CONFIDENTIAL TREATMENT REQUESTED

Confidentiality Agreement

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PRG SCHULTZ INTERNATIONAL INC

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Title: CONFIDENTIAL TREATMENT REQUESTED
Date: 5/10/2005
Industry: Business Services Sector: Services

CONFIDENTIAL TREATMENT REQUESTED, Parties: prg schultz international inc

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EXHIBIT 10.8

CONFIDENTIAL TREATMENT REQUESTED

CONFIDENTIAL PORTIONS OF THIS AGREEMENT WHICH HAVE BEEN REDACTED ARE MARKED

WITH BRACKETS ("[***]"). THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE

UNITED STATES SECURITIES AND EXCHANGE COMMISSION.

[CMS LOGO]

DEPARTMENT OF HEALTH & HUMAN SERVICES

Centers for Medicare & Medicaid Services

7500 Security Boulevard, Mail Stop C2-21-15

Baltimore, Maryland 21244-1850

OFFICE OF ACQUISITION AND GRANTS MANAGEMENT

March 7, 2005

Mr. Paul Dinkins, Exec. VP

PRG-Schultz International, Inc.

600 Galleria Parkway,

Suite 100 Atlanta, GA 30339

SUBJECT: Notice of Award, Contract for Non-MSP Recovery Audit Work in the State

of California

Dear Mr. Dinkins:

Congratulations, CMS has accepted PRG's final revised proposal for the subject

contract requirement. Attached is a copy of the subject contract.

The contract was developed from the Request for Proposal and now incorporates

your contractor-specific information and the state-specific information in

Sections B, C and G.

Please acknowledge acceptance of this award by providing two (2) original signed

SF 26 forms. The signature shall be by an authorized official of your

organization. Both originals shall be returned to CMS no later than March 10,

2005, 10:00 am local Baltimore time so that the Contracting Officer may

effectuate the award by COB on the 10th as well. Please return to the following

address:

Centers for Medicare & Medicaid Services

OAGM, Attn: Barbara J. Erbe

7500 Security Boulevard, MS C2-21-15

Baltimore, MD 21244-1850

RAC CONTRACT

You do not need to return the contractual document, just the signed forms. Upon

execution by the Contracting Officer, one original SF 26 will be returned to you

for your files. If you have any questions, please contact Barbara Erbe at (410)

786-5142.

Please understand you are not to have any press releases concerning this award

until the Secretary has officially announced the award to the public. We will

notify you at that time.

Sincerely,

/s/ Carol G. Sevel

Contracting Officer

Enclosure

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Contract No. HHSM-500-2005-000041

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TABLE OF CONTENTS

PART I - THE SCHEDULE

SECTION B - SUPPLIES OR SERVICES AND PRICES/COSTS

B.1 DESCRIPTION OF SERVICES

B.2 TYPE OF CONTRACT

B.3 PRICE SUMMARY

SECTION C - DESCRIPTION/SPECIFICATIONS/WORK STATEMENT

C.1 STATEMENT OF WORK

C.2 INCORPORATION OF REPRESENTATIONS AND CERTIFICATIONS

SECTION D - PACKAGING AND MARKING

D.1 PACKAGING AND MARKING

SECTION E - INSPECTION AND ACCEPTANCE

E.1 FEDERAL ACQUISITION REGULATION (FAR) CLAUSES

E.2 INSPECTION AND ACCEPTANCE

E.3 ACCEPTANCE BY THE PROJECT OFFICER/GOVERNMENT TASK LEADER

SECTION F - DELIVERIES OR PERFORMANCE

F.1 FEDERAL ACQUISITION REGULATION (FAR) CLAUSES

F.2 PERIOD OF PERFORMANCE

F.3 ITEMS TO BE FURNISHED AND DELIVERY SCHEDULE

F.4 TIME AND PLACE OF DELIVERIES

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SECTION G - CONTRACT ADMINISTRATION DATA

G.1 DATA TO BE DELIVERED

G.2 USE OF GOVERNMENT DATA (REPORTS/FILES/COMPTER TAPES OR DISCS)

G.3 OMB A-130 INFORMATION RESOURCE POLICY

G.4 KEY PERSONNEL

G.5 GOVERNMENT PROJECT OFFICER (PO)/CONTRACT SPECIALIST

G.6 CONTRACTING OFFICER'S RESPONSIBILITY

G.7 DESIGNATION OF PROPERTY ADMINISTRATOR AND PROPERTY ADMINISTRATION

G.8 INVOICING AND PAYMENT

G.9 PAYMENT BY ELECTRONIC FUNDS TRANSFER-CENTRAL CONTRACTOR REGISTRATION

G.10 CONSENT TO SUBCONTRACT

G.11 PAST PERFORMANCE REGISTRATION

G.12 ACCOUNTING AND APPROPRIATION DATA

SECTION H - SPECIAL CONTRACT REQUIREMENTS

H.1 DELIVERABLES/INTERNET - INTRANET APPLICATIONS

H.2 HHSAR 352.224-70 CONFIDENTIALITY OF INFORMATION

H.3 CONTRACTING PROHIBITIONS/ORGANIZATIONAL CONFLICT OF INTEREST

H.4 CONDITIONS FOR PERFORMANCE

H.5 HHSAR 352.270-7 PAPERWORK REDUCTION ACT

H.6 DISPOSAL OF IMAGED MEDICAL RECORDS

H.7 HIPAA BUSINESS ASSOCIATE PROVISION

H.8 COPYRIGHTS

H.9 DISSEMINATION, PUBLICATION AND DISTRIBUTION OF INFORMATION

H.10 FAR 52.204-7 CENTRAL CONTRACTOR REGISTRATION (CCR)

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Contract No. HHSM-500-2005-000041

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PART II - CONTRACT CLAUSES

SECTION I - CONTRACT CLAUSES

I.1 FEDERAL ACQUISITION REGULATION (FAR) CLAUSES

I.2 DEPARTMENT OF HEALTH AND HUMAN SERVICES ACQUISITION REGULATIONS

(HHSAR)

I.3 FAR 52.215-19 NOTIFICATION OF OWNERSHIP CHANGES (OCT 1997)

I.4 FAR 52.244-6 SUBCONTRACTS FOR COMMERCIAL ITEMS (JUL 2004)

PART III - LIST OF DOCUMENTS, EXHIBITS AND OTHER ATTACHMENTS

SECTION J - LIST OF ATTACHMENTS

J.1 STATEMENT OF WORK - NO. 40700NMSPB

J.2 GLOSSARY

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Contract No. HHSM-500-2005-000041

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SECTION B - SUPPLIES OR SERVICES AND PRICES/COSTS

B.1 DESCRIPTION OF SERVICES

The purpose of this contract will be to support the Centers for Medicare &

Medicaid Services (CMS) in conducting a demonstration project in the state of

California using recovery audit contractors (RACs) to provide recovery audit

services to identify underpayments and overpayments and/or recoup overpayments

under the Medicare program for services for which payment is made under part A

or B of title XVIII of the Social Security Act.

B.2 TYPE OF CONTRACT

This is an Indefinite Delivery (ID) Requirements contract.

B.3 PRICE SUMMARY

a. All payments shall be paid only on a contingency basis. The contingency

fees shall be paid once the recovery audit contractor collects the

Medicare overpayments. The recovery audit contractor shall not receive any

payments for the identification of the underpayments or overpayments.

b. For the identification of non-MSP overpayment and underpayments and the

recovery of non-MSP overpayments under SOW 40700NMSPB the RAC will receive

[***]% of the amount that is collected.

A reduced contingency percentage shall apply to a recoupment by offset.

(See below.)

The RAC shall receive [***]% of the agreed upon contingency fee percentage

for any of the following recovery efforts:

(a) Recovery efforts accomplished through the offset process of a

fiscal intermediary or carrier.

(b) Recovery efforts accomplished through Treasury offset or

another collection vehicle after the debt is referred to the

Department of Treasury.

as a result of a prior RAC identified request for medical

records or demand letter. Self- disclosed service and time

period must be included in the RAC's project plan.

[***] - CONFIDENTIAL PORTIONS OF THIS AGREEMENT WHICH HAVE BEEN REDACTED ARE

MARKED WITH BRACKETS ("[***]"). THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY

WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION.

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Contract No. HHSM-500-2005-000041

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d. If the provider files an appeal disputing the overpayment

determination and the appeal is adjudicated in the provider's

favor at the first level, the recovery audit contractor shall

repay Medicare the contingency payment for that recovery. If

the appeal is adjudicated in the agency's favor at the first

level, the recovery audit contractor shall retain the

contingency payment for that recovery. Subsequent appeals,

after the first level of appeal, will not affect the recovery

audit contractor's ability to retain the contingency payment.

See Payment Methodology Chart in Attachment J-1.

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Contract No. HHSM-500-2005-000041

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SECTION C - DESCRIPTION/SPECIFICATIONS/WORK STATEMENT

C.1 STATEMENT OF WORK

Independently and not as an agent of the Government, the Contractor shall

furnish all the necessary services, qualified personnel, material, equipment,

and facilities, not otherwise provided by the Government, as needed to perform

the Statement of Work (SOW), SECTION J. ATTACHMENT J.1, SOW 40700NMSPB, attached

hereto and made a part of this solicitation.

C.2 INCORPORATION OF REPRESENTATIONS AND CERTIFICATIONS

The Contractor's Representations and Certification's, submitted in response to

the solicitation's Section K, dated December 14, 2004, are hereby incorporated

by reference and made a part hereof of this contract.

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Contract No. HHSM-500-2005-000041

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SECTION D - PACKAGING AND MARKING

All deliverables required under this contract shall be shipped and marked in

accordance with Section C.1 Statement of Work and Section F.3 Items to be

Furnished and Delivery Schedule

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Contract No. HHSM-500-2005-000041

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SECTION E - INSPECTION AND ACCEPTANCE

E.1 FEDERAL ACQUISITION REGULATION (FAR) CLAUSES

52.246-5 INSPECTION OF SERVICES - COST REIMBURSEMENT (APR 1984)

E.2 INSPECTION AND ACCEPTANCE

a. All work under this contract is subject to inspection and final acceptance

by the Contracting Officer or the duly authorized representative of the

Government.

b. The Government's Project Officer or Government Task Leader are duty

authorized representatives of the Government and are responsible for

inspection and acceptance of all items to be delivered under this

contract.

c. Inspection and acceptance of the Contractor's performance shall be in

accordance with the applicable FAR Clauses in Section E.1 above.

E.3 ACCEPTANCE BY THE PROJECT OFFICER/GOVERNMENT TASK LEADER

All items to be delivered to the Project Officer will be deemed to have been

approved 60 calendar days after date of delivery, except as otherwise specified

in this contract, if written approval or disapproval has not been given within

such period.

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SECTION F - DELIVERIES OR PERFORMANCE

F.1 FEDERAL ACQUISITION REGULATION (FAR) CLAUSES

52.242-15 STOP-WORK ORDER. (AUG 1989) - ALTERNATE I (APR 1984)

F.2 PERIOD OF PERFORMANCE

This is a three (3) year contract. The period of performance is 3 years from the

time of award: March 10, 2005 through March 9, 2008. No contingency fees shall

be paid after the end of the period of performance.

F.3 ITEMS TO BE FURNISHED AND DELIVERY SCHEDULE

The Contractor shall furnish the items required under this contract in

accordance with the reporting instructions and delivery schedule set forth in

Attachment J.1.

F.4 TIME AND PLACE OF DELIVERIES

The supplies/services to be furnished shall be delivered in accordance with the

delivery schedule as specified in the statement of work.

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SECTION G - CONTRACT ADMINISTRATION DATA

G.1 DATA TO BE DELIVERED

a. Any working papers, interim reports, data given by the Government to the

Contractor or first produced by the Contractor under the contract, data

collected or otherwise obtained by Contractor under the contract (subject

to any specific restrictions that may pertain to this data), or results

obtained or developed by the Contractor (subcontractor or consultants)

pursuant to the fulfillment of this contract are to be delivered,

documented, and formatted as directed by the Contracting Officer.

b. In addition, information and/or data, which are held by the Contractor

related to the operation of their business and/or institution and which

are obtained without the use of Federal funds, shall be considered

"PROPRIETARY DATA" and are not "subject data" to be delivered under this

contract.

G.2 USE OF GOVERNMENT DATA (REPORTS/FILES/COMPUTER TAPES OR DISCS)

Any data given to the Contractor by the Government shall be used only for the

performance of the contract unless the Contracting Officer specifically permits

another use, in writing. Should the Contracting Officer permit the Contractor

the use of Government-supplied data for a purpose other than solely for

performance of this contract and, if such use could result in a commercially

viable product, the Contracting Officer and the Contractor must negotiate a

financial benefit to the Government. This benefit should most often be in the

form of a reduction in the price of the contract; however, the Contracting

Officer may negotiate any other benefits he/she determines is adequate

compensation for the use of these data.

Upon the request of the Contracting Officer, or the expiration date of this

contract, whichever shall come first, the Contractor shall return all data given

to the Contractor by the Government (including any images of medical records).

However, the Contracting Officer may direct that the Contractor retain the data

for a specific period of time, which period shall be subject to agreement by the

Contractor. Whether the data are to be returned, retained, or destroyed shall be

the decision of the Contracting Officer with the exception that the Contractor

may refuse to retain the data. The Contractor shall retain no data, copies of

data, or parts thereof, in any form, when the Contracting Officer directs that

the data be returned or destroyed. If the data are to be destroyed, the

contractor shall directly furnish evidence of such destruction in a form the

Contracting Officer shall determine is adequate.

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G.3 OMB A-130 INFORMATION RESOURCE POLICY

Each RAC is required to follow the established comprehensive approach to improve

the acquisition and management of their information resources in accordance with

this OMB Circular. This circular is issued pursuant to the Paperwork Reduction

Act (PRA) of 1980, as amended by the PRA of 1995, the Clinger-Cohen Act of 1996,

et al. The PRA establishes a broad mandate to perform information resources

management activities in an efficient, effective, and economical manner.

G.4 KEY PERSONNEL

a. For the purposes of this contract, the key person shall be the Project

Director/Project Manager, Rob Paulsson. It will be his responsibility to

obtain the staff necessary and to direct the work for the conduct of this

project. The key person under this contract shall be in accordance with

the HHSAR clause provided below.

b. HHSAR 352-270-5 KEY PERSONNEL (APR 1984)

The personnel specified in this contract are considered to be essential to

the work being performed hereunder. Prior to diverting any of the

specified individuals to other programs, the Contract shall notify the

Contracting Officer reasonably in advance and shall submit justifications*

(including proposed substitutions) in sufficient detail to permit

evaluation of the impact on the programs. No diversion shall be made by

the Contractor without the written consent of the Contracting Officer;

provided, that the Contracting Officer may ratify in writing such

diversions and such ratification shall constitute the consent of the

Contracting Officer required by the clause. The contract may be amended

from time to time during the course of the contract by either add or

delete personnel, as appropriate. (End of Clause)

*All proposed substitutions shall be submitted, in writing, to the

Contracting Officer at least 30 days prior to the proposed substitution.

Each request shall provide a detailed explanation of the circumstances

necessitating the proposed substitution, a complete resume and any other

information required by CMS. All proposed substitutions shall have

qualifications equal, to or greater than the person being replaced.

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G.5 GOVERNMENT PROJECT OFFICER (PO)/CONTRACT SPECIALIST

a. The Project Officer (PO) for this task order is Ms. Connie Leonard. Her

address is:

Centers for Medicare and Medicaid Services

7500 Security Blvd.

ATTN: Ms. Connie Leonard

Mailstop: C3-14-20

Baltimore, MD 21244-1850

(410) 786-0627

b. The Project Officer is responsible for: (1) monitoring the Contractor's

technical progress, including the surveillance and assessment of

performance and compliance with all substantive project objectives; (2)

interpreting the statement of work and any other technical performance

requirements; (3) performing technical evaluation as required; (4)

performing technical inspections and acceptances required by this

contract; (5) assisting in the resolution of technical problems

encountered during performance; and (6) providing technical direction in

accordance with Section G.6.; and, (7) reviewing of invoices/vouchers.

c. The Project Officer does not have the authority to act as agent of the

Government under this contract beyond the roles defined in G.5.b. above.

Only the Contracting Officer has authority to: (1) direct or negotiate any

changes in the statement of work; (2) modify or extend the period of

performance; (3) change the delivery schedule; (4) authorize reimbursement

to the Contractor any costs incurred during the performance of this

contract; or (5) otherwise change any terms and conditions of this

contract.

d. The Contract Specialist for this task order is Ms. Barbara Erbe. Her

address is:

Centers for Medicare and Medicaid Services

7500 Security Blvd.

ATTN: Ms. Barbara Erbe

Mailstop: C2-21-15

Baltimore, MD 21244-1850

(410) 786-5142

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Contract No. HHSM-500-2005-000041

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G.6 CONTRACTING OFFICER'S RESPONSIBILITY

In accordance with FAR 52.201-1 Definitions, The term Contracting Officer means

a person with the authority to enter into, administer, and/or terminate

contracts and make related determinations and findings. The term includes

certain authorized representatives of the Contracting Officer acting within the

limits of their authority delegated by the Contracting Officer.

Notwithstanding any of the other provisions of this Contract, the Contracting

Officer shall be the ONLY individual authorized to:

enter into and commit/bind the Government by contract for supplies or

services;

accept nonconforming work or waive any requirement of this Contract;

authorize reimbursement to the Contractor for any costs incurred during

the performance of the Contract, and

modify any term or condition of this Contract, i.e., make any changes in

the Statement of Work; modify/extend the period of performance; change the

delivery schedule.

G.7 DESIGNATION OF PROPERTY ADMINISTRATOR AND PROPERTY ADMINISTRATION

a. The CMS Property Administrator, Administrative Services Group, Office of

Property and Space Management at (410) 786-3346, is hereby designated the

property administration function for this contract. The Contractor agrees

to furnish information regarding Government Property to the Property

Administrator in the manner and to the extent required by the Property

Administrator, his duly designated successors, and in accordance with FAR

Part 45 and DHHS Manual entitled, Contractor's Guide for Control of

Government Property (1990).

b. The contractor is responsible for an annual physical inventory accounting

for all Government property under this contract. The inventory must be

conducted by September 30th and the form 565, Report of Accountable

Personal Property (J-15) submitted by October 31st of each year.

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c. The inventory report shall include all items acquired, furnished, rented

or leased under the contract. Employees who conduct the inventories should

not be the same individuals who maintain the property records. Following

the physical inventory, the contractor shall prepare an inventory report

and submit the report to the CMS Property Administrator at the following

address:

Centers for Medicare & Medicaid Services

OICS, Administrative Services Group

Division of Property and Space Management

7500 Security Blvd., Mailstop: SLL-14-06

Baltimore, MD 21244-1850

d. Commercially leased software is subject to these reporting requirements.

e. The RAC shall submit a consolidated report of all accountable Government

property under this contract, including subcontractor inventory

information.

f. The final inventory report shall indicate that all items required for

continued contract performance are acceptable and free from contamination.

Property that is no longer usable or required shall be reported and

disposition requested.

G.8 INVOICING AND PAYMENT

Invoicing and Payment

a. Submission of Invoices and Place of Payment

(i) No more than once each month following the effective date of this

contract, the Contractor may submit to the Government an invoice (or

public voucher) for payment, in accordance with FAR Clause 52.216-7

"Allowable Cost & Payment." Invoices shall be prepared in accordance

with this contract. All invoices shall be reconciled against the RAC

Database (40700NMSPB) or other documentation as appropriate to

ensure collection has been made and funds recouped deposited prior

to any invoice being paid.

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(ii) To expedite payment, invoices shall be sent, as follows:

Monthly invoices (original and four copies) shall be sent directly

to the address below (where applicable, the Contractor shall submit

the invoice to said office via the cognizant government auditor):

Department of Health and Human Services

Centers for Medicare & Medicaid Services

P.O. BOX 7520

7500 Security Boulevard

Baltimore, Maryland 21207-0520

(iii) Content of Invoice (if Applicable):

Contractor's name and invoice date;

Contract number of other authorization for delivery of property

and/or services;

Description, cost or price, and quantity of property and/or

services actually delivered or rendered;

Shipping and payment terms;

Othersubstantiating documentation or information as required by

the contract; and

Name (where practicable), title, phone number, and complete

mailing address of responsible official to whom payment is

to be sent.

b. Invoice Payment

(i) In accordance with FAR 52.232-33, the Centers for Medicare and

Medicaid Services (CMS) shall only make an electronic

reimbursement/payment.

In accordance with FAR 52.204-7, the contractor must register in the

Central Contractor Registration (CCR) database. Failure to register

in CCR may prohibit CMS from making awards to your organization.

The contractor shall notify CMS' Division of Accounting Operations

of all EFT and address changes in CCR via the following email

address: CCRChanges@cms.hhs.gov

(ii) The target date for payment pursuant to the provision of FAR Clause,

52.216-7 "Allowable Cost and Payment" of this contract shall be 30

calendar days after an invoice containing the information set forth

in Paragraph "a" of this article is received in the 7 payment office

designated herein.

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(iii) Upon receipt of the Contractor's "completion invoice" in the payment

office designated in Paragraph "a" of this article, payment of any

remaining cost and fee determined to be allowable pursuant to the

provisions of FAR Clause, 52.216-7 "Allowable Cost and Payment" of

this contract shall be due 30 calendar days after the Contracting

Officer approves the "completion invoice" for payment.

(iv) Payment shall be authorized after the Division of Accounting has

audited the invoice in accordance with Federal Regulations. This

audit includes verification that the invoice contains the rates/unit

prices, those indicated in the contract or purchase order. Any

discrepancies determined as a result of the audit, could delay the

processing of the invoice and may result in the invoice being

returned to the vendor for correction. Inquiries relating to

payments should be directed to Jean Katzen on (410) 786-5423 or

Suzanne Turgeon on (410) 786-1924.

G.9 PAYMENT BY ELECTRONIC FUNDS TRANSFER - CENTRAL CONTRACTOR REGISTRATION

a. Method of payment. (1) All payments by the Government under this contract

shall be made by electronic funds transfer (EFT), except as provided in

paragraph (a)(2) of this clause. As used in this clause, the term "EFT" refers

to the funds transfer and may also include the payment information transfer. (2)

In the event the Government is unable to release one or more payments by EFT,

the Contractor agrees to either -

(i) Accept payment by check or some other mutually agreeable method of

payment; or

(ii) Request the Government to extend the payment due date until such

time as the Government can make payment by EFT (but see paragraph

(d) of this clause).

b. Contractor's EFT information. The Government shall make payment to the

Contractor using the EFT information contained in the Central Contractor

Registration (CCR) database. In the event that the EFT information changes, the

Contractor shall be responsible for providing the updated information to the CCR

database.

c. Mechanisms for EFT payment. The Government may make payment by EFT through

either the Automated Clearing House (ACH) network, subject to the rules of the

National Automated Clearing House Association, or the Fedwire Transfer System.

The rules governing Federal payments through the ACH are contained in 31 CFR

part 210.

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d. Suspension of payment. If the Contractor's EFT information in the CCR

database is incorrect, then the Government need not make payment to the

Contractor under this contract until correct EFT information is entered into the

CCR database; and any invoice or contract-financing request shall be deemed not

to be a proper invoice for the purpose of prompt payment under this contract.

The prompt payment terms of the contract regarding notice of an improper invoice

and delays in accrual of interest penalties apply.

e. Liability for uncompleted or erroneous transfers. (1) If an uncompleted or

erroneous transfer occurs because the Government used the Contractor's EFT

information incorrectly, the Government remains responsible for -

(i) Making a correct payment;

(ii) Paying any prompt payment penalty due; and

(iii) Recovering any erroneously directed funds.

If an uncompleted or erroneous transfer occurs because the Contractor's

EFT information was incorrect, or was revised within 30 days of Government

release of the EFT payment transaction instruction to the Federal Reserve

System, and -

(i) If the funds are no longer under the control of the payment office,

the Government is deemed to have made payment and the Contractor is

responsible for recovery of any erroneously directed funds; or

(ii) If the funds remain under the control of the payment office, the

Government shall not make payment, and the provisions of paragraph (d) of

this clause shall apply.

f. EFT and prompt payment. A payment shall be deemed to have been made in a

timely manner in accordance with the prompt payment terms of this contract if,

in the EFT payment transaction instruction released to the Federal Reserve

System, the date specified for settlement of the payment is on or before the

prompt payment due date, provided the specified payment date is a valid date

under the rules of the Federal Reserve System.

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g. EFT and assignment of claims. If the Contractor assigns the proceeds of this

contract as provided for in the assignment of claims terms of this contract, the

Contractor shall require as a condition of any such assignment, that the

assignee shall register separately in the CCR database and shall be paid by EFT

in accordance with the terms of this clause. Notwithstanding any other

requirement of this contract, payment to an ultimate recipient other than the

Contractor, or a financial institution properly recognized under an assignment

of claims pursuant to subpart 32.8, is not permitted. In all respects, the

requirements of this clause shall apply to the assignee as if it were the

Contractor. EFT information that shows the ultimate recipient of the transfer to

be other than the Contractor, in the absence of a proper assignment of claims

acceptable to the Government, is incorrect EFT information within the meaning of

paragraph (d) of this clause.

h. Liability for change of EFT information by financial agent. The Government is

not liable for errors resulting from changes to EFT information made by the

Contractor's financial agent.

i. Payment information. The payment or disbursing office shall forward to the

Contractor available payment information that is suitable for transmission as of

the date of release of the EFT instruction to the Federal Reserve System. The

Government may request the Contractor to designate a desired format and

method(s) for delivery of payment information from a list of formats and methods

the payment office is capable of executing. However, the Government does not

guarantee that any particular format or method of delivery is available at any

particular payment office and retains the latitude to use the format and

delivery method most convenient to the Government. If the Government makes

payment by check in accordance with paragraph (a) of this clause, the Government

shall mail the payment information to the remittance address contained in the

CCR database.

G.10 CONSENT TO SUBCONTRACT

a. The Contractor shall be in compliance with FAR Part 44 and the

conflict of interest and exclusions provisions of this contract when

entering into a subcontract arrangement for the purpose of

performing this contract.

b. The Contractor shall be required to complete and submit the

Subcontract Checklist in order to obtain subcontract consent after

award of the contract.

c. Consent is granted to the following subcontracts:

Concentra Preferred Systems

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G.11 PAST PERFORMANCE REGISTRATION

In accordance with the past performance requirements of the FAR, CMS shall

require the contractor to register with the National Institutes of Health (NIH)

Contractor Performance System (CPS). The database allows for the electronic

collection, maintenance and dissemination of contractor performance information.

Contractor registration is available online at: https://cpscontractor.nih.gov.

G.12 ACCOUNTING AND APPROPRIATION DATA

CAN NO. SOURCE OF RECORD NO.

TBD 09-70-0005

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SECTION H - SPECIAL CONTRACT REQUIREMENTS

H.1 DELIVERABLES/INTERNET - INTRANET APPLICATIONS

If applicable, all written deliverables will include a version in Hypertext

Mark-Up Language (HTML) formatted according to Centers for Medicare and Medicaid

(CMS) Intenet, Intranet, and Extranet Standards; available online at

www.cms.gov/about/web/inetspecx.htm.

All websites. Internet applications, and content developed by Contractor shall

reside on CMS servers, follow CMS Standards and Guidelines, and fitter through

the standard agency Internet Clearance process.

If CMS agents or Contractor include information that appears on www.cms.gov or

www.medicare.gov as part of their websites, they must link directly to these

sites to ensure the validity and timeliness of the information. Duplication of

content is not permitted.

Contractor performing work on projects that include the development of Internet,

Intranet, or Extranet applications, shall schedule and meet with CMS's Web

Support Team for guidance before they begin to develop the project.

H.2. HHSAR 352-224-70 CONFIDENTIALITY OF INFORMATION (APR 1984)

(a) Confidential information, as used in this clause, means information

or data of a personal nature about an individual, or proprietary

Information or data submitted by or pertaining to an institution or

organization.

(b) In addition to the types of confidential information described in

paragraph (a) of this clause, information which might require

special consideration with regard to the timing of its disclosure

may derive from studies or research, during which public disclosure

of preliminary unvalidated findings could create erroneous

conclusions which might threaten public health or safety if acted

upon.

identify elsewhere in this contract specific information and/or

categories of information which the Government will furnish to the

Contractor or that the Contractor is expected to generate which is

confidential. Similarly, the Contracting Officer and the Contractor

may, by mutual consent, identify such confidential information from

time to time during the performance of the contract. Failure to

agree will be settled pursuant to the "Disputes" clause.

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Contract No. HHSM-500-2005-000041

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(d) If it is established elsewhere in this contract that information to

be utilized under this contract, or a portion thereof, is subject to

the Privacy Act, the Contractor will follow the rules and procedures

of disclosure set forth in the Privacy Act of 1974, 5 U.S.C. 552a,

and implementing regulations and policies, with respect to systems

of records determined to be subject to the Privacy Act.

(e) Confidential information, as defined In paragraph (a) of this

clause, that is information or data of a personal nature about an

individual, or proprietary Information or data submitted by or

pertaining to an institution or organization, shall not be disclosed

without the prior written consent of the individual, institution, or

organization.

(f) Written advance notice of at least 45 days will be provided to the

Contracting Officer of the Contractor's intent to release findings

of studies or research, which have the possibility of adverse

effects on the public or the Federal agency, as described in

paragraph (b) of this clause. If the Contracting Officer does not

pose any objections in writing within the 45-day period, the

Contractor may proceed with disclosure. Disagreements not resolved

by the Contractor and the Contracting Officer will be settled

pursuant to the "Disputes" clause.

(g) Whenever the Contractor Is uncertain with regard to the proper

handling, of material under the contract, or If the material In

question is subject to the Privacy Act or is confidential

Information subject to the provisions of this clause, the Contractor

should obtain a written determination from the Contracting Officer

prior to any release, disclosure, dissemination, or publication.

(h) Contracting Officer determinations will reflect the result of

internal coordination with appropriate program and legal officials.

(i) The provisions of paragraph (e) of this clause shall not apply when

the information is subject to conflicting or overlapping provisions

in other Federal, State or local laws.

H.3 CONTRACTING PROHIBITIONS/ORGANIZATIONAL CONFLICT OF INTEREST

a. The RAC and all subcontractors must be in compliance with FAR 9.5,

Conflict of Interest.

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Contract No. HHSM-500-2005-000041

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b. In addition, Section 306 of the Medicare Prescription Drug and

Modernization Act of 2003 stipulates that the Secretary may not enter into

a recovery audit contract under this section with an entity to the extent

that the entity is a fiscal intermediary under section 1816 of the Social

Security Act (42 U.S.C. 1395h), a carrier under section 1842 of such Act

(42 U.S.C. 1395u), or a Medicare Administrative Contractor under section

1874A of such Act.

c. In further carrying out the intention of the prohibition of MMA Section

306, CMS has determined the following exclusions apply:

(i) For the purpose of this contract, FIs, Carriers, PSCs, COBCs, and

DMERCs are precluded from being in a team arrangement, joint venture

arrangement, subcontract or in a wholly owned subsidiary arrangement

in order to perform this work.

(ii) If you are a Fl, Carrier, PSC, COBC, or DMERC with a wholly owned

subsidiary, that wholly owned subsidiary is also prohibited from

receiving an award at any tier for this work.

(iii) Any vendor that holds a MMA 306 RAC contract is prohibited from

entering into any other contract with CMS for the purpose of

identifying and/or recoupment of underpayments and overpayments

relating to Medicare claims. This prohibition shall be in effect for

the full term of the RAC contract.

H.4 CONDITIONS FOR PERFORMANCE

In addition to the performance requirement of this contract as set forth under

Section C. DESCRIPTION/SPECIFICATIONS/WORK STATEMENT, the Contractor may be

required to comply with the requirements of any revisions in legislation or

regulations which may be enacted or implemented during the period of performance

of this contract, and are directly applicable to the performance requirements of

this contract.

In the event new legislation or regulations impacting the Contract require

immediate implementation, the Contracting Officer shall issue a change order

pursuant to FAR Clause 52.243-1, entitled Changes - Cost Reimbursement.

<PAGE>

Contract No. HHSM-500-2005-000041

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H.5 HHSAR 352.270-7 PAPERWORK REDUCTION ACT (JAN 2001)

(a) In the event that it subsequently becomes a contractual requirement to

collect or record information calling either for answers to identical

questions from 10 or more persons other than Federal employees, or

information from Federal employees which is outside the scope of their

employment, for use by the Federal government or disclosure to third

parties. The Paperwork Reduction Act of 1995 (Pub. L. 104-13) shall apply

to this contract. No plan, questionnaire, interview guide or other similar

device for collecting information (whether repetitive or single-time) may

be used without first obtaining clearance from the Office of Management

and Budget (OMB). Contractors and Project Officers should be guided by the

provisions of 5 CFR 1320, Controlling Paperwork Burdens on the Public, and

seek the advice of the HHS operating division or Office of the Secretary

Reports Clearance Offers to determine the procedures for acquiring OMB

clearance.

(b) The Contractor shall obtain the required OMB clearance through the Project

Officer before expending any funds or making public contacts for the

collection of data. The authority to expend funds and proceed with the

collection of information shall be in writing by the Contracting Officer.

The Contractor must plan at least 120 days for OMB clearance. Excessive

delays caused by the Government that arises out of causes beyond the

control and without the fault or negligence of the Contractor will be

considered in accordance with the Excusable Delays or Default clause of

this contract.

H.6 DISPOSAL OF IMAGED MEDICAL RECORDS

Imaged medical records must be disposed of in a manner than leaves no trace of

data. The RAC shall use a method compliant with CMS operating procedures and

standards. In addition, a log of all disposed records shall be maintained by the

RAC.

H.7 HIPAA BUSINESS ASSOCIATE PROVISION

HIPAA BUSINESS ASSOCIATE PROVISION II

DEFINITIONS:

All terms used herein and not otherwise defined shall have the same meaning as

in the Health Insurance Portability and Accountability Act of 1996 ("HIPAA," 42

U.S.C. sec. 1320d) and the

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Contract No. HHSM-500-2005-000041

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corresponding implementing regulations. Provisions governing the Contractor's

duties and obligations under the Privacy Act (including data use agreements) are

covered elsewhere in the contract.

"Business Associate" shall mean the Contractor.

"Covered Entity" shall mean CMS' Medicare Fee for Service program and/or

Medicare's Prescription Drug Discount Care and Transitional Assistance Programs.

"Secretary" shall mean the Secretary of the Department of Health and Human

Services or the Secretary's designee.

OBLIGATIONS AND ACTIVITIES OF BUSINESS ASSOCIATE

(a) Business Associate agrees to not use or disclose Protected Health

Information ("PHI"), as defined In 45 C.F.R. ss. 160.103, created or

received by Business Associate from or on behalf of Covered Entity other

than as permitted or required by this Contract or as required by law.

(b) Business Associate agrees to use safeguards to prevent use or disclosure

of PHI created or received by Business Associate from or on behalf of

Covered Entity other than as provided for by this Contract. Furthermore,

Business Associate agrees to use appropriate administrative, physical and

technical safeguards that reasonably and appropriately protect the

confidentiality, integrity and availability of the electronic protected

health information ("EPHI"), as defined in 45 C.F.R. 160.103, it creates,

receives, maintains or transmits on behalf of the Covered Entity to

prevent use or disclosure of such EPHI.

harmful effect that is known to Business Associate of a use or disclosure

of PHI by Business Associate in violation of the requirements of this

Contract.

(d) Business Associate agrees to report to Covered Entity any use or

disclosure involving PHI it receives/maintains from on behalf of the

Covered Entity that is not provided for by this Contract of which it

becomes aware. Furthermore, Business Associate agrees to report to Covered

Entity any security incident involving EPHI of which it becomes aware.

(e) Business Associate agrees to ensure that any agent, including a

subcontractor, to whom it provides PHI received from Covered Entity, or

created or received by Business Associate on behalf of Covered Entity,

agrees to the same restrictions and conditions that apply through this

Contract to Business Associate with respect to such information.

Furthermore, Business Associate agrees to ensure that its agents and

subcontractors implement reasonable and appropriate safeguards for the PHI

received from or on behalf of the Business Associate.

(f) Business Associate agrees to provide access, at the request of Covered

Entity, to PHI received by Business Associate in the course of contract

performance, to Covered Entity or, as directed by Covered Entity, to an

individual In order to meet the requirements under 45 CFR ss. 164.524.

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Contract No. HHSM-500-2005-000041

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(g) Business Associate agrees to make any amendment(s) to PHI in a Designated

Record Set that Covered Entity directs or agrees to pursuant to 45 CFR ss.

164.526 upon request of Covered Entity.

(h) Business Associate agrees to make internal practices, books, and records,

including policies and procedures and PHI, relating to the use and

disclosure of PHI received from, or created or received by Business

Associate on behalf of Covered Entity, available to Covered Entity, or to

the Secretary for purposes of the Secretary determining Covered Entity's

compliance with the various rules implementing the HIPAA.

(i) Business Associate agrees to document such disclosures of PHI and

information related to such disclosures as would be required for Covered

Entity to respond to a request by an individual for an accounting of

disclosures of PHI In accordance with 45 CFR ss. 164.528.

(j) Business Associate agrees to provide to Covered Entity, or an individual

identified by the Covered Entity, information collected under this

Contract, to permit Covered Entity to respond to a request by an

Individual for an accounting of disclosures of PHI in accordance with 45

CFR ss. 164.528.

PERMITTED USES AND DISCLOSURES BY BUSINESS ASSOCIATE

Except as otherwise limited in this Contract, Business Associate may use or

disclose PHI on behalf of, or to provide services to, Covered Entity for

purposes of the performance of this Contract, if such use or disclosure of PHI

would not violate the HIPAA Privacy or Security Rules if done by Covered Entity

or the minimum necessary policies and procedures of Covered Entity.

OBLIGATIONS OF COVERED ENTITY

(a) Covered Entity shall notify Business Associate of any limitation(s) in its

notice of privacy practices of Covered Entity in accordance with 45 CFR

ss. 164.520, to the extent that such limitation may affect Business

Associate's use or disclosure of PHI.

(b) Covered Entity shall notify Business Associate of any changes in, or

revocation of, permission by Individual to use or disclose PHI, to the

extent that such changes may affect Business Associate's use or disclosure

of PHI.

use or disclosure of PHI that Covered Entity has agreed to in accordance

with 45 CFR ss. 164.522, to the extent that such restriction may affect

Business Associate's use or disclosure of PHI.

PERMISSIBLE REQUESTS BY COVERED ENTITY

Covered Entity shall not request Business Associate to use or disclose PHI in

any manner that would not be permissible under the HIPAA Privacy or

Security Rules.

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Contract No. HHSM-500-2005-000041

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TERM OF PROVISION

(a) The term of this Provision shall be effective as of March 10, 2005, and

shall terminate when all of the PHI provided by Covered Entity to Business

Associate, or created or received by Business Associate on behalf of

Covered Entity, is destroyed or returned to Covered Entity, or, if it is

infeasible to return or destroy PHI, protections are extended to such

information, in accordance with the termination provisions in this

Section.

(b) Upon Covered Entity's knowledge of a material breach by Business

Associate, Covered Entity shall either:

(1) Provide an opportunity for Business Associate to cure the breach or

end the violation consistent with the termination terms of this

Contract. Covered Entity may terminate this Contract for default if

the Business Associate does not cure the breach or end the violation

within the time specified by Covered Entity; or

(2) Consistent with the terms of this Contract, terminate this Contract

for default if Business Associate has breached a material term of

this Contract and cure is not possible; or

(3) If neither termination nor cure is feasible, Covered Entity shall

report the violation to the Secretary.

(1) Except as provided In paragraph (2) of this section, upon

termination of this Contract, for any reason, Business Associate

shall return or destroy all PHI received from Covered Entity, or

created or received by Business Associate on behalf of Covered

Entity. This provision shall apply to PHI that is in the possession

of subcontractors or agents of Business Associate. Business

Associate shall retain no copies of the PHI.

(2) In the event that Business Associate determines that returning or

destroying the PHI is infeasible, Business Associate shall provide

to Covered Entity notification of the conditions that make return or

destruction infeasible. Upon such notice that return or destruction

of PHI is infeasible, Business Associate shall extend the

protections of this Contract to such PHI and limit further uses and

disclosures of such PHI to those purposes that make the return or

destruction infeasible, for so long as Business Associate maintains

such PHI.

MISCELLANEOUS

(a) A reference in this Contract to a section in the Rules issued under HIPAA

means the section as in effect or as amended,

(b) The Parties agree to take such action as is necessary to amend this

Contract from time to time as is necessary for Covered Entity to comply

with the requirements of the Rules issued under HIPAA.

<PAGE>

Contract No. HHSM-500-2005-000041

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paragraph (c) of the section entitled "term of Provision" shall survive

the termination of this Contract.

(d) Any ambiguity in this Contract shall be resolved to permit Covered Entity

to comply with the Rules implemented under HIPAA.

H.8 COPYRIGHTS

a. Data first produced in the performance of this contract.

(i) The contractor agrees not to assert, establish, or authorize others

to assert or establish, any claim to copyright subsisting in any

data first produced in the performance of this contract without

prior written permission of the contracting officer. When claim to

government sponsorship (including contract number) to such data when

delivered to the government, as well as when the data are published

or deposited for registration as a published work In the U.S.

others acting on its behalf, a paid-up nonexclusive, irrevocable,

worldwide license for all such data to reproduce, prepare derivative

works, distribute copies to the public, and perform publicly, and

display publicly, by or on behalf of the government.

(ii) If the government desires to obtain copyright in data first produced

in the performance of this contract and permission has not been

granted as set forth above, the contracting officer may direct the

contractor to establish, or authorize the establishment of, claim to

such copyright to the government or its designated assignee.

b. Data not first produced in the performance of this contract.

The contractor shall not, without prior written permission of the

contracting officer, incorporate in data delivered under this contract any

data not first produced in the performance of this contract and which

contain the copyright notice of 17 U.S.C. 401 or 402, unless the

contractor identifies such data and grants to the government.

H.9 DISSEMINATION, PUBLICATION AND DISTRIBUTION OF INFORMATION

a. Subject to Section H.8, data and information either provided to the

contractor or any subcontractor generated by activities under this

contract or derived from research or studies supported by this contract

shall be used only for purposes of this contract.

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Contract No. HHSM-500-2005-000041

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b. Data and information either provided to the contractor, or to any

subcontractor, generated by activities under this contract, or derived

from research or studies supported by this contract, shall be used only

for the purposes of the contract. It shall not a duplicated, used or

disclosed for any purpose other than the fulfillment of the requirements

set forth in this contract. This restriction does not limit the

contractor's right to use data or information obtained from a

non-restrictive source. Any questions concerning "privileged information"

shall be referred to the contracting officer.

c. Some data or information may require special consideration with regard to

the timing of its disclosure. Also, some data or information, which relate

to policy matters under consideration by the government, may also require

special consideration with regard to the timing of its disclosure so that

the open and vigorous debate, within the government, of possible policy

options is not damaged.

d. Any requests for or questions about use or release of the date or

information or handling of material under this contract shall be referred

to the contracting officer who must render a written determination. The

contracting officer's determinations will reflect the results of internal

coordination with appropriate program and legal officials.

e. The contractor agrees not to release Medicare data and information either

provided to the contractor, generated by activities tinder contract, or

derived from research or studies supported by this contract without the

prior permission of the contracting officer.

f. Any presentation of any report, statistical or analytical material based

on information obtained from this contract which requires special

consideration with regard to the protection of the privacy of individuals

or of trade secrets or privileged or confidential commercial information

shall be subject to review by the contracting officer before

dissemination, publication, or distribution. Presentation includes, but is

not limited to, papers, articles, professional publications, speeches,

testimony or interviews with public print or broadcast media.

g. Written advance notice of at least forty-five (45) days shall be provided

to the contracting officer of the contractors desire to release

information where there may be a question of the protection of the privacy

of individuals or of trade secrets or privileged or confidential

commercial Information.

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Contract No. HHSM-500-2005-000041

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h. The contracting officer's review shall cover confidentiality issues and

the protection of the privacy of individuals. If the review reveals that

the privacy of individuals, trade secrets or privileged or confidential

commercial information is, or may be violated, the release use of the

presentation shall be denied until the offending material is removed or

until the contracting officer makes a formal determination, in writing,

that confidentiality provisions, the privacy of individuals, trade secrets

or privileged or confidential commercial information is not being

violated.

i. The contractor agrees to acknowledge support by CMS whenever reports of

projects funding, in whole or in part, by this contract are published in

any medium. The contractor shall include in any publication resulting from

work under this contract, an acknowledgment substantially, as follows:

"The analyses upon which this publication is based were performed under

contract number HHSM-500-2005-000041, entitled, "MMA Section 306 Recovery

Audit Demonstration," sponsored by the Centers for Medicare and Medicaid

Services, Department of Health and Human Services." The conclusions and

opinions expressed, and methods used herein are those of the author. They

do not necessarily reflect CMS policy. The author assumes full

responsibility for the accuracy and completeness of the ideas presented.

Ideas and contributions to the author concerning experience in engaging

with issues presented are welcomed. Any deviation from the above legend

shall be approved, in writing, by the contracting officer.

H.10 FAR 52.204-7 CENTRAL CONTRACTOR REGISTRATION CENTRAL (OCT 2003)

(a) Definitions. As used in this clause-

"Central Contractor Registration (CCR) database" means the primary Government

repository for Contractor information required for the conduct of business with

the Government.

"Data Universal Numbering System (DUNS) number" means the 9-digit number

assigned by Dun and Bradstreet, Inc. (D&B) to identify unique business entities.

"Data Universal Numbering System+4 (DUNS+4) number" means the DUNS number means

the number assigned by D&B plus a 4-character suffix that may be assigned by a

business concern. (D&B has no affiliation with this 4-character suffix.) This

4-character suffix may be

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Contract No. HHSM-500-2005-000041

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assigned at the discretion of the business concern to establish additional CCR

records for identifying alternative Electronic Funds Transfer (EFT) accounts

(see the FAR at Subpart 32.11) for the same parent concern.

"Registered in the CCR database" means that-

(1) The Contractor has entered all mandatory information, Including the DUNS

number or the DUNS+4 number, into the CCR database; and

(2) The Government has validated all mandatory data fields and has marked the

record "Active."

(b)

(1) By submission of an offer, the offeror acknowledges the requirement that a

prospective awardee shall be registered in the CCR database prior to

award, during performance, and through final payment of any contract,

basic agreement, basic ordering agreement, or blanket purchasing agreement

resulting from this solicitation.

(2) The offeror shall enter, in the block with its name and address on the

cover page of its offer, the annotation "DUNS" or "DUNS+4" followed by the

DUNS or DUNS+4 number that identifies the offeror's name and address

exactly as stated in the offer. The DUNS number will be used by the

Contracting Officer to verify that the offeror is registered in the CCR

database.

Bradstreet directly to obtain one.

(1) An offeror may obtain a DUNS number-

(i) If located within the United States, by calling Dun and Bradstreet at

1-866-705-5711 or via the Internet at http://www.dnb.com; or

(ii) If located outside the United States, by contacting the local Dun and

Bradstreet office.

(2) The offeror should be prepared to provide the following information:

(i) Company legal business name.

(ii) Tradestyle, doing business, or other name by which your entity is commonly

recognized.

(iii) Company physical street address, city, state and Zip Code.

(iv) Company mailing address, city, state and Zip Code (if separate from

physical).

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Contract No. HHSM-500-2005-000041

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(v) Company telephone number.

(vi) Date the company was started.

(vii) Number of employees at your location.

(viii) Chief executive officer/key manager.

(ix) Line of business (industry).

(x) Company Headquarters name and address (reporting relationship within your

entity).

(d) If the Offeror does not become registered in the CCR database in the time

prescribed by the Contracting Officer, the Contracting Officer will proceed to

award to the next otherwise successful registered Offeror.

(e) Processing time, which normally takes 48 hours, should be taken into

consideration when registering. Offerors who are not registered should consider

applying for registration immediately upon receipt of this solicitation.

(f) The Contractor is responsible for the accuracy and completeness of the data

within the CCR database, and for any liability resulting from the Government's

reliance on inaccurate or incomplete data. To remain registered in the CCR

database after the initial registration, the Contractor is required to review

and update on an annual basis from the date of initial registration or

subsequent updates its information

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