Commonwealth Health Insurance Connector Authority

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					Commonwealth Health Insurance Connector Authority
         100 City Hall Plaza, 6th Floor
              Boston, MA 02108


   REQUEST FOR PROPOSALS
                       TO

         PROVIDE HEALTH INSURANCE
                   FOR


     COMMONWEALTH CARE
              December 19, 2008
                             TABLE OF CONTENTS
SECTION I - GENERAL INFORMATION ...................................................................................4

        1.1      Overview of the Authority and Commonwealth Care .............................................4
        1.2      Eligible Proposers ....................................................................................................4
        1.3      Defined Terms .........................................................................................................5
        1.4      Purpose of Request for Proposals ............................................................................5
        1.5      Issuing Officer .........................................................................................................6
        1.6      Term of Contract ......................................................................................................6

SECTION II - SCOPE OF SERVICES REQUESTED ...................................................................7

        2.1      Overview ..................................................................................................................7

SECTION III - INFORMATION REQUIRED FROM PROPOSERS ...........................................8

        3.1      Proposal Format and Submission Date ....................................................................8
        3.2      Background ..............................................................................................................9
        3.3      Demonstrate Compliance with Commonwealth Care Regulations .........................9
        3.4      Financial Terms .....................................................................................................10
        3.5      Miscellaneous Provisions.......................................................................................11

SECTION IV - SUMMARY OF PROGRAM DESIGN ...............................................................13

        4.1      Summary of Program Design.................................................................................13

SECTION V - GENERAL CONDITIONS ...................................................................................21

        5.1      Additional Information ..........................................................................................21
        5.2      Questions................................................................................................................21
        5.3      Authority Rights.....................................................................................................21
        5.4      Reimbursement ......................................................................................................21
        5.5      Negotiations of Proposal and Contract ..................................................................21
        5.6      Applicable Laws ....................................................................................................22
        5.7      Public Records Request .........................................................................................22
        5.8      Ownership of Data .................................................................................................22
        5.9      Authority Liability .................................................................................................22

SECTION VI - CONTRACTING PROCESS ...............................................................................22

        6.1      Timeline .................................................................................................................22




                                                                  2
                                                  EXHIBITS
Exhibit A:   Form of Contract ................................................................................................. A-1
Exhibit B:   Capitation Rate Discount Bid Form .....................................................................B-1
Exhibit C:   Capitation Rate Adjustment Methodology ..........................................................C-1
Exhibit D:   Question Format .................................................................................................. D-1




                                                            3
                SECTION I - GENERAL INFORMATION

1.1   Overview of the Authority and Commonwealth Care
      The Commonwealth Health Insurance Connector Authority (the ―Authority‖) is a body
      politic and corporate and a public instrumentality of The Commonwealth of
      Massachusetts (the ―Commonwealth‖). The Authority is established pursuant to Chapter
      176Q of the Massachusetts General Laws (as amended from time to time, ―c. 176Q‖ or
      the ―Authority Governing Act‖), as added by Section 101 of Chapter 58 of the Acts of
      2006 (―c. 58‖ or the ―Health Care Reform Act of 2006‖). The purpose of the Authority is
      to facilitate the availability, choice and adoption of private health insurance plans to
      eligible individuals and groups as described in the Authority Governing Act.

      Amendments to the Authority Governing Act or the Health Care Reform Act of 2006
      may be enacted in the future. The contracts to be entered into pursuant to this RFP will
      require compliance with all such Acts, as well as any regulations and bulletins, as
      amended from time to time (―Commonwealth Care Regulations‖), as well as all other
      applicable laws and regulations.

      Commonwealth Care was established effective October 1, 2006, pursuant to c. 118H of
      the Massachusetts General Laws (―c. 118H‖), as enacted by Section 45 of the Health
      Care Reform Act of 2006. Commonwealth Care is administered by the board of directors
      of the Authority in consultation with the Commonwealth’s Office of Medicaid and the
      Health Safety Net Office established pursuant to the Health Care Reform Act of 2006.

      Commonwealth Care provides subsidy payments funded by the Commonwealth to assist
      eligible individuals in purchasing health insurance. The key criteria for eligibility in
      Commonwealth Care are income level and lack of access to other forms of subsidized
      insurance. An enrollee must have an income of no more than 300% of the Federal
      Poverty Level (FPL) to be eligible for enrollment in the plan. As of July 2008,
      Commonwealth Care had enrolled nearly 175,000 members. Members are enrolled in
      three different plan types (PT I, II and III) based on income level.




1.2   Eligible Proposers
      Section 123 of the Health Care Reform Act of 2006 provided, in effect, that only four
      health insurance providers referred to as the Medicaid Managed Care Organizations
      (MMCOs) were eligible to provide health insurance under Commonwealth Care and
      receive the premium subsidy payments until June, 2009, provided that certain
      Commonwealth Care enrollment targets were met by specified interim dates.




                                              4
      Beginning Fiscal Year 2010 (July 1, 2009-June 30, 2010), the Authority may enter into
      contracts with health insurance providers other than the initial four MMCOs. Therefore,
      this Request for Proposals (RFP) is open to all qualified and experienced health insurance
      organizations interested in providing health services to individuals eligible for enrollment
      in Commonwealth Care.



1.3   Defined Terms
      Capitalized terms not defined herein shall have the meanings assigned in the Form of
      Contract attached as Exhibit A hereto unless the context clearly indicates otherwise.



1.4   Purpose of Request for Proposals
      This RFP invites health insurance organizations to formally express interest in providing
      health insurance plans to Commonwealth Care members as Contracted Health Insurance
      Plans (Health Plans) commencing as of July 1, 2009. The Authority seeks only
      organizations firmly committed to providing the highest quality of service delivery to
      Eligible Individuals.

      The Authority anticipates that all Health Plans (1) submitting responses which
      demonstrate the ability to satisfy the criteria set forth in the Commonwealth Care
      Regulations (Section 3.3 below), and to meet the requirements for a Contractor in
      Articles II and V. of the Form of Contract, attached hereto as Exhibit A; (2) agreeing to
      execute, deliver and perform in accordance with the Form of Contract attached hereto as
      Exhibit A; and (3) agreeing to an Actuarially Sound Capitation Rate for Contract Year
      2010, commencing July 1, 2009 and ending June 30, 2010, as described in such Form of
      Contract in Article IV and which are deemed to be in the best interest of the
      Commonwealth, will be accepted for participation in Commonwealth Care.

      Notwithstanding the foregoing, the Authority reserves the right to reject a proposal, or to
      accept any proposal or portion thereof. The Authority reserves the right, at any time prior
      to the execution of a Contract, for any reason and without penalty, to amend this RFP
      upon notice to responders. Interested parties are urged to check regularly on Comm-
      PASS where any amendments or revisions will be posted prior to the date for response.
      The Authority reserves the right, at any time prior to the execution of a Contract, for any
      reason and without penalty, to cancel this procurement and reject all responses.
      Cancellation may result from, but may not be limited to, elimination of available funding,
      significant change of circumstances requiring the procurement, or lack of necessity for
      the services.




                                               5
1.5   Issuing Officer
      The Authority is issuing this RFP. The Issuing Officer and the individuals listed below
      are the sole points of contact regarding this RFP. No contact with any other Authority
      Employee and/or Board Member with respect to this RFP is permitted, from the date of
      release of this RFP until a contract is awarded, unless otherwise directed by the Issuing
      Officer.

      The Issuing Officer for this RFP is:

             Patrick Holland, Chief Financial Officer
             Commonwealth Health Insurance Connector Authority
             100 City Hall Plaza, 6th Floor
             Boston, MA 02108
             617-933-3058
             Email: patrick.holland@state.ma.us

      Proposers may also contact:

             Debra Hayes
             Commonwealth Health Insurance Connector Authority
             100 City Hall Plaza, 6th Floor
             Boston, MA 02108
             617-933-3056
             Email: debra.hayes@state.ma.us

      Legal questions may be directed to:

             Jamie Katz, General Counsel
             Commonwealth Health Insurance Connector Authority
             100 City Hall Plaza, 6th Floor
             Boston, MA 02108
             617-933-3062
             Email: Jamie.Katz@state.ma.us

1.6   Term of Contract
      The term of the contract resulting from this RFP shall be for one year, commencing July
      1, 2009 and ending June 30, 2010 (―Contract Year 2010‖). The contract will not be
      subject to renewal automatically or at the sole option of either party. The Authority may
      negotiate one or more renewals of some or all of the contracts or issue an RFP on such
      terms and conditions as may be negotiated between the parties for any such renewal
      period(s). The Authority anticipates that such contract renewal negotiations will
      commence no later than March 1, 2010, with all Health Plans.




                                               6
         SECTION II - SCOPE OF SERVICES REQUESTED
2.1   Overview
      Any health insurance provider that becomes a Commonwealth Care Health Plan shall
      provide the services specified in the Form of Contract attached hereto as Exhibit A. Any
      modifications to such Form of Contract a proposer deems necessary must be proposed for
      the Authority’s consideration and must be made by the time the proposal is submitted on
      February 18, 2009, as part of its response to this RFP.

      The Authority may modify the Form of Contract as it deems necessary prior to the
      execution of the Contract. Changes to the Contract after its execution by the parties shall
      be made only by written amendment.

      The Authority reserves the right to amend any contract resulting from this RFP to
      implement new initiatives or modify initiatives related to: (1) changes in Commonwealth
      Care Regulations, C. 58, C. 176Q, C. 118H or other state law; or (2) changes in federal
      law, regulation, or policy or the federal Medicaid demonstration waiver for
      Massachusetts, which may affect, in whole or in part federal financial participation in
      Commonwealth Care.

      Proposers are encouraged to include in their proposals any other activities or
      services they see as necessary or beneficial to the successful operation of
      Commonwealth Care.




                                               7
SECTION III - INFORMATION REQUIRED FROM PROPOSERS

3.1   Requirements and Proposal Submission Date
      3.1.1. Requesting Required Data

      In order to prepare a proposal that meets the requirements of this RFP, interested parties
      will need to review data regarding Commonwealth Care. Because of the nature and size
      of this data file, it is not being posted with this RFP, but will made available on request.
      Health Plans that are seriously considering submitting a response should contact Kathy
      Hogan at connector.rfr.questions@state.ma.us to obtain data. Information will be sent
      immediately upon request via Federal Express. Interested parties are urged to make this
      request sufficiently in advance of the proposal submission date in order to conduct
      required review and analysis.

      3.1.2   Required Notice of Interest

      Interested parties must provide the Authority with a notice of their interest in submitting
      a proposal by February 2, 2009. This notice will be non-binding. The notice should be in
      the form of a letter submitted electronically to Debra Hayes, at
      connector.rfr.questions@state.ma.us stating the name of the interested entity and contact
      information for a person at the entity who will be available to receive communications
      regarding this RFP. Failure to submit a notice by the specified date will prevent
      consideration of a final proposal.

      3.1.3   Proposal Preparation Requirements and Submission Deadline

      Proposals should be prepared in as concise a manner as possible, delineating the
      Proposer’s capabilities to satisfy the requirements of this RFP.

      A signed transmittal letter, no longer than one page, shall accompany each proposal. The
      transmittal letter shall be executed by an individual authorized to bind the responding
      party and shall, at a minimum, confirm the proposer’s willingness to be bound by, and
      ability to perform fully in accordance with, the terms and conditions of the Form of
      Contract, subject only to such exceptions or modifications as are deemed necessary by
      the proposer and referenced broadly in the transmittal letter and detailed in the body of
      the response or an attachment thereto. The transmittal letter shall include a statement to
      the effect that the proposer has not colluded with any other eligible proposer in the
      preparation of its response, including without limitation, in bidding the Capitation Rate
      Discount(s) included in Exhibit B. The letter must also provide the name, title, address,
      telephone and fax numbers of an individual who will be available to respond to requests
      for additional information, if necessary.




                                               8
      One (1) copy of the written proposal and one (1) electronic copy must be received at the
      Commonwealth Health Insurance Connector Authority, 100 City Hall Plaza, 6th Floor,
      Boston, MA 02108, Attention: Patrick Holland, Chief Financial Officer, no later than
      3:00 p.m. (Eastern Standard Time) on Wednesday, February 18, 2009. The Capitation
      Rate Bid Form in the form of Exhibit B shall be submitted separately via overnight mail
      on a CD or via email (steve.schramm@schrammraleigh.com) and must be received by
      Steve Schramm at schramm-raleigh Health Strategy, 7740 East Gelding Street, Suite #2,
      Scottsdale, AZ 85260 no later than 1:00 p.m. (Mountain Standard Time) on Wednesday,
      February 18, 2009. Proposals received after these deadlines will not be considered nor
      will telefaxed submissions be considered whenever received.

3.2   Proposal Content: Background
      In your proposal, please provide an overview of your organization, including information
      on size, organizational structure, location(s), ownership and affiliations, and years of
      experience in providing health insurance. Please outline your organization’s experience
      in providing health insurance plans for MassHealth, Medicaid, Medicare or other
      commercial sources, including approximate numbers of enrollees or members and dollar
      values of premiums or reimbursement received.

      Please describe your organization’s systems and infrastructure that will be used in
      providing services for Commonwealth Care, including, and without limitation:

      3.2.1   Who in your organization will serve as the Commonwealth Care Contract
              Manager? Please include the names and backgrounds of key individuals with key
              areas of responsibility.

      3.2.2   List all administrative subcontractors you anticipate would be involved in
              performing the services contemplated in this RFP. The scope of services
              provided by such subcontractor(s) must be clearly delineated.

              In the event your firm subcontracts with a vendor to provide behavioral health
              services to your enrollees, please describe the level of oversight you employ with
              such vendor. In addition, please provide evidence of collaboration between your
              firm and such behavioral health vendor.

      3.2.3   Please outline any recent or pending changes in your firm’s organization,
              corporate structure or location of facilities.


3.3   Demonstrate Compliance with Commonwealth Care Regulations and
      other Requirements
      The principal portion of the responder’s proposal shall demonstrate compliance with the
      regulations governing Commonwealth Care Health Plans, 956 CMR 2.00, (available at
      www.maheathconnector.org,) specially the following:



                                               9
      3.3.1   956 CMR 2.06(b)(1) - - describe proposed Network design; include a list of those
              providers that have executed contracts to participate in Commonwealth Care and
              those providers in which an executed contract is expected;

      3.3.2   956 CMR 2.06(b)(2) - - describe proposed Reimbursement of Providers by
              category or in such other level of detail as may be feasible;

      3.3.3   956 CMR 2.06(b)(3) - - describe utilization management capabilities;

      3.3.4   956 CMR 2.06(c)(1) - - describe marketing and outreach plans;

      3.3.5   956 CMR 2.06(d)(1) - - describe operations and governance practices, including
              assertion of compliance with, or gap analysis with compliance schedule for,
              Commonwealth Division of Insurance, NAIC and/or NCQA standards;

      3.3.6   956 CMR 2.06(d)(2) - - demonstrate compliance with Commonwealth Division of
              Insurance standards of solvency or provide gap analysis with schedule for
              compliance;

      3.3.7   956 CMR 2.06(d)(3) - - demonstrate compliance with NCQA Commercial
              customer service standards or NCQA Medicaid customer service standards or
              provide gap analysis with schedule for compliance; and

      3.3.8   956 CMR 2.06(e)(1) - - demonstrate compliance with cited standards for quality
              management and quality improvement or provide gap analysis with schedule for
              compliance.

      3.3.9   956 CMR 2.06(e)(2) - - demonstrate compliance with standards for patient
              protection set forth in 105 CMR 128.000, or provide gap analysis with schedule
              for compliance.

      3.3.10 956 CMR 2.06(e)(3) - - demonstrate compliance with stated standards for non-
             discrimination.

      3.3.11 Section 5.2 of the Form of Contract—demonstrate compliance with stated
             standards regarding HIPAA and data security.

      3.3.12 Section 5.3.B of the Form of Contract—demonstrate compliance with licensure
             requirements or provide gap analysis with schedule for compliance.




3.4   Financial Terms
      Each proposal must include a complete schedule of proposed Target Medical Capitation
      Rate Discounts, if applicable, by region (as described in Section 4.1.1.) for Contract Year
      2010, as contemplated by the Capitation Rate Bid Form attached as Exhibit B hereto.



                                              10
      The Authority’s Actuaries will verify that proposed Target Medical Capitation Rate
      discounts, are within the Actuarially Sound Capitation Rate Range, as set forth in Article
      IV of the Form of Contract, or request that proposer’s actuary certify that the proposed
      discount to the Target Medical Capitation Rate is below the Actuarially Sound Capitation
      Rate Range and proposer is aware of this fact. The Authority reserves the right to reject a
      proposed Target Medical Capitation Rate discount that is below the Actuarially Sound
      Capitation Rate Range despite the proposer’s actuary’s certification. Target Medical
      Capitation Rates and discounts, if applicable, for Contract Year 2010 shall be attached as
      Appendix D to the Contract and shall be subject to adjustment by the Authority for
      Contract Year 2010 as set forth in said Article IV.

      The Contract will include risk-sharing and stop loss provisions as set forth in Article IV
      of the Form of Contract.

      Monthly Capitation Payments calculated in accordance with the Contract will be paid by
      the Authority, which will be responsible for establishing and collecting Enrollee
      Contributions. Enrollment in Commonwealth Care will be administered by the Authority
      in cooperation with the Office of Medicaid. Enrollment will allow for free choice of
      Health Plans by Eligible Individuals. If auto-assignment applies, the Authority will give
      priority to the lowest cost options. Lock-in periods will apply. See Form of Contract,
      Articles II and III and Appendix D for more detail.

3.5   Miscellaneous Provisions
      3.5.1   Please disclose any material litigation affecting your organization, if any,
              including and without limitation, regarding your activities as a health insurance
              plan.

      3.5.2   Provide a copy of your most recent audited financial statements for the
              Massachusetts company providing the service, or, in the instance of a company
              new to Massachusetts, the parent company.

      3.5.3   Please provide the name of your counsel to be used in negotiating the Contract
              and the name of your actuary to be used in developing your Capitation Rate
              Discount(s). Please specify if you are planning to use in-house counsel or
              actuaries.

      3.5.4   Please provide details of any governmental investigation pending against your
              firm, or any ongoing or open audit or investigation by any regulatory authority or
              agency.

      3.5.5   Please provide a copy or description of your firm’s policy relative to:

              3.5.5.1   Equal employment/diversity/anti-discrimination practices; and

              3.5.5.2   Accommodation for the Americans with Disabilities Act (ADA)




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       3.5.5.3   The provision of employer subsidized health insurance offered to your
                 firm’s employees


3.5.6. The Commonwealth Care program requires participating Health Plans to
       accurately track the application and collection of copayment amounts across
       covered services against an out-of-pocket maximum per enrollee. Please confirm
       your organization’s ability to accurately perform this function and describe, in
       detail, how this function will work within your claims system.

3.5.7. Please submit, via an Access database or SAS, an alphabetical listing, by MRA
       and by Service Area, of your Primary Care Physicians and hospitals, including the
       unique (common) physician identifier, as of February 2009, as referenced in
       Section 4.1.8.B.

3.5.8. Please provide a plan for enhancing benefits for Plan Type I enrollees as
       described below in Section 4.1.8.C.

3.5.9. Please provide a Quality Incentive Plan as described below in Section 4.1.9.




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             SECTION IV- SUMMARY OF PROGRAM DESIGN
4.1      Summary of Program Design
The following highlights specific program attributes for Contract Year 2010. This is not
intended to be a comprehensive list, but represents the items within the Commonwealth Care
program the Authority wants responders to be specifically aware of for this proposal. These
items are reflected, as appropriate, in the Form of Contract or the Capitation Rate Bid Form.


1. Capitation Rate Development

      The Authority has established a fixed per member per month (pmpm) Target Medical
      Capitation Rate for the entire Commonwealth Care population ($369.00 pmpm). The
      Authority used actual Commonwealth Care paid claims experience (see Exhibit G for Claims
      distribution table) through June 30, 2008 and applied appropriate adjustments to determine
      total expected medical costs for Contract Year 2010. The adjustments include, but are not
      limited to, adjusting for claims not reflected in the base data, applying unit price and
      utilization trends, adjusting for demographics/acuity mix changes and updating for Contract
      Year 2009 and Contract Year 2010 copay changes not fully reflected in the paid claims
      experience through June 2008.

      This Target Medical Capitation Rate will be adjusted by geographic, benefit and acuity
      factors based on actual Health Plan enrollment during the rate period (see Exhibit C for
      documentation of this process and the specific adjustment factors and Exhibit D for enrollee
      risk details).

      Each responder must accept the Target Medical Capitation Rate of $369.00 pmpm and the
      adjustment factors set by the Authority. Responders may not bid above the Target Medical
      Capitation Rate; however, the Authority will allow responders to bid a percent discount off
      of the Target Medical Capitation Rate. This discount will be converted into an additional
      factor and will be applied when calculating the Health Plan’s final adjusted medical
      capitation rate as outlined in Exhibit C. Health Plans may bid separate discounts by region
      (e.g., a bid of 2% discount in the Western region with a bid of 3% discount in the Northern
      region is acceptable).

      Those Health Plans that propose the largest discount, resulting in the lowest medical
      capitation rate (prior to the application of adjustment factors set by the Authority), but within
      or below the Actuarially Sound Rate Range, will enjoy specific rewards further outlined in
      4.1.4, 5 and 6 below.




                                                   13
2. Administrative Fee

   In addition to the adjusted medical capitation rate, the Authority will pay incumbent MMCOs
   a fixed $32.00pmpm fee for administration, contingency, profit and risk, plus the potential of
   an incentive payment that could bring the total non-medical revenue to the current $35.00
   pmpm.

   This opportunity for incumbent MMCOs to receive an incentive payment, not to exceed
   $3.00 pmpm, through the care management incentive program is described in #8 below.

   To recognize start-up costs for entering the program, Health Plans new to Commonwealth
   Care will be paid the full fixed $35.00 pmpm administration fee that was paid to incumbent
   MMCOs in the first three years of the program (FY2007-FY2009) for administration,
   contingency, profit and risk, but will not be eligible for any additional incentive payment. In
   future years, new entrants will convert to the same administrative fee structure as
   incumbents.

   The monthly capitation payment paid to Health Plans will be the Health Plan’s final adjusted
   medical capitation rate (as described in 4.1.1. above) plus the administrative fee described
   herein.


3. Major Regional Areas (MRA)

   The Commonwealth Care coverage area is made up of 5 Major Regional Areas which
   contain 38 specific Service Areas (see Exhibit I for detail). Responders may submit
   proposals to provide health insurance in specific regions or state-wide. The Authority will
   not require responders to cover all service areas within a region. However, the Authority
   requires that incumbent MMCOs submit thorough and complete justification to reduce
   service area coverage (i.e. to drop an existing service area in a region for which they submit a
   bid). New Health Plan responders must submit thorough and complete justification to
   exclude more than two service areas in a region in which they submit a bid.


4. Auto Assignment

   In the event a Plan Type I (0 – 100% FPL) enrollee does not select a Health Plan after being
   determined eligible for Commonwealth Care, the Authority will automatically assign such
   enrollee to a Health Plan. Enrollees will be auto assigned to the three (3) lowest bidders in
   each service area according to the regional bids, based on the algorithm below.

   In order to be considered for auto assignment (―Qualifying‖ Bid), a Health Plan must bid a
   discount of at least 2% below the Target Medical Capitation Rate. If no Health Plan bids a
   discount of at least 2%, the auto assignment will be divided equally amongst the Health Plans
   participating in each service area and the Authority reserves the right to stop auto assignment
   at its discretion.



                                               14
   If only one Health Plan in a service area bids a discount of 2% or greater, 100% of the auto
   assignment will accrue to that Health Plan.
   The auto assignment algorithm below will be applied in each service area according to the
   number of Qualifying regional bids by health plans operating in that service area:


          Bidder                Service Area with 2       Service Area with 3
                                Qualifying Bids           Qualifying Bids
          Lowest Bid                                  75%                    70%
          2nd Lowest Bid                              25%                    20%
          3rd Lowest Bid                                                     10%
                     Total %                         100%                  100%


   In the event 2 or more Health Plans have identical lowest bids in a service area, the Authority
   will distribute auto assignment as follow:
       A.      In a service area with 2 Qualifying Bids; if there are 2 identical lowest bids; the 2
               Health Plans will split 100% of the auto assignment 50/50.
       B.      In a service area with 3 Qualifying Bids; if there are 3 identical lowest bids; the
               Health Plans will split 100% of the auto assignment 1/3, 1/3, 1/3.
       C.      In a service area with 3 Qualifying Bids; if there are 2 identical lowest bids those
               Health Plan will split 90% of the auto assignment 50/50 and the 3rd lowest bid
               Health Plan will receive 10% of the auto assignment.
       D.      In a service area with 3 Qualifying Bids; if there is a lowest bid and 2 identical 2nd
               lowest bids, the lowest bid Health Plan will receive 70% of the auto assignment
               and the 2 Health Plans tied for 2nd lowest bid will split 30% of the auto
               assignment 50/50.
       E.      In a service area with 3 Qualifying Bids; if there is a lowest bid, a 2nd lowest bid,
               and 2 identical 3rd lowest bids; the lowest bid Health Plan will receive 70% of the
               auto assignment, the 2nd lowest bid Health Plan will receive 20% of the auto
               assignment and the 2 Health Plans tied for 3rd lowest bid will split 10% of the auto
               assignment 50/50.



5. Aggregate Risk Sharing

   The Authority will offer an aggregate risk sharing program as follows:

      A. Aggregate risk sharing corridors will apply to all Health Plans as follows:
         i.    Aggregate risk sharing corridors of 4% above and below the medical
               capitation revenue (―Health Plan Full Risk Corridor‖)
         ii.   The Authority will share 50% above and below the Health Plan Full Risk
               Corridor



                                                15
          iii.    Health Plan returns to 100% full risk at 50% above and below the medical
                  capitation revenue (closed end risk sharing).

      B. The Health Plan with the lowest bid in each region will have the option to receive an
         enhanced risk sharing program as described below:

          i.      The Health Plan Full Risk Corridor for each MRA may be reduced at the
                  Health Plan’s discretion prior to the start of Contract Year 2010 if the Health
                  Plan is the lowest bidder in that MRA.
          ii.     The Authority will not share risk at the regional level; however, the Health
                  Plan’s enhanced Full Risk Corridor will be the enrollment weighted average
                  of its full risk corridor by MRA (based on actual member month distribution
                  at the end of Contract Year 2010).
                    a. If the discount percentage for a given MRA is between 3.0% and 3.99%,
                         the Health Plan full risk corridor can be lowered to 3% for that MRA.
                    b. If the discount percentage is 4% or greater, the Health Plan Full Risk
                         Corridor can be lowered to 2% for that MRA
                    c. The aggregate risk-sharing corridor for the Health Plan will be the
                         weighted average risk share threshold based on their enrollment by
                         region (e.g. if 50% of an Health Plan’s enrollment is at the 2% threshold,
                         and 50% is at 4% threshold, the overall aggregate risk sharing for the
                         Health Plan will be 3%.)



      C. Health Plans with low enrollment can opt, prior to the start of Contract Year 2010, to
         receive enhanced risk sharing

          i.      For Health Plans with an average total enrollment of less than 2,000 enrollees
                  statewide, the state will share 50% risk above and below 1% of capitation
                  revenue. (Averages will be defined as the actual Health Plan enrollment as of
                  the 6th month of actual enrollment).
          ii.     For Health Plans with an average total enrollment of less than 4,000 enrollees
                  statewide, the state will share 50% risk above and below 1.5% of capitation
                  revenue. (Averages will be defined as the actual Health Plan enrollment as of
                  the 6th month of actual enrollment).

6. Specific Stop Loss

   The Authority will offer a specific outlier stop-loss pool. Health Plans will fund the pool at
   1.25% of the capitation rate and the pool will pay for 75% of the claims above a $150,000
   threshold. See Article IV in the Form of Contract for further details.




                                               16
7. Enrollee Contribution Cost Differential

  Enrollee contributions are determined by the income level of the member and the capitation
  rate paid to the health plan they are enrolled in. The highest bid discount will set the floor for
  contribution amounts.

  Enrollees in Plan Types IIA, IIB and III will pay the Base Premium plus a differential amount
  based on the capitation amount paid to the Health Plan for those enrollees who select a Health
  Plan that is not the lowest bidder.

  Enrollee contribution differentials will be prorated based on income in 50% buckets (i.e.
  higher income groups will face a higher differential for choosing a higher priced plan than
  lower income enrollees face for choosing that same higher priced plan)

  Total enrollee differentials will be set so that the total differential faced by a Health Plan’s
  members is reflective of the Health Plan’s relative bid position (i.e. if Health Plan’s bid is $10
  dollars higher, average contribution differential faced by enrollees will be $10).


8. Plan Type I Incentives

       A.      The auto-enrollment look back period determines the length of time an enrollee
               has to be disenrolled from Commonwealth Care before they are put back into the
               pool for auto-enrollment. If an enrollee is out of the program for a duration that is
               shorter than this period, they are assigned back to the Health Plan they were
               previously enrolled with. Shorter auto-enrollment look back periods increase the
               impact of the auto-enrollment algorithm. The auto-enrollment look back period
               will be 3 months for Contract Year 2010 (it was 12 months in Contract Year
               2009).

       B.      An active open enrollment will be conducted for enrollees in all MRAs. Prior to
               open enrollment for Contract Year 2010, the Authority will evaluate Plan Type I
               enrollment as of March 1, 2009, based on the criteria outlined below:

                       i. Enrollees who meet the following criteria will be assigned to a Health
                          Plan, effective July 1, 2009:
                             1. Enrollee was enrolled in Commonwealth Care as of March 1,
                                  2009, and
                             2. Enrollee has not responded to open enrollment materials, and
                             3. Enrollee’s current Health Plan (as of March 1, 2009) did not
                                  bid a discount of at least 1% off of the Target Medical
                                  Capitation Rate, and
                             4. Enrollee is not part of a ―High Risk‖ population, as defined by
                                  DxCG




                                                 17
            ii. Enrollees who meet the following criteria will not be assigned to a
                Health Plan and will remain in their current Health Plan, effective July
                1, 2009:
                    1. Enrollee responds to open enrollment materials, or
                    2. Enrollee enrolled after March 1, 2009, or
                    3. Enrollee is currently enrolled with a Health Plan that bid a
                       discount of at least 1% off the Target Medical Capitation Rate,
                       or
                    4. Enrollee is part of a ―High Risk‖ population as defined by
                       DxCG

           iii. The Authority will compare the PCP selections of enrollees that meet
                the criteria outlined in 8.B.ii. above and are eligible for reassignment,
                as of March 1, 2009, to the Provider Networks (PCPs) of the lower
                cost Health Plans. If the enrollee’s PCP is part of a Provider Network
                that bid a discount of at least 1% off the Target Medical Capitation
                Rate, the enrollee will be reassigned to the lowest cost health Plan in
                which such PCP participates.

           iv. Enrollees will have sixty (60) days after reassignment to request a
               change and the existing Health Plan Change Request Process will
               continue to be in effect.

            v. Responders are required to submit a listing of their PCPs and hospitals,
               as described in Section 3.5.7. above, and update such listing quarterly.

           vi. Responders with current Commonwealth Care enrollees are required to
               submit, as of March 1, 2009, a completed listing of all enrollees, their
               recipient identification number, addresses and PCP of record (i.e.
               inbound 834 file). This information must be provided to the Authority
               no later than March 15, 2009.



C.   Offer enhanced benefit incentive for PT I enrollees. For the Health Plan that is
     the lowest bidder in each MRA, the Authority will return up to 25% of the Health
     Plan discount to fund enhanced benefits for PT I enrollees. Such enhanced
     benefit shall be administered by the Health Plan. The Authority is requesting that
     interested Health Plans submit a plan for enhancing benefits for their PTI
     enrollees in low-bid MRAs; including a value of the benefit being offered to the
     enrollee. Any plan submitted by the Health Plan is subject to Federal approval for
     matching funds.




                                      18
9. Quality Incentives

      Health Plans new to Commonwealth Care are not eligible for the Annual Physical
      Incentive or Emergency Room Quality Reporting incentive payments

      A.      Enrollee Annual Physical Incentive Program. In order to continue to enhance the
              enrollee experience and as a mechanism to enable PCPs to provide care based on
              the specific needs of each enrollee, incumbent MMCOs can earn up to
              $2.00pmpm through the enrollee annual physical incentive program.

              Health Plans are required to submit a Quality Incentive Plan as part of this
              response. The Quality Incentive Plan must include, at a minimum, the Health
              Plan’s plan to enhance the relationship between the enrollee and his/her Primary
              Care Physician, particularly for those enrollees that have been assigned a PCP and
              the strategy for achieving the targets identified below.

            i.       The Enrollee Annual Physical Incentive Program will be measured and
                     calculated as follow:
                                1. To be included in the measurement an enrollee must meet
                                     the following criteria; (1) new to the Health Plan in
                                     Contract Year 2010, or (2) enrollee was auto assigned to
                                     Health Plan prior to Contract Year 2010 and has been (or
                                     will be) enrolled in Health Plan for at least six months and
                                     not utilized any covered services.
                                2. Of those enrollee described above in 9.A.i.1., the Health
                                     Plan must increase the percent of their enrollees that have a
                                     comprehensive primary care office visit with an incurred
                                     date between July 1, 2009 and June 30, 2010 as measured
                                     by the claims for the enrollee included in the Health Plans
                                     encounter data set with the CPT-codes 99381 through
                                     99397. Each Health Plan’s baseline percent of enrollees
                                     that have had a comprehensive primary care office visit
                                     will be derived from the Health Plan’s encounter data set
                                     submitted to the Authority with claims incurred through
                                     December 31, 2007 and paid through June 30, 2008.
                                3. The Authority will compare the baseline percent to the
                                     percent incurred date between July 1, 2009 and June 30,
                                     2010. Baseline percent must increase by at least 5% to
                                     achieve incentive payment.


      B.      Emergency Room Quality Reporting Incentive Program. Incumbent MMCOs
              have the ability to earn up to $1.00 pmpm through an Emergency Room quality
              reporting incentive program. Such quality for reporting system would both
              generate more robust information on this population and their utilization patterns,
              as well as to create focus and transparency around Health Plan efforts to manage



                                               19
              ER utilization. Under this approach, Health Plan’s would be required to report to
              the Authority on a quarterly basis about their members’ ER utilization, what ER
              management programs they have in place, and the direct ROI of these specific
              programs on their CommCare population. For example:

              i.     The Contractor shall provide to the Authority by July 1, 2009 evidence of
                     existing care management programs which target emergency room
                     utilization. Contractor shall provide to the Authority in writing a
                     description of the program in place. Such description shall include length
                     of time program has been in place and the methodology Contractor will
                     use to measure the return on investment (ROI). Such ROI must include an
                     assessment of the change in emergency room pmpm cost as a result of
                     such care management programs.

              ii.    On a quarterly basis, Contractor will report in detail on ER utilization by
                     their enrollees, including;
                     1.     reason for ER visits (diagnosis code);
                     2.     number of enrollees with repeat visits within six months;
                     3.     assessment of visit, including whether or not the ER visit could have
                            been avoided by the use of extended office hours or after hours
                            information or nurse line

              iii    On a quarterly basis, Contractor must calculate above ROI and report to
                     the Authority.

              iv.    New Health Plans will be asked to voluntarily supply this information,
                     without any associated incentive payment.



10. Co-pays and Out of Pocket Maximums

   Please see Appendix C in the Form of Contract for benefit and cost sharing information.


11. Dental Benefit

   Health Plans are required to provide dental benefits to PT I members. Health Plans are
   encouraged to offer a modest preventive dental benefit for enrollees above 100% FPL, as an
   extra benefit. This will not be a required benefit above 100% FPL, and therefore, would not
   be recognized as a component of the capitation rate paid to Health Plan. The benefit must be
   structured such that there is no additional cost to the program or enrollees.




                                              20
                 SECTION V - GENERAL CONDITIONS
5.1   Additional Information
      The Authority will hold a formal bidder’s conference for proposers on Tuesday, January
      13, 2009.

      It may be necessary for the Authority to request additional information from one or more
      proposers and the Authority reserves the right to do so. The Authority may ask certain
      proposers to make oral presentations. The Authority will determine which proposers will
      do so in its sole discretion.

5.2   Questions
      Questions regarding this solicitation or requests for additional information should be
      directed to Kathy Hogan at Connector.RFR.Questions@state.ma.us. All requests for
      additional general information should be received by 5:00 PM on Wednesday, January
      21, 2009. Written responses to such questions will be provided to all eligible proposers
      by 5:00 PM on Monday, January 26, 2009. Questions shall be submitted in the format
      attached as Exhibit K.

5.3   Authority Rights
      The Authority reserves the right to reject any and all proposals, to waive any minor
      irregularities in a proposal, to request clarification of information from any proposer and
      to effect any agreement deemed by the Authority to be in its best interest with one or
      more proposers. .

5.4   Reimbursement
      The Authority will not reimburse proposers for any costs associated with the preparation
      or submittal of any proposal or for any travel and/or per diem expenses incurred in any
      presentations of such proposals, even if the RFP is cancelled or withdrawn.

5.5   Negotiations of Proposal and Contract
      A successful respondent will be expected to execute a Contract in substantially the same
      terms as the Form of Contract attached hereto as Exhibit A.

      Nothing in this RFP, nor in the Authority’s acceptance of any proposal in whole or in
      part, shall obligate the Authority to complete negotiations with the related proposer.
      Acceptance by the Authority of any proposal shall be subject to the condition subsequent
      that the Authority and the proposer execute the Contract in form and substance consistent
      with the Form of Contract attached as Exhibit A hereto with such only modifications or
      exceptions as the proposers shall have identified in its proposal and the Authority shall



                                               21
      have agreed to. The Authority reserves the right to end negotiations with a proposer at
      any time up to the consummation of the Contract arising from this RFP.

5.6   Applicable Laws
      The proposer shall be responsible for compliance with provisions of federal, state and
      local laws applicable to the development and submission of any proposal received in
      response hereto. By submitting a proposal, the proposer agrees that Commonwealth laws
      shall govern any and all claims and disputes which may arise between parties. .

5.7   Public Records Request
      All responses and related documents submitted or presented to the Authority as part of
      this RFP shall become the property of the Authority. They may be subject to disclosure
      upon request under M.G.L. c. 66, § 10, and c.4, §.7, cl. 26. The Authority is under no
      obligation to return any responses or materials submitted by a proposer in response to this
      RFP, including bidder ―trade secrets‖ and financial information. This public ownership
      of materials applies even if the proposer has submitted a non-disclosure or other
      statement asking the Authority to retain the security or confidentiality of the trade secret
      and/or financial information.

5.8   Ownership of Data and Material
      All material and data produced for the Authority under a Contract resulting from this RFP
      are the exclusive property of the Authority. All information provided by the Authority
      related to Commonwealth Care cannot be used for any purpose other than the functions
      described in the Contract without the express written consent of the Authority.

5.9   Authority Liability
      The Authority shall have no liability whatsoever to any proposer or subcontractor of a
      proposer for any financial losses incurred by such entity or entities in response to this
      proposal or in connection with the Contract or the services of such thereunder except as
      expressly set forth in the Contract.



               SECTION VI - CONTRACTING PROCESS
6.1   Timeline
      It is the Authority’s intention to accept proposals from Health Plans on or before
      February 18, 2009 with the requirement that the accepted Health Plans be prepared to
      execute Contracts by March 13, 2009. The Authority reserves the right to modify such
      dates at its discretion.




                                               22
The following estimated timeline, although subject to change, indicates the Authority’s
intentions regarding the Commonwealth Care contracting process:

              Activity                                    Date
 RFP Issued                               December 22, 2008
 Bidder’s Conference                      January 13, 2009
 Submission of written questions to       January 21, 2009
 Authority
 Authority replies to all questions       January 26, 2009
 Notice of Interest                       February 2, 2009, 3:00 PM (EST)
 Proposals due                            February 18, 2009, 3:00 PM (EST)
 Interviews (at Authority’s               February 23, 2009 – February 27,
 discretion)                              2009
 Execution of Contract                    March 13, 2008




                                       23
                            EXHIBITS

Exhibits provided under separate cover
Exhibit A – Form of Contract
CY10_Form of Contract_Draft 12 19 08

Exhibit B – Capitation Rate Discount Bid Form
Capitation Rate Bid Discount Form 12 19 08

Exhibit C – Capitation Rate Adjustment Methodology
Capitation Rate Adjustment Methodology 12 19 08

Exhibit D – Question Format
Commonwealth Care RFP Question Format 12 19 08
C-1