STATE OF NORTH CAROLINA

STATE OF NORTH CAROLINA Department of Health and Human Services, Division of Medical Assistance Request for Proposal #: 30-DMA-33091-16 Date of Issue: October 5, 2015 Proposal Opening Date: November 2, 2015 At 2:00 PM ET Direct all inquiries concerning this RFP to: Sharon Jordan Contracts Procurement Officer Email:sharon.a.jordan@dhhs.nc.gov Phone: (919) 855-4091 1

STATE OF NORTH CAROLINA Request for Proposal # 30-DMA-33091-16 For internal State agency processing, including tabulation of proposals in the Interactive Purchasing System (IPS), please provide your company s Federal Employer Identification Number or alternate identification number (e.g. Social Security Number). Pursuant to North Carolina General Statute 132-1.10(b) this identification number shall not be released to the public. This page will be removed and shredded, or otherwise kept confidential, before the procurement file is made available for public inspection. This page is to be filled out and returned with your proposal. Failure to do so may subject your proposal to rejection. ID Number: Federal ID Number or Social Security Number Vendor Name 2

EXECUTION In compliance with this Request for Proposals, and subject to all the conditions herein, the undersigned Vendor offers and agrees to furnish and deliver any or all items upon which prices are bid, at the prices set opposite each item within the time specified herein. By executing this proposal, the undersigned Vendor certifies that this proposal is submitted competitively and without collusion (G.S. 143-54), that none of its officers, directors, or owners of an unincorporated business entity has been convicted of any violations of Chapter 78A of the General Statutes, the Securities Act of 1933, or the Securities Exchange Act of 1934 (G.S. 143-59.2), and that it is not an ineligible Vendor as set forth in G.S. 143-59.1. False certification is a Class I felony. Furthermore by executing this proposal, the undersigned certifies to the best of Vendor s knowledge and belief, that it and its principals are not presently debarred, suspended, proposed for debarment, declared ineligible or voluntarily excluded from covered transactions by any Federal or State department or agency. As required by G.S. 143-48.5, the undersigned Vendor certifies that it, and each of its sub-contractors for any Contract awarded as a result of this RFP, complies with the requirements of Article 2 of Chapter 64 of the NC General Statutes, including the requirement for each employer with more than 25 employees in North Carolina to verify the work authorization of its employees through the federal E-Verify system. G.S. 133-32 and Executive Order 24 (2009) prohibit the offer to, or acceptance by, any State Employee associated with the preparing plans, specifications, estimates for public Contract; or awarding or administering public Contracts; or inspecting or supervising delivery of the public Contract of any gift from anyone with a Contract with the State, or from any person seeking to do business with the State. By execution of any response in this procurement, you attest, for your entire organization and its employees or agents, that you are not aware that any such gift has been offered, accepted, or promised by any employees of your organization. Failure to execute/sign proposal prior to submittal shall render proposal invalid and it WILL BE REJECTED. Late proposals cannot be accepted. Curser VENDOR: STATE OF NORTH CAROLINA Department of Health and Human Services, Division of Medical Assistance Refer ALL Inquiries regarding this RFP to: Sharon Jordan Request for Proposal # 30-DMA-33091-16 Proposals will be publicly opened: Contract Type: Open Market Commodity No. and Description: External Quality Review Services and Evaluation of the State s Quality Strategy Using Agency: Department of Health and Human Services (DHHS), Division of Medical Assistance Requisition No.: STREET ADDRESS: P.O. BOX: ZIP: CITY & STATE & ZIP: TELEPHONE NUMBER: TOLL FREE TEL. NO: PRINCIPAL PLACE OF BUSINESS ADDRESS IF DIFFERENT FROM ABOVE (SEE INSTRUCTIONS TO VENDORS ITEM #10): PRINT NAME & TITLE OF PERSON SIGNING ON BEHALF OF VENDOR: FAX NUMBER: VENDOR S AUTHORIZED SIGNATURE: DATE: E-MAIL: Offer valid for at least 60 days from date of proposal opening, unless otherwise stated here: days. After this time, any withdrawal of offer shall be made in writing, effective upon receipt by the agency issuing this RFP. ACCEPTANCE OF PROPOSAL If any or all parts of this proposal are accepted by the State of North Carolina, an authorized representative of the DHHS, Division of Medical Assistance shall affix his/her signature hereto and this document and all provisions of this Request For Proposal along with the Vendor proposal response and the written results of any negotiations shall then constitute the written agreement between the parties. A copy of this acceptance will be forwarded to the successful Vendor(s). FOR STATE USE ONLY: Offer accepted and Contract awarded this day of, 20, as indicated on the attached certification, by. (Authorized Representative of DHHS, Division of Medical Assistance). 3

Table of Contents Article Title Page No. 1.0 Purpose and Background 6 2.0 General Information 6 2.1 Request for proposal 6 2.2 Notice to vendors regarding RFP terms and conditions 6 2.3 RFP schedule 6 2.4 Proposal questions 7 2.5 Proposal submittal 7 2.6 Proposal contents 8 2.7 Definitions, acronyms, and abbreviations 10 3.0 Method of award and proposal evaluation process 11 3.1 Method of award 11 3.2 Confidentiality and prohibited communications during evaluation 12 3.3 Proposal evaluation process 12 3.4 Evaluation criteria 13 3.5 Interpretation of terms and phrases 14 4.0 Requirements 15 4.1 Contract term 15 4.2 Pricing 15 4.3 Invoices 15 4.4 Payment terms 15 4.5 Financial stability 16 4.6 Vendor experience 16 4.7 References 17 4.8 Background checks 17 4.9 Personnel 18 4.10 Vendor s representations 18 5.0 Scope of work 19 4

5.1 General 19 5.2 Objective 19 5.3 Task 19 5.4 Project organization 34 5.5 Technical approach 34 5.6 Acceptance of work 34 6.0 Contract administration 34 6.1 Contract administrator 34 6.2 Post award meetings 34 6.5 Dispute resolution 34 6.6 Division contract administrators 35 6.7 Contract changes 35 Attachments Title Page No. A Instructions to vendors 36 B North Carolina general contract terms and conditions 39 C Cost proposal 43 D Location of workers utilized by vendor 45 E Certification of financial condition 46 F Description of executive order #50 47 G State certifications required by state law 48 H Federal certifications and disclosures 49 I NC business associate addendum 55 J Data protection 58 K 42 CFR 438.354-qualifications of external review organizations 60 L NC Medicaid waiver performance measures 61 5

1.0 PURPOSE AND BACKGROUND The purpose of this Request for Proposal (RFP) is to solicit proposals from Vendors who are willing and able to provide external quality reviews (EQR) of DMA s behavioral health managed care initiative which is administered through Prepaid Inpatient Health Plans (PIHPs) and to evaluate the effectiveness of DMA s quality strategy. The managed care initiative is offered pursuant to a Medicaid Waiver. The Medicaid Waiver was implemented pursuant to Title XIX of the Social Security Act, the Balanced Budget Act of 1997, and Title 42 of the Code of Federal Regulations, and operates under concurrent 1915(b) and 1915(c) waivers. Currently, there are eight PIHPs, or Managed Care Organizations (hereinafter referred to as PIHPs), participating in the Medicaid Waiver covering all 100 counties. The eight PIHPs are: Alliance Behavioral Health, Cardinal Innovations Healthcare Solutions, CenterPoint Human Services, Eastpointe, Partners Behavioral Health Management, Sandhills Center, Smoky Mountain Center and Trillium Health Resources. The total number of participating PIHPs may be reduced by merger during the term of this contract. The Centers for Medicare and Medicaid Services (CMS) amended Parts 433 and 438 of Title 42 of the Code of Federal Regulations on January 24, 2003. These regulations, which require States to conduct an EQR, became effective as of March 25, 2003. Proposals shall be submitted in accordance with the terms and conditions of this RFP and any addenda issued hereto. 2.0 GENERAL INFORMATION 2.1 REQUEST FOR PROPOSAL DOCUMENT The RFP is comprised of the base RFP document, any attachments, and any addenda released before Contract award. All attachments and addenda released for this RFP in advance of any Contract award are incorporated herein by reference. 2.2 NOTICE TO VENDORS REGARDING RFP TERMS AND CONDITIONS It shall be the Vendor s responsibility to read the Instructions, the State s terms and conditions, all relevant exhibits and attachments, and any other components made a part of this RFP, and comply with all requirements and specifications herein. Vendors also are responsible for obtaining and complying with all Addenda and other changes that may be issued in connection with this RFP. If Vendors have questions, issues, or exceptions regarding any term, condition, or other component within this RFP, those should be submitted as questions as outlined in the instructions of this RFP. If the State determines that any changes will be made as a result of the points raised, then such decisions will be communicated in the form of an RFP addendum. The State may also elect to leave open the possibility for later negotiation of specific components of the Contract that have been addressed during the question and answer period. Other than through this process, the State rejects and will not be required to evaluate or consider any additional or modified terms and conditions submitted with Vendor s proposal. This applies to any language appearing in or attached to the document as part of the Vendor s proposal that purports to vary any terms and conditions or Vendors instructions herein or to render the proposal non-binding or subject to further negotiation. By execution and delivery of this RFP Response, the Vendor agrees that any additional or modified terms and conditions, whether submitted purposely or inadvertently, shall have no force or effect, and will be disregarded. Noncompliance with, or any attempt to alter or delete, this paragraph shall constitute sufficient grounds to reject Vendor s proposal as nonresponsive. Contact with anyone working for or with the State regarding this RFP other than the State Contract Specialist named on the face page of this RFP in the manner specified by this RFP shall constitute grounds for rejection of said Vendor s offer, at the State s election. 2.3 RFP SCHEDULE The table below shows the intended schedule for this RFP. The State will make every effort to adhere to this schedule. 6

Event Responsibility Date and Time Issue RFP State October 5, 2015 Submit Written Questions Vendor October 14, 2015 Provide Response to Questions State October 19, 2015 Submit Proposals Vendor November 2, 2015 Contract Award State December 1, 2015 Contract Effective Date State January 1, 2016 2.4 PROPOSAL QUESTIONS Upon review of the RFP documents, Vendors may have questions to clarify or interpret the RFP in order to submit the best proposal possible. To accommodate the Proposal Questions process, Vendors shall submit any such questions by the above due date. Written questions shall be e-mailed to sharon.a.jordan@dhhs.nc.gov by the date and time specified above. Vendors should enter RFP # 30-DMA-33091-16: Questions as the subject for the email. Questions submittals should include a reference to the applicable RFP section and be submitted in a format shown below: Reference RFP Section, Page Number Vendor Question Vendor question? Questions received prior to the submission deadline date, the State s response, and any additional terms deemed necessary by the State will be posted in the form of an addendum to the Interactive Purchasing System (IPS), http://www.ips.state.nc.us, and shall become an Addendum to this RFP. No information, instruction or advice provided orally or informally by any State personnel, whether made in response to a question or otherwise in connection with this RFP, shall be considered authoritative or binding. Vendors shall rely only on written material contained in an Addendum to this RFP. 2.5 PROPOSAL SUBMITTAL Sealed proposals, subject to the conditions made a part hereof and the receipt requirements described below, shall be received at the address indicated in the table below, for furnishing and delivering those items as described herein. [If the mailing address is the same as the physical office address, delete one column of the table and modify the remaining fields as needed] Mailing address for delivery of proposal via US Postal Service PROPOSAL NUMBER: 30-DMA-33091-16 Office of Procurement and Contract Services Mail Service Center 2008 Raleigh, NC 27699-2008 Office Address of delivery by any other method (special delivery, overnight, or any other carrier) PROPOSAL NUMBER: 30-DMA-33091-16 Hoey Building (Dix Campus) Office of Procurement and Contract Services 801 Ruggles Drive Raleigh, NC 27603 IMPORTANT NOTE: All proposals shall be physically delivered to the office address listed above on or before the proposal deadline in order to be considered timely, regardless of the method of delivery. This is an absolute requirement. All risk of late arrival due to unanticipated delay whether delivered by hand, U.S. Postal Service, courier or other delivery service is entirely on the Vendor. It is the sole responsibility of the Vendor to have the proposal physically in this Office by the specified time and date of opening. The time of delivery will be marked on each proposal when received, and any proposal received after the proposal submission deadline will be rejected. Sealed proposals, subject to 7

the conditions made a part hereof, will be received at the address indicated in the table in this Section, for furnishing and delivering the commodity as described herein. Note that the U.S. Postal Service generally does not deliver mail to specified street address but to the State s Mail Service Center. Vendors are cautioned that proposals sent via U.S. Mail, including Express Mail, may not be delivered by the Mail Service Center to the agency s purchasing office on the due date in time to meet the proposal deadline. All Vendors are urged to take the possibility of delay into account when submitting a proposal. Attempts to submit a proposal via facsimile (FAX) machine, telephone or electronic means, including but not limited to e-mail, in response to this RFP shall NOT be accepted. a) Submit two (2) signed, original executed proposal responses, five (5) of photocopies, two (2) un-redacted electronic copies on CD, DVD or flash drive and two (2) redacted electronic (Proprietary and Confidential Information Excluded) copies on CD, DVD or flash drive of your proposal simultaneously to the address identified in the table above. b) Submit your proposal in a sealed package. Clearly mark each package with: (1) Vendor name; (2) the RFP number; and (3) the due date. Address the package(s) for delivery as shown in the table above. If Vendor is submitting more than one (1) proposal, each proposal shall be submitted in separate sealed envelopes and marked accordingly. For delivery purposes, separate sealed envelopes from a single Vendor may be included in the same outer package. Proposals are subject to rejection unless submitted with the information above included on the outside of the sealed proposal package. c) The electronic copies of your proposal must be provided on separate read-only CD s, DVD s or flash drives. The files on the discs shall NOT be password protected, shall be in.pdf or.xls format, and shall be capable of being copied to other media including readable in Microsoft Word and/or Microsoft Excel. Disc One must contain unredacted copies of the Technical and Cost Proposals including any proprietary information and have the following label affixed to the disc: 1) Vendor name; (2) the RFP number; (3) the due date; and (4) the words Disc One Technical and Cost Proposal Non-Redacted. Disc Two must contain redacted copies of the Technical and Cost Proposals from which the Vendor s confidential and proprietary information has been deleted in accordance with the provisions of Attachment A, Paragraph 11 of the Instructions to Vendors. DHHS, Division of Medical Assistance, in responding to public records requests, will release the information on this disc. It is the sole responsibility of the Vendor to ensure that this disc complies with the requirements of A, Paragraph 11 of the Instructions to Vendors. The following label must be affixed to the disc: (1) Vendor name; (2) the RFP number; (3) the due date; and (4) the words Disc Two Technical and Cost Proposal Redacted Copy. 2.6 PROPOSAL CONTENTS Vendors shall populate all attachments of this RFP that require the Vendor to provide information and include an authorized signature where requested. Vendor RFP responses shall include the following items and those attachments should be arranged in the following order: a) Cover Letter b) Title Page: Include the company name, address, phone number and authorized representative along with the Proposal Number. c) Completed and signed version of EXECUTION PAGES, and signed receipt pages of any addenda released in conjunction with this RFP d) Table of Contents e) The Vendor s name and principal place of business. f) The Vendor s legal status; i.e. whether the Vendor is an individual, a corporation, a general partnership, a limited partnership, a joint venture or some other legal entity. g) The state in which the Vendor is incorporated or organized. h) A brief overview of the Vendor s history. i) A brief overview of all services provided by the Vendor 8

j) The details of: (1) Any criminal convictions of any of the Vendors or any of their officers, directors, employees, agents or subcontractors of which the Vendors have knowledge or a statement that there are none; (2) Any criminal investigations pending against of any of the Vendors or any of their officers, directors, employees, agents or subcontractors of which the Vendors have knowledge or a statement that there are none; (3) Any regulatory sanctions levied against any of the Vendors or any of their officers, directors, employees, agents or subcontractors by any state or federal regulatory agencies within the past three years of which the Vendors have knowledge or a statement that there are none. As used herein, the term regulatory sanctions includes the revocation or suspension of any license or certification, the levying of any monetary penalties or fines, and the issuance of any written warnings; (4) Any regulatory investigations pending against of any of the Vendors or any of their officers, directors, employees, agents or subcontractors by any state or federal regulatory agencies of which the Vendors have knowledge or a statement that there are none. Note: The Department may reject a proposal solely on the basis of this information. k) A statement of whether any of the Vendor s directors, partners, proprietors, officers or employees or any of the proposed project staff are related to any DHHS employees. If such relationships exist, identify the related individuals, describe their relationships, and identify their respective employers and positions. l) The Vendor s Assurance that the Vendor and the proposed Vendor staff are not excluded from participation by Medicaid or the Office of the Inspector General of the United States Department of Health and Human Services. m) A certification that none of the regulations cited in RFP Section 5.3 (1) would bar it from performing any of the duties of an independent EQRO for DMA as of the date that the Vendor filed its proposal; and the Vendor shall refrain for the life of this contract from entering into any contractual relationships that would violate those regulations. n) Documentation that the Vendor has the qualifications specified in RFP Section 4.6, above. o) A description of the Vendor s experience providing the services described in the Scope of Work (SOW), within the last five years, including: (1) The beginning and ending dates of the contracts; (2) The services provided under those contracts; (3) The total number of Vendor employees assigned to service each contract; (4) Whether any of those contracts were extended or renewed at the end of their initial terms; (5) Whether any of those contracts were terminated early for cause by either party to the contract; (6) The lessons learned from each of those contracts; and (7) The name, address, and telephone number of at least one manager in each client organization who is personally familiar with the Vendor s performance under the contract. p) A written description of the Vendor s understanding of the objective of this RFP. q) A written description of the Vendor s approach to the work described in the RFP r) Documentation of the Vendor s ability to perform the services described in the RFP. s) Work plans, timelines and schedule for all deliverables along with implementation and transition plans described in the RFP section 5.3. t) A discussion of problems foreseen by the Vendor and the Vendor s proposed solutions to these problems. 9

u) A description of how the Vendor will staff the project, including the name, resume and qualifications of each of the proposed team members (including subcontractors), and at least three (3) references for each. v) An Organization Chart showing the employees who will provide services under this contract and the chain of command and supervision of those employees. w) Documentation that the Vendor s proposed Project Manager has the experience required by RFP Section 4.6. x) Documentation that at least one member of the Vendor s proposed staff has the experience required by RFP Section 4.6 y) Identify the Vendor staff, if any, that must be relocated to North Carolina and indicate how long it will take them to relocate. z) The name and contact information of the Vendor s proposed Contract Administrator aa) ATTACHMENT A: INSTRUCTIONS TO VENDORS bb) ATTACHMENT B: NORTH CAROLINA GENERAL CONTRACT TERMS AND CONDITIONS cc) ATTACHMENT C: COST PROPOSAL dd) Completed and signed version of ATTACHMENT D: LOCATION OF WORKERS UTILIZED BY VENDOR ee) Completed and signed version of ATTACHMENT E: CERTIFICATION OF FINANCIAL CONDITION ff) Completed and signed version of ATTACHMENT F: DESCRIPTION OF EXECUTIVE ORDER #50 gg) Completed and signed version of ATTACHMENT G: CERTIFICATIONS REQUIRED BY STATE LAW hh) Completed and signed version of ATTACHMENT H: FEDERAL CERTIFICATIONS AND DISCLOSURES ii) Completed and signed version of ATTACHMENT I: N.C. BUSINESS ASSOCIATE ADDENDUM jj) ATTACHMENT J: DATA PROTECTION kk) ATTACHMENT K: 42 CFR 438.354 QUALIFICATIONS OF EXTERNAL REVIEW ORGANIZATIONS ll) ATTACHMENT L: N.C. MEDICAID WAIVER PERFORMANCE MEASURES If the Vendor submits additional attachments in its proposal, those attachments should follow the attachments listed above and should be lettered consecutively thereafter. 2.7 DEFINITIONS, ACRONYMS, AND ABBREVIATIONS a) BAFO: Best and Final Offer, submitted by a vendor to alter its initial offer, made in response to a request by the issuing agency. b) CENTERS FOR MEDICARE AND MEDICAID SERVICES (CMS): The agency within the Federal Department of Health and Human Services that has primary responsibility for the overall administration and coordination of the Medicare and Medicaid programs. CMS was formerly known as the Health Care Financing Administration. c) CLEAN CLAIM: A claim that can be processed without obtaining additional information from the provider of the service or from a third party. It includes a claim with errors originating in the PIHP s claims system but does not include a claim from a provider who is under investigation by a governmental agency for fraud or abuse or a claim under review for medical necessity. d) CODE OF FEDERAL REGULATIONS (CFR): The Code of Federal Regulations (CFR) is the codified form of the regulations published in the Federal Register by the executive agencies of the Federal Government. e) CONTRACT LEAD: Representative of the DHHS, Division of Medical Assistance who corresponds with potential Vendors in order to identify and contract with that Vendor providing the greatest benefit to the State. f) DHHS or DEPARTMENT: The NC Department of Health and Human Services g) DMA or DIVISION: Division of Medical Assistance h) EXTERNAL QUALITY REVIEW (EQR): The analysis and evaluation, by an EQRO, of aggregated information on quality, timeliness, and access to the health care services that a PIHP/MCO, or their subcontractors, furnish to Medicaid recipients. i) EXTERNAL QUALITY REVIEW ORGANIZATION (EQRO): An entity that meets federal competence and independence criteria for the performance of the EQR and EQR-related activities. 42 C.F.R. Part 438, Subpart E. 10

j) FINANCIAL RELATIONSHIP: A direct or indirect ownership or investment interest (including an option or nonvested interest) in any entity. This direct or indirect interest may be in the form of equity, debt, or other means and includes any indirect ownership or investment interest no matter how many levels removed from direct interest; or a compensation arrangement with an entity. k) FLAGRANT QUALITY OF CARE ISSUE: An issue, circumstance, or occurrence that places a recipient s health, safety, or wellbeing in immediate jeopardy. l) MANDATORY ACTIVITIES: Activities which must be performed to comply with federal EQR requirements. m) MCO: Managed Care Organization n) OPTIONAL ACTIVITIES: Certain activities which are optional to produce data for EQR. o) PLAN-LEVEL: A description of a specific organizational level at which work will be performed. For example, a Plan- Level data analysis involves the analysis of data from a single PIHP, or Plan, rather than the analysis of data from all eight PIHPs. p) PREPAID INPATIENT HEALTH PLAN (PIHP): [A]n entity that -- (1) Provides medical services to enrollees under contract with the State agency, and on the basis of prepaid capitation payments, or other payment arrangements that do not use State plan payment rates; (2) Provides, arranges for, or otherwise has responsibility for the provision of any inpatient hospital or institutional services for its enrollees; and (3) Does not have a comprehensive risk contract. 42 C.F.R. 438.2. q) QUALIFIED PROPOSAL: A responsive proposal submitted by a responsible Vendor. r) QUALITY: As it pertains to external quality review, means the degree to which a PIHP/MCO increases the likelihood of desired health outcomes of its enrollees through its structural and operational characteristics and through the provision of health services that are consistent with current professional knowledge. s) RFP: Request for Proposal t) STATE: The State of North Carolina, including any of its sub-units recognized under North Carolina law. u) STATE AGENCY: Any of the more than 400 sub-units within the executive branch of the State, including its departments, boards, commissions of higher education and other institutions. v) VALIDATION: The review of information, data, and procedures to determine the extent to which they are accurate, reliable, free from bias, and in accord with standards for data collection and analysis. w) VENDOR: Supplier, bidder, proposer, company, firm, corporation, partnership, individual or other entity submitting a response to a Request for Proposal. 3.0 METHOD OF AWARD AND PROPOSAL EVALUATION PROCESS 3.1 METHOD OF AWARD All qualified proposals will be evaluated and awards will be based on the criteria identified below as applied to each proposal. Pursuant to G.S. 143-52, all qualified proposals will be evaluated and awards will be made to Vendors meeting the RFP requirements and achieve the highest and best final evaluation, as described below. While the intent of this RFP is to award a Contract(s) to a single Vendor, the State reserves the right to make separate awards to different Vendors for one or more line items, to not award one or more line items or to cancel this RFP in its entirety without awarding a Contract, if it is considered to be most advantageous to the State to do so. The status of a Vendor s e-procurement Services account(s) shall be considered a relevant factor in determining whether to approve the award of a contract under this RFP. Any Vendor with an E-Procurement Services account that is in arrears by 91 days or more at the time of proposal opening may, at the State s discretion, be disqualified from further evaluation or consideration. The State reserves the right to waive any minor informality or technicality in proposals received. 11

3.2 CONFIDENTIALITY AND PROHIBITED COMMUNICATIONS DURING EVALUATION During the evaluation period from the date proposals are opened through the date the contract is awarded each Vendor submitting a proposal (including its representatives, sub-contractors and/or suppliers) is prohibited from having any communications with any person inside or outside the using agency, issuing agency, other government agency office, or body (including the purchaser named above, department secretary, agency head, members of the general assembly and/or governor s office), or private entity, if the communication refers to the content of Vendor s proposal or qualifications, the contents of another Vendor s proposal, another Vendor s qualifications or ability to perform the contract, and/or the transmittal of any other communication of information that could be reasonably considered to have the effect of directly or indirectly influencing the evaluation of proposals and/or the award of the contract. A Vendor not in compliance with this provision shall be disqualified from contract award, unless it is determined in the State s discretion that the communication was harmless, that it was made without intent to influence and that the best interest of the state would not be served by the disqualification. A Vendor s proposal may be disqualified if its sub-contractor and supplier engage in any of the foregoing communications during the time that the procurement is active (i.e., the issuance date of the procurement to the date of contract award). Only those discussions, communications or transmittals of information authorized or initiated by the issuing agency for this RFP or general inquiries directed to the purchaser regarding requirements of the RFP (prior to proposal submission) or the status of the contract award (after submission) are excepted from this provision. 3.3 PROPOSAL EVALUATION PROCESS The State shall review all Vendor responses to this RFP to confirm that they meet the specifications and requirements of the RFP. The State reserves the right to waive any minor informality or technicality in proposals received. The State will conduct a One-Step evaluation of Proposals: Proposals will be received from each responsive Vendor in a sealed envelope or package. All proposals must be received by the issuing agency not later than the date and time specified on the cover sheet of this RFP. At that date and time the package containing the proposals from each responding firm will be opened publicly and the name of the Vendor and total cost offered will be announced. Interested parties are cautioned that these costs and their components are subject to further evaluation for completeness and correctness and therefore may not be an exact indicator of a Vendor s pricing position. At their option, the evaluators may request oral presentations or discussion with any or all Vendors for the purpose of clarification or to amplify the materials presented in any part of the proposal. Vendors are cautioned, however, that the evaluators are not required to request presentations or other clarification and often do not; therefore, all proposals should be complete and reflect the most favorable terms available from the Vendor. Proposals will generally be evaluated according to completeness, content, and experience with similar projects, ability of the Vendor and its staff, and cost. Specific evaluation criteria are listed in 3.4 EVALUATION CRITERIA, below. Vendors are cautioned that this is a request for offers, not an offer or request to contract, and the State reserves the unqualified right to reject any and all offers at any time if such rejection is deemed to be in the best interest of the State. The State reserves the right to reject all original offers and request one or more of the Vendors submitting proposals within a competitive range to submit a best and final offer (BAFO), based on discussions and negotiations with the State, if the initial responses to the RFP have been evaluated and determined to be unsatisfactory. Upon completion of the evaluation process, the State will make Award(s) based on the evaluation and post the award(s) to IPS under the RFP number for this solicitation. Award of a Contract to one Vendor does not mean that the other proposals lacked merit, but that, all factors considered, the selected proposal was deemed most advantageous and represented the best value to the State. 12

3.4 EVALUATION CRITERIA All qualified proposals will be evaluated and award made based on the following criteria considered, to result in an award most advantageous to the State: Vendor shall respond to all of the items outlined in the Deliverables section of the Scope of Work. The Vendor will be scored on the content, quality, and completeness of the responses for each deliverables and to how well each deliverable addresses the following core factors. a) Overall approach and methods that will be used to accomplish the deliverables and the scope of work, including what is unique, creative or innovative about the proposed approaches and/or methods to meet the deliverable b) Utilization of the protocol for the specific activity along with identification and in-depth information for each specific tasks/activities and functions that will be performed in the order that they are likely to occur. c) Comprehensiveness of work plans, schedules, timelines, implementation and transition plans. Timelines are clear and include reasonable representation of all outlined activities as well as indicate who will have the primary responsibility for performing each major task/activity/function including the name and position title of all key personnel, subcontractors, or consultants that will perform the work to meet the deliverable. Note: The RFP task order has prioritized the activities based on the state's needs. The Evaluation Committee will score the proposals using the scoring system shown in the following scoring table. The highest score that can be awarded to any proposal is 5700 points. Technical (4050 Maximum Points) Proposal Deliverable Scoring total for each Deliverable Compliance with Medicaid MCO Federal and State regulations 200 Administrative Interviews 200 Validation of Performance Measures 200 Validation of Encounter Data 200 Validation of Performance Improvement Projects: 200 Annual Individual Reports. 150 Annual Program Report: 150 Information Systems Capabilities Assessment 200 Program Integrity Reviews and Ad Hoc Reports 200 Consumer Satisfaction Surveys 200 Provider Satisfaction Surveys 200 Evaluation of the State s Quality Strategy 150 Semi-Annual Audit 200 HEDIS and other Quality Measures Reports 100 Annual Technical Report 150 Follow-up Report: 150 13

Quality Forums 150 Annual summary report from each quality forum 150 Quality of Care Reports 150 Monthly Progress Reports 100 Annual Summary Report 150 Other Areas of Evaluation Transition and Implementation Plans 100 Vendor Qualifications 400 Technical Proposal Subtotal 4050 Cost Proposal 1650 Total Possible Score 5700 Cost (1650 Maximum Points) The State will determine the proposal with the lowest total annual cost by normalizing the scores as follows: The proposal with the lowest cost will receive a score of 1650. All other competing proposals will be assigned a portion of the maximum score using the formula: 1650 x the cost of the lowest cost proposal the cost of the cost proposal being evaluated PERFORMANCE OUTSIDE THE UNITED STATES Vendor shall complete ATTACHMENT D: LOCATION OF WORKERS UTILIZED BY VENDOR. In addition to any other evaluation criteria identified in this RFP, the State may, for purposes of evaluating proposed or actual contract performance outside of the United States, also consider how that performance may affect the following factors to ensure that any award will be in the best interest of the State: Total cost to the State Level of quality provided by the Vendor Process and performance capability across multiple jurisdictions Protection of the State s information and intellectual property Availability of pertinent skills Ability to understand the State s business requirements and internal operational culture Particular risk factors such as the security of the State s information technology Relations with citizens and employees Contract enforcement jurisdictional issues 3.5 INTERPRETATION OF TERMS AND PHRASES This Request for Proposal serves two functions: (1) to advise potential Vendors of the parameters of the solution being sought by the Department; and (2) to provide (together with other specified documents) the terms of the Contract resulting from this procurement. As such, all terms in the Request for Proposal shall be enforceable as contract terms in accordance with the General Terms and Conditions. The use of phrases such as shall, must, and requirements are intended to create enforceable contract conditions. In determining whether proposals should be evaluated or rejected, the Department will take 14

into consideration the degree to which Vendors have proposed or failed to propose solutions that will satisfy the Department s needs as described in the Request for Proposal. Except as specifically stated in the Request for Proposal, no one requirement shall automatically disqualify a Vendor from consideration. However, failure to comply with any single requirement may result in the Department exercising its discretion to reject a proposal in its entirety. 4.0 REQUIREMENTS This Section lists the requirements related to this RFP. By submitting a proposal the Vendor agrees to meet all stated requirements in this Section as well as any other specifications, requirements and terms and conditions stated in this RFP. If a Vendor is unclear about a requirement or specification or believes a change to a requirement would allow for the State to receive a better proposal, the Vendor is urged and cautioned to submit these items in the form of a question during the question and answer period in accordance with Section 2.4. 4.1 CONTRACT TERM The Contract shall have an initial term of two (2) years, beginning on the date the Contract is executed by the State (the Effective Date ). The Vendor shall begin work under the Contract within 30 business days of the Effective Date. At the end of the Contract s current term, the State shall have the option, in its sole discretion, to renew the Contract on the same terms and conditions for one additional one-year term. The State will give the Vendor written notice of its intent whether to exercise the option no later than one hundred and twenty (120) days before the end of the Contract s current term. In addition, the State reserves the right to extend a contract term for a period of up to 180 days in 90-day-or-less increments. 4.2 PRICING Proposal price shall constitute the total cost to the Division for complete performance in accordance with the requirements and specifications herein, including all applicable expenses such as administrative and other similar fees. Vendor shall not invoice for any amounts not specifically allowed for in this RFP. The Vendor shall use the Cost Table found in ATTACHMENT C: COST PROPOSAL to create the Cost Proposal. The Vendor shall not use any other tables or forms, nor modify the contents of any of the shaded cells in the Cost Table. All costs quoted in your Cost Proposal must be firm and fixed for the duration of the contract, which could last as long as three years if the State exercises its option for one additional year. 4.3 INVOICES a) The Vendor must submit one monthly invoice within fifteen (15) calendar days following the end of each month in which work was performed. b) Invoices must be submitted to the following address: NC Department of Health & Human Services Division of Medical Assistance Attention: Gregory Sligh 2501 Mail Service Center Raleigh, NC 27699-2501 c) Invoices must be submitted to the Contract Lead in hard copy on the Contractor s official letterhead stationery and must be identified by a unique invoice number. All invoice backup reports and spreadsheets must be provided in electronic format. d) Invoices must bear the correct contract number and purchase order number to ensure prompt payment. The Vendor s failure to include the correct purchase order number may cause delay in payment. e) Invoices must itemize the deliverables for which payment is sought, the invoice date, the period of time covered, the amount of fees due to the Vendor and the original signature of the Vendor s project manager. 4.4 PAYMENT TERMS a) This is a deliverables-based contract, not a time-and-materials contract. The Division will pay the Vendor the firm, fixed price specified in ATTACHMENT C: COST PROPOSAL for each deliverable. 15

b) The Vendor will be paid net thirty (30) calendar days after the Vendor s invoice received and the Division has approved all deliverables covered by the invoice and after the Division s Contract Administrator has approved the Vendor s invoice. c) If DMA rejects a deliverable, DMA will give the Vendor a written explanation for the rejection and a written description of the changes that must be made to the deliverable. d) The Vendor shall then have ten business days to correct and resubmit the deliverable to DMA. e) This cycle of submission, review, rejection, revision, and resubmission shall be repeated until DMA accepts the deliverable. f) If DMA does not accept the deliverable the third time it is submitted to DMA for acceptance, the Vendor s compensation for the deliverable shall be reduced by 2% every day thereafter until an acceptable deliverable is submitted to DMA. Example: If DMA notifies the Vendor for a third time that a deliverable is not acceptable; the Vendor resubmits the deliverable to DMA five days later; and DMA accepts the deliverable three days after it receives the fourth iteration of the deliverable, the Vendor s compensation for the deliverable shall be reduced by 10% (2% x 5 days). Note: The calculation of a reduction in compensation shall exclude the time a deliverable is under review by DMA. g) If the Vendor s deliverables are repeatedly late or defective, DMA may terminate the contract pursuant to the provisions of RFP Sections 9.13 or 9.14 or invoke any other remedy available at law or equity. 4.5 FINANCIAL STABILITY Each Vendor shall certify it is financially stable by completing the ATTACHMENT E: CERTIFICATION OF FINANCIAL CONDITION. The State is requiring this certification to minimize potential issues from Contracting with a Vendor that is financially unstable. From the date of the Certification to the expiration of the Contract, the Vendor shall notify the State within thirty (30) days of any occurrence or condition that materially alters the truth of any statement made in this Certification. 4.6 VENDOR EXPERIENCE a) The Vendor must be an External Quality Review Organization (EQRO) as described in 42 CFR 438.354. A copy of the regulation is attached to this RFP as ATTACHMENT K. b) The Vendor must have: 1) Five years experience performing EQR activities, as described in 42 CFR 438.358 and 438.364; 2) Five years experience with data management and analysis; and 3) Five years experience with statistical methodologies, techniques and procedures in support of quality improvement. c) Vendor Personnel: The Vendor shall provide at a minimum, the following personnel for EQR. The personnel must be in place at within 90 days of contract award. The staff must have the knowledge and experience required by 42 C.F.R.438.354(b)(1). The Vendor s staff must include: 1) A full-time Project Manager with five years of management experience and a minimum of five years of experience in offsite and onsite EQR activities who shall oversee all EQR activities and function as a liaison with DMA. The Project Manager shall have a Degree in Behavioral Health or Social Science and shall have experience in each of the following areas: i. Medicaid recipients, policies, data systems and processes; ii. Managed care delivery systems, organizations, and financing; iii. Quality assessment and improvement methods; and iv. Research design and methodology, including statistical analysis. 2) A full-time Contract Manager with the experience and knowledge required by 42 C.F.R. 438.354(b)(1): http://www.gpo.gov/fdsys/pkg/cfr-2011-title42-vol4/pdf/cfr-2011-title42-vol4-sec438-354.pdf. 16

3) At least one member of the Vendor s staff must have a minimum of five years experience monitoring contracts, and preferably experience with managed care contracts management and monitoring. 4) An IT or Claims Manager with a minimum of 10 years of experience with claims processing/database design/encounter data processing and implementation in a managed care environment. 5) A Program Integrity Manager with a minimum of 10 years of experience with Program Integrity and Monitoring in a managed care environment. 6) A Quality Manager with a Master s Degree in a Social Sciences or Clinical field with a minimum of 10 years of experience with program evaluation, survey design and analysis, statistical analysis and performance measurement. 7) A Finance Manager with a Bachelor s Degree in accounting, business administration, finance, or related discipline; or equivalent combination of training or experience. Must have completed 12 credit hours of accounting coursework and five years of professional accounting experience. 8) One Ph.D. level Psychologist with a minimum of 10 years of post-degree experience. 9) One clinician with a Master s degree or equivalent and a minimum of 10 years of post-degree experience in providing direct care to persons with a Mental Health diagnosis. 10) One clinician with a Master s degree or equivalent and a minimum of 10 years of post-degree experience in providing direct care to persons with a Substance Abuse diagnosis. 11) One clinician with a Master s degree or equivalent and a minimum of 10 years of post-degree experience in providing direct care to persons with intellectual and developmental delays. 4.7 REFERENCES Each Bidder shall provide the names of and contact information for at least three (3) client references who are familiar with the Bidder s performance on contracts for services of similar size and scope. The State shall contact these references to determine whether the services provided were substantially similar in scope to those proposed herein and whether the Vendor s performance was satisfactory. Such information shall be considered in the evaluation of the Vendor s proposal. COMPANY NAME CONTACT NAME TELEPHONE NUMBER 4.8 BACKGROUND CHECKS Vendor and its personnel are required to provide or undergo background checks prior to beginning work with the State. As part of Vendor background the details below must be provided to the State: (1) Any criminal felony conviction, or conviction of any crime involving moral turpitude, including, but not limited to fraud, misappropriation or deception, of Vendor, its officers or directors, or any of its employees or other personnel to provide services on this project, of which Vendor has knowledge or a statement that it is aware of none; (2) Any criminal investigation for any offense involving moral turpitude, including, but not limited to fraud, misappropriation, falsification or deception pending against Vendor of which it has knowledge or a statement it is aware of none; 17

(3) Any regulatory sanctions levied against Vendor or any of its officers, directors or its professional employees expected to provide services on this project by any state or federal regulatory agencies within the past three years or a statement that there are none. As used herein, the term regulatory sanctions includes the revocation or suspension of any license or certification, the levying of any monetary penalties or fines, and the issuance of any written warnings; (4) Any regulatory investigations pending against Vendor or any of its officers, directors or its professional employees expected to provide services on this project by any state or federal regulatory agencies of which Vendor has knowledge or a statement that there are none. (5) Any civil litigation, arbitration, proceeding, or judgments pending against Vendor during the three (3) years preceding submission of its proposal herein or a statement that there are none. Vendor s responses to these requests shall be considered to be continuing representations, and Vendor s failure to notify the State within thirty (30) days of any criminal litigation, investigation or proceeding involving Vendor or its then current officers, directors or persons providing services under this contract during its term shall constitute a material breach of contract. The provisions of this paragraph shall also apply to any subcontractor utilized by Vendor to perform services under this contract. 4.9 PERSONNEL Vendor shall not substitute key personnel assigned to the performance of this Contract without prior written approval by the Contract Lead. Vendor shall notify the Contract Lead of any desired substitution, including the name(s) and references of Vendor s recommended substitute personnel. The State will approve or disapprove the requested substitution in a timely manner. The State may, in its sole discretion, terminate the services of any person providing services under this Contract. Upon such termination, the State may request acceptable substitute personnel or terminate the contract services provided by such personnel. 4.10 VENDOR S REPRESENTATIONS a) Vendor warrants that qualified personnel will provide services under this Contract in a professional manner. Professional manner means that the personnel performing the services will possess the skill and competence consistent with the prevailing business standards in the industry. Vendor agrees that it will not enter any agreement with a third party that might abridge any rights of the State under this Contract. Vendor will serve as the prime Vendor under this Contract, and Vendor shall be legally responsible for the performance and payment of any subcontractor(s) that may be approved by the State. Names of any third party Vendors or subcontractors of Vendor may appear for purposes of convenience in Contract documents; and shall not limit Vendor s obligations hereunder. b) If any services, deliverables, functions, or responsibilities not specifically described in this Contract are required for Vendor s proper performance, provision and delivery of the service and deliverables under this Contract, or are an inherent part of or necessary sub-task included within such service, they will be deemed to be implied by and included within the scope of the contract to the same extent and in the same manner as if specifically described in the contract. Unless otherwise expressly provided herein, Vendor will furnish all of its own necessary management, supervision, labor, facilities, furniture, computer and telecommunications equipment, software, supplies and materials necessary for the Vendor to provide and deliver the Services and Deliverables. c) Vendor warrants that it has the financial capacity to perform and to continue to perform its obligations under the contract; that Vendor has no constructive or actual knowledge of an actual or potential legal proceeding being brought against Vendor that could materially adversely affect its performance of this Contract; and that entering into this Contract is not prohibited by any contract, or order by any court of competent jurisdiction. 18

5.0 SCOPE OF WORK 5.1 GENERAL The State s Medicaid Waiver was implemented pursuant to Title XIX of the Social Security Act, the Balanced Budget Act of 1997, and Title 42 of the Code of Federal Regulations, and operates under concurrent 1915(b) and 1915(c) waivers. The Centers for Medicare and Medicaid Services (CMS) amended Parts 433 and 438 of Title 42 of the Code of Federal Regulations on January 24, 2003. These regulations, which require States to conduct an external quality review (EQR), became effective as of March 25, 2003. Each federally EQR activity has an EQR Protocol that provides detailed instructions on how to complete the activity. 5.2 OBJECTIVE The Vendor shall perform three mandated and three optional EQR activities for each of the State s eight PIHPs/MCOs. The mandatory protocols are: EQR Protocol 1: Assessment of Compliance with Medicaid Managed Care Regulations EQR Protocol 2: Validation of Performance Measures Reported by the PIHP EQR Protocol 3: Validating Performance Improvement Projects (PIP) The optional EQR like activity protocols are: EQR Protocol 4: Validation of Encounter Data Submitted by the MCO EQR Protocol 5: Validation and Implementation of Surveys EQR Protocol 6: Calculation of Performance Measures The Vendor shall perform an Audit and Program Integrity review of each PIHP. The Vendor shall create a HEDIS Quality Measures report. The Vendor shall evaluate the effectiveness of the Division s quality strategy. 5.3 TASK 1) INDEPENDENCE OF EQRO a) Pursuant to 42 CFR 438.354(c), the Vendor may not: i) Review a particular PIHP if either the Vendor or the PIHP exerts control (as defined in 48 C.F.R. 19.101) over the other through: A) Stock ownership; B) Stock options and convertible debentures; C) Voting trusts; or D) Common management, including interlocking management; or Contractual relationships; ii) Deliver any health care services to Medicaid recipients; iii) Conduct, on the State s behalf, ongoing Medicaid managed care program operations related to oversight of the quality of PIHP services, except for EQR-related activities; or iv) Have a present or known future, direct or indirect financial relationship with a PIHP that it will review as an EQRO. Pursuant to 42 C.F.R. 438.320 (1) http://www.gpo.gov/fdsys/pkg/cfr- 2009-title42-vol4/pdf/CFR-2009- title42-vol4-sec438-354.pdf, financial relationship means (1) A direct or indirect ownership or investment interest (including an option or non-vested interest) in any entity. This direct or indirect interest may be in the form of equity, debt, or other means and includes any indirect ownership or investment interest no matter how many levels removed from a direct interest; or (2) A compensation arrangement with an entity. b) The Vendor shall immediately notify DMA in writing within five business days when it appears that any work assignment might violate these prohibitions. 19

NOTE: The Vendor must certify in its proposal that: (1) none of the regulations cited in ATTACHMENT K: 42 CFR 438.354 QUALIFICATIONS OF EXTERNAL REVIEW ORGANIZATIONS would bar it from performing any of the duties of an independent EQRO for DMA as of the date that the Vendor filed its proposal; and (2) the Vendor shall refrain for the life of the contract from entering into any contractual relationships that would violate those regulations. 2) ANNUAL EQRs a) Annual EQR: The Vendor shall conduct external quality reviews of all eight (8) Prepaid Inpatient Healthcare Plan/Managed Care Organizations (hereafter referred to as PIHPs) that are enrolled in the Waiver program during the term of this Contract pursuant to the requirements of 42 C.F.R. 438, Subpart E, External Quality Review of Medicaid Managed Care Organizations. The Vendor shall follow all CMS protocols. See: http://www.ecfr.gov/cgibin/text-idx?rgn=div5&node=42:4.0.1.1.8#sp42.4.438.e. b) The Vendor shall conduct the Annual EQR pursuant to an EQR work plan developed by the Vendor and approved by DMA. The Vendor shall draft an EQR work plan and submit it to DMA for approval prior to the beginning of each year of the contract. The work plan shall contain a schedule of activities and serve as a blueprint for completing project activities, define each activity, the sequence of activities, define the deliverables/ outcomes, and the time necessary to complete each Annual EQR task. The work plan must also contain draft review protocols and sample standard reports. 3) ADMINISTRATIVE INTERVIEWS a) The Vendor shall develop an Administrative Interview Guide for use in conducting Annual Administrative Reviews. The guide shall be reviewed and edited as necessary by the Vendor on an annual basis. The Administrative Interview Guide shall meet the requirements outlined in the CMS protocols specified in 42 CFR 438.352 (http://www.medicaid.gov/medicaid-chip-program-information/by-topics/quality-of-care/downloads/eqrprotocol-1-attachment-a.pdf and http://www.medicaid.gov/medicaid-chip-program-information/by-topics/quality-ofcare/downloads/eqr-protocol-1-attachment-d.pdf. b) The Vendor shall utilize the administrative interviews to provide technical assistance to the State staff involved in the oversight of the PIHP programs through planning meetings, review of organizational charts, policies and procedures and other documents, preparation of a review tool for on-site interviews, and participation in the on-site review and debriefing. c) Administrative Interviews shall be conducted annually onsite with each PIHP and shall assess the PIHP s day-to-day operations. d) The Vendor shall summarize the results of the on-site reviews and update the PIHP administrative interview guide for use by DMA in oversight activities. e) The Vendor shall help DMA create PIHP corrective action plans as needed. 4) VALIDATION OF PIHP PERFORMANCE IMPROVEMENT PROJECTS a) Each calendar year, the Vendor shall validate all performance improvement projects that have been submitted to DMA by the PIHPs. Validation of performance improvement projects shall include assessment of the PIHP methodology for conducting the projects and evaluation of the overall validity and reliability of the projects. The Validation shall be conducted in compliance with the CMS protocols specified in 42 CFR 438.352. b) Upon completion of each review, the Vendor will submit a summary report of the results of the validation of the performance improvement projects. The Annual Individual Report is a summary of the validation of the performance improvement projects for each PIHP as outlined in 42 CFR 438.240. There will be eight (8) Annual Individual Reports, one for each PIHP, which will include a summary of the performance improvement projects as outlined in EQR protocol 3 (http://www.medicaid.gov/medicaid-chip-program-information/by-topics/quality-ofcare/downloads/eqr-protocol-3.pdf). The review and summary will be based on the CMS protocol for performance improvement projects. c) Upon completion of all reviews, the Vendor will submit a report which summarizes the results of all performance improvement project reviews in one document. The Annual Program Report is a summary of the validation of the 20

performance improvement projects of all eight (8) PIHPs. There will be one Annual Program Report which will include a summary of reviews as outlined in EQR protocol 3 (http://www.medicaid.gov/medicaid-chip-programinformation/by-topics/quality-of-care/downloads/eqr-protocol-3.pdf). The review and summary will be based on what is outlined in the CMS protocol for performance improvement projects. 5) VALIDATION OF PERFORMANCE MEASURES a) During each calendar year, the Vendor shall validate the performance measures that have been submitted to DMA by the PIHPs. The Vendor shall validate ten 1915(b) waiver measures per year and ten 1915(c) waiver measures per year for each PIHP. Validation shall include: i) Review of the PIHP data management processes; ii) Evaluation of the soundness of the specified performance measures by verifying whether the data for the specified performance measures are accurately produced and reported; iii) Performance of an Information System Capabilities Assessment (ISCA) of the PIHP s information system; and iv) Assessment of the extent to which the PIHP addresses any quality improvement recommendations from previous years. b) The Validation shall be conducted in compliance with the CMS protocols specified in 42 CFR 438.352. See: http://www.medicaid.gov/medicaid-chip-program-information/by-topics/quality-of-care/downloads/eqr-protocol- 2.pdf. c) The Vendor shall propose the measures to be validated each year. DMA may accept or reject the Vendor s recommendation and may select additional measures to be validated. DMA s decision shall be final. The current measures are attached in ATTACHMENT M for reference. 6) EVALUATION OF STATE S QUALITY STRATEGY a) Pursuant to 42 C.F.R.438.204 and 42 C.F.R. 438.358, the Vendor shall evaluate the State s quality strategy in accordance with CMS protocols once during the initial two (2) year term of the contract and once during the option year, if DMA exercises its option to extend for a third and final year. The time of the review shall be selected by DMA. DMA will give the Vendor at least thirty (30) days prior written notice of the commencement date of the evaluation. b) The Vendor shall submit a written report to DMA no more than thirty days after it completes its evaluation. 7) SEMI-ANNUAL AUDIT a) The Vendor shall conduct two audits of each PIHP each year. Each audit shall consist of an onsite review of six months of paid, denied, and adjusted claims. DMA will provide the claims data extract. The first audit report is due by July 1, 2016. The Vendor shall submit a separate electronic report, in a format pre-approved by DMA, for each PIHP. b) The Audit Process: i) The Vendor shall select a sample of 3% of all claims from an entire month of claims on a random, stratified basis to ensure that both large and small dollar claims are represented. ii) To select the sample, the Vendor shall rank the entire month of claims and divide the claims into 7 strata, each of which must contain 1/7th of the total dollars paid, and randomly select an equal number of claims from each stratum. iii) The Vendor must utilize a statistically valid sample that can be extrapolated across the entire population (MH/SA/IDD) of claims. c) Data Requirements: DMA will give the Vendor a comprehensive claims file with a data dictionary and a historical eligibility file. The Vendor shall request claims data from the PIHP to provide additional code descriptions that are not included in the standard data dictionary. 21

d) Timeliness of Provider Payments: The Vendor shall determine the PIHP s compliance with the timeliness requirements governing provider payments. The Vendor s audit shall include: i) The timeliness of clean claims and all claims paid by the individual PIHP compared to established requirements; ii) The identification of any three-month periods during which the PIHP paid less than ninety percent (90%) of clean claims for covered services within 30 days following the PIHP s receipt of these claims; iii) The processes, procedures and definitions used by each PIHP to identify and process clean claims, as well as exceptions, within the established time requirements; and iv) A lag analysis of claim payments. e) HIPAA Transaction Capability and Compliance: i) The Vendor shall review the claims processing capabilities of each PIHP to determine whether each PIHP is exchanging billing, payment and transaction information with the Department and providers in compliance with DHHS, State and Federal requirements for HIPAA transactions, including all of the following: A) Standards for information transactions and data elements specified in 42 USC 1302d-2; B) Standards for health care claims or equivalent encounter information transactions specified in 45 CFR 162.1102; and C) Implementation specifications for Electronic Data Interchange standards published and maintained by the Accredited Standards Committee (ASC X12) and referenced in 45 CFR 162.920. ii) The Vendor shall utilize a screening methodology that includes researching contracts, review protocols, and audit matrices and standard reports. iii) The Vendor shall conduct this audit by reviewing documentation and information from each PIHP related to their claims environment. The documentation and information to be reviewed includes, but is not limited to: A) The PIHP s statement as to whether and how they meet the HIPAA requirements, and HIPAA companion guide, as outlined in the PIHP s contract; B) The PIHP s billing instructions (if any); C) The claims processing statistics provided by the PIHP; D) The results and documentation of any internal audit or review activity conducted by the PIHP; E) The results of any prior DMA review; and F) PIHP correspondence. iv) The Vendor shall determine whether any PIHP correspondence requires any follow-up action. v) The Vendor shall evaluate and document the volume and reason for any non-hipaa compliant transactions. f) Solvency: The Vendor shall review and report to DMA whether the PIHP has made adequate provision against the risk of insolvency with respect to capitation payments for Medicaid enrollees. Adequate provision includes all of the following: i) The PIHP has submitted all of the financial records and reports required to be submitted under their Contract, including monthly balance sheets. ii) There are no consecutive three-month periods during which the PIHP s ratio of current assets to current liabilities is less than 1.0, based on a monthly review of the PIHP s balance sheets for each month of the three-month period. iii) Using DMA approved or designated solvency measures, reviews and determines that the PIHP has made adequate provisions against the risk of insolvency based on a quarterly review of their financial records and reports. 22

g) Work Plan: The Vendor shall conduct all Semi-Annual audit activities pursuant to a work plan submitted by the Vendor and approved by DMA. The Vendor shall update and submit the draft work plan prior to the beginning of each contract year, which is subject to the approval of DMA. The Vendor s work plan must contain a draft review protocol. 8) HEDIS QUALITY MEASURES REPORT a) The Vendor must complete, and stay up-to-date on, literature review of CMS publications and applicable field research and submit recommendations to DMA for program management improvement and quality measures changes. DMA recommends that the Vendor utilize the HEDIS 2015 Technical Specifications for Health Plans, Volume 2, along with any relevant resources from CMS or other research organizations. b) Vendor shall review DMAs current HEDIS-like performance measures on a yearly basis and provide recommendations for changes. c) Vendor shall provide, on a yearly basis, suggested new quality measures based on national best practices for Behavioral Health Services. d) Vendor shall also provide, on a yearly basis, suggested program management changes based on best practices. 9) ANNUAL TECHNICAL REPORT a) The Vendor must submit to DMA an Annual Technical Report for each PIHP, which includes the following: i) An Executive Summary of the objectives of the EQR; ii) A description of the EQR process, including data collection tools, documents requested, offsite and onsite activities, and interviews conducted; iii) A description of the data reviewed and analyzed by the Vendor; iv) An explanation of how the data were aggregated and analyzed and the methodology used for validation procedures; v) Summary of findings and the conclusions drawn from the data; vi) Conclusions regarding the quality, timeliness and accessibility of the care furnished by the PIHP; vii) Performance improvement results, trends and effective interventions; viii) An assessment of the strengths and weaknesses of the PIHP; ix) Recommendations for improving the quality of the care provided by the PIHP; x) An assessment of the degree to which the PIHP implemented the quality improvement recommendations made during the previous year s EQR; xi) A summary of all of the findings related to the EQR activities mandated by CMS; xii) A determination of the PIHP s contract compliance review; and xiii) A determination of the PIHP s compliance with: A) Federal Medicaid Managed Care regulations; B) State contract requirements for the quality and timeliness of services; and C) State contract requirements for access to services. xiv) Follow-up Report to Annual Technical Report: The Vendor shall report to DMA any corrective actions taken by a PIHP in response to the findings in the Annual Technical Report. 10) VALIDATION OF ENCOUNTER DATA a) The Vendor shall conduct an annual validation of encounter data submitted by each PIHP utilizing the CMS Protocol for validating Medicaid MCO/PIHP encounter data found online at: http://www.medicaid.gov/medicaid-chip-program- 23

information/by-topics/quality-of-care/downloads/eqr-protocol-4.pdf. The Vendor shall concurrently validate a PIHP s encounter data, performance measures, and performance improvement projects. DMA will transmit an encounter file to the Vendor for the PIHPs. The CMS Protocol outlines the process that Vendor must follow for determining whether the encounter data is accurate and complete. b) Annual Encounter Data Validation Process: i) DMA will support this activity by giving the Vendor: A) An outline of the state s requirements for collection and submission of encounter data by the PIHP including the encounter types required to be submitted. B) The data submission format specified by DMA for PIHP use. C) DMA s data dictionary. D) An explanation of the information flow from the PIHP to the Division. E) DMA s standard for encounter data completeness and accuracy. F) The timeframes for data submission. G) The acceptable rates of accuracy and completeness for each data field submitted for each encounter type. ii) The Vendor shall perform the following tasks before performing any plan-level reviews or analyses: A) Review the State s requirements for collecting and submitting encounter data. B) Work with DMA to identify comparison data and set target error rates. iii) Analyze Electronic Encounter Data: The Vendor shall perform a series of checks to assess whether the encounter data can be used for analysis (e.g. trends, quality monitoring). The review shall include encounter and enrollment data and focus on finding missing and erroneous data, and comparing the findings to state standards and comparison error rates. The Vendor must also analyze the completeness of the encounter data over time and calculate utilization rates. The Vendor shall develop a plan for assessing data quality and standard processes for analyzing electronic encounter data. Note: The Vendor s proposal must contain the Vendor s draft plan for assessing data quality and standard processes for analyzing electronic encounter data. iv) Submission of Findings: The Vendor shall report the results of encounter data validation to DMA in a narrative report that includes data tables, a summary of the statistics for the information obtained from each activity for each PIHP, and highlight issues related to the accuracy and completeness of encounter data. 11) INFORMATION SYSTEMS CAPABILITIES ASSESSMENT (ISCA) a) The Vendor shall conduct a review of PIHP information system capabilities utilizing the Information Systems Capabilities Assessment in Appendix V of the CMS protocol. The CMS protocol can be found online at: http://www.medicaid.gov/medicaid-chip-program-information/by-topics/quality-of-care/downloads/app5- isassessment.pdf. This activity shall include a review of the Information System Capabilities Assessment submitted to the Vendor by the PIHP and interviews with the PIHP staff. b) The Vendor shall conduct the validations in five (5) sequential activities as follows: i) PIHP completes the Information Systems Capabilities Assessment (ISCA): The Vendor shall give the PIHP a copy of the ISCA. The PIHP must complete the ISCA and give the Vendor the documentation identified at the end of the assessment tool within thirty (30) days. ii) Vendor review of the completed ISCA and accompanying documents: The Vendor shall review the completed ISCA and accompanying documents and assess the adequacy of the PIHP s policies and procedures. The PIHP s answers shall be evaluated against the standards established by the State for: (1) PIHP information 24

systems; (2) calculating and reporting specific plan-level performance measures; and (3) collecting and submitting encounter data to DMA. Where an answer seems incomplete, or indicates an inadequate process, the Vendor shall note that section for follow-up and further review during the onsite activities. The State standards referenced above will be provided to the awarded Vendor by DMA. iii) Vendor conducts an onsite review of the Information System with PIHP Information Technology Staff: The Vendor shall conduct an onsite review of the PIHP s information system and interview the IT staff. The review must include the steps for processing of all HIPAA 837 Professional and 837 Institutional sample of cases. http://www.medicaid.gov/medicaid-chip-program-information/by-topics/quality-ofcare/downloads/app5-attacha-isca.pdf. iv) Follow-up interviews with PIHP staff: The Vendor shall interview PIHP staff who are responsible for completing the ISCA, as well as additional staff responsible for the PIHP s IS function. The interviews must focus on the topics outlined in the structured ISCA interview guide located at: http://www.medicaid.gov/medicaid-chip-program-information/by-topics/quality-of-care/downloads/app5- attachb-isreview.pdf. v) Analysis of information obtained through ISCA and follow up interviews: The Vendor shall submit a written report of findings to DMA about the PIHP s IS and the implications of the IS review in a format pre-approved by DMA. This analysis shall include: A) The completeness and accuracy of any encounter data collected and submitted to DMA; B) Calculation and validation of performance measures; C) The ability of the PIHP to conduct quality assessment and improvement initiatives; and D) The ability of the PIHP to oversee and manage the delivery of health care to its enrollees. 12) PROGRAM INTEGRITY FUNCTIONS a) The Vendor shall be familiar with Section 1902 (a)(68) of the Social Security Act, 42 CFR 438, 455 and 1000-1008, including proper payments to providers and methods for detection of fraud and abuse. b) The Vendor shall review each PIHP s written Compliance Plan to ensure that it is written to guard against fraud and abuse, is compliant with 42 CFR 438.608, and contains provisions regarding the following subjects: i) Training and education for the PIHP s employees, subcontractors and providers on fraud and abuse; ii) Communications between the PIHP s compliance officer and the PIHP employees, subcontractors and providers; iii) Provisions for internal and external monitoring and auditing; iv) Compliance with policies and procedures for detecting and investigating fraud and abuse; v) Capturing and tracking complaints; vi) Tracking overpayments, collections and reporting; vii) Handling self-audits and challenge audits; viii) Using data mining to determine leads; ix) Information for employees, subcontractors and providers regarding the False Claims Act; x) Enforcement of standards through well-publicized disciplinary guidelines; xi) Prompt response to detected offenses and development of corrective action initiatives; xii) Provision for full cooperation with any Federal or State investigation, including promptly supplying all data and information needed for the investigation; xiii) Verification that services billed by providers were actually provided to enrollees, using a DMA-approved reporting template; and 25

xiv) Obtaining financial information on potential and current network providers regarding outstanding overpayments, assessments, penalties, or fees due to DMA or any other State or Federal agency. c) The Vendor shall review PIHP activities and determine if the PIHP is identifying all overpayments and underpayments to providers and is offering providers the opportunity to appeal all program integrity, compliance, or monitoring actions taken by the PIHP, if such opportunity to appeal is required by any Federal or State law, rule or regulation. d) The Vendor shall review PIHP investigations of credible allegations of fraud to ensure that the PIHP is conducting (at a minimum) a desk review and forwarding all credible allegations of fraud to Program Integrity within twenty-four (24) hours of completion of the investigation along with any evidence collected as a result of the allegation. e) Where a PIHP has investigated a credible allegation of fraud, the Vendor shall review to determine whether the PIHP provided all of the following to Program Integrity: i) Subject (name, Medicaid provider ID, address, provider type); ii) Source/origin of complaint; iii) The date the allegation was reported to the PIHP or, if developed by the PIHP, the date the PIHP initiated the investigation; iv) Description of suspected intentional misconduct, with specific details including: A) The category of service; B) Factual explanation of the allegation; C) Specific Medicaid statutes, rules, regulations, or policies violated; and D) The dates on which the misconduct occurred; v) The amount paid to the provider over the last three years or during the period of the alleged misconduct, whichever is greater; vi) All communications between the PIHP and the provider concerning the conduct at issue; vii) Contact information for the PIHP staff persons with practical knowledge of the workings of the relevant programs; and viii) Sample/exposed dollar amount of the fraud allegation, when available. f) In each case of suspected Enrollee fraud, the Vendor shall determine whether the PIHP provided the following to Program Integrity: i) The recipient s name and Medicaid number; ii) The source of the allegation; iii) The nature of the allegation; iv) Copies of all communications between the PIHP and the provider concerning the conduct at issue; v) Contact information for PIHP staff persons with practical knowledge of the allegation; vi) The date the suspected fraud was reported to the State; and vii) The legal and administrative status of the case. 13) CONSUMER SATISFACTION SURVEYS a) Consumer Assessment of Healthcare Providers and Systems (CAHPS) Survey The Vendor shall utilize the CMS protocol for conducting surveys and must use the CAHPS created by the Agency for Healthcare Research and Quality. DMA will provide examples of the surveys for the Vendor upon award of the Contract. b) Prior to the release of the survey, new questions may need to be added to better reflect Medicaid Waiver policy in North Carolina. The Vendor must conduct 400 surveys with sampling at the plan-level. 26

c) The Vendor shall conduct annual consumer satisfaction surveys for each of the PIHPs, and shall analyze and report on the findings from the surveys to DMA in a format pre-approved by DMA. d) The Vendor must prepare and submit with its RFP response a proposed work plan that outlines all stages of the survey from implementation to the completion of the final survey report. The work plan must cover all mandatory activities related to the survey and include timelines, interim data review, distribution plans, protections for confidentiality (HIPAA), data collection methods and a quality control and analytic plan. The work plan shall also include mailings, tracking returned mail, validation that survey was sent to correct beneficiary, verification of correct age/ disability grouping, and follow-up on surveys not received. All final reports should be completed by June 16, 2016. e) The consumer surveys must be done all at one time with the sampling done at the plan-level to allow the results to be generalized to all PIHPs. f) The Vendor must comply with the Americans with Disabilities Act (http://www.ada.gov/pubs/adastatute08.htm) with regard to the distribution of the survey to those with Intellectual and Developmental Disabilities. The Vendor will be expected to provide an explanation of strategy in the Work Plan. g) DMA will identify and provide to the Vendor the purpose, objectives and audience for the consumer satisfaction survey. h) Development of a Sampling Plan: The Vendor shall determine the sampling size needed based on the current active population. The sampling plan must include Mental Health, Substance Abuse, and Intellectual and Developmental Disability populations. A minimum of four hundred (400) surveys must be completed for each PIHP for each calendar year the Contract is active. The Vendor must submit to DMA, upon award of the Contract, their proposed sampling plan, which is subject to the pre-approval of DMA. i) Develop A Strategy For Maximizing The Response Rate: The Vendor must outline a strategy, and submit it to DMA upon award of the Contract, that includes activities and milestones, for increasing survey response rates. j) If any of the surveys are not translated for Hispanic/Latino Consumers, the Vendor will translate thirty (30) days prior to distribution of the survey. k) The Vendor shall, on an annual basis, submit to each PIHP a raw data set containing results of the consumer survey along with a summary report for that PIHP. l) The Vendor must be able to provide translation services for any non-english speaking beneficiary. m) Vendor Deliverables: i) Survey work plan due within thirty (30) days of Effective Date ii) Sampling plan due within thirty (30) days of Effective Date iii) Final survey report due by June 16, 2016 iv) Raw data set for PIHPs due by June 16, 2016 14) PROVIDER SATISFACTION SURVEYS a) The Provider Satisfaction Survey The Vendor shall utilize the CMS protocol for conducting surveys and must use the Provider Satisfaction Survey created by DMA, which will be provided by DMA to the Vendor upon Contract award. The Vendor must conduct surveys on a minimum of 30% of providers in the PIHPs network. The surveys must be stratified by Mental Health, Developmental Disabilities, and Substance Abuse service providers for all eight (8) PIHPs. b) The Vendor shall conduct annual Provider satisfaction surveys for each of the PIHPs, and shall analyze and report on the findings from the surveys to DMA in a format pre-approved by DMA. c) The Vendor must prepare and submit with its RFP response a proposed work plan that outlines all stages of the survey from implementation to the completion of the final survey report. The work plan must cover all mandatory activities related to the survey and include timelines, interim data review, distribution plans, protections for 27

confidentiality (HIPAA), data collection methods and a quality control and analytic plan. The work plan shall also include mailings, tracking returned mail, ensuring follow up of surveys not received. The final reports should be completed and submitted to the Division by December 2, 2016. d) The provider satisfaction surveys must be done all at one time with the sampling done at the plan-level to allow the results to be generalized to all PIHPs. e) The Vendor must comply with the Americans with Disabilities Act (http://www.ada.gov/pubs/adastatute08.htm) with regard to the distribution of the survey to those with Intellectual and Developmental Disabilities. The Vendor shall provide an explanation of the strategy for addressing those with disabilities in the Survey Work Plan. f) DMA will identify and provide to the Vendor the purpose, objectives and audience for the provider satisfaction survey. g) Development of a Sampling Plan: The Vendor shall determine the sampling size needed based on the current active population. The sampling plan must include Mental Health, Substance Abuse, and Intellectual and Developmental Disability providers. A minimum of 400 surveys must be completed for each PIHP for the each calendar year for which the Contract is active. The anticipated response rate should be 30% for each PIHP. The Vendor must submit to DMA, upon award of the Contract, their proposed sampling plan, which is subject to the pre-approval of DMA. h) Develop A Strategy For Maximizing The Response Rate: The Vendor must outline a strategy, and submit it to DMA upon award of the Contract, that includes activities and milestones, for increasing survey response rates. i) The Vendor shall, on an annual basis, submit to each PIHP a raw data set containing results of the provider satisfaction survey along with a summary report for that PIHP. j) Vendor Deliverables: i) Survey work plan due within thirty (30) days of Effective Date. ii) Sampling plan due within thirty (30) days of Effective Date iii) Final survey report due by December 2, 2016 iv) Raw data set for PIHPs due by December 2, 2016 15) QUALITY FORUM a) The Vendor shall organize and run one quality forum per region (east, west and central regions) per year. The quality forum shall be an interactive face-to-face conference that includes the PIHPs and State stakeholders. The regions shall include: West (CenterPoint, Partners, Smoky Mountain), Central (Alliance, Cardinal Innovations, Sandhills), and East (Eastpointe, Trillium). b) The Vendor shall schedule, create an agenda (subject to DMA pre-approval), and maintain minutes from each of the quality forums. c) The Vendor shall create a survey in order to allow attendees the opportunity to provide feedback on the content and the organization of the quality forum. d) The minutes, attendee lists, and summary of survey results from each Quality Forum shall be submitted to DMA in an annual Quality Forum Report. The format of the summary of the survey will be subject to DMA pre-approval. 16) MONTHLY PROGRESS REPORTS a) Monthly progress reports must include a summary of review of all monthly activity and status of the deliverables. b) Progress reports must reflect all activities performed within the thirty (30) days of the invoice period; an invoice must be submitted with each progress report. c) Progress report activities should be consistent with the approved DMA Work Plan. 17) ANNUAL SUMMARY REPORT 28

a) The Vendor shall submit an annual report covering the contract year. The annual report shall summarize all of the Vendor s activities during the previous year and shall report developing trends in health care quality. The final annual report shall be due sixty (60) days after the end of the contract year. 18) CONTRACT DELIVERABLES Deliverable Quantity Due Date One per year per PIHP TBD based on January 1, 2016 start date Administrative Interviews: Assessment tool for PIHP Completion and an Administrative Interview report that includes reports of structure and process assessment and compliance with State, Federal and Contract requirements. The interviews will be completed as a part of the Medicaid MCO onsite reviews. One per year per PIHP Review tool: 30 days after start date Final Report: TBD Compliance with Medicaid MCO Federal and State regulations: Completion of Monitoring Medicaid Managed Care Organizations (MCOs) and Prepaid Inpatient Health Plans" (PIHPs) protocol, CMS, Version 2.0, (September 2012) to include review of the PIHP s documents and interviews with staff to determine the PIHPs compliance with the federal regulations and state contract requirements for quality, timeliness of, and access to care and services provided to Medicaid enrollees by the Plan. All worksheets and protocols must be CMS approved and compliant with EQR requirements. DMA will consider allowing the use of the Vendor s alternate worksheets with written approval from CMS that documents their compliance with the EQR regulations. http://www.medicaid.gov/medicaid-chip-programinformation/by-topics/quality-of-care/downloads/eqrprotocol-1.pdf Validation of Performance Measures: Completion of Validating Performance Measures protocol, Version 2.0 (September 2012)-CMS to include review of the data management processes of the PIHP, evaluation of algorithmic compliance (the translation of captured data into actual statistics) with specifications defined by the State, and verification of a sample of the State-specified performance measures with the PIHPs to confirm that the reported results are based on accurate source information. See the CMS validation protocol at: http://www.medicaid.gov/medicaid-chip-program-information/bytopics/quality-of-care/downloads/eqr-protocol-2.pdf One per year per PIHP TBD based on January 1, 2016 start date 29

Deliverable Quantity Due Date Validation of Encounter Data: (a) Submission of findings, after a review of: (1) State requirements for collection and submission of encounter data; (2) PIHP s capability to produce accurate and complete encounter data; (3) Analysis of PIHP electronic encounter data for accuracy and completeness; (4) Review of medical records, as appropriate, for additional confirmation of findings. (b) Rate Analysis Lag Tables, displaying total dollars representing encounters submitted monthly by PIHP. (c) Rate Analysis Risk Ratio Tables, with data regarding the differences in the risk mix of enrollees in a health plan and differences in the cost to support the annual rate setting and rate analysis activities. Validation of Performance Improvement Projects: Completion of Validation of Performance Improvement Projects protocol, Version 2.0 (September 2012)-CMS with the exception of Activity Two, Verifying Performance Improvement Project Study Findings (optional activity not mandated by CMS or DMA). Submission of findings to include an assessment about the extent to which the State should accept the findings of the PIHP s Performance Improvement Projects as valid and reliable, all worksheets included in Attachment A of the protocol. See CMS PIHP Validation requirements at: See the CMS validation protocol: http://www.medicaid.gov/medicaidchip-program-information/by-topics/quality-of-care/downloads/eqrprotocol-4.pdf http://www.medicaid.gov/medicaid-chip-programinformation/by-topics/quality-of-care/downloads/eqrprotocol-7.pdf One per year per PIHP One per year per PIHP TBD based on January 1, 2016 start date TBD based on January 1, 2016 start date Annual individual reports providing feedback on the PIHP Summary of prior year Performance Improvement projects, including the activities and outcomes of those activities. Annual program report summarizing all PIHPs prior year performance improvement activities, including the activities and outcomes of those activities. One per year per PIHP One per year TBD based on January 1, 2016 start date TBD based on January 1, 2016 start date 30

Deliverable Quantity Due Date Information Systems Capabilities Assessment: Outlines of the capabilities of a Prepaid Inpatient Health Plan s (PIHP) information system (IS) is essential to effectively and efficiently: (a) Validate PIHP encounter data, (b) Calculate or validate PIHP performance measures, and (c) Assess a PIHP s capacity to manage the health care of its enrollees well. Please see the CMS ISCA protocol: Program Integrity Reviews and Ad Hoc Reports Compliance with Section 1902 (a)(68) of the Social Security Act, 42 CFR 438, 455 and 1000-1008, including proper payments to providers and methods for detection of fraud and abuse. In addition compliance with 42 CFR 438.608. Consumer Satisfaction Surveys: Vendor will produce: (a) A work plan to for completing the consumer and provider satisfaction surveys (b) Sampling Plan (c) Final Survey Report Survey protocol: One per year per PIHP Eight per year One per year per PIHP TBD based on January 1, 2016 start date TBD based on January 1, 2016 start date TBD based on January 1, 2016 start date Provider Satisfaction Surveys: Vendor will produce: (a) A work plan to for completing the consumer and provider satisfaction surveys (b) Sampling Plan (c) Final Survey Report Survey protocol: http://www.medicaid.gov/medicaid-chip-program-information/bytopics/quality-of-care/downloads/app5-isassessment.pdf http://www.medicaid.gov/medicaid-chip-program-information/bytopics/quality-of-care/downloads/eqr-protocol-5.pdf http://www.medicaid.gov/medicaid-chip-program-information/bytopics/quality-of-care/downloads/eqr-protocol-5.pdf Evaluation of the State s Quality Strategy: Evaluation of the State s Quality Strategy pursuant to 42 CFR 438.204 and 42 CFR 438.358 at least once during the initial term of the Contract, at the request of DMA. Semi Annual Audit: An onsite audit twice per year to review timeliness of provider payments, HIPAA transaction capability and compliance and financial solvency for each PIHP. The legislation can be found at: http://www.ncga.state.nc.us/enactedlegislation/statutes/pdf/bysec tion/chapter_122c/gs_122c-124.2.pdf One per year per PIHP Once during the first 2 years of the contract and once during the option year Twice per year per PIHP TBD based on January 1, 2016 start date TBD Dec 1 and every six months thereafter HEDIS and other Quality Measures Reports: Literature review of CMS publications and applicable field research and recommendations to DMA for program management improvement and quality measures changes. 31 One per year TBD based on January 1, 2016 start date

Deliverable Quantity Due Date Annual Technical Report (a) An Executive Summary of the objectives of the EQR; (b) A description of the EQR process, including data collection tools, documents requested, offsite and onsite activities, and interviews conducted; (c) A description of the data reviewed and analyzed by the Vendor; (d) An explanation of how the data were aggregated and analyzed and the methodology used for validation procedures; (e) Summary of findings and the conclusions drawn from the data; (f) Conclusions regarding the quality, timeliness and accessibility of the care furnished by the PIHP; (g) Performance improvement results, trends and effective interventions; (h) An assessment of the strengths and weaknesses of the PIHP; (i) Recommendations for improving the quality of the care provided by the PIHP; (j) An assessment of the degree to which the PIHP implemented the quality improvement recommendations made during the previous year s EQR; (k) A summary of all of the findings related to the EQR activities mandated by CMS; (l) A determination of the PIHP s contract compliance review; and (m) A determination of the PIHP s compliance with: (1) Federal Medicaid Managed Care regulations; (2) State contract requirements for the quality and timeliness of services; and (3) State contract requirements for access to services. One per year per PIHP TBD based on January 1, 2016 start date Follow-up Report to Annual Technical Report: The Vendor shall report to DMA any corrective actions taken by a PIHP in response to the findings in the Annual Technical Report. Up to 8 per year TBD based on January 1, 2016 start date Quality Forums: Three interactive face-to-face conferences with the PIHPs and State stakeholders (one per region: east, west, central) per year. Vendor will submit an annual summary report from each quality forum. Annual Summary Report From Each Quality Forum One per year per three regions One per year TBD based on January 1, 2016 start date TBD based on January 1, 2016 start date Quality of Care Reports: Review of the (b) and (c) waiver measures and submit an annual report comparing the measures amongst all of the PIHPs. Three Quarterly and One Annual Report Quarterly reports based on start dates Monthly Progress Reports: Summary of review of all monthly activity and status of the deliverables Twelve per year Ten days following the end of each month Annual Summary Report: Annual report covering the fiscal year summarizing all of the Vendor s activities during the previous year and trends in health care quality. One per year TBD based on January 1, 2016 start date 32

19) QUALITY OF CARE REPORTS a) Quarterly and annual report of the (b) and (c) Waiver measures included in ATTACHMENT M. b) Reports should provide a comparison of the (b) and (c) Waiver measures for all eight (8) PIHPs. c) A sample report should be included in the proposal, which outlines the layout, content and methodology for how the report will be created. 20) TECHNICAL EXPERTISE AND ASSISTANCE a) When requested by DMA, the Vendor shall provide technical guidance and support to DMA and PIHP staff by: i) Responding to telephone inquiries; ii) Providing technical expertise at meetings and during on-site visits to each PIHP; and iii) Reviewing additional quality issues related to PIHP performance and report results of the review to DMA at a mutually-agreed upon date. 21) DUTY TO REPORT FLAGRANT QUALITY OF CARE ISSUES a) In the event that any of the Vendor s principals, officers, employees, or agents discover evidence of a flagrant quality of care issue during a review, the Vendor shall immediately notify DMA of that discovery by telephone, fax, or email. A flagrant quality of care issue is an issue, circumstance, or occurrence that places a recipient s health, safety, or well-being in immediate jeopardy. The Vendor shall submit a detailed written report of the matter to DMA s Contract Administrator within one business day after the issue is discovered. 22) TRANSITION PLANS a) Implementation Plan The Vendor shall describe, and include in its proposal, an initial implementation plan and approach for coordinating the take-over of existing activities from the current contractor. The implementation plan must address any foreseeable transition complications and potential methods for dealing with or resolving transition complications to minimize the disruption of existing services. The Vendor must submit a finalized implementation plan to the Division for approval within thirty (30) days after the contract Effective Date. b) End-of-Contract Transition Plan The Vendor shall describe, and include in its proposal, an overall plan and approach for coordinating the turnover of existing EQR activities and documents to the identified contractor. The end-of-contract plan must also address any foreseeable transitions, complications and potential method for resolving transition complications to minimize the disruption of existing services. The Vendor must submit a finalized transition plan to the DHHS for approval within 180 days after execution of the final option year of the contract. 23) DMA S RESPONSIBILITIES a) Consultation the Division staff will be available for consultation with the Vendor during normal State business hours (Monday through Friday, except for State Holidays, 8:00 a.m. to 5:00 p.m. ET) at its offices in Raleigh, North Carolina, for the purpose of discussing matters pertinent to the performance of the contract. b) Oversight the Division will: i) Review and approve the form, content, structure and format of all EQR tools and reports, review criteria, and any other materials to be used by the Vendor to perform the EQR activities. ii) Provide oversight of the formulation and application of the procedures, protocols, criteria and standards to be used in the validation process; iii) Monitor and evaluate the Vendor s performance and the timeliness of the Vendor s deliverables at least quarterly. DMA will monitor the Vendor through monthly calls, follow up on minutes from each call, review the monthly reports that accompany each invoice, feedback from PIHPs related to onsite reviews, and technical assistance provided; 33

iv) Respond to the Vendor s written inquires within ten (10) business days of receipt; v) Forward PIHP performance measures and performance improvement project information to the Vendor for validation no later than five (5) business days after DMA receives the measures and information from the PIHPs; vi) Supply the Vendor with a copy of the current PIHP contracts. 5.4 PROJECT ORGANIZATION Vendor shall describe the organizational and operational structure it proposes to utilize for the work described in this RFP, and identify the responsibilities to be assigned to each person Vendor proposes to staff the work. 5.5 TECHNICAL APPROACH Vendor s proposal shall include, in narrative, outline, and/or graph form the Vendor's approach to accomplishing the tasks outlined in the Scope of Work section of this RFP. A description of each task and deliverable and the schedule for accomplishing each shall be included. 5.6 ACCEPTANCE OF WORK In the event acceptance criteria for work or deliverables is not described in additional contract documents, the State shall notify Vendor, in writing ten (10) calendar days following completion of such work or deliverable that it is not acceptable. The notice shall specify in reasonable detail the reason(s) it is unacceptable. Acceptance by the State shall not be unreasonably withheld; but may be conditioned or delayed as required for reasonable review, evaluation, installation or testing, as applicable of the work or deliverable. Final acceptance is expressly conditioned upon completion of all applicable assessment procedures. Should the work or deliverables fail to meet any requirements, acceptance criteria or otherwise fail to conform to the contract, the State may exercise any and all rights hereunder, including, for deliverables, such rights provided by the Uniform Commercial Code as adopted in North Carolina. 6.0 CONTRACT ADMINISTRATION 6.1 CONTRACT ADMINISTRATOR The Vendor shall designate and make available to the State a Contract Administrator. The Contract Administrator shall be the State s point of contact for contract related issues and issues concerning performance, progress review, scheduling and service. The Vendor may change the identity of its Contract Administrator or the contact information by giving timely written notice of the change to the other party. 6.2 POST AWARD MEETINGS The Vendor shall attend an initial meeting with DMA and other involved state Agencies, which will be scheduled by DMA within thirty-five (35) to forty-five (45) days after the date of contract award. The initial meeting will be held in Raleigh, NC at the Division offices. The Vendor shall attend up to four (4) planning meetings for EQR activities as needed in the first year of the contract. The Vendor shall attend up to Project Review meetings per year. The purpose of these meetings will be to review project progress reports, discuss Vendor and State performance, address outstanding issues, review problem resolution, provide direction, evaluate continuous improvement and cost saving ideas, and discuss any other pertinent topics. The Vendor shall attend all meetings scheduled by the Division, at the dates, times, and places specified by the Division. A minimum of fourteen (14) days notice will be given by the Division to the Vendor. Key Vendor Personnel shall attend all such meetings in person, except when the Division decides, in its discretion, that one or more Key Vendor Personnel may attend a meeting via teleconference. 6.5 DISPUTE RESOLUTION The parties agree that it is in their mutual interest to resolve disputes informally. A claim by the Vendor shall be submitted in writing to the State s Contract Lead for resolution. A claim by the State shall be submitted in writing to the Vendor s Project Manager for resolution. The Parties shall negotiate in good faith and use all reasonable efforts to resolve such dispute(s). 34

During the time the Parties are attempting to resolve any dispute, each shall proceed diligently to perform their respective duties and responsibilities under this Contract. If a dispute cannot be resolved between the Parties within thirty (30) days after delivery of notice, either Party may elect to exercise any other remedies available under this Contract, or at law. This term shall not constitute an agreement by either party to mediate or arbitrate any dispute. 6.6 DIVISION CONTRACT ADMINISTRATORS The Division Contract Administrators are the persons to whom all required notices shall be given and to whom all matters relating to the administration or interpretation of this Contract shall be addressed. All Day-To-Day Activities Described In Section 4.6 Adolph Simmons, Jr. Division of Medical Assistance 1985 Umstead Drive 2501 Mail Service Center Raleigh NC 27603 Telephone: 919-855-4357 E-mail: adolph.simmons@dhhs.nc.gov For All Other Contract Issues Gregory Sligh Division of Medical Assistance 801 Ruggles Drive 2501 Mail Service Center Raleigh NC 27603 Telephone: 919-855-4158 E-mail: gregory.sligh@dhhs.nc.gov 6.7 CONTRACT CHANGES Contract changes, if any, over the life of the contract shall be implemented by contract amendments agreed to in writing by the State and Vendor. The remainder of this page is intentionally left blank 35

ATTACHMENT A: INSTRUCTIONS TO VENDORS 1. READ, REVIEW AND COMPLY: It shall be the Vendor s responsibility to read this entire document, review all enclosures and attachments, and any addenda thereto, and comply with all requirements specified herein, regardless of whether appearing in these Instructions to Vendors or elsewhere in this RFP document. 2. LATE PROPOSALS: Late proposals, regardless of cause, will not be opened or considered, and will automatically be disqualified from further consideration. It shall be the Vendor s sole responsibility to ensure delivery at the designated office by the designated time. 3. ACCEPTANCE AND REJECTION: The State reserves the right to reject any and all proposals, to waive any informality in proposals and, unless otherwise specified by the Vendor, to accept any item in the proposal. If either a unit price or an extended price is obviously in error and the other is obviously correct, the incorrect price will be disregarded. 4. BASIS FOR REJECTION: Pursuant to 01 NCAC 05B.0501, the State reserves the right to reject any and all offers, in whole or in part, by deeming the offer unsatisfactory as to quality or quantity, delivery, price or service offered, noncompliance with the requirements or intent of this solicitation, lack of competitiveness, error(s) in specifications or indications that revision would be advantageous to the State, cancellation or other changes in the intended project or any other determination that the proposed requirement is no longer needed, limitation or lack of available funds, circumstances that prevent determination of the best offer, or any other determination that rejection would be in the best interest of the State. 5. EXECUTION: Failure to sign EXECUTION PAGE in the indicated space will render proposal non-responsive and it shall be rejected. 6. ORDER OF PRECEDENCE: In cases of conflict between specific provisions in this solicitation, the order of precedence shall be (high to low) (1) any special terms and conditions specific to this RFP, including any negotiated terms; (2) requirements and specifications in Sections 4, 5 and 6 of this RFP; (3) North Carolina General Contract Terms and Conditions in ATTACHMENT B: NORTH CAROLINA GENERAL CONTRACT TERMS AND CONDITIONS; (4) Instructions in ATTACHMENT A: INSTRUCTIONS TO VENDORS; and (5) Vendor s Proposal. 7. INFORMATION AND DESCRIPTIVE LITERATURE: Vendor shall furnish all information requested in the spaces provided in this document. Further, if required elsewhere in this proposal, each Vendor must submit with their proposal sketches, descriptive literature and/or complete specifications covering the products offered. Reference to literature submitted with a previous proposal or available elsewhere will not satisfy this provision. Proposals that do not comply with these requirements shall be subject to rejection. 8. SUSTAINABILITY: To support the sustainability efforts of the State of North Carolina we solicit your cooperation in this effort. Pursuant to Executive Order 156 (1999), it is desirable that all responses meet the following: All copies of the proposal are printed double sided. All submittals and copies are printed on recycled paper with a minimum post-consumer content of 30%. Unless absolutely necessary, all proposals and copies should minimize or eliminate use of non-recyclable or nonreusable materials such as plastic report covers, plastic dividers, vinyl sleeves, and GBC binding. Three-ringed binders, glued materials, paper clips, and staples are acceptable. Materials should be submitted in a format which allows for easy removal, filing and/or recycling of paper and binder materials. Use of oversized paper is strongly discouraged unless necessary for clarity or legibility. 9. HISTORICALLY UNDERUTILIZED BUSINESSES: Pursuant to General Statute 143-48 and Executive Order #150 (1999), the State invites and encourages participation in this procurement process by businesses owned by minorities, women, disabled, disabled business enterprises and non-profit work centers for the blind and severely disabled. 10. RECIPROCAL PREFERENCE: G.S. 143-59 establishes a reciprocal preference requirement to discourage other states from favoring their own resident Vendors by applying percentage increases to any proposal by a North Carolina resident 36

Vendor. The Principal Place of Business is defined as the principal place from which the trade or business of the Vendor is directed or managed. 11. CONFIDENTIAL INFORMATION: To the extent permitted by applicable statutes and rules, the State will maintain confidential trade secrets that the Vendor does not wish disclosed. As a condition to confidential treatment, each page containing trade secret information shall be identified in boldface at the top and bottom as CONFIDENTIAL by the Vendor, with specific trade secret information enclosed in boxes or similar indication. Cost information shall not be deemed confidential under any circumstances. Regardless of what a Vendor may label as a trade secret, the determination whether it is or is not entitled to protection will be determined in accordance with G.S. 132-1.2. Any material labeled as confidential constitutes a representation by the Vendor that it has made a reasonable effort in good faith to determine that such material is, in fact, a trade secret under G.S. 132-1.2. Vendors are urged and cautioned to limit the marking of information as a trade secret or as confidential so far as is possible. 12. PROTEST PROCEDURES: When a Vendor wishes to protest a Contract resulting from this solicitation that is awarded by the Division of Purchase and Contract, or awarded by an agency in an awarded amount of at least $25,000, a Vendor shall submit a written request addressed to the State Purchasing Officer at Purchase and Contract, 1305 Mail Service Center, Raleigh, NC 27699-1305. A protest request related to an award amount of less than $25,000 shall be sent to the purchasing officer of the agency that issued the award. The protest request must be received in the proper office within thirty (30) consecutive calendar days from the date of the Contract award. Protest letters shall contain specific grounds and reasons for the protest, how the protesting party was harmed by the award made and any documentation providing support for the protesting party s claims. Note: Contract award notices are sent only to the Vendor actually awarded the Contract, and not to every person or firm responding to a solicitation. Bid status and Award notices are posted on the Internet at https://www.ips.state.nc.us/ips/. All protests will be handled pursuant to the North Carolina Administrative Code, 01 NCAC 05B.1519. 13. MISCELLANEOUS: Masculine pronouns shall be read to include feminine pronouns, and the singular of any word or phrase shall be read to include the plural and vice versa. 14. COMMUNICATIONS BY VENDORS: In submitting its proposal, the Vendor agrees not to discuss or otherwise reveal the contents of its proposal to any source, government or private, outside of the using or issuing agency until after the award of the Contract or cancellation of this RFP. All Vendors are forbidden from having any communications with the using or issuing agency, or any other representative of the State concerning the solicitation, during the evaluation of the proposals (i.e., after the public opening of the proposals and before the award of the Contract), unless the State directly contacts the Vendor(s) for purposes of seeking clarification or another reason permitted by the solicitation. A Vendor shall not: (a) transmit to the issuing and/or using agency any information commenting on the ability or qualifications of any other Vendor to provide the advertised good, equipment, commodity; (b) identify defects, errors and/or omissions in any other Vendor s proposal and/or prices at any time during the procurement process; and/or (c) engage in or attempt any other communication or conduct that could influence the evaluation and/or award of the Contract that is the subject of this RFP. Vendors not in compliance with this provision may be disqualified, at the option of the State, from the Contract award. Only those communications with the using agency or issuing agency authorized by this RFP are permitted. 15. TABULATIONS: Proposal tabulations can be electronically retrieved at the Interactive Purchasing System (IPS), https://www.ips.state.nc.us/ips/bidnumbersearch. Click on the IPS BIDS icon, click on Search for Bid, enter the proposal number, and then search. Tabulations will normally be available at this web site not later than one working day after the proposal opening. Lengthy or complex tabulations may be summarized, with other details not made available on IPS, and requests for additional details or information concerning such tabulations cannot be honored. 16. VENDOR REGISTRATION AND SOLICITATION NOTIFICATION SYSTEM: Vendor Link NC allows Vendors to electronically register free with the State to receive electronic notification of current procurement opportunities for goods and services of potential interests to them available on the Interactive Purchasing System, as well as notifications of status changes to those solicitations. Online registration and other purchasing information is available at the following website http://www.pandc.nc.gov/. 17. WITHDRAWAL OF PROPOSAL: A proposal may be withdrawn only in writing and only if the written request is actually received by the office issuing the RFP prior to the time for the opening of Proposals identified on the cover page of this RFP (or such later date included in an Addendum to the RFP). A withdrawal request must be on Vendor s letterhead and be signed by an official of the Vendor authorized to make such request. Any withdrawal request made after the opening of Proposals shall be allowed only for good cause shown and in the sole discretion of the Division of Purchase and Contract. 37

18. INFORMAL COMMENTS: The State shall not be bound by informal explanations, instructions or information given at any time by anyone on behalf of the State during the competitive process or after award. The State is bound only by information provided in this RFP and in formal Addenda issued through IPS. 19. COST FOR PROPOSAL PREPARATION: Any costs incurred by Vendor in preparing or submitting offers are the Vendor s sole responsibility; the State of North Carolina will not reimburse any Vendor for any costs incurred prior to award. 20. VENDOR S REPRESENTATIVE: Each Vendor shall submit with its proposal the name, address, and telephone number of the person(s) with authority to bind the firm and answer questions or provide clarification concerning the firm's proposal. 21. SUBCONTRACTING: Unless expressly prohibited, a Vendor may propose to subcontract portions of the work provided that its proposal clearly describe what work they plan to subcontract and that Vendor includes in its proposal all information regarding employees, business experience, etc. for each proposed subcontractor that is required to be provided for Vendor itself. 22. INSPECTION AT VENDOR S SITE: The State reserves the right to inspect, at a reasonable time, the equipment/item, plant or other facilities of a prospective Vendor prior to Contract award, and during the Contract term as necessary for the State determination that such equipment/item, plant or other facilities conform with the specifications/requirements and are adequate and suitable for the proper and effective performance of the Contract. This Space is Intentionally Left Blank 38

ATTACHMENT B: NORTH CAROLINA GENERAL CONTRACT TERMS AND CONDITIONS 1. PERFORMANCE AND DEFAULT: If, through any cause, Vendor shall fail to fulfill in timely and proper manner the obligations under this agreement, the State shall have the right to terminate this contract by giving written notice to the Vendor and specifying the effective date thereof. In that event, all finished or unfinished deliverable items under this contract prepared by the Vendor shall, at the option of the State, become its property, and the Vendor shall be entitled to receive just and equitable compensation for any acceptable work completed on such materials. Notwithstanding, Vendor shall not be relieved of liability to the State for damages sustained by the State by virtue of any breach of this agreement, and the State may withhold any payment due the Vendor for the purpose of setoff until such time as the exact amount of damages due the State from such breach can be determined. The State reserves the right to require at any time a performance bond or other acceptable alternative guarantees from a successful Vendor without expense to the State. In case of default by the Vendor, the State may procure the services necessary to complete performance hereunder from other sources and hold the Vendor responsible for any excess cost occasioned thereby. In addition, in the event of default by the Contractor under this contract, or upon the Contractor filing a petition for bankruptcy or the entering of a judgment of bankruptcy by or against the Contractor, the State may immediately cease doing business with the Contractor, immediately terminate for cause all existing contracts the State has with the Contractor, and may debar the Contractor from doing future business with the State Upon the Vendor filing a petition for bankruptcy or the entering of a judgment of bankruptcy by or against the Vendor, the State may immediately terminate, for cause, this Contract and all other existing Contracts the Vendor has with the State, and debar the Vendor from doing future business with the State. 2. GOVERNMENTAL RESTRICTIONS: In the event any Governmental restrictions are imposed which necessitate alteration of the material, quality, workmanship or performance of the items offered prior to their delivery, it shall be the responsibility of the Vendor to notify, in writing, the issuing purchasing office at once, indicating the specific regulation which required such alterations. The State reserves the right to accept any such alterations, including any price adjustments occasioned thereby, or to cancel the Contract. 3. AVAILABILITY OF FUNDS: Any and all payments to the Vendor are dependent upon and subject to the availability of funds to the agency for the purpose set forth in this agreement. 4. TAXES: Any applicable taxes shall be invoiced as a separate item. a. G.S. 143-59.1 bars the Secretary of Administration from entering into Contracts with Vendors if the Vendor or its affiliates meet one of the conditions of G. S. 105-164.8(b) and refuses to collect use tax on sales of tangible personal property to purchasers in North Carolina. Conditions under G. S. 105-164.8(b) include: (1) Maintenance of a retail establishment or office, (2) Presence of representatives in the State that solicit sales or transact business on behalf of the Vendor and (3) Systematic exploitation of the market by media-assisted, media-facilitated, or media-solicited means. By execution of the proposal document the Vendor certifies that it and all of its affiliates, (if it has affiliates), collect(s) the appropriate taxes. b. All agencies participating in this Contract are exempt from Federal Taxes, such as excise and transportation. Exemption forms submitted by the Vendor will be executed and returned by the using agency. c. Prices offered are not to include any personal property taxes, nor any sales or use tax (or fees) unless required by the North Carolina Department of Revenue. 5. SITUS: The place of this Contract, its situs and forum, shall be North Carolina, where all matters, whether sounding in Contract or tort, relating to its validity, construction, interpretation and enforcement shall be determined. 6. GOVERNING LAWS: This Contract is made under and shall be governed and construed in accordance with the laws of the State of North Carolina, without regard to is conflict of laws rules. 7. PAYMENT TERMS: Payment terms are Net not later than 30 days after receipt of correct invoice or acceptance of goods, 39

whichever is later. The using agency is responsible for all payments to the Vendor under the Contract. Payment by some agencies may be made by procurement card, if the Vendor accepts that card (Visa, MasterCard, etc.) from other customers, and it shall be accepted by the Vendor for payment under the same terms and conditions as any other method of payment accepted by the Vendor. If payment is made by procurement card, then payment may be processed immediately by the Vendor. 8. AFFIRMATIVE ACTION: The Vendor will take affirmative action in complying with all Federal and State requirements concerning fair employment and employment of people with disabilities, and concerning the treatment of all employees without regard to discrimination by reason of race, color, religion, sex, national origin or disability. 9. INTELLECTUAL PROPERTY INDEMNITY: Vendor shall hold and save the State, its officers, agents and employees, harmless from liability of any kind, including costs and expenses, resulting from infringement of the rights of any third party in any copyrighted material, patented or unpatented invention, articles, device or appliance delivered in connection with this contract. 10. ADVERTISING: Vendor agrees not to use the existence of this Contract or the name of the State of North Carolina as part of any commercial advertising or marketing of products or services. A Vendor may inquire whether the State is willing to act as a reference by providing factual information directly to other prospective customers. 11. ACCESS TO PERSONS AND RECORDS: During and after the term hereof, the State Auditor and any using agency s internal auditors shall have access to persons and records related to this Contract to verify accounts and data affecting fees or performance under the Contract, as provided in G.S. 143-49(9). 12. ASSIGNMENT: No assignment of the Vendor s obligations nor the Vendor s right to receive payment hereunder shall be permitted. However, upon written request approved by the issuing purchasing authority and solely as a convenience to the Vendor, the State may: a. Forward the Vendor s payment check directly to any person or entity designated by the Vendor, and b. Include any person or entity designated by Vendor as a joint payee on the Vendor s payment check. In no event shall such approval and action obligate the State to anyone other than the Vendor and the Vendor shall remain responsible for fulfillment of all Contract obligations. Upon advance written request, the State may, in its unfettered discretion, approve an assignment to the surviving entity of a merger, acquisition or corporate reorganization, if made as part of the transfer of all or substantially all of the Vendor s assets. Any purported assignment made in violation of this provision shall be void and a material breach of this Contract. 13. INSURANCE: COVERAGE - During the term of the Contract, the Vendor at its sole cost and expense shall provide commercial insurance of such type and with such terms and limits as may be reasonably associated with the Contract. As a minimum, the Vendor shall provide and maintain the following coverage and limits: a. Worker s Compensation - The Vendor shall provide and maintain Worker s Compensation Insurance, as required by the laws of North Carolina, as well as employer s liability coverage with minimum limits of $500,000.00, covering all of Vendor s employees who are engaged in any work under the Contract. If any work is sub-contracted, the Vendor shall require the sub-contractor to provide the same coverage for any of his employees engaged in any work under the Contract. b. Commercial General Liability - General Liability Coverage on a Comprehensive Broad Form on an occurrence basis in the minimum amount of $1,000,000.00 Combined Single Limit. (Defense cost shall be in excess of the limit of liability.) c. Automobile - Automobile Liability Insurance, to include liability coverage, covering all owned, hired and non-owned vehicles, used in connection with the Contract. The minimum combined single limit shall be $250,000.00 bodily injury and 40

property damage; $250,000.00 uninsured/under insured motorist; and $2,500.00 medical payment. REQUIREMENTS - Providing and maintaining adequate insurance coverage is a material obligation of the Vendor and is of the essence of this Contract. All such insurance shall meet all laws of the State of North Carolina. Such insurance coverage shall be obtained from companies that are authorized to provide such coverage and that are authorized by the Commissioner of Insurance to do business in North Carolina. The Vendor shall at all times comply with the terms of such insurance policies, and all requirements of the insurer under any such insurance policies, except as they may conflict with existing North Carolina laws or this Contract. The limits of coverage under each insurance policy maintained by the Vendor shall not be interpreted as limiting the Vendor s liability and obligations under the Contract. 14. GENERAL INDEMNITY: The Vendor shall hold and save the State, its officers, agents, and employees, harmless from liability of any kind, including all claims and losses accruing or resulting to any other person, firm, or corporation furnishing or supplying work, services, materials, or supplies in connection with the performance of this Contract, and from any and all claims and losses accruing or resulting to any person, firm, or corporation that may be injured or damaged by the Vendor in the performance of this Contract and that are attributable to the negligence or intentionally tortious acts of the Vendor provided that the Vendor is notified in writing within 30 days that the State has knowledge of such claims. The Vendor represents and warrants that it shall make no claim of any kind or nature against the State s agents who are involved in the delivery or processing of Vendor goods to the State. The representation and warranty in the preceding sentence shall survive the termination or expiration of this Contract. 15. INDEPENDENT CONTRACTOR: Vendor shall be considered to be an independent contractor and as such shall be wholly responsible for the work to be performed and for the supervision of its employees. Vendor represents that it has, or will secure at its own expense, all personnel required in performing the services under this agreement. Such employees shall not be employees of, or have any individual contractual relationship with the Agency. 16. KEY PERSONNEL: Vendor shall not substitute key personnel assigned to the performance of this contract without prior written approval by the State s assigned Contract Lead. The individuals designated as key personnel for purposes of this contract are those specified in the RFP or Vendor s proposal. 17. SUBCONTRACTING: Work proposed to be performed under this contract by the Vendor or its employees shall not be subcontracted without prior written approval of the State s assigned Contract Administrator. Acceptance of a Vendor s proposal shall include approval to use the subcontractor(s) specified therein in accordance with paragraph 21 of Attachment A: Instructions to Vendor. 18. TERMINATION FOR CONVENIENCE: The State may terminate this agreement at any time by days notice in writing from the State to the Vendor. In that event, all finished or unfinished deliverable items prepared by the Vendor under this contract shall, at the option of the State, become its property. If the contract is terminated by the State as provided in this section, the State shall pay for services satisfactorily completed by the Vendor, less payment or compensation previously made. 19. CONFIDENTIALITY: Any State information, data, instruments, documents, studies or reports given to or prepared or assembled by or provided to the Vendor under this agreement shall be kept as confidential, used only for the purpose(s) required to perform this contract and not divulged or made available to any individual or organization without the prior written approval of the State. 20. CARE OF PROPERTY: The Vendor agrees that it shall be responsible for the proper custody and care of any property furnished it by the State for use in connection with the performance of this contract or purchased by or for the State for this contract, and Vendor will reimburse the State for loss or damage of such property while in Vendor s custody. 21. PROPERTY RIGHTS: All deliverable items produced for or as a result of this contract shall be an become the property of the State, and Vendor hereby assigns all ownership rights in such deliverables, including all intellectual property rights, to the State; provided, however, that as to any preexisting works imbedded in such deliverables, Vendor hereby grants the State a fully-paid, perpetual license to copy, distribute and adapt the preexisting works. 22. OUTSOURCING: Any Vendor or subcontractor providing call or contact center services to the State of North Carolina 41

shall disclose to inbound callers the location from which the call or contact center services are being provided. If, after award of a contract, the contractor wishes to relocate or outsource any portion of the work to a location outside the United States, or to contract with a subcontractor for the performance of any work, which subcontractor and nature of the work has not previously been disclosed to the State in writing, prior written approval must be obtained from the State agency responsible for the contract. Vendor shall give notice to the using agency of any relocation of the Vendor, employees of the Vendor, subcontractors of the Vendor, or other persons performing services under a state contract to a location outside of the United States. 23. COMPLIANCE WITH LAWS: Vendor shall comply with all laws, ordinances, codes, rules, regulations, and licensing requirements that are applicable to the conduct of its business, including those of federal, state, and local agencies having jurisdiction and/or authority. 24. ENTIRE AGREEMENT: This contract and any documents incorporated specifically by reference represent the entire agreement between the parties and supersede all prior oral or written statements or agreements. This RFP, any addenda thereto, and the Vendor s proposal are incorporated herein by reference as though set forth verbatim. All promises, requirements, terms, conditions, provisions, representations, guarantees, and warranties contained herein shall survive the contract expiration or termination date unless specifically provided otherwise herein, or unless superseded by applicable Federal or State statutes of limitation. 25. AMENDMENTS: This contract may be amended only by written amendments duly executed by the State and the Vendor. The NC Division of Purchase and Contract shall give prior approval to any amendment to a contract awarded through that office. 26. WAIVER: The failure to enforce or the waiver by the State of any right or of breach or default on one occasion or instance shall not constitute the waiver of such right, breach or default on any subsequent occasion or instance. 27. FORCE MAJEURE: Neither party shall be deemed to be in default of its obligations hereunder if and so long as it is prevented from performing such obligations as a result of events beyond its reasonable control, including without limitation, fire, power failures, any act of war, hostile foreign action, nuclear explosion, riot, strikes or failures or refusals to perform under subcontracts, civil insurrection, earthquake, hurricane, tornado, or other catastrophic natural event or act of God. This Space is Intentionally Left Blank 42

ATTACHMENT C: COST PROPOSAL (1) Use the following Cost Table to create your Cost Proposal. (2) Do not use any other tables or forms. Instructions (3) Do not modify the contents of any of the shaded cells in the Cost Tables. (4) The costs to the State quoted in your Cost Proposal must cover all of your costs. No other payments will be made by the State for the services you render. (5) All costs quoted in your Cost Proposal must be firm and fixed for the duration of the contract, which could last as long as three years if the State exercises its option for one additional year. (6) The State may ask for clarification during the evaluation period but it is not required to do so. Cost Proposals that are incomplete or that contain significant inconsistencies may be rejected by the State without any request for clarification. Cost Table Deliverable Number Per Year Unit Cost Annual Cost Compliance with Medicaid MCO Federal and State regulations 8 $ $ Administrative Interviews 8 $ $ Validation of Performance Measures: 8 $ $ Validation of Encounter Data 8 $ $ Validation of Performance Improvement Projects 8 $ $ Annual individual reports 8 $ $ Annual program report 1 $ $ Information Systems Capabilities Assessment 8 $ $ Program Integrity Reviews and Ad Hoc Reports 8 $ $ Consumer Satisfaction Surveys: 8 $ $ Provider Satisfaction Surveys: 8 $ $ 43

Deliverable Number Per Year Unit Cost Annual Cost Evaluation of the State s Quality Strategy Once during the first 2 years of the contract Once during the option year $ $ Semi-Annual Audit 16 $ $ HEDIS and other Quality Measures Report 1 $ $ Annual Technical Report 8 $ $ Follow-up Report to Annual Technical Report 8 $ $ Quality Forums: from each quality forum. 3 $ $ Annual Summary Report From Each Quality Forum 1 $ $ Quality of Care Reports Three Quarterly and One Annual Report $ $ Monthly Progress Reports 12 $ $ Annual Summary Report 8 $ $ Total Annual Cost $ 44

ATTACHMENT D: LOCATION OF WORKERS UTILIZED BY VENDOR In accordance with NC General Statute 143-59.4, the Vendor shall detail the location(s) at which performance will occur, as well as the manner in which it intends to utilize resources or workers outside of the United States in the performance of this Contract. The State will evaluate the additional risks, costs, and other factors associated with such utilization prior to making an award. Please complete items a, b, and c below. a) Will any work under this Contract be performed outside the United States? YES NO If the Vendor answered YES above, Vendor must complete items 1 and 2 below: 1. List the location(s) outside the United States where work under this Contract will be performed by the Vendor, any sub-contractors, employees, or other persons performing work under the Contract: 2. Describe the corporate structure and location of corporate employees and activities of the Vendor, its affiliates or any other sub-contractors that will perform work outside the U.S.: b) The Vendor agrees to provide notice, in writing to the State, of the relocation of the Vendor, employees of the Vendor, sub-contractors of the Vendor, or other persons performing services under the Contract outside of the United States YES NO NOTE: All Vendor or sub-contractor personnel providing call or contact center services to the State of North Carolina under the Contract shall disclose to inbound callers the location from which the call or contact center services are being provided. c) Identify all U.S. locations at which performance will occur: This Space is Intentionally Left Blank 45

ATTACHMENT E: CERTIFICATION OF FINANCIAL CONDITION Name of Vendor: The undersigned hereby certifies that: [check all applicable boxes] The Vendor is in sound financial condition and received an unqualified audit opinion for the latest audit of its financial statements. Date of latest audit: The Vendor has no outstanding liabilities to the Internal Revenue Service or other government entities. The Vendor is not the subject of any current litigation or findings of noncompliance under federal or state law. The Vendor has not been the subject of any past litigation or findings of any past litigation or findings of noncompliance under federal or state law that may impact in any way its ability to fulfill the requirements of this Contract. He or she is authorized to make the foregoing statements on behalf of the Vendor. If any one or more of the foregoing boxes is NOT checked, explain the reason in the space below: Signature Date Printed Name Title [This Certification must be signed by an individual authorized to speak for the Vendor] 46

ATTACHMENT F: DESCRIPTION OF EXECUTIVE ORDER #50 Certification of Compliance With G.S. 133-32 and Executive Order 24 Background A. N.C. Gen. Stat. 133-32 makes it unlawful for any vendor, Vendor, subcontractor, or supplier who: (1) has a contract with a governmental agency; or (2) has performed under such a contract within the past year; or (3) anticipates bidding on such a contract in the future; to make gifts or to give favors to any governmental officer or employee who is charged with the duty of: (1) preparing plans, specifications, or estimates for public contract; or (2) awarding or administering public contracts; or (3) inspecting or supervising construction. B. By means of Executive Order 24, signed on October 1, 2009, Governor Perdue expanded the prohibitions in N.C. Gen. Stat. 133-32 to ban the giving of gifts and favors to any employee of the Cabinet agencies -- the Departments of Administration, Commerce, Correction, Crime Control and Public Safety, Cultural Resources, Environment and Natural Resources, Health and Human Services, Juvenile Justice and Delinquency Prevention, Revenue, and Transportation and the Office of the Governor -- regardless of the nature of their official duties. C. Executive Order 24 can be viewed online at: http://www.governor.state.nc.us/newsitems/executiveorderdetail.aspx?newsitemid=665 D. N.C. Gen. Stat. 133-32 can be viewed online at: http://www.ncga.state.nc.us/gascripts/statutes/statutestoc.pl Certifications 1. I certify that I understand that N.C. Gen. Stat. 133-32 prohibits my organization, as a bidder on a public contract, from giving any gifts or favors to any governmental officer or employee who is charged with the duty of: (1) preparing plans, specifications, or estimates for public contract; or (2) awarding or administering public contracts; or (3) inspecting or supervising construction. 2. I certify that I understand that Executive Order 24 prohibits my organization, as a bidder on a public contract, from giving any gifts or favors to any employee of Cabinet agencies and the Office of the Governor. 3. I certify, on behalf of my organization and its employees and agents, that I have made reasonable inquiries and have found no evidence that any such prohibited gifts or favors have been offered or promised by any of my organization s employees or agents to any covered State officers or employees. 4. I certify that the language of this certification shall be included in all subcontracts at all tiers (including subcontracts, subgrants, and contracts under grants, loans, and cooperative agreements) and that all subcontractors shall certify and disclose accordingly. 5. I understand that this certification is a material representation of fact; that the North Carolina Department of Health and Human Services will rely upon this certification if it decides to award a contract to my organization; and that submission of this certification is a prerequisite for State review of the attached proposal. VENDOR NAME E-MAIL ADDRESS AUTHORIZED SIGNATURE DATE TYPED OR PRINTED NAME OF PERSON SIGNING TYPED OR PRINTED TITLE OF PERSON SIGNING [This Certification Must Be Signed By The Same Individual Who Signed The Proposal Execution Page] 47

ATTACHMENT G: STATE CERTIFICATIONS REQUIRED BY STATE LAW Instructions The person who signs this document should read the text of the statutes listed below and consult with counsel and other knowledgeable persons before signing. The text of each North Carolina General Statutes can be found online at: Article 2 of Chapter 64: http://www.ncga.state.nc.us/enactedlegislation/statutes/pdf/byarticle/chapter_64/article_2.pdf G.S. 105-164.8(b): http://www.ncga.state.nc.us/enactedlegislation/statutes/pdf/bysection/chapter_105/gs_105-164.8.pdf G.S. 143-48.5: http://www.ncga.state.nc.us/enactedlegislation/statutes/html/bysection/chapter_143/gs_143-48.5.html G.S. 143-59.1: http://www.ncga.state.nc.us/enactedlegislation/statutes/pdf/bysection/chapter_143/gs_143-59.1.pdf G.S. 143-59.2: http://www.ncga.state.nc.us/enactedlegislation/statutes/pdf/bysection/chapter_143/gs_143-59.2.pdf G.S. 147-33.95(g): http://www.ncga.state.nc.us/enactedlegislation/statutes/html/bysection/chapter_147/gs_147-33.95.html Certifications (1) Pursuant to G.S. 143-48.5 and G.S. 147-33.95(g), the undersigned hereby certifies that the Contractor named below, and the Contractor s subcontractors, complies with the requirements of Article 2 of Chapter 64 of the NC General Statutes, including the requirement for each employer with more than 25 employees in North Carolina to verify the work authorization of its employees through the federal E-Verify system." E-Verify System Link: www.uscis.gov (2) Pursuant to G.S. 143-59.1(b), the undersigned hereby certifies that the Contractor named below is not an ineligible Contractor as set forth in G.S. 143-59.1(a) because: (a) Neither the Contractor nor any of its affiliates has refused to collect the use tax levied under Article 5 of Chapter 105 of the General Statutes on its sales delivered to North Carolina when the sales met one or more of the conditions of G.S. 105-164.8(b); and (b) [check one of the following boxes] Neither the Contractor nor any of its affiliates has incorporated or reincorporated in a tax haven country as set forth in G.S. 143-59.1(c)(2) after December 31, 2001; or The Contractor or one of its affiliates has incorporated or reincorporated in a tax haven country as set forth in G.S. 143-59.1(c)(2) after December 31, 2001 but the United States is not the principal market for the public trading of the stock of the corporation incorporated in the tax haven country. (3) Pursuant to G.S. 143-59.2(b), the undersigned hereby certifies that none of the Contractor s officers, directors, or owners (if the Contractor is an unincorporated business entity) has been convicted of any violation of Chapter 78A of the General Statutes or the Securities Act of 1933 or the Securities Exchange Act of 1934 within 10 years immediately prior to the date of the bid solicitation. (4) The undersigned hereby certifies further that: (a) He or she is a duly authorized representative of the Contractor named below; (b) He or she is authorized to make, and does hereby make, the foregoing certifications on behalf of the Contractor; and (c) He or she understands that any person who knowingly submits a false certification in response to the requirements of G.S. 143-59.1and -59.2 shall be guilty of a Class I felony. Contractor s Name Signature of Contractor s Authorized Agent Date Printed Name of Contractor s Authorized Agent Title Signature of Witness Date Printed Name of Witness Title The witness should be present when the Contractor s Authorized Agent signs this certification and should sign and date this document immediately thereafter. 48

ATTACHMENT H: FEDERAL CERTIFICATIONS AND DISCLOSURES The undersigned states that: (a) He or she is the duly authorized representative of the Contractor named below; (b) He or she is authorized to make, and does hereby make, the following certifications on behalf of the Contractor, as set out herein: a. The Certification Regarding Nondiscrimination; b. The Certification Regarding Drug-Free Workplace Requirements; c. The Certification Regarding Environmental Tobacco Smoke; d. The Certification Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion Lower Tier Covered Transactions; and e. The Certification Regarding Lobbying; (c) He or she has completed the Certification Regarding Drug-Free Workplace Requirements by providing the addresses at which the contract work will be performed; (d) [Check the applicable statement] [ ] He or she has completed the attached Disclosure Of Lobbying Activities because the Contractor has made, or has an agreement to make, a payment to a lobbying entity for influencing or attempting to influence an officer or employee of an agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with a covered Federal action; OR [ ] He or she has not completed the attached Disclosure Of Lobbying Activities because the Contractor has not made, and has no agreement to make, any payment to any lobbying entity for influencing or attempting to influence any officer or employee of any agency, any Member of Congress, any officer or employee of Congress, or any employee of a Member of Congress in connection with a covered Federal action. (e) The Contractor shall require its subcontractors, if any, to make the same certifications and disclosure. Signature Title Contractor Name Date [This Certification Must be Signed by the Same Individual Who Signed the Proposal Execution Page] I. Certification Regarding Nondiscrimination The Contractor certifies that it will comply with all Federal statutes relating to nondiscrimination. These include but are not limited to: (a) Title VI of the Civil Rights Act of 1964 (P.L. 88-352) which prohibits discrimination on the basis of race, color or national origin; (b) Title IX of the Education Amendments of 1972, as amended (20 U.S.C. 1681-1683, and 1685-1686), which prohibits discrimination on the basis of sex; (c) Section 504 of the Rehabilitation Act of 1973, as amended (29 U.S.C. 794), which prohibits discrimination on the basis of handicaps; (d) the Age Discrimination Act of 1975, as amended (42 U.S.C. 6101-6107), which prohibits discrimination on the basis of age; (e) the Drug Abuse Office and Treatment Act of 1972 (P.L. 92-255), as amended, relating to nondiscrimination on the basis of drug abuse; (f) the Comprehensive Alcohol Abuse and Alcoholism Prevention, Treatment and Rehabilitation Act of 1970 (P.L. 91-616), as amended, relating to nondiscrimination on the basis of alcohol abuse or alcoholism; (g) Title VIII of the Civil Rights Act of 1968 (42 U.S.C. 3601 et seq.), as amended, relating to nondiscrimination in the sale, rental or financing of housing; (h) the Food Stamp Act and USDA policy, which prohibit discrimination on the basis of religion and political beliefs; and (i) the requirements of any other nondiscrimination statutes which may apply to this Agreement. 49

II. Certification Regarding Drug-Free Workplace Requirements 1. The Contractor certifies that it will provide a drug-free workplace by: a. Publishing a statement notifying employees that the unlawful manufacture, distribution, dispensing, possession or use of a controlled substance is prohibited in the Contractor s workplace and specifying the actions that will be taken against employees for violation of such prohibition; b. Establishing a drug-free awareness program to inform employees about: i. The dangers of drug abuse in the workplace; ii. The Contractor s policy of maintaining a drug-free workplace; iii. Any available drug counseling, rehabilitation, and employee assistance programs; and iv. The penalties that may be imposed upon employees for drug abuse violations occurring in the workplace; c. Making it a requirement that each employee be engaged in the performance of the agreement be given a copy of the statement required by paragraph (a); d. Notifying the employee in the statement required by paragraph (a) that, as a condition of employment under the agreement, the employee will: i. Abide by the terms of the statement; and ii. Notify the employer of any criminal drug statute conviction for a violation occurring in the workplace no later than five days after such conviction; e. Notifying the Department within ten days after receiving notice under subparagraph (d)(ii) from an employee or otherwise receiving actual notice of such conviction; f. Taking one of the following actions, within 30 days of receiving notice under subparagraph (d)(ii), with respect to any employee who is so convicted: i. Taking appropriate personnel action against such an employee, up to and including termination; or ii. Requiring such employee to participate satisfactorily in a drug abuse assistance or rehabilitation program approved for such purposes by a Federal, State, or local health, law enforcement, or other appropriate agency; and g. Making a good faith effort to continue to maintain a drug-free workplace through implementation of paragraphs (a), (b), (c), (d), (e), and (f). 2. The sites for the performance of work done in connection with the specific agreement are listed below (list all sites; add additional pages if necessary): Address Street City, State, Zip Code Street City, State, Zip Code 3. Contractor will inform the Department of any additional sites for performance of work under this agreement. 50

4. False certification or violation of the certification may be grounds for suspension of payment, suspension or termination of grants, or government-wide Federal suspension or debarment. 45 C.F.R. 82.510. III. Certification Regarding Environmental Tobacco Smoke Public Law 103-227, Part C-Environmental Tobacco Smoke, also known as the Pro-Children Act of 1994 (Act), requires that smoking not be permitted in any portion of any indoor facility owned or leased or contracted for by an entity and used routinely or regularly for the provision of health, day care, education, or library services to children under the age of 18, if the services are funded by Federal programs either directly or through State or local governments, by Federal grant, contract, loan, or loan guarantee. The law does not apply to children's services provided in private residences, facilities funded solely by Medicare or Medicaid funds, and portions of facilities used for inpatient drug or alcohol treatment. Failure to comply with the provisions of the law may result in the imposition of a civil monetary penalty of up to $1,000.00 per day and/or the imposition of an administrative compliance order on the responsible entity. The Contractor certifies that it will comply with the requirements of the Act. The Contractor further agrees that it will require the language of this certification be included in any subawards that contain provisions for children's services and that all subgrantees shall certify accordingly. IV. Certification Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion Lower Tier Covered Transactions Instructions [The phrase "prospective lower tier participant" means the Contractor.] 1. By signing and submitting this document, the prospective lower tier participant is providing the certification set out below. 2. The certification in this clause is a material representation of the fact upon which reliance was placed when this transaction was entered into. If it is later determined that the prospective lower tier participant knowingly rendered an erroneous certification, in addition to other remedies available to the Federal Government, the department or agency with which this transaction originate may pursue available remedies, including suspension and/or debarment. 3. The prospective lower tier participant will provide immediate written notice to the person to whom this proposal is submitted if at any time the prospective lower tier participant learns that its certification was erroneous when submitted or has become erroneous by reason of changed circumstances. 4. The terms "covered transaction," "debarred," "suspended," "ineligible," "lower tier covered transaction," "participant," "person," "primary covered transaction," "principal," "proposal," and "voluntarily excluded," as used in this clause, have the meanings set out in the Definitions and Coverage sections of rules implementing Executive Order 12549, 45 CFR Part 76. You may contact the person to whom this proposal is submitted for assistance in obtaining a copy of those regulations. 5. The prospective lower tier participant agrees by submitting this proposal that, should the proposed covered transaction be entered into, it shall not knowingly enter any lower tier covered transaction with a person who is debarred, suspended, determined ineligible or voluntarily excluded from participation in this covered transaction unless authorized by the department or agency with which this transaction originated. 6. The prospective lower tier participant further agrees by submitting this document that it will include the clause titled "Certification Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion--Lower Tier Covered Transaction," without modification, in all lower tier covered transactions and in all solicitations for lower tier covered transactions. 7. A participant in a covered transaction may rely upon a certification of a prospective participant in a lower tier covered transaction that it is not debarred, suspended, ineligible, or voluntarily excluded from covered transaction, unless it knows that the certification is erroneous. A participant may decide the method and frequency by which it determines the eligibility of its principals. Each participant may, but is not required to, check the Nonprocurement List. 8. Nothing contained in the foregoing shall be construed to require establishment of a system of records in order to render in good faith the certification required by this clause. The knowledge and information of a participant is not required to exceed that which is normally possessed by a prudent person in the ordinary course of business dealings. 9. Except for transactions authorized in paragraph 5 of these instructions, if a participant in a covered transaction knowingly enters into a lower tier covered transaction with a person who is suspended, debarred, ineligible, or voluntarily excluded 51

from participation in this transaction, in addition to other remedies available to the Federal Government, the department or agency with which this transaction originated may pursue available remedies, including suspension, and/or debarment. Certification 1. The prospective lower tier participant certifies, by submission of this document, that neither it nor its principals is presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from participation in this transaction by any Federal department or agency. 2. Where the prospective lower tier participant is unable to certify to any of the statements in this certification, such prospective participant shall attach an explanation to this proposal. V. Certification Regarding Lobbying The Contractor certifies, to the best of his or her knowledge and belief, that: No Federal appropriated funds have been paid or will be paid by or on behalf of the undersigned, to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with the awarding of any Federal contract, continuation, renewal, amendment, or modification of any Federal contract, grant, loan, or cooperative agreement. If any funds other than Federal appropriated funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with this Federally funded contract, grant, loan, or cooperative agreement, the undersigned shall complete and submit Standard Form SF-LLL, "Disclosure of Lobbying Activities," in accordance with its instructions. The undersigned shall require that the language of this certification be included in the award document for subawards at all tiers (including subcontracts, subgrants, and contracts under grants, loans, and cooperative agreements) who receive federal funds of $100,000.00 or more and that all subrecipients shall certify and disclose accordingly. This certification is a material representation of fact upon which reliance was placed when this transaction was made or entered into. Submission of this certification is a prerequisite for making or entering into this transaction imposed by Section 1352, Title 31, U.S. Code. Any person who fails to file the required certification shall be subject to a civil penalty of not less than $10,000.00 and not more than $100,000.00 for each such failure. VI. Disclosure Of Lobbying Activities Instructions This disclosure form shall be completed by the reporting entity, whether subawardee or prime Federal recipient, at the initiation or receipt of a covered Federal action, or a material change to a previous filing, pursuant to title 31 U.S.C. section 1352. The filing of a form is required for each payment or agreement to make payment to any lobbying entity for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with a covered Federal action. Use the SF-LLL-A Continuation Sheet for additional information if the space on the form is inadequate. Complete all items that apply for both the initial filing and material change report. Refer to the implementing guidance published by the Office of Management and Budget for additional information. 1. Identify the type of covered Federal action for which lobbying activity is and/or has been secured to influence the outcome of a covered Federal action. 2. Identify the status of the covered Federal action. 3. Identify the appropriate classification of this report. If this is a follow-up report caused by a material change to the information previously reported, enter the year and quarter in which the change occurred. Enter the date of the last previously submitted report by this reporting entity for this covered Federal action. 4. Enter the full name, address, city, state and zip code of the reporting entity. Include Congressional District, if known. Check the appropriate classification of the reporting entity that designates if it is, or expects to be, a prime or sub-award recipient. Identify the tier of the subawardee, e.g., the first subawardee of the prime is the 1st tier. Subawards include but are not limited to subcontracts, subgrants and contract awards under grants. 52

5. If the organization filing the report in Item 4 checks "Subawardee", then enter the full name, address, city, state and zip code of the prime Federal recipient. Include Congressional District, if known. 6. Enter the name of the Federal agency making the award or loan commitment. Include at least one organizational level below agency name, if known. For example, Department of Transportation, United States Coast Guard. 7. Enter the Federal program name or description for the covered Federal action (Item 1). If known, enter the full Catalog of Federal Domestic Assistance (CFDA) number for grants, cooperative agreements, loans, and loan commitments. 8. Enter the most appropriate Federal Identifying number available for the Federal action identified in Item 1 (e.g., Request for Proposal (RFP) number, Invitation for Bid (IFB) number, grant announcement number, the contract grant, or loan award number, the application/proposal control number assigned by the Federal agency). Include prefixes, e.g., "RFP-DE-90-001." 9. For a covered Federal action where there has been an award or loan commitment by the Federal agency, enter the Federal amount of the award/loan commitment for the prime entity identified in Item 4 or 5. 10. (a) Enter the full name, address, city, state and zip code of the lobbying entity engaged by the reporting entity identified in Item 4 to influence the covered Federal action. (b) Enter the full names of the individual(s) performing services, and include full address if different from 10(a). Enter Last Name, First Name and Middle Initial (MI). 11. Enter the amount of compensation paid or reasonably expected to be paid by the reporting entity (Item 4) to the lobbying entity (Item 10). Indicate whether the payment has been made (actual) or will be made (planned). Check all boxes that apply. If this is a material change report, enter the cumulative amount of payment made or planned to be made. 12. Check the appropriate boxes. Check all boxes that apply. If payment is made through an in-kind contribution, specify the nature and value of the in-kind payment. 13. Check the appropriate boxes. Check all boxes that apply. If other, specify nature. 14. Provide a specific and detailed description of the services that the lobbyist has performed, or will be expected to perform, and the date(s) of any services rendered. Include all preparatory and related activity, not just time spent in actual contact with Federal officials. Identify the Federal official(s) or employee(s) contacted or the officer(s), employee(s), or Member(s) of Congress that were contacted. 15. Check whether or not a SF-LLL-A Continuation Sheet(s) is attached. 16. The certifying official shall sign and date the form, print his/her name, title, and telephone number. Public reporting burden for this collection of information is estimated to average 30 minutes per response, including time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comments regarding the burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden, to the Office of Management and Budget, Paperwork Reduction Project (0348-0046), Washington, D. C. 20503 53

1. Type of Federal Action: a. contract b. grant c. cooperative agreement d. loan e. loan guarantee f. loan insurance Disclosure Of Lobbying Activities (Approved by OMB 0344-0046) Complete this form to disclose lobbying activities pursuant to 31 U.S.C. 1352 Status of Federal Action: a. Bid/offer/application b. Initial Award c. Post-Award 4. Name and Address of Reporting Entity: Prime Subawardee Tier (if known) Congressional District (if known) Report Type: a. initial filing b. material change For Material Change Only: Year Quarter Date Of Last Report: 5. If Reporting Entity in No. 4 is Subawardee, Enter Name and Address of Prime: Congressional District (if known) 6. Federal Department/Agency: 7. Federal Program Name/Description: CFDA Number (if applicable) 8. Federal Action Number (if known) 9. Award Amount (if known) $ 10. a. Name and Address of Lobbying Entity (if individual, last name, first name, MI): b. Individuals Performing Services (including address if different from No. 10a.) (last name, first name, MI): (attach Continuation Sheet(s) SF-LLL-A, if necessary) 11. Amount of Payment (check all that apply): (attach Continuation Sheet(s) SF-LLL-A, if necessary) 13. Type of Payment (check all that apply): $ actual planned 12. Form of Payment (check all that apply): a. cash b. In-kind; specify: Nature Value a. retainer b. one-time fee c. commission d. contingent fee e. deferred f. other; specify: 14. Brief Description of Services Performed or to be Performed and Date(s) of Services, including officer(s), employee(s), or Member(s) contacted, for Payment Indicated in Item 11(attach Continuation Sheet(s) SF-LLL- A, if necessary): 15. Continuation Sheet(s) SF-LLL-A attached: Yes No 16. Information requested through this form is authorized by title 31 U. S. C. section 1352. This Signature: disclosure of lobbying activities is a material representation of fact upon which reliance was Print Name: placed by the tier above when this transaction was made or entered into. This disclosure is required Title: pursuant to 31 U. S. C. 1352. This information will be reported to the Congress semi-annually and will be available for public inspection. Any person who fails to file the required disclosure shall be subject Telephone No: Date: to a civil penalty of not less than $10,000 and not more than $100,000 for each such failure. Federal Use Only Authorized for Local Reproduction Standard Form - LLL 54

ATTACHMENT I: N.C. BUSINESS ASSOCIATE ADDENDUM NORTH CAROLINA DEPARTMENT OF HEALTH AND HUMAN SERVICES BUSINESS ASSOCIATE ADDENDUM This Agreement is made effective the day of, 2015, by and between DHHS, Division of Medical Assistance ( Covered Entity ) and (name of contractor) ( Business Associate ) (collectively the Parties ). 1. BACKGROUND a. Covered Entity and Business Associate are parties to a contract entitled Contract #33091 (the Contract ), whereby Business Associate agrees to perform certain services for or on behalf of Covered Entity. b. Covered Entity is an organizational unit of the North Carolina Department of Health and Human Services (the Department ) that has been designated in whole or in part by the Department as a health care component for purposes of the HIPAA Privacy Rule. c. The relationship between Covered Entity and Business Associate is such that the Parties believe Business Associate is or may be a business associate within the meaning of the HIPAA Privacy Rule. d. The Parties enter into this Business Associate Addendum to the Contract with the intention of complying with the HIPAA Privacy Rule provision that a covered entity may disclose protected health information to a business associate, and may allow a business associate to create or receive protected heath information on its behalf, if the covered entity obtains satisfactory assurances that the business associate will appropriately safeguard the information. 2. DEFINITIONS Unless some other meaning is clearly indicated by the context, the following terms shall have the following meaning in this Agreement: a. Electronic Protected Health Information shall have the same meaning as the term electronic protected health information in 45 C.F.R. 160.103. b. HIPAA means the Administrative Simplification Provisions, Sections 261 through 264, of the federal Health Insurance Portability and Accountability Act of 1996, Public Law 104-191, as modified and amended by the Health Information Technology for Economic and Clinical Health ( HITECH ) Act, Title XIII of Division A and Title IV of Division B of the American Recovery and Reinvestment Act of 2009, Public Law 111-5. c. Individual shall have the same meaning as the term individual in 45 C.F.R. 160.103 and shall include a person who qualifies as a personal representative in accordance with 45 C.F.R. 164.502(g). d. Privacy Rule shall mean the Standards for Privacy of Individually Identifiable Health Information at 45 C.F.R. Part 160 and Part 164. e. Protected Health Information shall have the same meaning as the term protected health information in 45 C.F.R. 160.103, limited to the information created or received by Business Associate from or on behalf of Covered Entity. f. Required By Law shall have the same meaning as the term required by law in 45 C.F.R. 164.103. g. Secretary shall mean the Secretary of the United States Department of Health and Human Services or the person to whom the authority involved has been delegated. h. Unless otherwise defined in this Agreement, terms used herein shall have the same meaning as those terms have in the Privacy Rule. 3. OBLIGATIONS OF BUSINESS ASSOCIATE a. Business Associate agrees to not use or disclose Protected Health Information other than as permitted or required by this Agreement or as Required By Law. b. Business Associate agrees to use appropriate safeguards and comply, where applicable, with subpart C of 45 C.F.R. Part 164 with respect to electronic protected health information, to prevent use or disclosure of the Protected Health Information other than as provided for by this Agreement. c. Business Associate agrees to mitigate, to the extent practicable, any harmful effect that is known to Business Associate of a use or disclosure of Protected Health Information by Business Associate in violation of the requirements of this Agreement. d. Business Associate agrees to report to Covered Entity any use or disclosure of the Protected Health Information not provided for by this Agreement of which it becomes aware, including breaches of unsecured protected health information as required by 45 C.F.R. 164.410. e. Business Associate agrees, in accordance with 45 C.F.R. 164.502(e)(1) and 164.308(b)(2), to ensure that any subcontractors that create, receive, maintain, or transmit protected health information on behalf of Business Associate agree to the same restrictions and conditions that apply to Business Associate with respect to such information. 55

f. Business Associate agrees to make available protected health information as necessary to satisfy Covered Entity s obligations in accordance with 45 C.F.R. 164.524. g. Business Associate agrees to make available Protected Health Information for amendment and incorporate any amendment(s) to Protected Health Information in accordance with 45 C.F.R. 164.526. h. Unless otherwise prohibited by law, Business Associate agrees to make internal practices, books, and records relating to the use and disclosure of Protected Health Information received from, or created or received by Business Associate on behalf of, Covered Entity available to the Secretary for purposes of the Secretary determining Covered Entity's compliance with the Privacy Rule. i. Business Associate agrees to make available the information required to provide an accounting of disclosures of Protected Health Information in accordance with 45 C.F.R. 164.528. 4. PERMITTED USES AND DISCLOSURES a. Except as otherwise limited in this Agreement or by other applicable law or agreement, if the Contract permits, Business Associate may use or disclose Protected Health Information to perform functions, activities, or services for, or on behalf of, Covered Entity as specified in the Contract, provided that such use or disclosure: 1) would not violate the Privacy Rule if done by Covered Entity; or 2) would not violate the minimum necessary policies and procedures of the Covered Entity. b. Except as otherwise limited in this Agreement or by other applicable law or agreements, if the Contract permits, Business Associate may disclose Protected Health Information for the proper management and administration of the Business Associate or to carry out the legal responsibilities of the Business Associate, provided that: 1) the disclosures are Required By Law; or 2) Business Associate obtains reasonable assurances from the person to whom the information is disclosed that it will remain confidential and will be used or further disclosed only as Required By Law or for the purpose for which it was disclosed to the person, and the person notifies the Business Associate of any instances of which it is aware in which the confidentiality of the information has been breached. c. Except as otherwise limited in this Agreement or by other applicable law or agreements, if the Contract permits, Business Associate may use Protected Health Information to provide data aggregation services to Covered Entity as permitted by 45 C.F.R. 164.504(e)(2)(i)(B). d. Notwithstanding the foregoing provisions, Business Associate may not use or disclose Protected Health Information if the use or disclosure would violate any term of the Contract or other applicable law or agreements. 5. TERM AND TERMINATION a. Term. This Agreement shall be effective as of the effective date stated above and shall terminate when the Contract terminates. b. Termination for Cause. Upon Covered Entity's knowledge of a material breach by Business Associate, Covered Entity may, at its option: 1) Provide an opportunity for Business Associate to cure the breach or end the violation, and terminate this Agreement and services provided by Business Associate, to the extent permissible by law, if Business Associate does not cure the breach or end the violation within the time specified by Covered Entity; 2) Immediately terminate this Agreement and services provided by Business Associate, to the extent permissible by law; or 3) If neither termination nor cure is feasible, report the violation to the Secretary as provided in the Privacy Rule. c. Effect of Termination. 1) Except as provided in paragraph (2) of this section or in the Contract or by other applicable law or agreements, upon termination of this Agreement and services provided by Business Associate, for any reason, Business Associate shall return or destroy all Protected Health Information received from Covered Entity, or created or received by Business Associate on behalf of Covered Entity. This provision shall apply to Protected Health Information that is in the possession of subcontractors or agents of Business Associate. Business Associate shall retain no copies of the Protected Health Information. 2) In the event that Business Associate determines that returning or destroying the Protected Health Information is not feasible, Business Associate shall provide to Covered Entity notification of the conditions that make return or destruction not feasible. Business Associate shall extend the protections of this Agreement to such Protected Health Information and limit further uses and disclosures of such Protected Health Information to those purposes that make the return or destruction infeasible, for so long as Business Associate maintains such Protected Health Information. 6. GENERAL TERMS AND CONDITIONS a. This Agreement amends and is part of the Contract. b. Except as provided in this Agreement, all terms and conditions of the Contract shall remain in force and shall apply to this Agreement as if set forth fully herein. 56

c. In the event of a conflict in terms between this Agreement and the Contract, the interpretation that is in accordance with the Privacy Rule shall prevail. In the event that a conflict then remains, the Contract terms shall prevail so long as they are in accordance with the Privacy Rule. d. A breach of this Agreement by Business Associate shall be considered sufficient basis for Covered Entity to terminate the Contract for cause. PLEASE PRINT NAME SIGNATURE Date 57

ATTACHMENT J: DATA PROTECTION The requirements of this section apply to all data that the Business Associate may create, receive, maintain, or transmit on DMA s behalf under the terms of this contract. The requirements apply regardless of the Business Associate s status as a HIPAA covered entity. General Provisions Business Associate agrees to maintain DMA claims data separately from other data sources in order to ensure data integrity and maintain data security. DMA information is confidential protected health information that may be used and disclosed only in accordance with Division of Medical Assistance (DMA), DHHS, State, and federal laws and regulations, including the Health Insurance Portability and Accountability Act of 1996, P.L. 104-91, as amended ( HIPAA ), and its implementing regulations, 45 CFR Parts 160, 162, and 164, including the Omnibus Rule. Data should be maintained in keeping with the requirements of the HIPAA and 256-bit encryption must be used for data in transit. Furthermore, all information listed in N.C.G.S 14-113.20(b) as identifying information such as social security numbers, employer taxpayer identification numbers, drivers license numbers, and any other numbers or information that can be used to access a person's financial resources, may be used and disclosed only in accordance with the NC Identity Theft Protection Act, N.C.G.S. 75-60 through 65 and N.C.G.S. 132-1.10. The Business Associate, its employees, agents, and contractors must protect all such information against theft and misuse at all times: in storage, while in use, and in transit. The parties agree that for data that is created, received, maintained, or transmitted for the purposes of fulfilling the terms of this contract, DMA has the role of the covered entity under HIPAA and the data owner under NC ID Theft law N.C.G.S. 75-65(a). The Business Associate does not own the data, but maintains or possesses the data under the provisions of N.C.G.S. 75-65(b). The Business Associate shall not take any independent action to notify oversight agencies such as the US Secretary of Health and Human Services or the NC Attorney General s office, or the individuals involved. Any recipient notification or notification of oversight agencies shall be performed directly by DMA or with the approval of DMA. Though the Business Associate may generate a suggested draft, the language of the recipient letter shall be determined and approved by DMA. Notification of DMA The Business Associate agrees to notify the DMA when a security or privacy incident takes place. A security incident means the attempted or successful unauthorized access, use, disclosure, modification, or destruction of information or interference with system operations in an information system, see 45 CFR 164.304. A privacy incident means an event in which there is reason to suspect a breach under HIPAA, that is, the acquisition, access, use, or disclosure of protected health information in a manner not permitted under 45 CFR 164 subpart E (Privacy of Individually Identifiable Health Information) which compromises the security or privacy of the protected health information. The Business Associate shall report to DMA as soon as practical but no later than 24 hours after the discovery of the suspected security incident or privacy incident. The initial report may consist of general information, with more detail to follow as the investigation continues. The requirement to notify DMA is satisfied by notifying the NC DHHS Office of Privacy and Security at: http://www.ncdhhs.gov/pso/. Risk Assessment and Recipient Notification When a privacy or security incident has occurred, the Business Associate shall: notify DMA immediately, but no later than 24 hours; provide detailed information, providing complete and accurate answers to questions from DMA within 1 business day unless otherwise agreed upon by both DMA and the Business Associate; investigate the incident to determine what, if any, information was disclosed and provide this to DMA within 5 days complete a risk assessment within 5 business days of the event and make a preliminary assessment regarding the presence of significant risk of compromise to the data; provide a list of all recipients affected within 5 business days of the event; update DMA as more information becomes available; provide all additional information required by HIPAA (including 45 CFR 164.410) and NC Identity Theft statutes 58

within 5 days of the event; perform action to mitigate the compromise of the data and harm to the individuals involved and report this to DMA within 10 days; determine the cause of the incident and perform remediation such as training, and policy/process changes to prevent these events in the future and report this to DMA within 10 days; pay all costs of notification or provide the notification, at the discretion of the DMA; promptly provide any information requested related to privacy/security issues to DMA and remediate problems raised by DMA staff. Accounting of Disclosures When it is concluded that the acquisition, access, use, or disclosure of protected health information in a manner not permitted under 45 CFR 164 subpart E (Privacy of Individually Identifiable Health Information) which compromises the security or privacy of the protected health information has taken place, the Business Associate shall send Sury Gundarapu the following information via secure email (portal here: https://web1.zixmail.net/s/login?b=ncdhhs): Date of event Names and MIDs of the individuals involved Description of information disclosed Name, address, and phone number of the individual or entity to whom the data was disclosed Designated Record Set The Business Associate shall evaluate their records to identify the records that qualify as a Designated Record Set as defined in 45 CFR 164.501 and required in 45 CFR 164.524 and shall give this information to DMA upon request. The Business Associate shall provide copies of records and allow amendments when required by the HIPAA Privacy Rule (45 CFR 164.526). Copies of records shall be given to DMA within 5-10 business days of the request. There shall be no supplemental charge for these processes. Policies The Business Associate shall comply with NC ITS Security standards Chapter 13 (Detecting and Responding to IS Incidents, (https://www.scio.nc.gov/library/pdf/statewideinformationsecuritymanual/statewide_information_security_manual_april_20_ 2012.pdf) as well as the DHHS Privacy and Security Information Incident Management Policy Privacy: http://info.dhhs.state.nc.us/olm/manuals/dhs/pol80/man/privacy_incident_and_complaint.pdf Security (Chapter 10): http://info.dhhs.state.nc.us/olm/manuals/dhs/pol-80/man/security_manual.pdf The Off-Site Storage Security Standard (https://security.dhhs.state.nc.us/files/polices-standards/off-site-storage- Standard.pdf) The Business Associate shall comply with all DHHS Privacy and Security Policies (http://info.dhhs.state.nc.us/olm/manuals/dhs/pol-80/man/) including the HIPAA Breach Notification for Unsecured PHI policy. Data Destruction Section 5c of the attached business associate agreement contains provisions regarding the return or destruction of PHI after the end of this agreement. The Business Associate agrees to notify DMA in writing of the disposition of the data (usually destruction, though other options may be considered as per the BAA) when this project is completed. 59

ATTACHMENT K: 42 CFR 438.354 QUALIFICATIONS OF EXTERNAL REVIEW ORGANIZATIONS (a) (b) (c) General Rule The State must ensure that an EQRO meets the requirements of this section. Competence The EQRO must have at a minimum the following: (1) Staff with demonstrated experience and knowledge of (i) Medicaid recipients, policies, data systems, and processes; (ii) Managed care delivery systems, organizations, and financing; (iii) Quality assessment and improvement methods; and (iv) Research design and methodology, including statistical analysis. (2) Sufficient physical, technological, and financial resources to conduct EQR or EQR-related activities. (3) Other clinical and nonclinical skills necessary to carry out EQR or EQR-related activities and to oversee the work of any subcontractors. Independence The EQRO and its subcontractors are independent from the State Medicaid agency and from the MCOs or PIHPs that they review. To qualify as independent (1) A State agency, department, university, or other State entity may not have Medicaid purchasing or managed care licensing authority; and (2) A State agency, department, university, or other State entity must be governed by a Board or similar body the majority of whose members are not government employees. (3) An EQRO may not (i) Review a particular MCO or PIHP if either the EQRO or the MCO or PIHP exerts control over the other (as used in this paragraph, control has the meaning given the term in 48 CFR 19.101) through (A) Stock ownership; (B) Stock options and convertible debentures; (C) Voting trusts; (D) Common management, including interlocking management; and (E) Contractual relationships. (ii) Deliver any health care services to Medicaid recipients; (iii) Conduct, on the State's behalf, ongoing Medicaid managed care program operations related to oversight of the quality of MCO or PIHP services, except for the related activities specified in 438.358; or (iv) Have a present or known future, direct or indirect financial relationship with an MCO or PIHP that it will review as an EQRO. 60

ATTACHMENT L: N.C. MEDICAID WAIVER PERFORMANCE MEASURES North Carolina Division Of Medical Assistance State PIHP Reporting Schedule-B Waiver Measures Performance measures Population Suggested Data Collection Frequency A. Effectiveness of Care Measures 1. Readmission rates for mental health Mental Health Annual 2. Readmission Rates for Substance Abuse SA Annual 3. Ambulatory Follow-up within 7 calendar days of discharge for SA Annual Substance Abuse 4. Ambulatory Follow-up within 7 calendar days of discharge for MH Annual Mental Health B. Access/Availability 1. Initiation and engagement of alcohol and other drug (AOD) MH/SA Annual dependence treatment 2. Call answer timeliness MH/SA and I/DD Annual 3. Call abandonment MH/SA and I/DD Annual 4. Gaps Analysis/Service Need Assessment MH/SA and I/DD Annual 5. Payment denials MH/SA and I/DD Annual 6. Out of Network Services MH/SA and I/DD Annual C. Patient and Provider Satisfaction 1. Provider Satisfaction Survey MH/SA and I/DD Annually 2. Grievances /Appeals MH/SA and I/DD Quarterly/Annually 3. Patient Satisfaction Survey MH/SA and I/DD Annually D. Use of Services 1. Mental Health Utilization-Inpatient Discharges and Average Mental Health Length of Stay 2. Mental Health Utilization-Percentage of Members Receiving Inpatient, Day/Night Care, Ambulatory and Other Support Services Mental Health 3. Chemical Dependency Utilization-Percentage of Members Receiving Inpatient, Day/Night Care, Ambulatory and Other Substance Abuse Support Services Annual Annual Annual 4. Identification of Alcohol and Other Drug Services (Penetration) Substance Abuse Annual 5. Identification of Mental Health Services (Penetration) Mental Health Annual 6. Integrated Care Child and Adult MH/SA and I/DD Annual E. Health Plan Stability Network Capacity MH/SA and I/DD Annual F. Plan Descriptive Information Unduplicated Count of Medicaid Membership MH/SA and I/DD Annual Diversity of Medicaid Membership MH/SA and I/DD Annual G. Health and Safety Critical Incident Reports MH/SA and I/DD Annual 61

State PIHP Reporting Schedule-Innovations Measures Performance measures Population Suggested Data Collection Frequency DMA tracks waiver participation through reporting by the PIHP on new enrollees and consumers transferring in from other waivers I/DD Monthly DMA reviews the PIHP Innovations provider network for adequate I/DD capacity and choice. Number and percent of new waiver enrollees who have a LOC I/DD prior to receipt of services Proportion of Level of Care evaluations completed at least I/DD annually for enrolled participants Proportion of Level of Care evaluations completed using approved I/DD processes and instrument Proportion of New Level of Care evaluations completed using I/DD approved processes and instrument Annually Annually Semi Annually Semi Annually Semi Annually Proportion of providers that meet licensure, certification, and/or other standards prior to their furnishing waiver services I/DD Annually Proportion of monitored non-licensed/non-certified Innovations providers that successfully implemented an approved corrective I/DD action plan Proportion of monitored Innovations providers wherein all staff completed all mandated training (excluding restrictive I/DD interventions) within the required time frame. Proportion of providers reviewed according to PIHP monitoring schedule to determine continuing compliance with licensing, I/DD certification, contract and waiver standards Annually Annually Annually Proportion of Individual Support Plans in which the services and supports reflect participant assessed needs and life goals I/DD Annually Proportion of Individual Support Plans that address identified I/DD health and safety risk factors Percentage of participants reporting that their Individual Support I/DD Plan has the services that they need Proportion of individuals for whom an annual plan and/or needed I/DD update took place Semi Annually Annually Semi Annually Proportion of new waiver participants who are receiving services according to their ISP within 45 days of ISP approval. I/DD Annually Proportion of participants who are receiving services in the type, scope, amount, and frequency as specified in the Individual I/DD Support Plan Proportion of PCPs that are completed in accordance with DMA I/DD requirements. Quarterly Annually 62

RFP Number: 30-DMA-33091-16 Vendor: Performance Measures Population Suggested Data Collection Frequency Proportion of records that contain a signed freedom of choice I/DD statement Proportion of participants reporting their Care Coordinator helps I/DD them to know what waiver services are available Proportion of participants reporting they have a choice between I/DD providers Number and Percent of Actions Taken to Protect the Consumer, I/DD where indicated What was the proportion of the level 2/3 incidents that reported I/DD within required timeframes as specified Annually Annually Annually Quarterly Quarterly What are the number of incidents referred to the Division of Social Service or the Division of Health Service Regulation I/DD Quarterly Number and Percentage of deaths and other incidents where required LME/MCO follow-up interventions were completed as I/DD required Quarterly Number and percentage of level 2 or 3 incidents where required LME/MCO follow-up interventions were completed as required I/DD Quarterly Was Medication Administered Properly by Caregiver I/DD Quarterly Percentage of beneficiaries who received appropriate medication I/DD Quarterly Were restraints properly used I/DD Quarterly The proportion of claims paid by the PIHP for Innovations wavier services that have been authorized in the service plan. I/DD Annually Ver: 4/10/15 Page 63

RFP Number: 30-DMA-33091-16 Vendor: ATTACHMENT M: The Vendor s review protocol for performance measures and a sample report Ver: 4/10/15 Page 64

RFP Number: 30-DMA-33091-16 Vendor: ATTACHMENT N: The Vendor s draft plan for assessing data quality and standard processes for analyzing electronic encounter data Ver: 4/10/15 Page 65