AMENDMENT TO THE PRODUCER AGREEMENT (MEDICARE) This amendment ( Amendment ) is effective on September 1, 2017 and amends and is made part of the Producer Agreement ( Agreement ) by and between California Physicians Service dba Blue Shield of California, and its affiliates and subsidiaries including Blue Shield of California Life & Health Insurance Company (collectively, Blue Shield ) and Producer. Blue Shield and Producer hereby agree to amend the Agreement to comply with legal requirements relating to Medicare Advantage plans and Medicare Prescription Drug Plans. Except as set forth in this Amendment, all other provisions of the Agreement shall remain unchanged and in effect. The Agreement is amended to include the following provisions: Specific Regulatory Obligations of Medicare Participation. You acknowledge and agree that sales of Blue Shield Medicare Advantage plans and Medicare Prescription Drug Plans ( Blue Shield Medicare Plans ) are subject to regulation by the Centers for Medicare & Medicaid Services ( CMS ) of the Department of Health and Human Services ( HHS ). As used in this Amendment, the term Medicare Laws and Regulations shall mean and include: (i) All relevant provisions of the Social Security Act, including but not limited to, Part C and Part D of Title XVIII; (ii) all rules and regulations promulgated pursuant to the relevant provisions of the Social Security Act, including but not limited to those set forth in 42 C.F.R. Parts 422 and 423; (iii) the CMS Internet Security Policy; and (iv) any and all relevant administrative guidelines (including the Medicare Marketing Guidelines), bulletins, manuals, instructions, requirements, policies, standards, or directives from time to time adopted or issued by CMS or HHS. Interpretation and Relationship to the Rest of the Agreement. The provisions of this Amendment apply to the solicitation and submission of applications for Blue Shield Medicare Plans. To the extent there is a conflict between the terms of this Amendment or Medicare Laws and Regulations and any other terms of the Agreement, the terms of this Amendment and Medicare Laws and Regulations shall govern as they apply to Blue Shield Medicare Plans. Absent such a conflict, the other terms of the Agreement also apply to Blue Shield Medicare Plans. The terms of the Agreement (including this Amendment), as they relate to the provision of services under Blue Shield Medicare Plans, shall be interpreted in a manner consistent with applicable Medicare Laws and Regulations. Compliance with Laws and Regulations. You agree that you shall be responsible for complying with all Medicare Laws and Regulations applicable to the performance of your obligations under the Agreement. Any amendments to applicable Medicare Law and Regulations shall be automatically included in the Agreement such that the Agreement remains in compliance with such amendments. Compliance with Blue Shield Policies and Procedures. You agree to comply with all Blue Shield policies and procedures applicable to Blue Shield Medicare Plans, including but not limited to, policies and procedures relating to enrollment, disenrollment, sales and marketing.
Training and Certification. You agree that you and your associates shall complete required training regarding Medicare and Blue Shield Medicare Plans and pass an approved test by at least the minimum level required by CMS on an annual basis. You further agree that you and your associates shall not be qualified to market or sell Blue Shield Medicare Plans until successful completion of such annual training and testing. Business Integrity. You represent and warrant that you have not been or will not during any term hereof be (i) listed as debarred, excluded, or otherwise ineligible for participation in federal health care programs or (ii) convicted of a felony, nor shall you employ any person or contract with any person to provide services under the Agreement if such person has been so debarred, excluded or convicted of a felony. If at any time you become aware of any violation of this representation and warranty, you agree to notify Blue Shield in writing immediately. If you become debarred or ineligible or if you have not taken the actions required of you in the preceding sentence (if and when applicable), then Blue Shield may terminate the Agreement immediately upon written notice to you without liability to Blue Shield, or take such other corrective or remedial action as warranted under the circumstances. Maintenance of Records; Audits. You shall maintain accurate, complete, and timely books, records and accounts of all transactions occurring under the Agreement. You shall retain such books and records relating to solicitation and sales of Blue Shield Medicare Plans for a period of at least ten (10) years or for such longer period of time as required by any on-going audit or investigation of you or Blue Shield conducted by a governmental authority. You shall permit HHS, the Comptroller General, Blue Shield or their designees to have the right to inspect, evaluate, and audit the books, records, contracts, documents and computer or other electronic systems relating to your performance of services pursuant to the Agreement, and otherwise cooperate with, assist and provide information as requested to the aforementioned entities. You agree to produce and provide such documents to Blue Shield to provide to HHS, the Comptroller General or their designees upon their request. The right of HHS, the Comptroller General, Blue Shield and their designees to inspect, evaluate and audit any of the foregoing types of information shall exist during the term of the Agreement and for a period of ten (10) years after the expiration or earlier termination and for such longer period of time as required to complete an on-going audit or investigation. The provisions of this section shall survive the expiration or earlier termination of the Agreement for any reason. Receipt of funds. You agree that you and your associates are prohibited from receiving funds on our behalf from applicants or members of Blue Shield Medicare Plans. Delegation. You acknowledge that Blue Shield delegates to you responsibility under its Part C and Part D contracts with CMS to provide the services set forth in this Amendment. You agree that Blue Shield may only delegate such responsibilities in accordance with Medicare Laws and Regulations, including standards set forth in 42 CFR 422.504(i)(3) and (4) and 423.505(i)(3) and (4). Monitoring. You acknowledge and understand that Blue Shield is responsible to CMS for administering its Part C and Part D contracts in accordance with Medicare Laws and Regulations. In view of the foregoing, you shall permit Blue Shield to monitor your performance (and that of any associates) on an on-going basis, in any manner that Blue Shield reasonably deems appropriate for compliance with Blue Shield s obligations to CMS.
Compliance with Blue Shield s Obligations. You agree that all services you perform relating to Blue Shield Medicare Plans pursuant to the Agreement shall be consistent with and shall comply with the contractual obligations imposed upon Blue Shield under its Part C and Part D contracts with CMS. You agree that you shall perform the services required of you by the Agreement in a manner that permits Blue Shield to comply with its CMS contracts and all applicable Medicare Laws and Regulations. Confidentiality. You shall comply with all applicable state and Medicare Laws and Regulations, Blue Shield policies and procedures, and administrative guidelines issued by CMS pertaining to the confidentiality, privacy, data security, accuracy, and/or transmission of personal, health, enrollment, financial, and consumer information and/or medical records (including prescription records) of members and potential members. Cooperation in Resolving Complaints and Ability to Terminate Associates. You agree to cooperate with Blue Shield in investigating and resolving any complaints or investigations regarding you or your associates in their provision of services under the terms of the Agreement. You agree that Blue Shield retains the right to approve, suspend, or terminate the authority of any of your associates to provide services under the terms of the Agreement. Contracts with Associates. You agree to enter into written contracts with any of your associates who market and/or sell Blue Shield Medicare plans under the terms of the Agreement. All such contracts shall contain the provisions required by Medicare Laws and Regulations and be consistent with the terms and conditions of the Agreement (including this Amendment). If the Agreement, or any Exhibit or Attachment, is modified or amended, you agree that all such contracts with your associates shall be modified or amended within thirty (30) calendar days to be consistent with such modifications or amendments. Hold Harmless. You acknowledge and agree that no applicant or Medicare beneficiary shall be responsible for any payment for your services provided under the Agreement. Under no circumstances, including breach of the Agreement, non-payment by Blue Shield or insolvency of Blue Shield, shall you or your associates bill, charge, collect a deposit from, seek compensation or remuneration or reimbursement from, or have any recourse against, any applicant, Medicare beneficiary or any person (other than Blue Shield) acting on behalf of any such Medicare beneficiary or applicant. You agree that this provision shall survive termination and shall be construed to be for the benefit of Medicare beneficiaries and applicants. This section supersedes any oral or written contrary agreement now existing or hereafter entered between you and any Medicare beneficiary, applicant or person acting on behalf of Blue Shield. Compensation. Blue Shield shall pay compensation to you based upon the number of Medicare beneficiaries produced by you and your associates who enroll in a Blue Shield Medicare Plan. Compensation will be calculated and paid in accordance with the Medicare Compensation Schedule set forth at www.blueshieldca.com/producer and this Amendment. a. Blue Shield shall pay commissions according to the applicable commission schedule as long as the following criteria are met:
1. You and your associates are properly certified to sell Blue Shield Medicare plans as determined by Blue Shield and consistent with Medicare Laws and Regulations. 2. You and your associates are continuously and properly licensed with the California Department of Insurance (DOI), and hold valid life and health insurance licenses. 3. You and your associates are not excluded from participation in any federal or state health care program. 4. Agents writing business under their own name or business entity must be individually appointed by Blue Shield. Agents writing business under an agency or TMO must either be: (a) appointed by Blue Shield; or (b) endorsed by the agency or TMO and the agency or TMO must be appointed by Blue Shield. 5. You are named as the producer of record for the Medicare beneficiary. 6. The Medicare beneficiary remains enrolled in Blue Shield. b. An initial year commission is available only when CMS reports and Medicare Laws and Regulations indicate that an initial year commission is payable. Renewal year commission shall be paid for each enrollment in year 2 and later as designated by CMS. c. All applications for Blue Shield Medicare Plans must be submitted to Blue Shield within one calendar day of receipt to allow for timely submission to CMS. Blue Shield reserves the right to reduce initial and renewal year commissions up to 50% on applications that are not submitted to Blue Shield within one calendar day of receipt. Blue Shield also reserves the right to pay no initial or renewal year commissions on applications submitted to Blue Shield over seven calendar days after receipt. d. Any retro-disenrollments or disenrollments within three (3) calendar months of the member s effective date in the plan shall result in Blue Shield charging back the full amount of the payment or, at Blue Shield s discretion, offsetting against future payments due to you, except as set forth in Medicare Laws and Regulations. If a Medicare beneficiary disenrolls from a Blue Shield Medicare Plan after the first three months of the initial year or a renewal year, commission shall be refunded on a 12-month prorated basis for months the beneficiary is no longer a member. e. Notwithstanding any other provision of the Agreement, Blue Shield may modify payments under the Agreement at any time to comply with Medicare Laws and Regulations relating to payments to independent insurance Agents. f. You agree that when a sale or renewal is made by your associate, you must pay your associate the entire amount set forth as the Agent/Producer payment at www.blueshieldca.com/producer. You may not withhold any portion of the commission payment. g. CMS defines the compensation year as January 1 through December 31 of
each year. Payments may not be paid until January 1 and must be paid in full by December 31 of the enrollment year. h. Notwithstanding any contrary provisions of the Agreement, Blue Shield may not change the Producer of Record or pay commissions to any individual other than the Producer of Record except to the extent allowable under Medicare Laws and Regulations.