Module 4 Negotiating and Finalizing The Service Provider Contract Group insurance Flashcards
Who is sent the letter of intent?
The letter of intent is sent to the winning bidder for mutual sign off
How many copies of the letter of intent should be sent to the selected service provider?
At least two - with two signed and returned
What are the 5 things accomplished by sending letter of intent?
- 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
What are 4 key drivers for contract Negotiation Power?
- Organizations size
- Organization name or reputation
- Competition
- Common Fee level in market (knowing what others are paying)
What are the 4 steps in negotiating and finalizing the service provider contract?
- identify final negotiation items
- Clarify Conditions for Cancelation
- Summarize and communicate final terms
- Hold meeting to discuss requirements
What other terms may be used to define “ the contract”?
Service agreement
Trust agreement 
What are typical content areas included in a contract
Contract and duration
Parties to the contract
Services to be performed
Contracts should include performance measures - defined the acronym SMART regarding smart guidelines
Specific
Measurable
Attainable
Relevant
Time bound
What are three examples of health plan performance measures?
Associated with provider, net work management
Percentage of board-certified physicians
Physician turnover rate
Appointment wait time
What are three examples of health plan performance measures?
Associated with clinical indicators
Admissions per thousand members
Average length of stay
Emergency room cases per thousand members
What are the retirement plan Performance measures for defined benefit services?
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
What are the primary retirement plan performance measures for direct contribution services?
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
What’s the purpose of a hold harmless statement?
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
What are five basic billing provisions that should be included in the contract regarding fees?
Billing process
Handling disputes
Ad HOK Services
General and administrative percentage
Negotiating a reduction in fees, if measures are not met
Regarding group insurance policies, in addition to price what is it important to check carefully?
It’s important to check, disclaimers and exclusions
Too many exclusions can leave the benefit with little to no value to the employee
What is a contract termination statement?
a formal letter, informing one party in a contract of the intention to cancel, or terminate their business agreement or an ongoing business relationship
What are four areas typically contained in a contract termination statement
Early termination, by who, how, and why
Reports and data to be returned to the client organization
Staff to assist in transition
Confidentialities agreement
What is a binder?
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
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?
Hold harmless statement
What part of the contract dictates the terms, under which an agreement can end, and when an already established contract ends
Contract termination statement
What serves as a contract of temporary or interim insurance until a formal policy is issued
A binder request
A contract should address data security. What are important aspects of data security to be included?
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)
Contingency plans should be included in a contract regarding data security.
What are four typical contingency plans included in the contract
Action if call-center is out of service
Back up locations
Back up of data
Action if service provider experiences an emergency or loss
Audit information should be included in a contract.
What are five things are typically included in the contract regarding audits
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
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.
It designates a period of time to finalize and implement the final contract
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
That they have the right to approve or disapprove any subcontractors
What is considered to be the most critical aspect of the contract?
Contingency plans
Communication review
Performance measures
Performance measures
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
Are all appropriate parties at the client organization who will be affected by the contract should review it
What are four primary factors to consider when making the transition to a new service provider?
Logistical issues
Health and welfare plan issues
Terminating current contracts
Communication
When implementing a change from an HR function to an outsourced function, who should be involved in the implementation team
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
During a transition of a service from HR to outsourcing documenting, the transition is important.
What items will the implementation team document or record?
Issues that are raised
Decisions on how issues will be handled and the responsible parties
When issues will be resolved
How issues were resolved?
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
To deliver seamless, uninterrupted service employees
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
All levels in the organization should be included on the team
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
To allow for teambuilding to help overcome resistance
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
Communicate the information in small pieces
In what manner should the HR team communicate with family members when changes will affect the them?
Directly
Indirectly
No communication is necessary
Directly
A service provider is someone who provides subscribers access to various types of services.
Name six types of service providers
Supplier
Consultant
Insurance organization
Broker
Benefits advisor
Attorney
What are the five primary steps to managing the service provider relationship?
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
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
Clarify, the roles and responsibilities of all members of the service team
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
The service provider
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
The performance, standard, the actual performance, and the variance from the standard
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
A merger may create redundancy in services performed by partners
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
Jointly, with the service provider and client resolving the dispute
At the end of the contract period, the organization must make a decision regarding next steps. What are the four basic options?
Internalize the function
Renew
Renegotiate
Rebid
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
Outsourcing did not provide the anticipated return on investment
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
Renegotiate the contract
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
Re-interview the top two or three prospects from the original search
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
Ensure that the existing service provider will work with the client long enough until the new service providers able to take over
