C. Where competition is not available or does not yield reasonable subcontract prices, the Intermediary shall also be required to undertake appropriate price analysis in accordance with Part 1-3.807-2(b) of the Federal Procurement Regulations and to undertake cost analysis in accordance with Part 1-3.807-2 (c) of the Federal Procurement Regulations in all subcontracts subject to approval of the Secretary under paragraph B of Article XIV. D. For any subcontract or modification of a subcontract entered into or renewed under this agreement, where the estimated cost to Medicare under the subcontract exceeds $100,000 and is not based on adequate price competition, established catalog or market prices of commercial items sold in substantial quantities to the general public, or prices set by law or regulation, the Intermediary shall in accordance with Parts 1-3.807-3 and 1-3.807-4 of the Federal Procurement Regulations, require the subcontractor to submit written cost or pricing data and certify that the cost or pricing data submitted was accurate, complete, and current prior to the entry into the subcontract or modification of a subcontract. The Intermediary further agrees, through inclusion in all such subcontracts to require subcontractors to maintain full and complete accounting records to support cost or pricing data submitted as aforesaid, to require subcontractors to provide for full access by the Intermediary, the Secretary, and the Comptroller General of the United States for the purpose of examining the accuracy of cost or pricing data submitted as aforesaid, and in accordance with Parts 1-3.807-5, and 1-3.814-3 of the Federal Procurement Regulations to agree to a reduction in price if the cost or pricing data submitted is found to be defective. E. Any subcontract under paragraph A of Article XIV, or any subcontract entered into or renewed under this agreement involving automated data processing systems or services shall provide to the Secretary or his representative: 1. The right to inspect fully any and all work performed or being performed thereunder either directly by the subcontractor or through arrangement with another party; 2. The right to obtain and use freely any data acquired or utilized by the subcontractor in the development and processing of claims or carrying out its functions under the subcontract; 3. The right to review without limitation all systems documentation, program logic, operating manuals, and all other operating methods and procedures involved in the performance of functions and duties under this agreement. Further, if more than 50 percent of the cost of development thereof has been paid out of Government funds, the Secretary shall have use of such information for health care or health care financing programs under the Act. F. Any subcontract under paragraph A of Article XIV, or any subcontract entered into or renewed under this agreement providing for the development of, or study of the feasibility for development of, a data processing system (including an automated data processing system), management procedures, internal or Medicare program instructional material or operating methods shall specify that the work product so produced shall inure to and remain the property of the Intermediary if more than 50 percent of the cost or price of such subcontract is to be paid from funds for the administration of programs under the Act, and, further, that the Secretary or his representative shall have the right of free and unrestricted use without further cost. G. Any subcontract under paragraph A of Article XIV, or any subcontract entered into or renewed under this agreement, involving automated data processing systems or services, which required prior approval of the Secretary, must provide that no lower tier subcontract for the performance of any functions or duties or parts thereof of such subcontracts, can be entered into without prior written approval of the Secretary. Further, such subcontracts must provide for the Comptroller General of the United States and the Secretary (including their duly authorized representatives) the same right to examine subcontractor records as is provided in Article XX B of this agreement. H. Any agreement between the Intermediary and a medical consultant engaged by the Intermediary to review Medicare claims, or health care utilization or to perform related services shall be deemed not to constitute a subcontract for purposes of this agreement. 76-614 O 76 - 13 I. The Intermediary agrees to insert in its subcontracts under this agreement the applicable articles of Appendix A. J. The Intermediary agrees that no subcontract under this agreement shall provide for payment on a cost-plus-a-percentage-of-cost basis. K. It is understood and agreed that the foregoing provisions of this Article are not by way of limitation upon the Secretary's right, at the time of prior approval, to require the Intermediary to specify other terms and conditions requisite upon subcontractors performing functions and duties under this agreement. Article XVI A. In submitting data processing proposals for approval of the Secretary, such notification, as required in Article XIV D, shall include: 1. the design specifications and cost analysis of the proposed change; and 2. documentation that such change or process is needed and is cost effective. B. When subcontracting pursuant to Article XV, the Intermediary shall design data systems specifications, equipment performance requirement specifications, and other specifications to foster free and open competition and opportunity to responsible suppliers, including manufacturers, leasing companies and third party vendors. Article XVII NOMINATION, OR WITHDRAWAL OF NOMINATION BY A PROVIDER OF SERVICES A. The Secretary may add other providers to the list of providers of services if any such provider of services requests the Secretary to do so, except that no such provider of services may be added without the prior consent of the Intermediary. B. If any provider of services, on such list of providers notifies the Secretary that it does not wish to have payments made to it by the Intermediary, the nomination of the Intermediary will not be binding upon such provider of services (and the provisions of this agreement will not be applicable to it), as of such time as the Secretary has prescribed by Regulation for such purpose. Such notification shall be made to the Secretary and the Intermediary. C. Deletions and additions to the list of providers resulting from the provisions of paragraphs A and B of this Article shall be made on a timely basis. Article XVIII COMPLEMENTARY INSURANCE A. The Intermediary's complementary insurance claims process may be integrated with its Medicare claims insurance process in accordance with Regulations and General Instructions. When the insurance processes are totally or partially integrated, all direct costs shall be charged to the appropriate line of business and indirect costs shall be prorated on appropriate allocation bases consistent with the Intermediary's established principles of allocating indirect costs as stipulated in Article XIII B. Where the claims processes are separate, the Intermediary will bear the costs of transferring to its own operation data needed on a routine or occasional basis in a manner prescribed by the Regulations and General Instructions. Where agreement has not been reached on cost determinations concerning com plementary insurance matters, these disputes will be subject to the fiscal disputes procedure of Article VI. B. The Medicare claims information which the Intermediary has access to for its own complementary insurance program may be disclosed to itself and to other complementary insurers but only in accordance with section 1106 of the Act and the Regulations prescribed thereunder. Article XIX DIRECT COMMUNICATION WITH THE PLANS The Secretary may communicate directly with Plans concerning all matters covered under the Plan subcontract. The Secretary agrees that announcements of new policy will be communicated to the Intermediary prior to any distribution of such policy to any Plan. The Secretary will give the Intermediary concurrent notice when written communications are directed to the Plans and when significant issues arise. Article XX A. The Intermediary shall maintain adequate accounting records covering the use of funds under this agreement. The Intermediary agrees that the Secretary and the Comptroller General of the United States (including their duly authorized representatives), until the expiration of three years after final payment for the term of this agreement or of the time periods for the particular records specified in Part 1-20 of the Federal Procurement Regulations (41-CFR Part 1-20), whichever expires earlier, shall have access to and the right to examine, upon reasonable notice and at all reasonable times, any directly pertinent books, documents, papers, and records of the Intermediary, and those of any parent, affiliated or subsidiary organization performing under formal or informal arrangement any services or furnishing any supplies or equipment to the Intermediary, involving transactions related to this agree ment. B. The Intermediary further agrees to include in all his subcontracts under this agreement, a provision to the effect that the subcontractor agrees that the Secretary and the Comptroller General of the United States (including their duly authorized representatives), until the expiration of three years after final payment for the term of the subcontract, or of the time period for the particular records specified in Part 1-20 of the Federal Procurement Regulations (41-CFR Part 1-20), whichever expires earlier, shall have access to and the right to examine, upon reasonable notice and at all reasonable times, any directly pertinent books, documents, papers, and records of such subcontractors, and those of any parent, affiliated or subsidiary organization performing under formal or informal arrangement any services or furnishing any supplies or equipment to the subcontractor, involving transactions related to the subcontract. For purposes of this Article, the term "subcontract" excludes (1) purchase orders not exceeding $2,500, and (2) subcontracts or purchase orders for public utility service at published rates established for uniform application to consumers. C. The periods of access and examination described in paragraphs A and B above, for records which relate to (1) appeals under the "Disputes" clause of this agreement, (2) litigation or the settlement of claims arising out of the performance of this agreement, or (3) costs and expenses of this agreement as to which exception has been taken by the Comptroller General or any of his duly authorized representatives, shall continue until such appeals, litigation, claims or exceptions have been disposed of. D. Each period this agreement is in effect, shall be a separate term of this agreement for purposes of this Article and "final payment" for a term of this agreement shall be deemed to have occurred on the date of the closing agreement referred to in Article VI, setting forth the final administrative costs for the final period of such term. Article XXI INSPECTION AND EVALUATION A. The Secretary shall have the right to appraise Intermediary and Plan performance under this agreement. The Secretary shall also have the right, at all reasonable times, and upon reasonable notice to the Intermediary to inspect, or otherwise evaluate the work performed or being performed hereunder and the premises in which it is being performed. Pursuant thereto, the Secretary shall have the right to maintain onsite representatives on the premises of the Intermediary and the subcontracting Plans. B. If any inspection or evaluation is made by the Secretary on the premises of the Intermediary or the Plan, or onsite representatives of the Secretary are maintained on the premises of the Intermediary or Plans, the Intermediary shall provide and shall require his subcontractor to provide all reasonable facilities and assistance for the safety and convenience of the Secretary's representatives in the performance of their duties. All inspections and evaluations by the Secretary's representatives shall be performed in such a manner as will not unduly delay the work. If a written report of such inspection or evaluation is prepared which reflects deficiencies and/or proposes corrective action to be taken by the Intermediary or the Plan, a copy shall be furnished to the Intermediary and the Plan. Any corrective action determined by the Secretary to be taken by the Intermediary or the Plan as a result of such inspection or evaluation shall be communicated directly to the Intermediary and the Plan. Article XXII A. Except as otherwise provided in this agreement, any dispute concerning a question of fact arising under this contract which is not disposed of by agreement shall be decided by a duly authorized representative of the Secretary who shall reduce his decision to writing and mail or otherwise furnish a copy thereof to the Intermediary. This decision shall be final and conclusive unless, within 30 days from the date of receipt of such copy, the Intermediary mails or otherwise furnishes to the Secretary a written appeal. The decision of the Secretary or his duly authorized representative for the determination of such appeals shall be final and conclusive unless determined by a court of competent jurisdiction to have been fraudulent, or capricious, or arbitrary, or so grossly erroneous as necessarily to imply bad faith, or not supported by substantial evidence. In connection with any appeal proceeding under this clause, the Intermediary shall be afforded an opportunity to be heard and to offer evidence in support of its appeal. Pending final decision of a dispute hereunder, the Intermediary shall proceed diligently with the performance of the contract and in accordance with the Secretary's decision. B. This disputes clause does not preclude consideration of law questions in connection with decisions provided for in paragraph A above: Provided, that nothing in this contract shall be construed as making final the decision of any administrative official, representative, or board on a question of law. C. Disputes concerning the interpretation or application of Regulations and General Instructions or administrative procedures in connection therewith shall not be subject to the provisions of this Article. In addition, this Article shall not apply to termination of this agreement under Article XXVI, Termination of Agreement. Article XXIII The Appendices A and B attached hereto are a part of this agreement. Article XXIV TERM OF AGREEMENT This agreement shall begin on July 1, 1975, and end on September 30, 1976. It will be automatically renewed for a period of 1 year unless the Intermediary or the Secretary gives written notice of intention not to renew the agreement at least 6 months before the end of the current period. The Secretary shall have the authority to not approve renewal of a Plan subcontract by giving notice to the Intermediary and the Plan at least 6 months prior to the end of the current term of the Plan subcontract. Article XXV MODIFICATION AND TERMINATION OF AGREEMENT A. This agreement may be modified or terminated at any time by mutual consent. B. If the Secretary finds that because of enactment of P.L. 92-603 or any other subsequent legislative changes, modification of this agreement is necessary to carry out the provisions of the Act, as amended, or to perform experiments and demonstration projects pursuant to legislative enactment, he may modify any of the functions, duties, parts thereof, or any other services to be performed by the Intermediary. Prior to any such modification, the Secretary shall afford the Intermediary an opportunity to consult and participate in planning for adjustments which might be necessary and thereafter provide the Intermediary written notice that the modification is to be made within 90 days after a date specified in the notice. C. Within 10 days of receipt of the Secretary's notification provided in paragraph B of this Article, the Intermediary may terminate this agreement upon 90 days written notice to the Secretary, and shall not be required to implement any modifications of this agreement provided for in such notification during such 90 day period. D. Any costs referred to in Article XXVI of this agreement, as being applicable if incurred at the termination of this agreement shall be allowable if incurred in the effectuation of any of the aforementioned provisions. Article XXVI TERMINATION OF AGREEMENT A. The Intermediary may terminate this agreement at any time upon 180 days notice to the Secretary, to the public and to its providers of services. B. If the Secretary finds, after 60 days notice and opportunity for hearing to the Intermediary, that— (1) The Intermediary failed substantially to carry out this agreement, or (2) The continuation of some or all of the functions provided for in this agreement is disadvantageous or is inconsistent with the efficient administration of Title XVIII of the Act, the Secretary may terminate this agreement at any time upon 120 days notice to the Intermediary and to its providers of services. |