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Item #07 Pharmacy Benefit Contract/Agreement
the Center of Goo Liv g C AGENDA ITEM COVER SHEET Meeting Date: 08/16/2011 Item # 7 Reviewed By: Contact Name: Gene Williford Department Director: Contact Number: 1032 City Manager: 'f Subject: Pharmacy Benefit Contract /Agreement. Background Summary: The present employee /dependent pharmacy benefit is part of the annual contract with Blue Cross Blue Shield of Florida. The contract is with a subsidiary company of Blue Cross, not part of the Blue Cross Blue Shield network but a separate pharmacy benefit management company. Issue: The City desires to contract directly with a different pharmacy benefit management company (Envision) not through the contract with Blue Cross in order to take advantage of a better discount arrangement. There will be no changes in the pharmacy benefit to employees and their dependents as a result of this change. Recommendations It is recommended by staff to contract with Envision so they may provide the pharmacy benefit to the City's employees /dependents. Attachments: Attached is the contract with Envision to provide services as the pharmacy benefit management company. Financial Impact: The discounted prices offered by Envision are projected to reduce the City's cost of providing a pharmacy benefit to the employees and their dependents by 10% to 15% per year for an anticipated savings of $50,000 in the first year of the contract. Type of Item: ❑ Public Hearing For Clerk's Dept Use: ❑ Ordinance First Reading ® Consent Agenda ❑ Ordinance Second Reading El Public Hearing ❑ Resolution ❑ Regular Agenda ❑ Commission Approval ❑ Discussion & Direction ❑ Original Document/Contract Attached for Execution by City Clerk ❑ Original Document/Contract Held by Department for Execution Reviewed by City Attorney ❑ N/A Reviewed by Finance Dept. ❑ N/A Reviewed by ( ) 111 N/A PHARMACY BENEFIT MANAGEMENT SERVICES AGREEMENT This Pharmacy Benefit Management Services Agreement (the "Agreement ") is effective the day of , (the "Effective Date ") by and between Envision Pharmaceutical Services, Inc., an Ohio Corporation (hereinafter "Envision "), and City of Ocoee, Florida ( "Plan Sponsor "). BACKGROUND Envision is a URAC accredited Pharmacy Benefit Management (PBM) company engaged in the business of providing comprehensive pharmacy benefit management services nationwide to various employers, unions, and health plans which sponsor or administer health benefit plans covering outpatient prescription medications. Plan Sponsor sponsors and /or administers one or more health benefit plans providing coverage for prescription medications to Covered Individuals and desires to engage Envision to provide pharmacy benefit management services in accordance with the terms and conditions of this Agreement. NOW, THEREFORE, in consideration of the mutual promises and agreements herein contained, Plan Sponsor and Envision hereby agree as follows: 1. DEFINITIONS 1.1 "Administrative Fee" means the amount that Envision charges Plan Sponsor for included services under this Agreement. Envision represents and warrants that the Administrative Fee and any fees for Additional Services and Miscellaneous Expenses set forth in Exhibit 1 are its sole compensation for the services rendered hereunder, and that it retains no revenues, directly or indirectly, from any other source. 1.2 "Average Wholesale Price" or "AWP" shall mean the average wholesale price of a Covered Medication in effect on the date the Covered Medication was dispensed as listed by an applicable industry standard reference on which pricing hereunder is based (i.e. Medi- Span), for the actual drug dispensed using the 11 digit National Drug Code (NDC) number provided by the dispensing pharmacy. 1.3 "Benefit Plan" means the group health plan, insurance plan, prescription drug plan, or other benefit plan sponsored or administered by Plan Sponsor that covers the cost of Covered Medications for Covered Individuals. 1.4 "Benefit Specification Form" means the form that is completed by Plan Sponsor, in conjunction with Envision, which details the specifics of the Benefit Plan such as which prescription medications are covered by Plan Sponsor, any limitations or exclusions, the Benefit Plan's tier structure and Co- Payments, and any conditions associated with the specific services to be rendered by Envision under this Agreement (i.e. prior authorizations, drug therapy management, etc.). \PBMSA (frm02181 ln)(r3) © Envision Pharmaceutical Services, Inc. Page 1 of 20 1.5 "Brand Drug" means a drug where the Medi -Span multisource code attached to the 11 digit NDC for such drug indicates an "N" (a single- source brand name drug product available from one manufacturer and is not available as a generic), an "M" (a brand drug product that is co- branded and not considered generic, nor is it available as a generic, and is generally considered a single- source drug product despite multiple manufacturers), or an "0" (an original brand drug product available from one or more manufacturers as a generic). 1.6 "Claim" means (i) an invoice or transaction (electronic or paper) for a Covered Medication dispensed to a Covered Individual that has been submitted to Envision by the dispensing pharmacy or a Covered Individual (including transactions where the Covered Individual paid 100% of the cost); and a (ii) "Paid Claim" is a Claim that has been fully funded (less applicable Co- Payments) by Plan Sponsor. 1.7 "Compound Drug" means a Covered Medication that requires compounding by a pharmacist because it is not available from the manufacturer in the prescribed form or strength. Compound Drugs consist of two or more solid, semi -solid or liquid ingredients, at least one of which is recognized under federal law as a Legend Drug. 1.8 "Co- Payment" means the amount of money (which may be a fixed amount or a percentage) that a Covered Individual must pay to the Participating Pharmacy for each Covered Medication filled or refilled under this Agreement in accordance with the terms of the Benefit Plan. 1.9 "Covered Individual" means an Eligible Employee and each of such Eligible Employee's eligible dependents who are identified by Plan Sponsor on the Eligibility File as being entitled to receive Covered Medications under the Benefit Plan in accordance with this Agreement. 1.11 "Covered Medication" means a prescription drug, medication, or device that meets the requirements for coverage under the Benefit Plan, after applying all conditions and exclusions set forth in the Benefit Specification Form, and which is dispensed by a Participating Pharmacy to a Covered Individual pursuant to a written or electronic prescription order or allowable refill. 1.12 "Eligible Employee" means an employee of Plan Sponsor on whose behalf Plan Sponsor has contracted with Envision to provide the services hereunder to such employee and the employee's eligible dependents. 1.13 "Eligibility File" means that electronic communication supplied to Envision by Plan Sponsor which identifies Covered Individuals along with other eligibility information necessary for Envision to provide PBM Services hereunder. Plan Sponsor acknowledges that eligibility begins on the first day the Covered Individual is reported by Plan Sponsor (or its designee) to be effective and continues through the last day the Covered Individual appears on the Eligibility File. 1.14 "Generic Drug" means a drug where the Medi -Span multisource code attached to the 11 digit NDC for such drug indicates a "Y" (a generic drug product available from one or more \PBMSA (frm02181 ln)(r3) C© Envision Pharmaceutical Services, Inc. Page 2 of 20 manufacturers). 1.15 "HIPAA" means the Health Insurance Portability and Accountability Act of 1996, as amended. 1.16 "Licensed Prescriber" means a licensed Doctor of Medicine (M.D.), Doctor of Osteopathy (D.O.), Doctor of Podiatry (D.P.M.), Doctor of Dentistry (D.D.S.), or other licensed health practitioner with independent prescribing authority in the state in which the dispensing pharmacy is located. 1.17 "Manufacturer Derived Revenue" means any discounts, rebates, pharmaceutical manufacturers administrative fees, and any other revenue received by Envision from pharmaceutical manufacturers (whether as a result of the number of covered lives, other incentives or other amounts received) for Covered Medications dispensed to Covered Individuals. 1.18 "MAC List" means a proprietary list of Generic Drugs for which Envision establishes a maximum price ( "MAC Price ") payable to the dispensing pharmacy, which includes most, but not all Generic Drugs. Envision maintains one commercial MAC List per Participating Pharmacy which is used to both determine the negotiated price payable to the dispensing pharmacy and the price charged to Plan Sponsor. Plan Sponsor will be charged the exact negotiated amount payable by Envision to the dispensing pharmacy without any markup or spread. Envision updates the MAC List from time -to -time as Generic Drugs come on the market or come off the market, or as their availability changes due to market circumstances. Generic Drugs that are excluded from the MAC List include Newly Available Generic Drugs, Single - Source Generic Drugs, and Limited Availability Generic Drugs ( "Excluded Generics "). For purposes of this definition, a Newly Available Generic Drug is one which, at the time the drug is dispensed, is subject to the Hatch -Waxman 180 day market exclusivity provision, a Single - Source Generic Drug is one which, at the time the drug is dispensed, is available from only one manufacturer, and a Limited Availability Generic Drug is one which, at the time the drug is dispensed, is priced higher than normal due to supply limitations or limited market competition. 1.19 "Participating Pharmacy" means a pharmacy (including a designated mail order or specialty pharmacy) that has entered into a negotiated pricing agreement with Envision to dispense Covered Medications to Covered Individuals. 1.20 "Plan Sponsor" means the entity (identified above as Plan Sponsor) that is financially responsible for the payment of Administrative Fees, Fees for Additional Services and Miscellaneous Expenses, and Covered Medications dispensed to Covered Individuals hereunder. 1.21 "Point -of- Sale" means the location and time that a Covered Medication is dispensed to a Covered Individual, and the corresponding Claim is submitted by the dispensing pharmacy for adjudication by Envision's on -line computerized claims processing system (hereinafter "Claims Adjudication System "). \PBMSA (frm02181 In)(r3) 0 Envision Pharmaceutical Services, Inc. Page 3 of 20 1.22 "Specialty Drug" means those high -cost injectable, infused, oral, inhaled, or biotech drugs which require special ordering, handling and /or patient intervention. Specialty Drugs will be priced based on where the drug is dispensed (i.e. retail, mail order, or specialty pharmacy). A list of Specialty Drugs is attached as Exhibit 1 -A. 2. PBM SERVICES Envision shall perform the following pharmacy benefit management services ( "PBM Services "): 2.1 Identification Card: Envision shall provide Plan Sponsor with Envision approved identification cards ( "ID Cards "), up to two per family, for distribution to Covered Individuals by Plan Sponsor. If requested by Plan Sponsor, Envision shall provide ID Cards directly to Covered Individuals at no additional cost, except for the cost of postage and handling. Additional ID Cards or replacement ID Cards (i.e. for lost or stolen ID Cards) will be provided at a cost as specified in Exhibit 1. If Plan Sponsor desires to re- design and/or re -issue ID Cards, or for special graphic requests, additional charges may apply. 2.2 Claims Processing: During the term of this Agreement, Envision shall accept, process, and adjudicate Claims for Covered Medications (i) submitted by Participating Pharmacies (via Envision's Claims Adjudication System in National Council for Prescription Drug Programs (NCPDP) formats); (ii) submitted by Plan Sponsor's owned pharmacies or Plan Sponsor's contracted pharmacies; (iii) submitted by Covered Individuals as Direct Member Reimbursements (DMRs, as defined below); or (iv) received from third parties, such as Medicaid, for reimbursement by Plan Sponsor. Claims shall be checked for eligibility, benefit design, Co- Payments, and exclusions to determine which Claims are successfully processed, pended for prior authorization, or rejected for ineligibility or other factors in accordance with Plan Sponsor's specifications as set forth in Plan Sponsor's Benefit Specification Form (incorporated herein by this reference). Claims that must be processed manually because they are (i) DMRs or (ii) Claims received from third parties, such as Medicaid, for reimbursement by Plan Sponsor for ineligible payments, will incur a fee as set forth in Exhibit 1. After termination of this Agreement, Envision shall process Claims for dates of service on or before the effective date of termination, for a period of ninety (90) days ( "Run -Out Period "), subject to the following. Plan Sponsor shall deposit and maintain, with Envision, an amount equal to the last Claims invoice prior to termination. At the end of the Run -Out Period, the balance of the deposit shall be promptly refunded to Plan Sponsor and, thereafter, any Claims received by Envision shall be rejected. 2.3 Direct Member Reimbursement (DMR): Envision shall provide, via its website, a DMR form, for use by Covered Individuals. These forms will be used for Covered Individual self -pay reimbursements for amounts other than Co- Payments paid out for Covered Medications that have not otherwise been reimbursed by Plan Sponsor. Envision shall accept, process, and adjudicate DMR Claims within ten (10) business days of receipt of the DMR form, but shall not be liable to reimburse a Covered Individual until Plan Sponsor provides funds for such purpose. 2.4 Pass - Through of Discounts and Dispensing Fees: Envision shall pass - through to Plan Sponsor the contractual charge of the dispensing pharmacy for the drug dispensed without any \PBMSA (frm02l 8I I n)(r3) 0 Envision Pharmaceutical Services, Inc. Page 4 of 20 reclassification, mark -up or spread by Envision, except as directed by Plan Sponsor in accordance with the Benefit Specification Form. The amount charged to Plan Sponsor shall be determined as follows: 2.4.1 For Brand Drugs: Envision shall charge Plan Sponsor the calculated negotiated amount payable to the Participating Pharmacy based on the drug pricing fields (i.e. AWP, MONY code, etc.) for the 11 digit NDC of the drug dispensed, less any applicable Manufacturer Derived Revenue (plus applicable dispensing fees); or, if lower, the Participating Pharmacy's reported Usual & Customary ( "U &C ") price (except for mail order and specialty pharmacies). 2.4.2 For Generic Drugs: For Generic Drugs included on the then current Envision MAC List, Envision shall charge Plan Sponsor the MAC Price for the drug dispensed; for Generic Drugs not on the MAC List (i.e. Excluded Generics), Envision shall charge Plan Sponsor the calculated negotiated amount payable to the Participating Pharmacy based on the drug pricing fields (i.e. AWP, MONY code, etc.) for the 11 digit NDC of the drug dispensed (plus applicable dispensing fees); or, if lower, the Participating Pharmacy's reported U &C price (except for mail order and specialty pharmacies). 2.4.3 Modifications by Plan Sponsor: Plan Sponsor's Benefit Plan may contain certain programs (e.g. mandatory generic program) and/or rules which determine the way in which Claims are adjudicated (i.e. what portion of a Claim is payable by Plan Sponsor and what portion is payable by Covered Individuals). The rules by which Plan Sponsor's Claims are adjudicated are detailed by Plan Sponsor as set forth in the Benefit Specification Form. To the extent Plan Sponsor's Benefit Plan modifies the standard Claims adjudication process, the Claims Adjudication System will be configured accordingly. However, such modifications shall not result in the reclassification of a Claim, except as follows: Plan Sponsor has requested that, for purposes of reporting pass - through pricing, Envision reclassify Brand Drugs with a MONY code of "0" and a DAW code of 0, 1, 2, or 7 as its Generic Drug equivalent, even though the drug dispensed is the Brand Drug. For example, if a prescription for an "0" drug is written with a DAW code of 2, the Covered Individual will pay the difference between the Generic Drug equivalent price and the Band Drug price ( "DAW Differential ") and the price charged to Plan Sponsor will be the Band Drug price less the DAW Differential. This Claim would normally be classified as a Brand Drug claim, however, Plan Sponsor has requested Envision to report the Claim as a Generic Drug Claim. 2.4.4 For Dispensing Fees: Envision shall charge Plan Sponsor the negotiated dispensing fee amount payable to the Participating Pharmacy for both brand drugs and generic drugs as applicable. 2.4.5 Negotiation of Pricing: Plan Sponsor acknowledges that Envision negotiates discounts and dispensing fees with Participating Pharmacies on behalf of Envision's collective clientele and not specifically for Plan Sponsor. The drug prices and Dispensing Fees charged to Plan Sponsor shall be no more than other similarly situated Clients of Envision. Nothing in this Section 2.4.5 shall affect Envision's obligation to pass through to Plan Sponsor 100% of all \PBMSA (frm02l 8l I n)(r3) © Envision Pharmaceutical Services, Inc. Page 5 of 20 1 . negotiated discounts and dispensing fees for Plan Sponsor's Claims without any mark -up or spread. 2.5 Manufacturer Derived Revenue 2.5.1 Negotiation of Manufacturer Derived Revenue: Envision shall endeavor to negotiate contracts with pharmaceutical manufacturers to obtain Manufacturer Derived Revenue for rebated Brand Drugs. Envision shall include such rebated Brand Drugs on the Formulary, subject to approval by Envision's Pharmacy & Therapeutics Committee. Plan Sponsor acknowledges that Envision negotiates Manufacturer Derived Revenue with pharmaceutical manufacturers on behalf of Envision's collective clientele and not specifically for Plan Sponsor. 2.5.2 Pass - Through of Manufacturer Derived Revenue: Envision shall pass through to Plan Sponsor one hundred percent (100 %) of all earned Manufacturer Derived Revenue payable from pharmaceutical manufacturers by adjusting Plan Sponsor's cost of Covered Medications at g the Point -of -Sale (unless otherwise specified herein). Specifically, the amount charged to Plan Sponsor by Envision (through the invoices provided under Section 4.2) for each Claim shall be the net price of the Covered Medication after applying applicable credits for expected earned Manufacturer Derived Revenue. Plan Sponsor acknowledges that if Covered Individuals pay a percentage of the drug cost (co- insurance) under the Benefit Plan, a proportional amount of the rebate will be passed on to the Covered Individual at the Point -of -Sale, unless otherwise indicated in the Benefit Specification Form. Envision shall have no obligation to reduce Brand Drug costs on drugs for which Envision does not have a current manufacturer contract for Manufacturer Derived Revenue. Nine months after the end of each Contract Year, Envision shall provide Plan Sponsor with a report reconciling Manufacturer Derived Revenue amounts advanced to Plan Sponsor and those amounts earned by Plan Sponsor from contracted pharmaceutical manufacturers (including market share based amounts) during the Contract Year. 2.5.3 Market Share Rebates: Plan Sponsor acknowledges that Plan Sponsor's portion of market share rebates is based on (i) Plan Sponsor's ability to meet and earn market share rebate levels by manufacturer and (ii) the ratio of Plan Sponsor's Claims for a particular rebated drug to the total number of Claims for such drug for all Envision clients, as adjusted for the effect of Plan Sponsor's Benefit Plan (e.g. tier structure and Co- Payment differentials) on the overall yield of market share rebates. 2.5.4 Revenue Yields: Plan Sponsor acknowledges that its yield of Manufacturer Derived Revenue is dependent on certain factors including, without limitation, the following: (i) Plan Sponsor's adherence to Envision's Formulary; (ii) the structure of Plan Sponsor's Benefit Plan; and (iii) the drug utilization patterns of Covered Individuals. Notwithstanding anything herein to the contrary, Envision shall not be liable to Plan Sponsor for earned Manufacturer Derived Revenue yields that are lower than expected if (i) Plan Sponsor's Benefit Plan does not adhere to the Envision Formulary; (ii) Plan Sponsor makes a material change to the Benefit Plan; (iii) Plan Sponsor's Benefit Plan does not meet the conditions for rebates of pharmaceutical manufacturer contracts; (iv) there is a significant change in the drug utilization patterns of the Covered Individuals; (v) there is a loss of rebates due to manufacturer drug patent expirations, manufacturer bankruptcy, or removal of a drug from the market; (vi) there are changes in \PBMSA (frm02181 I n)(r3) ©Envision Pharmaceutical Services, Inc. Page 6 of 20 pharmaceutical manufacturer rebate contracting terms or policies; (vii) Plan Sponsor fails to meet and earn market share rebate levels; or (viii) there is any governmental regulation, ruling, or guidance that impacts Envision's ability to maintain current earned Manufacturer Derived Revenue yields. 2.5.5 Sole Source: Plan Sponsor represents and warrants to Envision that, at no time during or after the term of this Agreement, is Plan Sponsor receiving Manufacturer Derived Revenue other than through Envision, either directly or indirectly (through a Group Purchasing Organization, drug wholesaler, or otherwise) for Claims processed by Envision under this Agreement. Plan Sponsor agrees that it shall not, at any time, submit Claims which have been transmitted to Envision to another pharmacy benefit manager or carrier for the collection of Manufacturer Derived Revenue or create a situation which would cause a manufacturer to decline payments to Envision. Envision reserves the right to recover from Plan Sponsor, and Plan Sponsor shall refund to Envision, any Manufacturer Derived Revenue advanced to Plan Sponsor by Envision, which is connected with any Claims for which Plan Sponsor received Manufacturer Derived Revenue from any other source or for amounts advanced to Plan Sponsor by Envision which have been withheld by a manufacturer due to breach of these provisions by Plan Sponsor. 2.5.6 Early Termination: If this Agreement is terminated for any reason by Plan Sponsor prior to the end of the Initial Term, Plan Sponsor agrees all unpaid market share rebates shall be forfeited by Plan Sponsor. 2.6 Pharmacy Network: Envision shall arrange for the dispensing of Covered Medications to Covered Individuals pursuant to contracts with a network of Participating Pharmacies. Plan Sponsor understands and agrees that the network of Participating Pharmacies may change from time to time, including the designated mail order provider and/or specialty pharmaceuticals provider. The list of Participating Pharmacies is constantly updated to reflect any changes in the network, including pharmacy addresses and telephone numbers, and is accessible via Envision's website. Plan Sponsor acknowledges that (i) orders exceeding a thirty day supply from a retail pharmacy are not available at all Participating Pharmacies; (ii) Covered Medications shall not be dispensed to Covered Individuals without a prescription order by a Licensed Prescriber; and (iii) the availability of drugs are subject to market conditions and that Envision cannot, and does not, assure the availability of any drug from any Participating Pharmacy. 2.7 Formulary: Envision shall maintain a list of commonly prescribed drugs and supplies ( "Formulary") which has been reviewed by Envision's Pharmacy & Therapeutics Committee (using evidence -based evaluation criteria for safety and efficacy in accordance with URAC standards and, when applicable, CMS guidelines) to be used by Plan Sponsor, Licensed Prescribers, Participating Pharmacies, and Covered Individuals to guide the selection of cost effective Covered Medications. The Formulary may be modified from time to time as new medications and /or new clinical information become available, is constantly updated to reflect any changes, and is accessible via Envision's website. Plan Sponsor acknowledges that adherence to the Formulary is necessary to maximize cost savings and yields in Manufacturer Derived Revenue, however, the determination of which Formulary and non - Formulary drugs are covered, limited, or excluded are governed by Plan Sponsor's Benefit Plan. Any customization \PBMSA (frm02181 tn)(r3) © Envision Pharmaceutical Services, Inc. Page 7 of 20 of the Formulary desired by Plan Sponsor for its use must be approved, in writing, by Envision, and Plan Sponsor acknowledges that such modifications may affect yields in Manufacturer Derived Revenue. 2.8 Generic Substitution: Unless otherwise specified by Plan Sponsor in the Benefit Specification Form, Envision's Claims Adjudication System will permit Participating Pharmacies to dispense a Generic Drug when a prescription is written for a Brand Drug. The decision to substitute a Generic Drug for a Brand Drug and the choice of drug is at the discretion of the dispensing pharmacy and subject to the law of the state in which the pharmacy is located. 2.9 Prior Authorizations 2.9.1 System Generated Prior Authorizations: Envision shall configure the Claims Adjudication System to require prior authorization before Covered Medications are dispensed in certain circumstances which have been specified by Plan Sponsor in the Benefit Specification Form. Examples of system generated prior authorizations include requests for lost or stolen drugs, vacation supplies, certain package sizes, dosage changes, and invalid days supply. System generated prior authorizations are included in the Administrative Fee. 2.9.2 Clinical Prior Authorizations: If Plan Sponsor has elected to receive Clinical Prior Authorization services from Envision, for those Covered Medications and circumstances specified by Plan Sponsor in the Benefit Specification Form, Envision shall contact the prescriber and verify that the requested drug is appropriate for the diagnosis in the judgment of the prescriber. Plan Sponsor will be charged for Clinical Prior Authorizations as specified in Exhibit 1. 2.10 Drug Utilization Review (DUR) 2.10.1 Concurrent DUR: Envision shall program edits into Envision's Claims Adjudication System which are applied to Claims during the adjudication process to identify the following: duplicate prescriptions; over - utilization/refill too soon; under - utilization; drug interactions; pediatric warnings; geriatric warnings; acute /maintenance dosing; formulary compliance; therapeutic duplication; drug inferred health state; drugs exceeding maximum dose; drugs below minimum daily dosage, and other financial and cost limitations which are specified by Plan Sponsor in the Benefit Specification Form. Envision's Claims Adjudication System will provide the dispensing pharmacy with the appropriate messaging to advise the pharmacy of DUR issues. 2.10.2 Retrospective DUR: Envision may review Claims retrospectively, as specified in the Benefit Specification Form, to determine the drug utilization patterns of Covered Individuals, and report the results of retrospective reviews to Plan Sponsor. Retrospective DUR reports may include, but are not limited to: high cost/high utilization of a particular drug class, or therapeutic appropriateness of drug for a particular disease state, and other agreed upon reports. 2.11 Drug Therapy Management (DTM) and other Clinical Programs: Envision provides certain clinical programs such as Drug Therapy Management, Drug Therapy Care Gap \PBMSA (frm02181 ln)(r3) ® Envision Pharmaceutical Services, Inc. Page 8 of 20 Management, and Formulary Adherence. Plan Sponsor may elect to receive some or all of these services at an additional charge by indicating so in the Benefit Specification Form. A description and cost of these programs will be provided upon request. 2.12 Business Associate Agreement: Envision shall execute a Plan Sponsor supplied HIPAA Business Associate Agreement, attached as Exhibit 2. 2.13 Customer Service: Envision shall maintain and operate a customer service center with toll -free customer service numbers and adequately staffed with trained personnel 24 hours a day, 7 days a week, 365 days a year, for the use of Plan Sponsor, Covered Individuals, Licensed Prescribers, and Participating Pharmacies. 2.14 Records: Envision shall maintain such business records as may be required by applicable law or regulation, or as may be necessary to properly document the delivery of, and payment for, Covered Medications and the provision of services by Envision under this Agreement. 2.15 Reports: Envision shall provide Plan Sponsor with access to web -based report generator through which Plan Sponsor may create and download a variety of standard and customized reports. Envision shall provide training for a Plan Sponsor designated individual on the capabilities of Envision's web -based reporting program. Plan Sponsor represents that the designated individual has received training and has knowledge of the HIPAA privacy and security regulations. Any reports that are to be provided by Envision to Plan Sponsor without cost (other than those available from Envision's web -based reporting program) shall be mutually determined prior to the configuration of Plan Sponsor's Benefit Plan in Envision's Claims Adjudication System and shall be specified in the Benefit Specification Form. Plan Sponsor shall be charged a fee for any other reports requested by Plan Sponsor. 2.16 Distribution of Materials: Envision shall bulk ship printed materials produced by Envision as agreed hereunder to Plan Sponsor at no additional charge. If Plan Sponsor requests ID Cards or other printed materials to be mailed directly to Covered Individuals, Plan Sponsor shall reimburse Envision its costs of postage and handling. 2.17 Retiree Drug Subsidy (RDS) Reports: For Plan Sponsors which submit requests for drug subsidies under the Medicare RDS program, Envision shall provide Plan Sponsor with quarterly reports summarizing Claims paid by Plan Sponsor for Medicare Part D drugs dispensed to Covered Individuals who Plan Sponsor has identified on the appropriate form as Medicare eligible retirees. Plan Sponsor acknowledges that any estimated Manufacturer Derived Revenue which has been passed - through to Plan Sponsor will have been deducted from the Claim amounts reported. Unless otherwise specified herein or included under an addendum to this Agreement, Envision shall not be responsible or liable to Plan Sponsor for any RDS services or subsidies. Any assistance requested by Plan Sponsor and /or provided by Envision shall be solely consultative and shall not be deemed to be an acceptance by Envision of any responsibility or liability for the completion or submission of any RDS application or request for subsidies under Medicare Part D. 2.18 Additional Services: Any services to be rendered under this Agreement which are not \PBMSA (frm02181 l n)(r3) © Envision Pharmaceutical Services, Inc. Page 9 of 20 included in the Administrative Fee shall be itemized in the Exhibits and Addendums hereto along with any associated costs or charges. 3. PLAN SPONSOR RESPONSIBILITIES 3.1 Eligibility Data: Plan Sponsor shall provide Envision (either directly or through an authorized third party administrator) with an Eligibility File, at least monthly, in the HIPAA 834 standard transaction code set format, or such other format as has been previously agreed to by Envision. Plan Sponsor shall provide timely eligibility updates (for example, additions, terminations, change of address or personal information, etc.) to ensure accurate determination of the eligibility status of Covered Individuals. Plan Sponsor acknowledges and agrees that (i) Envision provides such eligibility data to the Participating Pharmacies and understands that Envision and Participating Pharmacies will act in reliance upon the accuracy of data received from Plan Sponsor; (ii) Envision will continue to rely on the information provided by Plan Sponsor until Envision receives notice that such information has changed; and (iii) Envision shall not be liable to Plan Sponsor for any Claims or expense resulting from the provision by Plan Sponsor (or its designee) of inaccurate, erroneous, or untimely information. In addition, if Envision must create or update eligibility by manually entering Covered Individual data, Plan Sponsor will be charged a data entry fee as specified in Exhibit 1. In lieu of the Eligibility File, Plan Sponsor may provide eligibility information by updating Envision's Claims Adjudication System directly (except for the initial Eligibility File, which must be provided to Envision during the initial implementation), provided Plan Sponsor continues to meet Envision's conditions and specifications for direct eligibility updates. 3.2 Benefit Plan: Plan Sponsor shall provide Envision with complete information concerning the Benefit Plan. Plan Sponsor understands and agrees that Envision shall rely on the terms and conditions provided by Plan Sponsor on the Benefit Specification Form. The Benefit Specification Form may be changed from time to time by Plan Sponsor; provided, however, that Plan Sponsor changes must be communicated to Envision, in writing, at least thirty (30) days before any such change shall be implemented. The most recent executed Benefit Specification Form shall supersede any prior dated form. Plan Sponsor shall have sole authority to determine the terms of the Benefit Plan and the coverage of benefits thereunder, however, Plan Sponsor understands and agrees that any change in the Benefit Plan (e.g. mandatory generic program, coverage of over - the - counter drugs or medications, etc.) may affect yields in Manufacturer Derived Revenue and average drug pricing, and that Envision will not be liable to Plan Sponsor for a reduction of such yields or increase in pricing which result from any change in the Benefit Plan. 3.3 Payment: Plan Sponsor shall timely pay, or cause its designee to timely pay, Envision for services rendered hereunder in accordance with Section 4 below and Exhibit 1. 3.4 Cooperation: Plan Sponsor shall provide such cooperation and support as reasonably necessary to ensure that Envision can provide all services described hereunder in a timely, responsible, and professional manner. 4. TERMS OF PAYMENT \PBMSA (frm021811n)(r3) © Envision Pharmaceutical Services, Inc. Page 10 of 20 4.1 Pricing and Fees: Envision and Plan Sponsor agree that pricing for PBM Services shall be as set forth in Exhibit 1 hereto, as may be amended in writing from time to time. Plan Sponsor acknowledges that (i) Exhibit 1 has been reviewed and approved by Plan Sponsor; (ii) the fees specified in Exhibit 1 are subject to modification after the Initial Term of this Agreement. 4.2 Payments for Claims: Envision shall provide Plan Sponsor with an invoice of payable Claims twice each month (on or about the 1 and 16 day of the month) and Plan Sponsor shall pay Envision's invoices no later than 12:00 p.m. on the tenth (10 calendar day from receipt of said invoices. Invoices shall be deemed to have been received by Plan Sponsor upon the earliest delivery of the invoice by mail, e-mail, fax, or courier. 4.3 Financial Responsibility: Plan Sponsor understands and agrees that Envision cannot obligate Participating Pharmacies to continue to dispense Covered Medications without receiving payment for past Claims and Envision shall not be obligated to pay Participating Pharmacies if Plan Sponsor fails to timely pay Envision as required under this Agreement. Plan Sponsor understands that, if Plan Sponsor has not paid within seven (7) calendar days of written notice by Envision of a past due Claims invoice, Envision may notify Participating Pharmacies that Plan Sponsor has not timely paid amounts due for Claims. Further, Envision may suspend the provision of services until any unpaid balance is received and, as a condition of continuing to perform services under this Agreement, require Plan Sponsor to deposit with Envision a reasonable amount to ensure the timely payment of future invoices. Plan Sponsor further agrees that Envision shall not be liable for any consequences resulting from the untimely payment of Participating Pharmacies, including, without limitation, failure to meet any applicable prompt payment laws, due to the failure of Plan Sponsor to timely pay Envision as required under this Agreement. Notwithstanding anything herein to the contrary, Plan Sponsor shall be and remain responsible for the payment of all invoices for Covered Medications dispensed to Covered Individuals, along with any associated Co- Payments not timely paid by Covered Individuals, and dispensing fees and taxes. 4.4 Payment of Administrative Fee: Beginning with the first month under this Agreement, Envision shall provide Plan Sponsor with an invoice of Administrative Fees on or about the first day of each month. Administrative Fees are due within seven (7) calendar days of receipt of Envision's invoice. The monthly Administrative Fee is calculated by multiplying the number of Eligible Employees who are active at any time during the prior month (as reflected in Envision's Claims Adjudication System) by the Administrative Fee amount set forth in Exhibit 1 (except for the initial invoice which is based on Plan Sponsor's initial Eligibility File). 4.5 Fees for Additional Services and Miscellaneous Expenses: Plan Sponsor agrees to reimburse Envision for Additional Services and Miscellaneous Expenses (e.g. postage) specified in Exhibit 1 hereunder, within seven (7) calendar days of receipt of an invoice. 4.6 Untimely Payments: Plan Sponsor agrees that, in the event it fails to pay Envision any amounts due hereunder within the time period specified above, it shall pay Envision, in addition to such unpaid amounts, interest at a rate of 1.5% per month on the outstanding balance (or, if \PBMSA (frm021811n)(r3) 0 Envision Pharmaceutical Services, Inc. Page 11 of 20 lower, the rate of interest permitted under the law of Plan Sponsor's state of domicile). 4.7 Retroactive Disenrollment: Retroactive termination or disenrollment of a group, Eligible Employee, or Covered Individual shall not release Plan Sponsor of its obligation to pay Claims incurred, at any time, on behalf of such Covered Individual, or Administrative Fees due to Envision for such Covered Individual during any period for which services were renderable hereunder based on the then current eligibility. 4.8 Financial Audit by Plan Sponsor: Within twelve months after the end of each contract year hereunder, Plan Sponsor, at its sole expense, may audit Envision's records of Claims adjudicated on behalf of Plan Sponsor during the prior contract year. Envision shall make available to Plan Sponsor's auditor, any and all financial records containing Plan Sponsor's information and such other records as reasonably necessary for auditor to confirm that the amounts paid by Plan Sponsor are the cost to Envision on the day the Covered Medication was dispensed. Plan Sponsor agrees to not use as its auditors, any person or entity which, in the sole discretion of Envision, is a competitor of Envision, a pharmaceutical manufacturer representative, or any other person or entity which has a conflict of interest with Envision. Plan Sponsor understands that Envision's contracts with pharmaceutical manufacturers, Participating Pharmacies, and other third parties may contain non - disclosure provisions, and hereby agrees to comply with such non - disclosure provisions. Plan Sponsor's auditor shall execute a conflicts of interest disclosure and confidentiality agreement with Envision prior to the audit. Audits shall only be made during normal business hours following thirty (30) days written notice, be conducted without undue interference to Envision's business activity, and in accordance with reasonable audit practices. Plan Sponsor's auditor may inspect Envision's contracts with Participating Pharmacies and pharmaceutical manufacturers at Envision's offices only, and no copies of such contracts may be removed from Envision's offices. Plan Sponsor agrees to disclose the findings and methodologies of a completed audit, and provide Envision with a reasonable period of time to respond to such findings and methodologies, before a demand is made by Plan Sponsor for amounts it believes are due from Envision. 4.9 Financial Audit by Envision: Envision may, at reasonable intervals, request Plan Sponsor to provide records for Envision's inspection which provide support for the information contained in the Eligibility File. If warranted, Envision may, at its own expense, inspect and audit, or cause to be inspected and audited, once annually, the books and records of Plan Sponsor directly relating to the existence and number of Covered Individuals. 5. TERM AND TERMINATION 5.1 Term: The term of this Agreement shall commence on the Effective Date and shall remain in full force and effect for an initial term of three (3) years ( "Initial Term ") unless earlier terminated as provided herein. Upon the expiration of the Initial Term, and each subsequent renewal term, this Agreement shall renew automatically for an additional term of one year; unless, at least ninety (90) days prior to the end of such term, either party hereto notifies the other, in writing, of its intent that the Agreement terminate at the end of the current term. 5.2 Termination: This Agreement may be terminated as follows: \PBMSA (frm02181 In)(r3) © Envision Pharmaceutical Services, Inc. Page 12 of 20 5.2.1 For Cause: By either party hereto in the event the other party breaches any of its material obligations hereunder; provided, however, that the defaulting party shall have thirty (30) days to correct such breach after written notice is given by such non - breaching party specifying the alleged breach; 5.2.2 Insolvency: By either party hereto in the event the other party (i) is adjudicated insolvent, under state and/or federal regulation, or makes an assignment for the benefit of creditors; (ii) files or has filed against it, or has an entry of an order for relief against it, in any voluntary or involuntary proceeding under any bankruptcy, insolvency, reorganization or receivership law, or seeks relief as therein allowed, which filing or order shall not have been vacated within sixty (60) calendar days from the entry thereof; (iii) has a receiver appointed for all or a substantial portion of its property and such appointment shall not be discharged or vacated within sixty (60) calendar days of the date thereof; (iv) is subject to custody, attachment or sequestration by a court of competent jurisdiction that has assumed of all or a significant portion of its property; or (v) ceases to do business or otherwise terminates its business operations, is declared insolvent or seeks protection under any bankruptcy, receivership, trust deed, creditors arrangement or similar proceeding; 5.2.3 Failure to Pay: By Envision, upon reasonable notice, in the event Plan Sponsor fails to pay Envision according to terms of this Agreement. 5.2.4 Termination for Failure to Perform: Within sixty (60) days after the end of first contract year, a representative of Envision will meet with Plan Sponsor to conduct a business review. If, at the conclusion of the business review, Plan Sponsor is reasonably dissatisfied with the performance of Envision under the terms of this Agreement, Plan Sponsor may terminate this Agreement effective no sooner than thirty (30) days, nor later than ninety (90) days from the date of the business review; provided, that Plan Sponsor has not engaged another PBM prior to the business review. 5.3 Notices: All notices required in this Section 5 shall be reasonably specific concerning the cause for termination and shall specify the effective date and time of termination. 5.4 Effect of Termination: Termination of this Agreement for any reason shall not release any party hereto from obligations incurred under this Agreement prior to the date of termination. All services required to be performed under the terms of this Agreement shall be provided through the effective date of termination. Except as otherwise agreed, in writing, no services shall be provided by Envision after the effective date of termination. All payments required to be paid under the terms of this Agreement shall be paid in full. 6. CONFIDENTIAL INFORMATION 6.1 Confidentiality: Except as otherwise stated herein or required by law, neither party hereto shall disclose any information of, or concerning the other party which has either been provided by one party to the other or obtained by a party in connection with this Agreement (including this Agreement and the terms of this Agreement) or related to the services rendered \PBMSA (frm021811 n)(r3) m Envision Pharmaceutical Services, Inc. Page 13 of 20 under this Agreement, all of which information is deemed confidential information. All data, information, and knowledge supplied by a party hereto shall be used by the other party exclusively for the purposes of performing this Agreement. Upon termination of this Agreement, each party shall return to the other party, all confidential information provided including, without limitation, all copies and electronic magnetic versions thereof. Notwithstanding any of the foregoing to the contrary, "confidential information" shall not include any information which was known by a party prior to receiving it from the other party, or that becomes rightfully known to a party from a third party under no obligation to maintain its confidentiality, or that becomes publicly known through no violation of this Agreement. 6.2 Protected Health Information: Plan Sponsor will have access to Protected Health Information (PHI) (as defined by HIPAA) contained in reports provided by Envision or accessed by Plan Sponsor via Envision's website. Plan Sponsor agrees, for itself and its employees, that PHI shall not be used for any impermissible purpose, including, without limitation, the use of PHI for disciplinary or discriminatory purposes, and any user names and passwords assigned to designated individuals shall not be shared with non - designated individuals. 7. INDEMNIFICATION 7.1 Limited Indemnification by Envision: Envision hereby agrees to indemnify, hold harmless, and defend Plan Sponsor and its employees, officers, directors, trustees, shareholders, and agents from and against any and all liabilities, actions, claims, damages, costs, losses and expenses (including without limitation, reasonable costs of investigation and attorneys' fees) caused by or arising out of (i) any act or omission by Envision in the performance of the services provided under this Agreement; or (ii) any breach of any representation, covenant, or other agreement of Envision contained in this Agreement. 7.2 Limited Indemnification by Plan Sponsor: Plan Sponsor hereby agrees to indemnify, hold harmless, and defend Envision, the Participating Pharmacies, and their respective employees, officers, directors, shareholders, affiliates and agents from and against any and all liabilities, actions, claims, damages, costs, losses and expenses (including without limitation, reasonable costs of investigation and attorneys' fees) caused by or arising out of (i) the provision by Plan Sponsor or its designee of erroneous information; or (ii) Plan Sponsor's failure to comply with state or federal law in the operation of its Benefit Plan. 7.3 Limitation of Liability: Except for the indemnification obligations set forth above, each party's liability to the other hereunder will in no event exceed the actual proximate losses or damages caused by breach of this Agreement. In no event will either party or any of their respective affiliates, directors, employees or agents, be liable for any indirect, special, incidental, consequential, exemplary or punitive damages, or any damages for lost profits relating to a relationship with a third party, however caused or arising, whether or not they have been informed of the possibility of their occurrence. 7.4 Survival: This Section 7 shall survive the expiration or termination of this Agreement for any reason. \PBMSA (frm0218I In)(r3) ® Envision Pharmaceutical Services, Inc. Page 14 of 20 fi 8. RELATIONSHIP WITH CONTRACTED PHARMACIES Plan Sponsor acknowledges that Envision is neither an operator of pharmacies nor exercises control over the professional judgment used by any pharmacist when dispensing drugs or medical supplies to Covered Individuals. Nothing in this Agreement shall be construed to usurp the dispensing pharmacist's professional judgment with respect to the dispensing or refusal to dispense any drugs or medical supplies to Covered Individuals. Plan Sponsor releases Envision from any liability arising from the dispensing of drugs or medical supplies by any pharmacy to Plan Sponsor's Covered Individuals. 9. GENERAL 9.1 Legal Status: Nothing in this Agreement shall be deemed to confer upon Envision (i) the status of fiduciary as defined in either the Employee Retirement Income Security Act of 1974, as amended ( "ERISA "), or the Americans with Disabilities Act, as amended ( "ADA "), except to extent, in the performance of its obligations under this Agreement, Envision exercises actual discretionary control over the property of Plan Sponsor; (ii) any liability for the terms or validity of the Benefit Plan; or (iii) any liability for disclosing or reporting information regarding the Benefit Plan or changes in the Benefit Plan (e.g., calculation of Co- Payments, deductibles; or creditable coverage) as may be required by law to be disclosed to governmental agencies or Covered Individuals. 9.2 Independent Contractors: Envision and Plan Sponsor are independent contractors. Neither party hereto, nor any of its respective employees, shall be construed to be the employee or representative of the other, or liable for any acts of omission or commission on the part of the other. 9.3 Exclusivity: During the term of this Agreement, Envision shall be the sole provider of PBM Services to Plan Sponsor, including, without limitation, the exclusive contractor of rebates with pharmaceutical manufacturers for Plan Sponsor's Claims. 9.4 Assignment: Except as follows, this Agreement may not be assigned by either party hereto without the express written consent of the other party, which may not be unreasonably withheld. Envision may assign this Agreement to a commonly controlled subsidiary or affiliate company, or a controlling parent company; provided, however, that should this Agreement be assigned by Envision as permitted, Plan Sponsor may opt to terminate this Agreement. 9.5 Binding Effect: This Agreement and the exhibits and schedules attached hereto shall be binding upon and inure to the benefit of the respective parties hereto and their respective successors and assigns. Plan Sponsor's obligations hereunder are intended to inure to the benefit of and be enforceable by the Participating Pharmacies. 9.6 Intellectual Property: Each party hereto reserves the right to and control of the use of their names, symbols, trademarks or service marks presently existing or hereafter established, and no party may use any names, symbols, trademarks or service marks of any other party without the owner's written consent. \PBMSA (frm021811n)(r3) CO Envision Pharmaceutical Services, Inc. Page 15 of 20 9.7 Waiver: Neither the failure nor any delay on the part of either party hereto to exercise any right, power or privilege hereunder will operate as a waiver thereof, nor will any single or partial exercise of any such right, power or privilege preclude any other or further exercise thereof, or the exercise of any other right, power or privilege. In the event any party hereto should waive any breach of any provision of this Agreement, it will not be deemed or construed as a waiver of any other breach of the same or different provision. 9.8 Severability: The invalidity or non - enforceability of any term or provision of this Agreement shall in no way affect the validity or enforceability of any other term or provision. 9.9 Change in Law or Market Conditions: If any law, regulation, or market condition (e.g. an applicable industry standard reference on which pricing hereunder is based, changes the methodology for determining drug price in a way that materially changes the pricing or economics of the Agreement), either now existing or subsequently occurring, affects the ability of either party hereto to carry out any obligation hereunder (a "Material Change "), Envision and Plan Sponsor shall renegotiate the affected terms of this Agreement, in good faith, to preserve, to the extent possible, the relative positions of the parties that existed prior to such Material Change. Either party may notify the other party of a Material Change. If a successful renegotiation is not achieved within thirty (30) days after notification of a Material Change, any failure of the affected party to meet its obligations hereunder due to the effect of such Material Change shall not be deemed to be a breach of this Agreement; however, if continuation of the Agreement without modification is in violation of any law or regulation, or makes it impracticable for the affected party to meet its obligations hereunder, either party may terminate this Agreement with sixty (60) days prior written notice. 9.10 Headings: The section or paragraph headings contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement. 9.11 Entire Agreement: This Agreement shall constitute the entire agreement between Envision and Plan Sponsor with respect to the subject matter herein and supersede any prior understanding or agreements of any kind preceding this Agreement with respect to such subject matter. Any modification or amendment to this Agreement, or additional obligation assumed by Envision or Plan Sponsor in connection with this Agreement, shall be binding only if evidenced in a writing signed by both parties hereto. No term or provision of this Agreement shall establish a precedent for any term or provision in any other agreement. 9.12 Acceptance of Offer: Notwithstanding anything herein to the contrary, this Agreement shall not be binding upon the parties hereto unless and until the Agreement is signed and executed by a duly authorized officer of each of the parties. The signing of this Agreement by Plan Sponsor constitutes an offer only until the same has been accepted by Envision. 9.13 Dispute Resolution: Any controversy, claim or dispute arising out of or relating to this Agreement or the breach thereof, whether in tort or in contract, in law or in equity, shall be exclusively settled by private binding arbitration in accordance with the commercial rules of the American Arbitration Association (AAA) then in effect. There shall be three arbitrators: One \PBMSA (frm021811n)(r3) © Envision Pharmaceutical Services, Inc. Page 16 of 20 each selected by each party, and the third selected by the initial two arbitrators from a list of arbitrators provided by the AAA, who will serve as the chairperson. The arbitrator selected by each party need not be associated with the AAA, however, such arbitrator shall have received formal training and be experienced as an arbitrator. The decision of the arbitrators shall be final and binding, and judgment on the award rendered by the arbitrators may be entered in any court having jurisdiction thereof. All such arbitration proceedings shall be conducted on a confidential basis. The arbitration shall be conducted in Cleveland, Ohio. 9.14 Choice of Law: This Agreement shall be construed, interpreted, and governed according to the laws of the State of Ohio without regard to its conflict of laws and rules, except to the extent such laws are preempted by applicable Federal law. 9.15 Force Majeure: Neither Envision nor Plan Sponsor will be deemed to have breached this Agreement or be held liable for any failure or delay in the performance of all or any portion of its obligations under this Agreement if prevented from doing so by a cause or causes beyond its control. Without limiting the generality of the foregoing, such causes include acts of God or the public enemy, fires, floods, storms, earthquakes, riots, strikes, boycotts, lock -outs, acts of terrorism, acts of war or war - operations, restraints of government, power or communications line failure or other circumstances beyond such party's control, or by reason of the judgment, ruling or order of any court or agency of competent jurisdiction, or change of law or regulation (or change in the interpretation thereof) subsequent to the execution of this Agreement. The party claiming force majeure must provide the other party with reasonable written notice. However, as soon as cause preventing performance ceases, the party affected thereby shall fulfill its obligations as set forth under this Agreement. This Section 9.14 shall not be considered to be a waiver of any continuing obligations under this Agreement, including, without limitation, the obligation to make payments. 9.16 Notices: All notices required under this Agreement shall be in writing, signed by the party giving notice and shall be deemed sufficiently given immediately after being delivered by hand, or by traceable overnight delivery service, or by registered or certified mail (return receipt requested), to the other party at the address set forth below or at such address as has been given by proper notice. 9.17 Representations: Each signatory named below represents and warrants that he or she (i) has read this Agreement, Exhibits, and other attachments, and fully understands and agrees to the content therein; (ii) has entered into this Agreement voluntarily; (iii) has not transferred or assigned or otherwise conveyed in any manner or form any of the rights, obligations or claims which are the subject matter of this Agreement; and (iv) has the full power and authority to execute this Agreement. Envision further represents that there are no organizational arrangements that could potentially create a conflict of interest that affects clinical or financial decisions. Plan Sponsor further represents and warrants that (i) the entering into this Agreement for PBM Services is not in violation of any other agreement; (ii) has no undisclosed conflicts of interest; and (iii) it maintains, and shall continue to maintain throughout the term of this Agreement, any and all licenses, governmental authority, or other authorization required to operate an entity of its type. \PBMSA (frm021811 n)(r3) © Envision Pharmaceutical Services, Inc. Page 17 of 20 9.18 Consultant: Envision understands that Plan Sponsor utilizes the services of a consultant known as Crowne Consulting Group ( "Consultant ") to provide consulting, contract management, audit costs, and other consultant services on Plan Sponsor's behalf. Envision further understands that Plan Sponsor has negotiated with Consultant to pay a fee to Consultant (the "Consultant Fee ") and has requested Envision to invoice Plan Sponsor for this fee and remit same to Consultant. Envision agrees to invoice the Consultant Fee to Plan Sponsor on a monthly basis and, upon payment by Plan Sponsor, remit the Consultant Fee to Consultant. Plan Sponsor acknowledges and agrees that the Consultant Fee is not included in the Administrative Fee due to Envision under this Agreement and no portion of the Consultant Fee will be retained by Envision. The Consultant Fee is $1.00 per Paid Claim. IN WITNESS WHEREOF, Envision and Plan Sponsor have executed this Agreement as of the Effective Date above. For ENVISION: For PLAN SPONSOR: By: By: Barry 1. Katz, R.Ph., COO Print Name & Title Address: Address: Envision Pharmaceutical Services, Inc. 2181 East Aurora Road Twinsburg, OH 44087 PH: 330 - 405 -8080 PH: FX: 330 - 405 -8081 FX: E -MAIL: FEIN: \PBMSA (frm02181 ln)(r3) 0 Envision Pharmaceutical Services, Inc. Page 18 of 20 EXHIBIT 1 FEES Administrative Fee (Payable to Envision; not including fees payable to Plan Sponsor's TPAs, consultants, or brokers, if any) For Contract Year 1: $4.00 Per Eligible Employee Per Month (PEPM) For Contract Year 2: $4.00 PEPM For Contract Year 3: $4.00 PEPM Fees for Additional Services and Miscellaneous Expenses 1. Replacement by Envision of lost or stolen ID Cards $1.00 per card plus cost of postage 2. Manual Claims Processing and Direct Member Reimbursements (DMRs) $1.50 per Claim processed 3. Manually create or update the Eligibility File $1.00 per Covered Individual data entry 4. Ad Hoc Computer or Report Programming $150.00 per hour 5. Clinical Prior Authorizations $8.00 per authorization \PBMSA (frm02181 ln)(r3) © Envision Pharmaceutical Services, Inc. Page 19 of 20 EXHIBIT 2 BUSINESS ASSOCIATE AGREEMENT (To be supplied by Plan Sponsor) \PBMSA (frm021811n)(r3) © Envision Pharmaceutical Services, Inc. Page 20 of 20