actual price paid by Envision to Participating Pharmacies in the designated Network, plus any Cost Share, (the Ingredient Cost) for all Claims for the applicable category(including Claims paid at the U&C Price) during a Contract Year, excluding(i) Compound Drugs; (ii) Limited Distribution Drugs; (iii) drugs dispensed at a Specialty Pharmacy; (iv) Claims from non- Participating Pharmacies, LTC pharmacies, or government owned or operated pharmacies (e.g. Veterans Administration); (v) Claims paid at government required amounts (e.g. Medicaid); (vi) 340B Claims; (vii) vaccines; (viii) non-Prescription Drugs; and (ix) Claims from any Plan Sponsor owned or affiliated pharmacy which is not a Participating Pharmacy. (c)Annual Average Dispensing Fee is the average per Claim fee for all Claims by Envision to Participating Pharmacies in the designated Network (including Claims paid at the U&C Price) during a Contract Year, excluding (i) Compound Drugs; (ii) Limited Distribution Drugs; (iii) drugs dispensed at a Specialty Pharmacy; (iv) Claims from non-Participating Pharmacies, LTC pharmacies, or government owned or operated pharmacies (e.g. Veterans Administration); (v) Claims paid at government required amounts (e.g. Medicaid); (vi) 340B Claims; (vii) vaccines; (viii) non-Prescription Drugs; and (ix) Claims from any Plan Sponsor owned or affiliated pharmacy which is not a Participating Pharmacy. Annual Average Effective Rate and Annual Average Dispensing Fee Guarantee Plan Sponsor acknowledges that the Annual Average Effective Rates and Annual Average Dispensing Fees specified in this Exhibit 1 are conditioned upon Plan Sponsor's adherence to certain conditions under this Agreement and that the actual Annual Average Effective Rates and Annual Average Dispensing Fees will also depend on Plan Sponsor's drug utilization and mix of Participating Pharmacies. Within four months after the end of each Contract Year, Envision shall provide Plan Sponsor, upon request, with a report showing the actual Annual Average Effective Rates and Annual Average Dispensing Fees paid by Plan Sponsor for the Contract Year. The Annual Average Effective Rates and Annual Average Dispensing Fees guarantees set forth in Exhibit 1 shall be deemed to have been satisfied if the discounts passed through to Plan Sponsor for all Claims during the Contract Year are equal to or more favorable, in the aggregate, than the drug pricing and dispensing fee guarantees stated for each drug type or category individually. If the amounts paid by Plan Sponsor for all Claims during the Contract Year are less favorable, in the aggregate, than the combined Annual Average Effective Rates and Annual Average Dispensing Fees stated in Exhibit 1, Envision shall credit Plan Sponsor with the difference. Envision shall not be liable to Plan Sponsor for shortfalls in guaranteed Annual Average Effective Rates or Annual Average Dispensing Fees if (i) Plan Sponsor makes a change to the Benefit Plan at any time (regardless of whether or not such change is required by law); (ii)the configuration of System edits is modified by Plan Sponsor; (iii)Plan Sponsor does not adhere to the Formulary; or(iv)the utilization data provided by Plan Sponsor(or Plan Sponsor's agent) upon which the calculation of guarantees were based is inaccurate, incomplete, or there is a substantial change in drug utilization patterns of Covered Individuals. Plan Sponsor agrees that Envision's liability to Plan Sponsor for shortfalls in financial guarantees, in the aggregate, for any Contract Year shall be limited to amounts paid by Plan Sponsor to Envision for Administrative Fees during the applicable Contract Year, and Plan Sponsor has no right of offset to withhold any payment due Envision under this Agreement for any amounts Plan Sponsor believes are owed by Envision for financial guarantees. Tt.Worth PBM Services Agreement 062314(r2) ©Envision Pharmaceutical Services,LLC Page 23 of 26 Annual Average Manufacturer Derived Revenue Guarantee(E),(F),(G) For Contract Year 2015,2016 & 2017: • For Brand Drugs at a Retail Pharmacy - $22.50 per paid Brand Drug Claim • For 90 day supply of Brand Drugs at the Mail Order Pharmacy- $55.10 per paid Brand Paid Claim (E)Manufacturer Derived Revenue guarantees are stated as annual average amounts per Contract Year. (F) Guarantees require Plan Sponsor to maintain a Benefit Plan that has a tier structure with a minimum $20 differential in Cost Share between preferred Brand Drugs and non-preferred Brand Drugs. (G)340B Claims and other Claims not eligible for Manufacturer Derived Revenue,and Claims from any Plan Sponsor owned or affiliated pharmacy which is not a Participating Pharmacy, shall be excluded from the calculation of the guarantees above. Plan Sponsor acknowledges that the annual average Manufacturer Derived Revenue guaranteed amounts specified in this Exhibit 1 are conditioned upon Plan Sponsor's adherence to certain conditions under this Agreement. Nine months after the end of each Contract Year, Envision shall provide Plan Sponsor with a report reconciling Manufacturer Derived Revenue amounts advanced to Plan Sponsor and Manufacturer Derived Revenue amounts earned by Plan Sponsor for eligible Claims (including market share based amounts)during the Contract Year. (a) If the Manufacturer Derived Revenue advanced to Plan Sponsor for the Contract Year is, overall, lower than the overall Manufacturer Derived Revenue earned by Plan Sponsor for the Contract Year, Envision shall pay the difference to Plan Sponsor. (b) If the Manufacturer Derived Revenue earned by Plan Sponsor for the Contract Year is, overall, lower than the annual average Manufacturer Derived Revenue guaranteed amounts specified above, Envision shall pay the difference to Plan Sponsor. Notwithstanding anything herein to the contrary, Envision shall not be liable to Plan Sponsor for any shortfall in guaranteed Manufacturer Derived Revenue if. (i) Plan Sponsor makes a change to the Benefit Plan at any time (regardless of whether or not such change is required by law); (ii) the configuration of System edits is modified by Plan Sponsor; (iii) Plan Sponsor does not adhere to the Formulary; (iv) the utilization data provided by Plan Sponsor (or Plan Sponsor's agent) upon which the calculation of guarantees were based is inaccurate, incomplete, or there is a substantial change in drug utilization patterns of Covered Individuals; (v) there is a loss of rebates due to pharmaceutical manufacturer drug patent expirations, manufacturer bankruptcy, or removal of a drug from the market; (vi) there are changes in pharmaceutical manufacturer rebate contracting terms or policies; (vii)Plan Sponsor's Benefit Plan does not meet the conditions for rebates of pharmaceutical manufacturer contracts including market share rebates; (viii) if Plan Sponsor has been excluded by a manufacturer; or (ix) there is any governmental regulation, ruling, or guidance that impacts Envision's ability to maintain current Manufacturer Derived Revenue yields. Plan Sponsor agrees that Envision's liability to Plan Sponsor for shortfalls in financial guarantees, in the aggregate, for any Contract Year shall be limited to amounts paid by Plan Sponsor to Envision for Administrative Fees during the applicable Contract Year, and Plan Sponsor has no right of offset to withhold any payment due Envision under this Agreement for any amounts Plan Sponsor believes are owed by Envision for financial guarantees. \Ft.Worth PBM Services Agreement 062314(r2) ©Envision Pharmaceutical Services,LLC Page 24 of 26 EXHIBIT 2 PERFORMANCE MEASURES Unless otherwise stated, targets set forth below will be measured on a Contract Year basis. The total amount of penalties payable by Envision in any Contract Year shall not exceed ten percent. (10%) of Envision's Administrative Fee paid by Plan Sponsor during applicable Contract Year. Unless otherwise stated, payment of penalties will be credited towards future Administrative Fees. Failure to meet Performance Measures shall not be deemed to be a breach of this Agreement. CATEGORY TARGET MEASURE PENALTY Manufacturer Derived Revenue 100%Pass- 100%of MDR earned from pharmaceutical (MDR) through manufacturers is passed through to Plan $30,000 Sponsor,in accordance with the Agreement. Network Discounts 100%Pass- 100%of network discounts and dispensing fees Network Dispensing Fees through are passed through to Plan Sponsor upon the $30,000 effective date of any negotiated change. x Calculated as the amount of time the Claims System Availability 99.5% Adjudication System is available to process $12,500 Claims. Calculated as the time commencing immediately System Response time <4 seconds after receipt of the last character of a transaction $12,500 submitted by a pharmacy until the first character of the response is sent to the pharmacy. r _ r . Based on PBM's internal quality review. Percent of all claims paid with >99.98%Retail Calculated as all claims audited and found to be $12,500 no errors >99.98%Mail without error of any form,divided by all claims audited. Yeas The amount of time that elapses between when a call is received into the customer service queue Percent of calls that will be 93%answered in and the time the phone is answered by a answered within 30 seconds an average of 30 Customer Service Representative(CSR). $12,500 seconds or less Measurement and target determination will be based on an annual average. Percentage of calls that are not answered by a CSR(caller hangs up before call is answered). Calculated as the number of calls that are not Percent of calls abandoned <5% answered divided by the number of calls $12,500 received. Measurement and target determination will be Tt.Worth PBM Services Agreement 062314(r2) 0 Envision Pharmaceutical Services,LLC Page 25 of 26 CATEGORY TARGET MEASURE PENALTY based on an annual average. PBM Service coot.- er Year b Percentage of all calls made to Envision that Percent of calls with resolution were resolved by initial CSR. Calculated as the at end of first call(i.e.no further total calls to Envision minus total number of inquiry by caller required to >90% unresolved calls divided by the total number of $12,500 obtain requested information or calls received. action) Measurement and target determination will be based on an annual average. Percent of written inquiries Response time for all written inquiries will be responded to by paper within 10 business based on the number of business days days or responded to 99 $12,500 electronically within 2 business subtracting the date received at Envision from the date the response was sent. days Pharmacy Network Access >95% Based on network pharmacy access within 10 $12,500 miles for Plan Sponsors Covered Individuals. .... r' ... ..,c : ... °.E ...mt, '!� a .. Account Management Two(2)business Initial client inquiries will be acknowledged and $12,500 Responsiveness days responded to within two business days. Eligibility information submitted to Envision Enrollment Processing Two(2)business will become effective within 2 business days $12,500 days following the date of receipt. Assumes complete and accurate information is sent to Envision. Five(5)business Measured as the time from receipt of complete Ongoing ID card production days and accurate eligibility information to the time $12,500 vendor deposits ID Cards into the mail. Tt.Worth PBM Services Agreement 062314(r2) ©Envision Pharmaceutical Services,LLC Page 26 of 26 M&C Re-iew Page 1 of 2 Official site of the City of Fort Worth,Texas CITY COUNCIL AGENDA COUNCIL ACTION: Approved on 7/22/2014 DATE: 7/22/2014 REFERENCE NO.: C-26887 LOG NAME: 14PBM CODE: C TYPE: NON-CONSENT PUBLIC HEARING: NO SUBJECT: Authorize Execution of a Contract with Envision Pharmaceutical Services, LLC, in the Amount Up to $305,505.00 for the First Year for Administrative Services for the City's Self- Funded Pharmacy Benefits (ALL COUNCIL DISTRICTS) RECOMMENDATION: It is recommended that the City Council authorize the execution of a contract with Envision Pharmaceutical Services, LLC, in the amount up to $305,505.00 for the first year for administrative services for the City's self-funded pharmacy benefits. DISCUSSION: The Human Resources Department will use this contract for claims administration and Pharmacy Benefit Management (PBM) services. The City of Fort Worth currently contracts with Aetna for these services. The City issued a Request for Proposals (RFP) on February 19, 2014. Fifty-nine vendors were solicited from the purchasing database; eight responses were received. The proposals were thoroughly reviewed by an evaluation team consisting of staff from the following departments: Transportation & Public Works, Fire, Water, Parks and Community Services and Human Resources. The evaluation team was provided with resources and assistance by the City's benefits consultant, Arthur J. Gallagher, and by staff in the Human Resources Department and Purchasing Division. The evaluation team ranked the proposals based on the following factors: technical proposals, qualifications, adherence to terms and conditions of the RFP, financial stability and value-added services and pricing competitiveness. Two finalists were selected for presentations. Following the presentations, the evaluation team determined that Envision Pharmaceutical Services, LLC (Envision), provides the best overall solution to the City. Key factors in the team's decision included Envision's pass-through pricing program, which is expected to result in lower claims costs, a point-of-sale rebate option that provides easier processing for participants and more frequent updates to the preferred drug list, which will ensure the City is getting the most up-to-date pricing. As part of its proposal, Envision used information about the City's recent pharmacy claims experience to compare its projected claims with those of the incumbent over a one-year period. Those projections show anticipated claims cost in the amount of$14,763,611.00 with Envision compared to the amount of$17,589,624.00 with the current vendor, meaning a projected savings amount of$2.8M for the City's health plan over the test year. PRICE ANAYLSIS- The City will pay a monthly premium in the amount of$3.75 per employee/non- Medicare retiree per month for a total premium amount of$305,505.00 for the first year. ADMINISTRATIVE CHANGE ORDER-An administrative change order or increase may be made by the City Manager in the amount up to $50,000.00 and does not require specific City Council approval http://apps.cfwnet.org/council_packet/mc review.asp?ID=20035&councildate=7/22/2014 12/15/2014 M&C Review Page 2 of 2 as long as sufficient funds have been appropriated. AGREEMENT TERMS - Upon City Council approval, the initial three-year term of this contract shall begin on January 1, 2015 and expire on December 31, 2017. RENEWAL OPTIONS - This contract may be renewed up to two one-year terms at the City's sole discretion. This action does not require specific City Council approval provided that sufficient funds are appropriated for the City to meet its obligations during the renewal period. M/WBE OFFICE -A waiver of the goal for MBE/SBE subcontracting was requested by the Purchasing Division and approved by the M/WBE Office, in accordance with the BDE Ordinance, because the purchase of goods or services is from sources where subcontracting or supplier opportunities are negligible. FISCAL INFORMATION/CERTIFICATION: The Financial Management Services Director certifies that funds are available in the current operating budget, as appropriated, of the Group Health Insurance Fund. TO Fund/Account/Centers FROM Fund/Account/Centers FE85 534830 0148520 $249.435.00 FE85 534830 0148540 $56.070.00 Submitted for City Manager's Office by: Susan Alanis (8180) Originating Department Head: Brian Dickerson (7783) Additional Information Contact: Margaret Wise (8058) ATTACHMENTS http://apps.cfwnet.org/council_packet/mc review.asp?ID=20035&councildate=7/22/2014 12/15/2014