JOINT VENTURE AGREEMENT
-----------------------
THIS JOINT VENTURE AGREEMENT (the"Agreement") is made and entered into as
of the 1st day of January 2003, by and between Cobalt Corporation a Wisconsin
Chapter 180 business corporation ("Cobalt"), Valley Health Plan, Inc., a
Wisconsin Chapter 611 insurance corporation ("VHP"), and Luther Hospital, Mayo
Health System, a Wisconsin Chapter 181 nonprofit corporation, Midelfort Clinic,
Ltd., Mayo Health System, a Wisconsin Chapter 181 nonprofit corporation,
hereafter collectively referred to as Luther Midelfort ("L/M").
PREAMBLE
--------
WHEREAS, the parties wish to coordinate the design and marketing of various
managed care insurance products which utilize a provider network, including,
without limitation, Point of Service ("POS") and Health Maintenance Organization
("HMO") products and programs;
WHEREAS, L/M shall participate in the offering of these products by serving
as the primary provider and by assisting in the design and marketing of the
products;
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. SCOPE OF AGREEMENT
---------------------
1.1 Cobalt shall be defined herein to include all of its respective
subsidiaries and affiliates. L/M shall be defined herein to include those
subsidiaries and affiliates listed in Attachment B.
1.2 The relationships between and among the parties are that of independent
contractors working together in a cooperative arrangement. It is not the
intent of the parties to create, nor should this Agreement be construed to
create, a partnership or an employment relationship between or among the
parties.
1.3 This Agreement shall not create any agency relationship between or among
the parties other than those specifically enumerated. This Agreement
creates no fiduciary relationship between or among any of the parties.
2. PRODUCTS
-----------
2.1 The parties will design and market various insured and self-insured managed
care products that utilize a provider network, including POS and HMO
products. Hereafter, these products may be collectively referred to as
"Products."
2.2 The term "HMO" as used in this Agreement shall be defined as a product that
utilizes a primary care physician or clinic and requires the use of a
network provider to receive benefits. The term "POS" as used in this
Agreement shall be defined as a product which
utilizes a primary care physician or clinic, but allows the utilization of
non-network providers at a lower level of benefits.
2.3 POS products offered by VHP shall contain at least a twenty (20) percent
differential between the benefit levels provided when utilizing an
in-network provider and benefits provided when utilizing an out-of-network
provider.
3. GOVERNING BOARD
------------------
3.1 The cooperative arrangement contemplated by this Agreement shall be
directed through a Governing Board consisting of representatives from L/M
and Cobalt. Cobalt and L/M shall each select four members of the Governing
Board. The Governing Board shall provide review and direction on the major
functions of VHP, such as, but not limited to, the business plan, the
annual operating plan, marketing, public relations, underwriting,
operations performance, provider contracting, and member satisfaction. A
majority of the Governing Board must approve the annual business plan,
National Committee on Quality Assurance ("NCQA') related programs, major
marketing campaigns, and changes to the VHP provider network as set forth
in Section 3.3. In the event a majority cannot be reached, the contemplated
action before the Governing Board shall not take place. Employees, officers
or Directors of L/M, Cobalt, or VHP serving on the Governing Board and/or
committees established by the Governing Board shall not be entitled to
compensation for such service.
3.2 The Governing Board shall establish three committees: 1) an Executive and
Finance Committee, 2) a Marketing Committee, and 3) a Quality Committee.
(a) The Executive and Finance Committee shall be comprised of one (1) L/M
Governing Board Representative, one (1) Cobalt Governing Board
Representative, the Director of Valley Health Plan, and any other
persons appointed by L/M or Cobalt. The Executive and Finance
Committee shall be responsible for reviewing, reporting and making
recommendations to the Governing Board regarding VHP matters in such
areas as periodic financial reports, regulatory filings, external and
internal audits, annual operating plan, medical management programs,
tactical business plans, Marketing Committee recommendations and
Quality Committee recommendations.
(b) The Marketing Committee shall be comprised of the Director of VHP, the
VHP Sales Director, and two (2) L/M appointees. The Marketing
Committee shall be responsible for reviewing, reporting and making
recommendations to the Executive and Finance Committee on marketing
related matters in such areas as: new product development, service
areas, advertising and promotion, sales activities (e.g., quotes,
sales, cancellations, etc.), market and product trends and product
performance.
(c) The Quality Committee shall be comprised of the VHP Medical Director,
the Director of VHP, and other persons appointed by either L/M or
Cobalt. The Quality Committee shall be responsible for reviewing,
reporting and making recommendations to the
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Executive and Finance Committee on matters related to VHP's medical
management, quality, and continuous improvement functions such as:
medical management programs and policies, medical management reporting
capabilities, continuous quality improvement initiatives, NCQA
accreditation, regulatory filings, member satisfaction, member
grievances, and pharmacy related initiatives.
3.3 Any additions or deletions to the VHP provider network in the counties of
Eau Claire, Chippewa, Barron, and Dunn shall require approval by the
majority of the Governing Board members. Approval shall be based upon
appointment availability, geographic access, and cost of services. VHP may
expand its provider network and utilize non-L/M providers in all other
counties without approval of the Governing Board. Decisions regarding
provider network additions or deletions in these other counties shall also
be based upon appointment availability, geographic access, and cost of
services.
4. NON-EXCLUSIVITY
------------------
During the Term of this Agreement (as defined in Article 8.1 herein) or any
subsequent term(s), unless otherwise agreed by the Governing Board, (i) L/M
shall be allowed to contract with entities not affiliated with Cobalt in
order to participate as a network provider in any HMO or POS products
offered by other entities, (ii) any Cobalt subsidiary, with the exception
of VHP, shall be allowed to introduce new HMO or POS plans in any county
utilizing any provider network it so chooses.
5. BEST PRICE
-------------
L/M agrees to offer its Best Price to VHP for all services, and/or
supplies, including but not limited to pharmaceuticals, provided to VHP
members enrolled in HMO, POS, or Medicare Supplement plans. Both parties
acknowledge that Osseo, Bloomer and Barron Hospitals currently offer a
lower price to other payors and that these current hospital contracts do
not constitute a breach of this Agreement. As used herein, "Best Price"
means a price that is equal to or lower than the price L/M accepts and/or
contracts for from any other non-governmental payor with respect to HMO
and/or POS Products. In the event L/M offers a price to any other payor
that is less than the Best Price offered to VHP for like services, the
lower price will also be extended to VHP and immediately and automatically
become the new Best Price. In the event there is a time period in which L/M
offers a lower price to another non-governmental payor, L/M shall reimburse
VHP for the difference between the new Best Price and the price paid by VHP
to L/M during that same time period. Reimbursement shall be due within
thirty days of notice by either party of the existence of the new Best
Price. In the event reimbursement is not received within thirty (30) days,
VHP shall be entitled to offset amounts due VHP under this section against
payments due L/M pursuant to Attachment A, Exhibit 1.
The parties to this Agreement acknowledge and agree that the provisions of
this Article are binding on all subsidiaries and affiliates of L/M as
identified in Attachment B.
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6. NETWORK PROVIDER TERMS
-------------------------
All terms relating to Provider reimbursement are set forth in Attachment A
and its respective Exhibits, attached hereto and made a part of this
Agreement.
7. OPTION TO REPURCHASE
-----------------------
7.1 The parties entered into a Purchase and Sale Agreement dated July 1, 1992
through which United Wisconsin Services, Inc. (now known as Cobalt)
purchased one hundred percent of the outstanding shares of Midelfort Health
Plan (now known as VHP) from Midelfort Clinic (now known as L/M). L/M
retained an option to repurchase through the Purchase and Sale Agreement
and subsequent amendments. The parties agree to grant L/M an option to
repurchase VHP, subject to the terms set forth in this section of the
Agreement.
7.2 L/M shall have the option to repurchase one hundred (100) percent of the
outstanding shares VHP stock at the end of the Term of the Joint Venture
Agreement, or upon termination of the Agreement, whichever occurs earlier.
7.3 The purchase price for exercising said option shall be an amount equal to
four hundred thousand dollars ($400,000) plus one hundred (100) percent of
the net equity of VHP as of the date of repurchase. The net equity shall be
determined by applying generally accepted accounting principles.
7.4 L/M shall exercise its option to repurchase by giving written notice to the
CEO of Cobalt at least one hundred twenty (120) days, but no more than one
hundred thirty days (130) in advance of the effective date (the "Exercise
Date"). The repurchase shall be effective on January 1, 2006, or the date
of termination of the Agreement, whichever occurs earlier (the "Repurchase
Date").
7.5 In the event that L/M exercises its option to repurchase, Cobalt shall,
within forty-five (45) business days after the end of the month in which
the Exercise Date occurs, provide L/M; with the following: (i) statement of
all assets held by VHP and all liabilities of VHP as of the end of the
month in which the Exercise Date occurs and (ii) balance sheet and
statements of income and expenditures for VHP as of the end of the month in
which the Exercise Date occurs.
7.6 From the Exercise Date until the closing date of such repurchase (the
"Interim Period"), Cobalt shall not, in connection with VHP, without the
prior written consent of L/M, (a) enter into any contract or commitment
with respect to VHP extending beyond the closing date, other than the sales
or purchases made in the ordinary course of its business; (b) waive any
rights of any substantial value or sell, assign, or transfer any of its
assets of VHP other than in the ordinary course of business; (c) incur any
obligation or liabilities (absolute or contingent) other than current
liabilities incurred and obligations under contracts entered into in the
ordinary course of business; (d) encumber any assets, tangible or
intangible, other than the lien of current property taxes not due and
payable; (e) sell, assign or transfer any of
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the assets of VHP or cancel any debts or claims; (f) increase the salaries
or fringe benefits made available to employees of VHP, institute any bonus,
benefit, profit sharing, stock options, pension, retirement plan, or
similar arrangements for the benefit of the employees of VHP, or make any
changes in any such plans or arrangements presently existing; or (g) enter
into any other transactions or series of transactions other than in the
ordinary course of business.
7.7 Cobalt shall, within ninety (90) days after the Repurchase Date, provide
L/M. with the following: (i) statement of all assets held by VHP and all
liabilities of VHP as of the Repurchase Date; and (ii) balance sheet and
statements of income and expenditures for VHP as of the current calendar
year and Repurchase Date.
7.8 Cobalt represents and warrants that the financial statements provided to
L/M in accordance with Articles 7.5 and 7.7 hereof (i) will be in
accordance with the books and records of VHP and be complete and accurate
in all material respects; (ii) will present fairly and accurately in all
material respects the financial condition of VHP as of the dates of the
balance sheets; (iii) present or will present fairly and accurately in all
material respects the results of operations of VHP for the periods covered
by such statements, and (iv) have been or will be prepared in all material
respects on a basis consistent with the preparations of VHP's prior years'
financial statements.
7.9 Cobalt shall not liquidate, merge or take other actions with respect to VHP
that would prevent L/M from exercising its option to repurchase.
8. TERM AND TERMINATION
-----------------------
8.1 The Term of the Agreement shall be for three years, commencing on January
1, 2003 and continuing in effect through December 31, 2005. This Agreement
may be renewed for an additional three year term or terms, commencing on
January 1, 2006, by mutual written agreement of the parties; otherwise the
Agreement shall automatically renew for one year terms unless written
notice of termination is given at least one hundred twenty (120) days prior
to the end of the then current term. This Agreement may be terminated at
the end of the Term if proper notice is given.
8.2 Notwithstanding the above, if, in accordance with Article 7, L/M exercises
its right to repurchase all outstanding shares of VHP stock from Cobalt at
the end of the term of this Joint Venture Agreement, or its termination,
whichever is earlier, this Agreement shall terminate unless the parties
mutually agree otherwise in writing. Additionally, in the event that a
party substantially breaches any material term or condition of this
Agreement, notice of the specific breach shall be given to the breaching
party. The breaching party shall have sixty (60) days to cure such breach.
In the event the breaching party fails to cure said breach, the
non-breaching party shall have the right to terminate this Agreement on
thirty (30) days prior written notice.
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9. MISCELLANEOUS
----------------
9.1 The parties agree to utilize their best efforts in carrying out their
respective duties and obligations under this Agreement to ensure that the
purposes of this undertaking are accomplished.
9.2 This Agreement supersedes all prior agreements, proposals, offers or
letters of intent, including the prior joint venture agreements, relating
to the subject matter hereof. Any amendment to this Agreement must be in
writing, executed by, and delivered to, each of the parties.
9.3 In the event that a court, regulator, or administrative judge of competent
jurisdiction declares any provision of this Agreement to be invalid or
unenforceable, such declaration shall have no effect on the validity or
enforceability of the remainder of this Agreement; provided, however, that
the basic purposes of this Agreement may be achieved through the remaining
valid provisions.
9.4 Failure by any party to insist upon compliance with any term or provision
of this Agreement at any time or under any set of circumstances will not
operate to waive or modify that provision or render it unenforceable at any
other time.
9.5 This Agreement shall be construed according to the laws of the State of
Wisconsin.
9.6 All notices required or permitted by this Agreement shall be sent to the
following addresses, or to such other persons or locations indicated in
writing by the parties:
Cobalt:
Stephen E. Bablitch, CEO
401 West Michigan Street
Milwaukee, WI 53203
VHP:
Terry R. Bolz, President
Valley Health Plan, Inc.
2270 EastRidge Center
Eau Claire, WI 54701
L/M:
Randall Linton, M.D., CEO
Luther-Midelfort, Mayo Health System
1400 Bellinger Street
P. O. Box 1510 Eau Claire, WI 54702
9.7 No party may assign its rights or delegate its duties under this Agreement
without the prior
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written consent of the other parties. Such approved assignment or
delegation shall inure to the benefit of the parties, their successors, and
their permitted assigns or delegates.
9.8 Each signatory hereto represents and warrants that his/her execution of
this Agreement on behalf of his/her respective party has been duly
authorized and approved by the parties' Board of Directors and/or
shareholders (if legally required).
9.9 The parties to this Agreement recognize and acknowledge the proprietary
nature of information and materials made available and disclosed by the
parties in performance of this Agreement. By this Agreement, both parties
expressly represent, warrant, covenant and agree not to disclose to any
other person, entity or party, which is not an affiliate or subsidiary, any
of the proprietary information provided, disclosed or made available to
either party pertaining to the operations and business of either party,
including, without limitation, the compensation rates set forth in this
Agreement or any Attachments hereto, and any other terms of this Agreement,
without the prior written consent of the other party. Notwithstanding the
foregoing and irrespective of benefit coverage, L/M shall not be prohibited
from or penalized for engaging in provider-patient communications related
to treatment alternatives, coverage appeal decisions, reimbursement
incentives or other communications necessary to maintain the
provider-patient relationship. This Article shall survive the termination
or expiration of this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their respective representatives.
COBALT CORPORATION
By: /s/Michael E. Bernstein
---------------------------------
Title: President
------------------------------
Date: 1/7/03
-------------------------------
VALLEY HEALTH PLAN, INC.
By: /s/Terry Bolz
---------------------------------
Title: President
------------------------------
Date: 12/24/02
-------------------------------
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MIDELFORT CLINIC, LTD., MAYO
HEALTH SYSTEM
By: /s/Joel T. Rueber
----------------------------------
Title: Vice President
------------------------------
Date: 12/23/02
-------------------------------
LUTHER HOSPITAL, MAYO
HEALTH SYSTEM
By: /s/Joel T. Rueber
---------------------------------
Title: Vice President
------------------------------
Date: 12/23/02
-------------------------------
8
ATTACHMENT A
to the
JOINT VENTURE AGREEMENT
between
Cobalt, VHP and L/M
DEFINITIONS
- -----------
The following terms, when used in this Attachment and any Exhibits hereto, are
defined as follows.
"Clinic" means Midelfort Clinic, Ltd. Mayo Health Systems, including all
satellite locations.
"Coding Edits" means a comprehensive claim auditing application utilized by VHP
that verifies relationships among billed procedure codes and adjudicates claims
according to the auditing application.
"Covered Services" means those services rendered by Clinic, Hospital, or
Physician to a Member which are eligible for reimbursement under the Program.
Covered Services does not include chiropractic services.
"Hospital" means Luther, Barron, Bloomer and Osseo Hospitals.
"Inpatient Services" means those medical and ancillary Covered Services
requiring the admission of a Member to Hospital as a bed patient.
"Medically Necessary" means that the services or supplies provided to a Member
are required to diagnose or treat a Member's illness or injury. The
determination of whether a service or supply is Medically Necessary will be made
by VHP based on the findings of a medical review process and generally accepted
medical practice. The service or supply must be:
1. consistent with and appropriate for the diagnosis or treatment of the
Member's symptoms, illness or injury;
2. of proven value or usefulness, likely to yield additional information,
and not redundant when performed with other procedures;
3. not primarily for the convenience of a Member, the Member's family or
a Provider; and
4. the most appropriate and cost effective level of service that can
safely be provided to a Member. When applied to inpatient Services, it
means that the Member's symptoms or condition are such that services
cannot be safely provided to a Member as an outpatient.
The fact that any provider has prescribed, ordered, recommended or
approved a treatment, service or supply does not in itself make it
eligible for payment.
9
"Network Provider" means a hospital, physician, or other health care provider
selected by VHP to participate in the Program.
"Outpatient Services" means those Covered Services rendered at Hospital that are
not Inpatient Services.
"Member" means a person entitled to health care benefits under the Program,
including but not limited to, a person entitled to receive Covered Services
under the State of Wisconsin Medicaid (MA)/Badgercare HMO Program or a person
enrolled in Medicare who has supplemental wrap-around coverage under a VHP
policy.
"Physician(s)" means an individual (or individuals) duly licensed to practice
medicine in the State of Wisconsin, employed by or contractually affiliated with
Clinic.
"Primary Care Clinic" means a Network Provider clinic which specializes in
family practice, general practice, general pediatrics, general internal
medicine, geriatric or adolescent medicine.
"Program" means managed care programs offered and sold by VHP.
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I. CLINIC'S RESPONSIBILITIES
----------------------------
A. The medical care services required of Clinic by this Agreement shall be
performed by Clinic, Hospitals, and/or Physicians. Clinic warrants and
assures it has the express authority to contractually bind Hospital and
Physicians to the terms and conditions expressed herein, and that it acts
as Hospitals' and Physicians' agent in the execution of this Agreement.
Clinic certifies that Hospitals and Physicians hold all licenses and/or
certifications issued by the State of Wisconsin, or any other state(s)
law(s), as necessary to perform the medical services to be provided
Members.
B. Clinic shall notify VHP of the Physicians employed by or contractually
affiliated with Clinic, including thirty (30) days advance notification of
any additions or deletions. In cases of shorter termination by Clinic or
shorter notice of termination by Physician, Clinic will give notice to VHP
as soon as reasonably possible.
C. In accordance with Section II. C. herein, Clinic shall provide VHP with
sixty (60) days prior written notice (or as soon as reasonably possible if
Physician is unable to provide sixty (60) days prior written notice) of
those Physicians who will not be accepting additional patients. A Physician
not so listed shall be required to render services in accordance with the
terms of this Agreement to the Members who select or are assigned to that
Physician. VHP may denote in its marketing and advertising materials that
Physicians have been identified by Clinic as not accepting additional
patients.
D. Clinic as an organization will, at its own cost and expense, procure and
maintain policies of liability insurance, including medical malpractice
insurance, as required by the laws of the State of Wisconsin, and any other
state(s) law(s) as necessary to fulfill Clinic's, responsibilities under
this Agreement, and upon request shall furnish to VHP evidence of such
insurance coverage. Clinic shall, in writing and within ten (10) business
days, notify VHP of any restrictions, changes, cancellations or
terminations of any of the insurance described in this Article.
E. Clinic specifically acknowledges that Clinic, Hospital and Physicians are
solely responsible for all Clinical decisions regarding admission,
treatment, and/or discharge of Members under Clinic's, Hospitals' or
Physicians' care, notwithstanding receipt by Clinic, Hospital or Physician
of any denial, authorization, or recommendation issued by VHP pursuant to
its Utilization Management and Quality Improvement programs.
F. Subject to the terms of this Agreement, Clinic shall provide Covered
Services to Members in the same manner and in accordance with the same
standards as services are provided to Clinic's other patients.
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G. Clinic, if considered an individual practice association ("IPA") under
Wisconsin law, shall submit to the Office of the Commissioner of Insurance,
Bureau of Financial Examinations, P.O. Box 7873, Madison, WI 53707-7873, an
annual audited financial report within 180 days after the end of the IPA's
fiscal year. Such financial report shall be prepared on an accrual basis in
accordance with generally accepted accounting practices. The financial
report shall include: a report of an independent certified public
accountant; balance sheet; statement of gain or loss from operations;
statement of changes in financial position; statement of changes in net
worth; notes needed for fair presentation and disclosure; and supplemental
data and information which the commissioner may from time to time require.
Failure of the IPA to submit such report to the Office of the Commissioner
of Insurance in a timely manner shall be deemed a material breach of this
Agreement and may result in its non-renewal.
H. Clinic agrees to maintain, to the extent reasonably feasible, in accordance
with generally accepted accounting principles such financial and accounting
information relating to those aspects of the Clinic's operations which
pertain to VHP and its Members as shall be reasonably necessary for the
administration of the VHP program. On reasonable notice and at all
reasonable times, VHP may examine such information and the sources of such
information.
I. Clinic shall, in accordance with Wis. Admin. Code ss. 18.03(2)(c), provide
VHP with copies of records and respond to specific questions for review of
quality issues and/or Member grievances within thirty (30) days.
J. Clinic shall abide by all applicable provisions of VHP's agreement with the
State of Wisconsin, Medicaid/Badgercare HMO contract, including but not
limited to, those provisions outlined in Exhibit 2, attached hereto and
made a part of this Agreement.
K. For any applicable Program, Members shall designate a Primary Care Clinic.
Clinic acknowledges that Members who are members of the same family unit
need not select the same Primary Care Clinic. Clinic further acknowledges
that a Member may elect to change, or VHP may change, the Member's Primary
Care Clinic.
L. Clinic agrees to cooperate with VHP rules and regulations, including Member
rights and responsibilities standards and referral rules, as they are
established and amended from time to time. Copies of the relevant rules and
regulations are available for review by Clinic during VHP's normal business
hours at its main administrative office. If Clinic violates said rules or
regulations or the provisions of this Agreement, Clinic shall be in breach
of this Agreement.
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II. PHYSICIAN'S RESPONSIBILITIES
--------------------------------
All obligations created hereunder are agreed to by Clinic on behalf of
Physicians. Clinic shall, in its agreements with Physicians, require that
Physicians comply with the following terms.
A. Physician shall serve on the active medical staff of one or more Hospitals
and shall at all times maintain good standing among their professional
peers. Physician shall, in writing and within ten (10) business days,
notify VHP of any change in status regarding medical staff privileges or
other certifications.
B. Physician shall carry medical malpractice insurance as required by the laws
of the State of Wisconsin, or any other state(s) law(s) as necessary to
fulfill Physician's responsibilities under this Agreement. Insurance
described in this Article must provide coverage to Physician, and
Physician's staff, agents and employees, as appropriate. Evidence of all
such insurance shall be provided to VHP upon request. Physician shall in
writing and within ten (10) business days, notify VHP of any restrictions,
changes, cancellations or terminations of any of the insurance described in
this Article.
C. Subject to the terms of this Agreement, Physician shall provide Covered
Services to Members in the same manner and in accordance with the same
standards as medical services are provided to Physician's other patients.
Physician shall:
1. within the first year of this Agreement, accept as his or her patients
all eligible Members unless the Physician's practice has already been
closed in the previous contract period;
2. following the first year of this Agreement, to the extent he or she
accepts new patients, accept new Member patients; and
3. provide VHP with sixty (60) days prior written notice (or as soon as
reasonably possible if Physician is unable to provide sixty (60) days
prior written notice) if Physician will not be accepting additional
patients, and documentation in support of Physician's claims that he
or she is not realistically capable of accepting additional patients.
VHP may denote in its marketing and advertising materials which Physicians
have been identified as not accepting additional patients.
D. For all applicable Programs, Physician specifically acknowledges that all
hospital admissions are subject to the Quality Improvement and Utilization
Management programs described herein, and shall admit or arrange for the
admission of Members only to Hospital, unless:
1. the admitted Member, or an authorized relative on the Member's behalf,
requests admission to a non-Network hospital;
2. due to an emergency, it is not possible without compromising the
Member's health to admit the Member to Hospital; or
3. VHP gives prior written approval for the admission to a non-Network
hospital.
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E. Physician agrees to refer Members to other providers when he or she is
incapable of providing specialized Medically Necessary services or when
medically appropriate, and then only to other Network Physicians, unless:
1. due to an emergency, it is necessary that the Member be attended by a
non-Network Physician; or
2. VHP gives prior written approval for a referral to a non-Network
Physician.
F. Physician shall render Covered Services to Members in the most
cost-efficient manner consistent with sound medical practice. Where it is
possible without compromising the Member's health care, Physician shall
adopt the following procedures, provided the alternative to such a
procedure would be more costly:
1. prescribe drugs generically;
2. avoid admitting Members to hospitals on weekends;
3. perform diagnostic procedures prior to admitting a Member to a
hospital;
4. provide care on an outpatient basis; and
5. utilize home care and place Members in facilities or institutions
other than hospitals during periods of convalescence.
G. A Physician or other person who completes a claim on Physician's behalf
shall attempt to ascertain from each Member whether primary health care
coverage is available from a source other than the Program. In the event
there is other primary coverage, Physician or other person who completes
the claim on Physician's behalf shall indicate such other coverage when
submitting a claim to VHP.
H. Physician shall allow VHP to identify Physician as Network Provider
physicians and, if appropriate, as primary care physicians or specialty
care physicians, and to publicize in promotional materials Physician's
name, address, telephone number, specialty (if appropriate), and other
pertinent information. Should this Agreement terminate, Physician shall
post a notice in his or her office to advise his or her patients who are
Members that he or she is no longer a Network Provider until such time as
Physician's name is deleted from VHP's promotional materials.
I. Physician agrees that the referral of any Member to a non-Network physician
shall require the prior written authorization of VHP. Physician agrees that
prior written authorization is required from VHP for certain in-network
services. Further, Physician agrees that prior written authorization from
VHP is required for any out-of-network services. Pursuant to VHP's medical
management guidelines, Physician agrees to assist Members in obtaining
necessary authorizations.
J. Not withstanding Sections II. E and I above, in no way will L/M be
responsible for any costs of referral care, with or without an
authorization from VHP.
K. Physician shall, in accordance with Wis. Admin. Code ss. 18.03(2)(c),
provide VHP with copies of records and respond to specific questions for
review of quality issues and/or Member grievances within thirty (30) days.
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L. Physician shall abide by all applicable provisions of VHP's agreement with
the State of Wisconsin, Medicaid/Badgercare HMO contract, including but not
limited to, those provisions outlined in Exhibit 2, attached hereto and
made a part of this Agreement.
M. Physician agrees to cooperate with all VHP rules and regulations, including
Member rights and responsibilities standards and referral rules, as they
are established and amended from time to time. Copies of the relevant rules
and regulations are available for review by Physician during VHP's normal
business hours at its main administrative office. If Physician violates
said rules or regulations or the provisions of this Agreement, Physician
shall be in breach of this Agreement.
III. HOSPITAL'S RESPONSIBILITIES
--------------------------------
All obligations created hereunder are agreed to by Clinic on behalf of Hospital.
Clinic shall, in its agreement with Hospital, require that Hospital comply with
the following terms.
A. Hospital shall carry medical malpractice insurance as required by the laws
of the State of Wisconsin, or any other state(s) law(s) as necessary to
fulfill Hospital's responsibilities under this Agreement. Insurance
described in this Article must provide coverage to Hospital, and its staff,
agents and employees, as appropriate. Evidence of all such insurance shall
be provided to VHP upon request. Hospital shall in writing and within ten
(10) days notify VHP of any restrictions, changes, cancellations or
terminations of any of the insurance described in this Article.
B. Except as provided in Section III. C. below, Hospital has and shall
maintain in good standing all licenses, certifications, and other
governmental approvals which by law are required for Hospital to perform
its responsibilities pursuant to this Agreement. Hospital shall also
maintain in good standing accreditation by the Joint Commission on
Accreditation of Health Care Organizations ("JCAHO") or the American
Osteopathic Association ("AOA"), whichever is applicable. Evidence of such
licenses, certificates, and accreditation shall be made available to VHP
upon request. Hospital shall, in writing and within ten (10) business days,
notify VHP of any restrictions, changes, cancellations or terminations of
any of the licenses, certificates, and accreditations described in this
Article.
C. If Hospital is not JCAHO and/or AOA accredited or certified, Hospital shall
maintain an active quality assurance program. VHP shall monitor such
program pursuant to Section VI. VHP shall also monitor Hospital in
accordance with nationally recognized accrediting bodies including, but not
limited to, the National Committee for Quality Assurance ("NCQA") standards
that include, but are not limited to, the following: initial on-site review
of Hospital and Hospital's policies and procedures prior to execution of
this Agreement in order to evaluate Hospital's conformance with VHP
standards for non-accredited Hospitals; confirmation that Hospital is in
good standing with state and federal regulatory bodies, as well as
confirmation of Hospital's continued good standing with same
15
at least every three (3) years; and, if such review is requested by VHP,
planned on-site review of Hospital's facility, policies and procedures.
D. Subject to the terms of this Agreement, Hospital shall provide Covered
Services to Members in the same manner and in accordance with the same
standards as hospital services are provided to Hospital's other patients.
E. Hospital shall take reasonable steps to ensure that all physicians, staff
members, employees and other persons responsible for providing health care
at Hospital comply with applicable laws and regulations, Hospital rules,
and prevalent legal standards of care. Hospital shall, in writing and
within ten (10) business days, notify VHP of any restrictions, changes, or
terminations of Hospital privileges of any Physician.
F. Where it is possible, without compromising the Member's health care,
Hospital shall encourage physicians to adopt the following procedures,
provided the alternative to such procedure would be more costly:
1. avoid admitting Members to Hospital on weekends;
2. perform diagnostic procedures prior to admitting a Member to Hospital;
and
3. provide care on an outpatient basis.
This Article shall not be construed to prohibit Hospital from performing
the services mentioned herein during a Member's inpatient stay, provided
the reason for the stay or length of stay is not based solely on the
rendition of such services.
G. Hospital, or any person who completes a claim on Hospital's behalf, shall
attempt to ascertain from each Member whether primary health care coverage
is available from a source other than the Program. In the event there is
other primary coverage, Hospital, or the person who completes the claim on
Hospital's behalf shall indicate such other coverage when submitting a
claim to VHP.
H. Hospital shall allow VHP to identify Hospital as a Network Provider
hospital and to publicize in promotional materials Hospital's name,
address, telephone number, and any other pertinent information.
I. Hospital specifically acknowledges that Physicians working within Hospital
are solely responsible for all clinical decisions regarding admission,
treatment, and/or discharge of Members under Hospital's care,
notwithstanding receipt by Hospital of any denial, authorization, or
recommendation issued by VHP pursuant to its Utilization Management and
Quality Improvement programs.
J. Hospital shall, in accordance with Wis. Admin. Code ss. 18.03(2)(c),
provide VHP with copies of records and respond to specific questions for
review of quality issues and/or Member grievances within thirty (30) days.
16
K. Hospital shall provide to VHP a current directory and its periodic updates,
which identify those physicians having staff privileges at Hospital and the
level of such privileges.
L. Hospital shall abide by all applicable provisions of VHP's agreement with
the State of Wisconsin, Medicaid/Badgercare HMO contract, including but not
limited to, those provisions outlined in Exhibit 2, attached hereto and
made a part of this Agreement.
M. In accordance with VHP's quality improvement and utilization management
policies and procedures, Hospital shall notify VHP of all Inpatient
admissions within twenty-four (24) hours, regardless of whether it is a
scheduled or emergency admission. For Inpatient admissions to Luther
Hospital, L/M and VHP agree to establish a formal contract for utilization
management including but not limited to current processes for pre-admission
review and certification, admission and continued stay review, case
management and retrospective review as outlined in Exhibit 3. If a formal
contract is not executed by June 30, 2003, utilization management policy
for admissions to Luther Hospital shall be governed by policy as determined
by the Quality Committee in accordance with it responsibilities, as set
forth in the Agreement.
N. Hospital agrees to maintain, to the extent reasonably feasible, in
accordance with generally accepted accounting principles such financial and
accounting information relating to those aspects of the Hospital's
operations which pertain to VHP and its Members as shall be reasonably
necessary for the administration of the VHP program. On reasonable notice
and at all reasonable times, VHP may examine such information and the
sources of such information.
O. Hospital agrees to cooperate with all VHP rules and regulations, including
Member rights and responsibilities standards and referral rules, as they
are established and amended from time to time. Copies of the relevant rules
and regulations are available for review by Hospital during VHP's normal
business hours at its main administrative office. If Hospital violates said
rules or regulations or the provisions of this Agreement, Hospital shall be
in breach of this Agreement.
IV. VHP'S RIGHTS AND RESPONSIBILITIES
-------------------------------------
A. VHP shall identify Clinic, Hospital, and Physicians as Network Providers in
promotional and informational materials which it distributes or publishes
to Members residing or working within a reasonable geographical distance
from Clinic's facility(ies). VHP shall not identify hospital-based
Physicians (i.e., anesthesiologists, pathologists, radiologists and
emergency room physicians) in promotional materials or provider
directories.
B. VHP shall encourage Members to seek Clinic's, Hospital's, and Physicians'
services.
17
V. REIMBURSEMENT
----------------
A. VHP shall reimburse Clinic, Hospital, and/or Physicians for the rendition
of Covered Services to Members in the amount and manner set forth in
Exhibit 1, which is attached hereto and made a part hereof to this
Agreement. The reimbursement set forth in Exhibit 1 shall be subject to the
Best Price provisions outlined in Section 5 of this Agreement. Regardless
of the reimbursement methodology identified in Exhibit 1, VHP shall have
the exclusive right to use Coding Edits to determine the fee that
corresponds to the appropriate coding guideline for reporting a particular
procedure. VHP reserves the right to withhold payment for any claims
submitted after twelve (12) months of the date of service. Clinic,
Hospital, and Physicians shall submit claims electronically. VHP shall send
remittance advices to Luther Hospital and Midelfort Clinic electronically.
The electronic remittance files sent by VHP shall be in HIPAA-compliant 835
format and acceptable for electronic posting. VHP shall make weekly
payments and shall be subject to a penalty of $5,000 per week for every
week of claims with dates of service January 1, 2003 and later that is not
in a format acceptable for electronic posting to patient accounts.
B. Clinic, Hospital, and Physicians shall accept payments as payment in full
for Covered Services rendered to Members. Clinic, Hospital, and Physicians
shall not be permitted to bill or collect payment from Members, except for:
1. services not covered by the Program; and
2. deductibles and co-payments, as provided for by the Program.
Neither Clinic, Hospital, nor Physicians shall elect to be exempt from any
state laws restricting recovery of charges for covered services from HMO
Members.
C. In the event an error in payment is made, VHP must submit a post-payment
refund request to Clinic, Hospital, and/or Physicians to compensate for the
error. In the event Clinic, Hospital and/or Physicians fail to submit
requested payment to VHP within sixty (60) days, VHP shall adjust later
payments to Clinic, Hospital and/or Physicians to compensate for the error,
notwithstanding the fact that the subsequent payments might be unrelated to
those services for which the erroneous payment was made. Luther Midelfort
reserves the right to withhold payment for any refund requests submitted
after twelve (12) months from the date of payment.
D. In the event a Member has duplicate coverage and VHP is secondary to
another non -government payor, VHP will allow up to the contracted amount
VHP would have paid had VHP been primary. For services covered by a
government payor when VHP is secondary to a government payor, VHP will
allow up to the government payor's allowed amount. For services not covered
by a government payor when VHP is secondary, VHP will apply the HMO
reimbursement rate to covered services.
E. VHP shall compensate Clinic, Hospital, and Physicians in a manner
consistent with
18
Wisconsin's Timely Payment of Claims Statute, Wis. Stat.ss.628.46, upon
receipt of a valid claim for Covered Services rendered pursuant to this
Agreement.
F. This Agreement shall not apply to those professional Inpatient Services
rendered by Physician during a Member's confinement in Hospital if the
confinement commenced prior to the effective date of this Agreement.
G. VHP shall reimburse Hospital in accordance with the terms and conditions of
this Agreement for Inpatient Services rendered to a Member subsequent to
the termination of this Agreement if the Member's hospital confinement
commenced prior to such termination date.
H. VHP assumes full financial responsibility for the reimbursement of L/M with
respect to those Covered Services rendered to Members covered under an
insured product. Should the Program be offered on a self-insured basis,
reimbursement for Covered Services rendered to Members covered under a
self-insured product shall be made from a fund established and supported by
the group health plan of which the Member is enrolled. VHP shall accept no
liability for the capacity of such fund to satisfy Provider's claims. It is
understood that VHP's sole function relative to a self-insured product
shall be to provide administrative services to the extent agreed upon by
VHP and the applicable employer group. If funding by self-funded employer
is insufficient to satisfy Provider's claims, Provider may bill Member.
VI. UTILIZATION MANAGEMENT AND QUALITY IMPROVEMENT
--------------------------------------------------
A. Clinic, Hospital (other than Luther Hospital as referenced in Article
III.M.), and Physicians shall participate in programs or activities of
Utilization Management and Quality Improvement, or any similar such
programs, established by VHP. The programs' or activities' purpose(s) shall
be to monitor and reduce the utilization and cost of hospital and medical
services while maintaining quality health care for Members. The programs or
activities may be administered by VHP, one of its affiliates, or a
contracted vendor of such programs or activities.
B. The Utilization Management program may consist of various review
methodologies, including but not limited to, preauthorization (for
applicable programs), pre-admission review and certification, admission and
continued stay review, case management and retrospective case review as
deemed appropriate by VHP in accordance with established guidelines and
procedures.
C. Clinic, Hospital, and Physicians shall cooperate with and support the
Quality Improvement program, which may consist of various policies,
procedures and review methodologies, including but not limited to:
1. For professional services: pre-contractual and subsequent biannual
site and medical records review (PCPs, OB/GYNs, behavioral health
sites); pre-contractual credentialing and recredentialing at least
every three (3) years (MD, DO, DDS, PhD,
19
PsyD, ICSW, CICSW, APNP-Psychiatric); quality alert complaint and
sentinel event reviews; review of generally accepted clinical practice
guidelines; and, cooperation with data collection.
2. For facilities: pre-contractual site review and subsequent triannual
site reviews (non-accredited hospitals, skilled nursing facilities,
ambulatory surgical centers, home health agencies); pre-contractual
credentialing and recredentialing every three years (hospitals,
skilled nursing facilities, ambulatory surgical centers, home health
agencies, day treatment centers, residential treatment centers);
quality alert complaint and sentinel event reviews; and, cooperation
with data collection.
D. Clinic, Hospital, and Physicians shall meet all credentialing standards of
the National Committee Quality Assurance ("NCQA") and VHP. Failure to
cooperate with the credentialing process, or meet credentialing standards,
may result in the immediate termination of the Agreement.
E. Pursuant to Section III. B. herein, Hospital shall maintain in good
standing accreditation by JCAHO or AOA, whichever is applicable. Hospital
shall also maintain in good standing its Medicare certification. Hospital
shall advise VHP of any change or modification to such accreditation or
certification within thirty (30) days thereof. VHP reserves the right to
request Hospital to provide the most current applicable accreditation or
certification survey results.
VII. MEDICAL RECORDS
--------------------
A. VHP and Hospital, Clinic, and/or Physician hereby acknowledge and agree
that all medical records or other correspondence, written, verbal or
electronic, and documentation containing Individually Identifiable Health
Information ("Health Information"), as defined herein, shall be used only
for health purposes, including but not limited to treatment, which shall
include not only the provision of health care, but also the coordination of
health care among health care providers, and reimbursement or other uses as
required to carry out the purposes of this Agreement. All Health
Information shall be handled in a manner which is reasonably expected to
maintain its confidential nature, protecting it from deliberate or
inadvertent misuse or disclosure, and in compliance with all local, state
and federal laws, rules and/or regulations regarding the possession and
handling of such information.
For the purposes of this Agreement, "Health Information" means any
information, whether written, verbal or electronic, obtained or accessed by
either party which 1) can be used to identify an individual; and 2) relates
to a physical, mental or health condition of any individual; the provision
of mental or health care to an individual; or the payment for the provision
of mental or health care to an individual.
B. Upon request, Hospital, Clinic, and/or Physician shall submit Member's
Health Information to VHP in accordance with this Article. Health
Information requested by VHP shall be deemed to be the "minimum necessary,"
pursuant to the Health Insurance Portability and Accountability Act privacy
regulations, 45 CFR ss. 164.502(b), et seq.
20
VHP reserves the exclusive right to determine the amount of Health
Information which is minimally necessary in any particular situation, which
determination shall be final and binding upon Hospital, Clinic, and/or
Physician and shall not be subject to challenge by Hospital, Clinic, and/or
Physician. VHP also exclusively assumes any and all risk liability
associated with exercising this specified right regarding "minimally
necessary" determination under HIPAA.
C. To the extent permitted by state and federal law relating to
confidentiality of records, copies of patient health care records required
for administration of the Quality Improvement program shall be submitted to
VHP within a reasonable time and at charges no greater than those
identified in Wis. Admin. Code ss. HFS 117.05.
D. To the extent permitted by state and federal law relating to the
confidentiality of records, copies of patient health care records required
for billing, collection or payment of claims shall be submitted to VHP
within ten (10) days of the request and at no charge.
E. Should this Agreement be terminated, Clinic, Hospital and/or Physician
shall transfer a copy of Member's medical records to the Member or another
provider, upon request and at no cost, provided that the Member makes such
request in writing.
F. Clinic, Hospital and/or Physician shall maintain a separate patient record
on behalf of each individual Member. Such record shall contain information
required by federal and state laws, the Medicare and Medicaid programs
where applicable, nationally recognized accrediting bodies, including but
not limited to NCQA, American Accreditation HealthCare Commission, Inc.
(formerly known as the Utilization Review Accreditation Commission), Joint
Commission on Accreditation of Health Care Organizations and/or the
American Osteopathic Association, if applicable, and VHP. Such records
shall be retained for at least seven (7) years following the Member's last
date of service, or a longer period if required by applicable law.
VIII. TERMINATION
-----------------
A. VHP may terminate the Network Provider status of Clinic, Hospital, and/or
Physician immediately in the event Clinic, Hospital, and/or Physician:
1. presents or causes to be presented to VHP a false or fraudulent claim
or any proof in support of such claim, or prepares, makes or
subscribes to a false or fraudulent account, certificate, affidavit,
proof of loss or other document or writing in support of a claim made
to VHP, for or on behalf of any person insured or eligible for
benefits under the Program;
2. is convicted of violating Wis. Stat. ss. 943.395, or any similar
statute of another state or jurisdiction.
B. VHP may terminate the Network Provider status of an individual Physician
immediately in the event that the Physician:
1. is convicted of a felony or misdemeanor involving sexual misconduct;
or
21
2. loses his or her license or certificate of registration to practice.
C. In the event a Physician is reprimanded, or has his or her license limited,
suspended or revoked, Clinic shall give notice to VHP within ten (10) days.
Clinic shall notify VHP within ten (10) days of Clinic's notification of
the commencement of any civil or criminal action, including any
professional liability suit, brought against Clinic or any Physician, or
any settlement thereof. Any notification required by this Section shall be
sent to the attention of VHP's Medical Director. Failure to provide any
required notification shall be considered a material breach of this
Agreement.
D. Notwithstanding any portion of this Section, VHP may terminate the Network
Provider status of Hospital on the effective date of a reprimand, or a
limitation, suspension or revocation of Hospital's license, by any
appropriate regulatory body. In the event Hospital is reprimanded or has
its license limited, suspended or revoked, Hospital shall give notice to
VHP within ten (10) days. Hospital further shall notify VHP within ten (10)
days of Hospital's notification of the commencement of any civil or
criminal action, including any professional liability suit, brought against
Hospital, or any settlement thereof. Any notification required by this
Section shall be sent to the attention of VHP's Medical Director. Failure
to provide any required notification shall be considered a material breach
of this Agreement.
F. The termination of this Agreement shall not relieve the parties of any
obligation owed to each other nor relieve the parties of any other
obligations of this Agreement which shall continue past or survive the
termination of this Agreement. The provisions of this Agreement shall
continue to apply to any such obligations.
G. In the event of termination of this Agreement, Clinic, Hospital, and/or
Physician shall remain available at VHP's option, in accordance with Wis.
Stat. ss. 609.24, to provide services to Members. Clinic, Hospital and/or
Physician shall be reimbursed for services performed after termination at
the contracted rate in force at the time of termination.
H. In the event of a material breach by one party, the non-breaching party may
give notice specifying the breach and requiring correction of the breach
within a reasonable period of time, which period shall not be less than
fifteen (15) days after receipt of notice. In the event the breaching party
has not cured the breach within the required time, the non-breaching party
may immediately terminate this Agreement. If the breaching party has cured
the breach within the required time, this Agreement shall remain in effect
and the non-breaching party shall be limited to actual damages and specific
performance as its exclusive remedies. In terms of Clinic, Hospital, and/or
Physician, material breach shall include, but not be limited to:
1. refusing to participate in or cooperate with the Utilization
Management or Quality Improvement program, as provided for herein; or
2. seeking or collecting payment from a Member in violation of the terms
herein.
22
EXHIBIT 1
I. Set forth herein are the financial terms for the Agreement between VHP and
L/M with respect to Covered Services rendered to VHP Members.
A. HMO Reimbursement
-----------------
VHP shall reimburse Clinic, Hospital, and/or Physician for the rendition of
Covered Services to Members in an amount equal to provider's charge less
the applicable discounts outlined below during each corresponding contract
year:
- ------------------------ --------------- --------------- ---------------
Provider 2003 2004 2005
- ------------------------ --------------- --------------- ---------------
Clinic/satellites 25% 20% 15%
- ------------------------ --------------- --------------- ---------------
Luther Hospital 15% 15% 15%
- ------------------------ --------------- --------------- ---------------
Barron, Bloomer & 3% 3% 3%
Osseo Hospitals
- ------------------------ --------------- --------------- ---------------
B. POS Reimbursement
-----------------
VHP shall reimburse Clinic, Hospital and/or Physician for the rendition
of Covered Services to Members in an amount equal to provider's charge
less the applicable discounts outlined below for each corresponding
contract year:
- ------------------------ --------------- --------------- ---------------
Provider 2003 2004 2005
- ------------------------ --------------- --------------- ---------------
Clinic/satellites 15% 15% 15%
- ------------------------ --------------- --------------- ---------------
Luther Hospital 15% 15% 15%
- ------------------------ --------------- --------------- ---------------
Barron, Bloomer & 3% 3% 3%
Osseo Hospitals
- ------------------------ --------------- --------------- ---------------
C. M.A./Badgercare Product
-----------------------
1. VHP shall reimburse Clinic, Physicians and/or Hospitals for the
rendition of Covered Services to Members pursuant to the
Medicare/Badgercare fee schedule.
2. VHP and L/M will each be responsible for fifty (50) percent of
the total annual Health Check penalties incurred by VHP during
each calendar year of the term of the Agreement for Members who
select Clinic as their Primary
23
Care Clinic. VHP shall notify L/M of its share of the penalty in
writing by March 31 of each calendar year of the term of the
Agreement. Payment by L/M to VHP shall be due within thirty (30)
days of L/M's notification of the penalty amount.
D. Medicare Supplemental Product
-----------------------------
VHP shall reimburse Clinic, Physician, and/or and Hospitals for
the rendition of Covered Services to Members pursuant to
Medicare's fee schedule for Medicare-allowed benefits. For
Covered Services allowed by VHP but not Medicare, VHP shall
reimburse Clinic, Physician, and/or Hospitals for the rendition
of Covered Services to Members pursuant to the HMO Product
reimbursement rates identified the charts in Section I, A above.
II. Predictable Fee Increases (Clinic and Luther Hospital only)
-----------------------------------------------------------
A. Clinic and Luther Hospital shall each be allowed one (1) annual fee
increase during each calendar year of the term of the Agreement. The
impact to VHP of such annual allowable fee increase shall not exceed
eight (8) percent in the aggregate for each calendar year of the term
of the Agreement. When comparing actual fee increases to the
aforementioned eight (8) percent cap ("Cap"), Luther Hospital and
Clinic will be viewed in the aggregate. If the Cap is exceeded on an
aggregate basis, discount amounts as set forth in Section I above
("Discounts") will be adjusted so that the impact upon VHP equates to
eight (8) percent.
B. For each year of the term of the Agreement, VHP and L/M will mutually
agree to a selected base of high frequency CPT codes which will be
used to evaluate the relationship of annual fee adjustments and their
impact upon VHP. Prior year volumes of the selected base of CPT codes,
as determined from VHP's claim system, will be used to determine the
weighted impact of fee increases upon VHP for each year.
C. If L/M has any additional fee increase(s) within a calendar year, an
appropriate adjustment will be made to the Discounts to negate any
impact of such increase upon VHP.
D. Each year's base for determining the Discount for that year will be
the prior year's discounted fee schedule utilized by VHP.
E. VHP may conduct audits of the L/M charge master to verify the accuracy
of charge levels.
F. LM may conduct audits of VHP's calculations in determining the impact
of annual fee increases.
24
G. Any adjustments to the Discounts will be mutually agreed upon by L/M
and VHP.
III. Member Liability
----------------
Any applicable discount shall be applied to the total allowable charge
before any applicable co-payments, co-insurance or deductibles are applied.
IV. Coding Edits
------------
A. Coding Edits applied to L/M claims shall be subject to a maximum
impact of one (1) percent of total billed charges (exclusive of
provider discounts arrangements outlined this Exhibit 1, Article I.)
on a calendar year basis for all denials applied to provider
responsibility from whatever source.
B. L/M shall track Coding Edit denials for dates of service from January
1 through December 31 ("Tracking Period") for each term of the
Agreement. Should the denials exceed one (1) percent of total billed
charges for a calendar year, L/M shall notify VHP and provide
supporting documentation of charge calculations by March 1 of the year
following the Tracking Period. Any reconciliation payments required by
VHP shall be due on March 15 of the year following the Tracking
Period.
25
EXHIBIT 2
Clinic, Hospital, and/or Physician agrees to abide by all applicable provisions
of VHP's agreement with the State of Wisconsin Department of Health and Family
Services ("DHFS"), hereafter referred to as MA(Medicaid)/HMO contract. The
MA/HMO contract is incorporated by reference herein and Clinic, Hospital, and/or
Physician compliance with the Medicaid/Badgercare HMO contract specifically
includes but is not limited to the following requirements:
(a) Clinic, Hospital, and Physician uses only Medicaid-certified providers in
accordance with Article III.DD. of the Medicaid/Badgercare HMO contract.
(b) No terms of this subcontract are valid which terminate legal liability of
HMO in accordance with Article III.BB. of the Medicaid/Badgercare HMO
contract.
(c) Clinic, Hospital, and Physician agree to participate in and contribute
required data to HMO Quality Improvement programs as required in Article
III.Y. of the Medicaid/Badgercare HMO contract.
(d) Clinic, Hospital, and Physician agree to abide by the terms of the
Medicaid/Badgercare HMO contract (Article III.E.) for the timely provision
of emergency and urgent care. Where applicable, Clinic, Hospital, and
Physician agrees to follow those procedures for handling urgent and
emergency care cases stipulated in any required hospital/emergency room
MOUs signed by HMO in accordance with Article III.K. of the
Medicaid/Badgercare HMO contract.
(e) Clinic, Hospital, and Physician agree to submit HMO recipient
history/encounter data in the format specified by the HMO, so the HMO can
meet the Department specifications required by Article VI and Addendum IV
of the Medicaid/Badgercare HMO contract. HMOs will evaluate the credibility
of data obtained from subcontracted vendors' external databases to ensure
that any patient-reported information has been adequately verified.
(f) Clinic, Hospital, and Physician agree to comply with all non-discrimination
requirements in Article III.Q. of the Medicaid/Badgercare HMO contract.
(g) Clinic, Hospital, and Physician agree to comply with all record retention
requirements and, where applicable, the special reporting requirements on
abortions, sterilizations, hysterectomies, and Health Check requirements.
(h) Clinic, Hospital, and Physician agree to provide representatives of HMO, as
well as duly authorized agents or representatives of DHFS and the Federal
Department of Health and Human Services, access to its premises and its
contract and/or medical records in accordance with Article III and Article
IX of the Medicaid/HMO contract. Clinic, Hospital, and Physician agree
otherwise to preserve the full confidentiality of medical records in
accordance with Article XIII of the Medicaid/Badgercare HMO contract.
26
(i) Clinic, Hospital, and Physician agree to the requirements for maintenance
and transfer of medical records stipulated in Article III.Y. of the
Medicaid/Badgercare HMO contract. Clinic, Hospital, and Physician agree to
make medical records available to recipients and their authorized
representatives within ten (10) working days of the record request. This
requirement will take effect when the same requirement goes into effect for
the fee-for-service. The Department will notify HMOs when this occurs.
(j) Clinic, Hospital, and Physician agree to ensure confidentiality of family
planning services in accordance with Article III.C. of the
Medicaid/Badgercare HMO contract.
(k) Clinic, Hospital, and Physician agree not to create barriers to access to
care by imposing requirements on recipients that are inconsistent with the
provisions of medically necessary and covered Medicaid benefits (e.g., COB
recovery procedures that delay or prevent care).
(l) Clinic, Hospital, and Physician agree to clearly specify referral approval
requirements to its providers and in any sub-subcontracts.
(m) Clinic, Hospital, and Physician agree not to bill an Medicaid enrollee for
medically necessary services covered under the Medicaid/Badgercare HMO
contract and provided during the enrollee's period of HMO enrollment. This
provision shall continue to be in effect if the HMO becomes insolvent.
However, if an enrollee agrees in writing to pay for a non-Medicaid covered
service, then the HMO, HMO provider, Clinic, Hospital, and/or Physician can
bill.
The standard release form signed by the enrollee at the time of services
does not relieve the HMO, Clinic, Hospital, and Physician from the
prohibition against billing a Medicaid enrollee in the absence of a knowing
assumption of liability for a non-Medicaid covered service. The form or
other type of acknowledgment relevant to Medicaid enrollee liability must
specifically state the admissions, service, or procedures that are not
covered by Medicaid.
(n) Clinic, Hospital, and Physician must forward to the HMO medical records
pursuant to grievances, within fifteen (15) working days of the HMO's
request. If Clinic, Hospital, and/or Physician does not meet the fifteen
(15) day requirement, Clinic, Hospital, and/or Physician must explain why
and indicate when the medical records will be provided.
(o) Clinic, Hospital, and Physician agree to abide by the terms of Article
III.I. regarding appeals to the HMO and to the Department for HMO
non-payment of service providers.
(p) Clinic, Hospital, and Physician agree to abide by the HMO
marketing/informing requirements. Clinic, Hospital, and/or Physician will
forward to the HMO for prior approval all flyers, brochures, letters, and
pamphlets the subcontractor intends to distribute to its Medicaid enrollees
concerning its HMO affiliation(s), changes in affiliation, or relates
directly to the Medicaid population. Clinic, Hospital, and Physician will
not distribute any
27
"marketing" or recipient informing materials without the consent of the HMO
and the Department.
28
Attachment B
Provider Listing
- ----------------------------------------------------------------------------------------------------------------------------
Location Address Phone Number Federal Tax ID
- --------------------------------------------------- ---------------------------------- ------------------- -----------------
Clinics
- --------------------------------------------------- ---------------------------------- ------------------- -----------------
B Midelfort Clinic - Barron 1220 East Woodland Avenue (715) 537-3166 39-1735831
Barron, WI 54812
- --------------------------------------------------- ---------------------------------- ------------------- -----------------
E Midelfort Clinic - Bloomer 1507 Vine Street (715) 568-4650 39-1735831
Bloomer, WI 54724
- --------------------------------------------------- ---------------------------------- ------------------- -----------------
B Midelfort Clinic - Cameron 1001 Main Street (715) 458-4380 39-1735831
Cameron, WI 54822
- --------------------------------------------------- ---------------------------------- ------------------- -----------------
B Midelfort Clinic - Chetek 220 Douglas Street (715) 924-4811 39-1735831
Chetek, WI 54728
- --------------------------------------------------- ---------------------------------- ------------------- -----------------
E Midelfort Clinic - Chippewa Falls 611 First Avenue (715) 720-4400 39-1735831
Chippewa Falls, WI 54729
- --------------------------------------------------- ---------------------------------- ------------------- -----------------
E Midelfort Clinic - Clairemont Campus 733 W. Clairemont Ave (715) 838-5222 39-1735831
Eau Claire, WI 54701
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E Midelfort Clinic - Colfax 1010 High Street (715) 962-3117 39-1735831
Colfax, WI 54730
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E Midelfort Clinic - Luther Campus 1400 Bellinger Street (715) 838-5222 39-1735831
Eau Claire, WI 54703
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E Midelfort Clinic - Mondovi 700 Buffalo Street (715) 926-4858 39-1735831
Mondovi, WI 54755
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E Midelfort Clinic - Osseo 674 8th Street (715) 597-2575 39-1735831
Osseo, WI 54758
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B Midelfort Clinic - Prairie Farm 224 River Avenue (715) 455-1666 39-1735831
Prairie Farm, WI 54762
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Hospital and Nursing Homes
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Barron Medical Center Hospital and Nursing Home 1222 East Woodland Avenue (715) 537-3186 39-0920634
Barron, WI 54812
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Bloomer Community Memorial Hospital and Maplewood 1501 Thompson Street (715) 568-2000 39-0980343
Nursing Home Bloomer, WI 54724
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Luther Hospital 1221 Whipple Street (715) 838-3311 39-0813418
P.O. Box 4105
Eau Claire, WI 54702
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Osseo Area Medical Center and 13025 8th Street (715) 597-3121 39-1029430
Nursing Home P.O Box 70
Osseo, WI 54758
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E Eau Claire Claims Billing/Processing B Barron Region Claims Billing/Processing
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HCFA 1500 Box 33: HCFA 1500 Box 33:
Midelfort Clinic MRP Midelfort Clinic MRP-BCC
PO Box 1510 1220 Woodland Ave
Eau Claire, WI 54702-1510 Barron, WI 54812
29
Exhibit 3
UTILIZATION REVIEW PROCESS FOR VHP
Patient LutherMidelfort UR Attending MD Dr. Lindsay VHP Luther
Midelfort SW
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