MILLIMAN TECHNICAL PROPOSAL
Option 4: State Unit on Aging Funding Formula Request for Proposal Number 6406 Z1
Submitted by Milliman, Inc. December 8, 2020
Robert M. Damler, FSA, MAAA James B. Pettersson, CPA Principal and Consulting Actuary Senior Healthcare Consultant Milliman, Inc. Milliman, Inc. 10 West Market Street, Suite 1600 1301 Fifth Avenue, Suite 3800 Indianapolis, IN 46204 USA Seattle, WA 98101-2605 Tel +1 317 524 3512 Tel +1 206 613 8204 [email protected] [email protected]
MILLIMAN TECHNICAL PROPOSAL
TABLE OF CONTENTS
TRANSMITTAL LETTER ...... 3 REQUEST FOR PROPOSAL CONTRACTUAL SERVICES FORM ...... 4 FORM A...... 5 1. CORPORATE OVERVIEW ...... 6 a) Contractor identification and information...... 11 b) Financial statements...... 11 c) Change of ownership ...... 11 d) Office location...... 11 e) Relationship with the state ...... 11 f) Bidder’s employee relations to the state ...... 13 g) Contract performance ...... 13 h) Summary of contractor’s corporate experience ...... 13 i) Summary of bidder’s personnel/management approach ...... 17 j) Subcontractors ...... 22 2. TECHNICAL APPROACH ...... 23 a) Understanding of the project requirements ...... 23 b) Proposed development approach ...... 24 c) Technical requirements (Attachment A) ...... 24 d) Detailed project work plan ...... 33 e) Deliverables and due dates ...... 35 APPENDIX A: TERMS AND CONDITIONS ...... 36 APPENDIX B: BUSINESS ASSOCIATE AGREEMENT ...... 57 APPENDIX C: DATA USE AGREEMENT ...... 61 APPENDIX D: FINANCIAL STATEMENTS ...... 71 APPENDIX E: RESUMES...... 96
RFP 6406 Z1 Page 2 of 115 December 8, 2020 MILLIMAN TECHNICAL PROPOSAL
TRANSMITTAL LETTER
10 West Market Street December 8, 2020 Suite 1600 Indianapolis, IN 46204 USA Jennifer Crouse/Holly Glasgow RFP # 6406 Z1 Tel +1 317 639 1000 Department of Health and Human Services milliman.com PO BOX 94926 Lincoln, NE 68508 402-471-0524 [email protected]
RE: Milliman response to RFP 6406 Z1 – Medicaid Reimbursement Services, Option 4 – State Unit on Aging Funding Formula.
Ms. Crouse & Ms. Glasgow,
Milliman, Inc. (Milliman) is pleased to present the enclosed proposal for RFP 6406 Z1 to the state of Nebraska for State Unit on Aging Funding Formula.
Milliman is a national leader in Medicaid consulting with 25 years of experience supporting over 20 states and territories on Medicaid policy development and interpretation, waiver development, and associated financial supports. With a highly credentialed and collaborative team spanning healthcare policy, financing, operations and actuarial experience, we are uniquely suited to help Nebraska with the scope of work described in this RFP.
Milliman acknowledges Addendum 1 – Questions & Answers, released November 30, 2020.
This proposal is signed by Mr. Robert Damler of Milliman. Mr. Damler is an authorized representative of the organization who will interact with the State of Nebraska on any matters pertaining to this Request for Proposal and the resulting contract. Mr. Damler is a Fellow of the Society of Actuaries and a Member of the American Academy of Actuaries. He is also a Principal and Consulting Actuary in the Indianapolis office. As such, he is empowered to bind Milliman to all statements and services outlined in the proposal and any contract awarded pursuant to it. He would have ultimate responsibility and accountability for this contract.
Our proposal is being submitted electronically and has been organized into sections corresponding with the headings in the RFP:
1. Corporate Overview 2. Technical Approach
We appreciate your consideration of Milliman for this important work. Please reach out to me if you have any questions or need any additional information.
Best regards,
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REQUEST FOR PROPOSAL CONTRACTUAL SERVICES FORM
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FORM A
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1. CORPORATE OVERVIEW
Milliman is pleased to provide this corporate overview as part of our proposal to continue our longstanding relationship with the State of Nebraska (State), and provide consulting support for the Department of Health and Human Services (DHHS). In this proposal, we are excited to demonstrate to DHHS why we are the best choice to provide the services for this RFP Option.
Why Milliman?
We understand that Nebraska Medicaid has taken significant strides in recent years to enhance service delivery for the Medicaid population. Through this procurement, DHHS is seeking to engage a consulting firm that will serve as a trusted advisor and partner for the next 11 years.
Over the years to come, Nebraska Medicaid will continue to face significant challenges, some of which may not be foreseeable today. We are all engaged in a period of time when the healthcare landscape shifts on almost a daily basis, not only for Medicaid agencies, but for all involved in the delivery of healthcare services. Most recently, the COVID-19 pandemic has significantly impacted the economic circumstances of most Medicaid agencies, individuals served, and providers of essential healthcare services, which in turn is affecting access to services in multiple ways for all populations.
Nebraska continues to move forward with embracing numerous Medicaid reform initiatives, including the expansion of Medicaid eligibility as enabled under the Affordable Care Act, and continued investment in Medicaid managed care models. At the same time, new federal regulations are affecting and influencing unprecedented program design changes nationally. Supplemental payment programs are being altered through CMS’s facilitation of state directed supplemental payment programs using Subsection 438.6(c) “preprints”. Funding afforded through the federal DSH allotments are being significantly reduced. The dispute between several states and CMS related to DSH payment limits, and the legal resolution of federal policy articulated in FAQs 33 and 34 is yet to be determined – which will have a significant impact on the determination of hospital-specific DSH limits. And while it was just announced that the Medicaid Fiscal Accountability Regulation (MFAR) was withdrawn from the legislative agenda, elements of the MFAR may resurface in future periods potentially affecting Medicaid funding limitation and reporting requirements.
On top of all of this, there is an expectation that all Medicaid agencies will continue to move toward with more effective value-based purchasing strategies for all services covered under their programs, while at the same time trying to do more with less program funding.
Milliman is uniquely positioned to support DHHS over the course of this contract, with a project team that will deliver innovative and creative solutions, while at the same time provide balance and a national perspective to solutions in an ever-shifting Medicaid landscape. Milliman brings:
• Unmatched National Perspective - Milliman is a national leader in providing consulting services to state Medicaid agencies, with current contracts in 22 states and territories. We are a full-service firm with a deeply qualified, highly credentialed staff. Our team includes nationally renowned Medicaid actuarial, policy and financial consulting experts. Milliman will bring multi-dimensional and national insights to all of the elements of the scope of work anticipated under this contract, with the highest quality deliverables completed in a most cost-effective and efficient manner.
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• Unique Experience Nebraska Medicaid - Members of our proposed project team have significant experience supporting Nebraska Medicaid on numerous projects, including consulting and provider rate setting services, beginning in the mid-1990s, when our proposed Engagement Director, Jim Pettersson, supported a significant long-term care (LTC) reform initiative, which included numerous LTC rebalancing elements. In the years that followed, Jim and other Milliman project team members, Ben Mori, Annie Hallum and Nina Nikolova, supported DHHS with numerous reimbursement related issues, including revisions to reimbursement systems for inpatient and outpatient hospital services, and many of the other services that are the subject of this procurement.
• Commitment to Excellence – Milliman takes great pride in its commitment to excellence, and the innovation and thought leadership of its team members. Rather than rely on narrowly construed and incomplete foundational skills and expertise, our project team members represent “best in class”. Our people comprise innovative and creative problem solvers that can bring a unique balance and perspective to an ever-shifting healthcare landscape, as opposed to relying on annual processes and tasks that are limited, or static in nature. Our team members are adept at consistently providing highly regarded solutions, not only for public payers, but also for commercial payers and provider communities.
As with all of our state Medicaid clients, our deliverables for this engagement will consider the specific nuances that exist in Nebraska. We will be committed in our focus on the State of Nebraska, and provide solutions specifically designed to achieve DHHS’s overall program goals and objectives. Our commitment to service will not end with the completion of any single deliverable. It is crucial that once deliverables are provided that we continue to support DHHS with ongoing monitoring and consideration of assumptions and underlying data, and to identify potential changes for ongoing and future updates to deliverables.
Overview of Milliman’s Proposals
Milliman is submitting proposals for Options 2, 4, 5 and 6. While we believe our exceptional skills, expertise and bandwidth would put us in a position to provide unique and outstanding contributions for all six options specified in this RFP, it is our opinion that the auditing elements required under Options 1 and 3 would be best suited for Certified Public Accountant (CPA) firms with demonstrated auditing expertise.
To clarify, it is our understanding that Federal regulations specify that Disproportionate Share Hospital (DSH) audits, which principally comprise the scope of Option 3 of this RFP, must be “independent”. Centers for Medicare and Medicaid Services (CMS) guidance specifies audits must be certified by the Single State Audit Agency or any other CPA firm that operates independently from the Medicaid agency and the subject hospitals.
Additionally, the RFP requirements for Option 1: Long Term Care (LTC) Reimbursement, also require audit experience and independence that would most appropriately be provided by an auditing firm that is independent from nursing facilities in the State of Nebraska. We believe that our expertise with nursing facility and other long-term care payment and rate-setting solutions, including the development of home and community-based services (HCBS) rate-setting models, is unique and substantial. Milliman, however, is not in the business of providing audit services. Notwithstanding that limitation, we would be pleased to discuss opportunities with DHHS to support efforts related to long-term care payment and rate-setting reform should those opportunities arise in the future.
We are confident, however, that this proposal will demonstrate why Milliman is the best choice to provide support and guidance to DHHS over the course of this contract for the scope of work specified for Options 2, 4, 5 and 6.
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Overview of Milliman Milliman was founded in 1947, and was officially incorporated on July 5, 1957. The firm currently provides a full range of actuarial and other consulting services to our clients in the areas of Healthcare, Employee Benefits & Investment Consulting, Property & Casualty insurance, as well as Life Insurance & Financial Services.
While Milliman’s roots are actuarial, the firm now services many other markets and continues to contribute innovative hospital payment system design and rate setting methodologies, program funding strategies, predictive analytics, and healthcare efficiency solutions to states, healthcare providers and managed care organizations throughout the country. Today, Milliman serves the full spectrum of business, governmental and financial organizations with 62 offices in 31 cities throughout the United States and 31 additional cities worldwide.
62 offices 31 cities in the US 31 international cities
Milliman is owned by approximately 400 principals who have been elected in recognition of their technical, professional, and business achievements. We are governed by an eleven-member Board of Directors elected by the Principals. Corporate leadership is provided by Stephen A. White, President and Chief Executive Officer. Milliman’s Health Practice is directed by Thomas D. Snook. Both Mr. White and Mr. Snook are Fellows of the Society of Actuaries and Members of the American Academy of Actuaries.
Milliman currently employs approximately 3,800 persons worldwide, over 490 of which are qualified FSA actuaries and consultants. Milliman utilizes National Steering Committees to provide overall coordination and quality control for each consulting discipline. The Committees establish policy, develop guidelines, implement the peer review process, and provide support to local offices.
The Milliman Medicaid Consulting Group has the highest credentialed Medicaid practice in the country in terms of numbers of credentialed We are national actuaries and the level of their education. These individuals collaborate leaders in Medicaid on established best practices that are shared, discussed, and supplemental documented to provide consulting services with the highest level of payment design and quality and efficiency. We have employed innovative, customized thought leadership on strategies through a full-service, transparent approach with unmatched CMS’ permissible attention to detail for each client and project. The Milliman Medicaid approaches Consulting Group members are national leaders in Medicaid supplemental payment design and thought leadership on CMS’ permissible approaches.
Experience with State and Territorial Medicaid Agencies in the United States
Milliman brings a unique combination of highly skilled Medicaid-related actuarial and analytical expertise, and significant experience supporting Medicaid programs with long-term care reform initiatives, including home and community-based service (HCBS) reform and LTC rebalancing.
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As a firm that leads the nation in Medicaid actuarial consulting services, our team has the experience and tools that to ensure that the design of funding formulas and related models for this engagement will be developed with unmatched attention to quality, and that multiple formulas that exist today are efficiently brought together into a single and efficient solution. Our analytical expertise is broad and deep, as evidenced by the summary of Milliman’s ongoing contracts with state Medicaid agencies in Figure 1, below.
Figure 1: Milliman State Medicaid Agency Contracts
Alt. Pmt. 1115 Fee–for- Budget Capitation Contract Managed Care Method Waiver Service Forecasting PACE Rate State Rate Setting Duration Program Size Develop- Develop- Rate and Fiscal Setting & Risk Adj ment ment Support Support
2016 to $0.5 billion Alaska Present (est)
2019 to Arizona $12.0 billion Present
2018 to Arkansas $1.0 billion Present
1999 to Florida $12.0 billion Present
2005 to Hawaii $2.0 billion Present
2010 to Idaho <$0.1 billion Present
1998 to Illinois $12.0 billion Present
2000 to Indiana $6.0 billion Present
2015 to Iowa $4.2 billion 2018
$8.0 billion 1997 to medical and Michigan Present $2+ billion BH/SA
1992 to Minnesota $6.0 billion Present
2008 to Mississippi $3.0 billion Present
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Alt. Pmt. 1115 Fee–for- Budget Capitation Contract Managed Care Method Waiver Service Forecasting PACE Rate State Rate Setting Duration Program Size Develop- Develop- Rate and Fiscal Setting & Risk Adj ment ment Support Support
2002 to Nevada $1.5 billion 2019
New 2013 to $0.7 billion Hampshire Present
2007 to Ohio 2011, 2015 $15.0 billion to Present
2001 to Puerto Rico $2.5 billion Present
Rhode 2019 to $1.7 billion Island Present
South 2008 to $3.0 billion Carolina Present
2010 to Utah $1.0 billion Present
2012 to Vermont $1.5 billion Present
1996 to Washington $6.0 billion Present
2015 to Wisconsin $3.8 billion Present
Milliman also has significant experience LTSS and MLTSS programs, including design of fee schedules and rates for nursing facility services and HCBS for all LTSS populations, development of standard cost allocation protocols for reporting services at the service unit level and by funding source, supporting revisions to program provider service definitions and coding standards, and the development of new waiver applications for related services. Our consultants’ LTC experience includes engagements with the Medicaid agencies in Arkansas, Florida, Indiana, Illinois, Iowa, Michigan, Mississippi, New Hampshire, Ohio, Rhode Island, Washington, and Wyoming.
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a) Contractor identification and information
Milliman, Inc.
Corporate address:
1301 5th Avenue Suite 3800 Seattle, WA 98101
Milliman is a c-corporation incorporated in the State of Washington. Milliman was incorporated on July 5, 1957. The firm changed its name from Milliman & Robertson, Inc. to Milliman USA in 2001, and to Milliman, Inc. in 2004. These changes were in name only; no change in ownership or structure was involved.
b) Financial statements
Please find our most recently audited consolidated financial statements of Milliman, Inc. in Appendix D of this RFP. These audited financial reports comprise of the consolidated balance sheets as of December 31, 2019 and 2018, and the related consolidated statements of income, comprehensive income, shareholders’ equity, and cash flows for the years then ended, and the related notes to the consolidated financial statements.
c) Change of ownership
Milliman does not anticipate any change in ownership or control of the company in the twelve (12) months following the proposal due date of December 8, 2020. Milliman acknowledges that any change of ownership will require notification to the State.
d) Office location
Milliman’s Indianapolis office will be the location responsible for performance pursuant to an award of a contract. Project work will be supported by our Indianapolis and Seattle offices. Addresses are shown below:
1301 5th Avenue Suite 3800 Seattle, WA 98101
10 W Market Street Suite 1600 Indianapolis, IN 46204
e) Relationship with the state
Our Milliman team has recent and significant experience successfully providing consulting services to Nebraska Medicaid. Note that some of the experience described herein relates to services provided by members of our proposed project team while they were with their former employer, prior to joining the Milliman team. Specifically, Jim Pettersson, Ben Mori, Annie Hallum, and Nina Nikolova, provided consulting services to Nebraska Medicaid in varying capacities prior to joining Milliman in 2018.
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UPL and DSH Calculations in the Last Five Years
In context described in the previous paragraph, members of our Milliman team directed and supported the UPL and DSH consulting services for Nebraska Medicaid that are specified under Option 2 of this RFP, from December 2013 through 2018. This work focused on conducting calculations of DSH payments for eligible providers in accordance with the methods specified in Nebraska inpatient hospital SPA, and preparing the UPL demonstrations for the various provider types as required for submission to CMS. This work was performed by Jim Pettersson, Annie Hallum and Nina Nikolova under Contract Number 58871 04 prior to their departure from the contracted firm.
Hospital Inpatient Services in the Last 5 Years
Members of our proposed project team, Jim Pettersson, Ben Mori and Annie Hallum, also supported Nebraska Medicaid’s updates to the hospital inpatient prospective payment system in 2017 and 2918. After the initial implementation of Nebraska’s implementation of the All Patient Refined DRG (APR DRG) grouper model, members of Milliman’s team were engaged to update and help enhance the effectiveness of the inpatient payment system, and to correct for certain assumptions made by another consulting firm as part of the original APR DRG system design process. Milliman team members worked closely with Nebraska Medicaid staff to develop workable solutions to better achieve budget neutrality under the new system, and balancing those solutions with the hospital services funding appropriated by the state legislature. Note that since this work was performed by Milliman team members while employed by another contractor, we are not able to provide any information related to the contract number or contract terms.
Hospital Outpatient Services in the Last 5 years
Members of our proposed project team, Jim Pettersson, Ben Mori, and Annie Hallum, conducted the initial design of the hospital outpatient prospective payment system using the Enhanced Ambulatory Payment Group (EAPG) model in 2017 and 2018. While this project was completed on behalf of Nebraska Medicaid, it was actually performed under contract with Heritage Health Plans, an entity formed by the State’s Medicaid managed care plans for purposes of moving the EAPG transition forward for managed care payment purposes. Again, since this work was performed by Milliman team members while employed by another contractor, we are not able to provide any information related to the contract number or contract terms.
Earlier Hospital Inpatient Work
Milliman’s project team member, Jim Pettersson, worked with Nebraska Medicaid in the mid-late 1990’s to design and implement Nebraska Medicaid’s original Diagnosis Related Grouping (DRG) prospective payment system, which replaced a cost-based per-diem payment methodology. This project included a conceptual design, conduct of numerous payment simulation models, and calculations of all rates, relative weighs and other payment system components and parameters. This project also included the conduct of numerous stakeholder meetings across the state, including presentations in Omaha, Lincoln, Kearney, North Platte, Sidney and other locations.
Additional Milliman Support for Nebraska Medicaid
During 2014 and 2015, Milliman developed fiscal impact analyses for legislative bills that proposed to expand Medicaid under Section 2001 of the Patient Protection and Affordable Care Act (PPACA). This engagement included the evaluation of waivers for both employer and individual marketplace premium assistance programs.
During 2013, Milliman performed analyses of the impact of various provisions of PPACA, including MAGI conversion, the Physician fee schedule increase, and the enhanced CHIP FMAP.
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f) Bidder’s employee relations to the state
None of the proposed project team members are currently or formerly an employee of the State within the past six (6) months.
g) Contract performance
Milliman has not had a contract terminated for default in the past five (5) years. While Milliman has thousands of contracts in force with our clients, we are unable to comment on all business relationships within those contracts. However, we are not aware of any contracts being terminated as described within the past five (5) years. The professional personnel named in this RFP project team have not had any contracts terminated for any reasons described above.
h) Summary of contractor’s corporate experience
Milliman has longstanding partnerships with state agencies that oversee Older Americans Act (OAA) funding. In our role as a trusted advisor, we have had the opportunity to support overall agency budgeting, for both Medicaid and non-Medicaid funding, and to participate in strategic planning on the role of the AAAs in service delivery and rebalancing.
The actuaries and healthcare analysts at Milliman are unrivaled in their efficiency and ability to glean insight from data. We use census data, most commonly from the American Community Survey (ACS), on a regular basis for a wide variety of projects, including the Medicaid expansion and MAGI conversion analyses for Nebraska’s DHHS from 2013 to 2015. In this section we showcase several innovative analyses that used ACS data as a primary source.
We have also provided sample projects on re-structuring service delivery for the aged population, both Medicaid eligible and not Medicaid eligible, for nutritional, in-home services, case management, and options counseling. We also have the expertise to advise the State of Nebraska relative to maximizing its federal resources, by insuring a federally compliant linkage and braiding of funding with Medicaid and other agencies or entities that receive federal funding.
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Example 1: Indiana Family and Social Services Administration Rebalancing LTSS Time Period of 2015 and ongoing Project Scheduled and Actual Ad hoc requests for updates and expansion of the Rebalancing analysis Completion Dates Milliman developed LTSS projections (2010 through 2030), comparing the Status Quo (no efforts to support rebalancing) and Rebalancing scenarios. The original analysis combined data from two sources: 1) From historical Indiana data, we developed Use Rates by age – the percentage chance at each age that an Indiana resident would be using either institutional or community care, and 2) From census projections we collected the projected growth in each age cohort. Although the results were perhaps unsurprising, having an estimate of the dollar value being left on the table by higher than average rates of institutionalization, combined with the impact of an Bidders inevitably aging population provides a clarion call to action. Responsibilities Follow-up work involved analysis of successful strategies used in other states combined with barriers to implementation of these strategies in Indiana. Strategies considered included improvements to care management and related policy guidance, better integration of care between Medicare and Medicaid as well as coordination between approvals for waiver and state plan services, reimbursement review/reform, increased use of participant self-direction, increased flexibility in nursing scope of practice, and others. The work is ongoing, as some solutions require long term efforts, such as those that require state legislation, workforce development, or significant provider transitions. Contact name: Dr. Dan Rusyniak
Customer Name and Phone: (317) 233-7447 Contact Information Facsimile: Not Available Email address: [email protected] Was Work Performed Yes as Prime Contractor?
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Example 2: South Carolina Department of Health and Human Services Community Engagement Waiver and Redesign of South Carolina’s Financial Alignment Initiative Time Period of 2018 and ongoing Project Scheduled and Community Engagement waiver was completed in CY 2019; the redesign of the Actual Financial Alignment Initiative is anticipated to be completed in phases with the Completion Dates final phase being completed in calendar year 2022. The Community Engagement Waiver is an initiative to promote improved health outcomes and encourage self-sustainability for some of the most vulnerable South Carolinians. SCDHHS relied on Milliman’s expertise to develop an estimated fiscal impact of this program on the South Carolina Medicaid budget. The basis of the fiscal impact was developed on the following two primary components: 1) number of beneficiaries and 2) cost per beneficiary. To estimate the number of beneficiaries, we utilized publicly available American Community Survey data for South Carolina stratified by income, age, caretaker status, and insurance type. A range of scenarios were developed because the actual number of beneficiaries will depend on the economic situation and participation rate. Next, we leveraged South Carolina Medicaid claims experience to project the anticipated per member per month cost of each beneficiary cohort. Furthermore, we used self-reported health status through publicly available survey data and experience from other Medicaid expansion states to estimate the pent-up demand and morbidity of these new Medicaid beneficiaries. Bidders Responsibilities Additionally, we are working closely with SCDHHS to redesign the Financial Alignment Initiative in South Carolina. This program provides integrated Medicare and Medicaid coverage through a single managed care organization. We are providing analytical and policy support to SCDHHS as they look to revolutionize this program by relying on: • Evidence-based systems and models; • Improving the quality of life for vulnerable South Carolinians across all stages of life; • Reducing the burden to provide and access care; and, • Strengthening healthcare market stability. Currently, there has been a focus on expanding the eligibility of this program to dual eligible members down to age 21. We have provided insight into this new population by reviewing the MMA transactional files and developing cost profiles across various population cohorts. This analysis allows SCDHHS to understand the volume of new members that may enroll as well as the expected cost these potential new enrollees. Customer Name Contact name: Bryan Amick, Chief Innovation Officer and Contact Phone: (803) 898-0212 Information Facsimile: Not Available Email address: [email protected] Was Work Performed as Yes Prime Contractor?
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Example 3: Indiana Family and Social Services Administration Analysis of the Uninsured in Indiana Time Period of Late 2017 (using 2016 ACS data), and refreshed in late 2019 (using 2018 Project ACS data) Both projects were scheduled to occur immediately after the release of Scheduled and Actual updated ACS data, in the fall of 2017 and 2019. In both cases, the analysis Completion Dates was completed within 2 months of data release. The uninsured were analyzed by various characteristics: age, gender, race, income level, Medicaid/CHIP eligibility, and county. To avoid information overload and effectively communicate results, we employed a variety of useful graphing and illustration techniques, such as heat maps (right). Milliman also analyzed changes in the uninsured rate over the time period from 2013 through 2018, and compared Indiana to neighboring states and national averages. During this time period, most states that Bidders expanded Medicaid experienced a reduction in the Responsibilities
uninsured. However, from 2016 to 2018, there was national trend toward a deterioration in the insured rates for children and their families. Our analysis helped provide insight on the populations most affected, how the CHIP population was changing, and an understanding of the outreach and policy levers most likely to have an impact. Contact name: Allison Taylor
Customer Name and Phone: (317) 234-8725 Contact Information Facsimile: Not Available Email address: [email protected] Was Work Performed Yes as Prime Contractor?
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i) Summary of bidder’s personnel/management approach
We have assembled a project team that has over 100 combined years of experience in the healthcare industry, with a unique focus on Medicaid program reimbursement, and with significant experience supporting DHHS. By focusing on Medicaid as a subset of the healthcare industry, we have developed an expertise on programs impacting Medicaid beneficiaries such as the AAAs. Aging and Disability and the cost of long-term care services and supports is a driving factor in many Medicaid budgets. We provide assistance not only in the standard federal funding methodologies but also how to maximize funding to achieve the state’s goals of rebalancing LTSS and providing the appropriate service at the appropriate levels of care. Our consultants, including several that have worked in Medicaid Agencies, have drafted waivers, rebased rates for HCBS services, and worked to improve the LTSS systems in many states.
Our management approach focuses on providing an expert team that can serve as trusted advisors to our clients on a daily basis, and supplementing that team with an unmatched array of subject matter experts, which will be critical given the long term of this contract and the ever-shifting healthcare delivery and financing landscape. In this case, our team is not only highly qualified, but also has significant experience in the State of Nebraska around hospital and other provider reimbursement methodologies, as well as some of the very early LTSS rebalancing efforts in Nebraska. This experience has enabled us to understand the unique landscape of the Nebraska health care system.
The team structure for this Option will also ensure coordination with the teams established for other Options, which will help to lessen the administrative burden for DHHS from a contracting and management perspective, and ensure the most efficient use of DHHS staff time from a data management and coordination of other state resources. To ensure coordination and collaboration, our project management team for all Options will include the same project leadership – Rob Damler and Jim Pettersson will serve as the Managing Principal and Engagement Director, respectively, for all Options to be contracted with Milliman under this procurement. As described previously, Jim has significant experience working with DHHS on Medicaid provider reimbursement solutions and federal compliance issues over the last 25 years. Additionally, in an effort to create optimal continuity across all project tasks, many of the proposed team members, also with previous experience with DHHS, are included under more than one of the Options being bid by Milliman.
Finally, we bring to the table numerous subject matter experts to support our project teams. And while we have included a number of those experts in this proposal, we expect that the term of this contract will certainly require experts beyond those presented herein, especially as the Medicaid landscape changes over time, and DHHS’ goals, objectives and priorities change in response. This is where our commitment to the Medicaid space including other agencies that support Medicaid beneficiaries, and our commitment to innovation and thought leadership in that space, will allow us to be most responsive in meeting DHHS’ needs – not just in the immediate term – but throughout the entire term of the contract, and hopefully for many years to come.
In this section, we provide our management and staffing plan for this Option. An organization chart of our proposed project team is shown below. Following the organization chart, we provide a brief biography for each proposed team member. Detailed resumes for all team members, including contact information for reference purposes are provided in Appendix E.
Following the team member biographies below, we provide a description of our quality assurance protocols, which are integral to our project management approach, and which set us aside from our competitors.
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Robert Damler, FSA, MAAA – Managing Principal
Rob is a managing principal of Milliman. Rob established the Medicaid consulting practice in the Indianapolis office in 1994. Over his 29-year career, Rob has developed an expertise in the analysis of the financial risks associated with the financing and delivery of healthcare services. His experience includes both public and private pay healthcare. He has consulted on a wide array of topics, including managed care resource allocation models, financial projections, mergers and acquisitions, disease management, and risk adjuster development for specialized populations. He has consulted state Medicaid agencies and Medicaid health plans in projects involving Medicaid managed care capitation rate setting, 1915(b) waivers, 1915(c) waivers, 1115 waivers, state budget forecasting, expansion population financial projections, and fiscal analysis of new state and federal proposals.
He regularly volunteers with the American Academy of Actuaries and chaired the task force that wrote the Actuarial Standard of Practice No. 49, Medicaid Capitation Rate Setting. Rob is a board member of the Actuarial Standards Board and is an Academy Medicaid representative for Capitol Hill, providing independent advice to federal lawmakers and administrative office personnel. He also regularly volunteers as a speaker and author of research articles on Medicaid topics for the Society of Actuaries.
Jim Pettersson, CPA – Engagement Director
Jim Pettersson is a senior healthcare consultant with Milliman’s Medicaid Finance and Policy practice. He joined the firm in 2018 and has more than 30 years of experience providing consulting and advisory services to state Medicaid programs and state agencies, private insurers, hospital providers and other healthcare entities. Prior to joining Milliman, Jim supported DHHS with provider payment related issues from mid-1990’s - 2018, and served as the engagement director for the scope of services provided under this contract from 2012 to 2018.
He specializes in the design, implementation, and evaluation of Medicaid program healthcare delivery and payment systems for all types of provider services, and the evaluation of the adequacy of payment rates. His experience includes inpatient and outpatient hospital services, nursing facility services, and home and community-based services for aged and disabled populations, persons with intellectual and developmental disabilities, and behavioral health needs. Jim also has significant experience in the development of programs and related analyses to support opportunities for successfully leveraging federal funding for payment of provider services, and the regulatory and compliance considerations associated with enhanced and supplemental payment programs. He has frequently presented findings and recommendations to Medicaid program leadership, state legislative committees, and governor’s offices.
Ben Mori – Project Manager
Ben Mori is a Senior Healthcare Consultant in Milliman’s Medicaid Finance and Policy practice, focused on empowering payers to transform service delivery through payment. He has over 19 years of experience using analytics to develop payments consistent with enhancing resource efficiency and access to quality healthcare, for both public and commercial payers. Prior to joining Milliman, Ben served as the project manager for the similar services under this RFP provided under various contracts from 2010 to 2018.
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Ben’s expertise includes the development of prospective reimbursement systems to achieve payment transformation for healthcare payers, including inpatient and outpatient hospitals, home- and community- based service (HCBS) providers, long-term acute care hospitals, nursing facilities and professional service providers. Ben also is experienced in assisting State Medicaid agencies with program funding strategies to optimize Federal funding opportunities, maintain access to care and incentivize improved patient quality and outcomes. Ben has extensive project management and leadership experience, including directing multiple large-scale engagements for ten state agencies, three commercial BlueCross BlueShield plans and the Veterans Health Administration, impacting over 35 million lives.
Nina Nikolova, PMP – Senior Analyst
Nina Nikolova is a healthcare management analyst in the Medicaid Finance and Policy practice in the Seattle office of Milliman. She joined the firm in 2020. Nina has over six years of experience providing consulting services across nine State Medicaid agencies as well as for CMS. She is a Project Management Professional (PMP) certification holder with significant project leadership experience. Her experience includes supporting state Medicaid programs, including Nebraska, with supplemental and claim payment methodology design for inpatient and outpatient hospital, nursing facility, and home- and community-based services. Her experience also includes analyses and demonstrations required for federal approval of Medicaid programs and funding, including the evaluation of reimbursement rate adequacy for long-term care services, the development of upper payment limit (UPL) demonstrations and disproportionate share hospital (DSH) payments.
Joseph Whitley, MPP – Senior Analyst
Joseph Whitley is a healthcare consultant in the Medicaid Finance and Policy practice in the Seattle office of Milliman. He joined the firm in 2019. Joseph has over seven years of experience in finance and analytics, with a Master of Public Policy (MPP) focused on quantitative methods. In addition to his Medicaid consulting experience at Milliman, Joseph has worked as a Medicaid Fiscal Information and Data Analyst at the Washington State Health Care Authority and as the Funds Flow Coordinator for HealthierHere (the King County Accountable Communities of Health formed under the 1115 demonstration wavier). Joe’s expertise includes advanced-level financial research and analytic expertise required to successfully manage a State Medical Assistance program. Joseph has provided support for several state legislative sessions, in addition to work related to state Medicaid forecasting, Managed Care rate setting, and Medicaid reform under the 1115 waiver. Joe also has experience with home- and community-based service rate setting, dental managed care program implementation, development of Outpatient Prospective Payment Models, and the improvement of FQHC alternative payment models. Additionally, Joseph has experience working with funding strategies to optimize Federal funding opportunities, including Intergovernmental Transfers (IGT), Certified Public Expenditures (CPE), and Provider Tax programs.
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Christine Mytelka, FSA, MAAA – Subject Matter Expert Christine provides actuarial support and consulting services to state Medicaid agencies and Medicaid health plans. Her primary role involves leading in-depth analytic support for the State of Indiana’s Medicaid program, including Medicaid managed care services, Medicaid forecast and budget development, and specific program support. She leads capitation rate development and signs actuarial certifications for Indiana’s managed care programs.
For many years, the State of Indiana has relied on Christine to develop comprehensive Medicaid forecasts that are used in the state’s biennium budget. Christine models program and policy changes, working with the state budget agency and legislative fiscal analysts. She also has extensive experience with implementation and management of provider tax programs and integration of pass- through payments into managed care capitation rates. Other special projects have included Indiana’s 1634 transition, pharmacy carve-in, long-term service and support rebalancing, mental health and substance abuse program redesign, and health reform analysis.
Project Management – Providing Superior Project Deliverables
The deliverables required by this RFP will be significantly enhanced by Milliman’s rigorous peer review standards. To assure the highest quality in our work and to protect our clients, Milliman follows a robust peer review process intended to ensure all client deliverables meet the highest standard of quality. This standard starts by maintaining a culture emphasizing high quality work product and client service. We start such emphasis during recruiting and continue investing throughout each consultant’s career. Our consultants understand quality is the responsibility of each and every one of them, and our senior staff are involved and engaged at all stages of the project.
Our management approach to providing DHHS the highest quality consulting services and deliverables is summarized as follows.
Analytical Checking and Reasonability Testing Checking is an integral and required element of Milliman’s work processes. Key considerations in the checking process are as follows: . Checking includes a verification that: ‒ Numerical calculations are performed accurately ‒ Data has been incorporated correctly into the calculations . The selections of the appropriate checking methodology and personnel are made with consideration of the complexity and type of project. . The checker is not the person doing the work (although one reviews his / her own work before handing it off to be checked). . The peer reviewer is required to confirm that checking has been completed and satisfies Milliman requirements. In addition to technical checking, analyses are peer reviewed by the project manager and team leads to evaluate the reasonableness of results and data relied upon, adherence to proper procedures, and documentation. Additional peer review is performed depending on the scope of the deliverable. All quality assurance steps are fully documented.
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Pre-Release Peer Review Milliman has long maintained a formal policy and requirement for pre-release peer review, applicable to all work within the firm. This pre-release peer review ensures the highest quality for all client deliverables. Among other things, our policy requires that: . Each work product includes evidence of appropriate pre-release peer review. . Every substantive work product is reviewed by a second qualified professional, who has knowledge regarding the type of work performed in the work product but is not primarily responsible for the project, before delivery to the client. . Technical quality of the work product including methodology, assumptions, etc. is reviewed as part of the pre-release peer review process. . Peer review is done throughout the project to ensure critical review of the methodology and assumptions as they are developed, not just at the end of the project. . The nature of pre-release peer review is appropriate to the complexity and type of assignment. For example, Medicaid rate development projects must have evidence in the file indicating who reviewed the work product, when the review was completed, and the general scope of the review. Additionally, at least one of the individuals reviewing the results for these work products must be a Principal of the firm. The role of the pre-release peer reviewer is a critical one in assuring quality. Peer review can only be performed by consultants who have been pre-approved by Milliman’s national Health Steering Committee. Before project results are communicated with a client, the pre-release peer reviewer must be satisfied with the work and content of the communication. If the pre-release peer reviewer is not satisfied with the quality or the conditions present, he / she has the authority and responsibility to stop the project.
Addressing Work Product Issues Our peer review process is designed to ensure accurate and high-quality products by preventing errors in client deliverables. In addition, our documentation and reporting standards are designed to prevent surprises in the methodology and approach. However, in the event an issue occurs in a deliverable (whether related to an assumption, data relied upon, display issue, or miscalculation), we will work closely with DHHS to correct the issue as quickly as possible while following Milliman’s quality and peer review standards, and will help communicate the issue and any implications to DHHS and other stakeholders as needed. We will also update our processes and incorporate additional peer review into the impacted analysis to ensure the issue does not reoccur. We will provide draft analyses well in advance of final deliverables so that if issues are found in preliminary analyses, they will not impact actual results.
j) Subcontractors
Milliman does not intend to subcontract any part of our performance of the work required in this RFP.
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2. TECHNICAL APPROACH
a) Understanding of the project requirements
The mission of the Nebraska State Unit on Aging (SUA) is to “promote the dignity, independence, and freedom of choice for older Nebraskans”. The SUA partners with Nebraska’s eight Area Agencies on Aging (AAAs) and a network of providers to support and expand a wide range of community-based services, including activities that maintain health, services for those at risk of losing their independence, and support for family caregivers. The SUA provides guidance, oversight, and funding to Nebraska’s Aging Network. Our role is to support the SUA and the Nebraska Department of Health and Human Services (DHHS) by:
• Allocating state and federal funds to the AAAs in compliance with the Intrastate Funding Formula (IFF) • Developing well-designed tools that are easy to use and minimize manual inputs • Ensuring calculations are performed accurately and efficiently, and that the tolls support flexibility to allow service area modifications and/or changes to allocation variables (e.g. Population age 60+, low income, etc.) • Providing clear documentation that can be easily understood by all parties. • Assisting the state with a funding formula assessment and updates/revisions: o Advise the state on potential IFF revisions, providing a menu of options . Options will include, at a minimum, an assessment of alternative funding variables and data sources, with considerations for each . The assessment will estimate the impact of IFF changes on each of the service areas . Options will align with Aging State Plan objectives to ensure funds are targeted effectively to meet State Plan goals o Provide documentation for the state’s chosen updates/revisions to the IFF and draft materials to support stakeholder communication The novel coronavirus has o Conduct stakeholder meetings with DHHS prompted a reimagining of Funds to be allocated include the following: the support network for the • Older Americans Act Title III (III-A, III-B, III-C-1, III-C-2, III- aged. States are challenged D, and III-E) to find new and better ways • Older Americans Act Title VII to provide services safely • Nebraska Community Aging Services Act (CASA) funds • Aging and Disability Resource Center (ADRC) Act funds and promote health and • Care Management Funds wellbeing, while continuing to promote active Aging and Medicaid Environment engagement and independence. The current environment poses significant new challenges to the health and well-being of older Americans. Since the severity of illness caused by the novel coronavirus increases with age, older Americans are at heighted risk. For many, the safety of social distancing is difficult to achieve, with the need to seek treatment for chronic conditions, or due to dependence on long- term services and supports that require visits from caregivers. And for all, well-intentioned efforts to isolate and protect older Americans may cause loneliness and depression. As terms such as telehealth and PPE become part of the general lexicon, states are thinking innovatively about restructuring their health programs to maintain health and independence with greater safety, while continuing to support vibrant engagement with the community.
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b) Proposed development approach
The primary goals of our proposed approach are: to support an accurate and efficient process for the annual allocation of SUA funding, and to assist the state with updating or revising the funding allocation to reflect changes to demographics, the current environment, and Aging State Plan priorities, at the same time working with stakeholders to educate about the process and provide transparency in the funding mechanisms.
For each phase of the project, we will submit a work plan for review and approval, solicit input and direction from the SUA and DHHS throughout, prepare a draft deliverable for discussion, finalize the deliverable based on suggestions from the state, and prepare a report clearly documenting the results and the process. Detail on each phase is provided in the tables in the next section of this response.
All analyses will undergo Milliman’s rigorous quality control steps and peer review, which encompass both professional actuarial standards of practice and Milliman – specific additional requirements for both technical and overall review.
c) Technical requirements (Attachment A)
Bidder Responses State Unit on Aging 4.1.. Provide a draft work plan that details the requirements to automate the funding formula for each of the Title III/OAA, CASA, ADRC, and Care Management scopes of work, as identified in RFP section V. D. Bidder Response: This section contains proposed steps in our approach for supporting the funding formula allocation process for funds overseen by the SUA, including OAA funding under Title III and VII, CASA, ADRC, and Care Management funding. The full scope of work has been subdivided into three high-level tasks:
Figure 2 – Funding Formula Allocation Project Tasks
The tasks are not sequential, with Task 1 and Task 2 largely running concurrently, and with the results of Task 2 reflected in the final tool. We recommend separate planning meetings for each Task, and that all three initial meetings be scheduled early in the process.
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Task 1: Development of an automated funding formula allocation tool 1.1: Initial planning meeting After introductions, the proposed agenda includes: 1) data, 2) software options, and 3) state preferences. Prior to the meeting, Milliman will prepare background information on publicly available data and software options, and will ask about state data sources that may be available for this project and geographic granularity that may be needed for flexibility (county level, city, or geozip). Before designing the new tool, it will be helpful to get feedback on positive aspects of the current tool that users would like to retain, improvements and new functionality users would like to request, and user preferences for how data should be displayed, accessed and output, in addition to a better understanding of any constraints they may have in utilizing a new system. 1.2: Finalize the work plan for Task 1 To ensure a common understanding, Milliman will take detailed notes from the initial planning meeting and send these to DHHS for review and comment. After the meeting notes have been finalized and approved, Milliman will finalize the work plan for Task 1. The final work plan will build upon the work plan provided in this document, but additional detail and content may be updated to reflect discussion and recommendations from DHHS. 1.3: Build the automated tool The details of this subtask will be finalized based on discussion with DHHS. For purposes of this response, we recommend a flexible tool that be able to calculate accurate allocations for both historical and future years. It would contain:
. Two IFF structures: Both the current IFF structure and the updated structure. The two structure may include different funding variables and weights
. Data: Both data used to allocate funding under the current IFF and updated data to be used under the updated IFF
. Funding variables: Summarized data for the funding variables used under the current IFF, as well as any new or updated funding variables under the updated IFF
. Geography: Ability to summarize data by current service areas, and the flexibility to summarize data in a different manner under the updated IFF The tool would select the IFF and supporting elements applicable to the time period or periods selected by the user. For purposes of this response, we have assumed the primary data source will be updated census data from the American Community Survey (ACS). This data contains information on age, gender, income status, urban/rural status, minority status, English proficiency, and disability. To protect confidentiality, some of these data items are not available for geographic areas with low population, so depending on the geographic granularity needed to provide flexibility, additional allocation or estimation may be required, possibly using additional supporting data sources. We also plan to access the Administration for Community Living’s (ACL’s) Aging, Independence, and Disability (AGID) program data. This data may be used to corroborate and/or refine poverty, minority, or other census data elements. It also has information from the National Survey of Older Americans, which includes consumer assessment of Title III service quality and also reports on physical and social functioning of people receiving services. Under our proposed approach and as reflected in our cost estimate, we propose the development of an Excel-based tool. We would be pleased to discuss options for a web-based, hosted solution if DHHS is interested, and provide a separate cost estimate.
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The results from Task 2 (Assessment of the current IFF) will be incorporated in the tool. This may include an updated IFF structure to be used in future years, new funding variables, and additional data types as needed for new funding variables. 1.4: Provide DHHS with a draft template for review and discussion The tool will be delivered along with a user guide. The user guide will contain information on how to use the tool, along with an appendix specifying data used in the tool, sources of the data, and methodology and assumptions used for any allocation or estimation. 1.5: Finalize the automated template, incorporating suggestions from DHHS Milliman will also finalize the user guide. This step will be completed no later than September 30, 2021. 1.6: Maintenance and support of the automated template Milliman agrees to maintain and support the automated template through at least March 31, 2022. This includes answering user questions and addressing any performance issues that may arise, and may also include minor updates, by agreement of both parties. However, any significant model changes should be considered out of scope. Deliverables: 1.1 Automated funding formula allocation tool work plan 1.2 Automated funding formula allocation tool template
Task 2: Conduct an Assessment of the Current Intrastate Funding Formula (IFF) 2.1: Initial evaluation of the current IFF Prior to the first meeting for Task 2, Milliman will prepare an initial evaluation of the current IFF. This evaluation will include information on which funding variables best support the goals of the various funds and provide commentary. For example, the evaluation would provide general information on how the nationwide demand for in-home services (Title III-B) varies by age, and whether age 75+ is a better proxy than age 60+, as well as provide information on whether demand for in-home services appears correlated to other factors such as rural/urban location, low income status, or race. Also relevant may be how these measure correlate to other strategic goals in Nebraska’s Aging State Plan or address concerns that have arisen in the current environment. 2.2: Initial planning discussion The proposed agenda includes: 1) discussion of the initial evaluation of the current Nebraska IFF (Subtask 2.1), 2) state objectives and priorities, including any changes due to the current environment, 3) potential data sources, if needed for new funding variables. This meeting provides an opportunity to solicit input on DHHS priorities for funding allocation. Although the funding variables are generally chosen to reflect funding needed based on the goals of the funds, the state is provided considerable latitude to also reflect the state’s Aging State Plan priorities. The goal of this meeting is to leave with a provisional understanding of the desired funding variables. To the extent that DHHS decides to pursue a new funding variable that cannot be sourced from the ACS data, a supplemental data source will be identified. 2.3: Finalize the work plan for Task 2 To ensure a common understanding, Milliman will take detailed notes from the initial planning meeting and send these to DHHS for review and comment. After the meeting notes have been
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finalized and approved, Milliman will finalize the work plan for Task 2. The final work plan will include a specific plan for developing any new funding variables, including data sources and methodologies, and include all detail needed to transition from the current IFF to the next available version. The final plan will build upon the work plan provided in this document, but additional detail and content may be updated to reflect discussion and recommendations from DHHS. This work plan will be completed by February 28, 2021. 2.4: Develop preliminary IFF transition plan Building on the initial discussion, Milliman will develop the desired funding variables, calculate values of each funding variable for each service area, estimate one or more sets of provisional weights based on DHHS’ stated priorities, and calculate an initial fiscal impact to each service area. This confidential draft will be provided to DHHS for review and comment. 2.5: Finalize IFF transition plan Finalize the weights, funding variables, and fiscal impacts, based on feedback from DHHS. 2.6: Develop written report on the updated IFF This report will include the following elements: . Evaluation of the current IFF: A finalized version of the report prepared in Subtask 2.1 . Data and funding variables considered: Discussion of other data and funding variables considered, advantages and disadvantages, and why the final data and funding variables were selected. The chosen set of weights will be discussed in relation to the goals of each funds and other state priorities. . Fiscal impact: This will be illustrated by fund and overall for each of the eight service areas. . Full documentation: including data sources, methodology and assumptions used to develop funding variables, and a clear work plan to support managing the variables in future years. Milliman will also adjust or reformat the final report as needed for publication. The final deliverable under Subtask 2.6 will be completed no later than September 30, 2021. Deliverables: 2.1 IFF transition work plan 2.2 New IFF Transition Plan 2.3 Written report on the updated IFF
Task 3: Support communication, stakeholder engagement, and transition 3.1: Initial planning discussion The proposed agenda includes: 1) comprehensive list of stakeholders, both internal and external, 2) stakeholder engagement steps and timing, 3) potential risks. This meeting provides an opportunity for stakeholder engagement planning. We understand the primary interested parties will be the AAAs, but beneficiaries, advocates, and others may also be reaching out. Finally, internal state approval processes may influence timing and should be considered in planning 3.2: Finalize the work plan for Task 3 To ensure a common understanding, Milliman will take detailed notes from the initial planning meeting and send these to DHHS for review and comment. After the meeting notes have been
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finalized and approved, Milliman will finalize the work plan for Task 3, including updated timing for planned stakeholder meetings. The final plan will build upon the work plan provided in this document, but additional detail and content may be updated to reflect discussion and recommendations from DHHS. 3.3: Conduct stakeholder meetings There will be approximately one on-site stakeholder meeting and approximately four virtual meetings. Milliman recommends the on-site meeting be used to present and answer questions on the updated IFF. The virtual meetings could be used to communicate IFF changes to those who are unable to attend the in-person meeting. One virtual meeting could also be used prior to the in-person meeting to announce the initiative, take questions, and invite feedback or suggestions. For each meeting, Milliman will draft a presentation and other supporting materials in advance, to allow time for DHHS review. Milliman will be available to lead or co-lead each meeting, as directed by DHHS. Deliverables: 3.1 Stakeholder engagement work plan 3.2 Stakeholder meeting materials
4.2 Provide a description of how the bidder will address each item within RFP section V.D.6. Scope of Work: OAA and CASA, items a. through o. Bidder Response: Specifics on the proposed approach are addressed below, following the order in section V.D.6: a. Automated template: As part of the initial discussion in Task 1, Milliman will come prepared with background information on platforms such as excel, access, power BI, and hosted solutions. During the initial meeting, we will gather information on all desired features, exhibits, and functionality that is desired by the SUA and DHHS, and an understanding of any limitations on the part of the stakeholders. Beyond the choice of platform, developing expanded and enhanced exhibit layouts that address the SUA’s needs could add value for users, so we will want to make sure we have a comprehensive view of how the tool is currently used and the improvements that may be sought by DHHS and the stakeholders. b. Historical data: We are envisioning a drop-down or other selection that will allow the user to select the federal or state fiscal year on the main view or exhibit, and potentially develop additional exhibit(s) that provide summaries or comparisons of multiple years, depending on the desired functionality. The tool would store historical data and IFFs and contain lookups to reference the year to which each applies. c. Geographic flexibility: Milliman would recommend summarizing and storing data at a more granular geographic than is needed, in order to provide future flexibility. For example, instead of storing the population age 60+ by AAA service area, we could estimate it by a smaller geographic subdivision, such as county, and separately develop a lookup that would direct how to combine counties to form each service area. In this example, if the counties that comprise each AAA service area were to change in the future, we would not need to modify the underlying data, only change the mapping of counties to service area. We would consult with the state to understand what type of more granular geographic division is likely to be most useful. d. Evaluate current IFF: Milliman would discuss each of the current funding variables in the context of the goals of the various funds and provide commentary. For example, we could provide general information on how the nationwide demand for in-home services (Title III-B) varies by age, and whether age 75+ is a better proxy than age 60+, as well as provide
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information on whether it appears correlated to other factors such as rural/urban location, low income status, or race. Also relevant may be how these measures correlate to other strategic goals in Nebraska’s Aging State Plan or address concerns that have arisen in the current environment. e. Recommended variables: After the evaluation of the current IFF, Milliman would solicit feedback from the State which goals may have gained or lost priority since the prior IFF was developed. This input could be combined with the evaluation analysis to adjust the weights, and also consider adding or substituting variables. We recommend that the new variables be summarized as an extension to the new automated template developed in items a through c of this section. The template would contain historical data from the current IFF as well as new data under the proposed IFF, with ability to handle both sets of data and any changes to funding variables. It would also have the geographic flexibility to manage any changes to service area definitions. f. New variables would be proposed for high priority goals that do not have a strong measure under the current IFF. For new variables, we would be willing to consider any of the variables listed in the RFP under this section, and would also consider other variables, as needed to address state priorities. g. Written report: Following standard Milliman practice for any major deliverable, we would prepare a written report to document the assessment of the current IFF, data and variable options available, and recommended updates. To ensure an understanding of the impact to stakeholders, the report would also include an estimated comparison of allocations to service areas under the current IFF and recommended IFF with updated data. h. Prepare for publication: Milliman can draft the documentation needed for publication. i. Local funding considerations: The AAAs already utilize a variety of local resources to extend and enhance services provided using state and federal funding. It may be helpful to prepare a comprehensive list of local resources, such as senior centers, contact agencies, local meal programs, local ombudsmen, and other volunteers. In addition, counties may also have funding for transportation, the legal assistance developer (LAD) may be able to find local contacts for pro bono legal support, and language support may be available from various ethnic community resources and support groups. A survey of these various resources, and of the AAAs themselves, may be helpful in identifying best practices. In addition, identifying these resource may allow us to recommend use of Medicaid or braided funding of programs through the Medicaid program to maximize the resources available to the state. j. Work plan for managing the variables: This is described in Task 2. k. One-site stakeholder meeting: Milliman recommends this meeting be used to present and answer questions on the updated IFF. Milliman staff would draft presentations and other materials, and be available to lead or co-lead each meeting, as directed by DHHS. That being said, we recommend a state executive sponsor also be available to convey support for the changes the state has approved. l. Four virtual meetings: Milliman is also available to support stakeholder engagement virtually. The virtual meetings could be used to communicate IFF changes to those who are unable to attend the in-person meeting. One virtual meeting could also be used prior to the in-person meeting to announce the initiative, take questions, and invite feedback or suggestions. m. Transition work plan: This is outlined in task 3. A final work plan will be provided to DHHS by June 30, 2021. n. Final automated template: This will be provided to DHHS by September 30, 2021. o. Maintenance: Milliman agrees to maintain and support the automated template through at least March 31, 2022. This includes answering user questions and addressing any
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performance issues that may arise, and may also include minor updates, by agreement of both parties. However, any significant model changes should be considered out of scope.
4.3 Provide a description of how the bidder will address each item within RFP section V.D.7. Scope of Work: ADRC, items a. through m. Bidder Response: Specifics on the proposed approach for allocation of ADRC funding are addressed below, following the order in section V.D.7: a. Automated template: As part of the initial discussion in Task 1, Milliman will come prepared with background information on platforms such as excel, access, power BI, and hosted solutions. During the initial meeting, we will gather information on all desired features, exhibits, and functionality that is desired by the SUA and DHHS. Beyond the choice of platform, developing expanded and enhanced exhibit layouts that are consider the SUA’s needs could add value for users, so we will want to make sure we have a comprehensive view of how the tool is currently used and could be used.
b. Geographic flexibility: Milliman would recommend summarizing and storing data at a more granular geographic than is needed, in order to provide future flexibility. For example, instead of storing the population age 60+ by AAA service area, we could estimate it by a smaller geographic subdivision, such as county, and separately develop a lookup that would direct how to combine counties to form each service area. In this example, if the counties that comprise each AAA service area were to change in the future, we would not need to modify the underlying data, only change the mapping of counties to service area. We would consult with the state to understand what type of more granular geographic division is likely to be most useful.
c. Evaluate current funding formula: Milliman would plan to discuss each of the current funding variables in the context of ADRC goals and populations served, for both the participating AAAs and the ADRC Partner Organizations (APOs). Fundamentally, this will evaluate how well the current allocation methodology correlates with anticipated demand for information on LTSS from individuals served by each organization. In addition our review will include ways to maximize federal, state and local funding by utilizing all appropriate funding sources.
d. Recommended variables: After the evaluation of the current funding formula, Milliman would solicit feedback from the State on whether ADRC grantees are using the funding as intended, or whether the state would like to make adjustments on what is prioritized. This input could be combined with the evaluation analysis to adjust the weights, and also consider adding or substituting variables. We recommend that the new variables be summarized as an extension to the new automated template developed in items a and b of this section. The template would contain historical data from the current allocation as well as new data under the proposed allocations, with ability to handle both sets of data and any changes to funding variables. It would also have the geographic flexibility to manage any changes to service area definitions. From a preliminary review, we would recommend considering three types of metrics, although this could be expanded based on discussion with the SUA. 1) Total population served: For participating AAAs this could be Nebraska residents aged 60 and older in their service area; for APOs this could be number of Nebraska residents with one of the chronic health conditions supported by the APO. 2) Estimated service need: For AAAs, service need may be better correlated with population age 75 and older than with the total population. For APOs, individuals with many common conditions, such as diabetes, may be less likely to seek services than individuals with some rarer but more severe conditions, such as multiple sclerosis. 3) Historical ADRC services provided by each entity– this provides a useful check on estimates from census or other data sources.
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e. Describe the process, variables, and other considerations: Any proposed changes to the current funding formula would be clearly described and supported in both a report (word) format and with supporting formulas in excel exhibits. The report would also document the process and considerations used to evaluate options.
f. Proposed funding formula: Reflecting state feedback on program goals and new proposed funding variables, a new funding formula would be proposed, with the potential to include updates to the AAA/APO allocation as well as allocation between participating AAAs or APOs. The allocation methodology could include updates to the base amount, funding variables, or weights.
g. Written report: Following standard Milliman practice for any major deliverable, we would prepare a written report to document the assessment of the current funding formula, data and variable options available, and recommended updates. To ensure an understanding of the impact to stakeholders, the report would also include an estimated comparison of allocations to AAAs and APOs under the current funding formula and recommended funding formula.
h. Prepare for publication: Milliman can draft the documentation needed for publication.
i. Work plan for managing the variables: This is described in Task 2.
j. Four virtual meetings: Milliman is also available to support stakeholder engagement virtually. The virtual meetings could be used to communicate funding formula changes to those who are unable to attend the in-person meeting. One virtual meeting could also be used prior to the in-person meeting to announce the initiative, take questions, and invite feedback or suggestions.
k. Transition work plan: This is outlined in task 3. A final work plan will be provided to DHHS by June 30, 2021.
l. Final automated template: This will be provided to DHHS by September 30, 2021.
m. Maintenance: Milliman agrees to maintain and support the automated template through at least March 31, 2022. This includes answering user questions and addressing any performance issues that may arise, and may also include minor updates, by agreement of both parties. However, any significant model changes should be considered out of scope. 4.4 Provide a description of how the bidder will address each item within RFP section V.D.8. Scope of Work: Care Management,, items a. through l. Bidder Response: Specifics on the proposed approach on allocation of Care Management funding are addressed below, following the order in section V.D.8: a. Automated template: As part of the initial discussion in Task 1, Milliman will come prepared with background information on platforms such as excel, access, power BI, and hosted solutions. During the initial meeting, we will gather information on all desired features, exhibits, and functionality that is desired by the SUA and DHHS. Beyond the choice of platform, developing expanded and enhanced exhibit layouts that are consider the SUA’s needs could add value for users, so we will want to make sure we have a comprehensive view of how the tool is currently used and could be used.
b. Geographic flexibility: Milliman would recommend summarizing and storing data at a more granular geographic than is needed, in order to provide future flexibility. For example, instead of storing the population age 60+ by AAA service area, we could estimate it by a smaller
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geographic subdivision, such as county, and separately develop a lookup that would direct how to combine counties to form each service area. In this example, if the counties that comprise each AAA service area were to change in the future, we would not need to modify the underlying data, only change the mapping of counties to service area. We would consult with the state to understand what type of more granular geographic division is likely to be most useful.
c. Propose variables: Milliman would plan to evaluate the current funding variables for correlation to care management program goals and populations served. Milliman would also solicit feedback from the State on whether program goals or priorities have changed. This input would be combined with the evaluation analysis to adjust the weights, and also to consider adding or substituting variables that may correlate more closely to service area need for care management, such as considering income, psycho-social needs, or social determinants of health. We recommend also reviewing historical service units provided by each AAA, and whether the full allocation is commonly used, as a high level check on level of demand.
d. Describe the process, variables, and other considerations: Any proposed changes to the current funding formula would be clearly described and supported in both a report (word) format and with supporting formulas in excel exhibits. The report would also document the process and considerations used to evaluate options.
e. Proposed funding formula: Reflecting state feedback on program goals and new proposed funding variables, a new funding formula would be proposed, with the potential to include updates to the funding allocation variables or weights.
f. Written report: Following standard Milliman practice for any major deliverable, we would prepare a written report to document the assessment of the current funding formula, data and variable options available, and recommended updates. To ensure an understanding of the impact to stakeholders, the report would also include an estimated comparison of allocations to AAAs under the current funding formula and proposed funding formula.
g. Prepare for publication: Milliman can draft the documentation needed for publication.
h. Work plan for managing the variables: This is described in Task 2.
i. Four virtual meetings: Milliman is also available to support stakeholder engagement virtually. The virtual meetings could be used to communicate funding formula changes to those who are unable to attend the in-person meeting. One virtual meeting could also be used prior to the in-person meeting to announce the initiative, take questions, and invite feedback or suggestions.
j. Transition work plan: This is outlined in task 3. A final work plan will be provided to DHHS by June 30, 2021.
k. Final automated template: This will be provided to DHHS by September 30, 2021.
l. Maintenance: Milliman agrees to maintain and support the automated template through at least March 31, 2022. This includes answering user questions and addressing any performance issues that may arise, and may also include minor updates, by agreement of both parties. However, any significant model changes should be considered out of scope.
RFP 6406 Z1 Page 32 of 115 December 8, 2020 MILLIMAN TECHNICAL PROPOSAL
d) Detailed project work plan
We have provided narratives our proposed technical approach, including work steps, in our response Section 2.c of this proposal. Per the requirements of this RFP we provide our work plan in Gantt chart format further demonstration our proposed approach in Figure 3 as follows.
The actual project dates will be based on the final project timeline developed for each project task, based on project initiation discussions with DHHS. The estimated timeframes for these tasks assume the contract is initiated on February 1, 2021 – if the project start date is delayed, we will work with the Division to establish a new timeline.
RFP 6406 Z1 Page 33 of 115 December 8, 2020 MILLIMAN TECHNICAL PROPOSAL
Figure 3: State Unit on Aging Funding Formulas Timeline
2021 2022
Ta sk Task Description FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR
1 Development of an Automated Funding Formula Allocation Tool
1.1 Initial planning meeting
1.2 Finalize work plan for Task 1
1.3 Build the automated tool
1.4 Draft template to DHHS for review and discussion
1.5 Finalize automated template
1.6 Maintenance and support
2 Conduct Assessment of the Current Intrastate Funding Formula (IFF)
2.1 Initial evaluation of the current IFF
2.2 Initial planning discussion
2.3 Finalize the work plan for Task 2
2.4 Develop preliminary IFF transition plan
2.5 Finalize IFF transition plan
2.6 Develop written report on the updated IFF
3 Support Communication, Stakeholder Engagement, and Transition
3.1 Initial planning discussion
3.2 Finalize the work plan for task 3
3.3 Conduct stakeholder meetings
RFP 6406 Z1 Page 34 of 115 December 8, 2020 MILLIMAN TECHNICAL PROPOSAL
e) Deliverables and due dates
Per the requirements of this RFP, we list our proposed deliverables (based on the proposed scope of work described previously) and estimated due dates for each project task. The actual deliverable dates will be based on the final project timeline developed for each task, based on project initiation discussions with DHHS.
Figure 4 below shows the proposed project deliverables for work performed from February 2021 through March 2022. We will plan to deliver preliminary versions of each deliverable in advance of due dates communicated by DHHS, in order to provide ample time for review. The following estimated due dates apply to similar deliverables for all funds, including OAA, CASA, ADRC, and Care Management. The estimated due dates for these deliverables assume the project begins February 1, 2021 – if the project start date is delayed, we will work with DHHS to establish a new timeline.
Figure 4: State Unit on Aging Funding Formulas Project Deliverables
Estimated Due Date
Preliminary Final Deliverable Deliverable Deliverable
Task 1 - Development of an Automated Funding Formula Allocation Tool
1.1 – Automated funding formula allocation tool work plan 2/26/2021 3/31/2021
1.2 – Automated funding formula allocation tool template 8/31/2021 9/30/2021
Task 2 - Conduct Assessment of the Current Intrastate Funding Formula (IFF)
2.1 – IFF transition work plan 2/26/2021 3/31/2021
2.2 – New IFF Transition Plan 5/31/2021 6/30/2021
2.3 – Written report on the updated IFF 8/31/2021 9/30/2021
Task 3 - Support Communication, Stakeholder Engagement, and Transition
3.1 – Stakeholder engagement work plan 2/26/2021 3/31/2021
3.2 – Stakeholder meeting materials Various
RFP 6406 Z1 Page 35 of 115 December 8, 2020 MILLIMAN TECHNICAL PROPOSAL
APPENDIX A: TERMS AND CONDITIONS
RFP 6406 Z1 Page 36 of 115 December 8, 2020 TERMS AND CONDITIONS
Bidders should complete Sections II through VI as part of the proposal. Bidder is expected to read the Terms and Conditions and should initial either accept, reject, or reject and provide alternative language for each clause. The bidder should also provide an explanation of why the bidder rejected the clause or rejected the clause and provided alternate language. By signing the solicitation, bidder is agreeing to be legally bound by all the accepted terms and conditions, and any proposed alternative terms and conditions submitted with the proposal. The State reserves the right to negotiate rejected or proposed alternative language. If the State and contractor fail to agree on the final Terms and Conditions, the State reserves the right to reject the proposal. The State of Nebraska is soliciting proposals in response to this solicitation. The State of Nebraska reserves the right to reject proposals that attempt to substitute the bidder’s commercial contracts and/or documents for this solicitation.
The bidders should submit with their proposal any license, user agreement, service level agreement, or similar documents that the bidder wants incorporated in the Contract. The State will not consider incorporation of any document not submitted with the bidder’s proposal as the document will not have been included in the evaluation process. These documents shall be subject to negotiation and will be incorporated as addendums if agreed to by the Parties.
If a conflict or ambiguity arises after the Addendum to Contract Award have been negotiated and agreed to, the Addendum to Contract Award shall be interpreted as follows:
1. If only one Party has a particular clause then that clause shall control; 2. If both Parties have a similar clause, but the clauses do not conflict, the clauses shall be read together; 3. If both Parties have a similar clause, but the clauses conflict, the State’s clause shall control.
GENERAL
Reject & Provide Accept Reject Alternative within NOTES/COMMENTS: (Initial) (Initial) Solicitation Response (Initial) Milliman believes that the proposal submitted by our organization should precede amendments to the solicitation and any questions and answers, as well as the original solicitation document and any addenda.
The Contract resulting from this solicitation shall incorporate the following documents:
1. Request for Proposal and Addenda; 2. Amendments to the solicitation; 3. Questions and Answers; 4. Bidder’s proposal (Solicitation and properly submitted documents); 5. The executed Contract signature page(s), which may include contract deliverables and contracted pricing, and Addendum One to Contract, if applicable; and, 6. Amendments/Addendums to the Contract.
These documents constitute the entirety of the Contract.
Unless otherwise specifically stated in a future contract amendment, in case of any conflict between the incorporated documents, the documents shall govern in the following order of preference with number one (1) receiving preference over all other documents and with each lower numbered document having preference over any higher numbered document: 1) Amendment/Addenda to the executed Contract with the most recent dated amendment/amendment having the highest priority, 2) Addendum One to Contract 3) the executed Contract signature page(s) and any attached documents, 4) the Contractor’s submitted Proposal, 5) Amendments to solicitation and any Questions and Answers, 6) the original solicitation document and any Addenda. Deleted: 5 Any ambiguity or conflict in the contract discovered after its execution, not otherwise addressed herein, shall be resolved Deleted: , and 6) the Contractor’s submitted in accordance with the rules of contract interpretation as established in the State of Nebraska. Proposal…
Page 1 RFP Boilerplate | 07012019 NOTIFICATION
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Contractor and State shall identify the contract manager who shall serve as the point of contact for the executed contract.
Communications regarding the executed contract shall be in writing and shall be deemed to have been given if delivered personally or mailed, by U.S. Mail, postage prepaid, return receipt requested, to the parties at their respective addresses set forth below, or at such other addresses as may be specified in writing by either of the parties. All notices, requests, or communications shall be deemed effective upon personal delivery or five (5) calendar days following deposit in the mail.
Either party may change its address for notification purposes by giving notice of the change, and setting forth the new address and an effective date.
NOTICE (Buyer’s Representative) The State reserves the right to appoint a Buyer's Representative to manage [or assist the Buyer in managing] the contract on behalf of the State. The Buyer's Representative will be appointed in writing, and the appointment document will specify the extent of the Buyer's Representative authority and responsibilities. If a Buyer's Representative is appointed, the Contractor will be provided a copy of the appointment document, and is expected to cooperate accordingly with the Buyer's Representative. The Buyer's Representative has no authority to bind the State to a contract, amendment, addendum, or other change or addition to the contract.
GOVERNING LAW (Statutory) Notwithstanding any other provision of this contract, or any amendment or addendum(s) entered into contemporaneously or at a later time, the parties understand and agree that, (1) the State of Nebraska is a sovereign state and its authority to contract is therefore subject to limitation by the State’s Constitution, statutes, common law, and regulation; (2) this contract will be interpreted and enforced under the laws of the State of Nebraska; (3) any action to enforce the provisions of this agreement must be brought in the State of Nebraska per state law; (4) the person signing this contract on behalf of the State of Nebraska does not have the authority to waive the State's sovereign immunity, statutes, common law, or regulations; (5) the indemnity, limitation of liability, remedy, and other similar provisions of the final contract, if any, are entered into subject to the State's Constitution, statutes, common law, regulations, and sovereign immunity; and, (6) all terms and conditions of the final contract, including but not limited to the clauses concerning third party use, licenses, warranties, limitations of liability, governing law and venue, usage verification, indemnity, liability, remedy or other similar provisions of the final contract are entered into specifically subject to the State's Constitution, statutes, common law, regulations, and sovereign immunity.
The Parties must comply with all applicable local, state and federal laws, ordinances, rules, orders, and regulations.
BEGINNING OF WORK The bidder shall not commence any billable work until a valid contract has been fully executed by the State and the awarded Bidder. The awarded bidder will be notified in writing when work may begin.
AMENDMENT This Contract may be amended in writing, within scope, upon the agreement of both parties.
CHANGE ORDERS OR SUBSTITUTIONS
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Page 2 RFP Boilerplate | 07012019 The State and the Contractor, upon the written agreement, may make changes to the contract within the general scope of the solicitation. Changes may involve specifications, the quantity of work, or such other items as the State may find necessary or desirable. Corrections of any deliverable, service, or work required pursuant to the contract shall not be deemed a change. The Contractor may not claim forfeiture of the contract by reasons of such changes.
The Contractor shall prepare a written description of the work required due to the change and an itemized cost sheet for the change. Changes in work and the amount of compensation to be paid to the Contractor shall be determined in accordance with applicable unit prices if any, a pro-rated value, or through negotiations. The State shall not incur a price increase for changes that should have been included in the Contractor’s proposal, were foreseeable, or result from difficulties with or failure of the Contractor’s proposal or performance.
No change shall be implemented by the Contractor until approved by the State, and the Contract is amended to reflect the change and associated costs, if any. If there is a dispute regarding the cost, but both parties agree that immediate implementation is necessary, the change may be implemented, and cost negotiations may continue with both Parties retaining all remedies under the contract and law.
In the event any product is discontinued or replaced upon mutual consent during the contract period or prior to delivery, the State reserves the right to amend the contract or purchase order to include the alternate product at the same price.
VENDOR PERFORMANCE REPORT(S)
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The State may document any instance(s) of products or services delivered or performed which exceed or fail to meet the terms of the purchase order, contract, and/or solicitation specifications. The State Purchasing Bureau may contact the Vendor regarding any such report. Vendor performance report(s) will become a part of the permanent record of the Vendor.
NOTICE OF POTENTIAL CONTRACTOR BREACH
Reject & Provide Accept Reject Alternative within NOTES/COMMENTS: (Initial) (Initial) Solicitation Response (Initial) In many instances, immediate notification is functionally impossible; however, Milliman will promptly notify the State of a breach or anticipated breach caused by Milliman.
If Contractor breaches the contract or anticipates breaching the contract, the Contractor shall promptly Deleted: immediately give written notice to the State. The notice shall explain the breach or potential breach, a proposed cure, and may include a request for a waiver of the breach if so desired. The State may, in its discretion, temporarily or permanently waive the breach. By granting a waiver, the State does not forfeit any rights or remedies to which the State is entitled by law or equity, or pursuant to the provisions of the contract. Failure to give prompt notice, however, may be grounds for denial of any request for a waiver of a breach. Deleted: immediate
Page 3 RFP Boilerplate | 07012019 BREACH
Reject & Provide Accept Reject Alternative within NOTES/COMMENTS: (Initial) (Initial) Solicitation Response (Initial) Edits to this section intend to clarify that Milliman is only responsible for excess costs associated with a default caused by Milliman. Furthermore, Milliman believes that a party not fulfilling any and all of its obligations under this agreement, including a failure to pay for services, should be considered a breach.
Either Party may terminate the contract, in whole or in part, if the other Party breaches its duty to perform its obligations under the contract in a timely and proper manner. Termination requires written notice of default and a thirty (30) calendar day (or longer at the non-breaching Party’s discretion considering the gravity and nature of the default) cure period. Said notice shall be delivered by Certified Mail, Return Receipt Requested, or in person with proof of delivery. Allowing time to cure a failure or breach of contract does not waive the right to immediately terminate the contract for the same or different contract breach which may occur at a different time. In case of default of the Contractor, the State may contract the service from other sources and hold the Contractor responsible for any excess cost caused by Deleted: occasioned thereby Contractor’s default. OR In case of breach by the Contractor, the State may, without unreasonable delay, make a good faith effort to make a reasonable purchase or contract to purchased goods in substitution of those due from the contractor. The State may recover from the Contractor as damages the difference between the costs of covering the breach. Deleted: Notwithstanding any clause to the contrary, the State may also recover the contract
price together with any incidental or consequential NON-WAIVER OF BREACH damages defined in UCC Section 2-715, but less expenses saved in consequence of Contractor’s Reject & Provide breach.… Accept Reject Alternative within NOTES/COMMENTS: (Initial) (Initial) Solicitation Deleted: The State’s failure to make payment shall Response (Initial) not be a breach, and the Contractor shall retain all available statutory remedies and protections.¶
The acceptance of late performance with or without objection or reservation by a Party shall not waive any rights of the Party nor constitute a waiver of the requirement of timely performance of any obligations remaining to be performed.
SEVERABILITY
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If any term or condition of the contract is declared by a court of competent jurisdiction to be illegal or in conflict with any law, the validity of the remaining terms and conditions shall not be affected, and the rights and obligations of the parties shall be construed and enforced as if the contract did not contain the provision held to be invalid or illegal.
Page 4 RFP Boilerplate | 07012019 INDEMNIFICATION AND LIMITATION OF LIABILITY
Reject & Provide Accept Reject Alternative within NOTES/COMMENTS: (Initial) (Initial) Solicitation Response (Initial) Milliman’s risk management policy require that our company limit its indemnification of clients to our gross negligence, willful misconduct, and fraud. As a professional service firm, literally every claim that arises because of our services is going to allege negligence. If Milliman agrees to indemnify for simple negligence, Milliman essentially will be agreeing to indemnify for any claim that arises out of our services. This could completely undercut the requested limitation of liability. Therefore, Milliman’s risk management requirements limit indemnification of clients to Milliman’s gross negligence. Furthermore more, all indemnification clauses should be limited to third party claims. If the State has a direct claim that arises under this Agreement, the State is free to file such claim in accordance with the dispute resolution clause added to Section K.
In regard to the limitation of liability, Milliman recommends that the State give fair consideration to proposals, such as Milliman’s, that contain an explicit limit of liability since most actuarial firms have either: (i) An explicitly negotiated, contractual limit of liability, or (ii) An implicit, non-negotiated non-contractual limit of liability that is equal to the assets of the actuarial firm plus any errors & omissions (E&O) insurance, less legal fees.
Our understanding is that State would prefer proposals which do not contain a limitation of a vendor’s liability for services provided. However, no consulting firm is able to provide unlimited liability coverage. Please keep in mind that the ability for the State to recover damages is already limited. In most cases, the State will only be able to recover assets of a vendor and any Errors and Omissions (E&O) insurance the vendor may possess.
Please also note that the liability limits of the majority of Milliman’s remaining competitors are non-contractual limits. Most of these competitors are smaller firms with much smaller firm assets and much more limited E&O insurance. The limitation of liability Milliman is proposing is completely backed both by our firm’s assets and our E&O insurance and is larger than the non-contractual limits of liability most other actuarial firms in this market are able to provide.
We believe that because Milliman’s limitation of liability is larger than the non- contractual limits of liability of most of our competitors Milliman is more accountable. A firm that pays a claim negotiated to be equal to its E&O coverage, which is smaller than Milliman’s contractual limit, suffers a smaller impact to their finances and is therefore less accountable.
1. GENERAL The Contractor agrees to defend, indemnify, and hold harmless the State and its employees, agents, and its elected and appointed officials (“the indemnified parties”) from and against any Deleted: volunteers, and all third party claims, liens, demands, damages, liability, actions, causes of action, losses, judgments, costs, and expenses of every nature, including investigation costs and expenses, settlement costs, and reasonable attorney fees and expenses (“the claims”), sustained or asserted against the State for personal injury, death, or tangible property loss or damage, arising out of, resulting from, or attributable to the willful misconduct, gross negligence, or fraud Deleted: error, of the Contractor, its employees, Subcontractors, consultants, representatives, and agents, resulting from the performance of services under this contract, except to the extent such Deleted: omission Contractor liability is attenuated by any action of the State which directly and proximately contributed to the claims.
2. INTELLECTUAL PROPERTY (Optional) The Contractor agrees it will, at its sole cost and expense, defend, indemnify, and hold Page 5 RFP Boilerplate | 07012019 harmless the indemnified parties from and against any and all third party claims, to the extent such claims arise out of, result from, or are attributable to, the actual or alleged infringement or misappropriation of any patent, copyright, trade secret, trademark, or confidential information of any third party by the Contractor or its employees, Subcontractors, consultants, and agents Deleted: representatives, permitted use of the services or deliverables provided by Contractor under this contract; provided, however, the State gives the Contractor prompt notice in writing of the claim. The Contractor may not settle any infringement claim that will affect the State’s use of the Licensed Software without the State’s prior written consent, which consent may not be unreasonably withheld. Deleted: for any reason If a judgment or settlement is obtained or reasonably anticipated against the State’s use of any intellectual property for which the Contractor has indemnified the State, the Contractor shall, at the Contractor’s sole cost and expense, promptly modify the item or items which were determined to be infringing, acquire a license or licenses on the State’s behalf to provide the necessary rights to the State to eliminate the infringement, or provide the State with a non- infringing substitute that provides the State the same functionality. Deleted: At the State’s election, the actual or anticipated judgment may be treated as a breach 3. PERSONNEL of warranty by the Contractor, and the State may The Contractor shall, at its expense, indemnify and hold harmless the indemnified parties from receive the remedies provided under this and against any third party claim with respect to withholding taxes, worker’s compensation, solicitation.… employee benefits, or any other third party claim, demand, liability, damage, or loss of any nature relating to any of the personnel, including subcontractor’s and their employees, provided by the Contractor to perform service under this agreement.
4. SELF-INSURANCE The State of Nebraska is self-insured for any loss and purchases excess insurance coverage pursuant to Neb. Rev. Stat. § 81-8,239.01 (Reissue 2008). If there is a presumed loss under the provisions of this agreement, Contractor may file a claim with the Office of Risk Management pursuant to Neb. Rev. Stat. §§ 81-8,829 – 81-8,306 for review by the State Claims Board. The State retains all rights and immunities under the State Miscellaneous (Section 81- 8,294), Tort (Section 81-8,209), and Contract Claim Acts (Section 81- 8,302), as outlined in Neb. Rev. Stat. § 81-8,209 et seq. and under any other provisions of law and accepts liability under this agreement to the extent provided by law.
5. The Parties acknowledge that Attorney General for the State of Nebraska is required by statute to represent the legal interests of the State, and that any provision of this indemnity clause is subject to the statutory authority of the Attorney General.
6. LIMITATION OF LIABILITY. In the event of any claims arising from services provided by Contractor at any time, the total liability of MILLIMAN, its officers, directors, agents and employees to the State of Nebraska shall not exceed five million dollars ($5,000,000). This limit applies regardless of the theory of law under which a claim is brought, including negligence, tort, contract, or otherwise. In no event shall Contractor be liable for lost profits of the State of Nebraska or any other type of incidental or consequential damages. The foregoing limitations shall not apply in the event of the intentional fraud or willful misconduct of Contractor.
Page 6 RFP Boilerplate | 07012019 DISPUTE RESOLUTION AND ATTORNEY'S FEES
Reject & Provide Accept Reject Alternative within NOTES/COMMENTS: (Initial) (Initial) Solicitation Response (Initial) Milliman’s board mandates that all Milliman agreements must have a dispute’s resolution clause. Milliman prefers to resolve disputes by arbitration because Milliman has found that due to the complicated mathematical nature of its services, the issues that arise are complex and require an experienced adjudicator who understands the nature of actuarial services. A jury of twelve lay people will not understand the complexities that typically are involved in actuarial claims. Therefore, jury trials do not make for a fair forum for resolution of the issues.
In the event of any dispute arising out of or relating to this contract, the parties agree that the dispute will be resolved by final and binding arbitration under the Commercial Arbitration Rules of the American Arbitration Association. The arbitration shall take place before a panel of three arbitrators. Within 30 days of the commencement of the arbitration, each party shall designate in writing a single neutral and independent arbitrator. The two arbitrators designated by the parties shall then select a third arbitrator. The arbitrators shall have a background in either insurance, actuarial science or law. The arbitrators shall have the authority to permit limited discovery, including depositions, prior to the arbitration hearing, and such discovery shall be conducted consistent with the Federal Rules of Civil Procedure. The arbitrators shall have no power or authority to award punitive or exemplary damages. The arbitrators may, in their discretion, award the cost of the arbitration, including reasonable attorney fees, to the prevailing party. Any award made may be confirmed in any court having jurisdiction. Any arbitration shall be confidential, and except as required by law, neither party may disclose the content or results of any arbitration hereunder without the prior written consent of the other party, except that disclosure is permitted to a party’s auditors and legal advisors.
In the event of any litigation, appeal, or other legal action to enforce any provision of the contract, the Parties agree to pay all expenses of such action, as permitted by law and if ordered by the court, including reasonable attorney's fees and costs, if the other Party prevails.
ASSIGNMENT, SALE, OR MERGER
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Either Party may assign the contract upon mutual written agreement of the other Party. Such agreement shall not be unreasonably withheld.
The Contractor retains the right to enter into a sale, merger, acquisition, internal reorganization, or similar transaction involving Contractor’s business. Contractor agrees to cooperate with the State in executing amendments to the contract to allow for the transaction. If a third party or entity is involved in the transaction, the Contractor will remain responsible for performance of the contract until such time as the person or entity involved in the transaction agrees in writing to be contractually bound by this contract and perform all obligations of the contract.
Page 7 RFP Boilerplate | 07012019 CONTRACTING WITH OTHER NEBRASKA POLITICAL SUB-DIVISIONS OF THE STATE OR ANOTHER STATE
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The Contractor may, but shall not be required to, allow agencies, as defined in Neb. Rev. Stat. §81-145, to use this contract. The terms and conditions, including price, of the contract may not be amended. The State shall not be contractually obligated or liable for any contract entered into pursuant to this clause. A listing of Nebraska political subdivisions may be found at the website of the Nebraska Auditor of Public Accounts.
The Contractor may, but shall not be required to, allow other states, agencies or divisions of other states, or political subdivisions of other states to use this contract. The terms and conditions, including price, of this contract shall apply to any such contract, but may be amended upon mutual consent of the Parties. The State of Nebraska shall not be contractually or otherwise obligated or liable under any contract entered into pursuant to this clause. The State shall be notified if a contract is executed based upon this contract.
Q. FORCE MAJEURE
Reject & Provide Accept Reject Alternative within NOTES/COMMENTS: (Initial) (Initial) Solicitation Response (Initial) Typically, in Force Majeure situations, a restricted timeframe requirement can be functionally impossible. Therefore, Milliman will promptly notify the State of a breach of a Force Majeure event. Furthermore, due to the uncontrollable nature of Force Majeure events, a single party should not have the subjective right to dictate if relief from the affected party’s obligations should be granted.
Neither Party shall be liable for any costs or damages, or for default resulting from its inability to perform any of its obligations under the contract due to a natural or manmade event outside the reasonable control and not the fault of the affected Party (“Force Majeure Event”). The Party so affected shall promptly make Deleted: immediately a written request for relief to the other Party, and shall have the burden of proof to justify the request. Upon such notice, all obligations of the affected Party under this contract which are reasonably related Deleted: The other Party may grant the relief to the Force Majeure Event shall be suspended, and the affected Party shall do everything reasonably requested; relief may not be unreasonably withheld necessary to resume performance as soon as possible. Labor disputes with the impacted Party’s own employees will not be considered a Force Majeure Event.
R. CONFIDENTIALITY
Reject & Provide Accept Reject Alternative within NOTES/COMMENTS: (Initial) (Initial) Solicitation Response (Initial) Milliman would like to add some additional exclusions to this section that clarifies what should be considered “confidential information”. Please note that the added language are standard exclusions in a confidentiality setting.
As previously mentioned, in many instances, immediate notification is functionally impossible; however, Milliman will promptly notify the State if there is a breach of its confidential information that is in Milliman’s possession.
All materials and information provided by the Parties or acquired by a Party on behalf of the other Party shall be regarded as confidential information Notwithstanding the foregoing, information received from Page 8 RFP Boilerplate | 07012019 the disclosing Party, or a third party at the disclosing Party’s direction, shall not be considered confidential if such information: (i) was in the public domain at the time of the communication thereof to the receiving Party; (ii) enters the public domain through no fault of the receiving Party subsequent to the time of the communication thereof to the receiving Party; (iii) was in the receiving Party’s possession free of any obligation of confidentiality at the time of the communication thereof to the receiving Party; (iv) is developed by the receiving Party completely independent from the confidential information of the disclosing Party; or (v) is required by law or regulation to be disclosed, but only to the extent and for the purpose of such required disclosure after providing the disclosing Party with advance written notice, if not legally prohibited, of such disclosure so that the disclosing Party is afforded an opportunity to contest the disclosure or seek an appropriate protective order. All materials and information provided or acquired shall be handled in accordance with federal and state law, and ethical standards. Should said confidentiality be breached by a Party, the Party shall notify the other Party promptly of said breach and Deleted: immediately take prompt corrective action. Deleted: immediate It is incumbent upon the Parties to inform their officers and employees of the penalties for improper disclosure imposed by the Privacy Act of 1974, 5 U.S.C. 552a. Specifically, 5 U.S.C. 552a (i)(1), which is made applicable by 5 U.S.C. 552a (m)(1), provides that any officer or employee, who by virtue of his/her employment or official position has possession of or access to agency records which contain individually identifiable information, the disclosure of which is prohibited by the Privacy Act or regulations established thereunder, and who knowing that disclosure of the specific material is prohibited, willfully discloses the material in any manner to any person or agency not entitled to receive it, shall be guilty of a misdemeanor and fined not more than $5,000.
S. OFFICE OF PUBLIC COUNSEL (Statutory) If it provides, under the terms of this contract and on behalf of the State of Nebraska, health and human services to individuals; service delivery; service coordination; or case management, Contractor shall submit to the jurisdiction of the Office of Public Counsel, pursuant to Neb. Rev. Stat. §§ 81-8,240 et seq. This section shall survive the termination of this contract.
T. LONG-TERM CARE OMBUDSMAN (Statutory) Contractor must comply with the Long-Term Care Ombudsman Act, per Neb. Rev. Stat. §§ 81-2237 et seq. This section shall survive the termination of this contract.
U. EARLY TERMINATION
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The contract may be terminated as follows:
1. The State and the Contractor, by mutual written agreement, may terminate the contract at any time.
2. The State, in its sole discretion, may terminate the contract for any reason upon thirty (30) calendar day’s written notice to the Contractor. Such termination shall not relieve the Contractor of warranty or other service obligations incurred under the terms of the contract. In the event of termination the Contractor shall be entitled to payment, determined on a pro rata basis, for products or services satisfactorily performed or provided.
3. The State may terminate the contract immediately for the following reasons:
a. if directed to do so by statute; b. Contractor has made an assignment for the benefit of creditors, has admitted in writing its inability to pay debts as they mature, or has ceased operating in the normal course of business; c. a trustee or receiver of the Contractor or of any substantial part of the Page 9 RFP Boilerplate | 07012019 Contractor’s assets has been appointed by a court; d. fraud, misappropriation, embezzlement, malfeasance, misfeasance, or illegal conduct pertaining to performance under the contract by its Contractor, its employees, officers, directors, or shareholders; e. an involuntary proceeding has been commenced by any Party against the Contractor under any one of the chapters of Title 11 of the United States Code and (i) the proceeding has been pending for at least sixty (60) calendar days; or (ii) the Contractor has consented, either expressly or by operation of law, to the entry of an order for relief; or (iii) the Contractor has been decreed or adjudged a debtor; f. a voluntary petition has been filed by the Contractor under any of the chapters of Title 11 of the United States Code; g. Contractor intentionally discloses confidential information; h. Contractor has or announces it will discontinue support of the deliverable; and, i. In the event funding is no longer available.
V. CONTRACT CLOSEOUT
Reject & Provide Accept Reject Alternative within NOTES/COMMENTS: (Initial) (Initial) Solicitation Response (Initial) Unfinished work product represents a drastic expansion of liabilities faced by Milliman. Incomplete or partially completed work product may not have been reviewed, double-checked, or finalized and therefore should not be relied upon by the State. Therefore, Milliman only provides completed and finalized work product to its clients.
Milliman wants to ensure that its obligation to cooperate is limited to reasonable requests from the State and the State’s other contractors.
Upon contract closeout for any reason the Contractor shall within 30 days, unless stated otherwise herein:
1. Transfer all completed and final deliverables to the State; Deleted: or partially completed 2. Transfer ownership and title to all completed and final deliverables to the State; 3. Return to the State all information and data, unless the Contractor is permitted to keep the information or Deleted: or partially completed data by contract or rule of law. Contractor may retain one copy of any information or data as required to comply with applicable work product documentation standards or as are automatically retained in the course of Contractor’s routine back up procedures; 4. Reasonably cooperate with any successor Contactor, person or entity in the assumption of any or all of Deleted: C the obligations of this contract; 5. Reasonably cooperate with any successor Contactor, person or entity with the transfer of information or Deleted: C data related to this contract; 6. Return or vacate any state owned real or personal property; and, 7. Return all data in a mutually acceptable format and manner.
Nothing in this Section should be construed to require the Contractor to surrender intellectual property, real or personal property, or information or data owned by the Contractor for which the State has no legal claim.
Page 10 RFP Boilerplate | 07012019 CONTRACTOR DUTIES
INDEPENDENT CONTRACTOR / OBLIGATIONS
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It is agreed that the Contractor is an independent contractor and that nothing contained herein is intended or should be construed as creating or establishing a relationship of employment, agency, or a partnership.
The Contractor is solely responsible for fulfilling the contract. The Contractor or the Contractor’s representative shall be the sole point of contact regarding all contractual matters.
The Contractor shall secure, at its own expense, all personnel required to perform the services under the contract. The personnel the Contractor uses to fulfill the contract shall have no contractual or other legal relationship with the State; they shall not be considered employees of the State and shall not be entitled to any compensation, rights or benefits from the State, including but not limited to, tenure rights, medical and hospital care, sick and vacation leave, severance pay, or retirement benefits.
By-name personnel commitments made in the Contractor's proposal shall not be changed without the prior written approval of the State. Replacement of these personnel, if approved by the State, shall be with personnel of equal or greater ability and qualifications.
All personnel assigned by the Contractor to the contract shall be employees of the Contractor or a subcontractor, and shall be fully qualified to perform the work required herein. Personnel employed by the Contractor or a subcontractor to fulfill the terms of the contract shall remain under the sole direction and control of the Contractor or the subcontractor respectively.
With respect to its employees, the Contractor agrees to be solely responsible for the following:
1. Any and all pay, benefits, and employment taxes and/or other payroll withholding; 2. Any and all vehicles used by the Contractor’s employees, including all insurance required by state law; 3. Damages incurred by Contractor’s employees within the scope of their duties under the contract; 4. Maintaining Workers’ Compensation and health insurance that complies with state and federal law and submitting any reports on such insurance to the extent required by governing law; 5. Determining the hours to be worked and the duties to be performed by the Contractor’s employees; and, 6. All claims on behalf of any person arising out of employment or alleged employment (including without limit claims of discrimination alleged against the Contractor, its officers, agents, or subcontractors or subcontractor’s employees)
If the Contractor intends to utilize any subcontractor, the subcontractor's level of effort, tasks, and time allocation should be clearly defined in the contractor’s proposal. The Contractor shall agree that it will not utilize any subcontractors not specifically included in its proposal in the performance of the contract without the prior written authorization of the State.
The State reserves the right to require the Contractor to reassign or remove from the project any Contractor or subcontractor employee.
Contractor shall insure that the terms and conditions contained in any contract with a subcontractor does not conflict with the terms and conditions of this contract.
The Contractor shall include a similar provision, for the protection of the State, in the contract with any Subcontractor engaged to perform work on this contract.
Page 11 RFP Boilerplate | 07012019 EMPLOYEE WORK ELIGIBILITY STATUS
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The Contractor is required and hereby agrees to use a federal immigration verification system to determine the work eligibility status of employees physically performing services within the State of Nebraska. A federal immigration verification system means the electronic verification of the work authorization program authorized by the Illegal Immigration Reform and Immigrant Responsibility Act of 1996, 8 U.S.C. 1324a, known as the E-Verify Program, or an equivalent federal program designated by the United States Department of Homeland Security or other federal agency authorized to verify the work eligibility status of an employee.
If the Contractor is an individual or sole proprietorship, the following applies:
1. The Contractor must complete the United States Citizenship Attestation Form, available on the Department of Administrative Services website at http://das.nebraska.gov/materiel/purchasing.html
2. The completed United States Attestation Form should be submitted with the solicitation response.
3. If the Contractor indicates on such attestation form that he or she is a qualified alien, the Contractor agrees to provide the US Citizenship and Immigration Services documentation required to verify the Contractor’s lawful presence in the United States using the Systematic Alien Verification for Entitlements (SAVE) Program.
4. The Contractor understands and agrees that lawful presence in the United States is required and the Contractor may be disqualified or the contract terminated if such lawful presence cannot be verified as required by Neb. Rev. Stat. §4-108.
COMPLIANCE WITH CIVIL RIGHTS LAWS AND EQUAL OPPORTUNITY EMPLOYMENT / NONDISCRIMINATION (Statutory) The Contractor shall comply with all applicable local, state, and federal statutes and regulations regarding civil rights laws and equal opportunity employment. The Nebraska Fair Employment Practice Act prohibits Contractors of the State of Nebraska, and their Subcontractors, from discriminating against any employee or applicant for employment, with respect to hire, tenure, terms, conditions, compensation, or privileges of employment because of race, color, religion, sex, disability, marital status, or national origin (Neb. Rev. Stat. §48-1101 to 48-1125). The Contractor guarantees compliance with the Nebraska Fair Employment Practice Act, and breach of this provision shall be regarded as a material breach of contract. The Contractor shall insert a similar provision in all Subcontracts for goods and services to be covered by any contract resulting from this solicitation.
COOPERATION WITH OTHER CONTRACTORS
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Milliman wants to ensure that its obligation to cooperate is limited to reasonable requests from the State and the State’s other contractors.
Contractor may be required to work with or in close proximity to other contractors or individuals that may be working on same or different projects. The Contractor shall agree to reasonably cooperate with such other contractors or individuals, and shall not commit or permit any act which may interfere with the performance of work by any other contractor or individual. Contractor is not required to compromise Contractor’s intellectual property or proprietary information unless expressly required to do so by this contract.
DISCOUNTS Prices quoted shall be inclusive of ALL trade discounts. Cash discount terms of less than thirty (30) days will not be considered as part of the proposal. Cash discount periods will be computed from the date of receipt of a properly Page 12 RFP Boilerplate | 07012019 executed claim voucher or the date of completion of delivery of all items in a satisfactory condition, whichever is later.
PRICES Prices quoted shall be net, including transportation and delivery charges fully prepaid by the contractor, F.O.B. destination named in the solicitation. No additional charges will be allowed for packing, packages, or partial delivery costs. When an arithmetic error has been made in the extended total, the unit price will govern.
All prices, costs, and terms and conditions submitted in the proposal shall remain fixed and valid commencing on the opening date of the proposal until the contract terminates or expires.
The State reserves the right to deny any requested price increase. No price increases are to be billed to any State Agencies prior to written amendment of the contract by the parties.
The State will be given full proportionate benefit of any decreases for the term of the contract.
COST CLARIFICATION The State reserves the right to review all aspects of cost for reasonableness and to request clarification of any proposal where the cost component shows significant and unsupported deviation from industry standards or in areas where detailed pricing is required.
PERMITS, REGULATIONS, LAWS
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The contract price shall include the cost of all royalties, licenses, permits, and approvals, whether arising from patents, trademarks, copyrights or otherwise, that are in any way involved in the contract. The Contractor shall obtain and pay for all royalties, licenses, and permits, and approvals necessary for the execution of the contract. The Contractor must guarantee that it has the full legal right to the materials, supplies, equipment, software, and other items used to execute this contract.
OWNERSHIP OF INFORMATION AND DATA / DELIVERABLES
Reject & Provide Accept Reject Alternative within NOTES/COMMENTS: (Initial) (Initial) Solicitation Response (Initial) Milliman added language to this clause for two specific reasons: (i) Milliman needs to ensure that it retains its rights in the knowledge capital and intellectual property used in the rendering of services to the State. (ii) Milliman’s risk management policies require that Milliman mitigate risks by controlling our liability to third parties who are in receipt of our work product. Therefore, Milliman requires the inclusion of disclaimer lanaguge on all Milliman work.
Subject to the rights and obligations set forth herein, the State shall have the unlimited right to duplicate and use, all Deleted: T information and data developed or obtained by the Contractor and delivered to the State pursuant to this contract. Deleted: publish, Subject to the rights and obligations set forth herein, the State shall own and hold exclusive title to any deliverable Deleted: , developed by Contractor and delivered to the State as a result of this contract. Subject to the Contractor’s intellectual property rights set forth herein, Contractor shall have no ownership interest or title, and shall not patent, license, or Deleted: and disclose copyright, duplicate, transfer, sell, or exchange, the design, specifications, concept, or deliverable. Deleted: on behalf of the Contractor shall retain all rights, title and interest (including, without limitation, all copyrights, patents, service marks, Deleted: T trademarks, trade secret and other intellectual property rights) in and to all technical or internal designs, data, databases, methods, ideas, concepts, know-how, techniques, generic documents and templates (“Tools”) that have Page 13 RFP Boilerplate | 07012019 been previously developed by Contractor or such Tools developed during the course of the provision of the Services provided such Tools do not contain and/or are not based upon or derived from any State Rights and ownership by Contractor of its Tools shall not extend to or include all or any part of the State’s confidential information or proprietary data. To the extent that Contractor may include in the materials any Tools, Contractor agrees that the State shall be deemed to have a fully paid up perpetual license to make copies of the Tools as part of this engagement for its internal business purposes and provided that such Tools cannot be modified or distributed outside the State without the written permission of Contractor or except as otherwise permitted herein.
The deliverables are prepared solely for the use and benefit of the State in accordance with its statutory and regulatory requirements. Contractor recognizes that deliverables may be public records subject to disclosure to third parties, however, Contractor does not intend to benefit and assumes no duty or liability to any third parties who receive the deliverables and may include disclaimer language on the deliverables so stating. The State agrees not to remove any such disclaimer language from the deliverables.
INSURANCE REQUIREMENTS
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All edits to this section were made to be consistent with the insurance coverage maintained by Milliman.
The Contractor shall throughout the term of the contract maintain insurance as specified herein and provide the State a current Certificate of Insurance/Acord Form (COI) verifying the coverage. The Contractor shall not commence work on the contract until the insurance is in place. If Contractor subcontracts any portion of the Contract the Contractor must, throughout the term of the contract, either:
1. Provide equivalent insurance for each subcontractor and provide a COI verifying the coverage for the subcontractor; or 2. Require each subcontractor to have equivalent insurance and provide written notice to the State that the Contractor has verified that each subcontractor has the required coverage.
The Contractor shall not allow any Subcontractor to commence work until the Subcontractor has equivalent insurance. The failure of the State to require a COI, or the failure of the Contractor to provide a COI or require subcontractor insurance shall not limit, relieve, or decrease the liability of the Contractor hereunder.
In the event that any policy written on a claims-made basis terminates or is canceled during the term of the contract or within two (2) years of termination or expiration of the contract, the contractor shall obtain an extended discovery or reporting period, or a new insurance policy, providing coverage required by this contract for the term of the contract and two (2) years following termination or expiration of the contract.
If by the terms of any insurance a mandatory deductible is required, or if the Contractor elects to increase the mandatory deductible amount, the Contractor shall be responsible for payment of the amount of the deductible in the event of a paid claim.
Notwithstanding any other clause in this Contract, the State may recover up to the liability limits of the insurance policies required herein.
1. WORKERS’ COMPENSATION INSURANCE The Contractor shall take out and maintain during the life of this contract the statutory Workers’ Compensation and Employer's Liability Insurance for all of the contactors’ employees to be engaged in work on the project under this contract and, in case any such work is sublet, the Contractor shall require the Subcontractor similarly to provide Worker's Compensation and Employer's Liability Insurance for all of the Subcontractor’s employees to be engaged in such work. This policy shall be written to meet the statutory requirements for the state in which the work is to be performed, including Occupational Disease. The policy shall include a waiver of subrogation in favor of the State. The COI shall contain the mandatory COI subrogation waiver language found hereinafter. The amounts of such insurance shall not be less than the limits stated hereinafter. For employees working in the State of Nebraska, the policy must be written by an entity authorized by the State of Nebraska Department of Insurance to write Workers’ Compensation and Employer’s Liability Insurance for Nebraska employees.
Page 14 RFP Boilerplate | 07012019 2. COMMERCIAL GENERAL LIABILITY INSURANCE AND COMMERCIAL AUTOMOBILE LIABILITY INSURANCE The Contractor shall take out and maintain during the life of this contract such Commercial General Liability Insurance and Commercial Automobile Liability Insurance as shall protect Contractor and any Subcontractor performing work covered by this contract from claims for damages for bodily injury, including death, as well as from claims for property damage, which may arise from operations under this contract, whether such operation be by the Contractor or by any Subcontractor or by anyone directly or indirectly employed by either of them, and the amounts of such insurance shall not be less than limits stated hereinafter.
The Commercial General Liability Insurance shall be written on an occurrence basis, and provide Premises/Operations, Products/Completed Operations, Independent Contractors, Personal Injury, and Contractual Liability coverage. The policy shall include the State as Additional Insured(s). This policy Deleted: , and others as required by the shall be primary, and any insurance or self-insurance carried by the State shall be considered contract documents,… secondary and non-contributory. The COI shall contain the mandatory COI liability waiver language found hereinafter. The Commercial Automobile Liability Insurance shall be written to cover all Owned, Non- owned, and Hired vehicles.
REQUIRED INSURANCE COVERAGE COMMERCIAL GENERAL LIABILITY General Aggregate $2,000,000 Included Products/Completed Operations Deleted: $2,000,000 Aggregate Personal/Advertising Injury $1,000,000 per occurrence Bodily Injury/Property Damage $1,000,000 per occurrence Medical Payments Included Deleted: $10,000 any one person Damage to Rented Premises (Fire) Included Contractual Included Deleted: $300,000 each occurrence XCU Liability (Explosion, Collapse, and Included Underground Damage) Independent Contractors Included If higher limits are required, the Umbrella/Excess Liability limits are allowed to satisfy the higher limit. WORKER’S COMPENSATION Employers Liability Limits $500K/$500K/$500K Statutory Limits- All States Statutory - State of Nebraska USL&H Endorsement Statutory Voluntary Compensation Statutory COMMERCIAL AUTOMOBILE LIABILITY Bodily Injury/Property Damage $1,000,000 combined single limit Include All Owned, Hired & Non-Owned Included Automobile liability Motor Carrier Act Endorsement Where Applicable UMBRELLA/EXCESS LIABILITY Over Primary Insurance $1,000,000 per occurrence Deleted: 5 PROFESSIONAL LIABILITY All Other Professional Liability (Errors & $1,000,000 Per Claim / Aggregate Omissions) CYBER LIABILITY Breach of Privacy, Security Breach, Denial $5,000,000 of Service, Remediation, Fines and Penalties MANDATORY COI SUBROGATION WAIVER LANGUAGE “Workers’ Compensation policy shall include a waiver of subrogation in favor of the State of Nebraska.” MANDATORY COI LIABILITY WAIVER LANGUAGE “Commercial General Liability & Commercial Automobile Liability policies shall name the State of Nebraska as an Additional Insured and the policies shall be primary and any insurance or self- insurance carried by the State shall be considered secondary and non-contributory as additionally insured.”
Page 15 RFP Boilerplate | 07012019 3. EVIDENCE OF COVERAGE The Contractor shall furnish the Contract Manager, with a certificate of insurance coverage complying with the above requirements prior to beginning work at:
Department of Health and Human Services ATTN: MLTC Rate Reimbursement Contract Manager RFP 6406 Z1 Nebraska State Office Building 3rd Floor 301 Centennial Mall South Lincoln, NE 68509
These certificates or the cover sheet shall reference the RFP number, and the certificates shall include the name of the company, policy numbers, effective dates, dates of expiration, and amounts and types of coverage afforded. If the State is damaged by the failure of the Contractor to maintain such insurance, then the Contractor shall be responsible for all reasonable costs properly attributable thereto.
Reasonable notice of cancellation of any required insurance policy must be submitted to the contract manager as listed above when issued and a new certificate shall be submitted promptly to ensure no break in coverage. Deleted: coverage binder 4. DEVIATIONS Deleted: immediately The insurance requirements are subject to limited negotiation. Negotiation typically includes, but is not necessarily limited to, the correct type of coverage, necessity for Workers’ Compensation, and the type of automobile coverage carried by the Contractor.
ANTITRUST
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The Contractor hereby assigns to the State any and all claims for overcharges as to goods and/or services provided in connection with this contract resulting from antitrust violations which arise under antitrust laws of the United States and the antitrust laws of the State.
CONFLICT OF INTEREST
Reject & Provide Accept Reject Alternative within NOTES/COMMENTS: Deleted: By submitting a proposal, bidder certifies (Initial) (Initial) Solicitation that no relationship exists between the bidder and Response (Initial) any person or entity which either is, or gives the Milliman wants to ensure that it can comply with the conflict of interest appearance of, a conflict of interest related to this obligations set forth in this clause. Standard conflict of interest provisions tend Request for Proposal or project.¶ to be overly broad for Milliman due to the autonomy of each practice/office at ¶ our firm. Milliman is proposing an alternative clause to the deleted language in Bidder further certifies that bidder will not employ order to guarantee that we can meet the State’s needs, but still service our any individual known by bidder to have a conflict of other clients. interest nor shall bidder take any action or acquire any interest, either directly or indirectly, which will In the performance of this contract, the Contractor shall avoid all conflicts of interest and all appearances of conflicts conflict in any manner or degree with the of interest. Contractor represents to State that it maintains a robust internal conflict checking and agrees to promptly performance of its contractual obligations notify State of any potential conflict of interest encountered so that other arrangements can be made to complete the hereunder or which creates an actual or work. . appearance of conflict of interest.¶ ¶ If there is an actual or perceived conflict of interest, bidder shall provide with its proposal a full disclosure of the facts describing such actual or perceived conflict of interest and a proposed mitigation plan for consideration. The State will then consider such disclosure and proposed mitigation plan and either approve or reject as part of the overall bid evaluation Page 16 RFP Boilerplate | 07012019 STATE PROPERTY
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The Contractor shall be responsible for the proper care and custody of any State-owned property which is furnished for the Contractor's use during the performance of the contract. The Contractor shall reimburse the State for any loss or damage of such property; normal wear and tear is expected.
SITE RULES AND REGULATIONS
Reject & Provide Accept Reject Alternative within NOTES/COMMENTS: (Initial) (Initial) Solicitation Response (Initial) Milliman is willing to comply with the State’s on-site rules and regulations, but Milliman must first have a chance to review such policies prior to entry on to the State’s premises.
The Contractor shall use reasonable efforts to ensure that its employees, agents, and Subcontractors comply with Deleted: its best site rules and regulations, of which it is informed in writing prior to entry, while on State premises. If the Contractor must perform on-site work outside of the daily operational hours set forth by the State, it must make arrangements with the State to ensure access to the facility and the equipment has been arranged. No additional payment will be made by the State on the basis of lack of access, unless the State fails to provide access as agreed to in writing between the State and the Contractor.
ADVERTISING
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The Contractor agrees not to refer to the contract award in advertising in such a manner as to state or imply that the company or its goods or services are endorsed or preferred by the State. Any publicity releases pertaining to the project shall not be issued without prior written approval from the State.
NEBRASKA TECHNOLOGY ACCESS STANDARDS (Statutory) Contractor shall review the Nebraska Technology Access Standards, found at http://nitc.nebraska.gov/standards/2- 201.html and ensure that products and/or services provided under the contract are in compliance or will comply with the applicable standards to the greatest degree possible. In the event such standards change during the Contractor’s performance, the State may create an amendment to the contract to request the contract comply with the changed standard at a cost mutually acceptable to the parties.
Page 17 RFP Boilerplate | 07012019 DISASTER RECOVERY/BACK UP PLAN
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The Contractor shall have a disaster recovery and back-up plan, of which a copy should be provided upon request to the State, which includes, but is not limited to equipment, personnel, facilities, and transportation, in order to continue delivery of goods and services as specified under the specifications in the contract in the event of a disaster.
DRUG POLICY
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Contractor certifies it maintains a drug free work place environment to ensure worker safety and workplace integrity. Contractor agrees to provide a copy of its drug free workplace policy at any time upon request by the State.
WARRANTY
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Despite any clause to the contrary, the Contractor represents and warrants that its services hereunder shall be performed by competent personnel and shall be of professional quality consistent with generally accepted industry standards for the performance of such services and shall comply in all respects with the requirements of this Agreement. For any breach of this warranty, the Contractor shall, for a period of ninety (90) days from performance of the service, perform the services again, at no cost to the State, or if Contractor is unable to perform the services as warranted, Contractor shall reimburse the State fees paid to Contractor for the unsatisfactory services. The rights and remedies of the parties under this warranty are in addition to any other rights and remedies of the parties provided by law or equity, including, without limitation actual damages, and, as applicable and awarded under the law, to a prevailing party, reasonable attorneys’ fees and costs.
Page 18 RFP Boilerplate | 07012019 PAYMENT
PROHIBITION AGAINST ADVANCE PAYMENT (Statutory) Neb. Rev. Stat. §§81-2403 states, “[n]o goods or services shall be deemed to be received by an agency until all such goods or services are completely delivered and finally accepted by the agency.”
TAXES (Statutory) The State is not required to pay taxes and assumes no such liability as a result of this solicitation. The Contractor may request a copy of the Nebraska Department of Revenue, Nebraska Resale or Exempt Sale Certificate for Sales Tax Exemption, Form 13 for their records. Any property tax payable on the Contractor's equipment which may be installed in a state-owned facility is the responsibility of the Contractor
INVOICES
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Milliman needs to retain the right to suspend services for non-payment of invoices.
Invoices for payments must be submitted by the Contractor to the agency requesting the services with sufficient detail to support payment. Upon deliverable approval, contractor must submit detailed invoice. The terms and conditions included in the Contractor’s invoice shall be deemed to be solely for the convenience of the parties. No terms or conditions of any such invoice shall be binding upon the State, and no action by the State, including without limitation the payment of any such invoice in whole or in part, shall be construed as binding or estopping the State with respect to any such term or condition, unless the invoice term or condition has been previously agreed to by the State as an amendment to the contract. The Contractor reserves the right to stop all work if any bill goes unpaid by State for sixty (60) days. In the event the State receives an invoice and requests the Contractor to review or adjust charges or services reflected on the invoice, the 60-day period will be measured starting on the date the Contractor submits an adjusted invoice to State. In the event there is a work stoppage under this provision, the Contractor shall be entitled to collect the outstanding balance which the State has reviewed and approved, as well as charges for all State approved invoices for services and expenses incurred up to the date of stoppage.
INSPECTION AND APPROVAL
Reject & Provide Accept Reject Alternative within NOTES/COMMENTS: (Initial) (Initial) Solicitation Response (Initial) Milliman requires prior written notice in the event the State elects to conduct an inspection. Furthermore, Milliman has numerous clients, each with their own important deadlines and Milliman needs to be able to ensure that inspections are scheduled at a minimally disruptive time.
Final inspection and approval of all work required under the contract shall be performed by the designated State officials.
The State and/or its authorized representatives shall have the right to enter any premises where the Contractor or Subcontractor duties under the contract are being performed, and to inspect, monitor or otherwise evaluate the work being performed. Upon prior written notice, all inspections and evaluations shall be conducted at reasonable Deleted: A date and time, mutually agreed upon by the parties, and in a manner that will not unreasonably delay work. Deleted: s PAYMENT (Statutory)
Payment will be made by the responsible agency in compliance with the State of Nebraska Prompt Payment Act (See Neb. Rev. Stat. §81-2403). The State may require the Contractor to accept payment by electronic means such as ACH deposit. In no event shall the State be responsible or liable to pay for any goods and services provided by the Contractor prior to the Effective Date of the contract, and the Contractor hereby waives any claim
Page 19 RFP Boilerplate | 07012019 or cause of action for any such services.
LATE PAYMENT (Statutory) The Contractor may charge the responsible agency interest for late payment in compliance with the State of Nebraska Prompt Payment Act (See Neb. Rev. Stat. §81-2401 through 81-2408).
SUBJECT TO FUNDING / FUNDING OUT CLAUSE FOR LOSS OF APPROPRIATIONS (Statutory) The State’s obligation to pay amounts due on the Contract for a fiscal years following the current fiscal year is contingent upon legislative appropriation of funds. Should said funds not be appropriated, the State may terminate the contract with respect to those payments for the fiscal year(s) for which such funds are not appropriated. The State will give the Contractor written notice thirty (30) calendar days prior to the effective date of termination. All obligations of the State to make payments after the termination date will cease. The Contractor shall be entitled to receive just and equitable compensation for any authorized work which has been satisfactorily completed as of the termination date. In no event shall the Contractor be paid for a loss of anticipated profit.
RIGHT TO AUDIT (First Paragraph is Statutory) The State shall have the right to audit the Contractor’s performance of this contract upon a thirty (30) days’ written notice. Contractor shall utilize generally accepted accounting principles, and shall maintain the accounting records, and other records and information relevant to the contract (Information) to enable the State to audit the contract. (Neb. Rev. Stat. §84-304 et seq.) The State may audit and the Contractor shall maintain, the Information during the term of the contract and for a period of five (5) years after the completion of this contract or until all issues or litigation are resolved, whichever is later. The Contractor shall make the Information available to the State at Contractor’s place of business or a location acceptable to both Parties during normal business hours. If this is not practical or the Contractor so elects, the Contractor may provide electronic or paper copies of the Information. The State reserves the right to examine, make copies of, and take notes on any Information relevant to this contract, regardless of the form or the Information, how it is stored, or who possesses the Information. Under no circumstance will the Contractor be required to create or maintain documents not kept in the ordinary course of contractor’s business operations, nor will contractor be required to disclose any information, including but not limited to product cost data, which is confidential or proprietary to contractor.
Reject & Provide Accept Reject Alternative within NOTES/COMMENTS: (Initial) (Initial) Solicitation Response (Initial) If the State choses to conduct an audit, the State should be responsible for all fees associated with such audit, subject to the exceptions set forth in this clause.
The State shall pay all costs associated with the audit unless the audit finds a previously undisclosed overpayment Deleted: Parties by the State. If a previously undisclosed overpayment exceeds two percent (2%) of the total contract billings, or if fraud, material misrepresentations, or non-performance is discovered on the part of the Contractor, the Contractor Deleted: their own shall reimburse the State for the total costs of the audit. Overpayments and audit costs owed to the State shall Deleted: of be paid within ninety (90) days of written notice of the claim. The Contractor agrees to correct any material weaknesses or condition found as a result of the audit. Deleted: one-half of one Deleted: 0.5
Page 20 RFP Boilerplate | 07012019 MILLIMAN TECHNICAL PROPOSAL
APPENDIX B: BUSINESS ASSOCIATE AGREEMENT
RFP 6406 Z1 Page 57 of 115 December 8, 2020 6406 Z1 ATTACHMENT B DHHS HIPAA BUSINESS ASSOCIATE AGREEMENT PROVISIONS SERVICES CONTRACTS
1. BUSINESS ASSOCIATE. “Business Associate” shall generally have the same meaning as the term “business associate” at 45 CFR § 160.103, and in reference to the party in this Contract, shall mean Contractor.
2. COVERED ENTITY. “Covered Entity” shall generally have the same meaning as the term “covered entity” at 45 CFR § 160.103, and in reference to the party to this Contract, shall mean DHHS.
3. HIPAA RULES. “HIPAA Rules” shall mean the Health Insurance Portability and Accountability Act of 1996 as amended by the Health Information Technology for Economic and Clinical Health Act, and the the Privacy, Security, Breach Notification, and Enforcement Rules at 45 CFR Part 160 and Part 164.
4. OTHER TERMS. The following terms shall have the same meaning as those terms in the HIPAA Rules: Breach, Data Aggregation, Designated Record Set, Disclosure, Health Care Operations, Individual, Minimum Necessary, Notice of Privacy Practices, Protected Health Information (limited to information that Contractor receives from, or creates or receives for, or on behalf of DHHS in connection with the performance of services by Contractor), Required by Law, Secretary, Security Incident, Subcontractor, Unsecured Protected Health Information, and Use. All other terms used, but not otherwise defined, in this Attachment B shall have the same meaning as those terms in the HIPAA Rules.
5. THE CONTRACTOR shall do the following: 5.1. Not use or disclose Protected Health Information other than as permitted or required by this Contract, as requested by DHHS, or as required by law. Contractor may use Protected Health Information for the purposes of managing its internal business processes relating to its functions and performance under this Contract and to carry out its legal responsibilities. Use or disclosure must be consistent with DHHS’ minimum necessary policies and procedures. Contractor may also use Protected Health Information for the following purposes: 5.1.1. Contractor may use Protected Health Information to provide Data Aggregation services to DHHS as permitted by the Privacy Rule under 45 CFR § 164.504. 5.1.2. Contractor may de-identify Protected Health Information in accordance with the requirements of the Privacy Rule; provided that all identifiers are destroyed in accordance with this Attachment B and the Contract. 5.1.3. Contractor may create a Limited Data Set for the purpose of providing the services in accordance with the Contract, provided that Contractor complies with its obligations under this Attachment B and the Contractor. 5.2. Implement and maintain appropriate administrative, physical, and technical safeguards to prevent access to and the unauthorized use and disclosure of Protected Health Information. Comply with Subpart C of 45 CFR Part 164 with respect to electronic Protected Health Information, to prevent use or disclosure of Protected Health Information other than as provided for in this Contract and assess potential risks and vulnerabilities to the individual health data in its care and custody and develop, implement, and maintain reasonable security measures. 5.3. To the extent Contractor is engaged to carry out one or more of the DHHS’ obligations under Subpart E of 45 CFR Part 164, comply with the requirements of Subpart E that apply to DHHS in the performance of such obligations. Contractor may not use or disclosure Protected Health Information in a manner that would violate Subpart E of 45 CFR Part 164 if done by DHHS, except as otherwise permitted herein for purposes of Data Aggregation. 5.4. In accordance with 45 CFR §§ 164.502(E)(1)(ii) and 164.308(b)(2), if applicable, ensure that any agents and subcontractors that create, receive, maintain, or transmit Protected Health Information received from DHHS, or created by or received from the Contractor on behalf of DHHS, agree in writing to restrictions, conditions, and requirements no less stringent than the restrictions, Deleted: the same conditions, and requirements relating to the confidentiality, care, custody, and minimum use of Protected Health Information that apply to the Contractor with respect to such information. Page 1 of 3 Ver. 4/2018 5.5. Obtain reasonable assurances from the person to whom the information is disclosed that the information will remain confidential and used or further disclosed only as required by law or for the purposes for which it was disclosed to the person, and the person notifies the Contractor of any instances of which it is aware that the confidentiality of the information has been breached. 5.6. Within fifteen (15) days of receipt of written notice from DHHS: 5.6.1. Make available Protected Health Information that Contractor maintains in a Designated Record Set, to DHHS as necessary for DHHS to satisfy its obligations under 45 CFR § Deleted: DHHS’ 164.524; 5.6.2. Make any amendment(s) to Protected Health Information that Contractor maintains in a Designated Record Set, as directed or agreed to by DHHS pursuant to 45 CFR § 164.526,; Deleted: or take other measures as necessary to 5.6.3. 5.6.3. Contractor agrees to document disclosures of Protected Health Information made satisfy DHHS’ obligations under 45 CFR § by Contractor which are not excepted from disclosure accounting requirements under the 164.526; HIPAA Rules and make available such information as required to provide an accounting Deleted: Maintain of disclosures to DHHS as necessary for DHHS to satisfy its obligations under 45 CFR § 164.528. Deleted: the 5.7. Make its internal practices, books, and records relating to the use and disclosure of Protected Deleted: DHHS’ Heath Information received from, or created or received by the Contractor on behalf of the DHHS available to the Secretary for purposes of determining compliance with the HIPAA rules. If not legally prohibited, Contractor shall provide DHHS with a summary of the information it has made Deleted: copies available to the Secretary. 5.8. Report to DHHS within fifteen (15) days, any unauthorized use or disclosure of Protected Health Information made in violation of this Contract, or the HIPAA rules, including any successful security incident that may put electronic Protected Health Information at risk. Contractor shall, as instructed by DHHS, take prompt steps to mitigate any harmful effect of such unauthorized Deleted: immediate disclosure of Protected Health Information pursuant to the conditions of this Contract through the preparation and completion of a written Corrective Action Plan subject to the review and approval by DHHS. DHHS shall report any breach to the individuals affected and may report Deleted: The Contractor any such breach to the Secretary as required by the HIPAA rules. The parties acknowledge and agree that this section constitutes notice by Contractor to DHHS of the ongoing existence and occurrence of attempted but unsuccessful security incidents of which no additional notice to DHHS shall be required. Unsuccessful security incidents shall include, but not be limited to, pings and other broadcast attacks on Contractor’s firewall, port scans, unsuccessful log-on attempts, denials of service and any combination of the above, so long as such incidents do not result in unauthorized access, use or disclosure of DHHS’s electronic Protected Health Information.
6. TERMINATION. 6.1. DHHS may immediately terminate this Contract and any and all associated contracts if DHHS determines that the Contractor has violated a material term of this Contract. 6.2. Within thirty (30) days of expiration or termination of this Contract, or as agreed, unless Contractor requests and DHHS authorizes a longer period of time, Contractor shall return or destroy all Deleted: at the written direction of DHHS Protected Health Information received from DHHS (or created or received by Contractor on behalf of DHHS) that Contractor still maintains in any form and retain no copies of such Protected Health Information. Contractor shall provide a written certification to DHHS that all such Protected Health Information has been returned or destroyed (if so instructed), whichever is deemed appropriate. If such return or destruction is determined to be infeasible, Contractor Deleted: by the DHHS shall use such Protected Health Information only for purposes that makes such return or destruction infeasible and the provisions of this Contract shall survive with respect to such Protected Health Information. DHHS hereby acknowledges and agrees that infeasibility includes Contractor’s need to retain Protected Health Information for purposes of complying with its work product documentation standards and that for such retention no further notice to, or agreement by, DHHS is required. 6.3. The obligations of the Contractor under the Termination Section shall survive the termination of this Contract.
7. MISCELLANEOUS. 7.1. DHHS shall not request Contractor to use or disclose Protected Health Information in any
Page 2 of 3 Ver. 4/2018 manner that would not be permissible under the Privacy Rule or the Security Rule if done by DHHS, except as otherwise permitted herein for purposes of Data Aggregation. 7.2. The parties agree to take such action as is necessary to amend this Attachment from time to time in order to ensure compliance with the requirements of the HIPAA Rules and any other applicable law. 7.3. A reference in this Attachment B to a section in the HIPAA Rules means the section as in effect or as amended, and for which compliance is required. 7.4. In the event that any terms of this Attachment are inconsistent with the terms of the Contract, then the terms within this Attachment B shall control.
Page 3 of 3 Ver. 4/2018 MILLIMAN TECHNICAL PROPOSAL
APPENDIX C: DATA USE AGREEMENT
RFP 6406 Z1 Page 61 of 115 December 8, 2020 RFP 6406 Z1 ATTACHMENT C
DATA USE AGREEMENT (DUA) PROVISIONS
1. PURPOSE; APPLICABILITY; ORDER OF PRECEDENCE 1.1. The purpose of this DUA is to facilitate access to, creation, receipt, maintenance, use, disclosure or transmission of Confidential Information with Contractor, and set forth Contractor’s rights and obligations with respect to the Confidential Information and the limited purposes for which the Contractor may create, receive, maintain, use, disclose or have access to Confidential Information. This DUA includes, but is not limited to, taking any Confidential Information outside of any DHHS systems provided for data use, as well as the creation of any new data being used outside those systems. This DUA also describes DHHS’s remedies in the event of Contractor’s noncompliance with its obligations under this DUA. This DUA applies to both DHHS business associates, with “business associate” defined in the Health Insurance Portability and Accountability Act (HIPAA) (see Business Associate Provisions, Request for Proposal – Attachment B), as well as Contractors who are not business associates, who create, receive, Deleted: A maintain, use, disclose or have access to Confidential Information on behalf of DHHS, its programs or clients as described in the Contract. As a best practice, DHHS requires its contractors to comply with the terms of this DUA to safeguard all types of Confidential Information. 1.2. If any provision of the Contract conflicts with this DUA, this DUA controls. If any provision of the Business Associate Provisions conflicts with this DUA, the Business Associate Provisions shall control.
2. DEFINITIONS For the purposes of this DUA, capitalized terms have the following meanings: 2.1. “Authorized Purpose” means the specific purpose or purposes described in the Contract for Contractor to fulfill its obligations under the Contract, or any other purpose expressly authorized by DHHS, in writing, in advance. 2.2. “Authorized User” means a person: 2.2.1. Who is authorized to create, receive, maintain, access, process, view, handle, examine, interpret, or analyze Confidential Information pursuant to this DUA; 2.2.2. Who has a demonstrable need to create, receive, maintain, use, disclose or have access to the Confidential Information; and 2.2.3. Who has agreed in writing to be bound by the disclosure and use limitations pertaining to the Confidential Information as required by this DUA. 2.3. “Breach” means an impermissible use or disclosure of electronic or non-electronic sensitive personal information by an unauthorized person or for an unauthorized purpose that compromises the security or privacy of Confidential Information such that the use or disclosure poses a risk of reputational harm, theft of financial information, identity theft, or medical identity theft. Any acquisition, access, use, disclosure or loss of Confidential Information other than as permitted by this DUA shall be presumed to be a Breach unless Contractor demonstrates, based on a risk assessment, that there is a low probability that the Confidential Information has been compromised. 2.4. “Confidential Information” means any communication or record (whether oral, written, electronically stored or transmitted, or in any other form) provided to or made available to Contractor or that Contractor may create, receive, maintain, use, disclose or have access to on behalf of DHHS in connection with the Contract, which consists of or includes any or all of the following: 2.4.1. Education records as defined in the Family Educational Rights and Privacy Act, 20 U.S.C. §1232g; 34 C.F.R. Part 99 2.4.2. Federal Tax Information as defined in Internal Revenue Code § 6103 and Internal Revenue Service Publication 1075;
Data Use Agreement - 86273 Page 1 of 9 8/2019 2.4.3. Protected Health Information (PHI) in any form including without limitation, Electronic Protected Health Information or Unsecured Protected Health Information as defined in 45 C.F.R. §160.103; 2.4.4. Personally Identifiable Information (PII) means information that can be used to distinguish or trace an individual's identity, either alone or when combined with other personal or identifying information that is linked or linkable to a specific individual. 2.4.5. Social Security Administration Data, including, without limitation, Medicaid information means disclosures of information made by the Social Security Administration or the Centers for Medicare and Medicaid Services from a federal system of records for administration of federally funded benefit programs under the Social Security Act, 42 U.S.C., Chapter 7; 2.4.6. Medicaid Client refers to: • A Medicaid applicant; • A Medicaid member; • A person who is conditionally eligible for Medicaid; or • A person whose income or assets are considered in determining eligibility for an applicant or member 2.4.7. Personal Information as defined by Neb. Rev. Stat. § 87-802; 2.4.8. Information or records contained in Neb. Rev. Stat. § 84-712.05; 2.4.9. All privileged work product; 2.4.10. All other information designated as confidential under the constitution and laws of the State of Nebraska and of the United States 2.5. “Contract” includes, collectively, the Request for Proposal (or Request for Qualifications, as applicable), the Contractor’s proposal, as well as any addenda, appendices, and attachments; 2.6. “Destroy” or “Destruction”, for Confidential Information, means: 2.6.1. Paper, film, or other hard copy media have been shredded or destroyed such that the Confidential Information cannot be read or otherwise reconstructed. Redaction is specifically excluded as a means of data destruction. 2.6.2. Electronic media have been cleared, purged, or destroyed consistent with National Institute of Standards and Technology (NIST) Special Publication 800-88, “Guidelines for Media Sanitization,” such that the Confidential Information cannot be retrieved. 2.7. “Discover” or “Discovery” means the first day on which a Breach becomes known to Contractor, or, by exercising reasonable diligence would have been known to Contractor. 2.8. “Legally Authorized Representative” of an individual means any individual as defined in 42 CFR 435.923 (authorized representative), or any individual legally authorized to act on behalf of another individual under Nebraska law; 2.9. “Required by Law” means a mandate contained in law that compels an entity to use or disclose Confidential Information that is enforceable in a court of law and is consistent with 42 CFR Part 431, Subpart F, including court orders, warrants, subpoenas or investigative demands. 2.10. “Subcontractor” means a person who contracts with a prime contractor to work, to supply commodities, or to contribute toward completing work for a governmental entity. 2.11. “Workforce” means employees, volunteers, trainees or other persons whose performance of work is under the direct control of a party, whether they are paid by that party.
3. CONTRACTOR'S DUTIES REGARDING CONFIDENTIAL INFORMATION 3.1. With respect to PHI, Contractor shall: 3.1.1. Make PHI available if requested by DHHS in writing, if Contractor maintains PHI, as defined in HIPAA. 3.1.2. Provide to DHHS data aggregation services related to the healthcare operations Contractor performs for DHHS pursuant to the Contract, if requested by DHHS, if Contractor provides data aggregation services as defined in HIPAA.
Data Use Agreement - 86273 Page 2 of 9 8/2019 3.1.3. Upon written request, provide access to PHI in a Designated Record Set maintained by Deleted: P Contractor, to DHHS so that DHHS can reply to an individual who is requesting his or her own PHI, or such individual’s Legally Authorized Representative, in compliance with the requirements of HIPAA. 3.1.4. Upon written request, make PHI in Designated Record Set maintained by Contractor Deleted: M available to DHHS for amendment, and incorporate any amendments to PHI that DHHS directs, in compliance with HIPAA. 3.1.5. Document and make available to DHHS, upon written request, an accounting of use and disclosures made by Contractor which are not excepted from disclosure accounting requirements in compliance with the requirements of HIPAA. 3.1.6. If Contractor receives a request for access, amendment or accounting of PHI by any individual, promptly forward the request to DHHS or, if forwarding the request would violate HIPAA, promptly notify DHHS of the request and of Contractor’s response. DHHS will respond to all such requests, unless Contractor is Required by Law to respond or DHHS has given prior written consent for Contractor to respond to and account for all such requests. 3.2. With respect to ALL Confidential Information, Contractor shall: 3.2.1. Exercise reasonable care and no less than the same degree of care Contractor uses to protect its own confidential, proprietary and trade secret information to prevent Confidential Information from being used in a manner that is not expressly an Authorized Purpose or as Required by Law. Contractor must access, create, maintain, receive, use, disclose, transmit or Destroy Confidential Information in a secure fashion that protects against any reasonably anticipated threats or hazards to the security or integrity of such information or unauthorized uses. 3.2.2. Establish, implement and maintain appropriate procedural, administrative, physical and technical safeguards (for the purpose of this paragraph, “Safeguards”) to preserve and maintain the confidentiality, integrity, and availability of the Confidential Information, in accordance with applicable laws or regulations relating to Confidential Information, to prevent any unauthorized use or disclosure of Confidential Information as long as Contractor has such Confidential Information in its actual or constructive possession. DHHS must review and approve said Safeguards before actual or constructive possession of any Confidential Information. Contractor must also allow DHHS, or a third party representative of DHHS, to review the Safeguards, upon advance written request and in the Deleted: designated by sole discretion of DHHS. 3.2.3. Implement, update as necessary, and document privacy, security and Breach notice policies and procedures and an incident response plan to address a Breach, to comply with the privacy, security and breach notice requirements of this DUA prior to conducting work under the Contract. Contractor shall produce, within three business days of receipt of a written request by DHHS, copies of its policies and procedures and records relating to the use or disclosure of Confidential Information. 3.2.4. Obtain DHHS’s prior written consent to disclose or allow access to any portion of the Confidential Information to any person, other than Authorized Users, Workforce or Subcontractors of Contractor. Additional requirements set forth below pertaining to Deleted: , provided said Authorized Users, Subcontractors dictate further requirements before disclosure. Workforce or Subcontractors have completed 3.2.5. Establish, implement and maintain appropriate sanctions against any member of its DHHS-specified training in confidentiality, privacy, Workforce or Subcontractor who fails to comply with this DUA, the Contract or applicable security, and on the importance of promptly reporting any Breach to Contractor's management law. Contractor must maintain evidence of sanctions and produce it to DHHS upon written and as permitted in Section 3.1.3, above… request. 3.2.6. If not legally prohibited, obtain prior written approval of DHHS, to disclose or provide Deleted: All Authorized Users, Workforce or Subcontractors must execute, individually, an access to any Confidential Information on the basis that such act is Required by Law, so acknowledgement noting their obligations as that DHHS may have the opportunity to object to the disclosure or access and seek regards Confidential Information, and referencing appropriate relief. this DUA. Additional requirements set forth Deleted: O Data Use Agreement - 86273 Page 3 of 9 8/2019 3.2.7. Certify that its Authorized Users each have a demonstrated need to know and have access to Confidential Information solely to the minimum extent necessary to accomplish the Authorized Purpose. Contractor and any previously authorized Subcontractors shall Deleted: and that each has agreed in writing to maintain at all times an updated, complete, accurate list of Authorized Users and supply it be bound by the disclosure and use limitations pertaining to the Confidential Information to DHHS upon request. contained in this DUA… 3.2.8. Provide, and require Subcontractors and agents to provide, to DHHS periodic written confirmation of compliance with controls and the terms of this DUA. 3.2.9. Return to DHHS or Destroy, at Contractor’s expense, all Confidential Information Deleted: at DHHS’s election and received from DHHS or created or maintained by Contractor or any of Contractor’s agents or Subcontractors on DHHS's behalf upon the termination or expiration of this DUA, if reasonably feasible and permitted by law. Contractor shall certify in writing to DHHS that all such Confidential Information has been Destroyed or returned to DHHS, and that Contractor and its agents and Subcontractors have retained no copies thereof. Notwithstanding the foregoing, Contractor acknowledges and agrees that it may not Destroy any Confidential Information if federal or state law, or DHHS record retention policy or a litigation hold notice prohibits such Destruction. If such return or Destruction is not reasonably feasible, or is impermissible by law, Contractor shall immediately notify DHHS of the reasons such return or Destruction is not feasible, and agree to extend the protections of this DUA to the Confidential Information for as long as Contractor maintains such Confidential Information. Notwithstanding the foregoing, DHHS hereby acknowledges and agrees that infeasibility includes Contractor’s need to retain Confidential Information for purposes of complying with its internal work product documentation policy and that for such retention no further notice to, or agreement by, DHHS is required. 3.2.10. Comply with the current DHHS Acceptable Use Policy (AUP) provided to Contractor by DHHS, and require each Subcontractor and Workforce member who has direct access to DHHS Information Resources, to comply with the DHHS Acceptable Use Agreement. Deleted: as defined in the AUP, to execute a See Section 3.2.14 bullet point labeled “DHHS Information Security Policies.” 3.2.11. Only conduct secure transmissions of Confidential Information whether in paper, oral or electronic form. DHHS must approve the method of secure transmission before any Confidential Information is transmitted by Contractor. A secure transmission of electronic Confidential Information in motion includes secure File Transfer Protocol (SFTP) or encryption at an appropriate level as required by rule, regulation or law. Confidential Information at rest requires encryption unless there is adequate administrative, technical, and physical security as required by rule, regulation or law. All electronic data transfer and communications of Confidential Information shall be through secure systems. Contractor shall provide proof of system, media or device security and/or encryption to DHHS no later than 48 hours after Contractor’s receipt of DHHS's written request in response to a compliance investigation, audit, or the Discovery of a Breach. DHHS may also request production of proof of security at other times as necessary to satisfy state and federal monitoring requirements. De- identification of Confidential Information in accordance with HIPAA de-identification standards is deemed secure. 3.2.12. Designate and identify a person or persons, as Privacy Official and Information Security Official, each of whom is authorized to act on behalf of Contractor and is responsible for the development and implementation of the privacy and security requirements in this DUA. Contractor shall provide name and current address, phone number and e-mail address for such designated officials to DHHS upon execution of this DUA and prior to any change. Deleted: Upon written notice from DHHS, 3.2.13. Upon written request, make available to DHHS any information DHHS requires to fulfill Contractor shall promptly remove and replace DHHS's obligations to provide access to, or copies of, Confidential Information in such official(s) if such official(s) is/are not accordance with applicable laws, regulations or demands of a regulatory authority performing the required functions.… relating to Confidential Information. Contractor shall provide such information in a time Deleted: M and manner reasonably agreed upon or as designated by the applicable law or regulatory authority. Data Use Agreement - 86273 Page 4 of 9 8/2019 3.2.14. Comply with the following laws and standards if applicable to the type of Confidential Information and Contractor's Authorized Purpose: . The Privacy Act of 1974 (USC 552a); . OMB Memorandum 17-12; . 42 CFR Part 431, Subpart F; . The Federal Information Security Management Act of 2002 (FISMA); . The Health Insurance Portability and Accountability Act of 1996 (HIPAA); . Internal Revenue Publication 1075 – Tax Information Security Guidelines for Federal, State and Local Agencies; . NIST Special Publication 800-66 Revision 1 - An Introductory Resource Guide for Implementing the Health Insurance Portability and Accountability Act (HIPAA) Security Rule; . NIST Special Publications 800-53 and 800-53A – Recommended Security Controls for Federal Information Systems and Organizations, as currently revised; . NIST Special Publication 800-47 – Security Guide for Interconnecting Information Technology Systems; . NIST Special Publication 800-88, Guidelines for Media Sanitization; . NIST Special Publication 800-111, Guide to Storage of Encryption Technologies for End User Devices containing PHI; . Nebraska Information Technology Commission, Chapter 8 – Information Security Policy, available at: https://nitc.nebraska.gov/standards/index.html; . DHHS IT Policies available at the following link: http://dhhs.ne.gov/Documents/Information%20Technology%20(IT)%20Sec urity%20Policies%20and%20Standards.pdf . Family Educational Rights and Privacy Act; and . Any other state or federal law, regulation, or administrative rule relating to the specific DHHS program area that Contractor supports on behalf of DHHS. 3.2.15. Be permitted to use or disclose Confidential Information, except Confidential Information about Medicaid Clients, for the proper management and administration of Contractor roles and responsibilities or to carry out Contractor’s legal responsibilities, except as otherwise limited by this DUA, the Contract, or law applicable to the Confidential Information, if: (1) Disclosure is Required by Law; or (2) Contractor obtains reasonable assurances from the person to whom the information is disclose that the person shall: • Maintain the confidentiality of the Confidential Information in accordance with this DUA; • Use or further disclose the information only as Required by Law or for the Authorized Purpose for which it was disclosed to the person; and • Notify Contractor in accordance with Section 4 of a Breach of Confidential Information that the person Discovers or should have Discovered with the exercise of reasonable diligence. 3.2.16. For Confidential Information about Medicaid Clients, DHHS must provide prior written approval to the Contractor before Contractor is permitted to use such information for the uses described immediately above.
3.3. With respect to ALL Confidential Information, Contractor shall NOT: 3.3.1. Attempt to re-identify or further identify Confidential Information that has been de- identified, or attempt to contact any persons whose records are contained in the Confidential Information, except for an Authorized Purpose, without express written authorization from DHHS. 3.3.2. Engage in marketing or sale of Confidential Information. 3.3.3. Permit, or enter into any agreement with a Subcontractor to, create, receive, maintain, use, disclose, have access to or transmit Confidential Information, on behalf of DHHS without requiring that Subcontractor first gain approval from DHHS and execute Data Use Agreement - 86273 Page 5 of 9 8/2019 the Form Subcontractor Agreement, Appendix 1. Contractor is directly responsible for its Subcontractors’ compliance with, and enforcement of, this DUA. If Subcontractor requires Medicaid Client information access, the Contractor shall specifically identify as such in its request to DHHS.
4. BREACH NOTICE, REPORTING AND CORRECTION REQUIREMENTS 4.1. Cooperation and Financial Responsibility 4.1.1. Contractor shall, at Contractor’s expense, reasonably cooperate with DHHS in Deleted: fully investigating, mitigating to the extent practicable, and providing DHHS with all necessary information for DHHS to issue notifications, for any Breach of Confidential Information. Deleted: issuing 4.1.2. Contractor shall make Confidential Information in Contractor’s possession available Deleted: as directed by DHHS pursuant to the requirements of HIPAA or other applicable law upon a determination of a Breach. 4.1.3. Contractor’s obligation begins at the Discovery of a Breach caused by Contractor and continues as long as related activity continues, until all effects of the Breach are mitigated to DHHS’s satisfaction (the "incident response period"). 4.2. Initial Breach Notice 4.2.1. For federal information obtained from a federal system of records, including Federal Tax Information and Social Security Administration Data (which includes Medicaid and other governmental benefit program Confidential Information), Contractor shall initially notify DHHS of a Breach caused by Contractor within the twenty four hours of Discovery, Deleted: the followed by a detailed written report that is consistent with the requirements set forth in Deleted: first Section 4.2.2 and submitted to DHHS no later than the third business day from the date Contractor Discovers the Breach in compliance with Section 4.3. The Contractor shall specify whether Confidential Information is obtained from a federal system of records. For all other types of Confidential Information, Contractor shall also notify DHHS of the Breach caused by Contractor within 48 hours, or in a timeframe otherwise approved by Deleted: the first hour of Discovery DHHS in writing. Contractor shall initially report to DHHS's Privacy and Security Officers via email at: • [email protected]; and • [email protected].
Notification shall also be provided via email to the DHHS Contract Manager.
4.2.2. Contractor shall report all information reasonably available to Contractor about the Breach. This shall include, but not necessarily be limited to: • Date and time of the incident; • Date and time the incident was discovered; • Description of the incident and the data involved, including specific data elements, if known; • Potential number of records involved; if unknown, provide an estimated range; • Address where the incident occurred; • Information technology involved (e.g., laptop, server, mainframe etc.) 4.2.3. Contractor shall provide contact information to DHHS for Contractor's single point of contact who will communicate with DHHS both on and off business hours during the incident response period. 4.3. Third Business Day. No later than 5 p.m. on the third business day after Discovery, or a time within which Discovery reasonably should have been made by Contractor of a Breach of Confidential Information, Contractor shall provide written notification to DHHS of all reasonably available information about the Breach, and Contractor's investigation, including, to the extent known to Contractor: 4.3.1. The date the Breach occurred; 4.3.2. The date of Contractor's and, if applicable, Subcontractor's Discovery;
Data Use Agreement - 86273 Page 6 of 9 8/2019 4.3.3. A brief description of the Breach, including how it occurred and who is responsible (or hypotheses, if not yet determined); 4.3.4. A brief description of Contractor's investigation and the status of the investigation; 4.3.5. A description of the types and amount of Confidential Information involved; 4.3.6. Identification of and number of all individuals reasonably believed to be affected, including first and last name of the individual(s) and if applicable, the Legally Authorized Representative, last known address, age, telephone number, and email address if it is a preferred contact method; 4.3.7. Contractor’s initial risk assessment of the Breach, demonstrating whether individual or other notices are required by applicable law or this DUA for DHHS approval, including an analysis of whether there is a low probability of compromise of the Confidential Information or whether any legal exceptions to notification apply; 4.3.8. Contractor's recommendation for DHHS’s approval as to the steps individuals and/or Contractor on behalf of individuals, should take to protect the individuals from potential harm, including Contractor’s provision of notifications, credit protection, claims monitoring, and any specific protections for a Legally Authorized Representative to take on behalf of an individual with special capacity or circumstances; 4.3.9. The steps Contractor has taken to mitigate the harm or potential harm caused (including without limitation the provision of sufficient resources to mitigate); 4.3.10. The steps Contractor has taken, or will take, to prevent or reduce the likelihood of recurrence of a similar Breach; Deleted: may direct Contractor to 4.3.11. Identify, describe or estimate of the persons, Workforce, Subcontractor, or individuals and Deleted: as specified by DHHS any law enforcement that may be involved in the Breach; 4.3.12. A reasonable schedule for Contractor to provide regular updates regarding response to Deleted: Contractor must comply with all applicable legal and regulatory requirements, the Breach, but no less than every three (3) business days, or as otherwise directed by including but not limited to those contained in the DHHS in writing, including information about risk estimations, reporting, notification, if any, Financial Data Protection and Consumer mitigation, corrective action, root cause analysis and when such activities are expected to Notification of Data Security Breach Act of 2006, be completed; and Neb. Rev. Stat. §§ 87-801 et seq., in the time, 4.3.13. Any reasonably available, pertinent information, documents or reports related to a Breach manner and content of any notification to that DHHS requests following Discovery. individuals, regulators or third-parties, or any notice required by other state or federal 4.4. Breach Notification to Individuals and Reporting to Authorities. authorities. Notice letters will be in Contractor's 4.4.1. DHHS shall provide legally required Breach notification to individuals, regulators or third- name and on Contractor's letterhead, unless parties, following a Breach caused by Contractor. Contractor shall reimburse DHHS for all otherwise directed by DHHS, and will contain reasonable out-of-pocket costs and expenses incurred by DHHS in providing such legally contact information, including the name and title of required Breach notifications. Contractor's representative, an email address and a toll-free telephone number, for the individual to 4.4.2. [RESERVED]. obtain additional information 4.4.3. DHHS shall provide Contractor with draft notifications for Contractor’s approval prior to distribution and copies of distributed and approved communications. Deleted: Contractor 4.4.4. [RESERVED]. Deleted: DHHS 4.4.5. [RESERVED]. Deleted: DHHS Deleted: Contractor shall have the burden of 5. GENERAL PROVISIONS demonstrating to the satisfaction of DHHS that 5.1. Ownership of Confidential Information any required notification was timely made. If there 5.1.1. Subject to the rights, obligations, and restrictions, set forth in the Contract, all data are delays outside of Contractor's control, Contractor shall provide written documentation to collected as a result of Contractor providing services to DHHS under the Contract DHHS of the reasons for the delay… (including but not limited to all Confidential Information) shall be the property of DHHS. 5.2. DHHS Commitment and Obligations Deleted: If DHHS directs Contractor to provide notifications, DHHS shall, in the time and manner 5.2.1. DHHS will not request Contractor to create, maintain, transmit, use or disclose PII/PHI in reasonably requested by Contractor, cooperate any manner that would not be permissible under applicable law if done by DHHS, except and assist with Contractor’s information requests as otherwise permitted for purposes of Data Aggregation. in order to make such notifications… 5.3. DHHS Right to Inspection Deleted: Notwithstanding any other provision 5.3.1. At any time, upon reasonable written notice to Contractor, or if DHHS determines that Deleted: this project Data Use Agreement - 86273 Page 7 of 9 8/2019 Contractor has violated this DUA, DHHS, directly or through its agent, will have the right to inspect the facilities, systems, books and records of Contractor to monitor compliance with this DUA. An inspection shall not exceed three business days in duration. If Contractor is not un violation of this DUA, DHHS shall bear the expense of any such inspection. For purposes of this subsection, DHHS’s agent(s) include, without limitation, the Office of Public Counsel, the Nebraska Attorney General’s Office, the Nebraska Auditor of Public Accounts, outside consultants, legal counsel, or other designee. 5.4. Term; Termination of DUA; Survival 5.4.1. This DUA will be effective on the date on which it was signed, and will terminate upon termination of the Contract and as set forth herein. If the Contract is extended, this DUA is extended to run concurrent with the Contract. 5.4.2. If DHHS determines that Contractor has violated a material term of this DUA, DHHS may, in its sole discretion: • Exercise any of its rights, including but not limited to reports, access and inspection under this DUA and/or the Contract; or • Require Contractor to submit to a corrective action plan, including a plan for monitoring and plan for reporting as DHHS may determine necessary to maintain compliance with this DUA; or • Provide Contractor with a reasonable period to cure the violation as determined by DHHS; or • Terminate the DUA and Contract immediately, and, if DHHS further determines, seek relief in a court of competent jurisdiction. • Before exercising any of these options, DHHS will provide written notice to Contractor describing the violation and the action it intends to take. 5.4.3. If neither termination nor cure is feasible, DHHS may report the violation to the applicable Deleted: shall regulatory authorities. 5.4.4. The duties of Contractor or its Subcontractor under this DUA survive the expiration or termination of this DUA until all the Confidential Information is Destroyed or returned to DHHS, as required by this DUA. 5.5. Injunctive Relief 5.5.1. Contractor acknowledges and agrees that DHHS may suffer irreparable injury if Contractor or its Subcontractor fails to comply with any of the terms of this DUA with respect to the Confidential Information or a provision of HIPAA or other laws or regulations applicable to Confidential Information. 5.5.2. Contractor further agrees that monetary damages may be inadequate to compensate DHHS for Contractor's or its Subcontractor's failure to comply. Accordingly, Contractor agrees that DHHS will, in addition to any other remedies available to it at law or in equity, be entitled to seek injunctive relief without posting a bond and without the necessity of demonstrating actual damages, to enforce the terms of this DUA. 5.6. Indemnification 5.6.1. All of Contractor’s duties and obligations regarding indemnification otherwise contained in Deleted: herein the Contract apply to the provisions contained in this DUA. 5.7. Automatic Amendment and Interpretation 5.7.1. Upon the effective date of any amendment or issuance of additional regulations to any law applicable to Confidential Information, the parties agree to take such action as is Deleted: this DUA will automatically be amended necessary to amend this DUA in order to ensure compliance with such regulations and so that the obligations imposed on DHHS applicable law. Any ambiguity in this DUA will be resolved in favor of a meaning that permits and/or Contractor remain in compliance with DHHS and Contractor to comply with laws applicable to Confidential Information. such requirements… 5.8. Notices; Requests for Approval 5.8.1. All notices and requests for approval related to this DUA must be directed to the DHHS Contract Manager.
Data Use Agreement - 86273 Page 8 of 9 8/2019 APPENDIX 1. SUBCONTRACTOR AGREEMENT FORM
RFP 6406 Z1
The DUA between DHHS and Contractor establishes the permitted and required uses and disclosures of Confidential Information by Contractor. Contractor has received permissions by DHHS for operations purposes for Authorized Use and has subcontracted with (Subcontractor name) for performance of duties on behalf of Contractor, which are subject to the DUA. Subcontractor acknowledges, understands and agrees to be bound by the same terms and conditions applicable to Contractor under the DUA, incorporated by reference in this Agreement, with respect to DHHS Confidential Information. Contractor and Subcontractor agree that DHHS is a third-party beneficiary to applicable provisions of the subcontract.
DHHS has the right, but not the obligation, to review or approve the terms and conditions of the subcontract by virtue of this Subcontractor Agreement Form.
Contractor and Subcontractor assure DHHS that any Breach as defined by the DUA that Subcontractor Discovers shall be reported to DHHS by Contractor in the time, manner and content required by the DUA.
If Contractor knows or should have known in the exercise of reasonable diligence of a pattern of activity or practice by Subcontractor that constitutes a material breach or violation of the DUA or the Subcontractor's obligations, Contractor shall:
1. Take reasonable steps to cure the violation or end the violation, as applicable; 2. If the steps are unsuccessful, terminate the contract or arrangement with Subcontractor, if feasible; 3. Notify DHHS immediately upon Discovery of the pattern of activity or practice of Subcontractor that constitutes a material breach or violation of the DUA and keep DHHS reasonably and regularly informed about steps Contractor is taking to cure or end the violation or terminate Subcontractor's contract or arrangement.
This Subcontractor Agreement Form is executed by the parties in their capacities indicated below.
FOR CONTRACTOR: FOR SUBCONTRACTOR:
Name Name Title Title Contractor Name Subcontractor name
DATE: DATE:
Data Use Agreement - 86273 Page 9 of 9 8/2019 MILLIMAN TECHNICAL PROPOSAL
APPENDIX D: FINANCIAL STATEMENTS
RFP 6406 Z1 Page 71 of 115 December 8, 2020 Milliman REPORT OF INDEPENDENT AUDITORS AND CONSOLIDATED FINANCIAL STATEMENTS
MILLIMAN, INC.
December 31, 2019 and 2018 Table of Contents
PAGE
Report of Independent Auditors 1–2
Financial Statements Consolidated balance sheets 3 Consolidated statements of income 4 Consolidated statements of comprehensive income 5 Consolidated statements of changes in shareholders’ equity 6 Consolidated statements of cash flows 7 Notes to consolidated financial statements 8–21 Report of Independent Auditors
To the Shareholders of Milliman, Inc.
Report on the Consolidated Financial Statements We have audited the accompanying consolidated financial statements of Milliman, Inc., which comprise the consolidated balance sheets as of December 31, 2019 and 2018, and the related consolidated statements of income, comprehensive income, shareholders’ equity, and cash flows for the years then ended, and the related notes to the consolidated financial statements.
Management’s Responsibility for the Consolidated Financial Statements Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
1
Opinion In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Milliman, Inc. as of December 31, 2019 and 2018, and the results of its operations and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.
Change in Accounting Principle As discussed in Note 1 to the consolidated financial statements, Milliman, Inc. changed its method of accounting for revenue recognition in 2019 due to the adoption of Financial Accounting Standards Board Accounting Standards Codification Topic 606, Revenue from Contracts with Customers.
Seattle, Washington April 28, 2020
2
Milliman, Inc. Consolidated Balance Sheets
ASSETS December 31, 2019 2018 CURRENT ASSETS Cash and cash equivalents $ 48,158,822 $ 41,947,946 Receivables and unbilled revenue Client receivables 139,489,569 135,779,962 Unbilled revenue and client advances 150,717,640 127,512,297 Related party advances 242,382 318,408 Less: Allowance for doubtful accounts (50,000,000) (44,000,000)
Total receivables and unbilled revenue, net 240,449,591 219,610,667 Prepaid expenses, deposits, and other current assets 17,372,485 17,216,422 Income tax receivable 1,650,000 2,467,815
Total current assets 307,630,898 281,242,850
PROPERTY AND EQUIPMENT, net 43,489,581 31,882,405
INTANGIBLE ASSETS, net 308,416 838,362
GOODWILL, net 1,721,663 2,291,029
OTHER ASSETS Investments 779,818 880,518 Long-term deposits 2,824,021 4,228,861
Total other assets 3,603,839 5,109,379
$ 356,754,397 $ 321,364,025 LIABILITIES AND SHAREHOLDERS’ EQUITY CURRENT LIABILITIES Accounts payable and accrued liabilities $ 139,659,448 $ 111,671,440 Current portion of notes payable under lines of credit and long-term debt 39,733,905 46,681,804 Cash disbursements in excess of deposits 7,669,910 - Deferred revenue 27,872,675 44,313,381
Total current liabilities 214,935,938 202,666,625 NOTES PAYABLE UNDER LINES OF CREDIT AND LONG-TERM DEBT, net of current portion 11,697,209 12,358,994 DEFERRED INCOME TAX LIABILITIES 27,536,000 20,938,000 DEFERRED RENT 12,194,185 11,653,253
Total liabilities 266,363,332 247,616,872
COMMITMENTS AND CONTINGENCIES (Notes 9 and 13) SHAREHOLDERS’ EQUITY Milliman Inc. shareholders’ equity Class A voting common stock, $40 par value, 20,000 shares authorized, 10,870 and 10,800 shares issued and outstanding 434,800 432,000 Class B nonvoting common stock, $40 par value, 20,000 shares authorized, 7,100 and 6,950 shares issued and outstanding 284,000 278,000 Class C nonvoting common stock, $40 par value, 400 shares authorized, 0 and 0 shares issued and outstanding - - Additional paid-in capital 2,875,200 2,840,000 Retained earnings 87,135,454 70,466,670 Accumulated other comprehensive loss (1,489,595) (1,455,661)
Total Milliman, Inc. shareholders’ equity 89,239,859 72,561,009 Noncontrolling interest 1,151,206 1,186,144
90,391,065 73,747,153
$ 356,754,397 $ 321,364,025
See accompanying notes. 3 Milliman, Inc. Consolidated Statements of Income
Years Ended December 31, 2019 2018
OPERATING REVENUES $ 1,230,449,001 $ 1,156,450,892
OPERATING EXPENSES 1,213,374,732 1,149,933,232
OPERATING INCOME 17,074,269 6,517,660
OTHER LOSS, net (1,945,905) (2,048,188)
INCOME FROM EQUITY METHOD INVESTEE 3,831 103,180
INCOME FROM OPERATIONS BEFORE INCOME TAX EXPENSE 15,132,195 4,572,652
INCOME TAX EXPENSE (7,800,000) (4,230,000)
INCOME FROM OPERATIONS 7,332,195 342,652
LESS (INCOME) LOSS ATTRIBUTABLE TO NONCONTROLLING INTEREST 34,938 (1,294)
INCOME ATTRIBUTABLE TO MILLIMAN, INC. $ 7,367,133 $ 341,358
4 See accompanying notes. Milliman, Inc. Consolidated Statements of Comprehensive Income
Years Ended December 31, 2019 2018
NET INCOME $ 7,332,195 $ 342,652
OTHER COMPREHENSIVE (LOSS) INCOME Foreign currency translation adjustment (33,934) 175,555
COMPREHENSIVE INCOME $ 7,298,261 $ 518,207
See accompanying notes. 5 Milliman, Inc. Consolidated Statements of Changes in Shareholders’ Equity
Accumulated Class A Class A Class B Class B Additional Other Number Common Number Common Paid-In Retained Comprehensive Noncontrolling of Shares Stock of Shares Stock Capital Earnings Income (Loss) Interest Total
BALANCE, December 31, 2017 10,550 $ 422,000 - $ - $ 1,688,000 $ 70,210,228 $ (1,631,216) $ 1,184,850 $ 71,873,862
Net income - - - - - 341,358 - 1,294 342,652
Foreign currency translation adjustment ------175,555 - 175,555
Stock issued 780 31,200 6,950 278,000 1,236,800 - - - 1,546,000
Stock repurchased (530) (21,200) (84,800) - - - (106,000)
Dividends paid ($8 per share) - - - - - (84,916) - - (84,916)
BALANCE, December 31, 2018 10,800 432,000 6,950 278,000 2,840,000 70,466,670 (1,455,661) 1,186,144 73,747,153
Net income - - - - - 7,367,133 - (34,938) 7,332,195
Cumulative effect of change in accounting principle related to revenue recognition, net of tax - - - - - 9,449,000 - - 9,449,000
Foreign currency translation adjustment ------(33,934) - (33,934)
Stock issued 660 26,400 550 22,000 193,600 - - - 242,000
Stock repurchased (590) (23,600) (400) (16,000) (158,400) - - - (198,000)
Dividends paid ($8 per share) - - - - - (147,349) - - (147,349)
BALANCE, December 31, 2019 10,870 $ 434,800 7,100 $ 284,000 $ 2,875,200 $ 87,135,454 $ (1,489,595) $ 1,151,206 $ 90,391,065
6 See accompanying notes. Milliman, Inc. Consolidated Statements of Cash Flows
Years Ended December 31, 2019 2018 CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 7,332,195 $ 342,652 Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization 12,151,472 11,302,194 Deferred income taxes 6,598,000 2,262,000 Change in allowance for doubtful accounts 6,000,000 5,500,000 Loss on disposals of property and equipment - 46,940 Earnings from equity method investee (3,831) (103,180) Effect of change in accounting principle, net of tax 9,449,000 - Cash provided by (used in) changes in operating assets and liabilities Receivables (26,838,924) (27,579,663) Prepaid expenses, deposits and other current assets (156,063) (100,822) Income taxes receivable/payable 817,815 1,207,185 Long-term deposits 1,404,840 (181,505) Cash disbursements in excess of deposits 7,669,910 - Accounts payable and accrued liabilities 18,504,510 (7,380,379) Deferred revenue (16,440,706) 5,924,945 Deferred rent 540,932 (88,097)
Net cash from (used in) operating activities 27,029,150 (8,847,730)
CASH FLOWS FROM INVESTING ACTIVITIES Purchases of property and equipment (13,175,838) (7,268,726) Investments and advances 104,531 182,111 Return of capital from equity method investee - 3,554,264
Net cash used in investing activities (13,071,307) (3,532,351)
CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from notes payable and long-term debt 133,466,382 156,703,624 Payments on notes payable and long-term debt (141,076,066) (147,248,906) Proceeds from issuance of common stock 242,000 1,546,000 Repurchase of common stock (198,000) (106,000) Dividends paid (147,349) (84,916)
Net cash from (used in) financing activities (7,713,033) 10,809,802
EFFECTS OF FOREIGN CURRENCY TRANSLATION ON CASH (33,934) 175,555
NET CHANGE IN CASH AND CASH EQUIVALENTS 6,210,876 (1,394,724)
CASH AND CASH EQUIVALENTS Beginning of year 41,947,946 43,342,670
End of year $ 48,158,822 $ 41,947,946
7 See accompanying notes.
Milliman, Inc. Notes to Consolidated Financial Statements
Note 1 – Organization and Summary of Significant Accounting Policies
Organization – Milliman, Inc. (the Company) is an international company that provides consulting, actuarial, and allied services, including calculation of insurance risks and premiums in the areas of life insurance, property and casualty insurance, employee benefits, and healthcare. The Company was incorporated in the state of Washington in 1957.
Principles of consolidation – The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All material intercompany balances and transactions have been eliminated in consolidation.
Cash and cash equivalents – The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.
Revenue recognition – On January 1, 2019, the Company adopted Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customers (ASC 606) by applying the modified retrospective approach to those contracts which were not completed as of January 1, 2019. Results for reporting periods beginning after January 1, 2019 are presented under ASC 606, while prior period amounts are not adjusted and continue to be reported under the accounting standards in effect for the prior period.
The cumulative impact of adopting Topic 606 on January 1, 2019, was an increase in retained earnings of approximately $9,449,000 which is presented net of income tax expense. Under the modified retrospective method, the Company was not required to restate comparative financial information prior to the adoption of these standards and, therefore, such information presented prior to January 1, 2019, continues to be reported under the Company’s previous accounting policies.
The cumulative effect of the changes made to the consolidated balance sheet as of January 1, 2019 for the adoption of Topic 606:
Balance at December 31, Topic 606 Balance at 2018 Adjustments January 1, 2019 Liabilities Deferred revenue $ 44,313,381 $ (12,700,000) $ 31,613,381 Deferred income taxes 27,536,000 3,251,000 30,787,000 Shareholders' equity Retained earnings 70,466,670 9,449,000 79,915,670
8 Milliman, Inc. Notes to Consolidated Financial Statements
Note 1 – Organization and Summary of Significant Accounting Policies (continued)
The following table illustrates the impacts of adopting Topic 606 on the Company’s consolidated balance sheet as of December 31, 2019:
As Reported at Balances Without December 31, Topic 606 Adoption of Topic 2019 Adjustments 606 Liabilities Deferred revenue $ 27,872,675 $ 13,500,000 $ 41,372,675 Deferred income taxes 20,938,000 (3,400,000) 17,538,000 Shareholders' equity Retained earnings 87,135,454 (10,100,000) 77,035,454
The following table illustrates the impacts of adopting Topic 606 on the Company’s consolidated statement of operations for the year ended December 31, 2019:
As Reported at Balances Without December 31, Topic 606 Adoption of Topic 2019 Adjustments 606
Operating revenues $1,230,449,001 $ (13,500,000) $ 1,216,949,001 Income tax expense 7,800,000 (3,400,000) 4,400,000 Net income 7,332,195 (10,100,000) (2,767,805)
The Company generates the majority of its revenues from providing professional services under two types of billing arrangements: time-and-expense and fixed-fee. Revenue is recognized when evidence that an arrangement exists, the related services have been provided, the price is fixed or determinable, and collectability is reasonably assured. If at the outset of an arrangement management determines that the arrangement fee is not fixed or determinable, revenue is deferred until all criteria for recognizing revenue are met. Provisions are recorded for the estimated realization adjustments on all engagements. Invoices are typically presented monthly as work progresses or based on pre-established milestones and are due in 30 days.
Time-and-expense billing arrangements require the client to pay based on the number of hours worked by revenue-generating professionals at contractually agreed-upon rates. The Company recognizes revenues for professional services rendered under time-and-expense engagements based on the hours incurred at agreed-upon rates as work is performed. In some cases, time-and-expense arrangements are subject to a cap, in which case management assesses the work performed on a periodic basis to ensure that the cap has not been exceeded. Revenues are recognized over time as the services are performed.
In fixed-fee billing arrangements, a pre-established fee is agreed to for the engagement of specified professional services. These contracts are for varying periods and generally permit the client to cancel the contract before the end of the term. Revenues are recognized over time as the services are performed.
9 Milliman, Inc. Notes to Consolidated Financial Statements
Note 1 – Organization and Summary of Significant Accounting Policies (continued)
The Company recognizes revenues for professional services performed under these billing arrangements on a monthly basis over the specified contract term or, in certain cases, revenue is recognized on the proportional performance method of accounting based on the estimated percentage of completion for the engagement. The estimated percentage of completion is based on labor hours incurred as a percentage of total estimated labor hours for the contract.
Reimbursed expenses, which include travel, out-of-pocket expenses, outside consultants, and other similar costs are generally included in revenues, and an equivalent amount of reimbursable expenses is included in costs of services in the period in which the expense is incurred. Revenues recognized but not yet billed to clients, have been recorded as unbilled revenues within receivables on the accompanying consolidated balance sheets.
The Company also generates revenue through the following: (1) cloud-based subscription revenue, which allows clients to use hosted software over the contract period without taking possession of the software is comprised of subscription fees from customers utilizing the Company’s software and give clients access to the ordered subscription service, related support, and updates, if any, to the subscribed service, and (2) consulting services, which consist of fees associated with implementation, data migration, training, and other services, plus reimbursable expenses. Revenue for software license fees are generally recognized at a point in time upon billing and revenue for maintenance and support is typically recognized over time as the services are performed.
Multiple performance obligations – The Company’s contracts with clients often include promises to transfer multiple products and services. Determining whether products and services are considered distinct performance obligations that should be accounted for separately from one another sometimes requires judgment. Performance obligations are determined to be considered distinct if they are both capable of being distinct and distinct within the context of the contract. In determining whether performance obligations meet the criteria for being distinct, management considers a number of factors, such as the degree of interrelation and interdependence between obligations, and whether or not the good or service significantly modifies or transforms another good or service in the contract. The subscription and consulting services are both determined to be distinct performance obligations and the transaction price is allocated to each performance obligation based on their estimated standalone selling prices. Subscription revenue is recognized over time over the subscription period. The duration of the Company’s client contracts varies, but typically range from twelve to thirty-six months. The transaction price is allocated to consulting services using observable hourly rates and recognized over time using the input method as the services are delivered based on actual hours worked.
Upon adoption of ASC 606, the Company revised its accounting policy on revenue recognition certain cloud-based subscription revenue that previously resulted in deferred revenue under prior revenue recognition guidance. As a result of the implementation of this accounting policy, the Company has recorded a cumulative effect for the change in accounting principle, net of tax, as an increase to retained earnings of approximately $9.5 million resulting from recognizing previously deferred revenues on contracts that were in progress as of January 1, 2019.
10 Milliman, Inc. Notes to Consolidated Financial Statements
Note 1 – Organization and Summary of Significant Accounting Policies (continued)
Contract costs – Additionally, the Company has evaluated ASC Topic 340 - Other Assets and Deferred Cost (Topic 340) which requires companies to defer certain incremental costs to obtain customer contracts, and certain costs to fulfill client contracts. The Company has determined that they incur no significant costs of obtaining client contracts such as commissions and therefore the adoption of Topic 340 did not have a significant impact on the Company’s consolidated financial statements.
Unbilled revenue and deferred revenue – Unbilled revenue and deferred revenue are considered contract assets and liabilities, respectively. Contract assets represent accumulated charges that have not been billed as of year-end. Such amounts are reclassified to accounts receivable when billed under the terms of the contract. Contract liabilities consist of deferred revenue. Deferred revenue consists of prepayments of software maintenance contracts and amounts collected from clients in advance of services provided. The revenue is recognized as the related performance obligations are satisfied. Contract assets and liabilities are reported in a net position on a contract-by-contract basis at the end of each reporting period. There were no substantial non-current contract assets or liabilities for the periods presented.
Receivables – Client receivables consist of billed amounts due from clients. Management determines the allowance for doubtful accounts by identifying troubled accounts and by using historical experience applied to an aging of accounts. Client receivables and unbilled revenue are written off when determined to be uncollectible and recoveries of amounts previously written off are reported as income when received.
Property and equipment – Property and equipment are stated at cost, net of accumulated depreciation and amortization. Leasehold improvements are amortized utilizing the straight-line method over the shorter of the estimated useful life of the asset or respective lease term. The Company provides for depreciation of property and equipment, using the double-declining balance method over the following estimated useful lives:
Computers and electronic equipment 5 years Telephone equipment 5 years Office furniture 7 years
Intangible assets – Intangible assets represent customer lists and are amortized over periods from 3 to 20 years from the date of acquisition. The Company evaluates intangible assets annually for potential impairment; no impairment was noted during 2019 or 2018.
Goodwill – The Company adheres to the accounting alternative provided by FASB Accounting Standards Update (ASU) No. 2014-02, Intangibles-Goodwill and Other (Topic 350): Accounting for Goodwill (a consensus of the Private Company Council).
Goodwill represents the difference between the purchase price of an acquired business and the fair value of the identifiable tangible and intangible net assets acquired. Under the accounting alternative, goodwill is amortized on a straight-line basis over ten years and assessed for impairment if an event or circumstances indicate that the fair value of the entity may be less than its carrying amount. A goodwill impairment loss is recognized to the extent the carrying amount of the entity including goodwill exceeds its fair value. There was no impairment of goodwill during 2019 or 2018.
11 Milliman, Inc. Notes to Consolidated Financial Statements
Note 1 – Organization and Summary of Significant Accounting Policies (continued)
Valuation of long-lived assets – The Company periodically evaluates the carrying value of its long-lived assets, including, but not limited to, property and equipment, intangible assets and other assets. The carrying value of a long-lived asset is considered impaired if its estimated fair value is less than its carrying value. There was no impairment of long-lived assets during 2019 or 2018.
Investments – Investments consist of equity method investments where the Company is considered to have significant influence (generally greater than 20% ownership of the investee’s equity), but not control, and are carried at the cost of acquisition plus the Company’s equity in undistributed earnings or losses since acquisition.
Claims loss reserve – The Company receives professional liability insurance coverage through policies written directly and through reinsurance arrangements for amounts in excess of a self-insured retention layer. Actual costs for outstanding claims may vary from estimates based on trends of losses for filed claims and claims estimated to be incurred but not yet filed. Estimated losses and costs of these self- insurance programs are accrued, based on management’s best estimate of the Company’s exposure. The recorded claims loss reserve liability was $10,000,000 and $13,240,000 at December 31, 2019 and 2018, respectively. This amount is included in accounts payable and accrued liabilities on the consolidated balance sheets (see Note 7).
Income taxes – The Company is a cash-basis taxpayer and accounts for income taxes using an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial statement and tax basis of assets and liabilities at the applicable enacted tax rates. A valuation allowance is provided when it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company evaluates the realizability of its deferred tax assets by assessing its valuation allowance and by adjusting the amount of such allowance, if necessary.
The Company recognizes the tax benefits from uncertain tax positions only if it is more likely than not that the tax positions will be sustained on examination by the tax authorities, based on the technical merits of the position. The tax benefit is measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement.
Translation of foreign currencies – Assets and liabilities of foreign subsidiaries are translated to U.S. dollars at the year-end exchange rate; income and expenses are translated at the average exchange rates for the year. The related translation adjustments are reflected in the foreign currency translation line of the consolidated statements of shareholders’ equity and statements of comprehensive income.
Retained earnings – Included in retained earnings is undistributed capital of active equity principals, net of taxes. Future distributions of retained earnings are dependent upon board approval, future cash collections and are restricted by current debt covenants (see Note 8).
12 Milliman, Inc. Notes to Consolidated Financial Statements
Note 1 – Organization and Summary of Significant Accounting Policies (continued)
Fair value of financial instruments – Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The carrying amounts of cash and cash equivalents, client receivables, accounts payable, accrued expenses, notes payable under lines of credit and long-term debt approximate their fair values due to the short maturity or liquidity of those instruments or because the instruments are subject to variable interest rates.
Concentration of credit risk – Financial instruments which potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, client receivables and unbilled revenue. Cash and cash equivalents consist of deposits and money market funds. Concentrations of credit risk with respect to client receivables and unbilled revenue are limited as the Company has a large number of clients that are dispersed across many industries and geographic areas. The Company monitors concentrations of credit risk with respect to accounts receivable by performing credit evaluations on customers and, at times, will request retainers.
Approximately 88% and 87% of the Company’s revenues were generated by its United States based operations from a diverse client base during 2019 and 2018, respectively.
Sales and value-added taxes – The Company presents taxes collected from customers and remitted to governmental authorities on a net basis within the consolidated statements of income.
Use of estimates – The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements and the accompanying notes. Actual results could differ from those estimates.
Recent accounting pronouncements – In February 2016, the FASB issued Accounting Standards Update (ASU) No. 2016-02, Leases, which provides new guidelines that change the accounting for leasing arrangements. ASU 2016-02 primarily changes the accounting for lessees, requiring lessees to record assets and liabilities on the balance sheet for most leases. This standard is effective for nonpublic entities for annual reporting periods beginning on or after December 15, 2020, and interim reporting periods within annual reporting periods beginning after December 15, 2021. The Company is currently evaluating the impact of the standard on the consolidated financial statements.
Reclassifications – Certain prior year amounts have been reclassified to be in accordance with current year presentation. These reclassifications had no impact on net income for either period.
13 Milliman, Inc. Notes to Consolidated Financial Statements
Note 1 – Organization and Summary of Significant Accounting Policies (continued)
Subsequent events – Subsequent events are events or transactions that occur after the consolidated balance sheet date but before the consolidated financial statements are available to be issued. The Company recognizes in the consolidated financial statements the effects of all subsequent events that provide additional evidence about conditions that existed at the date of the consolidated balance sheet, including the estimates inherent in the process of preparing the consolidated financial statements. The Company’s consolidated financial statements do not recognize subsequent events that provide evidence about conditions that did not exist at the date of the consolidated balance sheet but arose after the consolidated balance sheet date and before the consolidated financial statements are available to be issued.
The Company has evaluated subsequent events through April 28, 2020, which is the date the consolidated financial statements were available to be issued.
Subsequent to December 31, 2019, the World Health Organization declared the novel coronavirus outbreak a public health emergency. There has been an impact throughout the geographic regions in the world where the Company’s offices are located. Given the dynamic nature of these circumstances and the duration of business disruption, any related financial impacts cannot be reasonably estimated at this time, but could materially affect the Company’s results for the year ended December 31, 2020.
Note 2 – Prepaid Expenses, Deposits, and Other Current Assets
Prepaid expenses, deposits, and other current assets consist of the following at December 31:
2019 2018
Prepaid insurance $ 8,550,536 $ 8,426,660 Deposits and other assets 8,821,949 8,789,762
$ 17,372,485 $ 17,216,422
14 Milliman, Inc. Notes to Consolidated Financial Statements
Note 3 – Property and Equipment
Property and equipment consist of the following at December 31:
2019 2018
Furniture and equipment $ 70,522,163 $ 70,324,225 Leasehold improvements 55,747,643 43,129,651 Construction in progress 4,928,475 1,123,353
131,198,281 114,577,229 Accumulated depreciation and amortization (87,708,700) (82,694,824)
Property and equipment, net $ 43,489,581 $ 31,882,405
Depreciation and amortization expense was $11,052,160 and $10,165,691 for 2019 and 2018, respectively.
Note 4 – Intangible Assets
The following table reflects changes in the net carrying amount of the customer lists for the years ended December 31:
2019 2018
Gross carrying amount $ 11,772,207 $ 11,772,207 Accumulated amortization (11,463,791) (10,933,845)
Customer lists, net $ 308,416 $ 838,362
Aggregate amortization expense for customer lists was $529,946 and $567,137 for 2019 and 2018, respectively.
The Company expects amortization expense for each year to be as follows:
2020 $ 115,916 2021 82,500 2022 82,500 2023 27,500
$ 308,416
15 Milliman, Inc. Notes to Consolidated Financial Statements
Note 5 – Goodwill
Goodwill consists of the following at December 31:
2019 2018
Gross carrying amount $ 5,693,649 $ 5,693,649 Accumulated amortization (3,971,986) (3,402,620)
Goodwill, net $ 1,721,663 $ 2,291,029
Aggregate amortization expense for goodwill was $569,366 for the years ended December 31, 2019 and 2018.
The Company expects goodwill amortization expense for each year to be as follows:
2020 $ 569,366 2021 569,366 2022 569,366 2023 13,565
$ 1,721,663
Note 6 – Investments
Professional Consultants Insurance Company, Inc. – Professional Consultants Insurance Company, Inc. (PCIC) was organized in 1987 as a captive insurance company under the laws of the State of Vermont. Through June 30, 2010, PCIC provided professional liability insurance on a claims-made basis to a group of actuarial and management consulting firms, all of which participated in the program as both policyholders and shareholders.
PCIC ceased issuing insurance policies effective July 1, 2010, based on an election by the shareholders to liquidate PCIC. Therefore, during 2019 and 2018, the Company paid no insurance premiums to PCIC. Accordingly, the Company began obtaining other insurance coverage at that time and has chosen to have a larger self-insured retention than it had under the previous structure. PCIC has been placed in run-off mode, and once all remaining claims are resolved any residual assets will be distributed to the shareholders.
The Company’s ownership interest in PCIC was 27.13% as of December 31, 2019 and 2018. The investment balance at December 31, 2019 and 2018, was $1,030,347 and $1,026,516, respectively, and is recorded in other assets on the consolidated balance sheets.
The Company accounts for its investment in PCIC as an equity-method investment. The Company’s proportionate share of PCIC’s net profit was $3,831 and $103,180 in 2019 and 2018, respectively, and these amounts are included in income from equity method investee in the accompanying consolidated statements of income.
16 Milliman, Inc. Notes to Consolidated Financial Statements
Note 6 – Investments (continued)
MBWL International – The Company entered into a joint venture with Barnett Waddingham and Lurse, UK and Germany based providers of actuarial services, administration and consultancy services. The Company’s share of the joint venture results is included in Other Assets on the accompanying consolidated balance sheets.
Note 7 – Accounts Payable and Accrued Liabilities
Accounts payable and accrued liabilities consist of the following at December 31:
2019 2018
Accounts payable $ 25,000,000 $ 22,000,000 Accrued profit sharing 30,990,041 28,799,510 Accrued vacation 17,820,326 15,674,628 Accrued bonuses 28,734,005 12,240,986 Sales and value added taxes 4,382,260 3,302,704 Tenant improvement allowance 18,298,301 11,364,198 Claims Loss Reserve 10,000,000 13,240,000 Other 4,434,515 5,049,414
$ 139,659,448 $ 111,671,440
Note 8 – Notes Payable under Lines of Credit and Long Term Debt
The Company has a line of credit that provides for maximum borrowings of $85,000,000 at LIBOR plus 1.15% (2.91% and 3.50% at December 31, 2019 and 2018, respectively) and expires in June 2021. This line is collateralized by the Company’s client receivables. This line has variable limitations on borrowings and is reserved for undrawn letters of credit totaling $1,200,380 (see Note 12). Outstanding borrowings on this line at December 31, 2019 and 2018, were $31,933,904 and $38,881,804, respectively and are due in June 2021.
The Company has another revolving line of credit note with a bank to finance equipment purchases and leasehold improvements. This note provides for maximum borrowings up to $26,000,000 and expires in June 2021. This line is collateralized by the Company’s client receivables. The note bears interest at LIBOR plus 1.15% (2.91% and 3.50% at December 31, 2019 and 2018, respectively) and requires principal and interest payments monthly. The balance outstanding under this note was $19,497,210 and $20,158,896, which includes the current portion of $7,800,000 for years ended December 31, 2019 and 2018. The current portion of this revolving line of credit note is based on management’s expectations of the amount that will be paid in the following year. The remaining portion is due in June 2021.
The Company’s credit agreements require that the Company maintain certain minimum financial ratios.
Long-term debt – On December 4, 2015, the Company signed a promissory note for $7,700,000. The note is collateralized by the Company’s client receivables and bears a variable interest rate equal to LIBOR plus 1.45%. The agreement requires quarterly principal payments of $385,000, and matures on January 1, 2021; however, the Company made payments in excess of those required during 2018. This note payable was retired during 2018. At December 31, 2018, there was no unpaid principal balance.
17
Milliman, Inc. Notes to Consolidated Financial Statements
Note 9 – Leases
The Company leases office space and equipment under various noncancelable operating leases. The aggregate future minimum obligations under these leases are as follows:
2020 $ 29,511,106 2021 27,907,358 2022 24,653,760 2023 22,615,684 2024 21,699,976 Thereafter 92,612,510
$ 219,000,394
The Company has been granted tenant improvement allowances from various lessors. These amounts are presented as a liability on the consolidated balance sheets and amortized against rent expense over the remaining lease term. As of December 31, 2019 and 2018, the Company had $18,298,301 and $11,364,198, respectively, of unamortized tenant improvement allowances. Rent expense, net of tenant improvement allowances, was $33,454,188 and $31,903,101 in 2019 and 2018, respectively. The Company had several lease agreements, which provided for rent holidays or escalating rental payments. At December 31, 2019 and 2018, deferred rent of $12,194,185 and $11,653,253, respectively, was recorded by the Company to account for rent escalations and will be amortized over the term of the relevant leases.
Note 10 – Income Taxes
The significant temporary differences between the financial statements and tax basis of assets and liabilities are associated with client receivables and unbilled revenue, accounts payable, accrued liabilities, deferred revenue, deferred compensation, net operating losses and depreciation of property and equipment.
Deferred tax assets and liabilities are recorded net of valuation allowances of approximately $4,400,000 and $4,100,000 at December 31, 2019 and 2018, respectively, and consist of the following:
Total December 31, 2019 Deferred tax assets $ 32,372,000 Deferred tax liabilities (59,908,000)
Net deferred income tax liability $ (27,536,000)
December 31, 2018 Deferred tax assets $ 33,543,000 Deferred tax liabilities (54,481,000)
Net deferred income tax liability $ (20,938,000)
18
Milliman, Inc. Notes to Consolidated Financial Statements
Note 10 – Income Taxes (continued)
The deferred tax liability beginning balance for the year ending December 31, 2019, was impacted by the adoption of FASB ASC Topic 606, Revenue from Contracts with Customers which is described in Note 1. The $9.5 million increase to retained earnings resulting from the adoption of ASC 606 is net of tax and includes a reduction to deferred income tax expense of $3.251 million.
For primarily all deferred tax assets, no valuation allowance is deemed necessary, based upon the estimated future taxable income from the reversal of existing temporary differences. The Company does have a valuation allowance related to certain foreign net operating losses that begin to expire in 2020.
The components of income tax expense were as follows:
2019 2018
Current $ 4,453,000 $ 1,968,000 Deferred 3,347,000 2,262,000
$ 7,800,000 $ 4,230,000
A reconciliation between the income tax provision at statutory rates and the recorded provision is as follows for the years ended December 31:
2019 2018
Income tax provision at statutory rate $ 3,178,000 $ 960,000 Permanent differences 1,751,000 1,690,000 Other - 80,000 True-up related to foreign operations 874,000 - Basis adjustment for fixed assets 719,000 - Return to provision true-up 456,000 - Valuation allowance 274,000 1,069,000 State tax provision, net of federal provision 695,000 209,000 Change in state effective rate (147,000) 222,000
$ 7,800,000 $ 4,230,000
The Company had no liability for uncertain tax positions as of December 31, 2019 and 2018. The Company recognizes interest accrued and penalties related to uncertain tax positions as a component of tax expense. During the years ended December 31, 2019 and 2018, the Company recognized no interest and penalties.
The Company files income tax returns in the U.S. federal jurisdiction and various state jurisdictions.
19 Milliman, Inc. Notes to Consolidated Financial Statements
Note 11 – Deferred Revenue
Deferred revenue consists of the following at December 31:
2019 2018
Prepayments of licensing fees and maintenance contracts $ 8,486,062 $ 22,998,312 Amounts collected from customers in advance of services provided 19,386,613 21,315,069
$ 27,872,675 $ 44,313,381
Note 12 – Letters of Credit
Letters of Credit – The Company has three outstanding letters of credit, totaling $1,200,380, under an existing line of credit facility to guarantee payment in the event the Company fails to meet its financial obligation to the beneficiaries. During 2019, there were no events of default that would require satisfaction of the guarantees described above.
Note 13 – Commitments and Contingencies
Contingent payments – The Company periodically acquires business from external entities and typically agrees to pay the seller a fixed percentage of revenues generated from future services for a specific time period. The Company may also agree to pay retiring equity principals a percentage of revenue earned from those equity principal’s former client base after retirement. At December 31, 2019, there were several agreements in place to pay a percentage of future revenues earned to retired equity principals with the last expiration date for payment being December 2028. During 2019 and 2018, the Company made payments to the retired equity principals of $31,957,288 and $30,288,395, respectively.
Legal matters – The Company is involved from time to time in claims, proceedings and litigation arising from its business. The Company does not believe that any such claims, proceedings or litigation, either alone or in the aggregate, will have a material adverse effect on the Company’s financial position or results of its operations.
Note 14 – Profit Sharing Plan
The Company has a non-discriminatory, defined contribution profit sharing plan (the Plan) for U.S. employees. Contributions to the Plan are discretionary and are determined annually by the Board of Directors of the Company. Participants are also allowed to make voluntary contributions, to which the Company matches 50% thereof, up to a certain percentage of an employee’s annual salary. During 2019 and 2018, the Company’s expense related to the Plan was approximately $39,500,000 and $36,400,000, respectively.
20 Milliman, Inc. Notes to Consolidated Financial Statements
Note 15 – Supplemental Cash Flow Information
Cash paid for interest during 2019 and 2018 was $1,246,697 and $1,158,038, respectively. The Company made income tax payments of $1,400,000 and $0 during 2019 and 2018, respectively.
Note 16 – Supplemental Operating Expense Information
Operating expenses consist of the following at December 31:
2019 2018
Employee compensation $ 731,993,923 $ 694,223,797 Employee benefits 76,869,130 72,092,828 Rent 33,454,186 31,903,101 Depreciation/amortization 12,151,473 11,302,194 Cleint reimbursable expenses 51,055,777 60,502,981 Other 307,850,243 279,908,331
Total operating expenses $ 1,213,374,732 $ 1,149,933,232
21
MILLIMAN TECHNICAL PROPOSAL
APPENDIX E: RESUMES
RFP 6406 Z1 Page 98 of 115 December 8, 2020 Robert Damler, FSA, MAAA Principal and Consulting Actuary
PROPOSED ROLE WITH THE STATE OF NEBRASKA Managing Principal
EDUCATION Bachelor of Science, Actuarial Science Ball State University – 1987
PROFESSIONAL QUALIFICATIONS Member, American Academy of Actuaries (MAAA) – 1990 Fellow, Society of Actuaries (FSA) – 1994
OVERVIEW OF EXPERIENCE Rob Damler is a managing principal of Milliman. Mr. Damler established the Medicaid consulting practice in the Indianapolis office in 1994. Over his 29-year career, Rob has developed an expertise in the analysis of the financial risks associated with the financing and delivery of healthcare services. His experience includes both public and private pay healthcare. He has consulted on a wide array of topics, including managed care resource allocation models, financial projections, mergers and acquisitions, disease management, and risk adjuster development for specialized populations. He has consulted state Medicaid agencies and Medicaid health plans in projects involving Medicaid managed care capitation rate setting, 1915(b) waivers, 1915(c) waivers, 1115 waivers, state budget forecasting, expansion population financial projections, and fiscal analysis of new state and federal proposals. Mr. Damler regularly volunteers with the American Academy of Actuaries and chaired the task force that wrote the Actuarial Standard of Practice No. 49, Medicaid Capitation Rate Setting. He is a board member of the Actuarial Standards Board and is an Academy Medicaid representative for Capitol Hill, providing independent advice to federal lawmakers and administrative office personnel. He also regularly volunteers as a speaker and author of research articles on Medicaid topics for the Society of Actuaries. With respect to the services requested by the State of Nebraska for Medicaid Reimbursement Services, the following list provides a background of Mr. Damler’s relevant experience:
• Collection, validation, and analysis. Claims and eligibility data form the basis of virtually every healthcare analytics assignment. Rob has been integral in managing the collection and analysis has managed the collection and analysis for numerous states and health plans over his 29+ year career. From the beginning years of performing data analytics to recent efforts to streamline internal database platforms, Rob is an expert in the use of data-based analytics for healthcare decision making. • Development of Fee Schedules: Rob and the Indianapolis team have developed fee schedules for home and community-based services, including services for behavioral health and long-term supports and services. Milliman utilized a robust fee schedule development process, which included data collection, site visits, structured interviews, and subject matter expert round tables. Each of these mechanisms provide opportunities to collect different types of information from a variety of stakeholders and experts. Milliman has not only demonstrated the ability to collect information in an efficient and robust manner, but also is able to translate that information into actionable items for their clients. • State of Indiana, Department of Health and Family Services: Provides comprehensive actuarial consulting services for the state’s Medicaid program. (2000 to Present) • State of Illinois, Department of Healthcare and Family Services: Provide comprehensive managed care consulting services including rate development, risk adjustment, encounter data validation, financial and budget analysis, development of managed care efficiency adjustments, and support of 438.6(c) directed payment and pass-through reconciliation. (2000 to Present) • State of Michigan, Department of Health and Family Services: Provides comprehensive managed care consulting services including rate development and budget forecasting for the state’s Medicaid program. (1997 to Present) • State of Ohio, Department of Medicaid: Provides comprehensive managed care consulting services including rate development and budget forecasting for the state’s Medicaid program. (2000 to Present)
PROFESSIONAL CONTRIBUTIONS VOLUNTEERISM
• American Academy of Actuaries, Actuarial Standards Board (2018 to Present) • Chairman, Task Force on Medicaid Rate Setting and Certification, American Academy of Actuaries, Actuarial Standards Board, Actuarial Standard of Practice #49, “Medicaid Managed Care Capitation Rate Development and Certification” (2013 to 2015) • Society of Actuaries Sections: Health, Social Insurance/Public Finance • American Academy of Actuaries Medicaid Workgroup (2001 to Present) • Ball State University Actuarial Science Advisory Board (1996 to 2006) • Ball State University Dean’s Executive Advisory Council, College of Sciences and Humanities (2010 to Present)
RESEARCH AND PUBLICATIONS • Medicaid Work Requirements: Overview of Policy and Fiscal Considerations, Society of Actuaries, In the Public Interest, Issue 16, co-author (January 2018) • Calendar Year 2016 Medicare Part B premium increase: Impact on state Medicaid programs, Milliman white paper, co-author (October 2015) • Medicaid Expansion: A Comparison of Two States Under Section 1115 Demonstration Waivers, Society of Actuaries, In the Public Interest, co-author (July 2015) • Medicaid and the ACA, an overview of 1915(i) State Plan Option, American Academy of Actuaries, Contingencies, co-author (May / June 2015) • Medicaid Expansion under the Affordable Care Act, SoA Health Watch (July 2013) • Considerations for Medicaid expansion through health insurance exchange coverage, Milliman Healthcare Reform Briefing Paper, co-author (April 2013) • PPACA Risk Adjustment Implementation Issues, Milliman Health Care Reform Issue Brief: Indiana Exchange Policy Committee, co-author (February 2012)
INDUSTRY PRESENTATIONS
• Risk Adjusters in Medicaid, Society of Actuaries, Session 88, Annual Meeting (October 2015) • Medicaid Expansion: What did we get Right?, Society of Actuaries, Session 147, Annual Meeting (October 2015) • Actuarial Standard of Practice #49, Medicaid Managed Care Capitation Rate Development and Certification, Society of Actuaries, Session 52, Spring Health Meeting (June 2015) • What is Up with Medicaid Expansion, Society of Actuaries, Session 83, Spring Health Meeting (June 2014) • ACA and the Changing Face of Medicaid, Society of Actuaries, Foundations of Affordable Care Act, Part 3, Spring Health Meeting (June 2013)
REFERENCES
Name Paul Bowling Jim Parker Brian Keisling Company Indiana Medicaid Illinois Department of Michigan Department of Health Healthcare and Family Services and Human Services Title Chief Financial Officer Administrator Director, Bureau of Medicaid Operations and Actuarial Services Office 402 W. Washington St., Prescott Bloom Building 4081 W Polk Rd, Address Room W 374 201 South Grand Avenue, Hart, MI 49420 Indianapolis, IN 46204 East Springfield, Illinois 62763
Telephone (317) 233-4451 (217) 558-2350 ext. 2020 (517) 284-1183 Number Email [email protected] [email protected] [email protected] Jim Pettersson, CPA Senior Healthcare Consultant
PROPOSED ROLE WITH THE STATE OF NEBRASKA Engagement Director
EDUCATION Bachelor of Science, Accounting, Central Washington University – 1981
PROFESSIONAL QUALIFICATIONS Certified Public Accountant, State of Washington
OVERVIEW OF EXPERIENCE Mr. Pettersson is a senior healthcare consultant with Milliman’s Medicaid Finance and Policy practice. He joined the firm in 2018 and has more than 30 years of experience providing consulting and advisory services to state Medicaid programs and state agencies, private insurers, hospital providers and other healthcare entities. He specializes in the design, implementation, and evaluation of Medicaid program healthcare delivery and payment systems for all types of provider services, and the evaluation of the adequacy of payment rates. His experience includes inpatient and outpatient hospital services, nursing facility services, and home and community-based services for aged and disabled populations, persons with intellectual and developmental disabilities, and behavioral health needs. Mr. Pettersson also has significant experience in the design, evaluation and support of Medicaid Disproportionate Share Hospital and other supplemental payment programs, including opportunities for successfully leveraging federal funding for payment of provider services, and the associated regulatory and compliance considerations. Mr. Pettersson has frequently presented findings and recommendations to Medicaid program leadership, state legislative committees, and governor’s offices. With respect to the services requested by the State of Nebraska for Medicaid Reimbursement Services, the following list provides a background of Mr. Pettersson’s relevant experience: • Mr. Pettersson has significant experience with the design, evaluation and implementation of prospective payment and rate-setting systems for all types of services, including inpatient and outpatient hospital services, nursing facility services, and home and community services (HCBS) for the aged and disabled, intellectual and developmentally disabled and mental health populations. He is a national expert in the application of patient classification systems used for prospective payment , including 3M’s inpatient APR DRGs and outpatient EAPGs.
• Mr. Pettersson directed projects to successfully design, implement and modify prospective payment policies and rate-setting methods for inpatient hospital services using the APR DRG classification model for the Medicaid programs in Arizona, Florida, Illinois, Kentucky, Minnesota, Nebraska, Pennsylvania, Washington and Wisconsin, and several commercial plans, and is currently assisting the Medicaid agency in Puerto Rico with a similar initiative. These projects focused on all phases of design, analytics and implementation, including the development of simulation models to establish and validate base rates, relative weights and all other payment parameters and components to support all payment policies for services under the models. He facilitated numerous stakeholder meetings comprising provider groups, advocacy associations, legislative representatives and other stakeholders. He directed the development of business requirements to support modifications to Medicaid Management Information Systems (MMIS), and developed and implemented strategies for program monitoring subsequent to system implementations. • Mr. Pettersson also has significant experience with outpatient hospital prospective payment systems. He directed projects for the Medicaid programs in Florida, Illinois, Nebraska, Washington and Wisconsin to design, implement, modify and monitor outpatient payment methodologies utilizing the Enhanced Ambulatory Patient Grouping (EAPG) model. These projects focused on all phases of design, analytics and implementation, including the development of simulation models to establish and validate base conversion factors, relative weights and other payment parameters to support all payment policies for services under the model. He facilitated stakeholder meetings comprising provider groups, advocacy associations, legislative representatives and other stakeholders. He also directed the development of business requirements to support modifications to MMIS, and implemented strategies for program monitoring subsequent to system implementations. • Mr. Pettersson has significant experience with development and evaluation of supplemental payments programs, including Disproportionate Share Hospital (DSH) payment programs, and upper payment limit (UPL) supplemental programs funded through Inter-Governmental Transfers (IGTs), Certified Public Expenditures (CPEs), Healthcare-Related Taxes and State Directed Payment Arrangements. Also assisted several states with the transition of supplemental payment programs funded by provider taxes and IGTs from fee-for-service (FFS) to a managed care environment, including the development of managed care “pass- through” payment and State Directed Payment approaches. His experience with these programs includes assisting the Medicaid agencies in Arizona, Kentucky, Illinois, Minnesota, Puerto Rico, South Carolina, Washington and Wisconsin.
• He directed projects for Medicaid programs in Arizona, Illinois and Washington to implement Health Care-Related Tax programs. For each of these projects, developed stakeholder engagement strategies and facilitated stakeholder meetings with provider groups, advocacy associations, legislative representatives and other stakeholders.
• Mr. Pettersson directed projects in Colorado, Minnesota, Nebraska and Wyoming to support rate setting initiatives to transform payment methods for all services covered under the States’ Developmental Disability Home and Community-Based (HCBS) waivers. Facilitated work groups with providers and other stakeholders.
• He directed projects for the Medicaid programs in Arkansas, Florida and New Hampshire to design nursing facility prospective payment systems, intended to transition payment methods from facility-specific cost based models to fully prospective and standardized models. He facilitated numerous public meetings to solicit stakeholder input. PROFESSIONAL CONTRIBUTIONS RESEARCH AND PUBLICATIONS • “Designing Payment Arrangements for Medicaid Providers in Response to the COVID-19 Emergency.” Milliman White Paper. April, 2020. • “Approved Medicaid State Directed Payments: How States are Using §438.6(c) ‘Preprints’ to Respond to the Managed Care Final Rule.” Milliman White Paper. October, 2018. • “Insights for Designing Effective Medicaid Readmissions Policies”. Issue Brief. February, 2017. • “New Kid in Town – Medicare and Medicaid APCs.” Healthcare Financial Management. January, 2006.
INDUSTRY PRESENTATIONS • “Recent Trends in Medicaid – Local and National Perspectives”. WA-AK HFMA Annual Conference & Trade Fair. Seattle, WA. February, 2015. • “The Implementation of Severity-Adjusted DRGs and Considerations for Ongoing Health Plan Operation.” World Research Group Seminars. Chicago, IL, September, 2008. Scottsdale, AZ, February, 2009. • “Participant Direction in Home and Community-Based Waivers and Ratesetting to Support Individual Budgets.” National Association of Reimbursement Officers, Annual Conference. Seattle, WA. August, 2008. • “The DOORS Model – A 2007 Update.” National Association of State Units on Aging, 23rd National HCBS Conference. Albuquerque, NM. October, 2007. • “What are the Costs of Developmental Disabilities in an HCBS Setting?” National Association of State Units on Aging, 22nd National HCBS Conference. Minneapolis, MN. October, 2006. • “State Revenue Enhancement Using Federal Matching Funds – Avoiding Federal Challenges.” American Association of Public Welfare Attorneys, National Meeting. Denver, CO. September, 2004. • “Becoming More Effective Users of Data in Managed Care.” HFMA, Annual National Institute. Seattle, WA. June 2002.
REFERENCES
Name Jim Parker Jorge Galva Rodriguez Jeff Saxon Company Illinois Department of Puerto Rico Health South Carolina Healthcare and Family Insurance Administration Department of Health and Services (PRHIA) Human Services Title Administrator Executive Director Program Manager III Address Prescott Bloom Building P.O. Box 195661 1801 Main Street 201 South Grand Avenue, San Juan, Puerto Rico Columbia, South Carolina East Springfield, Illinois 00919-5561 29201 62763 Phone (217) 558-2350, ext. 202 (787) 420-1282 (803) 898-1023 Number Email [email protected] [email protected] [email protected] Ben Mori Senior Healthcare Consultant
PROPOSED ROLE WITH THE STATE OF NEBRASKA Project Manager
EDUCATION Bachelor of Arts, Economics, Claremont McKenna College – 2001
OVERVIEW OF EXPERIENCE Ben Mori is a Senior Healthcare Consultant in Milliman’s Medicaid Finance and Policy practice, focused on empowering payers to transform service delivery through payment. He has over 19 years of experience using analytics to develop payments consistent with enhancing resource efficiency and access to quality healthcare, for both public and commercial payers. Ben’s expertise includes the development of prospective reimbursement systems to achieve payment transformation for healthcare payers, including inpatient and outpatient hospitals, home- and community-based service (HCBS) providers, long-term acute care hospitals, nursing facilities and professional service providers. Ben also is experienced in assisting State Medicaid agencies with program funding strategies to optimize Federal funding opportunities, maintain access to care and incentivize improved patient quality and outcomes. Ben has extensive project management and leadership experience, including directing multiple large-scale engagements for ten state agencies, three commercial BlueCross BlueShield plans and the Veterans Health Administration, impacting over 35 million lives. With respect to the services requested by the State of Nebraska for Medicaid Reimbursement Services, the following list provides a background of Mr. Mori’s relevant experience: • Mr. Mori has significant experience with the successful design and implementation of multi- million-dollar prospective payment methodologies systems for inpatient and outpatient hospital services and HCBS. He is a national expert in leading hospital reimbursement policies, including methodologies and patient classification systems under 3M’s all payer models (inpatient APR DRGs and outpatient EAPGs) and CMS’ Medicare models (inpatient MS-DRGs and outpatient APCs). He also has significant experience with the HCBS prospective rate setting process, including the use of service cost-based fee schedule and bundled rate models and developing provider cost surveys. Ben is experienced in all facets of payment system design, including the development of qualitative conceptual frameworks, rate calculations, claim cost calculations using cost report data, payment simulation modeling and impact analysis, stakeholder engagement with providers, managed care plans and legislative staff, development of IT system Business Requirements Documents, and assistance with the CMS approval process. In addition to Nebraska, Ben’s experience includes State Medicaid agencies in Arizona, Arkansas, Florida, Hawai`i, Illinois, Indiana, Kentucky, Minnesota, South Carolina, Washington, Wisconsin, Wyoming, and BlueCross BlueShield plans in Alabama, Massachusetts and New Jersey.
• Mr. Mori has assisted with the successful design and implementation of hospital readmission policies under 3M’s Potentially Preventable Readmissions (PPR) software and CMS’ Medicare readmission policy to incentivize reductions in excess utilization and improve patient outcomes. Experience includes State Medicaid agencies in Illinois, Washington, and Wisconsin, and BlueCross BlueShield plans in Massachusetts and New Jersey.
• Mr. Mori has significant experience with the successful design and implementation of multi-million dollar state Medicaid programs to optimize Federal funding opportunities, maintain access to care and incentivize improved patient quality and outcomes. Expertise includes the development of programs utilizing Upper Payment Limit (UPL) supplemental payments, Disproportionate Share Hospital (DSH) payments, Inter-Governmental Transfers (IGTs), Certified Public Expenditures (CPEs), Healthcare-Related Taxes and State Directed Payment Arrangements. Also assisted several states with the transition of supplemental payment programs funded by provider taxes and IGTs from fee-for-service (FFS) to a managed care environment, including the development of managed care “pass-through” payment and State Directed Payment approaches. Experience includes State Medicaid agencies in Arizona, Kentucky, Illinois, Minnesota, Nebraska, Pennsylvania, South Carolina, Washington and Wisconsin.
• Virtually all of Mr. Mori’s provider reimbursement projects have involved stakeholder engagement with multiple parties affected by the respective payment program, which is critical to gaining the support required by impacted parties, particularly for public Medicaid policies requiring state and federal approval. Ben’s stakeholder engagement experience has included a variety of modes, including both inbound communication (collecting provider surveys and cost reports, presentation Q&A, review of dedicated project email addresses, etc.) and outbound communication (stakeholder meeting facilitation in person and via webinar, status calls with provider associations, individual stakeholder meetings and interviews, legislative testimony, etc.). Mr. Mori has significant experience working with a variety of stakeholders, including providers (physicians, provider administrators, etc.), provider associations and their consultants, direct care worker associations, member advocacy groups, legislative and governor’s office staff, managed care plans, and CMS.
• Mr. Mori regularly tracks CMS regulations impacting Medicaid reimbursement, and has recently co-authored the several white papers on state considerations for achieving federal compliance (see publications listing below). Mr. Mori also regularly tracks national trends in Medicaid reimbursement, including base fee schedule methods (ex: use of DRG payment methodologies) and more advanced payment models (ex: bundled payments, ACOs, etc.). Ben recently developed a comprehensive Medicaid environmental scan for the Missouri Hospital Association on the full range of Medicaid hospital reimbursement approached used by states. In addition, Ben regularly provides exemplar state examples during the provider reimbursement design process.
• Mr. Mori has significant experience with the development of Medicaid HCBS provider surveys to collect key cost and staffing information. He oversaw the development of web-based surveys, identified targeted providers and survey participating strategies, addressed participant questions, conducted survey training, analyzed and reviewed survey results, and summarized survey data for use in rate calculations. Experience includes State Medicaid agencies in Indiana, Minnesota, and Wyoming.
• All of Mr. Mori’s provider reimbursement projects involved quantitative analysis to model the fiscal impact of payment policy changes using historical paid claims and encounter data. Ben is well versed in the standard paid claim formats for both institutional and non-institutional services, and the application of these data in the payment simulation modeling process. In addition to
Nebraska, Ben’s experience includes State Medicaid agencies in Arizona, Arkansas, Florida, Hawaii, Illinois, Indiana, Kentucky, Minnesota, South Carolina, Washington, Wisconsin, Wyoming, and BlueCross BlueShield plans in Alabama, Massachusetts and New Jersey.
• Mr. Mori also has significant experience working with Medicare hospital cost report data to conduct estimates of the costs incurred by hospitals for performing inpatient and outpatient services. Ben has overseen the developing of Milliman’s Hospital Costing Tool to use all-payer data from the HCRIS (CMS’ electronic cost report database) for application to payer-specific claims data for cost estimation purposes.
• As described previously, all of Mr. Mori’s provider reimbursement projects, have involved quantitative analysis to model the fiscal impact of payment policy changes. This includes applying new patient classifications (ex: DRGs) and other new rate parameters to historical claims and encounter data, simulating payments under new methodology scenarios, and applying appropriate trend factors (inflation, utilization, completion, etc.) to the new rate year. This also involves summarizing fiscal impact results at various levels, including the service line, provider and provider type, population, managed care plan, and patient classification. In addition to Nebraska, Ben’s experience includes State Medicaid agencies in Arizona, Arkansas, Florida, Hawaii, Illinois, Indiana, Kentucky, Minnesota, Nebraska, South Carolina, Washington, Wisconsin, Wyoming, and BlueCross BlueShield plans in Alabama, Massachusetts and New Jersey.
PROFESSIONAL CONTRIBUTIONS RESEARCH AND PUBLICATIONS • COVID-19: Designing payment arrangements for Medicaid providers in response to the COVID-19 emergency • HCBS: Meeting the needs of Medicaid Home and Community-Based Services program participants during the COVID-19 pandemic and beyond • MFAR: State considerations regarding Medicaid Fiscal Accountability Regulation proposed by CMS • Preprints: Approved Medicaid State Directed Payments: How States are Using §438.6(c) “Preprints” to Respond to the Managed Care Final Rule
REFERENCES
Name Amy Upston Abigail Cole Ranjani Starr Company Arizona Health Care Cost Washington State Health Care Hawaii State Department of Human Containment System Authority (HCA) Services, MedQUEST Division (AHCCCS) Title Hospital Finance Section Manager, Hospital Finance Health Analytics & Informatics Administrator and Drug Rebate, Financial Services Administrator Address 801 E Jefferson St Office Cherry Street Plaza P.O. Box 29920 Phoenix, AZ 85034 626 8th Avenue SE Honolulu, HI 96820-2320 Olympia, WA 98501 Phone (602) 618-2768 (360) 725-1835 (808) 692-8067 Number Email [email protected] [email protected] [email protected]
Nina Nikolova Healthcare Management Analyst \
PROPOSED ROLE WITH THE STATE OF NEBRASKA Senior Analyst
EDUCATION Bachelor of Business Administration, Finance, University of Washington, Michael G. Foster School of Business – 2011 == PROFESSIONAL QUALIFICATIONS Project Management Professional (PMP), Project Management Institute – 2019
OVERVIEW OF EXPERIENCE
Ms. Nikolova is a healthcare management analyst in the Medicaid Finance and Policy practice in the Seattle office of Milliman. She joined the firm in 2019. Nina has over six years of experience providing consulting services across nine State Medicaid agencies as well as for CMS. She is a Project Management Professional (PMP) certification holder with significant project leadership experience. Her experience includes supporting States with Medicaid programs and initiatives related to supplemental payment and claim payment methodology design for inpatient and outpatient hospital, nursing facility, and home- and community-based services.
Her experience also includes analyses and demonstrations required for federal approval of Medicaid programs and funding, including the evaluation of reimbursement rate adequacy for long- term care services, the development of upper payment limit (UPL) and disproportionate share hospital (DSH) calculations, and the evaluation of uncompensated care pool (UCP) payments.
With respect to the services requested by the State of Nebraska for Medicaid Reimbursement Services, the following list provides a background of Ms. Nikolova’s relevant experience:
RELEVANT EXPERIENCE:
Ms. Nikolova has supported the Nebraska Department of Health and Human Services (DHHS) with the annual Disproportionate Share Hospital (DHS) calculations in the past. She was closely involved in the various aspects of the project work including collecting, reviewing, and processing responses to the annual hospital survey, performing the calculations necessary to determine each hospital’s DSH eligibility status, calculating the payment distribution of each DSH pool across the qualifying hospitals, as well as developing the provider notification letters. Ms. Nikolova has assisted the Washington State Health Care Authority (HCA) in completing the annual Upper Payment Limit (UPL) demonstrations for inpatient and outpatient hospitals services. She also assisted with developing a managed care UPL demonstration as required by the Centers for Medicare and Medicaid services (CMS). In her role, Ms. Nikolova assisted with various aspects of the work including relevant data requests, performing the UPL calculations.
Ms. Nikolova also assisted the Washington HCA with analyses to determine the budget neutrality of the All-Patient Refined Diagnosis Related Groups (APR-DRG) and Enhanced Ambulatory Patient Grouping (EAPG) inpatient and outpatient payment systems after their implementation. She led the analysis process which involved simulating payments under HCA’s legacy payment systems and comparing the payments under the new systems. She also assisted with developing key materials for distribution to the client and stakeholders including fiscal impact summaries.
REFERENCES:
Name Abigail Cole Company Washington State Health Care Authority (HCA) Title Section Manager, Hospital Finance and Drug Rebate, Financial Services Address Office Cherry Street Plaza 626 8th Avenue SE Olympia, WA 98501 Phone (360) 725-1835 Number Email [email protected]
Ms. Nikolova has recently joined Milliman. We have provided a reference for her Milliman project related work; due to her recent employment with the firm, she does not currently have additional available references for Milliman-specific projects. Joseph Whitley, MPP Healthcare Consultant
PROPOSED ROLE WITH THE STATE OF NEBRASKA Senior Analyst
EDUCATION Bachelor of Arts, Political Science, Western Washington University – 2014
Master’s Degree, Public Policy Oregon State University – 2016
OVERVIEW OF EXPERIENCE
Joseph Whitley is a healthcare consultant in the Medicaid Finance and Policy practice in the Seattle office of Milliman. He joined the firm in 2019. Joseph has over seven years of experience in finance and analytics, with a Master of Public Policy (MPP) focused on quantitative methods. In addition to his Medicaid consulting experience at Milliman, Joseph has worked as a Medicaid Fiscal Information and Data Analyst at the Washington State Health Care Authority and as the Funds Flow Coordinator for HealthierHere (the King County Accountable Communities of Health formed under the 1115 demonstration wavier). Joe’s expertise includes advanced-level financial research and analytic expertise required to successfully manage a State Medical Assistance program. Joseph has provided support for several state legislative sessions, in addition to work related to state Medicaid forecasting, Managed Care rate setting, and Medicaid reform under the 1115 waiver. Joe also has experience with home- and community-based service rate setting, dental managed care program implementation, development of Outpatient Prospective Payment Models, and the improvement of FQHC alternative payment models. Additionally, Joseph has experience working with funding strategies to optimize Federal funding opportunities, including Intergovernmental Transfers (IGT), Certified Public Expenditures (CPE), and Provider Tax programs. With respect to the services requested by the State of Nebraska for Medicaid Reimbursement Services, the following list provides a background of Mr. Whitley’s relevant experience: . Managing State Medicaid Programs Experienced with numerous aspects of managing a state Medicaid program, including: i. Providing management, financial, contractual, and systems support required to implement a Dental managed care program; ii. Providing management, financial, contractual, and systems support required to implement an Integrated Managed care (medical and behavioral health) program; iii. Providing management, financial, contractual, and systems support required to implement an Oral Health pilot and a Partnership Access Line (PAL’s) program; iv. Assisting in the development and submission of various state plan amendments with CMS; v. Developing SQL based algorithms to group submitted managed care encounters for monthly utilization reports presented to executive and external stakeholders;
vi. Developing SQL based algorithms to track Pharmacy rebates across claims and financial accounting systems used in rate setting, forecasting, and budgeting processes; vii. Modeling impacts of various federal legislation related to the Affordable Care Act (ACA) and the Medicaid expansion population; viii. Modeling and stakeholdering fiscal impacts of the COVID-19 public health emergency on state Medicaid budgets/forecasts, managed care capitation rates, and risk corridors; ix. Modeling impacts of various program implementation and expansion (e.g. non-emergent transportation, emergency dental, hearing aids, ‘ABCD’ dental, chiropractic benefits, Pharmacy PDL etc.) for legislative and other external stakeholders; x. Creating claims based models to adjust forecasted trends in state medical assistance budgets; xi. Drafting and updating gross adjustments for state Medicaid budgets; xii. Developing program adjustments for Managed Care rate setting purposes; xiii. Tracking and modeling financial impacts of Federal Match Percentage (FMAP) changes to Medicaid expansion and CHIP populations; xiv. Providing financial support related to implementing an 1115 waiver that is funded by IGT. Experience includes Medicaid programs in Indiana, Michigan, Missouri, South Carolina, Puerto Rico and Washington.
. Value Based Payment Design and Alternative Payment Models Experienced with numerous aspects of Value Based Payment (VBP) and Alternative Payment Model (APM) design, including: i. Working with providers and stakeholders to advance VBP models under the HCP-LAN framework; ii. Assisting states in transitioning from cost-based reimbursement to Outpatient Prospective Payment Models (OPPS); iii. Assisting state Medicaid agencies in the development of alternative payment methodologies for FQHCs. Experience includes programs in Missouri and Washington.
. Medicaid Transformation i. Knowledgeable of federal regulation and national trends in financing and implementing 1115 Medicaid Transformation Demonstration waivers. ii. Knowledgeable of federal guidance and national trends in value based purchasing for state Medicaid agencies. iii. Experienced with developing partnerships between medical, behavioral health, social service, and community agencies and programs. iv. Experienced with the development of numerous pilot programs related to system transformation. v. Responsible for developing Investment Prioritization Framework excel based models used to prioritize ACHs investments and pilot projects. vi. Responsible for developing and monitoring excel-based Delivery System Reform Incentive Payments (DSRIP) forecasts for the King County Accountable Communities of Health (ACH); vii. Responsible for developing and implementing Pay for Progress (PFP) funding models for hospital, FQHC, Behavioral Health Agencies (BHAs), and Community Based Organizations (CBOs) in King County, Washington. viii. Participated in system transformation stakeholdering with state, regional, and local leadership as well as Community Based Organizations (CBOs), Behavioral Health Agencies (BHAs), hospitals, FQHCs, and tribal providers.
. Healthcare-Related Taxes and Federal Funding Optimization i. Knowledgeable of federal regulation and national trends in provider tax programs, as well as CPE and IGT funding arrangements. ii. Developed, rebased, and simulated numerous provider assessment tax models to ensure assessments meet federal compliance under § 433.68(e) and § 433.68(f). iii. Participated in stakeholdering of assessment models with state officials and providers. iv. Submitted numerous assessment model demonstrations (e.g. B1/B2, P1/P2, hold harmless) through the CMS approval process. v. Experience includes numerous Medicaid assessment models in Arizona, Hawaii, Missouri, Puerto Rico, and Washington.
. Developing State Directed Payment Methodologies i. Knowledgeable of federal regulation and national trends in §438.6(c) state directed payment preprints. Work includes developing, modeling, and operationalizing minimum fee-schedule and uniform dollar/percentage increases to provider payments. ii. Directed payment experience have included both hospital and physician preprints as well as emergency COVID-19 submissions. iii. Experience includes Medicaid programs in Arizona, Puerto Rico and Washington.
. Home and Community-Based (HCBS) Service Rate Setting i. Proficient with the HCBS prospective rate setting process, including the use of cost-based fee schedule and bundled rate models and developing provider cost surveys. ii. Experienced in all facets of payment system design, including the development of qualitative conceptual frameworks, rate calculations, claim cost calculations using cost report data, payment simulation modeling and impact analysis, stakeholder engagement with providers, managed care plans and legislative staff, development of IT system Business Requirements Documents, and assistance with the CMS approval process. iii. Experience includes Medicaid programs in Indiana, Main, and Michigan.
. Disproportionate Share Hospital (DSH), Psychiatric Residential Treatment Facility (PRTF) and Institute for Mental Disease (IMD) i. Knowledgeable of federal regulations and national trends in DSH as well as PRTF and IMD rate-setting methodologies, including IMD financing as a result of Managed Care in-Lieu of Services rules. ii. Worked with Medicaid agencies to benchmark current IMD and PRTF rates against reported facility costs and simulating the fiscal impact of cost rebasing. iii. Experience includes Medicaid programs in Indiana and Washington.
PROFESSIONAL CONTRIBUTIONS RESEARCH AND PUBLICATIONS . Designing Payment Arrangements for Medicaid Providers in Reponses to the COVID-19 Emergency – April 2020
REFERENCES
Name Thuy Hua-Ly Amy Upston Megan Atkinson Company HealthierHere Arizona Health Care Cost Washington State Health Containment System Care Authority (AHCCCS) Title Chief Financial Officer Hospital Finance Chief Financial Officer Administrator Address 1000 Second Avenue, 801 E Jefferson St 626 8th Ave SE, Olympia, Seattle WA, 98104 Phoenix, AZ 85034 WA 98501 Phone (206) 849-9988 (602) 618-2768 (360) 725-1222 Number Email [email protected] [email protected] [email protected]
Christine Mytelka, FSA, MAAA Principal and Consulting Actuary
PROPOSED ROLE WITH THE STATE OF NEBRASKA
Subject Matter Expert
EDUCATION Master of Science, Biophysics University of California, Berkeley – 1992 Bachelor of Arts, Physics Princeton University – 1989 == PROFESSIONAL QUALIFICATIONS Member, American Academy of Actuaries (MAAA) – 2000 Fellow, Society of Actuaries (FSA) – 2004
OVERVIEW OF EXPERIENCE Ms. Mytelka is a consulting actuary with Milliman’s Indianapolis office. She joined the firm in 2005 and has over 15 years of experience providing actuarial support and consulting to state Medicaid agencies and health plans. Ms. Mytelka has focused most of her efforts on work for the State of Indiana, working primarily for Indiana’s state Medicaid agency, the Family and Social Services Administration (FSSA). Her budgeting and forecasting work provides for regular interaction with the state budget agency, legislative services, and the legislative budget committee and their analysts. Her policy work has provided the benefit of close and enriching interactions with many different divisions within the agency, including managed care, agency clinicians and pharmacists, those supporting LTSS for the aged, those supporting members with intellectual disabilities, those supporting members with addiction or mental illness, the department of child services, eligibility, and workforce development. Ms. Mytelka is involved in collaborative work for work in other states, and as an active member of both the AAA and SOA Medicaid workgroups. With respect to the services requested by the State of Nebraska for Medicaid Reimbursement services, the following list provides a background of Ms. Mytelka’s relevant experience:
• State of Indiana, Family and Social Services Administration: implemented a stakeholder survey and moderated follow-up discussions pursuant to HCBS rate methodology development and rate setting. (2018 to present)
• State of Indiana, Family and Social Services Administration: Analysis of American Community Survey (ACS) PUMS data to review changes in the uninsured population, stratified by age and income level. This was done for Indiana, by region, and compared to neighboring states. The analysis exposed coverage gaps that appear most severe for CHIP-eligible children and their families. (2016 and 2018) • State of Indiana, Family and Social Services Administration: Pharmacy analysis reviewing the implications of carving pharmacy out of the Indiana’s managed care contracts – implications for access, adherence, drug utilization, mix of drugs prescribed and generic utilization, supplemental rebates, administrative costs, reimbursement to pharmacies, and of course overall cost to the state net of rebates. (2014 and 2019) • State of Indiana, Family and Social Services Administration: Ongoing analytical support for LTSS rebalancing planning. Analysis began with benchmarking Indiana’s progress relative to other states, and reviewing the cost, legal, and quality of care implications with maintaining a high institutional mix. Research and stakeholder surveys provided an understanding of some of the barriers to rebalancing, including financial incentives and large supplemental payments for institutional care, a history of stagnant reimbursement for community services, operational challenges such as lack of retroactive eligibility for waiver services, extremely restrictive state laws on nurse delegation and scope of practice, and lack of coordination between waiver and state plan services, especially home health services. We have also researched and advised on various structural options to support rebalancing, including MLTSS, managed fee for service, and more incremental options such as tightening case management guidelines and upgrading coordination with all SNPs. (2016 to present)
• State of Indiana, Family and Social Services Administration: Ongoing analytical support for efforts to redesign Indiana’s program for individuals with intellectual disabilities. Analyses and discussions have been wide-ranging, and include how to incorporate values on a good life from the lifecourse framework, how to add participant direction, whether to restructure Indiana’s two waivers (one capped, one not) into one waiver or three waivers, how to modify case management to make it more effective, consideration of new services that will better meet member needs, and how to do all of this within tight state budget constraints, also staying within federal cost neutrality guidelines. There has been discussion of the need for sustainable wages for direct service professionals, and performing regular (at least annual) assessments for more consistent development of individual budgets. (2018 to present)
• State of Indiana, Family and Social Services Administration: Ongoing analytical support for efforts to update the continuum of care for addiction services and to provide integrated physical/behavioral care under Indiana’s programs for individuals with serious mental illness or addiction. Provided fiscal analysis and ongoing monitoring of 1115 waivers for SUD and SMI IMD and residential supports. Rebased rates for 1915(i) programs, to put them on a consistent basis with each other and with programs sponsored by the other divisions, and also updated for important changes to service requirements and VBP. Provided research and fiscal analysis for the integrated care entity pilot and health home proposals. (2019 to present)
• State of Indiana, Family and Social Services Administration: Analysis of Indiana’s planned transition from 209(b) to 1634 status, including ending the spend down program. The review analyzed both administrative and benefit changes for various populations. In addition to the fiscal impact, loss of benefits to various groups was reviewed, and in some cases new programs were added or program changes were proposed to mitigate the impacts. (2014) All projects below are performed for the State of Indiana, Family and Social Services Administration • Development of Capitation rates for comprehensive managed care programs. Responsibilities include risk and acuity adjustment, encounter data validation, performance metric evaluation, minimum medical loss ratio review, and analysis of policy changes. Also development of rates for PACE and NEMT programs. (2008 to present)
• Development of state Medicaid and CHIP program budgets and forecasts, including projection of IGTs and state appropriation funding needs, as well as monthly monitoring of expenditures relative to budget. Development of fiscal impact estimates, total and state share, for a range of proposed policy and program changes, for legislative budget committee review prior to approval. (2005 to present) • Annual update of hospital assessment fee amounts and physician practice IGTs needed to support supplemental payments, including adjustments for program changes. Review to ensure continued compliance with safe harbors (2011 to present)
• Development of projections to support 1115 demonstration initiatives, including Maternal Opioid Misuse (MOM), Substance Use Disorder (SUD) and Serious Mental Illness (SMI), and the Healthy Indiana Plan (HIP) (2008 to present)
PROFESSIONAL CONTRIBUTIONS VOLUNTEERISM • American Academy of Actuaries Medicaid Workgroup • Milliman Mentorship Program • Society of Actuaries Health Section, Medicaid Workgroup
RESEARCH AND PUBLICATIONS • Milliman research report: “Healthy Adult Opportunity” (February 2020) • Milliman Research report: “HHS’ proposed modification of pharmacy rebate safe harbors – implications for Medicaid” (March 2019) • American Academy of Actuaries: “Medicaid and Long-Term Care Insurance (February 2019) • Milliman research report: “Medicaid Buy-in: Section 1332 Innovation waivers, state option, and top ten considerations” (May 2018) • Milliman research report: “How changing opioid prescribing patterns can impact risk scores”(April 2018) • Milliman research report: “Pass-through payment guidance in final Medicaid managed care regulations: Transitioning to value-based payments, delivery system reform, and required reimbursement” (May 2016)
INDUSTRY PRESENTATIONS • Professionalism for the Medicaid actuary, Society of Actuaries meeting, (August 2020) • Moderator for session on hospice and end of life care, Society of Actuaries meeting (June 2016) • Society of Actuaries webcast: “Medicaid 101” (March 2015) • Conference of Consulting Actuaries webcast: “Medicaid Current Issues” (March 2015)
REFERENCES
Name Allison Taylor Kathleen Leonard Paul Bowling Company Indiana Medicaid Indiana Medicaid Indiana Medicaid Title Medicaid Director Director of Reimbursement and Chief Financial Officer Actuary Address 402 W. Washington St., 402 W. Washington St., 402 W. Washington St., Room W 374 Room W 374 Room W 374 Indianapolis, IN 46204 Indianapolis, IN 46204 Indianapolis, IN 46204 Phone (317) 234-8725 (317) 233-9282 (317) 233-4451 Number Email [email protected] [email protected] [email protected]