SOW-03 X12 Transaction Assurance — ACME Health / Cumberland Valley

Independent assurance that X12 transactions produced and consumed by the combined entity are correct, complete and accepted by trading partners. ⚠ Supplier owns the outcome under this instrument: ACME defines what correct means and Supplier determines how to demonstrate it.

1. Parties, Instrument and Term

Attribute	Provision
Client	ACME Health
Supplier	Gallatin EDI Assurance
Instrument	SOW-03, issued under the Master Services Agreement
Vendor register reference	VN-03 in the Vendor Management Plan
Vehicle	Fixed price, deliverable-based
ACME owner	W. Ferriday, VP Claims Operations
Effective	August 28, 2023 — ⚠ subject to execution under §7
Term	From execution through core administration cutover acceptance.
Governing document	Vendor Management Plan §4 and §5. ⚠ Clauses in those sections are mandatory and are reproduced here in full rather than incorporated by reference.

2. Scope of Services

Ref	Element	Provision
SC-01	834 enrollment and maintenance	Full-file and change-file semantics per trading partner, effective dating, termination and reinstatement handling.
SC-02	837 claims	Institutional, professional and dental tested as separate rule sets, not as one format with options.
SC-03	835 remittance	Reconciled to the payment actually issued, across both paying platforms during coexistence.
SC-04	270/271 eligibility	Inquiry and response under load, including timeout and error behavior.
SC-05	820 premium payment	Reconciled against billing at group level.
SC-06	Trading partner readiness	⚠ Confirmation that each partner has re-registered and successfully exchanged test transactions — not merely that notice was sent.

3. Deliverables and Acceptance

⚠ Acceptance criteria are stated here, before work begins. A deliverable is accepted when the criterion is demonstrated, not when Supplier declares it complete.

Ref	Deliverable	Acceptance criterion
DL-01	Test strategy and traceability	Every transaction set mapped to the business control that proves it
DL-02	Executed test cycles per transaction set	⚠ Acceptance is a business-level control total, not a 999 acknowledgment
DL-03	Trading partner readiness register	Per partner, with evidence of a successful test exchange
DL-04	Defect report with aging	Counts reported with age; a stable count with rising age is a backlog
DL-05	Assurance opinion at cutover	Written opinion supporting the go/no-go decision

4. Service Levels

Level	Response	Resolution	Definition
Severity 1	4 hours	1 business day	Blocks a test cycle
Severity 2	1 business day	3 business days	Blocks a transaction set
Severity 3	2 business days	10 business days	Workaround exists
Severity 4	5 business days	By cycle end	Reporting or cosmetic

5. Warranty, Support and Version Obligations

The obligations below are mandatory under Vendor Management Plan §5 and are not subject to negotiation on price. They govern the period after acceptance, which is where the cost of an incomplete statement of work is actually incurred.

Ref	Term	Provision
SW-02	Defect remediation service levels	Response and resolution by severity, using ACME's severity definitions from the Quality Plan, not Supplier's. Severity 1 — a defect harming a member or breaching a regulatory obligation — carries a 1 hour response and continuous effort to resolution.
SW-08	Environment coverage	⚠ Support covers non-production environments. A test environment nobody will fix stops testing, which stops the program.

Supplier provides tooling rather than a licensed product, so warranty and version obligations are limited to defect remediation in that tooling and to test environment coverage.

6. General Conditions

Ref	Clause	Provision
GC-01	Governing agreement	This statement of work is issued under the Master Services Agreement between ACME Health and Gallatin EDI Assurance. Where the two conflict, the Master Services Agreement governs except on scope, price and schedule, which this instrument governs.
GC-02	Contracting party across the close	⚠ Executed before closing by ACME Health. Cumberland Valley Health Plan becomes a beneficiary at closing without further action; no novation is required because ACME is the contracting party throughout.
GC-03	Key personnel	Named individuals in §2 may not be substituted without written agreement. A substitution without agreement is a material failure, not an administrative change.
GC-04	Subcontracting	No subcontracting without prior written consent. All obligations of this instrument flow down to any approved subcontractor, including data-handling and audit rights.
GC-05	Data handling and location	⚠ No member-level data is processed, stored or accessed outside the United States. This is a contractual obligation, not a policy preference, and derives from a condition of the state insurance approval.
GC-06	Business associate agreement	A business associate agreement is executed before any access to protected health information, and remains in force through the retention period after termination.
GC-07	Security incident notification	Supplier notifies ACME within 24 hours of discovering a suspected security or privacy incident. ⚠ The clock runs from discovery, not from confirmation.
GC-08	Audit rights	ACME may audit compliance on 10 business days' notice, and without notice following a reported incident.
GC-09	Insurance	Professional liability, cyber liability and workers compensation maintained at the limits in the Master Services Agreement; certificates provided before work begins and on renewal.
GC-10	Change control	Scope changes are priced and approved before work begins, against the program's thresholds ($250,000 Program Manager, $1,000,000 Executive Sponsor, above that the Steering Committee). ⚠ Work performed before approval is performed at Supplier's risk.
GC-11	Intellectual property	Test cases, traceability and results are the property of ACME Health and are reusable for future trading partner onboarding.
GC-12	Knowledge transfer	Knowledge transfer is a deliverable with named receivers and an acceptance test, not a by-product of the work. Acceptance is by reverse shadowing: ACME performs unaided while Supplier observes.
GC-13	Termination for convenience	ACME may terminate on 30 days' written notice. Supplier is paid for work accepted and work in progress to the termination date.
GC-14	Transition assistance	⚠ On termination for any reason, Supplier provides transition assistance for up to 90 days at the rates in §4, and returns all data and artifacts in a documented, usable format. "Available on request" is not a format.
GC-15	Surviving obligations	Confidentiality, business associate terms, data return and record retention survive termination.
GC-16	Independence	Supplier confirms no engagement with Cumberland Valley Health Plan, Cheatham Mutual Holdings, or any party adverse to the transaction, and will disclose any such engagement arising during the term.

7. Execution

This statement of work is not effective until executed by an authorized signatory of both parties and endorsed by ACME Legal. ⚠ Work performed before execution is performed at Supplier's risk and is not payable.

For ACME Health

D. Ashmore

EVP & Chief Financial Officer · Executive Sponsor

Date: _______________

For Gallatin EDI Assurance

M. Everly

Managing Director · authorized signatory

Date: _______________

Procurement approval

H. Castellow

VP Procurement, ACME Health

Date: _______________

Legal review and endorsement

L. Hollingsworth

General Counsel, ACME Health

Date: _______________

Four signatures rather than two, and each one is a different check. The business owner confirms the work is wanted and funded; the supplier's officer binds their firm; Procurement confirms the commercial terms match the framework agreement; Legal confirms the clauses that only matter later — data handling, liability, termination and the §5 obligations — are actually present. ⚠ The signature most often skipped under schedule pressure is the legal one, and it is the only one that reads the parts of the document nobody expects to need.