3/30/2020 6:12 PM

Marilyn Burgess - District Clerk Harris County

Envelope No. 42015627
By: Wanda Chambers
Filed: 3/30/2020 6:12 PM

CAUSE NO. _______

Texas Children’s Health Plan, Inc., § IN THE DISTRICT COURT OF

§
Plaintiff, §
§
v. § HARRIS COUNTY, TX
§
Apple Homecare Medical Supply, Inc., §
§
Defendant. § ______ JUDICIAL DISTRICT

UNOPPOSED PETITION TO CONFIRM ARBITRATION AWARD

Applicant Texas Children’s Health Plan, Inc. (“TCHP”) files this Unopposed Petition to

Confirm Arbitration Award pursuant to the Federal Arbitration Act (“FAA”), 9 U.S.C. § 9, or in

the alternative, the Texas Arbitration Act (“TAA”), Tex. Civ. Prac. & Rem. Code § 171.087, and

respectfully shows the Court as follows:

SUMMARY

1. TCHP files this Unopposed Petition to Confirm the Arbitration Award. Apple

HMS does not oppose the relief sought in this Petition.

2. On November 22, 2019, Arbitrator Patricia Chamblin (“the Arbitrator”) issued a

final award (the “Award”) on the merits in this cause after presiding over a full evidentiary

hearing (the “Hearing”). The Hearing was held in Houston, Texas on September 25-27, and

attorneys for all of the parties appeared. The Hearing was held in accordance with the American

Arbitration Association’s rules and regulations pursuant to the alternative dispute resolution

provision contained in a contract to which both parties are subject. Both parties had agreed to

arbitration. The Award is attached hereto, with redactions of confidential information, as Exhibit

A.

98875766.1 -1-
 PARTIES

3. TCHP is a nonprofit corporation with an address of 6330 West Loop S STE 800

Bellaire, TX 77401. Apple Homecare Medical Supply, Inc. (“Apple HMS”) is a domestic

corporation duly incorporated under the laws of the State of Texas, with its principal place of

business in Richardson, Dallas County, Texas. Apple HMS can be served with process by

serving its registered agent, Lara Shankle, at 500 Industrial Drive, Suite 100, Richardson, TX

75081.

4. TCHP requests that process be issued for service on Apple HMS.

VENUE AND JURISDICTION

5. This Court is the proper venue for this lawsuit pursuant to Texas Civil Practice

and Remedies Code § 171.096, as the Arbitration was held in Houston, Texas. Under the

Ancillary Services Agreement (“Agreement”) between the parties, it was agreed that any

disputes be resolved by binding arbitration in Harris County, Texas. Ex. B at Section 14.20. In

addition, under the Texas Arbitration Act, “[i]f a hearing before the arbitrators has been held, a

party must file the initial application with the clerk of the court of the county in which the

hearing was held.” Tex. Civ. Prac. & Rem. Code § 171.096(c). The Texas Supreme Court has

held this is a mandatory venue provision. See In re Lopez, 372 S.W.3d 174, 177 (Tex. 2012)

(orig. proceeding). This Court also has venue pursuant to Texas Civil Practice and Remedies

Code § 15.002(a)(1) because a substantial part of the events giving rise to this Petition occurred

in Harris County, Texas.

6. This Court has subject-matter jurisdiction over this matter under Texas Civil

Practice & Remedies Code § 171.087. See In re Drobny, No. 01-15-00435-CV, 2016 WL

4537076, at *8 (Tex. App.—Houston [1st Dist.] Aug. 30, 2016, no pet.) (“Procedural matters

relating to the confirmation and vacat[ur] of arbitration awards in Texas courts are governed by

98875766.1 -2-
Texas law even if the FAA supplies the substantive rules of decision.”) (internal quotation marks

omitted).

7. This Court has personal jurisdiction over Respondent Apple HMS because Apple

HMS is a domestic corporation duly incorporated under the laws of the State of Texas, with its

principal place of business in Richardson, Dallas County, Texas.

FACTUAL BACKGROUND

8. This dispute arose out of a rate negotiation between Apple HMS and TCHP.

After the parties were unable to agree on a reimbursement rate for TCHP’s Medicaid members,

Apple HMS sent a letter to TCHP’s members, which TCHP contended was false and misleading.

When TCHP discovered this, it notified Apple HMS that it was terminating its Agreement with

Apple HMS. In response, Apple HMS initially filed a lawsuit in Smith County, Texas and

obtained an ex parte TRO. See Apple Homecare Medical Supply v. Texas Children's Health

Plan, Cause No. 18-2740-B in the 114th District Court of Smith County, Texas. Subsequently,

TCHP demanded arbitration pursuant to the parties’ Ancillary Services Agreement, which

mandates arbitration upon the request of any party. See Exh. B, Ancillary Services Agreement

between Apple HMS and TCHP. The parties reached a Rule 11 Agreement, and Apple HMS

agreed to arbitration. See Exhibit C.

9. Apple HMS initiated the arbitration on January 17, 2019. The parties appointed

Patricia Chamblin by agreement as the Arbitrator.

10. On September 25-27, 2019, the Arbitrator held a full three-day evidentiary

hearing on the dispute. On November 22, 2019, the Arbitrator issued an award.

11. The award found that TCHP’s termination of the Agreement with Apple HMS

was valid and not unlawful and that TCHP could reinstate its termination notice on or after

98875766.1 -3-
December 23, 2019. Ex. A at 70-72. The Award also provided for certain monetary relief and

provided that each party would pay its own attorney’s fees and expenses. Id.

ARGUMENTS AND AUTHORITIES

12. Under both the Federal Arbitration Act and the Texas Arbitration Act, courts must

confirm an arbitration award unless the award is vacated, modified, or corrected. 9 U.S.C. § 9;

Tex. Civ. Prac. Rem. Code § 171.087. Furthermore, “[a]ll reasonable presumptions are

indulged in favor of [an arbitration] award, and none against it.” New Medical Horizons II, Ltd.

v. Jacobson, 317 S.W.3d 421, 428 (Tex. App.—Houston [1st Dist.] 2010, no pet.) (citation

omitted). An arbitration award is presumed valid and entitled to great deference. Royce Homes,

L.P. v. Bates, 315 S.W.3d 77, 85 (Tex. App.—Houston [1st Dist.] 2010, no pet.). Judicial review

of an arbitration award is therefore “extremely narrow.” Jacobson, 317 S.W.3d at 428.

13. TCHP moves for an order confirming the arbitration award in this cause attached

hereto as Exhibit A. Apple HMS does not oppose confirmation of the award. In addition, an

application to vacate an arbitration award must be made within 90 days under the TAA or three

months under the FAA, which time has now passed. Tex. Civ. Prac. & Rem. Code § 171.088(b);

9 U.S.C. § 12.

CONCLUSION AND PRAYER

14. TCHP therefore respectfully requests that the Court set this Petition for

submission, confirm the Award, and issue a final judgment in conformity with the Award in

accordance with the FAA, or in the alternative, the TAA.

98875766.1 -4-
 Dated: March 30, 2020 NORTON ROSE FULBRIGHT US LLP
/s/ Darryl Anderson
Darryl Anderson
State Bar No. 24008694
darryl.anderson@nortonrosefulbright.com
Carlos R. Rainer
State Bar No. 24027641
carlos.rainer@nortonrosefulbright.com
Dov Preminger
State Bar No. 24098280
dov.preminger@nortonrosefulbright.com
1301 McKinney, Suite 5100
Houston, Texas 77010-3095
Telephone: (713) 651-5151
Facsimile: (713) 651-5246

ATTORNEYS FOR TEXAS CHILDREN’S

HEALTH PLAN, INC.

98875766.1 -5-
 CAUSE NO. _______

Texas Children’s Health Plan, Inc., § IN THE DISTRICT COURT OF

§
Plaintiff, §
§
v. § HARRIS COUNTY, TX
§
Apple Homecare Medical Supply, Inc., §
§
Defendant. § ______ JUDICIAL DISTRICT

ORDER CONFIRMING ARBITRATION AWARD AND ENTERING FINAL

JUDGMENT

On ______, 2020, the Court heard Texas Children’s Health Plan, Inc.’s (“TCHP”)

Unopposed Petition to Confirm Arbitration Award. Apple Homecare Medical Supply, Inc.

(“Apple HMS”) does not oppose the relief sought in the Petition. After considering the briefing

and arguments of all parties, the Court hereby CONFIRMS the Arbitration Award (“Award”)

attached hereto as Exhibit A. The Court accordingly ENTERS JUDGMENT in conformity with

the arbitration award and the order confirming it. The Award is incorporated into this judgment

as if fully set forth herein.

IT IS THEREFORE ORDERED, ADJUDGED, and DECREED by the Court that it has

jurisdiction over TCHP and Apple HMS, who collectively constitute all Parties in this

proceeding

Pursuant to the Award, it is further HEREBY ORDERED, ADJUDGED, and DECREED

as follows:

1. Apple Homecare Medical Supply, Inc. shall recover $8,316.67 from Texas

Children’s Health Plan, Inc.;

2. Texas Children’s Health Plan, Inc. shall recover $19,277.50 from Apple

Homecare Medical Supply, Inc.;

98875766.1 -6-
 3. If Texas Children’s Health Plan, Inc. has not already done so, TCHP shall pay

Apple Homecare Medical Supply, Inc. $1,500 to reimburse it for its share of the UnitedLex

invoice;

4. Texas Children’s Health Plan, Inc.’s termination of its Provider Agreement with

Apple Homecare Medical Supply, Inc. was valid and not unlawful;

5. Texas Children’s Health Plan, Inc. may reinstate its termination notice on or after

December 23, 2019;

6. The Provider Agreement will be terminated effective 90 days after Texas

Children’s Health Plan, Inc. reinstates its termination notice unless HHSC determines that Apple

Homecare Medical Supply, Inc. must remain in the Texas Children’s Health Plan, Inc.’s network

or unless the parties mutually agree to a different termination effective date.

7. Each party shall pay its own attorneys’ fees.

8. Each party shall pay its own expenses except that Texas Children’s Health Plan,

Inc. shall reimburse Apple Homecare Medical Supply, Inc. the amount of $1,500 as set forth in

paragraph 3 above.

9. The Administrative fees and expenses of the AAA totaling $22,425.00 are to be

borne equally. The compensation and expenses of the Arbitrator totaling $44,400.00 are to be

born equally. Therefore, Texas Children’s Health Plan, Inc. shall also pay Apple Homecare

Medical Supply, Inc., an amount of $4,962.50 in payment of the Administrative fees and

expenses of AAA and the compensation and expenses of the Arbitrator.

10. The arbitrator’s award does not usurp the authority of Texas Department of

Health and Human Services Commission to determine whether Apple Homecare Medical

Supply, Inc. Must be maintained in the Texas Children’s Health Plan, Inc. provider network.

98875766.1 -7-
 11. The Awards set forth in paragraphs 1, 2, and 3 shall be paid on or before 30 days

from the date of this award. In the event they are not paid on or before 30 days from the date of

the award, then any unpaid award shall bear post-judgment interest at the rate of 5.0%

compounded annually with interest beginning on the date of this Award.

12. The parties are hereby informed that they are responsible for maintaining the

filings, the court reporter’s transcript, and the exhibits for any future use; the Arbitrator will not

do so as the parties have copies of all of the filings, the court reporter’s record, and the exhibits.

13. The arbitrator’s award is in full settlement of all claims submitted to this

Arbitration. All claims and relief not expressly granted herein is hereby denied.

14. Execution shall issue for this Judgment. TCHP is allowed those writs and

processes as may be necessary in the enforcement and collection of this Judgment. Additionally,

this Judgment disposes of all claims by all parties, and it is a final and appealable judgment.

Signed this ___ day of ____________, 2020.

___________________________________
THE PRESIDING JUDGE

98875766.1 -8-
EXHIBIT A
 AMERIC
CAN ARBITRATION N ASSOCIA ATION
Co
ommercial Arbitratio n Tribunal

Case Number:
N 01-- 19-0000-1900

In the Matter
M of th
he Arbitratio
on between
n

Apple Homecare
H Medical
M Su
upply, Inc.

-vs-

Texas Children’s
C Health
H Plan
n, Inc.

AWARD
A OF
O ARBIT
TRATOR

I,, Patricia D.
D Chambliin, the und
dersigned A
Arbitrator, hhaving beenn designateed in

accordan
nce with the arbitration
n agreemen
nt and havinng been duly sworn annd having hheard

the proo
ofs and alleg
gations of th
he parties, do
d hereby A
AWARD ass follows:

I.
PRELIMIN
P NARY MA
ATTERS

A. The
T Parties

The
T Claimaant is Applle Homecarre Medicall Supply, IInc. (“Applle HMS”). The

Respond
dent is Texaas Children’s Health Plan, Inc. (“T
TCHP”).

TCHP
T filed a counter-cclaim again
nst Apple H
HMS. Thuss, TCHP is also a couunter-

claimantt, and Apple HMS is a counter-respondent.

B. The Arbitration

1. The American Arbitration Association (AAA) has jurisdiction over this

matter because the claims asserted by both parties primarily arise out of or relate to the

interpretation, performance, breach of the Ancillary Services Agreement (“Agreement”

or “Provider Agreement”) and thus fall within the scope of the arbitration clause in

section 14.20 of the Agreement and because the parties have otherwise consented to

arbitrate this matter in this forum. This Arbitration is governed by AAA’s Commercial

Arbitration Rules.

2. The parties both consented to the appointment of Patricia D. Chamblin as

the sole arbitrator in connection with this matter.

3. Venue is appropriate in Harris County, Texas pursuant to the terms of the

arbitration clause in the Provider Agreement and because the parties otherwise agreed to

arbitrate in Houston.

C. The Hearing

The arbitration hearing was conducted on September 25-27, 2019 at Houston,

Texas before Arbitrator Patricia Chamblin.

Claimant, Apple HMS, was represented by Gary Siller, Charles “Scott” Nichols,

and Zachary Thomas of Clark Hill Strasburger, PLC. Respondent, TCHP, was

represented by Darryl Anderson and Dov Preminger of Norton Rose Fulbright US LLP.

Corporate representatives for both parties were present during most of the arbitration

hearing, except when they were excused pursuant to the parties’ agreement pertaining to

Attorney’s Eyes Only evidence.

2
 A court reporter was present at TCHP’s request and transcribed the hearing.

The evidence consisted of live testimony, deposition testimony, documentary

evidence, and recordings of certain phone calls.

D. Post-Hearing Matters

1. Ruling on Apple HMS’s Trial Amendment

Before resting, Apple HMS moved for leave to file a trial amendment to assert

significant traditional provider and sole community provider claims under section

533.006 of the Texas Government Code. The Arbitrator deferred ruling on that issue

until Apple HMS filed a written motion, and TCHP had an opportunity to file a written

response. After the hearing, Apple HMS did file a motion, which TCHP opposed. This

motion is decided based upon the motion, the response, the replies, and the entire record

in the case.

TCHP sent notice of termination of the Agreement by letter dated November 9,

2018. The termination was effective 90 days from the date of the letter. Thereafter,

Apple HMS filed a lawsuit in Smith County and later filed its Arbitration Demand with

the American Arbitration Association. In its Arbitration Demand, Apple HMS contended

that TCHP’s termination of its contract with Apple HMS based on Apple HMS’s October

25, 2018 patient letter was an unlawful retaliatory action in violation of sections

843.281(b) and 843.363 of the Texas Insurance Code and parallel provisions in the

Agreement. Apple HMS did not contend that the termination was wrongful based on its

alleged status as a significant traditional provider or a sole community provider under

3
section 533.006 of the Texas Government Code and did not seek reinstatement to

TCHP’s network on that basis.

The scheduling order contained a deadline for amending the pleadings, but Apple

HMS did not amend its pleadings to assert its section 533.006 claims. The first time

Apple HMS asserted that it was entitled to remain in TCHP’s provider network based on

section 533.006 was in its “Causes of Action” document and its Proposed Findings of

Facts and Conclusions of Law (COL 25-28), which were emailed to TCHP on September

14, 2019, less than two weeks before the hearing.

However, when negotiations commenced in August 2018, TCHP told Apple HMS

that it was relying on this section 533.006(a)(2)(A)(ii) to renegotiate its rates. During the

hearing, the parties addressed Apple HMS’s status as a significant traditional provider.

The parties also repeatedly discussed prevailing provider contract rates and network

adequacy issues.

Under the circumstances, the motion for leave to amend is granted as follows:

a. The permitted amendment is the request for the following

declarations, which are set forth in Apple HMS’s “Causes of Action”
document:

• TCHP’s “prevailing provider contract rate” for DME

providers is 95-100% of the Medicaid fee schedule.

• TCHP must include Apple HMS in its provider network for

not less than three years because Apple HMS (i) previously
provided care to Medicaid and charity care recipients at a
significant level as prescribed by HHSC; (ii) agreed to accept
a reimbursement rate at or below TCHP’s applicable
prevailing provider contract rate; and (iii) has the credentials
required by TCHP. Tex. Gov’t Code § 533.006(a)(2)(A)(i)-
(iii).

4
 • TCHP must include Apple HMS in its provider network so
long as it (1) is a sole community provider in one or more zip
codes in Texas; (2) provides care to Medicaid and charity
care recipients at a significant level as prescribed by HHSC;
(3) agrees to accept a reimbursement rate at or below TCHP’s
applicable prevailing provider contract rate; and (4) has the
credentials required by TCHP. Tex. Gov’t Code §
533.006(b)(1)-(4).

b. In considering the merits of section 533.006 causes of action and

requested relief, the Arbitrator will consider the motion for leave to
amend, responses, replies, and any documents attached thereto or
referenced in those filings along with the hearing record. This
includes the full STAR Kids Contract Terms cited by TCHP in its
Response to the Motion for Leave to Amend, footnote 1.

2. Other Post-Trial Matters

Additionally, the parties were permitted to submit post-hearing briefs and submit

their attorneys’ fees evidence after those briefs were filed. The parties did submit post-

hearing briefs and attorneys’ fees evidence and various responses/objections/replies

before the evidence was closed.

II.
BRIEF BACKGROUND

TCHP is a managed care organization (“MCO”) that contracts with the Texas

Health and Human Services Commission (“HHSC”) to provide Medicaid services to

Texas children. TCHP, in turn, contracts with certain providers, including Durable

Medical Equipment (“DME”) providers such as Apple HMS, to provide services and

supplies to those children. In the summer of 2018, TCHP proposed an amendment to its

Provider Agreement with Apple HMS. The proposed amendment would have reduced

5
Apple HMS’s reimbursement rate for covered services from of the Medicaid

allowable fee schedule to of that schedule effective October 1, 2018.

TCHP stated that it was willing to negotiate the rate, but Apple HMS eventually

concluded it was not. Negotiations ended after Apple HMS sent an October 25, 2018

letter to TCHP parents,1 telling them that TCHP planned to reduce their child’s benefits

by 50% beginning November 21, 2018 and “strongly” suggesting that they consider

changing to a different MCO to keep their current level of benefits. TCHP asked Apple

HMS to retract the letter, which Apple HMS did not do.

On November 9, 2018, TCHP terminated the Provider Agreement effective 90

days from the date of the letter. TCHP stated that it terminated without cause, but, as

required by the Texas Insurance Code, TCHP provided a written explanation: “TCHP is

terminating due to the inaccurate, misleading letter that Provider sent to members

containing false statements alleging a reduction in benefits.” (Exhibit 52). Thereafter,

Apple HMS filed a lawsuit against TCHP in Smith County, Texas. The parties then

negotiated a Rule 11 Agreement and agreed, in part, to submit this matter to arbitration.

This arbitration ensued.

III.
CLAIMS AND COUNTER-CLAIMS

A. Apple HMS’s Demand and Amended Demand for Arbitration

Apple HMS’s Demand for Arbitration alleged the following causes of action:

1
In this award, “parents” or “members” refers to the parents or other adults who are responsible for
children (“patients”) who are (1) enrolled in the TCHP MCO and (2) are receiving DME products or
services from Apple HMS. Sometimes, parents or members are referred to as patients.

6
 1. TCHP’s violations of the Texas Insurance Code;

2. TCHP’s violations of the Provider Agreement;

3. Declaratory Judgment (TCHP’s termination of the Provider Agreement in

violation of the Texas Insurance Code and the terms of the Provider
Agreement prohibiting retaliatory conduct);

4. TCHP’s tortious interference with Apple HMS’s Provider-Patient

Relationships; and

5. TCHP’s breach of the Rule 11 Agreement

In its arbitration demand, Apple HMS alleged that TCHP violated the Insurance

Code and Provider Agreement in terminating based on the October 25 letter.2 The relief

sought by Apple HMS included reinstatement of the Provider Agreement at the 95%

reimbursement rate for a period of at least three years.

During and after the arbitration hearing, Apple HMS sought leave to add causes of

action under section 533.006 of the Texas Government Code. The declaratory judgments

sought by Apple HMS are set forth at pages 4-5 of this Award. As previously discussed,

its motion for leave to add these additional causes of action was granted.3

B. TCHP’s Amended Counterclaim

TCHP filed an amended counterclaim and alleged the following causes of action:

1. Declaratory Judgment that it had the right to terminate the Agreement and
acted lawfully in doing so;

2. Defamation;
2
Apple HMS also sent a complaint letter to HHSC and believed that was an unstated reason for the
termination. But, following the arbitration hearing, Apple HMS conceded this claim as there was no
evidence to support it.
3
In Apple HMS’s Cause of Action document and TCHP’s Summary Chart of Relief Requested
document, which were filed in September 2019, both parties listed relief that went beyond the relief they
sought in their pleadings. Relief that was not requested in Apple’s Demand and TCHP’s Amended
Counterclaim is denied—except for the section 533.006 causes action that were the subject of Apple
HMS’s motion to amend.

7
 3. Business Disparagement;

4. Breach of Contract:

a. Section 5.27 (marketing clause);

b. Sections 12.2 and 14.13 (confidentiality provisions); and

c. Section 14.20 (arbitration provision).

IV.
FACTUAL FINDINGS AND LEGAL REASONS

The Agreement provides that the Arbitrator shall prepare a written award

including factual findings and legal reasons on which the decision is based. Agreement, §

14.20. Factual findings and legal reasons are interspersed throughout this Award. For

example, while Section V is entitled “Factual Findings,” there are factual findings in

other sections of the Award. And, legal reasons are interspersed throughout the award as

well. To the extent any factual finding is considered a legal reason, or any legal reason is

considered a factual finding, it shall be so treated.

V.
FACTUAL FINDINGS

A. Background: Medicaid, TCHP, and Apple HMS

1. The State of Texas (the “State”) provides Medicaid services to qualifying,

low-income Texans.

2. The Texas Health and Human Services Commission (“HHSC”) is the state

agency charged with supervising and implementing Medicaid in Texas.

3. The State provides Medicaid services to eligible Texans in two primary

ways: (1) directly through the State, with the State reimbursing providers for services

8
rendered to Medicaid recipients (known as “Traditional Medicaid”), and (2) through a

managed care model, in which managed care organizations (“MCOs”) contract with the

State to provide Medicaid services on behalf of the State to eligible recipients.

4. In implementing the managed care model, HHSC and the MCO enter into a

contract. By law, HHSC’s contract with MCOs must contact certain provisions. Tex.

Gov’t Code § 533.005. HHSC uses standard contracts that comply with the statutory

requirements. See e.g. STAR Kids Contract Terms.

For example, section 533.005 provides that HHSC’s contract must contain a

requirement that the MCO cannot “implement significant, nonnegotiated, across-the-

board provider reimbursement rate reductions” except in certain circumstances. Tex.

Gov’t Code § 533.005(a)(25). The STAR Kids contract between HHSC and MCOs

contains such a requirement. STAR Kids Contract Terms, Attachment B-1, § 8.1.4.6.

5. The law also imposes certain requirements on HHSC with respect to

provider networks. Tex. Gov’t Code §533.006. These requirements include the

significant traditional provider and sole community provider provisions referred to in

Apple HMS’s amended demand. These requirements are also addressed in the STAR

Kids Contract Terms, Attachment B-1, §§ 8.1.4.16. and 8.1.25.

6. Pursuant to contract, the State pays MCOs a fixed, per-enrollee, “capitated”

amount to provide covered Medicaid benefits.

7. In return, the MCOs contract with a network of providers to provide the

Medicaid benefits guaranteed by the State to Medicaid recipients. The network includes

9
physicians, hospitals, durable medical equipment (“DME”) providers, and other providers

of health care services.

8. The benefits that the MCOs provide to their members are set by the State,

and MCOs have no authority to reduce them. See, e.g., 1 Tex. Admin. Code § 353.409(a)

(“An MCO must provide covered services to members.”); id. § 353.409(b) (“HHSC will

establish the scope and level of benefits, which all MCOs must agree to provide as a

condition of participation.”).

9. For Traditional Medicaid, the State has adopted a fee schedule (the

“Medicaid Fee Schedule”) that identifies the amount of reimbursement that a provider is

eligible to receive for providing identified products and/or services to patients.

10. In adopting the managed care model, the State expects MCOs to negotiate

reimbursement rates with providers who desire to contract with the MCO and to be

included in its network.

11. HHSC has specifically advised providers to “[b]e prepared to negotiate

your contract rates.” STAR Kids Frequently Asked Questions for Providers. (Exhibit

41). “The MCOs are not required to pay the same rates as traditional Medicaid.” Id. “The

rates they offer may be higher, the same, or lower than the FFS [Fee-For-Service] rate.”

Id. Even significant traditional providers must be prepared to negotiate rates. Id. (“You

[significant traditional providers] should be prepared to negotiate rates with MCOs,

however, you are not required to contract with all MCOs in your service area.”).

12. MCOs frequently reach an agreement with providers to reimburse them

based on a fixed percentage of the Medicaid Fee Schedule. Such an agreement is

10
memorialized in a contract, which is at times referred to as a provider agreement or an

ancillary services agreement. These contracts are required to have certain provisions

such as a provision concerning prohibited retaliatory action as set forth in section 843.281

of the Texas Insurance Code. 28 TAC §11.901(b)(1).

13. MCOs and providers are highly regulated by HHSC. This is reflected in

the applicable statutes including chapter 533 of the Texas Government Code and chapter

843 of the Texas Insurance Code, applicable Texas Administrative Code provisions, as

well as various manuals and guidelines. Examples of manuals and guidelines include the

HHSC Uniformed Managed Care Manual, the Texas Medicaid Provider Procedures

Manual (Provider Handbook), and the Texas Provider Marketing Guidelines. Other

resources include the STAR Kids Provider FAQ.

14. The extent of HHSC’s involvement in the relationships between MCOs and

Providers is demonstrated by the facts of this case. HHSC’s involvement is discussed in

greater detail later in this Award, but some examples are provided here. HHSC requires

certain terms be included in the provider agreements. HHSC determines whether

providers are significant traditional providers or sole community providers. HHSC is

made aware of and monitors rate negotiations between MCOs and providers. HHSC

receives member complaints and provider complaints and follows up on those. Upon

learning of the termination of a provider in circumstances such as these, HHSC follows

up to make sure that patients are transferred to other providers who care for their needs.

HHSC’s marketing team may review and approve communications with members. And,

11
by statute and under the terms of its contract with MCOs, HHSC has enforcement

provisions and the authority to fashion appropriate remedies.

B. TCHP and Apple HMS: General

15. TCHP is one of the MCOs that has contracted with the State to provide

Medicaid services in certain regions and provides coverage to over 400,000

Medicaid/CHIP enrollees. It serves three multi-county regions: the Harris region, the

Jefferson region, and the Northeast region. Generally speaking, its service area includes

Southeast Texas and East Texas.

16. TCHP’s provider network consists of thousands of physicians, hospitals,

and DME companies that provides Medicaid services to TCHP enrollees in TCHP’s

service area. The network includes dozens of DME companies.

17. Apple HMS is a statewide durable medical equipment (“DME”) and home

health services company. As part of its work, Apple HMS services pediatric Medicaid

patients with complex and high-acuity medical needs. Apple HMS provides respiratory

and ventilator services; urological, incontinence, enteral feeding, and diabetic supplies;

and general medical equipment such as wheelchairs and electric hospital beds. Apple

HMS also offers hospital and in-home training for caregivers and family members to

ensure they have the knowledge they need to properly use the medical equipment and

supplies that it provides. Since its inception in 1997, Apple HMS has served thousands

of fragile and chronically-ill Texas residents, many of whom are children that must rely

on Medicaid services to obtain the care they require.

12
 18. All of the evidence supports the proposition that Apple HMS is an excellent

DME provider. It was credentialed by TCHP. During rate negotiations, TCHP stated

that it wanted to continue its relationship with Apple HMS, and it appears that employees

in the departments that worked closely with Apple HMS wanted that as well. Apple

HMS witnesses displayed a passion for and commitment to the patients it served.

19. In November 2018, Apple HMS was serving approximately 327 of TCHP’s

MCO members. Of these members, there were 49 ventilator-dependent children and

approximately 160 high need enteral patients. These patient numbers fluctuated

somewhat during the course of the negotiations and this dispute.

C. TCHP/Apple HMS Provider Agreement

20. TCHP and Apple HMS signed an Ancillary Services Agreement

(“Agreement” or “Provider Agreement”) for the provision of DME products and services.

The effective date of the Agreement was November 1, 2016.

21. Effective November 1, 2016, Apple HMS was permitted to serve the

following TCHP Medicaid Members: STAR/Medicaid, CHIP, and STAR Kids.

22. The Agreement provided for a one-year term, to be “renewed automatically

for successive one (1) year terms, unless either party gives the other party written notice

of termination at least ninety (90) days prior to the expiration of the term.” Agreement, §

7.1.

23. The Agreement also provided that either TCHP or Apple HMS could

terminate the Agreement at any time, with or without cause, by providing 90-days written

notice of its intention to terminate. Agreement, § 7.2. The Agreement had a provision

13
that required TCHP to provide notice of the termination to members. Agreement, § 7.6.1.

The Agreement also provided that, following termination of the Agreement, the Provider

shall continue to provide services to certain members until the treatment is completed or

the responsibility is assumed by another provider. Agreement, § 7.6.3.

24. The contract automatically renewed effective November 1, 2017 and was

up for automatic renewal again effective November 1, 2018.

25. The Agreement provided for reimbursement to Apple HMS for covered

services at a rate of the Texas Medicaid allowable fee schedule.

26. The Agreement provided that there could be no unilateral amendment of the

Agreement except as required by HMO Laws.4 Agreement, § 14.21. Apple HMS

acknowledged that the Agreement was subject to filing with and/or approval by the Texas

Department of Insurance and agreed to any modifications that may be required by TDI or

HHSC. Id.

D. TCHP’s Decision to Renegotiate Provider Rates

27. Even before the effective date of the TCHP and Apple HMS Agreement in

2016, TCHP was considering an initiative to reduce DME provider reimbursement rates.

TCHP retained AArete, a third-party consulting firm, which concluded that TCHP’s

“current network rate” for DME providers was of the Medicaid fee schedule,

that there was a significant gap between TCHP’s current network rate and the rates

obtained by competing Medicaid managed care plans in the market, and that reducing
4
While the Agreement could not be amended unilaterally, TCHP could amend “claims payment
procedures or any of the information required to be provided in the Agreement” upon 90-days written
notice.” Amendment, §6.22. This provision does not state that rates can be amended unilaterally and, in
any event, TCHP never tried to impose a unilateral rate amendment on Apple HMS.

14
DME provider reimbursement rates to of the Medicaid fee schedule was

achievable.

28. Although TCHP used AArete as a consultant, it did not implement

AArete’s plan. In part, that was because AArete planned to achieve its goal through a

significant reduction in the number of TCHP’s DME providers. But, under Texas law,

TCHP was required to offer patients a choice in providers, and TCHP did not want to try

to reduce reimbursement rates by reducing the numbers of providers.

29. TCHP decided to renegotiate its contracts with DME providers using its

own personnel. In July 2017, Sherry Vetter, TCHP’s Vice President of Government and

Expansion Programs, informed HHSC that TCHP was preparing to renegotiate

reimbursement rates with DME providers and non-physician licensed behavioral health

providers in an effort to reduce reimbursement. TCHP planned to commence the

renegotiation process in September 2017 and stated that it would continue for as long as

it takes to complete the initiatives. She said TCHP planned to send contract amendments

with proposed reimbursement rates and allow providers to negotiate rates. She noted that

the amendments would require a signature and that TCHP would monitor and maintain

network adequacy throughout each initiative. TCHP stated that it did not consider this an

across-the-board rate reduction.

30. TCHP’s goal was to reduce DME reimbursement rates to of

Medicaid rates. Although TCHP had planned to start its DME initiative in 2017, it did

not actually start the DME initiative until 2018.

15
 31. Sherry Vetter initiated the project. RosCet Varner, Director of Network

Management for TCHP, reported to Vetter. Varner was in charge of implementing the

initiative. Several contracts administrators reported to Varner and were assigned to

negotiate with specific DME providers. The administrator would send the proposed

amendment, which reduced rates to of Medicaid, to the DME provider. The

amendment required signatures by both parties. The DME provider could sign it and

return it or negotiate the rate. If the provider chose to negotiate the rate, the contracts

administrator would communicate with Varner and receive instructions from her. The

administrators had no authority to negotiate rates. Varner could negotiate the contract

within certain parameters. Beyond those parameters, Varner communicated with and

received guidance from Vetter.

32. In the summer of 2018, TCHP commenced negotiations with approximately

five of its DME providers. TCHP’s Senior Contracts Administrator Jenny Price was

assigned to handle negotiations with Apple HMS.

E. TCHP’s Failed Negotiations with Apple HMS

33. TCHP commenced rate negotiations with Apple HMS in August 2018.

34. On August 23, 2018, TCHP’s Jenny Price sent an email to George Nartey,

who was Apple HMS’s Director of Government Affairs and Managed Care Contracting.

Price’s email to Nartey attached a proposed amendment to the fee schedule and asked

that Nartey (1) review and sign the proposed amendment, and (2) return it to Price for

TCHP’s countersignature. The proposed amendment provided that reimbursement would

be “the maximum acceptable charge for Covered Services calculated at percent

16
 of the prevailing Medicaid allowable fee schedule.”5 (Exhibit 23A). Thus, this

amendment proposed a reduction in Apple HMS’s reimbursement rate from to

of the Medicaid fee schedule. The proposed effective date of the proposed amendment

was October 1, 2018. The proposed amendment required the agreement of both parties

and included signature blocks for both Apple HMS and TCHP.

Apple HMS had no advance notice that TCHP intended to renegotiate its rate. It

was surprised that TCHP intended to renegotiate rates and was shocked by the amount of

the proposed reduction in rates.

35. Later that day, Price and Nartey spoke by phone in a call that was recorded

by Apple HMS. During the call, Price told Nartey several times that Apple HMS had the

right to counter. He ultimately responded: “. . . hopefully we [will] be able to put

together a counter proposal that makes sense to everybody and then we can move forward

together.” (Exhibit 66).

36. Nartey and Price exchanged several emails on August 23 and 24, 2018. In

the course of those emails, Nartey stated that “the 90 calendar day notification period in

section 6.22 would apply.”6 He also made the first of many requests for an in person

meeting with TCHP. For her part, Price emphasized Apple HMS’s right to negotiate. At

one point, she said: “[t]he amendment rate is what I can agree to but if you would like to

5
The proposed rate provision said: “Reimbursement to Provider for providing Covered Contracted
Services for covered Medicaid members shall be paid at the lessor (sic) of Provider’s usual and customary
charge for services provided or the maximum acceptable charge for Covered Services calculated at
percent of the prevailing Medicaid allowable fee schedule.” The parties only focused on the
Medicaid allowable fee schedule, presumably because it would always be less than the provider’s usual
and customary charges.
6
This provision is not applicable to a renegotiation of fees. See footnote 4.

17
present a counter rate proposal to TCHP and open up negotiations please prepare/send

your counter to me at this email address for discussion with leadership.” (Exhibit 10).

37. On August 29, 2018, Price and Nartey talked by phone. A transcript of the

call, which was recorded by Apple HMS, reveals that Price discussed a counter offer and

Nartey’s request to move the effective date of the amendment to November 21, 2018.

Specifically, she said:

As we talked about prior, you do have the right to make a

counter. So if you want to open negotiations by submitting a
counter offer that includes a request to extend the effective
date out 90 days from the 8/23 date that you received that
amendment. TCHP will agree to do that, we can extend it out
90 days from the 8/23 date to 11/21/18 but I need to [sic] you
to submit to me a counter offer for the rate and include the
request to move out the effective date.

(Exhibit 67). At another point during the call, she said: “I have to have a counter offer

showing that you want to open negotiations.”7 An email sent by Price to Nartey that

same day says essentially the same thing.

38. On August 30, 2018, Nartey emailed Price, “formally requesting a 90 day

delay in the proposed fee Schedule amendment’s effectiveness starting 08/23/2018 and

ending on 11/21/2018.” (Exhibit 13). He also attached Apple HMS’s first response to

TCHP’s proposed amendment. (Exhibit 11). The proposal begins on page 3 of the

attachment:

7
During the August 29 phone call, Price told Nartey that this rate reduction was not required by
Medicaid. This was to correct a misstatement she made in their first phone call when she told him that it
was required by Medicaid.

18
 Proposal

In light of the facts presented we are proposing the following.

1. TCHP preserve our current reimbursement rate of

of the Texas Medicaid fee schedule effective 90 days
from 08/23/2018.

2. The appropriate TCHP management personnel meet

with Apple Homecare’s Executive team in Houston to
discuss and negotiate more sustainable and longterm
cost savings measures that will satisfy both of our
commercial and regulatory objectives. We have found
in person meetings to be the most effective way to
successfully negotiate, discuss and resolve critical
issue relating to our contracts. Please provide some
dates as to when you would be able to meet with us at
the earliest opportunity.

(Exhibit 11).

39. TCHP did not consider Apple HMS’s proposal to keep the reimbursement

rate at to be a negotiation. On September 19, 2018, Price emailed Nartey and

communicated TCHP’s response to Apple HMS’s proposal:

After discussion with leadership, if you are unwilling to

negotiate then our only other option would be to consider
termination. We hope to continue our partnership with you.

(Exhibit 14).

Later that day, Nartey responded to Price’s email, stating:

Per the counter proposal section of the document I sent you

highlighting our position, we are fully willing to negotiate.
Please provide some dates when your team would be able to
meet with us at your H[o]uston office or wherever you prefer
to meet. Our team is ready to meet and discuss the issue.

Id.

19
 40. On September 27, 2018, Nartey emailed a letter to Price along with a new

counter-proposal. The letter, signed by Apple HMS’s Vice President Steve Shankle,

covered a number of topics. Among other things, Shankle stated:

I hope we are not too late to negotiate a fair arrangement. If

we do not agree on a new contract, then we inevitably
become competitors working against each other in same
market for the same patient/family. I can personally attest that
I have been here before with other MCOs and it is a public
relations nightmare. Our families are educated and know they
have choices. To tell a family that one MCO service provider
pays at of the Texas Medicaid fee schedule and the
other MCO provider pays at is very confusing, bad for
the families, bad for the patients and bad for patient choice.

(Exhibit 15). At the end of the letter, Shankle again requested the opportunity to present

Apple HMS’s position in person as he had found that “personal meetings result in better

communication and potentially better outcomes.” Id.

41. Apple HMS’s Counter Proposal was part of Shankle’s September 27 letter.

Id. Apple HMS proposed reducing its fee schedule from to of the Texas

Medicaid fee schedule. In addition, Apple HMS offered to provide three types of

“administrative relief”

. Finally, Apple HMS offered to provide

20
 42. Price acknowledged receipt of the proposal on September 28, 2018. She

forwarded the proposal to her supervisor and noted that Apple HMS was adamant about a

face-to-face meeting.

43. TCHP did not respond to the proposal until October 25. On October 25,

2018, in a thirty-minute phone call between Price and Nartey, TCHP advised Apple HMS

that TCHP was interested in continuing its relationship with Apple HMS but that the

reduction from to was not adequate. TCHP did not make a counter offer. Price

stated that Apple HMS needed to regroup and determine what they could agree to in

terms of a rate reduction. Nartey attempted to find out a ball park rate that might be

acceptable to TCHP, but Price did not give him one. TCHP apparently wanted Apple

HMS to make a business decision as to what rate they could accept and present it to

TCHP.

In that call, TCHP rejected the administrative relief proposed by Apple HMS.8

Price’s notes concerning the call indicated that she told Nartey that TCHP welcomed a

counter-offer that “outlines some value-based options, outlines processes that Apple is

willing to put in place that would improve healthcare outcomes, results in better

utilization management and helps in reducing the number of incidents that necessitate ER

visits for patients.” But, Nartey told Price that this would require input from TCHP,

which TCHP seemed unwilling to provide.

8
The evidence shows that TCHP thought that the administrative relief would be unacceptable to HHSC
and that it would increase its administrative burden because it would have resulted in different
arrangements for different DME providers.

21
 44. For all intents and purposes, that was the end of the TCHP-Apple HMS

negotiations. Nartey and Apple HMS concluded that TCHP was not negotiating in good

faith and that TCHP would not budge from its proposed reimbursement rate of . The

preponderance of the evidence indicates that TCHP would have negotiated upward from

although it is quite possible that the parties would have never reached an agreement

on rates.

45. The parties had made very little progress during two months of

negotiations. Part of the reason for their lack of progress was that TCHP was focused on

achieving a significant reduction in rate whereas Apple HMS did not want a significant

reduction in rate but, rather, wanted to focus on other means of providing cost savings

and value to TCHP.9 Another reason was a difference in approach: (1) TCHP preferred to

negotiate by phone and email whereas Apple HMS preferred to negotiate in person, and

(2) Apple HMS preferred to negotiate directly with decision-makers, while TCHP

preferred for providers to communicate with TCHP personnel who had no actual

authority to negotiate. Furthermore, it probably did not help the process that Apple HMS

did not offer to reduce rates when it made its first proposal and that TCHP did not make a

counter-response to Apple HMS’s offer to reduce rates to in its second proposal.

Additionally, TCHP got the negotiations off on the wrong foot when it told Apple HMS

that the renegotiation was required by Medicaid, which it was not; that misstatement was

quickly corrected but it contributed to Apple HMS’s distrust of TCHP. And for Apple

9
Based on Apple HMS’s Smith County lawsuit, it also appears that Apple HMS believed that TCHP’s
goal was to significantly reduce the number of providers. Based on the evidence presented in this case,
TCHP was not attempting to reduce the number of providers.

22
HMS’s part, it appears that Apple HMS thought that TCHP was trying to impose a

unilateral rate cut effective November 21 pursuant to section 6.22 of the Agreement

whereas TCHP was not trying to impose a unilateral rate cut and could not do so under

section 14.21 of the Agreement.

Regardless, the negotiations were a complete failure.

F. Apple HMS’s October 25, 2018 letter

46. On October 25, 2018, Apple HMS mailed a letter to the TCHP members

that it serviced. During the hearing, Apple HMS personnel characterized the letter as “a

call to action letter.” Its purpose was to encourage TCHP members to contact TCHP,

Texas Medicaid (HHSC), and Texas senators to try to get TCHP to change course.

Among other things, the letter repeatedly stated that TCHP was cutting its members’

benefits:

• “I am reaching out to you with great concern over your looming 50%
benefit reduction with Texas Children’s Health Plan.”

• “The Problem

Texas Children’s Health Plan (TCHP) has notified Apple HMS that on
November 21st, TCHP will reduce your benefits under the STAR, STAR
Kids and CHIP programs by 50%.”

• “Yes, I said your benefits will be cut by 50%.”

• “I am asking you to call and tell them that you demand they maintain your
current level of benefits with Texas Children’s Health Plan . . . .”

• “You also have the right to change your MCO from Texas Children’s
Health Plan to another health plan. Apple HMS is in network with the
other STAR, STAR Kids, and CHIP MCOs in your service area, and we
strongly suggest you consider making this change to keep your current
level of benefits.”

23
 • “There is still time to change the course of this benefit reduction.”

• “Please reach out to the contacts on the previous page and demand
they maintain the benefits your family deserves.”

(Exhibit 33) (all emphasis in original). While the letter repeatedly mentions benefits

being cut, the letter also mention rates:

• “Unfortunately, this will have a major impact on the level and type of care
you will receive under the dramatically reduced rates.”

• “These new rates are unsustainable and will result in loss of service for you
and your family. Apple HMS is currently negotiating in good faith with
Texas Children’s Health Plan but there is little time left to address the issue
before their deadline of November 21st. I need your help.”

• “I am asking you to call and tell them that you demand they maintain your
current level of benefits with Texas Children’s Health Plan and that you are
opposed to any rate cut of any kind.

Id.

47. Many of the statements in the letter were false, misleading, and inaccurate,

and the letter as a whole was false, misleading, and inaccurate in several respects:

• the benefits provided by TCHP are state-mandated, and cannot be

reduced;

• TCHP was not going to reduce benefits;

• the proposed rate reduction to Apple HMS would not go into effect
without Apple HMS’s execution of a contract amendment;

• nothing was going to happen to the patients on November 21. Apple

HMS had asked that the effective date of any amendment be
extended to November 21 and TCHP had agreed. TCHP had not
issued a termination notice, and the contract could not be terminated
until 90 days after a termination notice issued; and

• even if Apple HMS were out of the network entirely, that would not
constitute a “50% benefit reduction” since other DME providers

24
 could continue to provide the same DME products to TCHP
members consistent with the benefits mandated by state law.

48. The fact that Apple HMS referenced rates several times in this letter does

not change the fact that the statements concerning benefits are false, misleading, and

inaccurate and the letter as a whole is false, misleading, and inaccurate. Unlike the

references to benefits, the references to “rate” are not bolded, underlined, or placed in

larger font.

49. Anyone who reads the October 25 letter would think that benefits were

being cut; they would not understand that, in actuality, the proposed cut was to the

provider’s reimbursement rate. As discussed below, that is exactly what parents who

received this letter thought—they thought their child’s benefits were being cut.

G. Apple HMS’s Phone Calls with Parents

50. Apple HMS followed up this letter with individual phone calls to all

recipients of the letter.10 In those calls, which were to be completed within 24 hours,

Apple HMS representatives were instructed to “[c]onfirm that [the TCHP members]

received the letter” and “highlight that a 50% reduction is what TCHP is proposing.”11

(Exhibit 51). Apple HMS representatives were further instructed to advise TCHP

members who received the October 25 letter that “[t]hey have choices in MCOs as stated

in the letter . . .” In addition to these calls that Apple HMS initiated, some parents

10
Instructions for these calls had already been emailed to certain Apple HMS employees on October 25,
2018 before Price called Nartey to discuss TCHP’s response to Apple HMS’s September 27 proposal.
11
These parents were told that TCHP was cutting benefits by 50%. See e.g. transcript of call relating to
Patient A-1: Apple HMS’s representative said “Look, from what I know . . . is that we received a letter
notifying us that Texas Children’s Health Plan as of November will cover 50% . . . we are trying to reach
an agreement with the plan—we’re attempting to fight them so they don’t cut benefits in half.” (Exhibit
154).

25
initiated calls to Apple HMS. Some of the parents were scared and, after talking to

Medicaid and Senator Cruz’s office, at least one was angry. The following are excerpts

from the transcripts of some of Apple HMS/parent calls:

Patient C-2 (12:06 p.m. on 10/29/18)

Patient Representative: . . . I know this letter to be illegal. . .

. . I will be looking for a different medical supply company. I
don’t appreciate the way that I was treated. I do not
appreciate the scare tactic that was used against me and my
husband. My son needs oxygen to breathe. Using Medicaid as
a standpoint to threaten the fact that he would lose that
oxygen is tacky and unprofessional. So I put your letter to
good use. So thank you for sending that to me. And I hope
you have a wonderful day.

...

Patient Representative: According to Medicaid, it is illegal

because you used scare tactics to get your patients to respond
to Medicaid and to call their senator to help your company.
That is illegal.

...

Patient Representative: So these are scare tactics sir, this

has been, this letter has been sent to Medicaid and I have
spoken with Senator Cruz’s people about this letter and it is
illegal.

(Exhibit 154). This patient was concerned and called Medicaid and Senator Cruz’s office

and was told this was an illegal scare tactic.

Patient G-1 (1:31 p.m. on 10/29/18)

Patient Representative: I just opened my mail. I just

received some kind of letter saying that as of November 21st
Medicaid is not going to cover his medical supplies?

Apple HMS: Yes, ma’am. That is correct.

26
 ...

Patient Representative: I just called that number. There is

no way I could ever afford [child’s name redacted] medical
supplies.

...

Apple HMS: . . . And we’re notifying y’all because I believe

Children’s has not done so. And we are trying to get ahead of
this.

Patient Representative: . . . This is the first I’ve heard of it.

I’m just horrified.

Id.

Patient H-2 (2:40 p.m. on 10/29/18)

Patient Representative: Yes, sir. First I want to know – is

this only affecting the home medical supplies?

Apple HMS: Um, yeah. Yes it is. At this point. If it’s going
to affect the nursing and stuff, I have no idea at this point.
We’re a DME, so we only know what’s happening with us.

...

Patient Representative: . . . my daughter receives formulas

and incontinence supplies, things like that. So does that mean
that it’s gonna be cut in half, or will –

. . . Does that mean we’re going to have to find payment for

the rest of it? How is that going to work? . . .

This parent was very concerned. She was concerned that more than just medical

supplies were being cut—she thought that the cut might affect other Medicaid benefits

as well, such as nursing benefits. She also was concerned that she would have to pay

for the other half of her child’s supplies. At one point, she said: “My daughter will be

starved to death.” (Exhibit 154).

27
 Patient I-2 (2:43 p.m. on 10/29/18)

Patient Representative: So, I’m wanting to know – when

and if that happens that they cut out the 50%, what would be
left that y’all would be able to supply with her, because I
know that everything else would be out of pocket.

These parents were frightened and concerned by Apple HMS’s false, misleading,

and inaccurate statements.

51. Apple HMS admitted during the hearing that some of these parents were

misled by Apple HMS’s letter. For example, Steve Shankle testified:

Q: Can you see how members reading your October 25th letter that
their benefits were going to be cut by 50 percent might interpret
that to mean that they were going to lose half of their benefits
package that they use on a regular basis?

Mr. Shankle: At the time I wrote the letter, no.

Q: Isn’t it correct that in your deposition you agreed that you could
see how members might see that?

Mr. Shankle: I could correct that. At the time I wrote the letter
that’s not actually where my mind was.

Q: Okay. As you sit here today, you understand that members could
have read it that way?

Mr. Shankle: I see that some did read it that way actually.

Q And you understood when you sent the letter to patients that they
were going to be worried about losing benefits, correct?

Mr. Shankle: Yes.

Hr’g Tr. at 478:18-479:9.

These recorded calls only represent a small fraction of the total impact of the

letter. Nartey had instructed Apple HMS employees to call all TCHP members who used

28
Apple HMS products within 24 hours regarding the letter, but most of the calls were not

recorded, and Apple HMS was only required to produce transcripts for five days of calls.

H. TCHP and HHSC and the Patient Letter

52. Apple HMS’s letter suggested that parents call TCHP (and others) to let

their voices be heard. And, they did so. On October 29, 2018, TCHP’s Controls and

Compliance Department notified various TCHP officials of an increasing volume of

STAR Kids-related complaints coming in on TCHP’s Fraud and Abuse hotline, related to

a letter that STAR Kids members were receiving from Apple HMS, stating that, effective

11/21/18, TCHP was going to cut medical supply benefits to their children by 50%. The

parents who called were agitated and stated that Apple HMS provided a list of numbers

and email addresses that families could use to advocate for their children and complain

about TCHP’s benefit decrease. (Exhibit 133).

53. On October 29, 2018, Vetter emailed Cindy Fortress and Terri Frazier at

HHSC and said that she was giving them a heads up regarding a letter circulated by

Apple HMS. Vetter said that TCHP was drafting a cease and desist letter to Apple HMS

“as it is not only false information but it is never appropriate to involve members in this

way.” (Exhibit 36). Cindy Fortress, who is Senior Manager, Managed Care Compliance

and Operations (MCCO), Medicaid and CHIP Services, responded: “Good, that was

ridiculous to get the members upset.” Id.

In another email sent that day, Fortress asked Vetter if TCHP was doing any

member outreach due to the Apple DME letter “to let them [members] know that the

information in the letter is not true re: member benefits.” (Exhibit 134). Vetter replied

29
that TCHP was drafting a letter to members who used Apple HMS’s services. She

reported that they were working with some members to change providers. She also said

that Legal was preparing a cease and desist letter as well as a termination letter. Id.

54. On October 30, 2018, Vivian Wozniak, TCHP’s assistant general counsel,

sent a letter to Apple HMS stating that Apple HMS’s letter and phone calls “include

inaccurate, misleading and false statements regarding alleged benefit reductions” and

demanded that Apple HMS “cease and desist such communications immediately and

issue a retraction letter to all recipients of the communication by no later than Friday,

November 2, 2018.” There was no evidence that Apple HMS issued a retraction letter.

(Exhibit 135).

55. On November 1, 2018, Nancy Guerra, a Managed Care Compliance

Operations Research and Resolution Specialist with HHSC, wrote TCHP stating that

HHSC is “getting calls from TCHP members stating that they are receiving a letter from

Apple Homecare Medical Supply stating that TCHP will cut member’s Medicaid

Managed Care and CHIP benefits by 50% as of November 21, 2018” and that “the letter

encourages members to choose a different health plan for their area.” (Exhibit 54).

HHSC asked that TCHP review and address the issue with the provider and stated: “The

provider is incorrect, the rates are being decreased, not the member’s services.” Id.

56. TCHP started working on placing members with other DME providers as a

result of patient phone calls and following its decision to terminate the contract.

57. On November 9, 2018, outside counsel for TCHP sent another cease and

desist letter to Apple HMS, specifically identifying examples of statements that TCHP

30
contended were false statements about benefit reductions. (Exhibit 141). In that letter,

TCHP again asked Apple HMS to issue a retraction letter.

58. On November 9, 2018, TCHP sent a letter to Apple HMS, terminating the

Provider Agreement. TCHP stated that it had elected to terminate Apple HMS’s Provider

Agreement, effective 90 days from the date of the letter. TCHP stated it was terminating

the contract without cause, but noted that the Texas Insurance Code requires TCHP to

provide a written explanation of the reason for the termination. Its explanation was:

“Accordingly, TCHP is terminating due to the inaccurate, misleading letter that Provider

sent to members containing false statements alleging a reduction in benefits.” (Exhibit

52).

59. On November 9, TCHP employee Shantelle Smither notified other TCHP

personnel that Cindy Fortress at HHSC had called for an update on the following things:

(1) Whether TCHP had terminated the provider yet and where it was in
the process;

(2) How many members were impacted; and

(3) Where was TCHP in helping members transition to a new provider.

Smither stated that Fortress stressed that “we need to prioritize the 40 kids that are vent

dependent and make sure they have care before the term is complete.” (Exhibit 143).

60. TCHP responded to HHSC by email on November 12, 2018. That email

from Vetter to Fortress, stated that the 90-day termination letter was sent to Apple HMS

on November 9 and Apple HMS on November 12. She said that 327 members in three

service areas had been impacted. She noted that Fortress was aware that many of these

31
members had received inaccurate information from the provider regarding a decrease in

benefits. She said that, since November 1, TCHP had been working diligently to contact

effected members by phone to assure them there is no reduction in benefits and to

provide alternate in-network provider options. Vetter said that TCHP’s priority was to

ensure that there is no interruption in service or supplies and that it was prioritizing calls

based on medical necessity. She also said that members would receive written

notification as soon as TCHP’s letter was approved by the HHSC Marketing Team.

(Exhibit 145).

Fortress immediately responded, asking for “an update on the approximately 40

vent dependent kids.” Id. Vetter responded that she would get specific information on

those members and report back.

61. On November 15, 2018, Vetter emailed Fortress at HHSC and stated there

were 49 vent dependent members with Apple HMS in three service areas. All had been

contacted by TCHP’s care coordination team. TCHP said they had identified in-network

providers who have the capacity to take the members and they were offering assistance to

the families in the making the transition to a new provider. (Exhibit 145). HHSC

responded: “Let’s just make sure there is no gap in services. Thanks for your due

diligence.” (Exhibit 146).

62. While TCHP was in the process of switching its effected members to other

providers, Apple HMS (Steve Shankle) emailed Apple HMS personnel on November 14

and told them that Apple HMS was going “to start another campaign of calling all

TCHP vent patients and enteral patients to let them know that THERE IS NO NEED

32
TO SWITCH TO ANOTHER PROVIDER at this time and we are continuing to work

through a possible solution.” (Exhibit 144)(emphasis in the original) Among other

actions taken by Apple HMS, Tyler and Houston respiratory therapists were told to

contact all vent and enteral patients that have TCHP insurance to assure them that Apple

HMS would continue to service them through February and to tell them that Apple HMS

is “continuing to fight for their rights to be serviced at the level Apple has serviced

them.” Id.

I. The Lawsuit and Rule 11 Agreement.

63. On December 6, 2018, Apple HMS filed a lawsuit in Smith County, Texas

alleging, inter alia, violations of the Texas Insurance Code and seeking an ex parte

temporary restraining order. (Exhibit 149). That same day, the court issued an ex parte

TRO restraining TCHP from encouraging any Apple HMS patient to switch to a different

provider, to refrain from contacting Apple HMS patients for that purpose, and refrain

from telling anyone that Apple HMS’s provider agreement is being terminated. (Exhibit

150). The court also set the request for temporary injunction for hearing on December 20,

2018.

64. On December 10, TCHP sent a letter to Apple HMS invoking its arbitration

rights pursuant to the Agreement and demanding that Apple HMS dismiss and abate its

lawsuit and proceed in arbitration. (Exhibit 151).

65. TCHP filed a motion to compel arbitration on December 13, 2018. The

motion was set for hearing contemporaneously with the injunction request, on December

20.

33
 66. But, on December 19, the parties reached a Rule 11 Agreement under

which Apple HMS agreed to resolve this dispute in arbitration pursuant to TCHP’s

arbitration demand under the Agreement. (Exhibit 37). The parties also agreed that their

Rule 11 Agreement would remain in effect until May 9, 2019, or the date the arbitration

is concluded, whichever occurred first.

67. This Rule 11 Agreement was later extended and remains in effect. Apple

HMS has been in the TCHP network and is still being reimbursed for covered services at

its pre-existing contract rate.

68. One of the provisions of the Rule 11 Agreement dated December 19, 2018

was the parties would not contact patients about termination or proposed rate changes

except to the following extent: “TCHP will provide a short letter to its members who

currently use Apple HMS products, advising them that termination of the Agreement will

not occur on February 7, 2018.” Apple HMS was to do the same. “The content of the

letters will be agreed upon by Apple HMS and TCHP in advance.” (Exhibit 37).

69. On January 7, 2019, Apple HMS’s lawyer wrote TCHP’s lawyer stating

that TCHP had violated the Rule 11 Agreement by sending a letter to Apple HMS

patients advising that as of February 7, 2019 Apple HMS would no longer be in TCHP’s

provider network. (Exhibit 155). Thereafter, counsel spoke and then Apple HMS’s

lawyer sent an email demanding that TCHP immediately reach out to patients who

received the letter stating that it was sent in error and that Apple HMS would not be

terminated from the network on February 7. (Exhibit 160).

34
 70. On January 11, 2019, Siller wrote TCHP lawyer Ranier to see if TCHP’s

“retraction” letter had gone out as it did not appear that any of the patients had received

it. (Exhibit 38). Siller also said a TCHP employee had reportedly told a member that

Apple HMS was terminated from the plan and the patient needed to be moved to another

provider immediately. Siller asked that this situation be remedied immediately.

71. On January 28, 2019, Apple HMS’s lawyer notified TCHP’s lawyer that

there was another incident. Reportedly, TCHP had switched a patient’s services without

consent and appropriate paper work. (Exhibit 161).

72. The Rule 11 issue was apparently resolved at some point. But Apple HMS

temporarily lost a number of patients as a result of the violation of the Rule 11 agreement

and lost $8,316.67 in revenue as a result of the violation.

VI.
THE OCTOBER 25, 2018 LETTER

The October 25, 2018 letter is at the heart of this dispute. Apple HMS contends

that the letter was an accurate, protected communication and that TCHP violated the

Texas Insurance Code and the Agreement when it terminated the Provider Agreement

based on October 25, 2018 letter. TCHP contends that the letter was false, misleading,

and inaccurate, violated the terms of the Agreement and the law, and provided a valid

basis for terminating the Agreement. The following are factual findings and legal reasons

regarding the October 25, 2018 letter.

35
A. Texas Law and the Agreement expressly prohibit false, misleading or
inaccurate statements about benefits.

Texas law clearly prohibits false, misleading, or inaccurate statements about

benefits:

• “[P]roviders must not make any written or oral statement containing

material misrepresentations of fact or law relating to their plan or the
Medicaid managed care program.” 1 Tex. Admin. Code § 353.405(d)(2).

• “[P]roviders must not make false, misleading or inaccurate statements

relating to services or benefits, providers, or potential providers through
their plan.” Id. § 353.405(d)(3).

• “Marketing materials must not be misleading, inaccurate, or contain

misrepresentations.” (Exhibit 60, Texas Provider Marketing Guidelines at
3).

The October 25 letter is clearly a “marketing material.” That term is

defined in the Provider Marketing Guidelines (p. 3) to mean “materials
produced in any medium designed or intended to be provided to Medicaid
or CHIP clients or client’s parent/legal representative” excluding
“[m]aterials relating to the prevention, diagnosis, or treatment of a medical
or dental condition.”12

• “Marketing materials must not make false, misleading, or inaccurate

statements relating to services or benefits.” (Ex. 60, Provider Marketing
Guidelines at 3).

• “The MCO must not make false, misleading, or inaccurate statements, or

misrepresentations of fact or law, benefits or services, of the
Medicaid/CHIP benefits/services, In-Network and Out-of-Network
providers or potential providers, or the MCO.” (Exhibit 74, Uniform
Managed Care Manual § IX, at p.10).

12
Apple HMS did not consider the letter to be “marketing since its executives viewed it as a “call to
action.” But the letter expressly advocates that TCHP members switch from one MCO (TCHP) to
competing MCOs to preserve Apple HMS’s commercial relationship with those members. That is
“marketing” even under the narrowest conceivable definition.” Apple HMS also did not believe it was
marketing because the letter was only sent to current patients, but marketing includes communications
with existing clients when the goal is to maintain the business relationship.

36
 [The references to “MCO” are explicitly stated in the Manual to be
applicable to providers like Apple HMS as well, as Shankle conceded. See
id., p. 2, § II; see also Hr’g Tr. at 526:13-18.]

The Agreement incorporates these requirements as a contractual obligation as

well. Apple HMS “agrees to comply with state and federal laws, rules, and regulations

governing marketing.” (Exhibit 40, Agreement, § 5.27) “In addition, Provider agrees to

comply with HHSC’s marketing policies and procedures, as set forth in HHSC's Uniform

Managed Care Manual, and the Provider Handbook.” Id.

Regardless, there is no dispute about this: Mr. Nartey and Mr. Shankle both

admitted that a provider cannot make false or misleading statements. Hr'g Tr. at 246:1-4;

527:23-528:4.

B. Statements in Apple HMS’s letter were false, misleading, and inaccurate.

As discussed in the factual findings, on October 25, 2018, Apple HMS sent out

what it characterized as a “call to action” letter. The purpose of the letter was to call

parents to action—to encourage them to call TCHP, HHSC, and elected officials to

complain about a benefit reduction that was allegedly planned by TCHP. Apple HMS

hoped that phone calls and emails from concerned parents would cause TCHP to change

course and negotiate reimbursement rates that were acceptable to Apple HMS.

Apple HMS’s letter to parents states that benefits were going to be reduced by

50%. The evidence presented at the hearing shows by a preponderance of the evidence

and as a matter of law that these statements about benefit cuts were false, misleading, and

inaccurate. HHSC establishes the “benefit package” that TCHP and other MCOs are

required to provide to members. See Exhibit 84, page 3 of 5. It is undisputed that TCHP

37
cannot reduce these benefits in any way. See also, e.g., 1 Tex. Admin. Code § 353.409(a)

(“An MCO must provide covered services to members.”); id.§ 353.409(b) (“HHSC will

establish the scope and level of benefits, which all MCOs must agree to provide as a

condition of participation.”). The only thing that TCHP could negotiate to reduce is

Apple HMS’s reimbursement rates. See Exhibit 41 (“The MCOs are not required to pay

the same rates as traditional Medicaid. The rates they offer may be higher, the same, or

lower than the [fee-for-service] rate.”).

Apple HMS witnesses confirmed that they provide these state-mandated benefits

regardless of the rates they negotiate with MCOs. Apple HMS had negotiated varying

Although benefits to TCHP members could not be cut and were not being cut,

Apple HMS sent a letter saying that was what was going to happen.

38
 And, Apple HMS told patients that this would happen on November 21, which

was less than a month away. That was also false as TCHP was required to give 90-days’

notice of intention to terminate the contract, regardless of whether the termination was

with or without cause. Agreement, § 7.2. TCHP had not sent notice of termination of the

Agreement at the time the October 25 letter was sent so there would have been no

termination before late January at the earliest. TCHP had never proposed a unilateral

change in the rates; the November 21 date was the proposed effective date of any agreed

amendment to the reimbursement rate and that date was only relevant if an agreement

was reached.13

Telling members about a 50% benefit cut that was to take place in less than a

month was false, misleading, and inaccurate and very upsetting to members as

documented by the previously discussed transcripts and records of phone calls between

members and Apple HMS personnel. But, it had its intended effect: highly concerned

parents contacted Apple HMS, TCHP, HHSC, and Senator Cruz’s office.

HHSC thought the letter was incorrect as well. After TCHP notified HHSC about

Apple HMS’s letter, HHSC asked TCHP: “are you all doing any member outreach due to

the Apple DME letter to let them know that the information in the letter is not true re:

member benefits?” (Fortress 10/29/18 email) (Exhibit 134) The next day a different

13
During the arbitration, Apple HMS’s witnesses testified that they believed TCHP was going to
unilaterally reduce Apple HMS’s rates or terminate the Agreement on November 21, 2018. There is no
evidence that TCHP was going to do either of those things. TCHP had proposed an agreed rate
reduction—not a unilateral one. Additionally, if TCHP sent notice of termination on November 21st, the
Agreement would not terminate for another 90 days. Even if Apple HMS did believe that Apple HMS
was going to unilaterally amend the contract or send notice of intention to terminate, there was absolutely
no scenario in which patients were going to lose half of their state-mandated benefits at any time, much
less on November 21.

39
HHSC employee wrote TCHP about the Apple HMS letter and said: “The provider is

incorrect, the rates are being decreased, not the member’s services.” (Guerra letter

11/1/18 letter) (Exhibit 54). And, when TCHP told HHSC representatives that TCHP

planned to issue a cease and desist letter, HHSC responded “good, that was ridiculous to

get the members upset.” (Exhibit 36).

C. Apple’s Explanation Fails

Mr. Shankle testified that he believed “the reference to benefits in the [October 25]

letter is interchangeable with reimbursement rates.” Hr’g Tr. at 482:2-5. Thus, Apple

HMS argued that a reimbursement rate cut of 50% would be essentially the same as a

50% benefit cut.

In support of Apple HMS’s position, Shankle relied heavily on definition of the

term “benefit” located in a glossary on the CMS website.14 Shankle admitted that

definition of “benefit” in the CMS glossary as a justification for the language in the letter

was something that came up after the litigation commenced. Hr’g Tr. at 509: l 17-25. In

fact, he first became aware of this definition around the time the first depositions were

taken in this matter.

Apple HMS was not relying on the definition of “benefit” in the CMS glossary

when it drafted the October 25 letter to the parents. When parents received a letter telling

them that benefits were being cut, they were not thinking about the definition of benefits

contained in a CMS glossary. These parents understood the letter to say that their child’s

14
Shankle acknowledged that the glossary was not an “official CMS legal definition.” Hr’g Tr. at 510:
21-23.

40
benefits were being cut on November 21 and that they were going to have to find money

to pay for all or part of their child’s DME services and supplies. And that simply was not

true.

Apple HMS also argued benefits were being cut because the quality of the

supplies would decrease. But, Apple HMS did not tell parents the quality of the supplies

they received would decrease; it told them their child’s benefits would decrease. And

some parents were concerned that the benefits that were being cut would include more

than just DME benefits.

Apple HMS also argued that TCHP intended to cut the rates of all its DME

providers and that would somehow decrease benefits by 50% or more. But there is no

evidence to support this argument. First, there is no evidence that TCHP planned to

make an across-the-board rate reduction. TCHP specifically told HHSC that it was not

engaging in an across-the-board rate reduction. The fact that TCHP decided to begin its

renegotiation initiative by sending a proposed amendment to approximately five of its

DME providers out of its many DME providers is not credible evidence of an across-the-

board reduction. Second, there is no credible evidence that TCHP intended to force

Apple HMS or the other DME providers to accept a reimbursement rate of of the

Medicaid fee schedule. The credible evidence establishes that TCHP was trying to

negotiate reimbursement rates in the to range consistent with its understanding of

the rates that other MCOs were paying providers. Third, there is no evidence that a

reimbursement rate of of Medicaid fee schedule would not be sustainable for

other DME providers who may have had lower costs than Apple HMS. Finally, there is

41
no evidence that TCHP could or would, under any circumstance, allow its reimbursement

rate initiative to decimate its DME provider network such that HHSC-mandated benefits

could not or would not be provided to TCHP members. And, there is no evidence or

reason to believe that HHSC would ever let TCHP get away with a 50% reduction in

benefits if that were the consequence of TCHP’s new rates.

The bottom line is that a 50% reduction in reimbursement rates is not a 50%

reduction in benefits—as a matter of fact or law.

D. Conclusion

TCHP proved by a preponderance of the evidence that Apple HMS’s October 25

letter contained false, misleading, and inaccurate statements and that the letter as a whole

was false, misleading and inaccurate.

VII.
APPLE HMS’S CAUSES OF ACTION

The following finding of facts and conclusions of law are issued with respect to

Apple HMS’s causes of action.

A. TCHP’s Violations of Texas Insurance Code § 843.281(b) and Provider

Agreement, § 5.8

Apple HMS alleged that TCHP violated Texas Insurance Code § 843.281(b) and a

similar provision in section 5.8 of the Agreement by terminating the Agreement in

retaliation for filing a complaint against TCHP with HHSC. (Arbitration Demand, pp.

11-19).

While Apple HMS maintains that its complaints to HHSC were reasonably filed, it

“agrees with TCHP that there is no evidence that the decision to terminate Apple HMS’s

42
Provider Agreement was motivated by those specific complaints, because TCHP

apparently did not receive notice of the complaints before it already had decided to

terminate the agreement.” Apple HMS’s Post-Hearing Brief, p. 15. Accordingly, Apple

HMS conceded its causes of action based on section 843.281(b) of the Texas Insurance

Code and section 5.8 of the Agreement. Further, Apple HMS failed to prove by a

preponderance of the evidence that TCHP terminated the Agreement because of or in

retaliation for any complaints filed by Apple HMS with HHSC. This claim and requested

relief is denied.

B. TCHP’s violation of the Texas Insurance Code § 843.363(a)

Apple HMS alleges that TCHP violated section 843.363(a) of the Texas Insurance

Code when it terminated Apple HMS’s contract based upon the October 25, 2018 letter

that Apple HMS sent to its patients. See Arbitration Demand, pp. 11-18.

Section 843.363(a) of the Texas Insurance Code provides:

(a) A health maintenance organization15 may not, as a condition of a contract

with a . . . provider, or in any other manner, prohibit, attempt to prohibit, or
discourage a . . . provider from discussing with or communicating in good
faith with a current . . . patient, or a person designated by a patient, with
respect to:

(1) information or opinions regarding the patient's health care, including

the patient's medical condition or treatment options;

(2) information or opinions regarding the terms, requirements, or

services of the health care plan as they relate to the medical needs of
the patient;

15
TCHP is a managed care organization. A MCO such as TCHP comes within Chapter 843’s definition
of a “health maintenance organization,” and TCHP does not contend otherwise. Tex. Ins. Code § 843.002
(14).

43
 (3) the termination of the . . . provider's contract with the health care
plan or the fact that the . . . provider will otherwise no longer be
providing medical care, dental care, or health care services under the
health care plan; or

(4) information regarding the availability of facilities, both in-network

and out-of-network, for the treatment of the patient's medical
condition.

Section 843.363(b) states that an HMO may not terminate a provider for communicating

with a patient in a manner protected by this section.

Apple HMS contends that its October 25 letter was made in good faith and was

protected under subsection (a)(1)-(4).16

Apple HMS prayed for various relief for the alleged violation of section 843.363

of the Texas Insurance Code including the following: (1) declaratory judgment that

TCHP’s termination of its Provider Agreement violated the Texas Insurance Code, which

prohibits retaliatory conduct; (2) reinstatement of its Provider Agreement at the

reimbursement rate of of the Medicaid fee schedule for at least three years or,

alternatively, money damages to compensate it for lost profits it would have made but for

the breach;17 and (3) arbitration and other litigation costs and attorney’s fees. The relief

sought for violation of section 843.363 is denied for several reasons.

16
The Arbitrator does not need to reach and does not reach the issue of whether the communication (the
letter) was written in “good faith.”
17
Apple HMS’s economic expert calculated that the termination of the TCHP agreement would result in
lost profits of between approximately , depending on the discount rate used,
over a five year period. For 2020 alone, she calculated lost profits of slightly over at the
reimbursement rate.

44
 1. No private cause of action.

First, there is no private cause of action for breach of section 843.363 of the Texas

Insurance Code. Neither Apple HMS nor TCHP has cited any Insurance Code provision

that creates a private cause of action for violation of this section of the Code. Chapter 843

of the Insurance Code grants the insurance commissioner authority to undertake

enforcement actions and seek injunctive relief. Tex. Ins. Code §§ 843.461 and 843.463.

It also provides for criminal penalties. Tex. Ins. Code § 843.464. But, the enforcement

subchapter does not provide for a private cause of action or other relief to third parties for

violation of section 843.363. And neither does any other section of Chapter 843.

Moreover, there is no private cause of action for breach of section 843.363 of the

Texas Insurance Code. In Witkowski v. Brian, Fooshee & Yonge Props., 181 S.W.3d

824, 831 (Tex. App.—Austin 2005, no pet.), the court stated: “We apply a ‘strict rule of

construction’ to statutory enforcement schemes and imply causes of action only when the

drafters’ intent is clearly expressed from the language as written.” The Witkowski court

cited the Texas Supreme Court decision in Brown v. Arturo De La Cruz, 156 S.W.3d 560

(Tex. 2004). In Brown, the court said: “By implying a private cause of action in a statute

that did not provide for one, the court of appeals exceeded those [jurisdictional]

bounds.”). Id. at 569. See also Christus Health Gulf Coast v. Aetna, Inc., 397 S.W.3d

651, 655-56 (Tex. 2013) (analyzing an amendment to the Prompt Pay Statute, the court

observed that a statutory “change [amendment] provides administrative relief in

situations like this, but it nowhere grants providers a private action against HMOs”);

Peacock v. AARP, Inc., 181 F.Supp.3d 430, 436 (S.D. Tex. 2016) (granting a motion to

45
dismiss because no private right of action for alleged violations of various provisions of

the Texas Insurance Code); Koenig v. Aetna Life Ins., No. 4:13-CV-00359, 2015 WL

6473351, at *9 (S.D. Tex. Oct. 27, 2015) (“[E]ven assuming that Aetna is subject to

liability under [Insurance Code] § 4151.117(b), no private right of action exists for its

alleged violations. . .”); Texas Medical Ass’n v. Aetna Life Ins. Co., 80 F.3d 153, 157 (5th

Cir. 1996) (No judicial action to privately enforce PPO rules).

There is no private cause of action for breach of section 843.363 of the Texas

Insurance Code.

2. Not protected information or opinion

Even if the Texas Insurance Code did create a private cause of action for violation

of section 843.363, that section does not protect communications that are false,

misleading, or inaccurate, and, as discussed above, the statements in the October 25, 2018

letter from Apple HMS to TCHP members were false, misleading, and inaccurate.

Additionally, even if the statements were true, they are not statements of the type

protected by section 843.363(a)(1)–(4) of the Texas Insurance Code. As written, this

statute protects a provider’s discussions with a particular patient about that patient’s

medical condition and treatment (section 843.363(a)(1)); information or opinions

regarding terms, requirements, or services of the health care plan as they relate to the

medical needs of the patient (section 843.363(a)(2)); and the availability of care under the

health care plan requirements and networks for the treatment of the patient’s medical

condition (section 843.063(a)(4)). These provisions address a patient’s medical care and

46
treatment and related issues under the existing contract—not under a proposed

amendment to reimbursement rates in the provider’s contract with the MCO.

Additionally, Apple HMS’s statements in the October 25 letter do not relate to

termination of the provider’s contract with the health care plan. Apple HMS’s contract

had not been terminated. While section 843.363(a)(3) protects and permits a provider to

inform a patient that its contract with the plan has been terminated or that it will no

longer provide services under the health care plan for some other reason, it does not go

beyond that and protect information or opinions regarding proposed rate cuts, benefits

cuts, negotiations, or similar matters. Nor does it protect communications suggesting that

patients change providers.

In conclusion, the statute is specific and does not protect the information and

opinions of the type contained in the October 25 letter and does not protect false,

misleading, and inaccurate statements. Thus, even if there were a private cause of action

for violation of section 843.363, the October 25, 2018 letter is not protected

communication under the statute.

Accordingly, this claim and all relief requested based on an alleged violation of

section 843.363 of the Texas Insurance Code is denied.

C. TCHP’s breach of section 5.7 of the Agreement

Apple HMS also contends that TCHP violated section 5.7 of the Agreement.

Arbitration Demand, p. 9. Apple HMS did not establish by a preponderance of the

evidence that TCHP breached section 5.7 of the Agreement. Arbitration Demand, p. 19.

47
The Agreement between TCHP and Apple HMS permits either party the right to

terminate the Agreement with or without cause on 90 days’ notice. Agreement, § 7.2.

1. Termination of the Agreement

Apple HMS alleges that TCHP violated section 5.7 of the Agreement when it

terminated its Agreement with TCHP. Section 5.7 of the Agreement closely tracks the

language of section 843.363 of the Texas Insurance Code in relevant respects. Thus,

Apple HMS has failed to establish a breach of section 5.7 by a preponderance of the

evidence for many of the same reasons that Apple HMS failed to establish a violation of

section 343.363 of the Texas Insurance Code. First, the letter does not communicate the

kind of information that is protected by section 5.7(a)-(d) of the Agreement. Second,

section 5.7 does not protect the false, misleading, and inaccurate statements made by

Apple HMS in its October 25 letter in part because doing so would conflict with other

provisions of the Agreement such as section 5.27. TCHP did not violate section 5.7 of the

Agreement by terminating Apple HMS based upon the false, misleading, and inaccurate

statements in the October 25 letter.

2. TCHP patient contact

Apple HMS also claims that TCHP violated section 5.7 by interfering with the

provider-patient relationship. Section 5.7 states that “TCHP agrees that it will not

interfere in any way or manner with the provider-patient relationship.” In particular,

Apple alleges that TCHP violated this provision by contacting patients and encouraging

48
them to move to other network providers. This claim is denied.18 Apple HMS failed to

prove by a preponderance of the evidence that TCHP violated section 5.7 by contacting

its members.

TCHP’s initial contact with these parents occurred only after Apple HMS’s

October 25 letter asked the parents to call TCHP and after Apple HMS “strongly”

suggested that the parents change MCOs. TCHP learned of the letter when it received

phone calls from parents who had received it. Under these circumstances, there was

nothing inappropriate about TCHP talking to those parents about the letter and a possible

change of providers.

And, after TCHP sent notice of termination to Apple HMS, it was appropriate for

TCHP to discuss a change in DME providers with its plan members. In fact, it was

required to notify members of the termination and make arrangements for their care.

Agreement, ¶ 7.6.1.

Moreover, at all relevant times, HSSC was well aware of both the October 25

letter and the termination, and was regularly contacting TCHP to confirm that TCHP was

taking steps to make sure that members, particularly ventilator-dependent members,

would have an appropriate DME provider after Apple HMS’s departure from the

network.

TCHP’s contact with the parents did not violate section 5.7 of the Agreement.

Even if there were a breach of section 5.7 by patient contact, Apple HMS has not

18
Apple HMS’s cause of action for breach of the Rule 11 Agreement is discussed separately.

49
established by a preponderance of the evidence any damages as a result of a breach of

section 5.7.19

In summary, Apply HMS did not prove by a preponderance of the evidence that

TCHP breached section 5.7 of the Agreement. Accordingly, this cause of action is

denied. Further, all relief sought by Apple HMS for breach of contract is denied

including its prayer for declaratory judgment that TCHP violated section 5.7 of the

Provider Agreement, prayer for reinstatement of the Provider Agreement, its alternative

prayer for lost profit damages, and its prayer for arbitration costs, other litigation costs,

and attorneys’ fees.

D. Declaratory Judgment: Wrongful Termination Based on Letter

In its Arbitration Demand, Apple HMS seeks a declaratory judgment that TCHP’s

conduct violated the Texas Insurance Code and Provider Agreement. Arbitration

Demand, pp. 19-20. Based on the factual findings and legal reasons previously

discussed, Apple HMS has not established a violation of the Texas Insurance Code or the

Provider Agreement by TCHP. Thus, Apple HMS has not established by a preponderance

of the evidence that it is entitled to a declaratory judgment that TCHP has violated the

Texas Insurance Code or breached the Agreement. TCHP acted lawfully when it

terminated Apple HMS’s contract based upon the false, misleading, and inaccurate

statements contained in the October 25 letter. Apple HMS is therefore not entitled to a

declaratory judgment, or reinstatement, or other requested relief.

19
The issue of TCHP’s contact with members in violation of the Rule 11 Agreement is a different issue
and discussed later in this award.

50
 Apple HMS’s newly added grounds for declaratory relief and reinstatement are

addressed later in this Award.

E. TCHP’s Tortious Interference with Apple HMS’s Provider-Patient

Relationships

Apple HMS alleges that TCHP willfully and intentionally interfered with Apple

HMS’s provider relationships “by using the termination of the Provider Agreement as an

excuse to contact Apple HMS’s patients, and move or attempt to move them to other

network providers” and alleges that such conduct caused Apple HMS to permanently lose

several of its existing patient relationships and suffer damage to its reputation and

business goodwill. Arbitration Demand, p. 20. In its post-hearing brief, however, Apple
20
HMS sought in damages for the temporary loss of patients between January

and March 2019.21 Apple HMS’s Post-Hearing Brief, pp. 17-18. Apple HMS also sought

injunctive relief prohibiting TCHP from contacting Apple HMS’s patients for as long as

the Provider Agreement is in effect.

To prove tortious interference with an existing contract, a plaintiff must provide:

(1) the existence of a contract subject to interference; (2) a willful and intentional act of

interference; (3) the act was the proximate cause of plaintiff’s damages; and (4) actual

damage or loss. Texas Beef Cattle Co. v. Green, 921 S.W.2d 203, 210 (Tex. 1996).

The tortious interference claim is denied. Apple HMS has not established by a

preponderance of the evidence that TCHP tortiously interfered with an existing contract.

20
These damages are the same damages that Apple HMS seeks for violation of the Rule 11 Agreement.
21
In its post-hearing brief, Apple HMS also seeks exemplary damages. Punitive damages are not
recoverable under section 14.20 of the Agreement. Furthermore, Apple HMS did not plead for those
damages. In any event, there is no evidence to support the award of exemplary damages in this case.

51
 Apple HMS failed to establish by a preponderance of the evidence or as a matter

of law that it had a contract with patients/parents that was subject to interference.

Assuming Apple HMS had a contract subject to interference, Apple HMS has not

established by a preponderance of the evidence that TCHP committed a “willful and

intentional act of interference.” The notification to TCHP members that TCHP had made

the decision to terminate Apple HMS from its network and its diligent efforts to ensure

that those members could obtain equivalent services from other DME providers does not

constitute a “willful and intentional interference” because, based on the factual findings

and legal reasoning herein, TCHP was within its rights to terminate its contract with

Apple HMS.

Justification is a defense. “Under the defense of legal justification or excuse, one

is privileged to interfere with another’s contract (1) if it is done in a bona fide exercise of

his own rights, or (2) if he has an equal or superior right in the subject matter to that of

the other party.” Sterner v. Marathon Oil Co., 767 S.W.2d 686, 691 (Tex. 1989).

TCHP was justified in working with members to change providers both before and

after the termination letter was sent to Apple HMS. Apple HMS’s patient letter

encouraged plan members to call TCHP and to consider switching plans. The evidence

shows that many plan members did call TCHP, and TCHP was justified in answering

their calls and in discussing issues raised by the letter, including whether the members

should switch DME providers.

And, TCHP was legally justified in its contacts with plan members after the notice

of intention to terminate the contract was sent. TCHP had the right under the Agreement

52
to communicate with its members and transition them to other DME suppliers.

Agreement, § 7.6.1. TCHP was required to provide notice of termination to its members.

In fact, around the time the contract was terminated and thereafter, HHSC was contacting

TCHP to make sure that its members were being transitioned to other DME providers.

Moreover, to the extent Apple HMS has suffered any damages, it has not

established by a preponderance of the evidence that those damages were proximately

caused by any pre-Rule 11 Agreement contact that TCHP had with its members.

Apple HMS also failed to prove by a preponderance of the evidence that it

permanently lost several of its existing patient relationships as a result of TCHP’s

conduct between the date of termination and the date the Rule 11 Agreement was

executed. Further, Apple HMS failed to prove by a preponderance of the evidence that

TCHP’s alleged interference caused Apple HMS to suffer damage to its reputation and

business goodwill.

The cause of action for tortious interference and the requested relief is denied.

F. TCHP’s Breach of the Rule 11 Agreement Prohibiting TCHP from

Contacting Apple HMS’s Patients

Apple HMS asserted a claim for breach of the Rule 11 Agreement. Arbitration

Demand, p. 20.

The parties entered into a Rule 11 Agreement dated December 19, 2018 in which

TCHP and Apple HMS agreed the Provider Agreement would remain in effect for a

period of time. Under the Rule 11 Agreement, neither party was to contact parents about

termination except that Apple HMS and TCHP were to provide letters to TCHP members

53
who were using Apple HMS products, advising them that termination of the Agreement

would not occur on February 7, 2019.

The elements of breach of contract are: (1) the existence of a valid contract; (2) the

plaintiff performed or tendered performance of its contractual obligations; (3) the

defendant breached the contract, and (4) the plaintiff suffered damages as a result of the

defendant’s breach. Wright v. Christian & Smith, 950 S.W.2d 411, 412 (Tex. App.—

Houston [1st Dist.] 1997, no writ).

The Rule 11 Agreement is a valid and enforceable attorney agreement because it is

in writing, signed, and filed with the papers as part of the record in this case. (Exhibit 37).

Rule 11 Agreements are enforceable as contracts. See Padilla v. LaFrance, 907 S.W.2d

454, 461 (Tex. 1995); Kennedy v. Hyde, 682 S.W.2d 525, 529-30 (Tex. 1984); Knapp

Med. Ctr. v. De La Garza, 238 S.W.3d 767, 768 (Tex. 2007).

TCHP employees or agents contacted parents of Apple HMS’s patients in January

2019 to tell them that Apple HMS would no longer be in the TCHP network as of

February 7, 2019 and to transition patients to a different provider. TCHP refers to this as

“technical non-compliance” with the Rule 11. While this does not appear to be a willful

violation of the Rule 11 Agreement and appears to be the type of violation that can occur

when a number of persons and entities need to be notified about a Rule 11 Agreement,

Apple HMS proved by a preponderance of the evidence that TCHP violated the Rule 11

Agreement. Specifically, Apple HMS proved by a preponderance of the evidence that

there was a valid, enforceable contract, that Apple HMS performed its contractual

obligations, and that TCHP breached the contract.

54
 Apple HMS proved by a preponderance of the evidence that it temporarily lost

approximately eight or nine patients as a result of the violation of the Rule 11 Agreement,

and it proved by a preponderance of the evidence that, as a consequence of the breach, it

lost revenues in the amount of $8,316.67.

Apple HMS’s cause of action for breach of Rule 11 Agreement is granted and

damages of $8,316.67 will be awarded. Since Apple HMS failed to prove by a

preponderance of the evidence that it suffered damage to its reputation and business good

will as a result of the breach, those damage claims are denied.

G. Declaratory Judgment that Apple HMS belongs in TCHP’s Provider

Network Based on section 533.006 of the Texas Government Code.

During and following the hearing, Apple HMS sought and was granted leave to

amend its arbitration demand to seek a declaration that belongs in TCHP’s provider

network based on two provisions of section 533.006 of the Texas Government Code: the

significant traditional provider provision and the sole community provider provision. It

also sought a declaratory judgment that the prevailing provider contract rate was 95%-

100%.

1. Significant Traditional Provider

Apple HMS seeks a declaration that it is a significant traditional provider (“STP”)

and meets the criteria for mandatory inclusion in TCHP’s provider network outlined in

section 533.006(a)(2) of the Texas Government Code. That provision states that the

“commission [HHSC] shall require that each managed care organization that contracts

with the commission to provide health care services to recipients in a region . . . include

55
in its network for not less than three years . . . each health care provider in the region

who: (i) previously provided care to Medicaid and charity recipients at a significant level

as prescribed by the commission;22 (ii) agrees to accept the prevailing provider contract

rate of the managed care organization,” and (iii) has the requisite credentials.23

(emphasis added). Apple HMS contends that it has proven these three elements and that,

accordingly, this provision entitles it to a declaration relating to its inclusion in TCHP’s

provider network, reinstatement in TCHP’s provider network at a reimbursement rate of

95%-100%, and attorneys’ fees.

Apple HMS’s prayer for declaratory judgment based on its status as a STP, its

prayer for reinstatement, and the associated requested relief is denied for the following

independent reasons.

a. No private cause of action.

For the same reasons discussed on page 45 of this Award, there is no private cause

of action for violation of section 533.006 of the Texas Gov’t Code.

b. Section 533.006 governs HHSC – not TCHP

The obligations in section 533.006 are obligations imposed on HHSC—and not on

TCHP. Section 533.006(a) states that “[t]he commission [HSSC] shall require that each

managed care organization that contracts with the commission to provide health care

services in a region” to include significant traditional providers in its network for a

minimum of three years. Tex. Gov’t Code § 533.006(a)(2). Thus, this statutory provision

22
TCHP witnesses testified that Apple HMS was a significant traditional provider.
23
Apple HMS has the requisite credentials.

56
focuses requires HHSC to include certain provisions in its contracts with MCOs. The

statutory requirements are imposed on HHSC, not an MCO.

c. HHSC enforcement

HHSC complied with the requirements of section 533.006(a)(2) by requiring

MCOs to comply with chapter 533 of the Government Code. Specifically, section

7.02(a) of HHSC’s STAR Kids Contract Terms states: “MCO must comply, to the

satisfaction of HHSC, with all Contract provisions, all provisions of state and federal

laws, rules, regulations, policies, guidelines . . . including all applicable provisions of the

following: . . . Texas Gov’t Code Chapters 531 and 533” (emphasis added).

Under the HHSC/TCHP contract, it is HHSC (and not the Arbitrator or TCHP)

who determines whether Apple HMS belongs in the network based upon its status as a

STP. Tex. Gov’t Code § 533.006(a)(2)(i) (To be a significant traditional provider the

provider must provide care at the levels “prescribed by the commission”).

Article 12 of the STAR Kids contract contains a procedure for resolving disputes

between HHSC and TCHP about whether TCHP has complied with the terms the

contract. If TCHP has not complied, “HHSC may pursue tailored contractual remedies

for noncompliance with this Contract.” STAR Kids Contract Terms, §12.02(a). Further,

“At any time and at its discretion, HHSC may impose or pursue one or more remedies for

each item of noncompliance and will determine remedies on a case-by-case basis.” Id.

(emphasis added). HHSC is the entity that determines whether TCHP has violated the

terms of its contract with HHSC pertaining to significant traditional providers and what,

if anything, should be done about it if TCHP did violate it.

57
 d. Good cause to terminate

TCHP is not required to keep Apple HMS in its provider network when TCHP has

good cause for termination. The STAR Kids Provider FAQs specifically state that a

“MCO may terminate a contract with a STP only after demonstrating to the satisfaction

of HHSC, good cause for termination (such as fraud, waste, or abuse).” (Exhibit 41, p.

2). Apple HMS states that its contract cannot be terminated because it was not

terminated for fraud, waste, or abuse, which are the only grounds specified in the FAQ.

But, fraud, waste and abuse are just examples of appropriate reasons for terminating a

provider. Based on prior factual findings and legal reasons, it was proper for TCHP to

terminate Apple HMS for false, misleading, and inaccurate statements since Texas law

and the Agreement prohibit such statements.

These findings and legal reasonings are supported by HHSC’s response to the

October 25 letter and the termination. HHSC thought that Apple HMS’s statements that

benefits were being reduced by 50% were false (“not true”) [Exhibit 134] and voiced no

objection when TCHP informed HHSC that it was terminating its contract with Apple

HMS. In addition, the FAQs confirm that it is HHSC, and not the arbitrator, who is

responsible for determining good cause for termination and enforcing this code section.

STAR Kids Providers FAQ (after demonstrating, to the satisfaction of HHSC, good cause

for termination).

As previously discussed, the arbitrator believes that HHSC has the jurisdiction and

responsibility to determine whether Apple HMS should be included in the network as an

STP. But, to the extent that the decision is the arbitrator’s, the request for declaratory

58
judgment and reinstatement is denied because good cause existed for the termination of

the Agreement with Apple HMS.

e. Mootness

TCHP argues that STP issue is moot because the three-year period for purposes of

section 533.006(a)(2) expired on October 31, 2019. Apple HMS does not dispute that the

three-year period has ended and does not dispute that, up until now, it has continued to

serve TCHP members at the reimbursement rate just as it did before the Agreement

was terminated.

But Apple HMS says that even though three years has now passed, it is still

entitled to the STP declaration. Apple HMS says that a STP is entitled to a contract for a

minimum of three years and that, given the history of the contract, it would probably have

renewed annually into perpetuity. That argument is completely speculative, especially in

these circumstances where the parties demonstrated that they were, unfortunately, unable

to negotiate the reimbursement rate.

Apple HMS also argues that the only way it remained in the network for the full

three years was by pursuing legal action and that, as a consequence, it is entitled to the

declaration and attorneys’ fees even if TCHP can no longer be required to keep it in the

network under this provision. This appears to be an attempt to recover attorneys’ fees.

But Apple HMS did not assert the STP issue (its entitlement to be in the network based

on its STP status) in any of its arbitration pleadings until September 2019 and did not

incur attorneys’ fees on that issue until then. Apple HMS cannot not recover attorneys’

fees on a moot claim that it belatedly asserted until September 2019.

59
 For the independent reasons set forth in paragraphs (a)-(e) above, all of the relief

sought by Apple based on section 533.006(a)(2) of the Texas Government Code is denied

including its prayer for declaratory judgment that Apple HMS be included in TCHP’s

provider network for not less than three years based on its status as a significant

traditional provider is denied, its prayer for reinstatement, and its prayer for related relief

is denied.

2. Sole Community Provider

Apple HMS seeks a declaration that it is a sole community provider and meets the

criteria for mandatory inclusion in TCHP’s provider network based on Texas

Government Code §533.006(b), seeks reinstatement, and asks that TCHP be required to

keep Apple HMS in its provider network at the prevailing contract rate of for as

long as Apple HMS meets the criteria for mandatory inclusion in the TCHP network.

Section 533.006(b) provides that “a contract between a managed care organization

and the commission for the organization to provide health care services to recipients in a

health care service region that includes a rural area must require that the organization

include in its provider network rural hospitals, physicians, home and community support

services, agencies, and other rural health providers who: (a) are sole community

providers; (2) provide care to Medicaid and charity care recipients at a significant level as

prescribed by the commission;24 (3) agree to accept the prevailing provider contract rate

24
This same requirement is required to be an STP, and TCHP witnesses testified that Apple HMS was an
STP.

60
of the managed care organization; and (4) have the credentials required by the managed

care organization. . .”25 Tex. Gov’t Code § 533.006(b).

Apple HMS’s request is denied for the following independent reasons. As

previously discussed, (1) there is no private cause of action for violation of section

533.006, (2) Section 533.006 governs HHSC – not TCHP, (3) HHSC (and not the

Arbitrator) has authority to determine whether Apple HMS belongs in TCHP’s network

because it is a sole community provider under section 533.006, and (4) TCHP properly

terminated its Agreement with Apple HMS as a result of its false, misleading, and

inaccurate statement. These same reasons require denial of the declaratory judgment and

reinstatement under the sole community provider provision of section 533.006 of the

Texas Government Code. See this Award, section VII (G)(1)(a)-(d).

HHSC is the entity that has the authority to enforce section 533.006 both under the

statute and under HHSC’s contract with TCHP. This is particularly appropriate in this

case as the sole community provider provision involves an issue of network adequacy.

The evidence showed that HHSC has primary responsibility for overseeing network

adequacy, although the Texas Insurance Commission is involved as well.

In addition, HSSC, and not the Arbitrator, must decide (1) whether Apple HMS is

a sole community provider; and (2) whether Apple HMS should remain in the network as

a sole community provider when it improperly sent a letter containing false, misleading

statements, and inaccurate statements to parents and when it improperly and encouraged

them to change providers. HHSC was well aware of this matter based on calls from

25
Apple HMS has the requisite credentials.

61
TCHP members and Apple HMS’s complaint letter. HHSC knew that TCHP was

terminating Apple HMS’s contract. During this time, HHSC was in regular contact with

TCHP. The evidence establishes that HHSC was focused on TCHP’s network and

making sure that TCHP had DME providers to care for children, particularly ventilator-

dependent children. Based on the preponderance of the evidence, it appears HHSC felt

the termination was proper and that it was comfortable with TCHP’s efforts in

transferring children to other DME providers.

Finally, this request is denied because Apple HMS failed to prove by a

preponderance of the evidence that it was a sole community provider.

The request for a declaratory judgment and all other requested relief on the sole

community provider issue is denied for each of the independent reasons listed above.

3. Prevailing provider contract rate

As part of the relief requested on the STP and sole community provider issue,

Apple HMS seeks a declaration that the prevailing provider contract rate is

It is unnecessary to decide this issue since the requested relief on the STP and sole

community provider causes of action is denied. But, out of an abundance of caution, this

issue will be addressed.

The witnesses for Apple HMS and TCHP had their own definitions of prevailing

provider contract rate, but there was no authority cited to support their definitions—no

statutes, contract terms, rules, regulations or other authority. Each party offered a

plausible definition of prevailing rates. Apple HMS failed to establish the actual

definition of prevailing rates. Since the definition of prevailing rate was not established

62
as a matter of law or by a preponderance of the evidence, the prevailing rate cannot be

determined. The failure to establish the definition of prevailing provider contract rate is

an additional ground upon which the section 533.006 causes of action must be denied.

The relief sought by Apple HMS for violation of the significant traditional

provider and sole community provider sections of the Texas Government Code is denied.

VIII.
TCHP’S CAUSES OF ACTION

A. Declaratory Judgment

TCHP sought a declaratory judgment that it had the right to terminate the contract

and acted properly in doing so. Amended Counterclaim, p. 8.

Based on fact findings and legal reasons previously stated herein, TCHP’s

termination of the Agreement was valid and not unlawful. TCHP is entitled to a

declaratory judgment declaring (1) that its termination of the Agreement was valid and

not unlawful; (2) that it may reinstate its termination notice on or after December 23,

2019, and (3) that the Provider Agreement will be terminated effective 90 days after

TCHP reinstates its termination notice, unless HHSC determines that Apple HMS must

remain in TCHP’s network or unless the parties mutually agree to a different termination

effective date.

B. Defamation

TCHP brought a cause of action for defamation and business disparagement, based

upon Apple HMS’s letter to TCHP’s members, which falsely claimed that TCHP’s

63
members’ benefits would be cut by 50% and that this statement and others were false.

TCHP’s Demand, p. 9.

Defamation and business disparagement are similar in that both involve harm from

the publication of false information. In Re Steven Lipsky, 460 S.W.3d 579, 591 (Tex.

2015). But, the respective torts serve different interests. Id. Defamation actions chiefly

serve to protect the personal reputation of an injured party, while business disparagement

protects economic interests. Id.

The elements of a defamation cause of action are: “(1) the publication of a false

statement of fact to a third party, (2) that was defamatory concerning the plaintiff, (3)

with the requisite degree of fault, and (4) damages in some cases.” Id. at 593. The status

of the allegedly defamed person determines the degree of fault that must be proved; “a

private individual need only prove negligence, whereas a public figure or official must

prove actual malice.” Id. “‘Actual malice’ in this context means that the statement was

made with knowledge of its falsity or with reckless disregard for the truth.” Id. “Finally,

the plaintiff must plead and prove damages, unless the defamatory statements are

defamatory per se.” Id.

TCHP proved that statements in the letter were false by a preponderance of the

evidence. Apple HMS sent a letter to over 300 TCHP members stating that TCHP was

going to cut benefits by 50% on November 21, 2018. “It is well settled that the meaning

of a publication, and thus whether it is false and defamatory, depends on a reasonable

person’s perception of the entirety of a publication and not merely individual statements.”

Id. at 594 citing Bentley v. Bunton, 94 S.W.3d 561, 596 (Tex. 2002)(internal quotation

64
marks omitted). Here, a reasonable person’s interpretation of the statements in the letter

would be that TCHP was going to cut patient benefits would be cut by 50%. In fact, that

was the interpretation of many TCHP members who received the letter and of HSSC.

Read as a whole, the letter was false and individual statements in the letter were false.26

Next, TCHP contends that these false statements were defamatory per se. “A

statement is defamatory per se if it ‘injures a person in his office, profession, or

occupation.” Hancock v. Variyam, 400 S.W.3d 59, 66 (Tex. 2013) quoting Tex. Disposal

Sys. Landfill, Inc. v. Waste Mgmt. Holdings, Inc., 219 S.W.3d 363, 581 (Tex. App.—

Austin 2007, pet. denied). Hancock states that “[t]he Restatement more fully defines a

statement that injures one in her profession as a statement that ‘ascribes to another

conduct, characteristic or a condition that would adversely affect his fitness for the proper

conduct of his lawful business, trade, or profession. . .’” Hancock, 460 S.W.3d at 66

quoting RESTATEMENT (SECOND) OF TORTS § 573 (1977). TCHP failed to

establish as a matter of law or by a preponderance of the evidence that Apple HMS’s

letter (or the individual statements) were defamatory per se.

Having concluded that Apple HMS’s statements were not defamatory per se, it is

not necessary to decide whether these statements are defamatory because there is no

evidence of actual damages. Hancock, 400 S.W.3d at 68. TCHP failed to establish, by a

26
Apple HMS argued that the statement was true or “substantially true.” “The test used in deciding
whether the broadcast is substantially true involves consideration of whether the alleged defamatory
statement was more damaging to [the plaintiff's] reputation, in the mind of the average listener, than a
truthful statement would have been.” McIlvain v. Jacobs, 794 S.W.2d 14, 16 (Tex. 1990). “This
evaluation involves looking to the ‘gist’ of the broadcast.” Id. Even looking at the entire letter, the
statements were not substantially true. Statements that TCHP was going to cut a member’s benefits by
50% would have been more damaging to TCHP than a statement that it was going to cut Apple HMS’s
rates by 50%.

65
preponderance of the evidence, that it has suffered damages as a result of Apple HMS’s

allegedly defamatory conduct.

C. Business Disparagement

“To prevail on a business disparagement claim, a plaintiff must establish that (1)

the defendant published false and disparaging information about it, (2) with malice, (3)

without privilege, (4) that resulted in special damages to the plaintiff.” Id. at 544.

TCHP failed to prove special damages by a preponderance of the evidence. The

special damages alleged by TCHP were for outside attorney’s fees in the amount of

$19,277.50. TCHP’s Post-Hearing Brief, p. 19. With respect to these attorneys’ fees,

TCHP’s attorney’s fee affidavit established that the “work was ultimately directly

relevant to the work in litigating the contract issues that have been raised in this case.”27

This is a tort claim. The business disparagement claim and requested relief is denied.

D. Breach of Contract

TCHP alleged that Apple HMS breached its Agreement in three respects: the

marketing clause, the confidentiality provisions, and arbitration provisions.

(Counterclaim, p. 9).

1. The marketing clause

TCHP alleges that Apple HMS’s false, misleading, and inaccurate letter breached

section 5.27 of the Agreement. TCHP’s Demand, p. 9. TCHP has established, by a

preponderance of the evidence, that Apple HMS breached section 5.27 of the Agreement.

27
In any event, these damages are being awarded to TCHP in connection with the breach of contract
claim.

66
 Section 5.27 provides that Apple HMS “agrees to comply with state and federal

laws, rules, and regulations governing marketing.” Agreement, § 5.27. “In addition,

[Apple HMS] agrees to comply with HHSC’s marketing policies and procedures, as set

forth in HHSC’s Uniform Managed Care Manual, and the Provider Handbook.” Id.

Apple HMS “is prohibited from engaging in direct marketing to Members that is

designed to increase enrollment in a particular health plan.” Id.

TCHP established, by a preponderance of the evidence, that the false, misleading,

and inaccurate statements contained in the October 25 letter, as described herein violate

both HHSC’s Texas Provider Marketing Guidelines and the Uniform Managed Care

Manual, and therefore they constitute a breach of section 5.27.

TCHP has also established, by a preponderance of the evidence, that Apple HMS’s

statements in the October 25 letter urging TCHP members to enroll in particular health

plans other than TCHP constitutes a breach of section 5.27 of the Agreement.

TCHP proved by a preponderance of the evidence that it incurred damages as a

result of the breach of the marketing clause. Specifically, TCHP proved $19,277.50 in

pre-lawsuit attorneys’ fees related to the breach of the marketing provision. These pre-

suit attorney’s fees are awarded as damages for the breach of section 5.27.

2. The confidentiality provisions

On information and belief, TCHP alleged that Apple HMS’s contact with other

DME providers breached sections 12.2 and 14.13 of the Agreement to the extent Apple

HMS disclosed confidential information about the Agreement and rates to them. Section

12.2 prohibits Apple HMS from disclosing “[t]he terms of this Agreement, including but

67
not limited to the provisions regarding payment for services.” Section 14.13 obligates

Apple HMS “to keep this Agreement and its contents confidential and not to disclose this

Agreement or its contents to any third party without prior written consent.”

TCHP failed to establish by a preponderance of the evidence that it incurred any

damages as a result of the alleged breach of the confidentiality provisions of the

Agreement.

3. The arbitration provision

Finally, TCHP alleges that Apple HMS breached the arbitration provision of

Agreement “by failing to abide by TCHP’s December 10, 2018 demand for arbitration.”

Counterclaim, p. 10. TCHP contended that arbitration provisions contained in section

14.20 of the Agreement required arbitration of this dispute; Apple HMS contended that it

did not.

The arbitration demand was made on December 10, 2018. The parties signed a

Rule 11 Agreement dated December 19, 2018 in which they agreed to arbitrate. The

Provider Agreement does not specify an amount of time that a party has to evaluate

whether arbitration is required under the arbitration provision.

Apple HMS agreed to arbitrate within nine days of the arbitration demand and

without the necessity of a Motion to Compel hearing. On its face, this does not appear to

be an unreasonable delay. TCHP failed to prove by a preponderance of the evidence that

Apple HMS breached the arbitration provision of the agreement. This cause of action is

denied.

68
 IX.
ATTORNEYS FEES, EXPENSES, AND EXPENSES28

Both parties sought to recover significant attorneys’ fees and expenses and filed

objections and responses to each other’s attorneys’ fees evidence.

A. Attorneys’ Fees.

AAA Commercial Rule 47(d)(ii) provides that the award of the arbitrator may

include an award of attorneys’ fees if it is authorized by law or by the arbitration

agreement.29 The Agreement provides: “If any party brings an action against any other

party to enforce any condition or covenant of this Agreement, the prevailing party shall

be entitled to recover its court costs and reasonable attorneys’ fees incurred in such

action.” Agreement, § 14.16. The parties did bring actions against each other to enforce

conditions or covenants of this Agreement, but I conclude that there is no prevailing

party. Based on the findings, conclusions, and judgment, attorneys’ fees are not awarded

to either party. Each party shall pay its own attorneys’ fees.

B. Expenses

The agreement is silent as to the recovery of expenses.

28
The administrative costs for the arbitration and the fees of the arbitrator are not addressed in this
section. They are addressed in section X of the Award.
29
Here, attorneys’ fees will be decided based upon the Agreement. But, if they were made as authorized
by law, attorneys’ fees would be denied. The award of attorneys’ fees in a declaratory judgment action is
left to the discretion of the court (or in this case the arbitrator). Tex. Civ. Prac. & Rem. Code § 37.009
(“the court may award costs and necessary attorneys’ fees as are equitable and just). On these facts, I
would award no attorneys’ fees to either party on their declaratory judgment actions. As for Apple HMS,
attorneys’ fees are recoverable on a breach of contract claim, but Apple HMS did not segregate out the
amount of damages attributable to its Rule 11 claim, which was the only claim on which relief was
granted. And, as for TCHP, the only claim on which it could recover attorneys’ fees (other than the DJA)
is for its breach of the marketing provision, which was actually a claim asserted primarily to defend
against the declaratory judgment action. And TCHP was awarded its attorneys’ fees as damages on that
cause of action.

69
 By order dated September 23, 2019, TCHP was ordered to pay UnitedLex’s

invoice (not to exceed $1,500) representing the cost of producing the redacted voice

transcripts. Apple HMS agreed to pay the balance, if any. The amount of the invoice

exceeds $1,500. Accordingly, if TCHP has not already done so, TCHP will be ordered

to pay $1,500 to Apple HMS to reimburse it for the UnitedLex invoice. All other

expenses shall be paid by the party incurring same.

C. Interest

AAA Rule 47(d)(i) provides that the award of the arbitrator may include interest at

such rate and from the date of the arbitrator may deem appropriate. Prejudgment interest

will not be awarded. Post judgment interest will be awarded as set forth below.

X.
AWARDS

ACCORDINGLY, IT IS ORDERED AS FOLLOWS:

1. Apple Homecare Medical Supply, Inc. shall recover $8,316.67 from Texas

Children’s Health Plan, Inc.;

2. Texas Children’s Health Plan, Inc. shall recover $19,277.50 from Apple

Homecare Medical Supply, Inc.;

3. If Texas Children’s Health Plan, Inc. has not already done so, TCHP shall

pay Apple Homecare Medical Supply, Inc. $1,500 to reimburse it for its

share of the UnitedLex invoice;

4. Texas Children’s Health Plan, Inc.’s termination of its Provider Agreement

with Apple Homecare Medical Supply, Inc. was valid and not unlawful;

70
 5. Texas Children’s Health Plan, Inc. may reinstate its termination notice on

or after December 23, 2019;30

6. The Provider Agreement will be terminated effective 90 days after Texas

Children’s Health Plan, Inc. reinstates its termination notice unless HHSC

determines that Apple Homecare Medical Supply, Inc. must remain in the

Texas Children’s Health Plan, Inc.’s network or unless the parties mutually

agree to a different termination effective date;

7. Each party shall pay its own attorneys’ fees.

8. Each party shall pay its own expenses except that Texas Children’s Health

Plan, Inc. shall reimburse Apple Homecare Medical Supply, Inc. the

amount of $1,500 as set forth in paragraph 3 above.

9. The Administrative fees and expenses of the AAA totaling $22,425.00 are

to be borne equally. The compensation and expenses of the Arbitrator

totaling $44,400.00 are to be born equally. Therefore, Texas Children’s

Health Plan, Inc. shall also pay Apple Homecare Medical Supply, Inc., an

amount of $4,962.50 in payment of the Administrative fees and expenses of

AAA and the compensation and expenses of the Arbitrator.

10. This AWARD does not usurp the authority of Texas Department of Health

and Human Services Commission to determine whether Apple Homecare

30
The purpose of this thirty-day period is to try to protect the parents from any more unnecessary angst
caused by the parties’ dispute. Hopefully, this 30-day period will give the parties time to address this
Award with each other and, if necessary, HHSC before they start sending notices to the parents and
causing them additional stress.

71
 Medical Supply, Inc. mustt be maintaained in thee Texas Chhildren’s H
Health

Plan, Inc. provid

der network
k.

11. The Awards

A set forth in parragraphs 1, 2, and 3 shhall be paid on or beforre 30

days from the date

d of thiss Award. IIn the evennt they are not paid oon or

before 30 days from

fr ward, then anny unpaid aaward shall bear
the datte of the aw

post-jjudgment interest
i at the rate oof 5.0% coompoundedd annually with

intereest beginnin
ng on the daate of this A
Award.

12. The parties

p ormed that they are reesponsible for maintaiining
are hereby info

the fiilings, the court

c reporrter’s transccript, and tthe exhibitss for any fu
future

use; the
t Arbitrattor will not do so as the partiess have copiies of all oof the

gs, the courtt reporter’s record, andd the exhibitts..

filing

This AWARD is in fulll settlemennt of all claims subbmitted to this

Arbitration.
A All claims and relief not
n expresssly granted hherein is heereby denied.

Signed
S on: November
N 22, 2019.

ARBITRA
ATOR PAT
TRICIA CH
HAMBLIN
N

72
EXHIBIT B
 ANCILLARY SERVICES AGREEMENT

BY AND BETWEEN

TEXAS CHILDREN'S HEALTH PLAN, INC.

and

Apple Homecare Medical Supply

EFFECTIVE November 1 , 2016

Ancillary allprd 2013vl

TD! 10117/13
 ARTICLE I DEFINITIONS .................................................................................................. 1
1.1 Adjudication .................................................................................................................. I
1.2 Adjudication-Denied...................................................................................................... 1
1.3 Ancillary Services .......................................................................................................... !
1.4 Behavioral Health Services ............................................................................................ I
1.5 Billed Charges .............................................. ;................................................................2
1.6 CHIP Perinate Program .................................................................................................2
1. 7 Clean Claim ................................................................................................................... 2
1. 8 Covered Ancillary Services ........................................................................................... 2
1.9 Deficient - Denied Claim .............................................................................................. 2
1.10 Deficient - Pended Claim ..............................................................................................2
1.11 Early Childhood Intervention Services .......................................................................... 2
1.12 Emergency Behavioral Health Condition ...................................................................... 2
1.13 Emergency Medical Condition ..................................................................................... .3
1.14 Emergency Services ...................................................................................................... .3
1.15 Individual Family Service Plan .................................................................................... .3
1.16 MedicallyNecessary...................................................................................................... 3
1.17 Medical Specialty Group .............................................................................................. .3
1.18 Member .......................................................................................................................... 3
1.19 Out-of-Area Urgent Care ............................................................................................... 3
1.20 Participating Ancillary .................................................................................................. .4
1.21 Participating Physician ................................................................................................. .4
1.22 Personnel. ...................................................................................................................... .4
1.23 Plan ............................................................................................................................... .4
1.24 Primary Care Physician ................................................................................................ .4
1.25 Proper Referral .............................................................................................................. .4
1.26 Provider Handbook ...................................................................................................... ..4
1.27 Service Area.................................................................................................................. .4
1.28 Specialist Physician ....................................................................................................... 4
1.29 TCHP Medical Director .................................................................................................5

ARTICLE II DELIVERY OF ANCILLARY SERVICES .................................................... 5

2.1 Delivery of Ancillary Services ...................................................................................... 5
2.2 Non-discrimination ....................................................................................................... .5
2.3 Standard of Care ............................................................................................................ 5
2.4 Physician or Other Healthcare Ancillary Instructions ...................................................5
2.5 Cancellation of Product Orders .................................................................................... .5

ARTICLE III VERIFICATION OF COVERAGE.................................................................. 6

3.1 Verification/Certification.............. :................................................................................6
3.2 Discharge ....................................................................................................................... 6

ARTICLE IV PERSONNEL ................................................................................................... 6

4.1 Personnel and Ancillary Criteria. ................................................................................... 6
4.2 Personnel Evaluation ..................................................................................................... 6
4.3 Orientation ..................................................................................................................... 7

Ancillary allprd 2013vl -i-

TD! 10/17/13
 4.4 Payroll Obligations ................................................................ :....................................... 7
4.5 Personnel Availability ...................................................................................................7

ARTICLE V RESPONSIBILITIES OF TCHP AND PROVIDER ....................................... 7

5 .1 Prior Authorization Procedures ....................................,................................................ 7
5.2 Liaison ........................................................................................................................... 7
5.3 Administrative Responsibilities ..................................................................................... 7
5.4 Updates to Contract Infonnatiori ................................................................................... 7
5.5 Utilization Review ......................................................................................................... 7
5. 6 Necessary Services ........................................................................................................ 8
5.7 Provider-Patient Relationship and Communications ..................................................... 8
5.8 No Retaliation ................................................................................................................ 8
5.9 Posting Notice of Complaint Process ............................................................................ 8
5.10 Economic Profiling Data :.............................................................................................. 8
5.11 Compliance with TCHP Policies and Procedures ......................................................... 8
5, 12 Advance Directives ........................................................................................................ 9
5.13 Behavioral Health ........................................................................ ,................................. 9
5.14 Professional Conduct ..................................................................................................... 9
5.15 Ancillary Notice ............................................................................................................. 9
5.16 Gifts and Gratuities ........................................................................................................ 9
5.17 Announcement ................................................................................................................ 9
5.18 Needs Assessment ......................................................................................................... 9
5.19 Licenses ....................................................................................................................... 10
5.20 Laws, Rules andRegulations ....................................................................................... 10
5.21 Compliance with Laws ................................................................................................ 10
5.22 Family Planning Services ........................................... :.. ,... ,......................................... 11
5.23 Tuberculosis ......................................................... ;...... ;.......... :.... ;... ~ ............................ 11
5.24 Women, Infants and Children ("WIC") .......................:..... ;................. :....................... 11
5.25 Fraud and Abuse .......................................................... ,................ :.............................. 11
5.26 Early Childhood Intervention Services ........................................................................ 12
5.27 Marketing .................................................................. ,... ,...................... ,....................... 12
5.28 Medicaid Enrollment ................................................... ;............................................... 12
5.29 National Provider Identifier ......................................................................................... 12
5.30 Quality Assessment and Perfonnance Improvement................................................... 12
5.31 Texas Health Steps ...................................................................................................... 13
5.32 Child Support Obligations ........................................................................................... 13
5.33 Use of Provider Perfonnance Data .............................................................................. 13

ARTICLE VI BILLING AND PAYMENT .......................................................................... 13

6.1 Payments to Provider .............................................................. :.................................... 13
6.2 Program Violation ........................................................ ,.............................................. 13
6.3 Claims Submission ............................................................................. 14
6.4 Electronic Submission Requirements ..............................:........................................... 14
6.5 Deficient Claims .......................................................................................................... 15
6.6 Requests for Additional Infonnation ........................................................................... 15
6.7 Claims Payment ........................................................................................................... 15

Ancillary allprd 2013vl -ii-

TD! 10/17/13
 6.8 Offsets and Withholding .............................................................................................. 15
6.9 Hold Hannless ............................................................................................................. 15
6.10 Professional Services ................................................................................................... 17
6.11 Coordination ofBenefits .............................................................................................. 17
6.12 Emergency Services and Out-of-Area Urgent Care .................................................... 17
6.13 Copayments/Deductibles ............................................................................................. 18
6.14 Non-Covered Ancillary Services ................................................................................. 18
6.15 Member's Ability to Contest Claims ......................................................... 18
6.16 Liability........................................................................................................................ 18
6.17 Payment ........................................................................................................................ 18
6.18 Third Party Recovery ................................................................................................... 18
6.19 Communication Regarding Clean Claims ................................................................... 19
6.20 Penalties ............................................................................. ,......................................... 19
6.21 Fee Schedule Information ........................................... ,.......... -. .................................... 19
6.22 Amendment.. ...................................................... ;......................................................... 20

ARTICLE VII TERM AND TERMINATION ...................................... :................................ 20 .

7.1 Term .....................................................................................'. ....................................... 20
7 .2 Termination With or Without Cause ........................................................................... 21
7.3 Termination for Default ............................................................................................... 21
7.4 Automatic Termination................................................................................................ 21
7.5 Termination in the Event of Bankruptcy ..................................................................... 21
7.6 Rights and Responsibilities Upon Tennination ........................................................... 22

ARTICLE VIII RECORDS ...................................................................................................... 23

8.1 Preparation and Maintenance of Records ...................................... :........................... :.23
8.2 Inspection of Records ..................................................................................................24
8.3 Confidentiality of Records/Information ...................................................................... 24
8.4 HHSC's Access to Records ......................................................................................... 25
8.5 HHS C's Access to Records ......................................................................................... 25
8.6 Audit or Investigation of Records ................................................................................ 25
8. 7 Expedited Access to Records ..................................................................26
8.8 Audit or Investigation of Funds ................................................................................... 26
8.9 Provider Required Fraud and Abuse Policies .............. ; ................................ 26

ARTICLE IX INSURANCE .................................................................................................. 27

9.1 TCHP Liability Insurance ............................................................................................ 27
9.2 Worker's Compensation and Employer's Liability Insurance ........... ;........................ 27
9.3 Provider Insurance ....................................................................................................... 27
9.4 Certificates, Notifications ...............................................................;............................ 27

ARTICLE X COOPERATION ............................................................. :.............................. 28

I 0.1 Material Change ........................................................................................................... 28
10.2 Complaints ..... :.................................................................... :... :.................................... 28
10.3 Procedures.................................................................................... ;............................... 28

Ancillaryallprd 2013vl -iii-

TDI 10/17/13
 ARTICLE XI ADVERTISING ..................................................... :........................................ 28
11.1 Use ofNarnes ............................................................................................................... 28
112 Reservation of Rights .................................................................................................. 29

ARTICLE XII REPRESENTATIONS AND WARRANTIES .... ,......................................... 29

12. 1 Availability of Information .......................................................................................... 29
12.2 Confidentiality of Information ................................... ,, ...................................... ,., ....... 29
12.3 Authorization Required ............................................................................................... 29
12.4 Corporate Authority and Licensure ............................................................................. 29

ARTICLE XIII INDEMNlFICATION .................................................................................... 29

13.1 Duty to Defend and Cooperate ................................................................................... .29
13.2 Indemnification by TCHP ........................................................................................... .30
13.3 Indemnification by Provider ....................................................................................... .30
13.4 Other Conditions oflndenmification ........................................................................... 30
13.5 Survival ....................................................... ,..................................................... ,.,, ...... .31

ARTICLE XIV MISCELLANEOUS ....................................................................................... 31

14.1 Relationship of Parties .................................................................................................31
14.2 Remedies ................................................................... :................................................. .31
14.3 Notices ........................................................................................................................ .31
14.4 Independent Contractors ............................................................................................. .32
14.5 Binding Effect. ............................................................................................................ .32
14.6 Assignment ................................................................................................................. .32
14.7 Captions ...................................................................................................................... .32
14.8 Governing Law and Venue ......................................................................................... .32
14.9 Waiver................................................................................ :........... ., ........................... .32
14.10 Force Majeure ................................................ 32
u. ••••••••••• , .........: .....................................

14.11 Entire Agreement ....................................... ;..............•........ :......., ................................ .33

14.12 Severability .................................................................... ;.............................................. 33
14.13 Confidentiality ......................................................... :........ ;..... ,................................... .33
14.14 Survival of Representations .............................. :.......................................................... 33
14.15 Further Acts ................................................................................................................ .33
14.16 Attorneys' Fees ............................................................................................................ 33
14.17 Headings ...................................................................................................................... 33
14. 18 Gender and Number .................................................................................................... .33
14.19 Non-Exclusivity ........................................................................................................... 33
14.20 Dispute Resolution and Arbitration ............................................................................. 34
14.21 Amendment. ............................................................................. ,.............. ,.... ,, ..... ,........ 34

EXHIBIT A Compensation
EXHIBITB List of Plans
EXHIBIT C TCHP Claims Processing Addresses
EXHIBITD Covered Ancillary Services
SCHEDULE A Behavioral Health Services
SCHEDULEB Early Childhood Intervention Services

Ancillary allprd 2013vl

TDJ 10/17/13
 ANCILLARY SERVICES AGREEMENT

This Ancillary Services Agreement ("Agreement") is made as of this -1§±-day of

,llouemb«" • ~(the "Effective Date"), by and between Texas Children's Health Plan,
Inc., a Texas non-profit corporation ("TCHP"), and APPLE HOMECARE MEDIAL SUPPLY
("Provider").

RECITALS
WHEREAS, TCHP is a health maintenance organization licensed in the State of Texas
that is engaged in the business of arranging for the provision of certain health care services to
persons ("Members") enrolled in health plans offered or sponsored by TCHP in its own name
and on its own behalf ("TCHP Plans");

WHEREAS, TCHP is a contractor with the Texas Health and Human Services
Commission (''HHSC") in the State Children's Health Insurance Program ("CHIP") and the State
of Texas Access Reform Medicaid managed care program ("STAR");

WHEREAS, TCHP desires to contract for Ancillary Services as defined in this

Agreement to be provided to its Members;

WHEREAS, Provider is licensed in the State of Texas and desires to provide and/or to
arrange to provide Covered Ancillary Services to Members; and

WHEREAS, TCHP and Provider desire to provide a full statement of their respective
rights, duties, and obligations in connection with this Agreement.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree as follows:

ARTICLE I
DEFINITIONS

For the purposes of this Agreement, the following terms shall have the following
meanings:

I.I Adjudication shall mean to pay or deny a Clean Claim.

1.2 Adjudicated-Denied shall mean a Clean Claim that has been denied for payment.

1.3 Ancillary Services shall mean clinical laboratory services, diagnostic services, early
childhood intervention service, or any other services TCHP shall contract to provide to its
Members and that shall be listed on Exhibit D.

1.4 Behavioral Health Services shall mean Covered Services for the treatment of mental,
emotional, or chemical dependency disorders.

Ancillmy allprd 2013vl3

TD! 10/17/13
.I-
 1.5 Billed Charges shall mean the Ancillary charges for the provision of Ancillary services
included on the claim submitted by Provider to TCHP.

1.6 CHIP Perinate Program means the State of-Texas progranlin which HHSC contracts
with HMOs to provide, arrange for, and coordinate Covered Ancillary Services for
enrolled CHIP Perinate and CHIP Perinate Newborn Members. An HMO must
specifically contract with HHSC as a CHIP Perinatal HMO in order to participate in this
part of the CHIP Program.

1.7 Clean Claim shall mean a claim submitted by a physician or provider for medical care or
healthcare services rendered to a Member, with the data necessary for TCHP or its
subcontracted claims process to Adjudicate and accurately report the claim. A Clean
Claim must meet all requirements for accurate and complete data as defined in the
appropriate 837 - (claim type) encounter guides as follows:

a. 837 Professional Combined Implementation Guide

b. 83 7 Institutional Combined Implementation Guide

c. 837 Professional Companion Guide

d. 837 Institutional Companion Guide

1.8 Covered Ancillarv Services shall mean the care, treatment, and/or ancillary that the
Member is entitled to receive in accordance with the Plan. To be covered, a service must
be both Medically Necessary and otherwise comply with the Plan, including all
procedural requirements of the Plan.

1.9 Deficient - Denied Claim shall mean a claim denied fot 1;he purpose of obtaining
additional information from the Provider. A claim may be denied if it does not contain
accurate and complete data in all claim fields that are reqilired to Adjudicate a Clean
Claim.

I.I 0 Deficient - Pended Claim shall mean a claim pended for the purpose of obtaining
additional information from the Provider. A claim may be pended if it does not contain
accurate and complete data in all claim fields that are required to Adjudicate as a Clean
Claim.

1.11 Early Childhood Intervention Services or ECI shall mean the services, treatments, and/or
ancillary that: (i) are provided as described in Schedule B; and (ii) are provided in
conjunction with the Texas Interagency Council on Early Childhood Intervention.

1.12 Emergency Behavioral Health Condition shall mean any condition, without regard to the
nature or cause of the condition, which in the opinion of a prudent layperson possessing
an average knowledge of health and medicine: (i) requires immediate intervention and/or
medical attention without which Members would present an immediate danger to
themselves or others, or (ii) which renders Members incapable of controlling, knowing or
understanding the consequences of their actions.
Ancillary allprd 2013v13
TD! 10117113
-2-
 1.13 Emergency Medical Condition shall mean a medical condition manifesting itself by acute
symptoms of recent onset and sufficient severity, including severe pain, such that a
prudent Member, possessing an average knowledge of medicine and health, could
reasonably expect the absence of immediate medical care could result in: (i) placing the
Member's health in serious jeopardy, (ii) serious impairment to any of the Member's
bodily functions, (iii) serious dysfunction of any of the Member's bodily.organs or parts,
(iv) serious disfigurement, or (v) in the case of a pregnant woman, serious jeopardy to the
health of the woman or her unborn child.

1.14 Emergencv Services shall mean Covered Ancillary Services furnished by Provider under
this Agreement that are needed to evaluate or stabilize an Emergency Medical Condition
or an Emergency Behavioral Health Condition (including post•stabilization services).

1.15 Individual Family Service Plan ("IFSP") shall mean a written plan developed in
conjunction with ECI Services in accordance with criteria and established, as set forth
more particularly, on Schedule B.

1.16 Medically Necessary shall mean non-behavioral health-related Ancillary Services that
are: (i) reasonable and necessary to prevent illnesses or medical conditions as determined
by the Member's Participating Physician and TCHP's Medical Director or provide early
screening, interventions and/or treatments for conditions that cause suffering or pain,
cause physical deformity or limitations in functions thereafter, to cause or worsen a
handicap, cause illness or infirmity of a Member, or endanger life; (ii) provided at the
appropriate facilities at the appropriate levels of care for the treatment of a Member's
health condition; (iii) consistent with the professionally recognized health care
organizations or governmental agencies; (iv) not experimental or investigative; (v) not
solely for the convenience of the Member or his or her physician, hospital, or another
health care provider; (vi) the most appropriate supply or level of service needed to
provide Covered Ancillary Services to the Member; and (vii) consistent with the
standards adopted by TCHP. ·

!. I7 Medical Special(y Group shall mean a professional association or non-profit health

corporation composed of physicians that has a contract with TCHP to provide or ·arrange
for the delivery of physician and related services to Members.

1.18 Member shall mean an individual who is entitled to benefits under a Plan listed in
Exhibit B.

1.19 Out-ofArea Urgent Care shall mean care that: (i) is needed urgently by a Member while
he or she is outside the Service Area, the need for which could not reasonably have been
anticipated before the Member left the Service Area and (ii) cannot safely be postponed
until the Member is able to return to the Service Area to obtain care from or through his
or her Primary Care Physician. Out-of-Area Urgent Care does not include services
provided by non-Participating providers after the point at which the Member could safely
be transferred to the care of a Participating provider.

Ancillary aliprd 2013v13

TDI 10/17113
.3.
 1.20 ParticipatingAncillarv shall mean (i) clinical laboratory services; (ii) diagnostic services;
(iii) Early Childhood Intervention services; or (iv) any other Ancillary of services that has
entered into an agreement with TCHP to provide Ancillary Services to Members.

1.21 Participating Physician shall mean a Primary Care or Specialist Physician who has
entered into a contract with TCHP or who has accepted employment or entered in a
contract with a Medical Specialty Group to provide or arrange for physician and related
services to Members. A physician who is not otherwise a Participating Physician will be
considered to be a Participating Physician for the period of time he/she takes temporary
call for a Participating Physician or otherwise covers for a Participating Physician.

1.22 Personnel shall mean any and all individuals employed or contracted by Provider to
provide Covered Ancillary Services.

1.23 Plan shall mean the Member's TCHP Plan Group or Individual Service
Agreement/Evidence of Coverage, Schedule of Benefits, and any supplemental benefit
riders. A list of Plans in which Provider will participate is attached hereto as Exhibit B.

1.24 Primary Care Physician shall mean a physician who has entered into an agreement with
TCHP or who has accepted employment or entered into a contract with a Medical
Specialty Group to provide services to Members as their designated Primary Care
Physician in medical fields, including, but not limited to, general practice, internal
medicine, family practice, or pediatrics.

1.25 Proper Referral shall mean a prior written authorization, issued by a Member's Primary
Care Physician, for the Member to receive a particular Covered Service within a specified
time frame. A Proper Referral is issued to the Member by the Member's Primary Care
Physician. Proper Referrals are required for all Covered Anoillary Services that are not
provided by the Member's Primary Care Provider except for (i) those items requiring
prior authorization by TCHP as listed in the Provider Handbook· and (ii) Emergency
Services and Out-of-Area Urgent Care. A Proper Referral must identify the particular
participating health care provider (or non-participating provider, if approved by TCHP)
who shall provide the service. Where the TCHP Provider Handbook requires that a
particular service be pre-authorized by TCHP, the ordering physician must obtain such
prior authorization for the service to be covered.

1.26 Provider Handbook shall mean the instructional guide that TCHP mandates Providers
follow and that outlines the operational policies and procedures that are to be followed by
Providers with respect to services provided under this Agreement. The Provider
Handbook, and any amendments thereto as made from time to time by TCHP, is
incorporated herein by reference.

1.27 Service Area shall mean the geographic area in which TCHP is authorized by law to
serve Members.

1.28 &ecialist Physician shall mean a physician who has entered into an agreement with
TCHP or who has accepted employment or entered into a contract with a Medical

Ancillruy allprd 2013v 13

TDI 10117113
-4-
 Specialty Group to provide services to Members upon referral by Primary Care
Physicians.

1.29 TCHP Medical Director shall mean the physician designated by TCHP to coordinate all
issues arising out of the provision of Ancillary Services and related healthcare services
under this Agreement. For the purposes of this Agreement, all references to the TCHP
Medical Director shall mean the TCHP Medical Director and his or her authorized
designee.

ARTICLE IT
DELIVERY OF ANCILLARY SERVICES

2.1 Delivery of Ancillary Services. Subject to the terms and conditions of this Agreement,
Provider shall provide or arrange to provide Covered Ancillary Services to Members
within the TCHP Service Area.

2.2 Non-discrimination.

2.2.1 Covered Ancillary Services shall be rendered without regard to race,

religion, sex, age, color, nationality, origin, handicap, health status, marital
status, sexual orientation, income, source of.payment, participation in a
managed care plan, or health status.

2.2.2 Provider shall not discrinrinate with respect to quality of care between
Members or other patients because Members are members of the Plan.
Provider shall perform or provide Covered Ancillary Services to Members
with the same courtesy and professional manner as for any other patient
not affiliated with the Plan.

2.3 Standard of Care. Provider agrees to use its best efforts in providing and/or arranging for
the provision of Covered Ancillary Services, and implementing quality assurance and
utilization review pro grams in order to provide a standard of care in conformity with
· generally accepted medical practices in effect at the time of service.

2.4 Physician or Other Healthcare Ancillary Instructions. Ancillary shall provide only those
covered Ancillary Services specified by a Member's physician or other healthcare
provider. Such specifications will not be altered in any way without the prior written
consent of the Member's physician or other healthcare provider, unless Emergency
Service is required.

2.5 Cancellation of Product Orders. A Provider that offers delivery services for covered
products, such as durable medical equipment (DME), limited home health supplies
(LHHS), or outpatient drugs or biological products must reduce, cancel, or stop delivery
if the Member or the Member's authorized representative submits an oral or written
request. Provider must maintain records documenting the request.

Ancillary allprd 20!3vl3

TOI 10/17/13
-5-
 ARTICLE III
VERIFICATION OF COVERAGE

3.1 Verification/Certification. Unless an Emergency Medical Condition exists, Provider

shall verify each Member's eligibility for benefits through the appropriate TCHP Plan
prior to providing or arranging for the provision of Covered Ancillary Services for the
Member as follows:

3.1.1 Provider shall require the Member to produce his or her membership
identification card, or if the Member is a recent enrollee who has not yet
received such card, to produce an enrollment form. Provider
acknowledges that the membership card does not constitute complete
proof of eligibility; therefore, even if the Member produces the card,
Provider shall confirrn eligibility as provided in Subsection 3.1.2 below.

3.1.2 To verify such Member's eligibility, Provider shall telephone TCHP or

otherwise comply with TCHP's verification procedures.

3.1.3 Provider shall also verify that a Proper Referral has been obtained and that
any prior authorizations required pursuant to the Provider Handbook have
been obtained.

3.2 Discharge. Provider shall coordinate discharge plans for Members with TCHP and shall
provide discharge plans to Members, the Primary Care Physician and Specialist
Physicians prior to discharge.

ARTICLE IV
PERSONNEL

4.1 Personnel and Ancillarv Criteria. If Ancillary is a group or other organization, Provider
will, in the selection of medical directors, laporatory or imaging directors, general
supervisors, technologists and other Personnel, verify the individual's (i) current license
or registration to practice in Texas, if appropriate; (ii) professional work experience;
(iii) educational qualifications; and (iv) previous work references and personal character
references. If Provider utilizes the services of individuals who will physically and
directly be involved in a patient's care, then Ancillary shall, in addition to those items
listed above, verify the individual's CPR certification, if applicable.

Ancillary represents to TCHP that, at the time this Agreement is entered into, (i) it
possesses all necessary licenses and or other permits required by federal or state law and
(ii) it is eligible to participate in the Medicare program (Title XVIII of the Social Security
Act, as amended) and the Medicaid program (Title XIX of the Social Security Act, as
amended), and (iii) it complies with the rules and regulations applicable to the Medicare
and Medicaid programs. Ancillary agrees to maintain in good standing all such licenses,
certification, and accreditation during such period of time as this Agreement is in effect.

4.2 Personnel Evaluation. If applicable, Ancillary will: (i) evaluate the qualifications of all
Personnel before assignment; (ii) ensure that they maintain such qualifications during the
Ancillary allprd 2013vl3
TDJ 10/17113
-6-
 tenn of this Agreement; and (iii) be responsible for maintaining high standards of
performance of Covered Ancillary Services under this Agreement. Ancillary shall also
ensure that Personnel will comply with the appropriate standards of care for the provision
of Covered Ancillary Services and shall participate in all governmental programs
required pursuant to this Agreement, and comply with the mles and regulations thereof.

4.3 Orientation. Ancillary will ensure that all Personnel have received adequate instruction
and training to properly conduct Covered Ancillary Services. When appropriate, such
instruction and training will include explanation and testing on the proper use of the
specific equipment operated by Ancillary. TCHP shall not be liable for any damage to
any equipment of Ancillary. For Covered Ancillary Services to be rendered in the homes
of Members, Ancillary will ensure that all Personnel have completed a home-care
orientation.

4.4 Pavroll Obligations. Ancillary will maintain sole and direct responsibility for
compensation of Personnel, including payment of wages and other compensation,
reimbursement of expenses, and compliance with federal, State, and local tax withholding
requirements, workers compensation, social . security, unemployment, and other
obligations imposed on the employer of such Personnel.

4.5 Personnel Availability. If, for any reason, Ancillary is unable to fill a request by TCHP
for Personnel, Ancillary agrees to make reasonable efforts to obtain services for Member.

ARTICLEV
RESPONSIBILITIES OF TCHP AND PROVIDER
5.1 Prior Authorization Procedures. TCHP agrees to provide to Provider, prior to execution
of this Agreement, TCHP's prior authorization certification procedures as specified in the
Provider Handbook and further agrees that any changes in such procedures shall be
provided in writing to Provider.

5.2 Liaison. TCHP and Provider shall maintain a continuing liaison and shall closely
cooperate with each other in providing services to Members.

5.3 Administrative Responsibilities. TCHP and 'Provider shall perform all administrative
responsibilities necessary to carry out the terms of this Agreement.

5.4 Updates to Contract Information. Network providers must inform both the MCO and
HHSC's administrative services contractor of any changes to the provider's address,
telephone number, group affiliation, etc.

5 .5 Utilization Review. Provider, directly or through its designee, shall be solely responsible
at its expense for implementation, maintenance and operation of its utilization review
program relating to Ancillary Services provided as part of the Plan. Provider agrees to
participate and comply with TCHP's verification/certification process as described in
Article III. herein. ·

Ancillary allprd2013v13
TD! 10117/13
.7.
 5.6 Necessary Services. Provider and TCHP acknowledge and agree that any payment made
directly or indirectly to Provider under the terms and conditions of this Agreement is not
intended nor made as an inducement to withhold, reduce, or limit Medically Necessary
Covered Ancillary Services to any Member, nor shall TCHP use any financial incentives
or make any payment to Provider that acts directly or indirectly as an inducement to limit
Medically Necessary services. ·

5.7 Provider-Patient Relationship and Communications. TCHP agrees that it will not
interfere in any way or manner with the provider-patient relationship. TCHP will not
intervene in any way or manner with the rendition of services by Provider. Further,
TCHP shall not, as a condition of this Agreement with Provider, or in any other manner,
prohibit, attempt to prohibit, or discourage Provider personnel from, or in any way
penalize, terminate, or refuse to compensate Provider for Covered Ancillary Services for
discussing with or communicating to a current, prospective, or former patient, or a party
designated by the patient, (a) information or opinions regarding the patient's health care,
including, but not limited to, the patient's medical condition or treatment options, (b)
information or opinions regarding the provisions, terms, requirements or services of the
Plan as they relate to the medical needs of the patient, (c) upon termination of this
Agreement, the fact that this Agreement has terminated or that Provider will otherwise no
longer be providing Ancillary Services under the TCHP Plan, or (d) the fact that, if
Medica!ly Necessary Covered Ancillary Services are not available through Provider,
TCHP will, upon the request of Provider, and within time appropriate to the
circumstances relating to the delivery of the Covered Ancillary Services and the
condition of the Member, but in no event to exceed five (5) business days after receipt of
reasonably requested documentation, allow referral to a non-network provider. TCHP
shall not impose restrictions upon the Provider's free communication with Members
about each Member's medical conditions, treatment options, TCHP referral policies, and
other TCHP policies, including financial incentives or arrangements and all managed care
plans with whom Provider contracts.

5.8 No Retaliation. TCHP shall refrain from engaging in any retaliatory action against
Provider, including termination of or refusal to renew this Agreement, because Provider
reasonably files, on behalf of a Member, a complaint or grievance against TCHP or if a
TCHP decision has been appealed by Provider on behalf of a Member.

5 .9 Posting Notice of Complaint Process. Provider shall post in a location reasonably certain
to be seen by Members, a notice to Members regarding the process for resolving
complaints with TCHP. Such notice shall include the Texas Department of Insurance's
toll-free number for filing complaints. '

5.10 Economic Profiling Data. TCHP shall make available to Provider on request, the
economic profile of Provider, including the standards by which the Provider is measured.
Any use of an economic profile must recognize the characteristics of Provider's
operations that may account for variations from expected costs or utilization.

5. I I Compliance with TCHP Policies and Procedures. Provider represents and warrants that,
in performing services under this Agreement, Provider shall comply with the Provider
Ancillary allprd 2013v13
TDI 10/!7/13
-8-
 Handbook, and all policies and procedures of TCHP. Copies of the Provider Handbook
shall be provided to Provider upon execution of this Agreement. Amendments to the
Provider Handbook rnay be made at any time by TCHP in its sole discretion.

5.12 Advance Directives. Provider must comply with the requirements of state and federal
laws, rules and regulations relating to advance directives.

5.13 Behavioral Health. If Provider provides Behavioral Health Services, as defined above,
Provider must comply with the tenns of Schedule A attached hereto, which is
incorporated herein by reference.

5.14 Professional Conduct. While performing Covered Ancillary Services under the
Agreement, Provider and its personnel must (i) comply with applicable Texas rules,
regulations and HHSC requests regarding personal and professional conduct generally
applicable to the service locations; and (ii) otherwise conduct themselves in a
businesslike and professional manner.

5.15 Ancillary Notice. Ancillary shall send written notice to TCHP within forty-eight (48)
hours or such lesser period of time as required by the applicable statute of this State, of
receiving any written or oral notice of any legal, governmental or other ilction initiated or
consummated against Ancillary or Personnel used by Ancillary, including, but not limited
~= .
a) cancellation of Ancillary' s general and professional liability insurance;

b) Ancillary's suspension from participation in the Medicare or Medicaid

program due to fraud or abuse or for any other reason; or

c) any malpractice suit involving Ancillary, Personnel used by Ancillary or

TCHP.

5.16 Gifts and Gratuities. Provider may not offer or give anything of value to an officer or
employee of HHSC or the State of Texas in violation of state law. A "thing of value"
means any item of tangible or intangible property that has a monetary value of more than
Fifty Dollars ($50.00) and includes, but is not limited to, cash, food, lodging,
entertainment and charitable contributions. The tenn does not include contributions to
public office holders or candidates for public office that are paid and reported in
accordance with state and/or federal law. TCHP may terminate this Agreement at any
time for violation of this requirement.

5.17 Announcement. Subject to the provisions of Article XI hereof, Ancillary agrees that
TCHP may use the name of Ancillary for the purpose of carrying out the tenns of the
Agreement. This includes the distribution of an announcement by TCHP to the media
that an arrangement has been established between TCHP and Ancillary.

5.18 Needs Assessment. When appropriate, TCHP will assess and/or coordinate the need for
Covered Ancillary Services to be provided under this Agreement in cooperation with the
Member's physician.
Ancillary allprd 2013vl3
TD! 10117113
-9-
 5.19 Licenses. TCHP will comply with all requirements of the law relating to any business in
which TCHP is engaged relating to this Agreement, and shall obtain and maintain in
effect all p=its, licenses, and governmental approvals necessary for that purpose.

5.20 Laws. Rules and Regulations. Provider understands and agrees that it is subject to all
state and federal laws, rules, regulations, waivers, policies ahd guidelines, and court- ·
ordered consent decrees, settlement agreements, or other court orders that apply to this
Agreement, TCHP's managed care contract with HHSC, TCHP's Plans, and all persons
or entities receiving state and federal funds. Provider understands and agrees that any
violation by Provider of a state or federal law relating to the delivery of services pursuant
to this Agreement, or any violation of TCHP's contract with HHSC, could result in
liability for money damages, and/or civil or criminal penalties and sanctions under State
and!or federal law.

5.21 Compliance with Laws. Provider acknowledges that it is subject to and must comply
with all state and federal laws, rules, regulations, and all subsequent amendments or
modifications, and reporting requirements that apply to all persons or entities receiving
state and federal funds, including provisions of the Pro-Children Act of 1994 (20 U.S.C.
§6081 et seq.) regarding the provision of a smoke-free workplace and promoting the non-
use of all tobacco products; National Environmental Policy Act of 1969 (42 U.S.C. §4321
et seq.) and Executive Order 11514 ("Protection and Enhancement of Environmental
.Quality") relating to the institution .of environmental quality control measures; Clean Air
Act and Water Pollution Control Act regulations (Executive Order 11738, "Providing for
Administration of the Clean Air Act and Federal Water Pollution Control Act with
Respect to Federal Contracts, Grants, and Loans"); State Clean Air Implementation Plan
(42 U.S.C. §7401 et seq.) regarding conformity of federal actions to State Implementation
Plans under §l 76(c} of the Clean Air Act; and Safe Drinking Water Act of 1974 (21
U.S.C. §349; 42 U.S.C. §300f to 300j-9) relating to the protection of underground
sources of drinking water; the exclusion, debarment, and suspension provisions of
Section 1128(a) or (b) of the Social Security Act (42 USC § 1320 a-7), or Executive
Order 12549; the provisions of the Byrd Anti-Lobbying Amendment, found at 31 U.S.C.
1352, relating to use of federal funds for lobbying for or obtaining federal contracts;
Health and Safety Code, Chapter 85, Subchapter E, relating to the Duties of State
Agencies and State Contractors for confidentiality of AIDS and HIV-related medical
information and an anti-discrimination policy for employees and Members with
conununicable diseases; confidentiality provisions relating to Members information;
Section 504 of the Rehabilitation Act of 1973 . (29 U.S.C. §794); the Americans with
Disabilities Act of 1990 (42 U.S.C. §12101 et seq.), and all requirements imposed by the
regulations implementing these acts and all amendments to the laws and regulations; the
provisions of Executive Order 11246, as amended by 11375, relating to the Equal
Employment Opportunity; Title VI of the Civil Rights Act of!964, (42 U.S.C. §2000d et
seq.) and as applicable 45 C.F.R. Part 80 or 7 C.F.R. Part 15; ; Age Discrimination Act
of 1975 (42 U.S.C. §§6101-6107; Title ix of the Education Amendments of 1972 (20
U.S.C. §§1681-1688); Food Stamp Act of 1977 (7 U.S.C. §200 et seq.); Executive
Order 13279, and its implementing regulations at 45 C.F.R. Part 87 or 7 C.F.R. Part 16;
and the HHS agency's administrative rules as set forth in the Texas Administrative Code,
to the extent applicable to this Agreement; The Immigration and Nationality Act (8
Ancillary allprd 2013vl3
TD! 10117113
- 10 -
 U.S.C. § 1101 et seq.) and all subsequent immigration laws and amendments; the Health
Insurance Portability and Accountability Act of 1996 (HIPAA) (Public Law 104-191);
and the Health Information Technology for Economic and Clinical Health Act (HITECH
Act) at (42 U.S.C. 17931 et. seq.) Texas Government Code, Title 10, Subtitle D, Chapter
2161 and 1 TAC§ 111.ll(b) and 111.13(c)(7) relating to the good faith effort to use
Historically Underutilized Businesses (HUBs); section 9-7.06 of article IX of the General
Appropriations Act of 1999 regarding "Buy Texas"; Texas Family Code § 231.006
regarding child support payments; and chapter 552 of the Texas Government Code
regarding the release of public information.

5.22 Family Planning Services. Provider agrees that Members requesting contraceptive
services or family planning services shall also be provided counseling and education
about family planning and family planning services available to them. Provider must
comply with state and federal laws and regulations governing Members' confidentiality
(including minors) when providing information on family planning services to Members.
Provider cannot require parental consent for minors to receive family planning services.

5.23 Tuberculosis. Provider must coordinate with the local tuberculosis control program to
ensure that all Members with confirmed or suspected. tiiberculosis have a contact
investigation and receive "directly observed therapy." Provider shall report to the Texas
Department of State Health Services ("TDSHS") or the local tuberculosis control
program any Member who is non-compliant, drug resistant or who is or may be posing a
public health threat.

5.24 Women. Infants and Children C"WIC"). Provider must coordinate with the Texas WIC
Special Supplemental Nutrition Program to provide medical information necessary for
WIC eligibility determinations, such as height, weight, hematocrit or hemoglobin.

5.25 Fraud and Abuse. Provider understands and agrees that it is subject to all state and
federal laws and regulations relating to fraud, abuse, or waste in health care and the
Medicaid and/or CHIP Programs, as applicable. Provider shall cooperate and assist
IBISC and any state or federal agency that is charged with the duty of identifying,
investigating, sanctioning or prosecuting suspected fraud, abuse or waste. Provider
understands and agrees that HHSC Office of Inspector General ("OIG") and/or the Texas
Medicaid Fraud Control Unit must be allowed to conduct private interviews of Provider
and its employees, agents, contractors and patients, and subcontractors and their
personnel, witnesses and patients. Provider and its employees, agents and contractors
shall cooperate fully in making its personnel available in person for interviews,
consultation, grand jury proceedings, pre-trial conference, hearings, trial and in any other
process, including investigations at Provider's own expense. Provider shall comply with
requests for information from such entities, in the form and language requested. Provider
must prqvide originals and/or copies of any and all information, allow access to premises,
and provide records to the OIG, HHSC, the Centers for Medicare and Medicaid Services
("CMS"), the U.S. Department of Health and Human Services, Federal Bureau of
Investigation, Texas Department of Insurance, the Texas Attorney General's Medicaid
Fraud Control Unit or other unit of state or federal government, upon request and free-of-
charge. If Provider has placed required records in another legal entity's records, such as
Ancillary al Ip rd 2013v13
TOI 10117113
- 11 -
 a hospital, Provider is responsible for obtaining a copy of these records for use by the
above-named entities or their representatives. Provider contracts that are requested by
any agency with authority to investigate and prosecute fraud and abuse must be produced
at the time and place required by HHSC or the requesting agency. Provider contracts
requested in response to a public information request must be produced within forty-eight
(48) hours of the request. Requested contracts and all related records must be provided
free of charge to the requesting agency. Compliance with these requirements will be at
the Provider's own expense. Provider must report any suspected fraud or abuse,
including, without limitation, any suspected fraud and abuse committed by TCHP or a
Member to the HHSC OIG.

5.26 Early Childhood Intervention Services. Provider shall cooperate and coordinate with
local Early Childhood Intervention ("ECI") programs to comply with federal and state
requirements relating to the development, review and evaluation of Individual Family
Service Plans ("IFSP"). Provider understands and agrees that any Medically Necessary
Health and Behavioral Health Services contained in an lFSP must be provided to the
Member in the amount, duration, scope and service setting established in the IFSP.

5.27 Marketing. Provider agrees to comply with state and federal laws, rules, and regulations
governing marketing. In addition, Provider agrees to comply with HHSC' s marketing
policies and procedures, as set forth in HHSC's Uniform Managed Care Manual, and the
Provider Handbook. Provider is prohibited from engaging in direct marketing to
Members that is designed to increase enrollment in a particular health plan. The
prohibition should not constrain Provider from engaging in permissible marketing
activities consistent with broad outreach objectives and application assistance.

5.28 Medicaid Enrollment. Provider must enter into and maintain a Medicaid provider
agreement with HHSC or its agent to participate in the Medicaid Program, and must have
a Texas Provider Identification Number ("TPIN"). Provider warrants that Provider has
not been excluded from participation in any program under Title XVIU or the Texas
Medical Assistance Program under any of the provisions of Section 1128(a) or (b) of the
Social Security Act (42 USC Section 1320(a)7) or Executive Order 12549. ·Provider shall
notify TCHP within ten (I 0) days of the time Provider receives notice of any action being
taken against Provider which could result in exclusion from the Medicaid program.
Provider shall notify TCHP immediately of any and all pending or potential litigation or
administrative actions against Provider. Provider warrants that as of the effective date of
this Agreement, there are no pending or potential administrative actions against Provider
that have not been disclosed to TCHP.

5.29 National Provider Identifier. Provider shall have a National Provider Identifier (''NPI")
in accordance with 45 C.F.R. Part 162, Subpart D and shall provide TCHP with the NP!
number upon execution of this Agreement.

5.30 Quality Assessment and Performance Improvement. Provider shall comply with TCHP's
Quality Assessment and Performance Improvement ("QAPI") program requirements as
set forth in the Provider Handbook and as amended from time to time.

Anclllwy allprd 2013v 13

TD! 10117fl3
-12-
 5.31 Texas Health Steps. Provider must comply with TDSHS's mandated education and
training provided by managed care organizations regarding the scope of benefits
available in the Texas Health Steps Program. Training must include Texas Health Steps
benefits, the periodicity schedule for Texas Health Steps checkups and immunizations,
and services available under the Texas Health Steps program which are available to all
Medicaid recipients and are available to ensure that Members can comply with the
periodicity schedule, including but not limited to transportation, dental check-ups, and
Comprehensive Care Program. Providers should be educated and trained to treat each
Texas Health Steps visit as an opportunity for a comprehensive assessment of the
Member. Provider must send all Texas Health Steps newborn screens to the TDSHS or a
TDSHS-certified laboratory. Provider must include detailed identifying infonnation for
all screened newborn Members and each Member's mother to allow HHSC to link the
screens perfonned at the hospital with screens perfonned at the two-week follow-up.

5.32 Child Supoort Obligations. The parties acknowledge thatTexas Family Code§ 231.006
requires TCHP to withhold contract payments from any for-profit entity or individual
who is at least thirty (30) days delinquent in child support obligations. It is the Provider's
responsibility to detennine and verify that no owner, partner, or shareholder in a Provider
who has at least a 25% ownership in a Provider is delinquent in child support obligations.
Provider must attach a list of the names and Social Security nilmbers of aJl shareholders,
partners, or owners who have at least a 25% ownership interest in Provider. A child
support obligor who is more than thirty (30) days delinquent in paying child support or a
business entity in which the obligor is a sole proprietor, partner, shareholder or owner
with an ownership interest of at least 25% of a Provider is not eligibie to receive payment
under this Agreement. If TCHP is infonned and verifies that a child support obligor who
is more than thirty (30) days delinquent is a partner, shaieholder, or owner with at least a
25% ownership interest in a Provider, it will withhold any payments due under this
Agreement until it has received satisfactory evidence that the obligation has been
satisfied or that the obligor has entered into a written repayment request.

5.33 Use of Provider Perfonnance Data. Provider shall permit TCHP to use perfonnance data
related to the Covered Services for purposes including the following: (i) quality
improvement activities; (ii) public reporting consumers; (iii) preferred status designation
in TCHP's network; and/or (iv) reduced member cost sharing.

ARTICLE VI
BILLING AND PAYMENT

6.J Payments to Provider. TCHP shall compensate Provider in accordance with Exhibit A to
this Agreement. TCHP shall have final detennination authority over whether a service is
considered a Covered Service. Provider understands and agrees that HHSC is not liable
or responsible for payment for Covered Ancillary Services rendered pursuant to this
Agreement.

6.2 Program Violation. Program violations arising out of performance of the contract are
subject to administrative enforcement by the Health and Human Services Commission

Ancillary allprd2013vll
TD! 10117/13
- 13.
 Office of the Inspector General (OIG) as specified in I Texas Administrative Code,
Chapter 371, Subchapter G.

6.3 Claims Submission. TCHP adheres to the claims processing requirements set forth in the
HHSC Uniform Managed Care Claims Manual, Chapter 2.0. For all Covered Ancillary
Services rendered in accordance with this Agreement, Provider shall submit to TCHP a
Clean Claim within ninety-five (95) days from the date of service for Provider's services
or supplies which identifies the Covered Ancillary Services provided to Members. If a
claim is not received by TCHP within ninety-five (95) days, the claim will be denied.
Upon request, Provider will provide a copy of a Member's itemized bill at no charge to
TCHP. TCHP agrees to be reasonable in the request for such itemized bills. Such claim
shall be submitted in hard copy or electronic transmission, if available, in standard CMS-
1500 (or its successor) format or UB-92 (or its successor) fonnat, or ASC Xl2N 837 (or
its successor) format. Such hard copy claim materials or electronic information shall be
complete, accurate and provided to TCHP at the addresses listed in Exhibit C.
Submission of a Clean Claim shall require Provider to complete all required information
as set forth more particularly in the TCHP Provider Handbook. TCHP may not refuse to
process or pay an electronically submitted Clean Claim because the claim is submitted
together with or in a batch submission with a claim that is not a Clean Claim. Appeals
and corrective adjustments of claims, for any reason, must be requested within one
hundred twenty (120) days of the date of disposition for any Medicaid or CHIP TCHP
product. Providers may appeal any disposition of a claim in accordance with the TCHP
Provider Handbook.

Provider acknowledges that TCHP may request that additional information be submitted
to process a Clean Claim; provided, however, only infonnation specific to the claim or
episode of care and relevant and necessary for resolution of the claim that is contained or
is in the process of being incorporated into a patient's medical record or billing record
will be required.

If Provider files with the wrong plan within the 95-day submission requirement and
produces documentation to support such timely submissiOn, TCHP shall honor the initial
filing date and process the claim without denying resubmission. Filing must occur; in
this instance, within 95 days of receiving the Remittance· and Status Report from the
wrong health plan. TCHP has the right · to review· and determine the necessary
documentation required upon refiling of claims. ·

Provider must comply with the requirements of Texas Government Code §531.024161,
regarding the submission of claims involving supervised providers. ·

6.4 Electronic Submission Requirements. TCHP has established an electronic claims filing
system that is offered to each of its contracted Providers for the purpose of submitting
and receiving claims information. This electronic data interchange allows for the
automated processing and Adjudication of claims.

TCHP shall, at all times, require the use ofHIPAA-compliant electronic formats.

Ancillary allprd 2013vl3

TOI 10/17/13
- 14 -
 6.5 Deficient Claims. If a submitted claim is determined by TCHP to be Deficient, Provider
shall be notified that the claim is Deficient within thirty (30) calendar days of receipt.
The tenn "Deficient Claim" shall mean a claim submitted by a physician or Provider for
medical care or heal th care services rendered to a Member that does not contain the data
necessary for TCHP to Adjudicate and accurately report the claim.

6.6 Requests for Additional Information. Additional information necessary to allow

Adjudication of a Deficient Claim must be requested within thirty (30) days ofreceipt of
the original claim. Deficient Claims (both Deficient - Pended or Deficient - Denied
Claims) for which additional information is requested must be Adjudicated by TCHP
within thirty (30) days from the date of receipt of the requested information. Deficient -
Pended or Deficient - Denied Claims for which additional information is not received
must be Adjudicated - Denied within thirty (30) days from the date the information was
requested from the Provider.

TCHP shall make every effort to avoid making multiple requests from a Provider in
connection with a claim.

6. 7 Claims Payment. TCHP shall: (1) pay the Clean Claim for Covered Ancillary Services
submitted by Provider within thirty (30) days from the date the claim is received and pay
the Clean Claim for pharmacy services no later than eighteen (18) days of receipt if
submitted electronically or twenty-one (21) days of receipt if submitted non-
electronically; (2) pay the portion of the claim that is not in dispute and notify Provider
why the remaining portion of the claim will not be paid; or (3) deny the entire claim and
notify Provider why the claim will not be paid. Such Clean Claim shall be submitted to
the addresses listed in Exhibit C. Deficient - Pended or Deficient - Denied Claims for
which additional information has been requested, in accordance with Section 6.5, shall be
Adjudicated by TCHP within thirty (30) days from the date the information was
requeste.d by TCHP from the Provider. ·

A claim is considered to have been paid on the date of (i) postmark, if a claim payment is
delivered by United States mail; (ii) electronic submission, if a claim payment is made
electronically; (iii) delivery of payment through a commercial carrier; or (iv) receipt by
Provider if claim payment is made through other methods not described herein.

6.8 Offsets and Withholding. TCHP shall have the right, in accordance with this Agreement,
to offset from current payments due to Provider the amounts of all duplicate or erroneous
claims payments, regardless of cause. Provider acknowledges that TCHP shall engage in
back-up withholding from all payments due to Provider if Provider fails to disclose tax
identification numbers to TCHP or gives incorrect numbers.

6.9 Hold Harmless.

6.9.1 Provider hereby agrees that in no event, including, but not limited to
nonpayment by TCHP, TCHP insolvency, or breach of this Agreement,
shall Provider bill, charge, collect a deposit from, seek compensation,
remuneration, or reimbursement from, or have any recourse against a

Ancillary allprd 2013vl3

TD! 101!7/!3
- 15 -
 Member, or persons other than TCHP acting on their behalf, for Ancillary
Services provided pursuant to this Agreement. Provider further agrees that
(i) this provision shall survive the termination of this Agreement
regardless of the cause giving rise to tennination and shall be construed to
be for the benefit of Members and that (ii) this provision supersedes ariy
oral or written contrary agreement now existing or hereafter entered into
between Provider and any Member, or persons acting on their behalf. Any
modifications, additions, or deletion to the provisions of this clause shall
become effective on a date no earlier than fifteen (15) days after the
Commissioner of Insurance of the State of Texas has received written
notice of such proposed changes. Provider is specifically prohibited from
billing or collecting any amount from a Medicaid Member for Covered
Ancillary Services provided pursuant to this Agreement. Provider
understands that federal and state laws provide severe penalties for any
provider who attempts to bill or collect any payment from a Medicaid
recipient for a Covered Service.

6.9.2 Notwithstanding the foregoing, Provider shall have the right to seek
reimbursement from any Member for any of the following:

a) Any co-payment, coinsurance or deductible amount appropriately

payable by a Member under a TCHP Plan;

b) Charges for non-covered Ancillary Services, if Provider has

informed Member of costs for non-covered services prior to
rendering such services and having obtained a Private Pay fonn
from such Member;

c) Charges incurred when a Member remains at Provider after the

discharge time specified in discharge orders written by a
Participating Physician;

d) Any other sums due Provider for any services provided to a

Member for which TCHP is not responsible tomake payment; and

e) Any sums due Provider. for any services provided to a Member for
which a party other than TCHP is responsible to make payment.

The parties understand and agree that the charges described in this Section
6.9.2(b)-(e) may be at rates other than those set forth on the attached exhibits.

6.9.3 Provider acknowledges that TCHP will initiate and maintain any action
necessary to stop Provider or its employees, agents, assigns, trustees, or
successors-in-interest from maintaining an action against HHSC, a Health
and Human Services agency, or any Member to collect payment from
HHSC, an HHS agency, or any Members over and above allowable co-
payments or deductibles, excluding payment for non-Covered Ancillary

Ancillary allprd 2013vl3

TD! 10117/13
- 16 -
 Services. This provision does not restrict CHIP Provider from collecting
allowable copayment and deductible amounts from CHIP Members.

6.10 Professional Services. It is understood and agreed that the professional component of
services rendered by physicians or other professionals who have contracted with
Ancillary to provide such services are not included in the rates payable pursuant to this
Agreement for Ancillary Services.

6.11 Coordination of Benefits. Provider and TCHP agree to cooperate and use reasonable
efforts to accomplish coordination of benefits with other group carriers consistent with
standard industry practices and in accordance with Texas Insurance Code § 843.349,
including using reasonable efforts to secure the required information to implement such
coordination. If Provider submits a claim to TCHP and another insurer, Provider shall
provide written notice on the claim and shall include the identity of the other insurer. If
TCHP's coverage is secondary, Provider may first bill the primary payor. When TCHP is
found to be secondary, TCHP shall be obligated to compensate Provider within forty-five
(45) days of receipt of explanation of benefits by the primary carrier.

6.12 Emergency Services and Out-of-Area Urgent Care. In circumstances where it is·
reasonably possible for Provider to do so, Provider shall provide, arrange for or assist in
arranging for Covered Emergency Services and Covered Out-of-Area Urgent Care.
TCHP will pay for Covered Emergency Services and Covered Out-of-Area Urgent Care
performed by non-network physicians or providers at the negotiated or usual and
customary rate. The following provisions and procedures apply tci Covered Emergency
Services and Covered Out-of-Area Urgent Care without regard to whether or not the
physician or provider furnishing the services has a contractual or other arrangement with
TCHP to provide items or services to Members: ·

6.12.1 any medical screening examination or either evaluation required by state or

federal law which is necessary to detennine whether an emergency
medical condition exists will be provided to Members in the emergency
department of a hospital or comparable facility;

6.12.2 necessary Emergency Services will be provided to Members, including the

treatment and stabilization of an emergency medical condition;

6.12.3 services originating in a hospital emergency department or compaiable

facility following treatment or stabilization of an emergency medical
condition as approved by TCHP.

It is understood that circumstances may prevent Provider from having any role in a
Member's Covered Emergency Medical Care cir Covered Out-of-Area Urgent Care until:
(i) the Member has been stabilized and Provider has been notified of the situation, in the
case of a medioal emergency within the Service Atea; or (ii) the Member has returned to
the Service Area, in the case of a medical emergency or need for urgent care outside the
Service Area. Primary Care Physicians, on behalf of TCHP, will respond to inquiries
regarding post-stabilization care from the treating physician or provider within the time

Ancillary allprd 2013vl3

TDI I0/17113
- 17 -
 appropriate to the circumstances relating to the delivery of services and the condition of
the patient, but in any case, within one (1) hour after the inquiry is received.

6.13 CoJJayments/Deductibles. Provider acknowledges Provider is responsible for collecting

at the time of the service any applicable CHIP copayments or deductibles in accordance
with the terms of the CHIP cost-sharing limitations. Provider shall not charge: cost-
sharing or deductibles to CHIP Members of Native American Tribes or Alaskan natives;
co-payments or deductibles to a CHIP Member with an JD card that indicates the
Member has inet his or her cost-sharing obligation for the balance of their term of
coverage; co-payments for well-child or well-baby visits or immunizations for CHIP
Members. No cost sharing may be collected from a CHIP member for the balance of their
term of coverage. Provider acknowledges that co-payments are the only amounts that
Provider may collect from CHIP Members up to their cost- sharing limitation, except for
costs associated with unauthorized non-emergency services provided to a Member by
out-of-network providers for non-Covered Ancillary Services.

6.14 Non-Covered Ancillary Services. Provider shall inform Members of the costs for non-
Covered Ancillary Services and must obtain a signed Private Pay Agreement from such
Member. A sample Private Pay Agreement is included in the Provider Handbook. Except
for costs associated with unauthorized non-emergency services provided to Member by
out of network providers and for non-covered services, the co-payments outlined in the
HHSC Uniform Managed Care Manual are the only amounts a provider may collect.

6.15 Member's Ability to Contest Claims. Providers are prohibited from including in their
contract with their covered members language which limits the member's ability to
contest claims payment issues, or that binds the member to the insurer's interpretation of
the contract terms.

6.16 Liability. In the event that TCHP becomes insolvent or ceases operations, Provider
understands and agrees that its sole recourse against TCHP will be through TCHP's
bankruptcy, conservatorship, or receivership estate. Provider understands and agrees that
TCHP's Members may not held liable for TCHP's debts in the event of the entity's
insolvency. Provider understands and agrees that HHSC does not assume liability for the
actions of, or judgments rendered against, TCHP, its employees, agents or subcontractors.
Further, Provider understands and agrees that there is D,O right of subrogation,
contribution, or indemnification against HHSC for any duty .owed to Provider by TCHP
or any judgment rendered against TCHP. HHSC's liability to Provider, if any, is
governed by the Texas Tort Claims Act, as amended. or moQified (Tex. Civ. Pract. &
Rem. Code§ 101.001 et seq.).

6.17 Pavment. TCHP agrees to pay or arrange to pay Ancillary in accordance with the
provisions of Article VI for Covered Ancillary Services provided under this Agreement.

6.18 Third Party Recovery. Provider shall not interfere with or place liens upon the state's
right or TCHP's right, acting as the state's agent, to recovery from third party resources.
Provider agrees to seek recovery from potential third party resources prior to seeking
payment from TCHP. Provider agrees to comply with the provisions of 1 TAC §

Ancillary allprd 2013vl3

TD! I0117/13
- 18 -
 354.2301 et seq. relating to Third Party Recovery in the Medicaid Program. Provider
agrees not to seek recovery in excess of the Medicaid payable amount or otherwise
violate state and federal laws.

6.19 Communication Regarding Clean Claims. All written communication, including claims,
pertaining to this Article VI shall be submitted via first class United States mail, return
receipt requested; United States mail; overnight delivery service; electronic submission;
or by hand delivery. Proof of delivery shall be presumed and maintained by the sender in
accordance with the Texas Administrative Code applicable provisions.

6.20 Penalties. TCHP shall adjudicate (finalize as paid or denied adjudicated) clean claims
within 30 days from the date the claim is received by Provider. TCHP will pay Provider
interest at a rate of 18% per annum on all clean claims that are not adjudicated within 30
days.

TCHP is not liable for the penalties set forth in this section:

a) If the failure to timely pay the claim is a result of a catastrophic event

certified by TCHP; or

b) If the claim was paid timely, but for less than the contracted rate, and:

(i) the Provider notifies TCHP of the underpayment after the one
hundred eightieth (l 801h) day after the· date the underpayment was
received; and

(ii) TCHP pays the balance of the claim on dr before the forty-fifth
(45th) day after TCHP receives written notice of the underpayment.

6.21 Fee Schedule Information. Provider may request information necessary to determine that
the Provider is being compensated in accordance with the Agreement. TCHP may
provide the information by any reasonable method through which the Provider can access
the information, including e-mail, computer disks, paper or access to an electronic
database. TCHP shall rrovide the fee schedules and other information within TCHP's
control by the tenth (101 ) day after the date TCHP receives the request.

6.21.1 The information must include a Provider-specific summary and

explanation of all payment and reimbursement methodologies that will be
used to pay claims submitted by Provider. At a minimum, the information
will include: (i) a fee schedule, including, if applicable, CPT, HCPCS,
CDT, ICD-9-CM codes and modifiers that pertains to the range of health
care services reasonably expected to be delivered under the Agreement by
that Provider on a routine basis; (ii) all applicable coding methodologies;
(iii) all applicable bundling processes, which must be consistent with·
nationally recognized and generally accepted bundling edits and logic;
(iv) all applicable downcoding policies; (v) a description of any other
applicable policy or procedure TCHP may use that affects the payment of
specific claims submitted by or on behalf of Provider, including
Ancillary allprd 2013vl3
TDI 10117113
"19 -
 recoupment; (vi) any addenda, schedules, exhibits or policies used by
TCHP in carrying out the payment of claims that are necessary to provide
a reasonable understanding of the infonnation provided pursuant to the
request; and (vii) the publisher, product name and version of any software
TCHP uses to determine bundling and unbundling of claims.

6.21.2 In the case of a reference to source information as the basis for fee
computation that is outside the control ofTCHP, such as state Medicaid or
federal Medicare fee schedules, TCHP shalt clearly identify the source and
explain the procedure by which the Provider may readily access the source
electronically, telephonically, or as otherWise agreed to by the parties and
shall be provided by the thirtieth (30th) day after the date TCHP received
the request. Nothing in this section shall be construed to require TCHP to
provide specific information that would violaie any applicable copyright
law or licensing agreement.

6.21.3 Provider may not use or disclose the information for any purpose other
than: (i) the Provider's practice management, (ii) billing activities,
(iii) other business operations, or (iv) communications with a
governmental agency involved in the regulation of health care or
insurance. Provider may not use this information to knowingly submit a
claim for payment that does not accurately represent the level, type or
amount of services that were actually provided to a Member or to
misrepresent any aspect of the services and may not rely upon information
provided pursuant to this section about a service as a representation that a
Member is covered for that service.

6.21.4 A Provider that receives information under this section may terminate his
or her participation under the Agreement on or before the thirtieth (30'h)
day after the date of receipt of the information without penalty or
discrimination in participation in other health care products or plans.

6.22 Amendment. No amendment, revision, or substitution of any of the claims payment

procedures or any of the information required to be provided in the Agreement shall be
effective, unless TCHP provides at least ninety (90) calendar days written notice to
Provider identifying with specificity the amendment, revi.sion or substitution.

ARTICLE VII
TERM AND TERMINATION

7.1 Term. The initial term of this Agreement shall commence on the Effective Date to
continue for a one year period and shall be renewed automatically for successive one (1)
year terms, unless either party gives the other party written notice of termination at least
ninety (90) days prior to the expiration of the term.

Ancilhcy allprd 2013vl3

TDI 10/17/13
-20 -
 7.2 Termination With or Without Cause. TCHP or Provider may terminate this Agreement at
any time, with or without cause, by giving Provider or TCHP, as the case may be, ninety
(90) days written notice of its intention to terminate.

7.3 Termination for Default. This Agreement may be terminated upon an Event of Default
by a party. The following shall constitute Events of Default hereunder:

7.3.1 Provider's failure or refusal to provide Covered Ancillary Services to

Members under this Agreement.

7.3.2 The failure of TCHP to perform its obligations to reimburse Provider for
Covered Ancillary Services provided under this Agreement.

7.3 .3 The failure by any party to perform, keep, or fulfill any material covenant,
undertaking, obligation or condition set forth in this Agreement (other
than the obligation to pay money).

The non-defaulting party shall deliver written notice to the defaulting party and state the
specific default. If such default continues for a period of thirty (30) days !)fter written
notice of such failure, the non-defaulting party shall provide the defaulting party with no
less than ninety (90) days' written notice of its intention to terminate.

7.4 Automatic Termination. This Agreement shall automatically terminate, effective

immediately upon written notice to Provider, upon ·the occurrence of any of the
following events:

7.4 .1 Imminent harm to patient health; or

7.4.2 An action by a state licensing board or other governmental agency against

Provider's license or involving Medicare or Medicaid certification; or

7.4.3 Fraud or malfeasance by Provider.

In the event of death or permanent disability of Provider, this Agreement shall

automatically terminate effective immediately upon such event.

7.5 Termination in the Event of Bankruptcy. To the extent permitted by applicable law,
either TCHP or Ancillary may terminate this Agreement by giving at least ninety (90)
days written notice of termination in the event of bankruptcy. As used in this Section 7.5,
bankruptcy of an entity shall mean: (i) the filing of a petition commencing a voluntary
case against the entity under the United States Bankruptcy Code; (ii) a general
assignment by the entity for the benefit of creditors; (iii) the insolvency of the entity;
(iv) the inability of the entity to pay its debts as they become due; (v) the filing by the
entity of any petition or answer in any proceeding seeking for itself or consenting to, or
acquiescing in, any insolvency, receivership, composition, readjustment, liquidation,
dissolution, or similar relief under any present or future statute or regulation, or the filing
the entity of an answer or other pleading admitting or failing to deny or to contest the
material allegations of a petition filed against it in any such proceedings; (vi) the entity's
Ancillary allprd 2013vl3
TD! 10117113
• 21 •
 seeking or consenting to, or acquiescence in, the appointment of, any trustee, receiver or
liquidator of it, or any material part of its property; or (vii) the commencement against the
entity of an involuntary case under the United States Bankruptcy Code, or a proceeding
under any receivership, composition, readjustment, liquidation, insolvency, dissolution,
or like law or statute, which case or proceeding is not dismissed or vacated within
sixty (60) days.

7.6 Rights and Responsibilities Upon Termination.

7.6.1 Advanced Notice to Members. In the event of termination of this

Agreement, or TCHP Plan shall provide any notice required by federal or
state law of the impending termination of Provider to Members who are
undergoing treatment at Provider prior to the time of tennination. TCHP
shall make a good faith effort to provide mitten notice of Provider's
termination to Members receiving primary care from, or who were seen on
a regular basis by Provider, within fifteen (15) days after receipt or
issuance of the termination notice, in accordance with 42 C.F .R. §
438.IO(f)(S). If Provider is terminated for reasons related to imminent
harm to the health of a Member, TCHP shall notify Members immediately
of Provider's termination. Provider acknowledges that TCHP will notify
the CHIP administrative contractor of the termination.

7.6.2 Termination Review. At least ninety (90) days before the effective date of
a termination of Provider, TCHP shall provide a written explanation to
Provider of the reasons for termination, except in cases of (i) imminent
harm to a patient health, (ii) an action by state medical or other physician
licensing board or other governmental agency that effectively impairs
Provider's ability to practice medicine, (iii) fraud or (iv) malfeasance; in
which cases the termination shall be immediate. No later than 30 days
following receipt of the termination notice, and except in a case in which
Provider has an action against his/her license by a state board of other
governmental agency, the Provider may request a review of the proposed
or immediate termination by the TCHP Advisory Review Panel, or its
successor. The TCHP Advisory Review Panel shall appoint at least one
representative in Provider's specialty or sh;rrilar specialty, if available,
appointed to serve on the panel. The decision of the TCHP Advisory
Review Panel shall be considered by, but noi be binding on, TCHP in
making its termination decision. Within thirty (30) days following receipt
of the Provider's request for review and before the effective date of the
termination, the TCHP Advisory Review Panel must make its formal
recommendation, and the MCO must communicate its decision to the
provider. TCHP shall provide Provider upon request, a copy of the
recommendation of the determinations of the TCHP Advisory Review
Panel and TCHP. Provider shall be entitled, on request, to an expedited
review process by TCHP. TCHP shall comply with applicable Texas
Insurance Code provisions.

Ancillaryallprd 2013vl3
TDI 10117/13
-22 -
 7.6.3 Continuity of Care/Special Circumstance Post Termination. Following
termination of this Agreement, Provider shall continue to provide Covered
Ancillary Services to any Member who is ·under active treatment either
until such treatment is completed or responsibility is assumed by another
Participating Ancillary. In no case will treatment of a Member be
prematurely terminated due to the terinination of this Agreement.
Provider shall be compensated for any such Covered Ancillary Services in
an amount equal to l 00% of the Medicaid Fee Schedule or actual billed
charges, whichever is less. Except for reasons of medical competence or
professional behavior of Provider, termination of this Agreement shall not
release TCHP from the obligation to compensate Provider for Covered
Ancillary Services rendered to a Member of Special Circumstance, at no
less than the rate of compensation under this Agreement for a period of
time specified below in exchange for continuity of ongoing treatment of a
Member then receiving Medically Necessary treatment in accordance with
the dictates of medical prudence. For purposes of this Section 7.6.3,
"Special Circumstance" shall mean a condition regarding which Provider
reasonably believes that discontinuing care by Provider could cause harm
to the Member who is a patient. Examples of a Member with a Special
Circumstance include a Member with a disability, acute condition, life-
threatening illness, or who is past the twenty-fourth (24th) week of
pregnancy. · Special Circumstance shall be identified by the Provider,
which Provider shall request that the Member be permitted to continue
treatment um:ler Provider's care. Any disputes ·arising over the necessity
for continued treatment shall. be resolved in accordance with TCHP's
grievance procedures. Provider agrees not to seek payment from the
Member of any amounts for which the Member would not be responsible
if Provider were still a TCHP network provider. The obligation of TCHP
to compensate Provider for ongoing treatment of a Member shall be as
follows: (a) in the case of a Member who at the time of termination of this
Agreement has been diagnosed with a tenninal illness, for a period not to
exceed nine (9) months after the effective date of such termination; (b) in
the case of a Member who at the time of termination of this Agreement is
past the twenty-fourth (24th) week of pregnancy, for a period which
includes delivery of the child, immediate postpartum care, and the follow-
up check-up within the first six (6) weeks of delivery; or (c) in the case of
all other Members, for a period not to exceed ninety (90) days after the
effective date of such termination.

ARTICLEVID
RECORDS

8.1 Preparation and Maintenance of Records. Provider will prepare and maintain with
respect to each Member for whom it provides services under this Agreement standard
hospital or ancillary, medical, and financial records in such form and containing such
information and meeting all other record keeping requirements of applicable law,
accreditation standards, and reimbursement requirements. Records created and
Ancillary allprd 2013vl3
TDI 10/17/13
-23 -
 maintained by Provider shall be and remain the property of Provider, and shall be
retained for a period of (i) ten'(! 0) years from the last date of treatment, or (ii) if the
Member was younger than eighteen (18) years of age when last treated, until on or after
the Member's twentieth (20th) birthday, or on or after the. tenth (! 01h) anniversary of the
date on which the Member was last treated, whichever date is later, or (iii) some other
longer period as may be required by law.

· 8.2 Inspection of Records. To the extent permitted by all applicable law, Provider's bylaws,
policies and procedures, and in accordance with, and to the extent of, each patient's
written consent, Provider agrees to allow, during regular working hours, TCHP
representatives to review and make copies of medical records and patient bills maintained
by Provider regarding Covered Ancillary Services provided under this Agreement to
Members.

8.3 Confidentiality of Records/Information.

8'.3,1 Provider shall protect the confidentiality of each Member's protected

health information ("PHI''), including medical records. Provider shall
comply with all applicable federal and state laws, including, without
limitation, the HIPAA Privacy and Security Rule governing the use and
disclosure of PHI. Each party shall only disclose information contained in
such records in accordance with all applicable law with the express written
consent of the Member and as otherWise required by this Agreement.
Provider shall not transfer an identifiable Member's medical or other
record to another entity or person without written consent from the
Member or someone authorized to act on his or her behalf; however,
HHSC may require Provider to transfer a Member's record to another
agency or to HHSC if HHSC determines the transfer is necessary to
protect either the confidentiality of the record or to the health or welfare of
the Member.

8.3.2 Provider shall treat all information that is obtained through the
performance of services under this Agreement as confidential information
to the extent that confidential treatment is required under state and federal
laws, rules and regulations. Such information includes, without limitation,
information relating to applicants or recipients of HHSC programs.
Provider may not use information obtained through the performance of
this Agreement in any manner except as is necessary for the proper
discharge of obligations and securing of rights· iinder this Agreement.

8.3.3 TCHP recognizes, acknowledges, and agrees · that patient records

pertaining to AIDS and psychiatric and alcohol and drug treatment are
particularly sensitive and confidential and civil and criminal penalties may
be imposed for breaching the confidentiality of the information contained
in such records. TCHP shall obtain, and furnish to Provider, any special
patient consent requested by Provider prior to the release of any
documents containing such information.
Ancillary allprd 20 llv13
TD! 10/!7/!3
- 24-
 8.3.4 Provider will defend, with counsel approved by HHSC, indemnify and
hold harmless HHSC from all damages, costs, liabilities, and expenses
(including, without limitation, reasonable attorney's fees and costs) caused
by or arising from Provider's failure to protect HHSC's confidential
information. HHSC will not unreasonably withhold approval of counsel
selected by Provider.

8.4 HHSC's Access to Records. Upon written request of the Secretary of Health and Human
Services or the Comptroller General or any of their duly authorized representatives,
Provider will make available at no cost those contracts, books, documents and records
necessary to verify the nature and expense of the cost of providing Anciilary Services to
Members. This section is included pursuant to and is governed by the requirements of 42
U.S.C. Sections 1395x(v)(l)(I).

8.5 HHSC's Access to Records. Provider agrees to provide at no cost, HHSC with all
information required under TCHP' s managed care contract with HHSC, including,
without limitation, the reporting requirements and other information related to the
Provider's performance of its obligations under the contract and any information in its
possession sufficient to permit HHSC to comply with the federal Balanced Budget Act of
1997 or other federal or state laws, rules and regulations. All information must be
provided in accordance with the timeliness, definitions, fonnats and instructions specified
byHHSC.

8.6 Audit or Investigation of Records. Provider shall provide at no cost, the following
entities or their designees with prompt, reasonable and adequate access to this Agreement
and any records, books, documents, and papers that are related to this Agreement and/or
the Provider's performance of its responsibilities under this Agreement:

8.6.1 The United States Department of Heiilth and Human Services or its
designee;

8.6.2 The Comptroller General of the United States or its designee;

8.6.3 MCO Program personnel from HHSC or its designee;

8.6.4 The Office of Inspector General;

8.6.5 The Medicaid Fraud Control Unit of the Texas Attorney General's Office
or its designee;

8.6.6 Any independent verification and validation contractor, audit firm, or

quality assurance contractor acting on behalf ofHHSC;

8.6.7 The office of the State Auditor ofTexas or its designee;

8.6.8 A $tate or federal law enforcement agency;

Ancillary allprd 2013vll

TD! 10117113
-25 -
 8.6.9 A special or general investigating committee of the Texas Legislature or
its designee; and

8.6.10 Any other state or federal entity identified by HHSC, or any other entity
engaged by HHSC.

Provider must provide access wherever it maintains such records, books, documents, and
papers. Provider must provide such access in reasonable comfort and provide any ·
furnishings, equipment, and other conveniences deemed reasonably necessary to fulfill
the purposes described herein. Requests for access may be for, but are not limited to, the
following pmposes: examination; audit; investigation; contract administration; the
making of copies, excerpts, or transcripts; or any other plllJlose HHSC deems necessary
for contract enforcement or to perform its regulatory functions,

8.7 Expedited Access to Records. Upon receipt of a record review request from the_Health
and Human Services commission Office of Inspector General (OIG) or another state or
federal agency authorized to conduct compliance, regulatory, or program integrity
functions, a provider must provide, at no cost to the requesting agency, the records
requested within three business days of the request. If the OIG or_another state or federal
agency representative reasonably believes that the requested records are about to be
altered or destroyed or that the request may be completed at the time of the request or in
less than 24 hours, the provider must provide the records requested at the time of the
request or in less than 24 hours. The request for record review includes clinical medical
or dental Member records; other records pertaining to the Member; any other records of
services provided to Medicaid or other health and human services program recipients and
payments made for those services; documents related to diagnosis, treatment, service, lab
results, charting; billing records, invoices, documentation of delivery items, equipment,
or supplies; radiographs and study models related to orthodontia services; business and
accounting records with backup support documentation; statistical documentation;
computer records and data; and/or contracts with providers and subcontractors. Failure to
produce the records or make the records available for the purpose of reviewing,
examining, and securing custody of the records may result in OIG imposing sanctions
against the provider as described in 1 Texas Administration Code Chapter 371
Subchapter G.

8.8 Audit or Investigation of Funds. Provider understands and agrees that the acceptance of
funds under this contract acts as acceptance of the authority of the State Auditor's Office
("SAO"), or any successor agency, to conduct an investigation in connection with those
funds. Provider further agrees to cooperate fully with the SAO or its successor in the
conduct of the audit or investigation, including providing all reeords requested at no cost.

8.9 Provider Required Fraud and Abuse Policies. If the Provider receives annual Medicaid
payments of at least $5 million, (cumulative, from all sources), the Provider must;

8.9.1 Establish written policies for all employees, managers, officers,

contractors, subcontractors, and agents of the Provider. The policies must
provide detailed information about the False Claims Act, administrative

Ancillary allprd2013vl3
TDl I0/17/13
-26 -
 remedies for false claims and statements, and state laws about civil or
criminal penillties for false claims, and whistleblower protections under
such laws, as described in Section 1902 (a)(68)(A) of the Sociill Security
Act.

8.9.2 Include as part of such written policies detailed provisions regarding the
Provider's policies and procedures for detecting and preventing Fraud,
Waste, and Abuse.

8.9.3 Include in any employee handbook a specific discussion of the laws

described in Section l 902(a)(68)(A) of the Social Security Act, the rights
of employees to be protected as whistleblowers, and the Provider's
policies and procedures for detecting and preventing Fraud, Waste and
Abuse.

ARTICLE IX
INSURANCE

9.1 TCHP Liability Insurance. During the term of this Agreement, TCHP shall obtain and
keep in force, at its sole expense, liability insurance covering its obligations for claims
arising from the delivery of services or an equivalent self-insurance program in amounts
that meet or exceed applicable legal and regulatory requirements, including requirements
of the Texas Department oflnsurance.

9 .2 Worker's Compensation and Employer's Liability Insurance. Provider and TCHP will
maintain in full force and effect, at each party's respective expense, workers'
compensation and employers' liability insurance covering its statutory and legal
obligations for employee job-related injuries~ Said policies shall provide for statutory
benefits. In the event either party becomes a non-subscribing employer under the Texas
Worker's. Compensation Act, such party shall provide coverage satisfactory to the other.

9.3 Provider Insurance. Provider, at its sole expense, agree8 to maintain insurance in the
amount of one hundred thousand ($100,000) per occurrence and three hundred thousand
($300,000) annual aggregate for professionill liability, and one hundred thousand
($100,000) per occurrence and three hundred thousand ($300,000) annual aggregate for
commercial general liability. Provider will furnish to TCHP evidence of such coverage
upon request by TCHP. If any of the insurance coverages described in this Section are
provided through "claims made" rather than "occurrence" fonils, then Provider shall
provide, ''tail coverage" upon the termination of expiration of this Agreement that covers
the term of Ancillary's Agreement with TCHP. Provider shall provide TCHP evidence
that such ''tail coverage" has been obtained and is maintained in force.

9.4 Certificates, Notifications. TCHP and Provider shall each, upon written request, provide
to the other certificates of coverage evidencing the foregoing insurance. Each policy
shall provide for a least thirty (30) days advance written notice of cancellation or non-
renewal to the insured. TCHP and Provider shall each immediately inform the other in

Ancillary allprd 2013vl3

TD! 10/17113
-27 -
 writing if it receives such a notice or otherwise learns that its insurance coverage is to be
terminated or materially modified in any way.

ARTICLEX
COOPERATION
I 0.1 Material Change.

10.1. l Provider will notify TCHP of any legal, regulatory, or governmental

action initiated against Provider that could materially affect Provider's
ability to perform its obligations hereunder. TCHP shall notify Provider
of any such legal, regulatory, or governmental action initiated against
TCHP or any Participating Physician that could affect the ability of TCHP
to perform its obligations hereunder.

10.1.2 Provider will notify TCHP of any significant changes in operations,

emergency conditions, or other factors materially adversely affecting
Hospital Services being provided to Members by the Provider.

I 0.2 Complaints. TCHP maintains a complaint system that provides reasonable procedures to
resolve an oral or written complaint, including a process for the notice and appeal of a
complaint. TCHP' s complaint and appeal process shall comply with the requirements of
the Texas Insurance Code for CHIP and CHIP Perinatal Program providers. Provider
agrees to cooperate with TCHP to resolve complaints of Members in accordance with the
procedures and time frames provided in the Provider Handbook. All written or oral
complaints received by Provider from Members or persons acting on behalf of Members
shall be reported to TCHP in writing by Provider as soon as possible but no later than two
(2) business days of when they were received. All written complaints and all significant
oral complaints, including any that concern the quality of medical care, shall be
responded to in writing by TCHP. If the Member's complaint relates in any way to
TCHP coverage, TCHP shall communicate the response to the Member. Provider
understands and agrees that HHSC reserves the right and retains the authority to make
reasonable inquiry and to conduct investigations into complaints made by or on behalf of
Provider or any Member.

10.3 Procedures. To the extent permitted by applicable law, Provider and TCHP will
cooperate in developing appropriate procedures and formats for reporting the information
and data required to be reported by the parties under this Agreement. Each party will use
reasonable efforts to report information in formats reasonably requested by the other
party.

ARTICLE XI
ADVERTISING

11.1 Use of Names. TCHP may use the name, address, telephone number and a factual
description of the facilities and services of Provider and other TCHP network providers
in advertisements and promotional materials and in Plan handbooks and other
information provided to Members and Participating Physicians. With TCHP's prior
Ancillary allprd 2013vl3
TDI 10/\7/13
-28 -
 written consent, which shall not be unreasonably withheld, Provider may use the name,
address, telephone number and factual description of services of TCHP in advertisements
and promotional materials of Provider. Provider may .use TCHP's name in notification
letters to physicians and patients. ·

11.2 Reservation of Rights. Except as provided in this section, Provider and TCHP reserve the
right to use and control the use of its respective name, symbols, and trademarks and
service marks presently existing and subsequently acquired. In addition, except as
provided in this section, neither Provider nor TCHP will use any other party's name,
symbol, trademark or service marks without the prior written consent of the other party
and will cease any such use immediately upon receipt of written notice from the other
party or termination of this Agreement, whichever occurs first.

ARTICLE XII
REPRESENTATIONS AND WARRANTIES
Each party hereby represents and warrants that:

12.1 Availability ofinformation. It will make information or documents provided pursuant to

this Agreement available only to its personnel and its attorneys, accountants, auditors,
and consultants who have a need to know.

12.2 Confidentiality of Information. The terms of this Agreement, including but not limited to
· the provisions regarding payment for services, are confidential and shall not be disclosed
except as necessary to the performance of this Agreement, or as required by law. Neither
party shall disseminate or publish information developed under this Agreement or
contained in reports to be furnished pursuant tp this Agreement without prior written
approval of the other party.

12.3 Authorization Required. No statement regarding, or disclosure of, confidential

information or documents shall be made to any third party without the authorization of
Provider and TCHP and, as required, by the Member or Participating Physicians.

12.4 Coroorate Authority and Licensure. TCHP is a corporation qualified to do business in

Texas, is in good standing, and has obtained all necessary licenses and approvals required
to conduct business in the State of Texas.

ARTICLE XIII
INDEMNIFICATION

13.1 Duty to Defend and Cooperate. To the extent not covered by liability insurance carried
by the parties, each party shall be solely responsible for its own claims, liabilities,
damages, injuries, suits, demands, and expenses of all kinds (including, without
limitation, attorneys' fees and court costs), which may result or arise from any alleged
malfeasance, neglect, misconduct, error, or omission caused, or alleged to have been
caused, by such party, or by any member, partner, employee, representative or agent of
such party, in connection with the performance of the Agreement. In the event that a

Ancillaryallprd 2013vl3
TD! I0/17113
-29-
 claim is made against both parties, it is the intent of both parties to cooperate in the
defense of said claim and to cause their insurers to do likewise.

13.2 Indemnification by TCHP. Subject to and in accordance with Section 13.4 below, TCHP
shall indemnify and hold harmless Provider, its directors, officers, and employees (the
"Provider Indemnitees") from and against claims and costs resulting from the negligent
acts or omissions, intentional misconduct or breach of this Agreement by TCHP, its
directors, officers, employees or authorized agents in connection with the performance of
the Agreement; provided, however, that TCHP shall not be obligated to indemnify or
hold hannless Provider Indemnitees to the extent that such claims or costs arise, in whole
or in part, from any negligent acts or omissions, intentional misconduct, or breach of the
Agreement by Provider Indemnitees, their authorized agents or independent contractors,
including without limitation any alleged or actual medical malpractice by Provider or its
health professionals.
13.3 Indemnification by Provider. Subject to and in accordance with Section 13.4 below,
Provider shall indemnify and hold harmless TCHP, its directors, officers, employees and
affiliates (the "TCHP Indemnitees") from and against claims and costs resulting from the
negligent acts or omissions, intentional misconduct, or breach of this Agreement by
Provider, its directors, officers, employees, authorized agents or independent contractors
in connection with the performance of the Agreement; provided, however, that Provider
shall not be obligated to indemnify or hold harmless TCHP Indemnitees to the extent that
such claims and costs arise, in whole or in part, from any negligent acts or omissions,
intentional misconduct or breach of this Agreement by TCHP Indemnitees, their
authorized agents or independent contractors.

13.4 Other Conditions of Indemnification. After receiving written notice of any claim for
which indemnification would be available under this Article XIII, the Indemnitee shall
give written notice thereof to the Indemnitor, except that the Indemnitee need not give
such notice if the Indemnitor has otherwise received written notice of the claim. The
Indemnitor may at any time, in its sole discretion, assume the defense of the claim (and
be subrogated to the Indemnitee's position) by giving written notice to the Indemnitee.
Beginning at the point when the Indemnitor assumes the defense of the claim, all future
costs relating to the claim shall be borne by the Indemnit-0r, provided that the Indemnitee
cooperates with the Indemnitor in the defense of the claim. If the Indemnitor elects to
assume the defense of the claim, the Indemnitee shall be represented by legal counsel
chosen by the Indemnitor. This may be the same counsel representing the Indemnitor,
unless the parties carmot appropriately be represented by the same counsel due to actual
or potential conflict of interest, in which case the Indemnitor shall choose separate
counsel for the Indemnitee.

Except to the extent the Indemnitor elects to assume the defense of the claim as provided
in this Section 13.4, the Indemnitee shall defend the claim at his own expense, subject to
reimbursement by the Indemnitor in accordance with this Artide XIII. The timing of
such reimbursement shall be detennined by agreement of the parties; if they are unable
after good faith negotiations to agree, the issue shall be arbitrated in accordance with
Section 14.20 below. Notwithstanding any other provision of this Article XIII, no
Ancillary allprd 2013vl3
TDI J0/17/13
- 30 -
 indemnification shall be available hereunder (i) for any settlement to which the
Indemnitor did not give prior, express written consent, (ii) for any claim of which
Indemnitor did not receive notice as provided in this Section 13.4, or (iii) if the
Indemnitee failed reasonably to cooperate with the Indemnitor in the defense of the
claim.

Nothing in this Article XIII shall change or diminish in any way the statutory or common
law rights of any Indemnitee to contribution from any Indenrnitor.

13.5 Survival. With respect to claims arising during the life of this Agreement, this Article
XIII shall survive termination or expiration of the Agreement.

ARTICLE XIV
MISCELLANEOUS

14.1 Relationship of Parties. TC.HP and Provider are separate and independent entities. The
relationship between the parties is purely contraCtual and the parties acknowledge that
none of the provisions of this Agreement is intended to create, and none shall be deemed
or construed to create, any relationship, including, but not limited to, any agency or joint
venture relationship, among the parties, other than that of independent contractors.
TC.HP has no power or right to exercise control or discretion over the manner, method or
details by which Provider and its employees provide services under this Agreement.

14.2 Remedies. The remedies provided to the parties by this Agreement are not exclusive or
exhaustive, but are cumulative of each other and in addition to any other remedies the
parties may have.

14.3 Notices. Notices or communications to be given under this Agreement shall be given to
the respective parties in writing either by personal delivery, overnight delivery service, or
registered or certified mail, return receipt requested, postage prepaid, as follows:

To TC.HP: Texas Children's Health Plan, Inc.

Contracts Department
P. 0. 301011
Houston, Texas 77230-1011
Attention: President

To Provider: Apt.e.. \-\-c:nV\11..~{(t. M-ed.l01\ &;pp1~,.:f;l\c.,

S"!:>o ·::;:!f\C\i.stdq\ d.d v-e 'i... \}r 100
V-.ichc..rd..\c.1'\ ;Tx -::rsoir I
Attention: CEO/Executive Director

or at such other addresses and to such other persons as either party may from time to time
designate by notice given as provided by this section. Such notices or communication
shall be deemed to have been received no later than five (5) days after deposit in the
United States mail if sent by regular, registered or certified mail, return receipt requested,

Ancillaryallprd 2013vl3
TD! 10/17/13
- 31 -
 postage prepaid, or one (I) day after delivery to an overnight delivery service, whichever
occurs first.

14.4 Independent Contractors. No provision of this Agreement is intended to create or shall

be construed to create any relationship between Provider and TCHP other than that of
independent entities contracting with each other solely for the purpose of effecting the
provisions of this Agreement. Nothing in this Agreement shall be construed to establish
a relationship of partnership, joint venture, agency, or employment between the two
parties. Neither party has authority to enter into contracts or to assume any obligations
for the other party nor make any warranties or representations on behalf of the other party
concerning the duties, obligations, or services of the other except in accordance with the
express terms of this Agreement or as otherwise authorized in writing by the other party.

14.5 Binding Effect. This Agreement shall be binding upon and inure to the benefit of the
parties hereto, their successors and assigns, and nothing in this Agreement is intended,
nor shall be deemed, to confer any benefits on.any third party. ·

14.6 Assignment. Except as expressly provided herein, neither TCHP nor Provider shall, in
whole or in part, assign, transfer, delegate, subcontract, convey, or otherwise dispose of
this Agreement or any of its rights or obligations, including its right to receive monies
due or to become due under this Agreement, or its right, title, or interest therein, by
power of attorney or otherwise (all such acts are hereinafter collectively referred to as
"Acts of Assignment"), unless the prior written consent of the other party shall be
obtained, which consent shall not be unreasonably withheld, qualified or delayed. Any
attempted Act of Assignment without such consent shall be void and shall not release the
party attempting to make such Act of Assignment from its obligations under this
Agreement.

14. 7 Captions. The captions and headings throughout this Agreement are for convenience
only and shall in no way be held or deemed to limit, modify, or amplify the meaning of
any provision of this Agreement.

14.8 Governing Law and Venue. This Agreement shall be governed in all respects by all
federal and Texas state laws and regulations applicable to health maintenance
organizations and all other applicable federal or Texas state laws or regulations. The
invalidity or unenforceability of any terms or conditions hereof shall in no way affect the
validity or enforceability of any other term or provision. Venue of any· dispute arising
from this Agreement shall be in Harris County.

14.9 Waiver. Waiver by any party ofa breach or violation of~y provision of this Agreement
shall not operate as, or be construed to be, a waiver of any prior, concurrent, or
subsequent breach. None of the provisions of this Agreement shall be considered waived
by any party except when such waiver is given in writing.

14.1 O Force Majeure. If any party fails to perform its obligations under this Agreement (except
for the obligation to pay money) because of strikes, accidents, act of God, weather
conditions, or action or inaction of any governmental body or other proper authority or

Ancillary allprd2013vl3
TD! 10/17/13
- 32 -
 other causes beyond its control, then such failure to perform shall not be deemed a default
under this Agreement and shall be excused without penalty until such time as said party
is capable of perfonning.

14. ll Entire Agreement. This Agreement, any amendments or addenda hereto, and any
exhibits specifically made a part of this Agreement, constitute the entire agreement
among the parties regarding the subject matter of this Agreement and supersede all prior
or cqntemporaneous discussions, representations, correspondence and agreements,
whether oral or written. This Agreement may be amended or modified oiily by a writing
duly executed by all parties. The language of this Agreement shall be construed as a
whole according to its fair and common meaning and shall not be construed for or against
any party.

14.12 Severability. If any part, term, or provision of this Agreement is adjudged by any court
or administrative agency to be illegal or in conflict with any applicable law or regulation,
the particular part, term or provision held to be invalid, if mutually agreed by the parties,
may be deleted or amended to conform to the minimum requirements of such law or
regulation. If the parties do not so mutually agree, such particular part, term or provision
shall be ineffective to the extent of its invalidity. The invalidity of any part, term or
provision shall not affect the validity or enforceability of the remaining provisions of this
Agreement.

14.13 Confidentiality. The parties and their respective attorneys, accountants, auditors, and
consultants agree to keep this Agreement and its contents confidential and not to disclose
this Agreement or its contents to any third party without the prior written consent of th~
other party.

14.14 Survival of Representations. The representations and warranties set forth in this
Agreement shall be continuing and shall survive the tennination ofthis Agreement.

14.15 Further Acts. The parties agree to cooperate fully with each other to take such further
action and execute such other documents or instruments as are reasonably necessary or
appropriate to implement this Agreement.

14.16 Attorneys' Fees. If any party brings an action against any other party to enforce any
condition or covenant of this Agreement, the prevailing party shall be entitled to recover
its court costs and reasonable attorneys' fees incurred in such action.

14.17 Headings. The headings contained in this Agreement are for reference purposes only and
shall not affect the meaning or interpretation of this Agreement.

14.18 Gender and Number. Whenever the context of this Agreement requires, the gender of all
words used in this Agreement shall include the masculine, feminine, and neuter, and the
number of all words in this Agreement shall include the singular and plural.

14.19 Non-Exclusivitv. This Agreement is not exclusive, and nothing in this Agreement
precludes any party from contracting with any other person or entity for any purpose.

Ancillary allprd 2013vl3

TDI I0/17/13
- 33 -
 14.20 Dispute Resolution and Arbitration. The parties to this Agreement agree to meet and
confer in good faith to resolve any controversy, dispute or claim arising out of or relating
to the interpretation, performance, or breach of this Agreement through informal
discussions between the parties. If the parties are unable to resolve the dispute through
such discussions, the parties agree that such controversy, dispute, or claim shall be
resolved by binding arbitration in Harris County, Texas, at the request of any party, in
accordance with the rules of the American Arbitration Association. The arbitrators shall
apply Texas substantive law and federal substantive law where state law is preempted.
Civil discovery for use in such arbitration may be conducted in accordance with the
General Arbitration Act, codified in Chapter 171 of the Texas Civil Practice and
Remedies Code, and the arbitrator selected shall have the power to enforce the rights,
remedies, duties, liabilities, and obligations of discovery by the imposition of the same
terms, conditions, and penalties as can be imposed in like circumstances in a civil action
by a court of competent jurisdiction of the State of Texas. The provisions of Texas Civil
Practice and Remedies Code Section 171.007 concerning the right to discovery and the
use of depositions in arbitration are incorporated herein by reference and made applicable
to this Agreement.

The arbitrators shall have the power to recommend all legal and equitable remedies and
awards of compensatory damages provided by Texas law, excluding the power to award
punitive damages. The arbitrators shall prepare in writing a:nd provide to the parties an
award including factual findings and the legal reasons on which the decision is based.
The arbitrators shall not have the power to commit errors oflaw or legal reasoning, and
the award may be vacated or corrected pursuant to Texas Civil Practice and Remedies
Code Section 171.013 and Section 171.014 for any such error. Each party shall bear an
equal share of the costs of mediation or arbitration.

14.21 Amendment. Except as provided in this Section 14.21, no modification, alteration,

amendment or waiver of any term, covenant or condition of the Agreement shall be valid
unless (i) in writing and subscribed by an authorized representative of the party against
which such modification, alteration, amendment, or waiver is asserted and (ii) approved ·
by any governmental authority whose approval under the HMO Laws are required.
Notwithstanding the foregoing, TCHP may unilaterally amend this Agreement if required
to do so pursuant to the HMO Laws. TCHP shall furnish Provider with written notice of
any such amendments. PROVIDER ACKNOWLEDGES THAT THIS
AGREEMENT IS SUBJECT TO FILING WITH AND/OR APPROVAL BY THE
TEXAS DEPARTMENT OF INSURANCE AND HEREBY AGREES TO ANY
MODIFICATIONS THAT MAY BE REQUIRED BY THE TEXAS
DEPARTMENT OF INSURANCE OR HHSC.

[SIGNATURE PAGE FOLLOWS]

Ancillary allprd 2013vl3

TD! 10117113
- 34 -
 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date
first set forth above.

TEXAS CHILDREN'S HEALTH PLAN, INC. APPLE HOMECARE MEDICAL

By: ~ ::PL~
Name: Christopher M. Born Name: Ge.o';91Z Neir:~
Title: President Title: Gvvf I «I'\ csz O}Rce.r

Date: --~1~•+(~=--'-<'l!-'1~~~----- Date: ob/I S /2.016

'
Tax ID Number (TIN): =z£,-2-'1!.\44o 2-

Attachments:

EXHIBIT A Compensation
EXHIBIT B List of Plans
EXHIBIT C TCHP Claims Addresses
EXHIBITD Covered Ancillary Services
SCHEDULE A Behavioral Health Services
SCHEDULEB Early Childhood Intervention Services

Ancillary allprd 2013vl3

TOI 10/17/13
• 35.
 EXHIBIT A
COMPENSATION

Compensation for Covered Services:

Reimbursement for Covered Services shall be the lesser of Provider's usual and customary
charge for services provided, or the maximum acceptable reimbursement for Covered Services
calculated at ninety five percent (95%) of the current Texas Medicaid allowable amount.

Ancillary allprd 2013vl

TOI 10/17/13
A-1
 EXHIBITB
LIST OF PLANS

I. State of Texas Access Reform ("STAR") Medicaid Managed Care Products administered
by TCHP

2. State Children's Health Insurance Program ("CHIP") administered by TCHP

3. CHIP Perinate Program administered by TCHP

4. STAR KIDS administered by TCHP

Ancillary allprd 201 Jvl

TD! 10117113
B-1
 EXHIBITC
TCHP CLAIMS PROCESSING ADDRESS

Provider shall refer to TCHP's Provider Manual for most current claims processing
address.

Ancillary allprd 2013vl

TD! 10/17fl3
C·I
 EXHIBITD
COVERED ANCILLARY SERVICES

Ancillary allprd 2013vl

TD! 10117113
D-1
 SCHEDULE A
BEHAVIORAL HEALTH SERVICES

I. Behavioral Health Services. If Provider offers Behavioral Health Services to Members,

Provider shall:

(a) screen all Members age twelve (12) and over for substance abuse within forty-
eight (48) hours of inpatient admission;

(b) document such assessment, which should minimally include past and present
history of substances used, amounts, frequency and prior treatment history, in the
Member's medical record;

(c) provide Members all Medically Necessary behavioral health care Ancillary
Services as defined by HHSC;

(d) use the DSM-IV multi-axial classification when assessing Members and any other
assessment/instrument outcome measures required by HHSC;

(e) document DSM-IV and assessment/outcome information in the Member's

medical record;

(f) maintain screening and evaluation procedures for the detection and treatment of,
or referral for, any known or suspected behavioral health problems and disorders;

(g) comply with 28 Texas Administrative Code Part 1, Chapter 3, Subchapter HH, as
amended from time to time regarding Chemical Dependency Treatment;

(h) provide, if applicable, inpatient psychiatric services to Members under the age of
twenty-one (21 ), up to the annual limit under HHSC regulations, who have been
ordered to receive behavioral health services by an authorized court; and

(i) send initial and quarterly (or more frequently if clinically indicated) summary
reports of Member's behavioral health status to the Member's primary care
physician.

2. Discharge Notification. To aid in facilitating continuity and coordination of care,

Provider shall report all discharges from psychiatric inpatient stays to TCHP by
facsimile, within forty-eight (48) hours of discharge.

3. Follow-Up Services. If Provider provides inpatient psychiatric services to a Member, it

must schedule the Member for outpatient follow-up or continuing treatment prior to
discharge. The outpatient treatment must occur within seven days from the date of
discharge. Behavioral health providers must' contact Members who have missed
appointments within twenty-four (24) hours to reschedule appointments. Members'

Ancillary allprd 2013vl

TD! I0/17/13
-1-
 medical records shall contain documented evidence of Provider's compliance with this
provision.

Ancillary allprd 2013vl

TDI 10/17/13
-2-
 SCHEDULEB
EARLY CHILDHOOD INTERVENTION SERVICES

In the event TCHP and Ancillary intend to contract for the provision of Early Childhood
Intervention Services ("ECI"), the terms of this Exhibit shall supplement the Agreement and be
incorporated by reference herein.

I. Definitions.

For purposes of this Agreement, the following terms shall have the following meanings:

1.1 Child (or Children) shall mean a Covered Person who is younger than three (3) years of
age and who is documented as having developmental delay or has a medically diagnosed
physical or mental condition that has a high probability of resulting in developmental delay and
who is eligible for ECI services pursuant to 20 U.S.C. §§ 1471 and 1485, and the Texas Human
Resources Code§§ 73.001 and 73.024, as may be amended from time to time.

1.2 Contracted Services shall mean only those ECI health care services, treatments, and/or
supplies that: (i) are provided by Providers to Children upon referral by physicians or other
healthcare professionals; (ii) are reimbursable as Covered Services; (iii) are provided in
accordance with this Agreement and Exhibit; (iv) are Medically Necessary; and (v) include
occupational therapy/evaluation, physical therapy/evaluation, speech therapy/evaluation, and
nutritional/ dietary services.

1.3 Early Childhood Intervention C"ECI") means the Texas lnteragency Council on Early
Childhood Intervention, its rules, regulations, and any other requirements or guidelines.

1.4 Eligibility means the criteria established by the Texas lnteragency Council on Early
Childhood Intervention to determine acceptance for early childhood intervention services.

1.5 Evaluation and Assessment means the ongoing procedures used by appropriate qualified
personnel throughout the period of a Child's eligibility to identify:(i) the Child's unique needs
and strengths; (ii) the resources, priorities, and concerns of the family and identification of
support and services necessary to enhance developmental needs of the Children; and (iii) the
nature and extent of intervention services needed by the Child and the family.

1.6 Individual Family Service Plan ("IFSP'') means a written plan developed by the
interdisciplinary team in accordance with criteria established in 25 Texas Admin. Code § 621.21
et seq. based upon all Evaluation and Assessment information, including the family's description
of their strengths and needs, which outlines the early intervention services for the Child and the
Child's family.

1.7 Interdisciplinary Team means the Child's parent(s) and a minimum of two professionals
from different disciplines who meet to share Evaluation and Assessment information, determine
Eligibility, assess needs, and develop the IFSP. ·

Ancillary allprd 2013v I

TD! 10117/l3
-3-
 1.8 Medically Necessarv. The term "medically necessary", when used in conjunction with
this Exhibit shall be modified to include services or supplies that are: (i) reasonably necessary to
prevent illness or medical conditions that cause suffering or pain, cause physical deformity or
limitations in function, threaten to cause or worsen a handicap, cause illness or infirmity of a ·
Child, or endanger life; (ii) provided in the Child's Natural Environment, unless the early
intervention cannot be achieved satisfactorily in the Natural Environment and at the appropriate
levels of care for treatment of the Child' medical conditions; (iii) appropriate and necessary for
the symptoms, diagnosis or treatment of a medical condition; and (iv) provided in accordance
with accepted medical standards, including the Texas Interagency Council Early Childhood
Intervention.

In detennining whether an ECI service is Medically Necessary under TCHP's contract with the
Texas Health and Human Services Commission, TCHP must consider the guidelines of the
Medicaid and Children's Health Insurance Program, as well as Part H of Individuals with
Disabilities Education Act ("IDEA") and the Texas Interagency Council on Early Childhood
Intervention. All services prescribed must be specified in the Child's IFSP.

1.9 Natural Environment means settings that individual families identify as natural or normal
for their family, including the home, neighborhood and community settings in which children
without disabilities participate. To the maximum extent appropriate to meet the needs of the
Child, ECI services must be provide in Natural Environments, including the home and
community settings in which children without disabj!ities participate.

II. Provider's Obligations.

2.1 Deliverv of Contracted ECI Services. Subject to the terms and conditions of this
Agreement and in accordance with the applicable TCHP policies and procedures governing
referrals and recertification, Provider will provide Contracted Services to Children upon the
request of the TCHP or the Child's Participating Physician. Except for Evaluations and
Assessments, and in cases of Medical Emergency, Provider shall provide Contracted Services to
Children only upon the written referral by a primary care physician and in accordance with the
Child's IFSP. Provider shall discuss with and seek approval frol)l the primary care physician
prior to rendering or arranging any continuing treatment which 'js beyond the specific treatment
authorized iri the primary care physician's referral or IFSP . .Jn addition, Provider shall not refer a
Child to another Participating Physician, or any other Health Care professional without the prior
concurrence of the Child's primary care physician, except in the case of a Medical Emergency
with the concurrence of the TCHP.

Provider shall comply with the following:

a) Provider's consultations and recommendations must be sent to the primary care physician
for inclusion in his/her medical records;

b) Provider shall consult with the primary care physician and inform the Child's family of
diagnostic, treatment, and follow-up recommendations; and

Ancillary allprd 2013vl

m110117113
-4-
 c) Provider shall provide Children and their families with appropriate health education in
the management of a Child's special needs.

2.2 Standard of Care. Provider shall render Contracted Services in a manner that assures
availability, adequacy, presentation of human dignity, and continuity of care to Children, both
dwing the term of this Agreement and upon termination hereof in accordance with provisions of
Sections_ and_ hereof. Provider shall remain solely responsible for the quality for Contracted
Services provided and shall render such services in accordance with generally accepted practice
and professional recognized standards. Provider shall: (i) ensure that Contracted Services are
available from Provider within a reasonable time from the date of request for services, (ii) be
available as appropriate to attend to a Child's emergency needs; (iii) keep reasonable office
hours, and (iv) provide coverage by other providers when Provider is not available.

III. Responsibilities of TCHP.

3.1 Needs Assessment. When appropriate, TCHP will assess and/or coordinate the need for
Covered Services to be provided under this Agreement in cooperation with the Child's
Participating Physician.

3.2 Provider Training. TCHP will ensure that ne.twork providers are educated regarding the
identification of Children who have or are at risk for having disabilities and/or developmental
delays. TCHP will ensure that providers refer identified Children in the service area to Local ECI
programs within two (2) days from the day the Child is identi:fied.

3.3 Coordination. TCHP will coordinate and cooperate with the Local ECI Program to
ensure that all medical diagnostic procedures are conducted and medical records are provided to
perform developmental assessments and develop the IFSP within the timelines established at 34
C.F.R. § 303.1.

3.4 Reimbursement of Local EC! Program. TCHP shall reimburse the Local EC! program
for all health related assessments petforrned by Local ECI program for a child who has gone
through an initial ECI intake and screening process regardless of the origin of the initial referral.
TCHP shall not require any prior authorization for Evaluations and Assessments. All Evaluation
and Assessment data including but not limited to test protocols and/or assessment reports must
be maintained as part of the child's main records at the Local ECiprogram.

3.5 Accessto Services.

(a) TCHP will assure that no unnecessary barriers are created for Children to obtain EC!
services, including requiring prior authorization for the ECI Evaluation and Assessment and
insufficient authorization periods for prior authorized services. TCHP will approve therapy and
other necessary health related services for time frames called for in the IFSP, not to exceed 6
months.

(b) Contracted Services that are determined necessary by the Interdisciplinary Team,
identified in the IFSP and, approved, recommended, referred or prescribed by the Child's
Participating Physician will be provided by qualified providers employed by or contracted with
Ancillary allprd 2013vl
TD! I0117113
-5-
 the Local EC! program and provided in Natural Environments to the maximum extent
appropriate and are to be reimbursed by TCHP.

(c) TCHP shall approve all Contracted Services identified in the IFSP that are approved,
recommended, referred or prescribed the Child's Participating Physician and shall not modify the
IFSP or alter the amount, duration and scope of services established by the Child's IFSP.

Ancillary allprd 2013v I

TDI I0/17/13
-6-
EXHIBIT C
 Texas Children's Health Plan, Inc. v. Apple Homecare Medical Supply, Inc.

Dov Preminger dov.preminger@nortonrosefulbright.com Texas Children's Health Plan, Inc.

1301 McKinney, Suite 5100 512-536-4594

Apple Homecare Medical Supply, Inc.

Houston, TX 77010 713-651-5246

/s/ Dov Preminger 24098280

X Enforcement of
arbitral award

X
 Marilyn Burgess
HARRIS COUNTY DISTRICT CLERK
201 Caroline | P.O. Box 4651 | Houston, Texas 77210-4651 | 832-927-5800 | www.hcdistrictclerk.com

Request for Issuance of Service

CASE NUMBER: _______________________________ CURRENT COURT: ___________________________________________

Unopposed Petition to Confirm Arbitration Award and Exhibit A-C

Name(s) of Documents to be served: _____________________________________________________________________________________

3/30/2020
FILE DATE: ______________________ Month/Day/Year
SERVICE TO BE ISSUED ON (Please List Exactly As The Name Appears In The Pleading To Be
Served):
Apple Homecare Medical Supply, Inc.
Issue Service to: __________________________________________________________________________
500 Industrial Drive, Suite 100
Address of Service: ________________________________________________________________________
Richardson, TX 75081
City, State & Zip:__________________________________________________________________________
Lara Shankle
Agent (if applicable) ________________________________________________________________________
TYPE OF SERVICE/PROCESS TO BE ISSUED: (Check the proper Box)
X Citation Citation by Posting Citation by Publication Citations Rule 106 Service
Citation Scire Facias Newspaper______________
Temporary Restraining Order Precept Notice
Protective Order
Secretary of State Citation ($12.00) Capias (not by E-Issuance) Attachment (not by E-Issuance)
Certiorari Highway Commission ($12.00)
Commissioner of Insurance ($12.00) Hague Convention ($16.00) Garnishment
Habeas Corpus (not by E-Issuance) Injunction Sequestration
Subpoena
Other (Please Describe) ___________________________________
(See additional Forms for Post Judgment Service)
SERVICE BY (check one):
ATTORNEY PICK-UP (phone) __________________ X E-Issuance by District Clerk
MAIL to attorney at: ___________________ (No Service Copy Fees Charged)
CONSTABLE Note: The email registered with EfileTexas.gov must be
CERTIFIED MAIL by District Clerk used to retrieve the E-Issuance Service Documents.
Visit www.hcdistrictclerk.com for more instructions.

CIVIL PROCESS SERVER - Authorized Person to Pick-up: ________________ Phone: __________

OTHER, explain ______________________________________________________________________

Dov Preminger
Issuance of Service Requested By: Attorney/Party Name: ___________________Bar 24098280
# or ID ___________
1301 McKinney, Suite 5100, Houston, Texas 77010
Mailing Address:______________________________________
512-536-4594
Phone Number:__________________________________________