MEMORANDUM OF UNDERSTANDING

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP86-00964R000100110036-6
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 5
• Document Creation Date: December 14, 2016
• Document Release Date: July 24, 2003
• Sequence Number: 36
• Publication Date: January 1, 1951
• Content Type: CONT

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MEIORANDUM OF UNDERSTANDING
MEMORANDUM OF UNDERSTANDING made this day of
195 , between the United States Government hereinafter referred to as the
ttGovernment") as represented by the Contracting Officer executing this MEMO-
RANDUM OF UNDERSTANDING; the Government Employees Health Association (herein-
after alternately referred to as the "Association" and "Group Treasurer"); and
Group Hospitalization, Inc. and Medical Service of the District of Columbia
(hereinafter referred to as the "Corporation"). WITNESSETH THAT:
WHEREAS, the Government is desirous of fostering the establishment of a
hospitalization and surgical service program which will afford substantial pro-
tection to its employees against burdensome medical expenses, subject always to
the recognition of certain conditions required in the national interest and
constituting a part of the consideration hereof;
WHEREAS, the Association is a government-employee organization possessing
adequate facilities which it is willing to provide for the administration and
supervision of a hospitalization and surgical service program; and
WHEREAS, the Corporation is willing to undertake such hospitalization and
surgical service program tihrough the mechanism of the Association, subject to
certain conditions herein specified,
NOW, THEREFORE, THE PkE IES AGREE AS FOLLOWS:
ARTICLE I. Statement of Principle
A. The parties hereto acknowledge that the interest of the Government
shall be paramount to the :interests of all other parties in areas involving
security considerations. It shall be the exclusive right of the Government to
determine the existence of such areas and to require deviation from normal ad-
ministrative procedure as hereinafter set forth.
B. The Government hereby initially determines and the Corporation agrees
that three of its officers shall be cleared for security and shall sign secrecy
agreements in connection therewith. Unless and until the parties mutually
agree that other persons in the Corporation must be knowledgeable, no further
information of this MEMORANDUM OF UNDERSTANDING (hereafter called "MEMORANDUW")
or the contents thereof shall be disclosed. By the execution of thin J(rdORLV
the C rporation hereby initially designates I I and S
~ Ias the authorized representatives of the Corporation to conduct business
Lions required under this Agreement.
ARTICLE II. Contract between Member of the Association and the Corporation.
A. Hospital Service and Surgical Service Certificates and the application
to the Corporation of members of the Association (hereafter called "subscribers")
including any amendments or riders to either, shall constitute the contract be-
tween the subscribers and the Corporation, and shall be determinative of all
benefits covered thereunder. Any terms or provisions of this M P.ANDUM which
are inconsistent with the contract as constituted above shall be considered
authorized changes or waivers and equivalent to an approved rider or endorsement
of the contract as above constituted.
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ARTICLE III. Administration of Program.
A. General. There shall be two classes of subscribers, Group A and
Group B. Croup A subscribers shall be deemed to include subscribers whose
hospital and surgical claims may be paid by the Corporation through its estab-
lished mechanisms. Group B subscribers shall be deemed to include subscribers
whose claims must be administered as provided in subparagraph B(3) hereof. In
general, records will be retained in the custody and control of the Associa-
tion and the Corporation shall have the right to obtain information necessary
for processing purposes.
B. Central Administration. The Association shall undertake the central
administration of the projected program for servicing employees with the in-
surance made available by the Corporation. Pursuant to this responsibility,
the Association will establish organizational divisions which shall operate as
regional collection points. The Association or its designee will establish
itself with the Corporation as the central collection service for the aforesaid
organizational divisions.
? (1) Application Procedure. Normally, application shall be accom-
plished by completing the Corporation's subscriber's application form with
disclosure of all information normally required thereby. Where security
considerations are paramount as determined by the Government, pursuant to
ARTICLE I hereof, the completion of the subscriber's application form may
be accomplished by number, by pseudonym, by alias, or by any other method
satisfactory to the parties hereto. Identification cards shall be issued
as appropriate.
(2) Collection. The Association shall, be responsible for the colleo-
tion of all premiums from the aforesaid regional collection points, and
the monies so collected shall be transmitted to the Corporation in accord-
ance with established schedules. The Association shall prepare monthly
billing invoices, listing the subscribers, where appropriate, assigned to
each of the aforesaid organizational divisions. Said invoices shall be
transmitted to an addressee to be approved by the Government. Subsequent
to collection, the Association will transmit premiums collected to the
Corporation.
(3) Settlement. The Corporation acknowledges and agrees that the
administration of Group B subscribers is in fact a reimbursement opera-
tion, subject to the benefits, limitations, and conditions of the contract
as previously defined in the Hospital Service and Surgical Service Certi-
ficates. Normally, all supporting documents, such as hospital roam
charges, surgical charges, doctor bills, and miscellaneous expenses shall
be forwarded to the Corporation in support of the proof of loss. The
Goverment reserves the right to determine, in the event of security con-
siderations, that the papers and documents in support of the proof of loss
should not be forwarded to the Corporation. In such event, the Associa-
tion will certify the amount concerned to the Corporation, Where support-
ing papers are not forwarded in support of proof of loss, it shall be the
responsibility of the Association to maintain full information concerning
the claimant and related expenses. The Corporation shall have the right
to audit such accounts in the facilities of the Association. Where claims
are processed in the aforesaid non-conventional manner, the Corporation
shall. remit a check payable to the Association or its designee, which
shall be responsible for transmittal and payment of the proceeds to the
claimant. The Association hereby acknowledges that it is authorized to
receive such checks for and on behalf of such claimant and hereby agrees
to hold the Corporation harmless from the claims of such claimants to the
extent of the payments so made,
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(ii.) Maintenance of Records. Where conventional administrative pro-
cedures cannot be applied because of security reasons, it is understood
and agreed that substantial evidence in support of claims thereof will be
acceptable. It is recognized and agreed that the mandatory use of forms
supplied by the Corporation would be undesirable or impracticable for
selected members of the Association. In this connection, said members
will be instructed with respect to the constitutive elements of substan-
tial evidence as used herein to the end that there shall be compliance
with the provisions of the Hospital Service and Surgical Service Certifi-
cates in basic content.
ARTICLE IV. Assurances by Corporation.
A. Upon the execution of this MEMORANDUM, the Corporation agrees as fol-
(1) That it will accept applications from present and new employees
of the Government agency concerned without regard to the usual mandatory
percentage of enrollment,;
(2) That the Government will not be required to certify that the
numbers covered will meet any specified percentage of total Agency strength
(3) That the filing system of the Corporation shall not reflect the
specific Agency involved nor its interests;
(4) That, if determined to be necessary by the Government, applica-
tions, issuance of identification cards, collections, and settlements will
be accomplished by other than conventional administrative procedures.
(5) That information of this MMAORANDUM shall be restricted as pro-
vided in ARTICLE I hereof.
ARTICLE V. Specific Exceptions.
A. It is understood and agreed that the definition of words and terms as
used in the contract between the members of the Association and the Corporation
shall carry the meaning intended in the Hospital Service and Surgical Service
Certificates, subject to the following emendation and amplification of ARTICLE
III, 33 . (3) and (Li) .
(1) Non-participating Hospital. It is recognized that medical treat-
ment or facilities in some areas of the world may not be on a parity with
those provided by hospitals registered by the American Medical Assoication.
In such event, available hospital treatment or facilities shall operate as
standard.
(2) Diagnosis and Medical Treatment. The agreement by the member or
employee to furnish the Corporation at any time upon its request any and
all hospital information and records is subject always to the prior right
of the Government to determine the availability thereof.
(3) Waiting Period. All members in good standing of the Association
who transfer their policies to the Corporation will have the prescribed
waiting periods waived for all cases, with the exception of obstetrical
cases as hereafter stated, provided their membership has been in effect for
more than ten months. In the event that the period of membership is less
than ten months, that portion of the waiting period will be waived.which is
equivalent to the period of membership in the Association, including ob-
stetrical cases.
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ARTICLE VI. Effect of MEMORANDUM as Rider or Endorsement of Subscriber's
Policies.
This M MORANDUM, upon execution, shall be considered to be a rider or
endorsement of the contracts concerned to the extent that it affects any con-
ditions, provisions,,-or terms thereof.
ARTICLE VII. Corporation's Copy of Contract.
It is understood and agreed that an executed copy of this MEMORANDUM
shall. be made available at any time to the bforesaid cleared representatives of
the Corporation or to such representatives of the Corporation as may be cleared
from time to time as provided in this MJEMORANDUM. Said copy shall be placed
in the files of the Corporation in such fashion that it will be available only
to the three aforesaid representatives of the Corporation or such other repre-
sentatives of the Corporation as the Government may from time to time approve.
ARTICLE VIII. Termination.
This MEMORANDUM shall be effective for one year from the date of execution
subject to the right of either party to cancel this MEMORANDUM by giving three
calendar months prior written notice to the otherl ?f2+0 ffiqffiPA4iB~ -r
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CLE IX. Statem&_t of Intention.
It is the intention of the Corporation and the Association to consider
the effect in possible savings resulting from the centrally administered in-
surance program. It is acknowledged at this time that the absence of informa-
tion and lack of experience by the Association precludes any definitive ar-
ranfgements with the Association in relation to cost-sharing or rate reduction.
In order to effectuate this statement of intention, the Corporation and the
Association will cooperate by a mutual exchange of information for the period
concerned.
IN WITNESS WHEI OF, the parties hereto have hereunto set their hands and
seals the day and year first above written intending to be legally bound there-
by.
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