R2007-236 AUTHORIZING AGREEMENT WITH BLUE CROSS BLUE SHIELD OF ILLINOIS

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�-�`- � � w v.� SI;CTION 14: ITLU�CARD ld.l Like all Blue Goss and Blue Shield Licensces, ihe Claim Administr�l�r participates in a program called "BlueCard." Whenever Covered Persons access he�lih care services outside the Claim Administrator's service area, the Claims for ihose services may be processed through BlueCard and presented to the Claim Administrator for payment in conformity with network access rules of the BlueCard Nolicies ihen in effect ("Policies"). Under BlueCard, when Covered 1'ersons receive Covered Services within the geographic area served by an on-site I31ue Cross and/or Blue Shield Licensee("1-Ios� I31ue"), the Claim Administrator will remain responsible to the Lmployer Tor fulfilling the Claim Administrator's contract obligations. 1-Iowever, the Host Blue will only be responsible, in accordance with applicable BlueCard Policies, i1�any, for providing such services as contracting with its participating Providers and handling all interaction with its participating Providers. '['he financial terms of BlueCard are described generally below. 14.2 Liubility C�Iculation Method Per Claim The calculation of a Covered Person's liability on Claims 1�or Covered Services incurred outside the Claim Administrator's service area and processed through BlueCard will be based on the lower of the Provider's billed charges or the negotiated price the Claim Administrator pays the Host Blue. The calculation ot the Employer's liability on Claims for Covered Services incurred outside the Claim Administrator's service area and processed through BlueCard will be based on the negotiated price the Claim Administrator pays the Host I31ue. The methods employed by a I-Iost Blue to determine a negotiated price will vary among Host Blues based on the terms of each Host Blue's Provider contracts. The negotiated price paid to a Host Blue by the Claim Administratoteon a Claim for Covered Services processed through BlueCard may represent: a. The actual price paid on the Claim by the Host I31ue ro the health care Provider("Actual Price"), or b. An estimated price,determined by the Host Blue in accordance with BlueCartl Policies, based on the Actual Price increased or reduced to reflect aggregate payments expected to result from settlements,withholds,any other contin- gent payment arrangements and non-Claims transactions with all of the Host Blue's health care Providers or one or more particular Providers ("Estimated Price"), or c. An average price,determined by the Host Blue in accordance with BlueCard Policies,based on a billed charges dis- count representing the Host Blue's average savings expected after settlements,withholds,any other contingent pay- ment arrangements and non-Claims transactions for all of its Providers or for a specified group of Providers("Aver- age Price"). An Average Price may result in greater variation to the Covered Person and the Employer from the Actual Price than would an Estimated Price. IIost Blues using either the Estimated Price or Average Price will, in accordance with BlueCard Policies, prospectively increase or reduce the Estimated Price or Average Price to correct for over-or underestimation of past prices. However, the amount paid by the Covered Person and the Employer is a final price and will not be aftected by such prospective ad,justmenL In addition, the use of a liability calculation method of Estimated Price or Average Yrice may res�lt in some portion of the amount paid by the Employer being held in a variance account by the Host Blue, pending settlement with its participating Providers. Because all amounts paid are final,the funds held in a variance account, if any,do not belong to the Employer and are eventu�lly exhausted by Provider settlements and through prospective adjustments to the nego- tiated prices. Statutes in a small number of states may require a Host Blue either a) to use a basis for calculating a Covered Person's liability for Covered Services that does not reflect the entire savings realized, or expected ro be realized,on a particular Claim or b)to add a surcharge. Should any state statutes mandate liability calculation methods that difter from the nego- tiated price methodology or require a surcharge, the Claim Administrator would then calculate the Covered Person's li- ability and the �mployer's liability for any Covered Services consistent with the applicable state statute in effecl at the time the Covered Person received those services. 14.3 Return of Overpayments Under I31ueCard, recoveries from a Host Blue or from participating Providers of a Host Blue can arise in several ways, including, but not limited to,anti-fraud and abuse audits, 1'rovider/hospital audits,credit balance audits,utilization review i icsc u,nsn It��.�/o� -26-