MMA SRC #11, Attachment 2: Delegate and Subcontractor ... 01/MAGELLAN...C. For delegations to provider groups where credentialing is the only function delegated, the Vendor Manager

MMA SRC #11, Attachment 2: Delegate and Subcontractor

Contracting and Oversight Policy

DELEGATE AND SUBCONTRACTOR CONTRACTING AND OVERSIGHT

Page 1 of 7 —PROPRIETARY Magellan Health policies apply to all subsidiaries and affiliates, including but not limited to Magellan Healthcare, National Imaging Associates, Magellan Rx Pharmacy, Magellan Medicaid Administration, Magellan Complete Care, AlphaCare of New York, Magellan Pharmacy Solutions, Magellan Rx Management, CDMI and Magellan Life Insurance Company d/b/a/Magellan Rx Medicare as indicated in the Line of Business Applicability in this policy.

Policy and Standards Product Applicability: (For Health Insurance Marketplaces, policies and procedures are the same, unless contractual

requirements dictate a more stringent variation in which case customized documents are created.)

Commercial

Medicaid

Medicare Part C

(Medicare Advantage) Medicare Part D

Federal

Business Division and Entity Applicability:

Magellan Healthcare

Magellan Healthcare [Behavioral](B)

Magellan Complete Care(C)

MCC Florida (CFL) MCC Virginia (CVA)

MCC AlphaCare of New York (CNY)

MCC The Management Group (CTMG)

Magellan Healthcare Provider Group(G)

National Imaging Associates(N)

Magellan Rx Management

Magellan Rx Pharmacy(I)

Magellan Medicaid Administration(A)

Magellan Pharmacy Solutions(S)

Magellan Method (formerly CDMI)(D)

Magellan Rx Management(R)

Magellan Administrative Services(O)

Magellan Rx Medicare(K)

Corporate Policy:

Policy Number: QI.115.04.B-C-CFL-CVA-CNY-CTMG-L-N-I-A-S-D-R-O-K

Policy Name: Delegate and Subcontractor Contracting and Oversight Date of Inception: November 20, 2014

Previous Annual Review Date: June 14, 2016

Current Annual Review Date: July 13, 2017

Review Type:

New Policy

No Changes

Non-substantive

Substantive (material changes or initial documentation of current processes)

Previous Corporate Approval Date: June 16, 2016

Current Corporate Approval Date: July 18, 2017

Unit Effective Date: August 18, 2017

Corporate Policy Approvals:

Janet Maurer Approval on file July 18, 2017

Magellan Health, Chief Medical Officer Date

John J. DiBernardi, Jr., Esq. Approval on file July 17, 2017

Magellan Health, Senior Vice President & Chief Compliance Officer Date

Dan Gregoire, Esq. Approval on file July 14, 2017

Magellan Health, Executive Vice President, General Counsel Date

Trade secret as defined in Section 812.081, Florida Statutes



Cross Reference(s)

First Tier, Downstream, and Related Entities (FDR) Oversight Program; Vendor Sourcing and Contracting

Policy Statement

The properly licensed affiliates and subsidiaries of Magellan Health, Inc., (Magellan) assigned staff

contract and monitor delegates and subcontractors for both initial and ongoing compliance, including

appropriate documentation of oversight activities. This policy includes activities from pre-

delegation, contracting, routine monitoring through annual auditing and termination of a

subcontractor relationship.

Purpose

To present the steps and decision points used by Vendor Management staff and other assigned staff

to monitor delegate and subcontractor ongoing compliance with performance requirements, including

appropriate documentation of oversight activities.

Scope

Account Management

Claims (Service Ops)

Clinical Operations

Compliance

Corporate Physical Security Credentialing/Re-cred

EAP

Federal and State Affairs

Finance

Human Resources

Information Systems Security

Information Technology Security

Legal

Marketing/Comm/Sales

Network

Operations (Member Services)

Quality Improvement

Special Investigations Unit

Key Terms (as used in this policy)

Corrective Action Plan (CAP)

A formal document outlining compliance deficiencies and documenting planned activities to

institute changes aimed at correcting the deficiencies.

Delegation (‘Delegated’)

The legal assignment to others to: 1) perform a specific task or function on behalf of Magellan

for which Magellan is directly contracted to perform itself, and 2) for which Magellan does

not provide direct control and management of the entity or individual or service provided at

the member or provider level. Magellan remains liable for compliance with any and all rules

and requirements pertaining to the delegated functions.

Delegated Entity (Delegate)

Any entity or individual contracted to: 1) perform a specific task or function on behalf of

Magellan for which Magellan is directly contracted to perform itself, and 2) for which

Magellan does not provide direct control and management of the entity or individual or

service provided at the member or provider level.




Subcontractor

For the purpose of this policy which is the scope of delegation oversight, Subcontractor is an

entity that is identified as such through Magellan’s delegation determination guidelines and

is contracted to provide a specific service in relation to a Magellan agreement with a third

party (customer or health plan).

Unit

The business unit that is served by a vendor or delegated entity.

Vendor

Any entity or individual who provides goods or services to Magellan and does not otherwise

meet the definition of a Delegated Entity. Subcontractors that are not defined as delegated

entities using Magellan delegation determination guidelines are vendors.

Vendor Manager

The assigned staff member responsible for coordinating and managing subcontractors and

vendors. The title “Vendor Manager” may vary by business unit, number of delegates, etc.;

therefore, the generic title of Vendor Manager is used in this policy for simplicity. In some

cases, the Vendor Manager is also the Business Owner.

Additional Policy Terms & Definitions are available should the reader need to inquire as to the

definition of a term used in this policy.

To access the Policy Terms & Definitions Glossary in MagNet, click on the below link: (internal link(s)

available to Magellan Health employees only)

Policy Terms & Definitions Glossary

Standards

I. Determining Whether To Delegate or Subcontract a Function

A. Magellan remains accountable for services which are delegated or subcontracted. In

order to restrict the number of such relationships, because determination of delegation

varies by function, applicable accreditation, and line of business, prior to pursuing a

contract for any service that touches members in any way, the business owner consults

with Legal and Quality representatives. The Quality representative may be the Chief

Quality Officer (CQO) or designee.

B. Prior to any Unit within Magellan entering into a delegation arrangement, the Senior

Vice President (SVP) of the division (or designee), the General Manager (GM), Legal, and

the CQO must approve delegation of the function. The GM is responsible for

communicating this decision to stakeholders.

C. Where required, the Vendor Manager works with assigned Account Management

personnel to inform customers, and where necessary, obtain approvals of a new delegated

relationship.

II. Determining Whether a Service is Delegated or Subcontracted

Because determination of whether contracting with a vendor is considered delegation or

Subcontracting varies by function, applicable accreditation, and line of business, prior to

pursuing a new vendor or changing the scope of services for an existing vendor, Magellan

applies the Vendor First Tier, Downstream, and Related Entities (FDR)/Delegate/Subcontractor Determination Procedure.


http://magnet/OurBusiness/Dept/LegCompSec/PoliciesPages/MagPoliciesHome.aspx



III. Pre-delegation /Due Diligence

A. Prior to entering into a delegation arrangement, the responsible Vendor Manager, with

support of the appropriate Subject Matter Experts (SME) and the assigned contract

manager, review the intended delegate’s ability to perform the services for which they

are being contracted, including but not limited to:

1. Compliance with accreditation, contractual requirements;

2. Determining potential business conflicts and exclusion status;

3. IT Security Assessment (as applicable); and

4. The existence of policies, procedures, and an established quality monitoring

program/processes.

B. Upon completion of the due diligence, the Vendor Manager submits results and

recommendations to the business unit Quality Committee. The business unit Quality

Committee reviews and determines approval to move forward with the delegation.

C. For delegations to provider groups where credentialing is the only function delegated, the

Vendor Manager and business unit follow the Delegation of Credentialing Procedure for

review of the delegation through the Credentialing Committee.

IV. Contracting

A. Magellan utilizes a formal delegation agreement and /or Subcontractor Addendum and

monitors delegated activities and functions regularly using a systematic process to assess

compliance. A business owner of the delegation agreement and monitoring process is

designated within Magellan.

B. Magellan retains overall accountability for completion of the tasks delegated. Magellan

is responsible for ensuring the delegated entity’s compliance with internal

Plan/Organization standards and requirements, as well as federal, state and

accreditation standards.

C. The Vendor Manager or other assigned staff in coordination with Sourcing and Legal is

responsible for making sure all documentation is included in the contracting process.

D. The Vendor Manager works with the assigned Legal representative to ensure the

contract template, delegation agreement, Business Associate Agreement (BAA), and all

contract documents comply with any accreditation and specific contract requirements, as

well as Magellan policy.

V. Delegation Agreement

A. A written, mutually agreed-upon, delegation agreement is required between Magellan

and the delegated entity. This document includes, but is not limited to, the following:

1. A written description of all delegated functions;

2. Identified responsibilities of both parties;

3. Identified scope of delegated services provided to members on behalf of Magellan by

the delegate, as well as any services that are not delegated;

4. A statement indicating that the delegate will follow all applicable State and Federal

laws and regulations, as well as all terms and conditions of the contract between

Magellan and the delegate;

5. A statement indicating that the delegate will follow all applicable Magellan policies

and procedures and/or customer policies and procedures, as required, and where




applicable, will be in compliance with applicable accrediting entities’ standards,

including: National Committee for Quality Assurance (NCQA), Utilization Review

Accreditation Commission (URAC) and the Joint Commission;

6. A statement indicating that the delegate has mechanisms in place to monitor patient

safety;

7. A statement addressing whether Magellan allows sub-delegation by the delegate to

occur and a description of the permission process;

a) If the organization is allowed to sub-delegate, the agreement includes a

requirement for monitoring, reporting and oversight by the delegate, and

requires the functions to be subject to the terms of the delegation agreement and

in accordance with accreditation standards.

b) Sub-delegate agrees to comply with all applicable Health Insurance Portability

and Accountability Act (HIPAA) requirements and with any restrictions or

conditions with regard to Protected Health Information (PHI) set by Magellan’s

contracts with its customers.

8. The reporting process by the delegate to Magellan, which must be at a minimum

semiannually;

9. Arrangements for the use and disclosure of protected health information by the

delegate (evidenced in a separate Business Associate Agreement document),

including an agreement to comply with all applicable HIPAA requirements and with

any restrictions or conditions with regard to PHI set by Magellan’s contracts with its

customers;

10. A process for evaluating the delegate’s performance including:

a) A review of periodic performance data;

b) The right of Magellan to conduct surveys of the delegate if quality of care or

performance measures are not met;

c) The development of a Corrective Action Plan (CAP) within thirty (30) days of the

audit or identification of opportunities; and

d) Periodic follow-up reports based on established CAP timeframes.

11. Notification to Magellan if there are any material changes in the delegates’

performance within thirty (30) days; and

12. A description of remedies, including revocation of the delegation, if the delegate does

not fulfill its obligations.

B. Magellan reserves the rights to approve, suspend, or terminate the right of any

contracted entity to perform previously delegated services.

VI. Subcontractor Addendum: A written, mutually agreed-upon, Subcontractor Addendum is

required between Magellan and a Subcontractor. This document includes requirements

specific to the customer requirements for contracts with Subcontractors, which allow for

oversight and monitoring.

VII. Delegate/Subcontractor Oversight and Monitoring

Magellan retains responsibility for the quality of services delivered to our members and

customer organizations through our Delegates and Subcontractors. Each contract includes

specific performance standards and requirements. To ensure quality and that the terms and

conditions of contractual obligations are adhered to, Magellan monitors delegate and




Subcontractor performance on an ongoing basis consistent with the Magellan Vendor FDR/Delegate/Subcontractor Routine Monitoring Procedure.

VIII. Non-Performance Issues

A. When a Delegate or Subcontractor’s performance does not meet expectations or the entity

is non-compliant with requirements, the Vendor Manager assesses the Delegate or

Subcontractor plans for addressing any failed performance, or non-compliance with any

requirement.

B. The Vendor Manager evaluates necessary actions to correct the issue with the Business

Owner. Such actions may include:

1. Corrective Action Plan: A formal corrective action plan (CAP) is required if a

performance issue is part of a trend or is not able to be immediately and directly

remedied. CAPs are time limited and must be followed through completion;

2. Monitor: If the root cause of an issue is corrected immediately, the Vendor Manager

continues to monitor through ongoing performance reporting to ensure the root cause

that was identified was truly responsible for the issue and that the applied correction

fully corrects the performance issue. The monitoring may be more frequent or

include additional metrics as appropriate to the performance concern;

3. Resolve: If the issue appears random and is immediately corrected, the Vendor

Manager considers the issue resolved. The performance metric is included in future

reports; therefore, it continues to be monitored, but is not a target for specific

monitoring; and

4. Discretionary/For Cause Audit and Contract Evaluation: In the case of an egregious

performance issue such as a circumstance that could impact the safety of members,

the Vendor Manager works with the legal, compliance and quality teams to conduct a

thorough targeted evaluation of the vendor’s performance and compliance.

C. When a vendor refuses, or does not follow through, to correct performance issues, the

Vendor Manager and Business Owner review the performance issues with key

stakeholders including but not limited to the Legal and Compliance team and National

Delegate Oversight Group to determine the appropriate course of action which may

include termination and replacement of the Delegate or Subcontractor.

IX. Reporting to Vendor Oversight Committee, Quality Committee, and National Delegate

Oversight Group

A. On a regularly scheduled basis, the Vendor Manager reports oversight issues, needs,

results (as applicable per the reporting period), including any missed performance

standards and the plan to address such performance to the National Delegate Vendor

Oversight Group and the local Vendor Oversight Committee. In the absence of a local

Vendor Oversight Committee, the Vendor Manager reports to the National Delegate

Vendor Oversight Group.

B. On a regularly scheduled basis, the Vendor Manager reports results of ongoing

monitoring to the regional or business unit Quality Improvement Committee which

includes leadership from the business unit, Quality, and Compliance and operations

teams. The committee documents concerns and communicates business impacts, needs,

or other considerations. The regional Quality Improvement Committee has ultimate

authority to approve or reject the recommendations of the Vendor Oversight Committee

or Vendor Manager.




X. Audits

A. Audit Planning

1. Depending on contractual and accreditation requirements, a Vendor Manager may

utilize a risk assessment of all Delegates and Subcontractors to stratify them

according to risk and prioritize audit activity. In such a case the Vendor Manager

applies the Vendor FDR Delegate and Subcontractor Risk Driven Audit Stratification Procedure.

2. The Vendor Manager formulates an annual Audit Plan ensuring that all contractual,

accreditation and regulatory requirements are met for all Delegates and

Subcontractors within the business unit scope.

3. The Vendor Manager consults with internal SMEs regarding Delegates and

Subcontractors that need specialty expertise for auditing. The Vendor Manager

works with such partners to coordinate resources.

4. The Vendor Manager presents the audit plan to the National Delegate Vendor

Oversight Group and to the regional or business unit Quality Committee.

B. Audit Process

1. The Vendor Manager follows the Vendor FDR/Delegate/ Subcontractor Audit Procedure to conduct the audit of each Delegate or Subcontractor according to the

Audit Plan.

2. Audit results are reported to the Quality Improvement Committee.

3. The Vendor Manager coordinates follow up on any concerns identified in the audit

through closure.

Associated Corporate Forms & Attachments (internal link(s) available to Magellan Health employees only)

Please click here, Delegated Vendor Oversight Site, for a copy of the Procedures referenced in this

policy as noted below:

Vendor FDR/Delegate/Subcontractor Determination Procedure

Delegation of Credentialing Procedure

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