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3.02

3.03

3.04

(c) Provide PDA with a complete copy of the Plan Document (and summary plan
description, if separate), including any amendments and summary of material
modifications that were in effect during the Reconciled Pian Year;

(d) Be solely responsible to inform PDA of any changes in the information it previously
supplied PDA;
(e) Be solely responsible for reconciling any conflicting data provided by the Plan

Sponsor, its contractors and/or vendors, including confirmation of retirement dates
and confirmation of the final Covered Retiree List that is submitted for a new Final
Reconciliation for the Reconciled Plan Year; and

(f) Be solely responsible for any fees charged by its vendors to provide any data or
information to PDA, including negotiations with the vendors to reduce or eliminate
any proposed charges.

Drug Subsidy Reopening Request and Related Tasks

(a) To enable PDA to fulfill all of its duties regarding the Medicare Drug Subsidies,
Plan Sponsor consents to and authorizes PDA’s designation of an employee or a
representative of PDA to be the “Account Manager” for purposes of filing the
Reopening Request and, if granted, a new Final Reconciliation with CMS that are
filed after the Effective Date, with all the authority that designation entails,
including necessary authority as may be necessary in the Subsidy Application and
any follow-up processes.

(b) To enable PDA to fulfill all of its duties regarding the Medicare Drug Subsidies,
Plan Sponsor consents to and authorizes PDA’s designation of employees or
representatives of PDA to be the “Cost Repoxter” and “Payment Requester” for
the Reconciled Plan Year with all the authority those designations entail, including
the necessary authority to (i) gather, organize and submit appropriate information to
CMS and (ii) request Medicare Drug Subsidy payments from CMS.

(c) Plan Sponsor shall provide its full and good faith cooperation in the procurement;
access and/or review of such other reasonable information as may be determined by
PDA to be reasonably necessary in order to perform its services hereunder.

HIPAA Compliance. Notwithstanding any provision in this Agreement to the contrary, Plan
Sponsor shall, during the term of this Agreement, be solely responsible for ensuring that the
Plan is and remains in full compliance with the privacy and security requirements under the
Heaith Insurance Portability and Accountability Act (HIPAA) and impiementing regulations.
In particular, Plan Sponsor shall have in place all necessary business associate agreements,
Plan amendments, and related documentation to the extent required under HIPAA in order to
(i) permit the disclosure of protected health information (within the meaning of HIPAA) to
Plan Sponsor and (ii) establish the permitted and required uses and disclosures of protected
health information by Plan Sponsor.

Compensation. In consideration for the services set forth herein, Plan Sponsor shall pay PDA
the compensation and applicable reimbursements as set forth on Exhibit A.

City of Nashua 4 SA Revised March 2016

4.01

4.02

5.01

5.02

5.03

SECTION 4
RELATIONSHIP OF THE PARTIES

Independent Contractor. In performing services under this Agreement, PDA performs all
acts as an independent contractor and not as an officer, employee or agent of Plan Sponsor,
administrator(s) (if other than Plan Sponsor), or the Plan. Nothing in this Agreement shall be
construed to mean that Plan Sponsor (or any of its agents) retains any control over the
manner and means of how PDA performs the services provided for herein, but only a right to
review the results of the work performed.

Not a Fiduciary or Insurer. Plan Sponsor is the named fiduciary and/or primary decision
maker of the Plan. As fiduciary and/or decision maker, Plan Sponsor maintains discretionary
authority and responsibility in the administration and operation of the Plan, including, but
not limited to, the determination of covered services, interpretation of the terms of the Plan,
and the determination of eligibility for and entitlement to benefits under the Plan in
accordance with the terms of the Plan. PDA does not assume any responsibility for any act,
omission or breach by any fiduciary (e.g., failure by Plan Sponsor to timely perform Final
Reconciliation), and assumes responsibility solely for its own acts or omissions and as may
otherwise be required by law.

SECTION 5
TERM AND TERMINATION

Term. This Agreement shall be in effect for a period of three (3) years from the Effective
Date (the “Initial Term”).

Termination. Subject to continuing obligations under Section 5.03, this Agreement may be
terminated as specified below:

(a) Following the Initial Term by either party with or without cause upon forty-five (45)
days’ prior written notice;

(b) By and at the election of PDA, upon Plan Sponsor’s failure to provide timely and
adequate payment of service fees to PDA in accordance with the provisions of this
Agreement;

(c) By PDA as of the date Plan Sponsor voluntarily or involuntarily files for bankruptcy
protection for any or all portion of its business operations; or

(d) By mutual written agreement of the parties.

Obligations After Contract Termination; Survival. All responsibilities of either party under
this Agreement shall terminate upon the termination of this Agreement, except that the
following rights and liabilities of the parties shall survive the termination of this Agreement
for the specified time period as provided below or as otherwise agreed by the parties hereto:

(a) Plan Sponsor’s and Plan’s duty to pay PDA for amounts due to PDA hereunder,
until such amounts are paid in full, specifically including all payments with respect

City of Nashua 5 SA Revised March 2016

to all Medicare Drug Subsidies paid to Plan Sponsor as a result of the preparation by
PDA, with respect to the Reconciled Plan Years, of (i) a Reopening request filed
with CMS, (ii) a new Final Reconciliation filed with CMS or {iii} a Payment
Request made by PDA to CMS;

(b) Plan Sponsor’s, the Plan’s and PDA’s respective duties hereunder that are predicated
on, or reasonably contemplates continuation beyond, the termination of this
Agreement, including, but not limited to, this Section 5.03 and Sections 5.04, 5.05
and 5.06. Notwithstanding the foregoing, such duties shall not survive beyond the
duration of any applicable statute of limitations.

5.04 Qutstanding Fees; Records. Upon termination of this Agreement, Plan Sponsor and Plan
agrees to remit to PDA any outstanding balances due (or which, under Section 5.03(a),
becomes due) under this Agreement. Without limiting other available remedies, PDA shall
have the right to retain all records in its possession with regard to its services pursuant to this
Agreement until receipt of all outstanding monies due.

5.05 Cooperation with Successor. In the event Plan Sponsor appoints a successor to PDA for any
or all of PDA’s services described herein, PDA shall cooperate as reasonably necessary in
transferring files, records, reports and the like, and PDA shall be entitled to reasonable
compensation for its services in connection therewith. Notwithstanding any provision of this
Agreement (including any exhibit or addendum hereto), to the contrary, PDA shall not,
without prior written agreement with Plan Sponsor, be obligated to assist a successor to PDA
or otherwise take or continue any action following termination of the Agreement if and to
the extent such assistance or action may, in the opinion of PDA, would cause PDA to
become a fiduciary with respect to the Plan in any manner.

5.06 Access to Information. Plan Sponsor shall have the right, upon providing reasonable notice,
to periodically review, at its own expense, any records of PDA relating to the services
provided herein; any examination of such records shall be carried out in a manner mutually
agreeable to PDA and Plan Sponsor and to the extent permitted by applicable law.

SECTION 6
GENERAL PROVISIONS

6.01 Caveats. By its execution of this Agreement, Plan Sponsor and Plan acknowledge their
knowledge, understanding and agreement to the following with respect to Reopening
Services:

(a) PDA may conciude, after consuliation with the Pian Sponsor and the Plan, that it is not
appropriate to file a Reopening request with respect to a Reconciled Plan Year. In such
case, PDA’s engagement with respect to that Reconciled Plan Year will end;

(b) In generating drug benefit cost information for purposes of requesting Medicare Drug
Subsidy payments, PDA will need to filter out certain drug claims that may be covered
under Medicare Part B and therefore ineligible for Medicare Drug Subsidy payments.
Due to impracticalities that are inherent in any large scale filtering processes (e.g.,
whether a drug should or should not be filtered out in this process may depend on factual
circumstances that could not be known by PDA or any other vendor), PDA will use its

City of Nashua 6 SA Revised March 2016

6.02

6.03

6.04

6.05

6.06
6.07

best judgment as to the approach to adopt, subject to the Plan Sponsor’s final approval,
but PDA cannot guarantee the complete accuracy of the adopted approach.;

(c) In generating drug benefit cost information for purposes of requesting Medicare Drug
Subsidy payments, PDA will need to report any rebates or other manufacturer’s
discounts, credits or like amounts received by the Plan Sponsor or the Plan or being
credited against the administrative expenses of the Plan Sponsor or the Plan. It is the
Plan Sponsor’s responsibility to provide accurate and actual numbers for the amounts of
rebates and other administrative allowances described in this subsection to PDA ina
timely manner for Final Reconciliation;

(d) While PDA will keep Plan Sponsor up-to-date on progress, PDA will also provide a
final cost report upon reconciliation for the final costs submitted for each plan year. Any
interim filings and the applicable notices of the deposit transaction for Electronic Fund
Transfers by CMS will be confirmed via the Plan Sponsor’s designated bank account
deposit transactions, and the confirmation emails as provided by the CMS/RDS
affirming payment approval and deposit increments; and

(e) New Final Reconciliation. While PDA will assist Plan Sponsor with a New Final
Reconciliation for a Reconciled Plan Year, Plan Sponsor shall first verify that all
information provided for that New Final Reconciliation is accurate and correct, and the
Plan Sponsor shall be solely responsible for completing Step 12 of the New Final
Reconciliation.

Amendment; Assignment. This Agreement may not be amended without the express written
consent of both parties. No assignment by either party pertaining to this Agreement shall be
valid without the express written consent of the other party, which consent will not be
unreasonably withheld.

Confidentiality. PDA recognizes that it shall be provided with personal information
regarding Members of the Plan in the course of providing services under this Agreement.
PDA shall safeguard such information to ensure that no person who does not need to know
such information has access to such information. To the extent required by law, PDA will
enter into a “Business Associate Agreement” with the Plan and/or Plan Sponsor, provided
that no such Business Associate Agreement shall alter or amend the rights and
responsibilities of the parties under this Agreement.

Consultation with Plan Sponsor. PDA shall consult with and obtain prior approval from Plan
Sponsor and/or legal counsel designated by Plan Sponsor when legal matters regarding the
Plan arise.

Entire Agreement. The entire agreement between the parties concerning the subject matter
hereof is incorporated into this document, the Business Associate Agreement and any
exhibits or addenda hereto. This Agreement (including Exhibit A (Compensation), Exhibit B
(Illustrative List of Information), and Attachment B (Business Associate Agreement).
Attachment C (Authorization and Request for Release of Documents and Data) or addenda
hereto) supersedes all previous agreements whether oral or written between the parties
concerning the subject matter hereof.

Governing Law. This Agreement shall be governed exclusively by the laws of the State of New
Hampshire, and any Iitigafion shall be brought in a court located in the State of New Hampshire.

Headings. The headings of this Agreement are solely for the convenience of the parties and
do not affect the meaning or interpretation of any provision of this Agreement.

City of Nashua 7 SA Revised March 2016

6.08

6.09

6.10

6.11

Notice. Any notice required to be given hereunder between the parties shall be written,
effective upon receipt and shali be served by facsimile or by personal delivery or certified
mail, return receipt requested to the address cited in the signature block of this Agreement or
to such other address as shall be specified by like notice by either party.

Other Service Providers; No Legal or Tax Advice. PDA may seek the services of others in
performing its duties and obligations under this Agreement. Plan Sponsor acknowledges and
agrees that PDA’s services pursuant to this Agreement are in the nature of consulting,
logistical and non-discretionary ministerial services and are not intended, and shall not be
construed or characterized as, the provision of legal or tax advice or professional fiduciary
services.

Successor_and Assigns; Waiver. Subject to the provisions of Section 6.01 above, this
Agreement shall be binding upon and inure to the benefit of and be enforceable against the
parties hereto and their respective successors and assigns. Failure to enforce any provision of
this Agreement shall not affect the rights of the parties to enforce such provision in another
circumstance or their right to enforce any other provision of this Agreement at any time. If
any provision of this Agreement is determined to be unenforceable or invalid, such
determination shall not affect the validity of the other provisions contained in this
Agreement.

Counterparts. This Agreement may be executed in multiple counterparts, each of which shall
be deemed to be an original and all of which together shall constitute a single agreement.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed,

effective as of the Effective Date, by their duly authorized officers.

PART D ADVISORS, INC. City of Nashua, on behalf of itself and the City of
Nashua Health Plan
By: By:
Name: Name:
Title: Title:
Address: 17199 N. Laurel Park Drive Address:
Suite 400

Date:

Livonia, MI 48152

Date:

City of Nashua 8 SA Revised March 2016

EXHIBIT A
TO
AGREEMENT WITH

City of Nashua
This Exhibit is Effective April 7, 2017

COMPENSATION

PDA’s compensation for the services provided pursuant to the Agreement shall be a Performance
Bonus with respect to the Reconciled Plan Year:

Drug Subsidy Services

Performance Bonus, If the Plan Sponsor receives a larger Medicare Drug Subsidy as a result of the
New Final Reconciliation prepared by PDA than the Medicare Drug Subsidy received as a result of
the original Final Reconciliation filed for the Reconciled Plan Year, then the Plan Sponsor will pay
PDA twenty percent (20%) of such increase in the Medicare Drug Subsidy for the Reconciled Plan
Year. If there is no increase in the Medicare Drug Subsidy received by the Plan Sponsor, there shall
be no Performance Bonus for that Subsidy Application.

To illustrate how the Performance Bonus is calculated, assume (1) that the Plan Sponsor received
$100,000 as the Medicare Drug Subsidy as a result of the original Final Reconciliation filed for the
Reconciled Plan Year, (2) that the Plan Sponsor received $150,000 as the total Medicare Drug
Subsidy as a result of the new Final Reconciliation prepared by PDA for the Reconciled Plan Year,
(3) a $50,000 increase. The Performance Bonus would be $10,000 (($150,000-$100,000) x 20%)).

GENERAL PROVISIONS

Delinquent Accounts, Accounts and invoices not paid by the later of the end of the month, or within
30 days of billing, are considered delinquent and are subject to a monthly service charge of 1.5
percent (1.5%) of the delinquent amount. Besides late fees and service charges, subsequent subsidy
filings could be delayed at the sole discretion of PDA if accounts are beyond 30 days in arrears.

Failure to Timely Comply with the RDS Program. It is the duty and responsibility of the Plan
Sponsor to be cognizant of the various due dates for the RDS Program (e.g., Final Reconciliation)
and the potential penalties for being late. If a deadline is missed due to Plan Sponsor or Authorized
Representative negligence or tardiness, PDA shall not refund any paid service fees and will not
accept any financial responsibility due to such negligence.

Demands for Overpayment. Upon Final Reconciliation, CMS may determine an overpayment for
the relevant Plan Year was made to the Plan Sponsor and demand return of such overpayment. The
Plan Sponsor shall be financially responsible for the return of any and all overpayments made by
CMS. To the extent CMS determines an overpayment and such amount was included in determining
the Performance Bonus, PDA shall immediately reimburse the Plan an amount equal to the portion
of the Performance Bonus based upon the overpayment.

City of Nashua 9 SA Revised March 2016

ACKNOWLEDGMENT AND APPROVAL

The undersigned duly authorized officer of Plan Sponsor hereby acknowledges, understands, and
agrees, on behalf of Plan Sponsor, to this Exhibit A, which shall, upon execution of the parties
hereto, become an integral part of the Agreement for Part D Subsidy Services made by and between
PDA and Plan Sponsor as currently in effect.

PART D ADVISORS, INC. City of Nashua, on behalf of itself and
the City of Nashua Health Plan

By: By:
Name: Name:
Title: Title:
Date: Date:

City of Nashua 10 SA Revised March 2016

EXHIBIT B
TO
AGREEMENT WITH

City of Nashua

ILLUSTRATIVE LIST OF INFORMATION

REQUIRED FROM

PHARMACY BENEFIT MANAGERS
(Non-Exhaustive)

CATEGORY a ] TYPE

Billing Transactions Patient Gender
Prescribe ID Qualifier
Prescribe ID

Patient Date of Birth
Product ID National Drug Code
Compound Code
Quantity Dispensed
Days Supply

Fill Number

Product Strength
Dosage Form

Response Transactions Date of Service Service
Provider ID Prescription
Number Ingredient Cost
Paid Dispensing Fee
Paid Sales Tax (if
applicable) Patient Pay
Amount Billing
Pharmacy NPI

CMS Data Elements Identifiers | Contract Number
Plan Benefit Package (PBP) ID
Health Insurance Claim Number (HIC#)

Indicators Drug Coverage Status
Adjustment/Deletion Flag
Out of Network Flag
Catastrophic Coverage Flag
Dispense as Written

Cost/Payment Fields Gross Drug Cost Below Catastrophic Cap

Gross Drug Cost Above Catastrophic Cap
Low-Income Cost-Sharing Subsidy Amount (LICS)
Secondary/Other Payer Amount

Supplemental Cost Share Amount

City of Nashua ll SA Revised March 2016

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PART) «=

ADVISORS

PDA’s RDS Reopening Process

Part D Advisors (PDA) is the Retiree Drug Subsidy (RDS) industry leader with more than a decade of experience.
Since our founding in 2005, PDA has established the gold standard in RDS administration, providing support
and recovery services for nearly 300 plan sponsors across 30 states. PDA has built our subsidy improvement
process around our proprietary software suite and experienced account team. The City of Nashua now has a
risk free opportunity to engage PDA in reviewing its historical RDS filings to identify additional dollars while
securing its RDS records in our database the CMS required six years of audit support.

City of Nashua’s Reopening Opportunity

The Centers for Medicare and Medicaid Services (CMS) allows plan sponsors such as City of Nashua to reopen
previously reconciled applications for up to four years after the original reconciliation date. Our one-of-a-kind
methodology and custom built software can help City of Nashua improve its total subsidy recovery by an average
of 8%-15%; an increase of as much as $115,000. The following chart is derived from information published
annually by CMS and shows City of Nashua’s historical subsidy collection from 2012 & 2013.

Plan Year | Retiree Count Original Subsidy 8% Improvement 15% Improvement
2012 352 $ 278,629 | | $ 22,290 $ 41,794
2013 810 $ 494,434 $ 39,554 $ 74,165
Totals: 1,162 $ 773,068 $ 61,844 $ 115,959

How Does PDA Recover Additional Subsidy?

The PDA Reopening Process takes an entirely new approach to the RDS by utilizing custom tools designed to
combine membership, Rx claims, and medical data together to increase the value of each dataset. This approach
provides benefits that couldn't be achieved when membership, claims matching, and cost reporting are handled
by different parties. PDA’s software focuses on three main areas to provide additional value:

Improved Membership

PDA collects and reviews as many sources of eligibility information as possible, including census files, pension
lists, and alias information gleaned from claims files. Rather than have the Plan Sponsor create the retiree lists
and work with the RDS to correct legitimate members who get rejected, PDA has built custom software to store
and review this information so that RDS rejections can be reversed quickly and accurately.

Improved Claims Matching

PDA’s review of claims and eligibility from multiple sources enables us to store every potential member alias and
link it back to an approved member record. This combined review allows PDA to build a vast database of Social
Security Numbers and Health Insurance Claim Numbers (HICNs) which are then used to match up all the claims
for cardholder/contract groupings.

Improved Drug Filtering
PDA has built a custom drug filter with the sole aim being accuracy in RDS filings. Our drug filter is reviewed and
updated on a monthly basis based on advice from our clinical pharmacist and a review of the Medispan database.

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PARTI

ADVISORS

Additionally, PDA can use medical data to identify drugs that are either Part B or Part D drugs depending on the
situation in which they are administered.

The Medicare Database as the Source of Truth

Historically, a primary factor limiting most Plan Sponsors’ success with the RDS has been CMS membership
rejections. Eligible retirees can receive CMS rejection codes if the demographic information submitted is not an
exact match for the Medicare database. If the Medicare database contains an inaccurate record or if required
information such as social security numbers are unavailable for certain members, the plan sponsor will have little
recourse to correct the submission. Further complicating this problem is that the most common rejection codes
do not provide any detail as to what information was incorrect in the membership record. RDS website users
submitting retirement lists are left with very limited options to correct these rejections with the tools and resources
available to them.

Navigating the Reopening Process

PDA’s account team will work with the City of Nashua through all portions of the RDS reopening process. Our
system is designed to minimize the effort needed by the City while maximizing additional subsidy. Reopening
multiple applications can take up to 6-12 months during which time PDA will do the heavy lifting reducing our
customer's workload to just a few hours per application.

The deadline to reopen a reconciled RDS application is four years from the original determination date meaning
deadlines are often fast approaching. To meet this challenge, PDA’s team of full time Software Developers added
Task Manager to our existing software suite. Task Manager is a one of a kind tool that organizes the RDS
reopening process into specific tasks with a set project schedule based on our extensive RDS reopening
experience. Task Manager communicates with our other proprietary software tools to help our account teams
create estimates, update eligibility, filter claims, match members, create cost reports, and much more. This
unique set-up gives our team the ability to process reopenings for all reconciled applications (for which data is
available) at the same time. This greatly minimizes the plan sponsor's risk of losing opportunities to reopen and
brings in the most additional subsidy as quickly as possible.

Contingency Pricing Arrangement

PDA’s RDS reopening services are entirely risk free and the City would not be invoiced until after they
have received additional dollars from CMS. The entire reopening process from start to finish is provided on a
contingency fee basis, which means no charges whatsoever unless additional money is collected. Most
importantly, whether or not additional subsidy dollars are received, PDA will still warehouse all data and
documentation for the requisite six year term and support City of Nashua in the event of a CMS audit.

In consideration of our long standing relationship with Workplace Benefit Solutions and HUB International, PDA
has cut our standard fees in half. PDA is offering the City of Nashua our reopening services for 20% of the
additional subsidy collected.

SE a aE a Se a a a a Ai SH APS NTE SEES Snag ge MTC]
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