OFFICIAL DOCUMENTS PROJECT NUMBER P168802 REIMBURSABLE ADVISORY SERVICES AGREEMENT between MINISTRY OF FINANCE OF THE REPUBLIC OF PARAGUAY and MINISTRY OF PUBLIC HEALTH AND SOCIAL WELFARE OF THE REPUBLIC OF PARAGUAY and the INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT AGREEMENT FOR REIMBURSABLE ADVISORY SERVICES AGREEMENT dated as of the Signature Date (as defined in Section 18 of the Annex to this Agreement), between the Ministry of Finance of the Republic of Paraguay ("MoF") and the Ministry of Public Health and Social Welfare of the Republic of Paraguay ("MPHSW") (jointly referred to as "the "Clients") and the INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (the "Bank") (jointly referred to as "the Parties" and each of them a "Party"). WHEREAS, the Clients have requested the Bank to provide to the Clients reimbursable advisory services (the "Reimbursable Advisory Services" or "RAS") described in the Schedule to this Agreement to provide technical assistance and evidence- based advice to the Clients on the development of: (i) a universal health coverage system oriented towards results and focused on epidemiological transition and most prevalent diseases; and (ii) a strategy to progressively harmonize pre-existing health insurance schemes; NOW, therefore, the Parties hereto agree as follows: 1. Reimbursable Advisory Services. The Bank shall provide to the Clients the services ("Reimbursable Advisory Services" or "RAS") described in the Schedule to this Agreement, on the terms and conditions set out in this Agreement, including the Annex hereto, which constitutes an integral part hereof. 2. Client Contacts. In carrying out the Reimbursable Advisory Services, the Bank shall work closely with the designated officials of the Clients. The Clients shall provide the Bank with the names and contact information for said designated officials. 3. Timing. While the Bank undertakes to mobilize all reasonable means available to it to carry out the Reimbursable Advisory Services in a timely manner, the work program and timetable set out in the Schedule to this Agreement have been prepared in good faith based in light of information currently available to the Bank, and are given on an indicative basis assuming that: (i) the Clients and their personnel shall carry out their respective duties in a satisfactory and timely manner; and (ii) the Clients shall at all times act in a timely manner in providing information, making decisions and providing necessary support as provided herein and as requested from time to time by the Bank. -2- 4. Payment (a) The Clients, through MoF, shall pay the Bank a fixed fee of five hundred ninety-eight thousand nine hundred twenty-eight US Dollars (US$ 598,928) in accordance with the following schedule of payment: Amount of Estimated invoice date Event upon which Payment is Due Installment 1. $ 93,985 Twenty-five (25) weeks upon acceptance by MPHSW of outputs I after the Signature Date and 7 referred to in the table in Section B of the Schedule to this Agreement. 2. $ 67,045 Twenty-five (25) weeks upon acceptance by MPHSW of outputs 2 after the Signature Date and 8 referred to in the table in Section B of the Schedule to this Agreement. 3. $ 123,215 Twenty-seven (27) upon acceptance by MPHSW of outputs 3 weeks after the and 9 referred to in the table in Section B of Signature Date the Schedule to this Agreement. 4. $ 115,758 Twenty-seven (27) upon acceptance by MPHSW of outputs 4 weeks after the and 10 referred to in the table in Section B of Signature Date the Schedule to this Agreement. 5. $ 118,674 Thirty-two (32) weeks upon acceptance by MPHSW of outputs 5 after the Signature Date and 11 referred to in the table in Section B of the Schedule to this Agreement. 6. $ 80,251 Thirty-two (32) weeks upon acceptance by MPHSW of outputs 6 after the Signature Date and 12 referred to in the table in Section B I of the Schedule to this Agreement. (b) All payments to the Bank hereunder shall be made in full when due, upon submission of an invoice by the Bank. Payment shall be made, in United States Dollars, in immediately available funds, without any deductions whatsoever for taxes, duties, charges or other withholdings, and notwithstanding any pending dispute between the Parties, to such account as the Bank may from time to time designate in writing. 5. Effectiveness. This Agreement shall become effective as of the Signature Date, once it has been duly signed by all Parties. 6. Expiration. This Agreement shall expire on September 30, 2019 unless it shall earlier be renewed with the mutual agreement of the Clients and the Bank. 7. Termination. Either the Clients or the Bank may terminate this Agreement prior to its expiration upon ninety (90) days' written notice to the other. Upon receipt of such notice, the Parties shall take all appropriate steps to terminate in an orderly manner the -3- activities then ongoing under the Reimbursable Advisory Services and to settle promptly all outstanding matters. 8. Cooperation. (a) The Clients shall at all times provide the Bank in a timely manner with any and all information that may affect the performance of the Reimbursable Advisory Services, inform the Bank of any developments relating to the Reimbursable Advisory Services, and do all things necessary to enable Bank Personnel to carry out the Reimbursable Advisory Services hereunder. (b) It is expressly agreed and understood that the Bank shall bear no responsibility for delay in performance occasioned by the Clients' failure to provide its contribution as set forth in Section D of the Schedule to this Agreement or otherwise cooperate as set forth in paragraph (a) above. 9. Addresses. For purposes of Section 17 of the Annex to this Agreement: (a) the Clients' addresses are: For MoF: Chile No128 Asunci6n, Paraguay For MPHSW: Pettirossi esquina Brasil Asunci6n Paraguay; and (b) the Clients' Electronic Addresses are: For MoF: Fax: 595-21-448283 E-mail: secretaria ieneral@hacienda.gov.py For MPHSW: Fax: 595-21-204757 E-mail: martha.pena@mspbs.gov.py (c) the Bank's address is: The World Bank 1818 H Street, NW Washington, DC 20433 United States of America; and (d) the Bank's Electronic Address is: -4- Fax: (54-11) 4313-1233 E-mail: 1perez2gworldbank.org IN WITNESS WHEREOF, the Parties hereto, acting through their duly authorized representatives, have caused this Agreement to be signed in their respective names as of the Signature Date. MINISTRY QF FIN NCE OF INTERNATIONAL BANK FOR THE REPU IC 0 PARAGUAY RECONSTRUCTION AND DEVELOPMENT By: By: Q0ul p o A hkoised-ReFsentative Aut rized Representative Na e: LW / Name: Title: / /// 0 Title: Date: /l L / Date: . MINISTRY OF PUBLIC HEALTH AND SOCIAL WELFARE OF THE REPUBLIC PARA AY By: AuthoriA Representative Name: V\'b M L Title: 5 r ( Date: ZO -5- SCHEDULE Description of the Reimbursable Advisory Services A. Reimbursable Advisory Services. Except as the Clients and the Bank may otherwise agree, the Reimbursable Advisory Services shall include the following activities: 1. Analysis of private health insurance schemes contracted by government agencies, through: (a) The analysis of data from primary and secondary sources, including: (i) The identification of all private insurance schemes contracted by public agencies and the analysis of data on the characteristics of the schemes, including their scope (in services covered and provider networks) and costs for the public agencies. (ii) A list of all insurance contracts available in the private sector and their characteristics in terms of scope, coverage and costs. (iii) Demographic profile of public employees to estimate the future disease profiles and epidemiological burdens. (b) Carrying out of an analysis of the private health insurance schemes contracted by government agencies, including the analysis of insurance contracts' coverage, costs and choice of provider networks and correspondence with epidemiological profiles of burden of disease relevant to the age groups covered. 2. Review of the current landscape of health insurance and service provision options available in the sectors covered by private insurers, the Institute of Social Security ("IPS"), and the MPHSW, including identification of capacity gaps that need to be filled so that each of the three sectors can adequately provide the universal benefits plan, through: (a) Analysis of data to estimate the service provision capacity and capacity gaps to provide a universal benefits plan by the sectors covered by private insurers, the Institute of Social Security ("IPS"), and the MPHSW, including the analysis of: -6- (i) Data on utilization of IPS and MPHSW services and their estimated costs, for both in-patient and out-patient services, including, if possible data disaggregated by epidemiology (ICD 10 codes) so that current and future needs estimations can be made. (ii) Demographic profile of public employees, IPS affiliates and the whole population covered by MPHSW to estimate future disease profiles and epidemiological burdens. (iii) Service provision capacity in the sectors covered by private insurers, the IPS and the MPHSW, including human resources, medical equipment, infrastructure and management structure. (b) The review of experiences of other countries in the Latin American and the Caribbean region that have undergone similar reform processes regarding a universal health coverage system and the harmonization of pre-existing health insurance schemes. 3. Study and proposed design of the minimum universal benefits plan (for the sectors covered by private insurers, the IPS and the MPHSW) centered on catastrophic diseases and continuous access to basic services, including: (a) A proposed design of the methodology for the selection of a minimum list of benefits for the health benefit plan, considering the most epidemiological relevant health conditions, pathologies and diseases that are most cost- effective to address. (b) A review of international experiences in the design of similar minimum benefits packages. 4. Study to estimate the fiscal implications of the progressive implementation of the initial health benefits plan, including the scalability of the benefits plan, investments required to close the capacity gaps, and the demographic and epidemiological transition, including: (a) The development of an algorithm to produce fiscal projections with the possibility to include estimates of the current and future demographic and epidemiological changes, initially taking placeholder values for the relevant parameters of interest and carrying out the corresponding updates when relevant estimates from the activities described under Sections A.1 and A.2 above become available. 5. Political economy analysis for the possible convergence paths towards the integration of the sub-sectors operating in health, including: (a) A study on international experiences from countries that have undertaken similar type of reforms with a focus on identifying key reform and -7- implementation challenges, mapping of relevant stakeholders and special interest groups. (b) The development of focus groups and/or semi-structured interviews for special interest groups to understand their thoughts and concerns about a potential reform, including the qualitative analysis of the information from these activities. (c) Workshops and presentations to sectoral stakeholders and special interest groups, including those from civil society organizations working in the health sector to infer or to obtain their views on the potential reform. (d) Analysis of alternatives paths towards the possible integration of the sub- sectors in the future, including a discussion of challenges that may arise and potential ways to mitigate those challenges. 6. Development of an action plan with alternative proposed strategies for the implementation of the conclusions and recommendations prioritized by the government of each study with specific suggestions for the short, medium and long run, including: (a) A study and the development of a proposed action plan taking as inputs the outputs from the activities described under Sections A.1-4 above to develop specific actions that can be undertaken in the short-, medium- and long-run towards the implementation of the reform. (b) Consultations with stakeholders and other sectoral organizations to refine the proposed action plan. It is expressly agreed and understood that in cases where any specific investments are identified, and possible cost-benefit-analysis are undertaken by the Bank in the course of the Reimbursable Advisory Services, the Bank is under no obligation to finance such activities or pre-judge any financing conditions. Any change to the foregoing scope of work shall be set out in a writing signed by the Clients and the Bank, setting out the additional work to be undertaken and the fees in respect thereof. B. Timetable. Except as the Clients and the Bank may otherwise agree, the Bank shall endeavor to perform the Reimbursable Advisory Services in accordance with the following tentative timetable: -8- Output Output Estimated delivery date No. 1 Progress report with an analysis of private Seven (7) weeks after the insurance for public employees. Signature Date 2 Progress report with an analysis of the Seventeen (17) weeks after the health coverage capacity and gaps in the Signature Date sectors covered by private insurers, the IPS and the MPHSW. 3 Progress report with a proposed design of a Seventeen (17) weeks after the scalable universal health benefit plan. Signature Date 4 Progress report with a study on fiscal Nineteen (19) weeks after the implications of the health benefit plan Signature Date implementation. 5 Progress report with political economy Nineteen (19) weeks after the analysis for possible convergence paths. Signature Date 6 Progress report with a proposed action plan Nineteen (19) weeks after the for the implementation of conclusions and Signature Date recommendations. 7 Final report with an analysis of private Twenty-three (23) weeks after insurance for public employees, the Signature Date 8 Final report with an analysis of the health Twenty-three (23) weeks after coverage capacity and gaps in the sectors the Signature Date covered by private insurers, the PS and the MPHSW. 9 Final report with a proposed design of a Twenty-five (25) weeks after scalable universal health benefit plan. the Signature Date 10 Final report with a study on fiscal Twenty-five (25) weeks after implications of the health benefit plan the Signature Date implementation. 11 Final report with political economy Thirty (30) weeks after the analysis for possible convergence paths. Signature Date 12 Final report with a proposed action plan for Thirty (30) weeks after the the implementation of conclusions and Signature Date recommendations. C. Bank Personnel. The Bank will be responsible for determining the appropriate composition of teams needed to fulfill the Reimbursable Advisory Services. The following is an indicative list of categories of Bank Personnel likely to be involved in carrying out the Reimbursable Advisory Services: health specialists, health economists, sociologist, informatic specialist, lawyer and political scientist. D. Counterparts and Facilities. The Clients shall carry out the following activities in support of the Reimbursable Advisory Services: -9- (a) Through MiPHSW: (i) participate in regular meetings with the Bank Personnel in charge of developing the various outputs of the Reimbursable Advisory Services; (ii) obtain and provide to the Bank in a timely manner all of the information required for the development of the activities and the delivery of the outputs described, respectively, in Sections A and B of this Schedule, including the necessary access to datasets and systems of the MPHSW, IPS and other relevant public institutions; (iii) coordinate and facilitate the involvement and participation of stakeholders, special interest groups and civil society organizations in workshops carried out as part of the Reimbursable Advisory Services; (iv) make available physical space and office-support facilities (or similar premises acceptable to the Bank) in support of the Reimbursable Advisory Services for collaboration with other stakeholders; (v) provide the Bank Personnel with the necessary administrative and organizational support for the Reimbursable Advisory Services; (vi) formally designate a team within MPHSW as the main counterpart of the Bank to: (A) review draft documents submitted by the Bank with respect to any of the activities referred to under Sections A of this Schedule, providing response with comments in less than five (5) business days of the Clients, commencing on the first business day following the date of submission by the Bank; and (B) review the outputs agreed to in Section B of this Schedule within ten (10) business days of the Clients, commencing on the first business day following the date of submission by the Bank. In the absence of any comments and/or observations communicated by MPHSW to the Bank within such period, the aforementioned outputs shall be deemed accepted by the MPHSW without reservations; notwithstanding the foregoing, if MPHSW provided comments/observations to the submitted outputs within the indicated period, the Bank shall revise said document taking into account the MPHSW's considerations and shall re-submit a final version thereof within fifteen (15) business days counting as of the business day following the Bank's receipt of the formal notification with the MPHSW's comments/observations. (b) Through MoF: - 10 - (i) obtain and provide to the Bank in a timely manner information from the MoF required for the development of the pertinent activities described in Section A.1 and A.3 of this Schedule. E. Records. The Bank shall keep appropriate records of the Reimbursable Advisory Services in accordance with its normal record-keeping practices and shall furnish to the Clients such information regarding the Reimbursable Advisory Services as the Clients shall reasonably request. - 11 - ANNEX STANDARD TERMS AND CONDITIONS 1. Performance Standard; Non-Exclusivity. The Bank hereby shall carry out the Reimbursable Advisory Services with the same care and diligence as it uses in its other analytical and advisory activities. The engagement of the Bank as adviser to the Clients hereunder is non-exclusive and shall not restrict the Clients from engaging other advisers on the same or related issues. 2. Bank Personnel. The Bank shall, in its sole discretion, determine the composition of the staff (including staff holding consultant appointments) ("Bank Personnel") assigned to perform the Reimbursable Advisory Services. The Schedule to this Agreement contains an indicative list of Bank Personnel likely to be involved in carrying out the Reimbursable Advisory Services; provided, however, that the Bank retains at all times the right to assign such other person or persons in addition to, or substitution for, any of the persons appearing on that list as the Bank may deem necessary or appropriate in the performance of its duties hereunder. The Clients may, if they have reasonable cause for dissatisfaction with the performance of any of the Bank Personnel, request the Bank to replace such person(s). For avoidance of doubt, it is agreed and understood that this Agreement does not create any employment or other contractual relationship between the Clients and Bank Personnel. 3. Clients Contributions. The Clients shall carry out the activities and provide the facilities and other arrangements set out in the Schedule to this Agreement. 4. Bank Operational Policies. The Bank shall provide its advice in a manner consistent with its relevant environmental and social safeguards policies. 5. Confidentiality. The Parties agree that this Agreement and the outputs set out in the Schedule to this Agreement shall only be made available to the public after the Clients have given their written consent to such disclosure. For this purpose, the Client hereby authorizes the Bank to publicly disclose this Agreement. With respect to underlying information provided by the Clients in support of the Reimbursable Advisory Services, the Clients reserve the right to designate said information as confidential. The Bank may publicly disclose such information only after the Clients have given their prior consent. With respect to underlying information (other than the final outputs) provided by the Bank in support of the Reimbursable Advisory Services, the Bank reserves the right to designate said information as confidential. The Clients may publicly disclose such information only after the Bank has given its prior consent. 6. Intellectual Property. The intellectual property rights of each Party in any of its pre-existing data or documents used by the Bank in connection with the Reimbursable Advisory Services shall remain with that Party. The intellectual property rights in new materials prepared by the Bank in connection with the Reimbursable Advisory Services shall belong to the Clients; provided, however, that the Bank shall have the global, non- - 12 - exclusive, perpetual (for the duration of the copyright), fully sub-licensable and royalty- free right to use, copy, display, distribute, publish and create derivative works of all or part of these materials and incorporate the information therein in its research, papers, publications, web sites, and other media without the consent of the Clients, subject to the limitations on disclosure of confidential information and any third party rights, as indicated in Section 5, Confidentiality, of this Annex. 7. Representation of the Bank's Views and Use of the Bank's Name, Marks and Logo. (a) The Clients agree that it shall not represent, or permit the representation of, the Bank's views without the prior written consent of the Bank. (b) The Client further agree that it shall not use, or permit the use of the Bank's name, marks or logos in any advertisements, promotional literature or information without the prior written consent of the Bank, and that if such consent is provided that it shall use the name, marks and logos strictly in accordance with the permission provided and with the insertion of the Bank's usual disclaimers. (c) All Parties shall include the appropriate attribution and disclaimers in new materials prepared in connection with the Reimbursable Advisory Services. 8. Disclaimers and Liabilities (a) While the Bank shall make diligent efforts in its performance of the Reimbursable Advisory Services, the Bank makes no express or implied representation or warranty as to the extent of success that may be achieved in the implementation of any recommendation contained in any work product prepared by or with the assistance of the Bank or Bank Personnel. (b) Without limitation to the immunities and privileges of the Bank under its Articles of Agreement and other applicable rules of law, the Bank shall not be liable to the Client or other third party for any loss, cost, damage or liability that the Clients shall incur as a result of the Reimbursable Advisory Services. (c) The Parties acknowledge and agree that it is not the purpose of this Agreement to create a partnership, joint venture or similar arrangement whereby the Parties could be held jointly liable vis-a-vis third Parties or for any other purposes. Nothing herein shall constitute a commitment by the Bank to provide financing to the Clients in respect of a project or otherwise. 9. Enforceability. The rights and obligations of the Bank and the Clients under this Agreement shall be valid and enforceable in accordance with their terms notwithstanding the law of any state or political subdivision thereof to the contrary. 10. Settlement ofDisputes. (a) The Parties hereto shall endeavor in good faith to resolve any differences or disputes under, or in connection with, this Agreement by - 13 - amicable settlement. Any dispute arising out of or in connection with this Agreement which is not settled by agreement of the Parties shall be finally settled by arbitration in accordance with the UNCITRAL Arbitration Rules in force on the Signature Date. In the event of a conflict between the UNCITRAL Arbitration Rules and the terms of this Agreement, the terms of this Agreement shall govern. (b) Neither the Clients nor the Bank shall be entitled in any proceeding under paragraph (a) of this Section to assert any claim that any provision of these Standard Conditions or of the RAS Agreement is invalid or unenforceable because of any provision of the Bank's Articles of Agreement. 11. Privileges and Immunities; Tax Immunity. The Clients recognize and shall take all reasonable steps to give effect to the status, immunities and privileges of the Bank and its Personnel set forth in the Bank's Articles of Agreement and other applicable rules of law. The Parties acknowledge and agree that no provision of this Agreement, nor the submission to arbitration by the Bank, in any way constitutes or implies a waiver, renunciation, termination, or modification by the Bank of any privilege, immunity or exemption of the Bank granted in the Bank's Articles of Agreement and other applicable rules of law. This includes, inter alia, the immunity of the Bank, its assets, income and its operations and transactions, from all taxation and customs duties. 12. Amendments. Any amendment or waiver of, or any consent given under, any provision of this Agreement shall be in writing and, in the case of an amendment, signed by the Parties. 13. Saving of Rights. No course of dealing and no failure or delay by any Party hereto in exercising any power, remedy, discretion, authority or other right under this Agreement shall impair, or be construed to be a waiver of or an acquiescence in, that or any other power, remedy, discretion, authority or right under this Agreement, or in any manner preclude its additional or future exercise. 14. Successors and Assignees; No Assignment without Consent. This Agreement binds and benefits the respective successors and assignees of the Parties, provided that none of them may assign this Agreement in whole or in part without the prior consent of the other. 15. Entire Agreement; Language. (a) This Agreement, together with its Schedule, constitutes the entire agreement among the Parties hereto and supersedes any and all prior agreements, understandings and arrangements, oral or written, between the Parties with respect to the subject matter hereof. (b) This Agreement has also been prepared in the Spanish language at the request of the Client, however, only the English version of the Agreement shall be legally binding. - 14 - 16. Termination. Notwithstanding termination or expiration of this Agreement, the provisions of this Agreement relating to (i) obligation of confidentiality under Section 5 of this Annex, (ii) the obligations spelled out in Sections 6 on Intellectual Property and 11 on Privileges and Immunities of this Annex; and (iii) the obligation of the Clients to pay to the Bank remuneration for the Reimbursable Advisory Services performed prior to the date of termination or expiration of the Agreement, as well as reimbursement of any reasonable costs related to the termination of the Agreement by the Clients, shall continue in full force and effect. 17. Execution of this Agreement; Notices and Requests. (a) This Agreement may be executed in several counterparts, each of which is an original, but all of which constitute the same agreement. If executed by Electronic Means, this Agreement is an original. (b) Any notice or request required or permitted to be given pursuant to this Agreement shall be in writing. Such notice or request shall be deemed to have been duly given or made when delivered by hand, by mail, or Electronic Means, to the Party to which it is to be given or made at such Party's address or Electronic Address, set out in Section 9 of this Agreement, or at such other address or Electronic Address as such Party shall have designated by notice to the Party giving such notice or making such request. Notices delivered by Electronic Means shall be deemed dispatched by the sender from its Electronic Address when it leaves the Electronic Communications System of the sender and shall be deemed received by the other Party at its Electronic Address when such notice or request becomes capable of being retrieved in machine readable format by the Electronic Communications System of the receiving Party. (c) Electronic Documents shall have the same legal force and effect as information contained in this Agreement or a notice under this Agreement not executed or transmitted by Electronic Means. 18. Definitions (a) "Electronic Address" means the designation of an address that uniquely identifies a person within a defined Electronic Communications System for purposes of authenticating the dispatch and receipt of Electronic Documents. (b) "Electronic Communications System" means the collection of computers, servers, systems, equipment, network elements and other hardware and software used for the purposes of generating, sending, receiving or storing or otherwise processing Electronic Documents, acceptable to the Bank and in accordance with any such additional instructions as the Bank may specify from time to time to the Clients. (c) "Electronic Document" means information contained in this Agreement or a notice under this Agreement that is transmitted by Electronic Means. - 15 - (d) "Electronic Means" means the generation, sending, receiving, storing or otherwise processing of an Electronic Document by electronic, magnetic, optical or similar means, including, but not limited to, electronic data interchange, electronic mail, telegram, telex or telecopy, acceptable to the Bank. (e) "Signature Date" means the later of the dates on which the Clients and the Bank signed this Agreement.