Module 4 Negotiating and Finalizing The Service Provider Contract Group insurance

Question 1

Who is sent the letter of intent?

Answer 1

The letter of intent is sent to the winning bidder for mutual sign off

Question 2

How many copies of the letter of intent should be sent to the selected service provider?

Answer 2

At least two - with two signed and returned

Question 3

What are the 5 things accomplished by sending letter of intent?

Answer 3

• informs the service provider of selection
• Documents the service to be provided
• Documents the conversion and service dates
• States the date for contract completion
• Names the primary plan sponsor contact

Question 4

What are 4 key drivers for contract Negotiation Power?

Answer 4

• Organizations size
• Organization name or reputation
• Competition
• Common Fee level in market (knowing what others are paying)

Question 5

What are the 4 steps in negotiating and finalizing the service provider contract?

Answer 5

• identify final negotiation items
• Clarify Conditions for Cancelation
• Summarize and communicate final terms
• Hold meeting to discuss requirements

Question 6

What other terms may be used to define “ the contract”?

Answer 6

Service agreement

Trust agreement 

Question 7

What are typical content areas included in a contract

Answer 7

Contract and duration

Parties to the contract

Services to be performed

Question 8

Contracts should include performance measures - defined the acronym SMART regarding smart guidelines

Answer 8

Specific

Measurable

Attainable

Relevant

Time bound

Question 9

What are three examples of health plan performance measures?

Associated with provider, net work management

Answer 9

Percentage of board-certified physicians

Physician turnover rate

Appointment wait time

Question 10

What are three examples of health plan performance measures?

Associated with clinical indicators

Answer 10

Admissions per thousand members

Average length of stay

Emergency room cases per thousand members

Question 11

What are the retirement plan Performance measures for defined benefit services?

Answer 11

95% of all confirmation statements of benefits will be mailed within three days of request

95% of all confirmation statements of benefits will be mailed within five days of indication of separation from service and all required paperwork

100% of all benefit estimates and calculations will be accurate

Question 12

What are the primary retirement plan performance measures for direct contribution services?

Answer 12

Quarterly participant statements will be delivered by the 20th of each month

Quarterly ADP/ACP tests will be completed within 15 business days of request

Question 13

What’s the purpose of a hold harmless statement?

Answer 13

The hold, harmless statement, indemnifies the service provider from certain actions and the liabilities that may result from those actions

Most service providers require this statement

Question 14

What are five basic billing provisions that should be included in the contract regarding fees?

Answer 14

Billing process

Handling disputes

Ad HOK Services

General and administrative percentage

Negotiating a reduction in fees, if measures are not met

Question 15

Regarding group insurance policies, in addition to price what is it important to check carefully?

Answer 15

It’s important to check, disclaimers and exclusions

Too many exclusions can leave the benefit with little to no value to the employee

Question 16

What is a contract termination statement?

Answer 16

a formal letter, informing one party in a contract of the intention to cancel, or terminate their business agreement or an ongoing business relationship

Question 17

What are four areas typically contained in a contract termination statement

Answer 17

Early termination, by who, how, and why

Reports and data to be returned to the client organization

Staff to assist in transition

Confidentialities agreement

Question 18

What is a binder?

Answer 18

Serves as a contract of temporary or interim insurance, until a formal policy is issued

Upfront money, or working capital for the service provider to pay on the organizations behalf

Question 19

What is the part of a contract that absolve an individual or enterprise from being liable to damages or other liabilities out of the contract?

Answer 19

Hold harmless statement

Question 20

What part of the contract dictates the terms, under which an agreement can end, and when an already established contract ends

Answer 20

Contract termination statement

Question 21

What serves as a contract of temporary or interim insurance until a formal policy is issued

Answer 21

A binder request

Question 22

A contract should address data security. What are important aspects of data security to be included?

Answer 22

Defined the data platform and how it is secured

Limit to accessing the platform except for contracted functions

Address confidentiality needs (HIPAA)

Secure transfer of data (encryption)

Question 23

Contingency plans should be included in a contract regarding data security.

What are four typical contingency plans included in the contract

Answer 23

Action if call-center is out of service

Back up locations

Back up of data

Action if service provider experiences an emergency or loss

Question 24

Audit information should be included in a contract.

What are five things are typically included in the contract regarding audits

Answer 24

Who will conduct the audits?

Who has access to the service providers information

Include an audit on demand statement

Specified data to be available from service providers for the company to do it’s own audit

Question 25

Which statement is most accurate regarding the letter of intent? It is sent at the same time as the RFP It is sent all bitters as a way of finalizing the bidding process It designates a period of time to finalize and implement the final contract.

Answer 25

It designates a period of time to finalize and implement the final contract

Question 26

If the primary service provider will be utilizing subcontractors to provide the service, what should the client company include in the contract? The binder request be required That they have the right to approve or disapprove any subcontractors That the primary service provider establishes and monitors the performance measures

Answer 26

That they have the right to approve or disapprove any subcontractors

Question 27

What is considered to be the most critical aspect of the contract? Contingency plans Communication review Performance measures

Answer 27

Performance measures

Question 28

Which statement is most accurate regarding the final review of the contract? All appropriate parties at the client organization, who will be affected by the contract should review it Legal is only included at the service provider makes that request It is not necessary to include procedures for amending the agreement

Answer 28

Are all appropriate parties at the client organization who will be affected by the contract should review it

Question 29

What are four primary factors to consider when making the transition to a new service provider?

Answer 29

Logistical issues Health and welfare plan issues Terminating current contracts Communication

Question 30

When implementing a change from an HR function to an outsourced function, who should be involved in the implementation team

Answer 30

Similar to the provider selection team Staff from all levels of the organization Requires knowledge of day-to-day operation People on the team, most affected by the change

Question 31

During a transition of a service from HR to outsourcing documenting, the transition is important. What items will the implementation team document or record?

Answer 31

Issues that are raised Decisions on how issues will be handled and the responsible parties When issues will be resolved How issues were resolved?

Question 32

When a typical HR function is now performed by a service provider. What is one of the primary goals of the HR department? To deliver seamless, uninterrupted service to the employees To allow the service provider to control the transition To ensure all departments are affected by the transition

Answer 32

To deliver seamless, uninterrupted service employees

Question 33

Which statement is most accurate regarding the members of the implementation team? Only the staff should be a part of the team Members must be in Management roller higher All levels of the organization should be included on the team

Answer 33

All levels in the organization should be included on the team

Question 34

Why might an organization choose to include on the implementation team, those individuals whose job may be most affected by the change to the service provider? To minimize the effect of potential layoffs To allow for teambuilding to help overcome resistance To gauge the level of resistance for the project

Answer 34

To allow for teambuilding to help overcome resistance

Question 35

If the changes caused by the transition to a new service provider or complex, what is the best approach for communicating the information? Communicate the information in small pieces of information Disseminate information via email only Communicate the senior management, and allow them to determine the communication strategy

Answer 35

Communicate the information in small pieces

Question 36

In what manner should the HR team communicate with family members when changes will affect the them? Directly Indirectly No communication is necessary

Answer 36

Directly

Question 37

A service provider is someone who provides subscribers access to various types of services. Name six types of service providers

Answer 37

Supplier Consultant Insurance organization Broker Benefits advisor Attorney

Question 38

What are the five primary steps to managing the service provider relationship?

Answer 38

Understand what things to look for a service provider and team Take steps to insure an effective two way partnership Monitor accountability Leverage across your service provider Know when to manage changes to the team and escalate issues

Question 39

Once the service team for an account has been assigned, the client should first do which of the following? Introduced all members of the service team to senior management Clarify, the roles and responsibilities of all members of the service team Instruct all members of the service team, to review the particulars of the contract

Answer 39

Clarify, the roles and responsibilities of all members of the service team

Question 40

Who will most likely take more of the lead in initial meetings between the client and the service team? The service provider The client The HR Director

Answer 40

The service provider

Question 41

When monitoring service providers performance, what would the client expect the service provider to include the typical performance report? The performance standards and obstacles to achieving optimal performance The performance standard projected performance and additional benefits, not included in the contract The performance standard, the actual performance, and the variance from the standard

Answer 41

The performance, standard, the actual performance, and the variance from the standard

Question 42

What is a common outcome of a merger regarding service provider functions? A merger may create redundancy in services performed by partners A merger will cause all existing service provider contracts to become invalid A merger will cause service providers to increase the agreed-upon fees

Answer 42

A merger may create redundancy in services performed by partners

Question 43

When conflicts arise between the client and the service provider, how are they best resolved? Unilaterally, with the client resolving the dispute Unilaterally, with the service provider, resolving the dispute Jointly, with the service provider and client resolving the dispute

Answer 43

Jointly, with the service provider and client resolving the dispute

Question 44

At the end of the contract period, the organization must make a decision regarding next steps. What are the four basic options?

Answer 44

Internalize the function Renew Renegotiate Rebid

Question 45

Why might an organization decide to Insource a function rather than continue the relationship with the current service provider? Outsourcing did not provide anticipated return on investment The service provider met expectations, but did not exceed expectations Outsourcing caused a reduction in the organizations HR staff

Answer 45

Outsourcing did not provide the anticipated return on investment

Question 46

The client is basically satisfied with the relationship with the current service provider. The client, however, would like to add additional responsibilities to the current agreement. What would you recommend the client do in the situation? Insource the project Renegotiate the contract Rebuild the contract

Answer 46

Renegotiate the contract

Question 47

When re-bidding an ongoing project, what is one strategy that may help to streamline the process? Re-interview the top two or three prospects from the original search Resend request for information to the companies identified in the original search Create a new selection team, and begin with a fresh start

Answer 47

Re-interview the top two or three prospects from the original search

Question 48

What is one of the most effective strategies for transitioning from one service provider to another? Allow the account managers from both service providers to discuss the positive aspects and negative aspects of servicing this particular contract Ensure that the existing service provider will work with the client long enough until the new service provider is able to take over Discourage interaction and communication between the two service providers

Answer 48

Ensure that the existing service provider will work with the client long enough until the new service providers able to take over