Knox-Keene Addendum

Knox-Keene Act Administrative Contracting Addendum
The California Department of Managed Health Care (“DMHC”) requires that specific terms and conditions be incorporated into all administrative, management or consulting contracts wherein a health care service plan delegates any Knox-Keene Act regulated or required non-clinical health care service plan function.  New Century Health Plan (“Plan”) is licensed by DMHC to operate a health care service plan and _______________________________________ (“Vendor”) is providing Knox-Keene Act-regulated or -required non-clinical health care service plan functions to Plan; the parties therefore agree as follows:
Definitions:
All terms not defined in the Agreement shall have the meanings assigned to them in California Health & Safety Code section 1345 and 28 California Code of Regulations section 1300.45.
Required Provisions:
Vendor agrees to the following:
1.    Books and Records.  All books, contracts or records relating to services delegated under this agreement shall be stored by Vendor for a minimum of five years and open to inspection, including via electronic means, during normal business hours and shall be located in the state of California to the extent feasible. 
a.    To the extent Vendor generates or receives such books, contracts, or records under the Agreement, Vendor shall maintain books of account; a current list of the names and addresses of all individuals employed by the Plan as solicitors; a current list of the names and addresses of all solicitor firms with which the Plan contracts; the amount of any commissions paid to solicitors and the manner in which the commission was determined.
b.    To the extent Vendor generates or receives such books, contracts, or records under the Agreement, Vendor shall maintain books of account; a current list of the names and addresses of the firm’s partners, if any, and all of its employees who may act as solicitors.
c.    No books, contracts or records will be removed from the state without the prior consent of DMHC.  
d.    Books, contracts, and records, including records, books, and papers that are possessed in any medium whether electronic or otherwise, from the most recent two-year period shall be maintained in a way that allows for immediate access; all other books, contracts, and records shall be maintained in a way that allows for retrieval within five days of an examination request.
2.    Audits and Monitoring.  DMHC shall have the right to conduct an examination of the fiscal and administrative affairs of Vendor at least once every five years, and this examination may include review of the books, contracts, or records described above, including electronic records which shall be furnished in a digitally searchable form upon DMHC’s request.  Plan shall have the right to monitor Vendor’s performance with respect to services delegated to Vendor and these rights shall include, at minimum, any monitoring required to ensure compliance with the Knox-Keene Act and DMHC guidelines.
3.    Confidentiality of Medical Information Act.  To the extent applicable, Vendor shall cooperate with Plan in producing communications in the form, format, or location requested by a plan member as required under Cal. Civ. Code § 56.107, including, for example, to prevent a communication from disclosing medical information or provider name and address relating to receipt of sensitive services.  Vendor will take the necessary steps to protect the confidentiality of a member’s medical information, particularly when the member has a right to receive sensitive services, without requiring authorization from a primary subscriber, and all communications regarding those services will be directed solely to the patient receiving care, in accordance with Cal. Civ. Code § 56.107.
4.    Liability.  Vendor and Plan are each responsible for their own acts or omissions, and are not liable for the acts or omissions of, or the costs of defending, others.
5.    Licensure, Registration, and Certification.  
a.    Personnel employed by Vendor shall be licensed or certified by their respective board or agency, where licensure is required by law.
b.    Equipment required to be licensed or registered by law shall be so licensed or registered, and the operating personnel for that equipment shall be licensed or certified as required by law.
6.    Subcontracting.  To the extent Vendor is permitted to subcontract any functions delegated to it by Plan under this agreement, it shall provide notice of any proposed subcontracting to Plan for Plan’s review and approval, and further reporting to DMHC as required.  Vendor shall not subcontract any functions delegated to it by Plan under this agreement without obtaining Plan’s prior approval.
7.    Any funds received by the Vendor for the account of Plan shall at all times be segregated from the assets of the Vendor and shall be deposited no later than the business day following receipt to a trust account in a state or federal bank authorized to do business in this state and insured by an appropriate federal insuring agency.
8.    Any funds received by the Agent for the account of the Plan shall be transmitted to the Plan, or to a person designated in the contract, net of actual commissions earned under the particular contract within (5) five business days after such funds are received by the Agent.
IN WITNESS WHEREOF, the parties hereto have executed this Addendum as of the date set forth below:


New Century Health Plan            ___________________________________
    
By:    ___________________________    By:    _____________________________
            
Name:    ___________________________    Name    _____________________________
                
Title:     ___________________________     Title:    _____________________________
                
Date:    ___________________________    Date:    _____________________________