FHP, INC. (CALIFORNIA)
MEDICAL GROUP SERVICES AGREEMENT
(TALBERT)
THIS MEDICAL GROUP SERVICES AGREEMENT (this "Agreement") is made and entered
into this 6th day of November, 1996, by and between FHP, INC. (California)
("Health Plan"), and TALBERT MEDICAL GROUP, INC. ("Medical Group") with
reference to the following facts:
WHEREAS, Health Plan operates various prepaid health plans for the provision of
Covered Services to persons enrolled as Members in such plans in a manner
consistent with the laws of the State of California and the United States; and
WHEREAS, Health Plan's ultimate parent, FHP International Corporation, has
recently entered into an agreement to be acquired by PacifiCare Health Systems,
Inc., which acquisition, when completed, will result in various legal and
operational changes to Health Plan, including, among other things, a change of
Health Plan's name to PacifiCare and a change of certain operating procedures
and compensation programs upon the Conversion Date, as defined below; and
WHEREAS, Medical Group and its Participating Providers desire to participate in
Health Plan's prepaid health service delivery system by providing or arranging
for Covered Services to Medical Group Members on a prepaid basis in coordination
with Health Plan and its Participating Providers under the terms specified in
this Agreement; and
NOW, THEREFORE, it is agreed as follows:
ARTICLE 1
DEFINITIONS
Whenever used in this Agreement, the following terms shall have the definitions
contained in this Article 1
1.1 ACCREDITATION ORGANIZATION is any organization, including, without
limitation, the National Committee for Quality Assurance (NCQA), engaged
in accrediting or certifying Health Plan, any Managed Care Plans, or any
Participating Providers.
1.2 AGREEMENT is this Medical Group Services Agreement between Health Plan and
Medical Group, and any amendments, exhibits and attachments hereto,
including Product Attachments.
1.3 BASE AGREEMENT is this Medical Group Services Agreement between Health
Plan and Medical Group, and any amendments, exhibits and attachments
hereto, excluding Product Attachments.
1.4 CAPITATION PAYMENTS are monthly payments made to Medical Group on a
prepaid basis for Covered Services provided or arranged by Medical Group
under this Agreement.
1.5 COMMENCEMENT DATE shall be the closing date of that certain Amended and
Restated Agreement and Plan of Reorganization involving PacifiCare Health
Systems, Inc. and FHP International Corporation (the "Reorganization
Agreement") or on the first day of the month following the closing of the
Reorganization Agreement if the Reorganization Agreement does not close
during the first five (5) days of the month.
1.6 CONVERSION DATE is the date specified in a written notice from Health Plan
to Medical Group indicating that Health Plan has revised its systems,
operations and programs and that the compensation and other programs which
become effective under this Agreement upon the Conversion Date will be
initiated. Health Plan's written notice shall precede the Conversion Date
by at least ninety (90) days and may be stated in term of the conversion
occurring no sooner than ninety (90) days after the date specified in such
written notice.
1.7 COPAYMENT is a fee that may be charged to Members for certain Medical
Group Services and collected by Medical Group or its Participating
Providers at the time Medical Group Services are provided, as set forth in
the applicable Managed Care Plan.
1.8 COST OF CARE is the valuation of Medical Group Services and other health
care services provided or arranged by Medical Group, as described in
Section 5.8 and EXHIBIT 1 TO THE BASE AGREEMENT.
1.9 COVERED SERVICES are those medically necessary health care services,
supplies and benefits which are required by a Member as determined by
Medical Group or Health Plan in accordance with the Member's Managed Care
Plan and Health Plan's Quality Improvement Program and Utilization
Management Program. For purposes of this Agreement, "medically necessary"
shall have the meaning set forth in the applicable Subscriber Agreement.
1.10 DIVISION OF FINANCIAL RESPONSIBILITY is the matrix for each Managed Care
Plan which specifies either: (i) the financial responsibility of Health
Plan, Medical Group and Hospital for Covered Services, where both Medical
Group and Hospital are capitated by Health Plan for providing or arranging
Covered Services for Medical Group Members; or (ii) the financial
responsibility of Health Plan and Medical Group for Covered Services and
Covered Services that are Hospital Services, where Medical Group is
capitated by Health Plan and Hospitals are paid on non-capitated basis by
Health Plan for providing or arranging Covered Services to Medical Group
Members. The Division of Financial Responsibility for each Managed Care
Plan is set forth in the applicable Product Attachment.
1.11 ELIGIBILITY LIST is the list of Members for whom Medical Group shall
provide or arrange
Covered Services.
1.12 EMERGENCY is the sudden and unexpected onset or occurrence of a symptom,
illness, medical condition or injury which requires immediate diagnosis
and/or treatment in order to alleviate or attempt to prevent severe pain,
permanent disability, serious medical complications or loss of life. The
final determination of whether an Emergency existed shall be made by the
Health Plan Medical Director or designee, subject to appeal under the
applicable Member appeals procedure.
1.13 EMERGENCY SERVICES are Covered Services required by a Member for the
diagnosis and treatment of an Emergency.
1.14 GOVERNMENT AGENCY shall mean any local, state or federal government agency
or entity with regulatory or other authority over Health Plan, this
Agreement or any Managed Care Plan.
1.15 HOSPITAL(S) are the licensed acute care hospitals which have entered into
written agreements with Health Plan to provide Hospital Services to
Medical Group Members in the Medical Group Risk Area on either a capitated
basis or a per diem basis. Hospitals which are capitated by Health
Plan for Medical Group Members are identified on EXHIBIT 1 to the Base
Agreement.
1.16 HOSPITAL SERVICES are either: (i) Covered Services for Medical Group
Members assigned to Hospital which are the financial responsibility of
Hospital, as specified in the Division of Financial Responsibility for
each Managed Care Plan, where Hospital is capitated by Health Plan for
such Covered Services; or (ii) Covered Services for Medical Group Members
which are initially paid for by Health Plan and are the shared financial
responsibility of Health Plan and Medical Group, as specified in the
Hospital Incentive Programs set forth in the Product Attachments and
summarized in the Division of Financial Responsibility, where Hospitals
are paid on per diem basis for such Covered Services.
1.17 MANAGED CARE PLAN is any one of the various health benefit plans or
products sponsored or administered by Health Plan or its subsidiaries or
affiliates including, without limitation, a commercial prepaid plan
("Commercial Plan"), a commercial point-of-service plan ("Commercial POS
Plan"), a Medicare-risk plan ("Medicare Plan") and a Medicare-risk point-
of-service plan ("Medicare POS Plan"). Each Managed Care Plan is
described in the applicable Subscriber Agreement and Product Attachment.
Health Plan may make available some, and not all, of the Managed Care
Plans under this Agreement.
1.18 MEDICAL GROUP MEMBERS are the Members listed on the Eligibility List.
1.19 MEDICAL GROUP RISK AREA is the geographic area within a thirty (30) mile
radius of each Medical Group facility. Such radius commences with the
address of Medical Group
facility and extends for thirty (30) miles over the shortest route using
public streets and highways.
1.20 MEDICAL GROUP SERVICES are Covered Services for Medical Group Members
which are the financial responsibility of Medical Group, as specified in
the Division of Financial Responsibility for each Managed Care Plan.
1.21 MEMBER is an individual who is enrolled in a Managed Care Plan and meets
all the eligibility requirements for membership in the Managed Care Plan
and for whom the applicable Premium has been received by Health Plan.
1.22 OUT-OF-AREA MEDICAL SERVICES are those Urgently Needed Services and
Emergency Services provided while a Medical Group Member is outside the
Medical Group Risk Area which would have been the financial responsibility
of Medical Group had such services been provided within the Medical Group
Risk Area.
1.23 PARTICIPATING PROVIDERS are (i) physicians and health care professionals
who are shareholders, partners or employees of Medical Group and (ii)
physicians, medical groups, individual practice associations ("IPA"),
health care professionals, hospitals, facilities and other providers of
health care services or supplies that have entered into written contracts
with Health Plan, Medical Group or Hospital to provide Covered Services to
Members pursuant to Managed Care Plans.
1.24 PREMIUM is the payment for Covered Services under each Managed Care Plan
as may be further defined in the applicable Product Attachment.
1.25 PRIMARY CARE PHYSICIAN is any of Medical Group's Participating Providers
who meet Health Plan's criteria for providing initial and primary care
Covered Services to Members, for maintaining the continuity of patient
care, and for initiating and coordinating referrals for Covered Services
to Members.
1.26 PRODUCT ATTACHMENTS are the attachments to the Base Agreement which set
forth the terms and conditions under which Medical Group shall provide or
arrange Covered Services to Medical Group Members pursuant to the Managed
Care Plans. The Product Attachments and additional provisions applicable
to the Product Attachments are described in EXHIBIT 2 to the Base
Agreement. All Product Attachments are a part of this Agreement and are
incorporated herein.
1.27 PROVIDER MANUAL is the Health Plan Provider Policies and Procedures Manual
and related written materials which shall be provided to Medical Group by
Health Plan prior to or concurrent with the execution of this Agreement.
The Provider Manual is incorporated into this Agreement, and may be
updated from time to time by Health Plan as provided in this Agreement.
1.28 QUALITY MANAGEMENT AND IMPROVEMENT ("QI") PROGRAM are those standards,
protocols, policies and procedures adopted by Health Plan to monitor and
improve the quality of clinical care and quality of services provided to
Members. The QI Program is described in the Provider Manual, and may be
updated from time to time by Health Plan as provided in this Agreement.
1.29 STATE AND FEDERAL LAW shall mean any and all laws and regulations of the
State of California or of the United States which are applicable to Health
Plan, this Agreement, Managed Care Plans, and Medical Group and its
Participating Providers.
1.30 SUBSCRIBER AGREEMENT is the contract between Health Plan and a Subscriber
or Subscriber Group which describes the costs, benefits or services,
procedures, conditions, limitations, exclusions, and other obligations to
which Members are entitled and subject to under a Managed Care Plan. A
copy of the current standard form Subscriber Agreement for each Managed
Care Plan shall be provided to Medical Group by Health Plan concurrent
with the execution of each Product Attachment, and may be updated from
time to time by Health Plan.
1.31 SUBSCRIBER OR SUBSCRIBER GROUP is the individual or employer,
organization, firm or other entity which contracts with Health Plan under
a Subscriber Agreement to obtain the benefits of a Managed Care Plan.
1.32 URGENTLY NEEDED SERVICES are Covered Services under a Managed Care Plan
which are required without delay in order to prevent the serious
deterioration of a Member's health as a result of an unforeseen illness or
injury while the Member is temporarily outside the Health Plan Service
Area (that is, the geographic area in which Health Plan is licensed in the
State of California to offer each Managed Care Plan).
1.33 UTILIZATION MANAGEMENT ("UM") PROGRAM are those standards, protocols,
policies and procedures adopted by Health Plan regarding the management,
review and approval of the provision of Covered Services to Members. The
UM Program is described in the Provider Manual, and may be updated from
time to time by Health Plan as provided in this Agreement.
ARTICLE 2
DUTIES OF MEDICAL GROUP
2.1 PROVIDE OR ARRANGE COVERED SERVICES. Medical Group, through its
Participating Providers, shall provide or arrange Covered Services in the
Medical Group Risk Area to Medical Group Members, in coordination with
Health Plan and Health Plan's Participating Providers and in accordance
with the terms and conditions set forth in this Agreement and the Managed
Care Plans. Medical Group shall be financially responsible for Medical
Group Services. The primary concern of Medical Group and its
Participating Providers under this Agreement shall be the quality of
Covered Services provided to or
arranged for Members. Nothing stated in this Agreement shall be
interpreted to diminish this responsibility.
2.2 PROFESSIONAL STANDARDS. All Covered Services provided or arranged by
Medical Group shall be provided or arranged by duly licensed, certified or
otherwise authorized professional personnel and at physical facilities in
accordance with (i) the generally accepted medical and surgical practices
and standards prevailing in the applicable professional community at the
time of treatment, (ii) the provisions of Health Plan's QI Program and UM
Program, (iii) the requirements of State and Federal Law and (iv) the
standards of Accreditation Organizations.
2.2.1 LICENSURE OF MEDICAL GROUP. Medical Group is legally organized and
incorporated under the laws of the State of California. Medical Group
shall maintain in good standing at all times during the term of this
Agreement any and all licenses, certificates and/or approvals required
under State and Federal Law for the performance by Medical Group of the
duties required by this Agreement.
2.2.2 LICENSURE/CERTIFICATION OF MEDICAL GROUP'S PARTICIPATING PROVIDERS.
Each of Medical Group's Participating Providers shall maintain in good
standing at all times during the term of this Agreement the necessary
licenses or certifications required by State and Federal Law and by the
Managed Care Plans to provide or arrange Covered Services to Members.
2.2.3 HOSPITAL PRIVILEGES FOR MEDICAL GROUP'S PARTICIPATING PROVIDERS.
Unless otherwise specified by Medical Group and approved by Health Plan
for specific Participating Providers, each of Medical Group's
Participating Providers who is a physician shall maintain in good standing
at all times during the term of this Agreement medical staff membership
and clinical privileges at Hospital necessary to provide or arrange
Covered Services to Members.
2.3 MEDICAL GROUP'S PARTICIPATING PROVIDERS. Medical Group shall have a
sufficient number of Participating Providers throughout the Medical Group
Risk Area to provide or arrange Covered Services and meet the needs of
Health Plan and Medical Group Members as determined by Health Plan's QI
Program and in accordance with State and Federal Law. Medical Group's
Participating Providers shall provide or arrange Covered Services,
including Emergency Services, to Medical Group Members twenty four (24)
hours a day, three hundred sixty five (365) days per year. Medical Group's
Participating Providers must meet Health Plan's credentialing standards
and must be approved by Health Plan before providing or arranging Covered
Services to Members.
2.3.1 PARTICIPATING PROVIDER INFORMATION. Medical Group shall provide
Health Plan with a complete list of its Participating Providers, together
with the provider specific information required by Health Plan for
credentialing and for administration of the Managed Care Plans, at the
time this Agreement is signed.
2.3.2 NOTICE OF PARTICIPATING PROVIDER ADDITIONS. Medical Group shall
use its best efforts to provide at least sixty (60) calendar days prior
written notice to Health Plan of the addition of any new Participating
Providers. Such notice shall include the provider specific information
required by Health Plan, as set forth in the Provider Manual. All new
Participating Providers must be approved by Health Plan before providing
or arranging Covered Services to Members. Health Plan shall use its best
efforts to approve new Participating Providers as quickly as possible
after receiving the written notice from Medical Group.
2.3.3 NOTICE OF PARTICIPATING PROVIDER TERMINATIONS. Medical Group shall
provide sixty (60) calendar days prior written notice to Health Plan of
the termination of any of its Participating Providers; provided, however,
that if any Participating Providers are terminated with less than sixty
(60) calendar days notice, then Medical Group shall provide written notice
to Health Plan as soon as Medical Group becomes aware of such termination.
2.3.4 RESTRICTION, SUSPENSION OR TERMINATION OF PARTICIPATING PROVIDERS.
Medical Group shall, as warranted, immediately restrict, suspend or
terminate its Participating Providers from providing or arranging Covered
Services to Members in the following circumstances: (i) the Participating
Provider ceases to meet the licensing/certification requirements or other
professional standards described in this Agreement; (ii) Health Plan or
Medical Group reasonably determines that there are serious deficiencies in
the professional competence, conduct or quality of care of the
Participating Provider which affects or could adversely affect the health
or safety of Members; or (iii) Health Plan reasonably demands that the
Participating Provider be restricted, suspended or terminated. Medical
Group shall immediately notify Health Plan of any of its Participating
Providers who cease to meet the licensing/certification requirements or
other professional standards described in this Agreement and Medical
Group's actions under this Section. If Medical Group fails to act as
required by this Section with respect to any of its Participating
Providers, Health Plan shall have the right to immediately prohibit such
Participating Providers from continuing to provide Covered Services to
Members.
2.3.5 CHANGES IN CAPACITY. Medical Group and its Participating Providers
will continue to accept Members enrolled by Health Plan for so long as
Medical Group and its Participating Providers have the capacity to provide
and arrange Covered Services under this Agreement and for so long as
Medical Group continues to accept new patients from any HMO or other
prepaid Health Plan. Medical Group shall provide at least one hundred
twenty (120) calendar days prior written notice to Health Plan of any
significant changes in the capacity of Medical Group to provide or arrange
Covered Services that would prevent Medical Group from accepting
additional Members. A significant change in capacity includes, without
limitation, the following: (i) inability of Medical Group to properly
serve additional Members due to a lack of Primary Care Physicians or other
Participating Providers; (ii) inability of any one of Medical Group's
Primary Care
Physicians or other Participating Providers to serve additional Members;
or (iii) closure of any office or facility used by Medical Group or its
Primary Care Physicians or other Participating Providers. Health Plan may
continue to enroll Members with Medical Group until the expiration of the
notice period required under this Section, and in such event, Medical
Group and its Primary Care Physicians and other Participating Providers
shall continue to accept such Members. Health Plan shall discontinue the
enrollment of Members with Medical Group upon expiration of the notice
period required under this Section until such time, if any, that Medical
Group provides written notification to Health Plan that it has the
capacity to accept additional Members.
2.3.6 NOTICE OF CHANGES IN NETWORK. In the event of a closure of a
Medical Group clinic, a termination of one or more Primary Care Physicians
or a change in a Medical Group clinic location, Health Plan shall have the
sole authority and responsibility for providing notice of such changes to
the effected members. Members will be given a choice to stay with Medical
Group, stay with the same physician by moving to another group or select a
new group from the network.
2.4 MEDICAL GROUP'S SUBCONTRACTS WITH PARTICIPATING PROVIDERS. Medical Group
shall demonstrate and certify to Health Plan prior to the Commencement
Date and upon Health Plan's written request at any time during the term of
this Agreement (in the format specified by Health Plan) that its
subcontracts with Participating Providers comply with requirements of this
Agreement. Medical Group shall amend any and all of its existing
subcontracts with Participating Providers which do not comply with this
Agreement within thirty (30) days following the execution of this
Agreement and shall provide Health Plan with written certification
thereof.
2.4.1 COMPLIANCE WITH PROVISIONS OF AGREEMENT. Medical Group's
subcontracts with Participating Providers shall be in writing. All such
subcontracts shall be consistent with the terms and conditions of this
Agreement (including the Product Attachments) and shall meet Health Plan's
requirements for Participating Provider subcontracts as set forth in the
Provider Manual. If this Agreement is amended or modified, all such
subcontracts shall be amended or modified within thirty (30) calendar days
to be consistent with such amendments or modifications.
2.4.2 COMPLIANCE WITH STANDARDS OF ACCREDITATION ORGANIZATIONS AND
REQUIREMENTS OF STATE AND FEDERAL LAW. Medical Group's subcontracts with
Participating Providers shall comply with the standards of Accreditation
Organizations and requirements of State and Federal Law. If there are
changes in such standards and/or requirements, Medical Group shall amend
its subcontracts with Participating Providers to comply with such changes
within thirty (30) calendar days following notice thereof from Health
Plan.
2.4.3 ACCESS BY HEALTH PLAN, ACCREDITATION ORGANIZATIONS AND GOVERNMENT
AGENCIES. Medical Group and its Participating Providers shall be required
to make available at all reasonable times for inspection, examination and
copying by Health Plan, Accreditation
Organizations and Government Agencies copies of all Participating Provider
subcontracts, and all books and records pertaining to Covered Services
provided to Members under this Agreement. Medical Group and its
Participating Providers shall retain such books and records for a term of
at least five (5) years from the close of the fiscal year in which the
Covered Services were provided.
2.4.4 MEDICAL GROUP'S RESPONSIBILITY FOR PROVIDING OR ARRANGING COVERED
SERVICES. Notwithstanding the existence of Medical Group's subcontracts
with its Participating Providers, Medical Group shall remain responsible
for satisfying the obligations of Medical Group set forth in this
Agreement. If any of Medical Group's subcontracts with Participating
Providers are terminated, Medical Group shall remain responsible for
providing or arranging Covered Services through its remaining
Participating Providers and shall remain financially responsible for
Medical Group Services provided to Medical Group Members under this
Agreement.
2.4.5 DISCLOSURE OF TERMS. Nothing in this Agreement shall be deemed to
require Medical Group to disclose the financial terms of its subcontracts
with Participating Providers, unless such disclosure is required by State
or Federal Law or unless Health Plan is responsible for paying or
administering claims under the terms of such subcontracts.
2.5 ACCEPTANCE AND TRANSFER OF MEMBERS. Medical Group and its Participating
Providers may not impose any limitations on the acceptance of Members for
care or treatment that are not imposed on other patients. Health Plan,
Medical Group and its Participating Providers shall not request, demand,
require or seek directly or indirectly the transfer, discharge or removal
of any Member for reasons of Member's need for, or utilization of, Covered
Services, except in accordance with the procedures established by Health
Plan for such action. Medical Group and its Participating Providers shall
not refuse or fail to provide or arrange Covered Services to any Member.
Health Plan and Medical Group shall exercise reasonable efforts in
following the procedures for transfer, discharge or removal of Members as
set forth in the Provider Manual. Nevertheless, Health Plan may require
transfer of Members for any reason, and Medical Group may request that
Health Plan transfer Medical Group Members to another of Health Plan's
Participating Providers if Medical Group is unable to provide the Covered
Services required by this Agreement for reasons related to capacity of
Medical Group and its Participating Providers. In addition, Medical Group
may request that Health Plan transfer a Medical Group Member to another of
Health Plan's Participating Providers in the event of a material breakdown
in the physician-patient relationship. Health Plan shall evaluate such
requests considering the best interests of the Member. In the event
Health Plan grants a request for transfer of a Member by Medical Group,
the transfer shall not be effective until the end of the month following
the month in which the Member receives notice of transfer, unless the
Member agrees to an earlier transfer and Health Plan has made arrangements
with another of Health Plan's Participating
Providers to accept the Member.
2.6 MEDICAL RECORDS. Medical Group and its Participating Providers shall
maintain all patient medical records relating to Covered Services provided
to Members, in such form and containing such information as required by
the QI Program, Accreditation Organizations and State and Federal Law.
Medical records shall be maintained in a manner that is current, detailed,
organized and permits effective patient care and quality review by Medical
Group and Health Plan pursuant to the QI Program. Medical records shall
be maintained in a form and physical location which is accessible to
Medical Group's Participating Providers, Health Plan, Government Agencies
and Accreditation Organizations. Upon request, Medical Group and its
Participating Providers shall provide to Health Plan, at Medical Group's
expense, copies of Member medical records for purposes of conducting
quality assurance, case management and utilization reviews, credentialing
and peer review, claims processing, verification and payment, resolving
Member grievances and appeals and other activities reasonably necessary
for the proper administration of the Managed Care Plans consistent with
State and Federal Law. Medical Group and its Participating Providers
shall maintain the confidentiality of all Member medical records and
treatment information in accordance with State and Federal Law. Medical
records shall be retained by Medical Group and its Participating Providers
for at least five (5) years following the provision of Covered Services.
The provisions of this Section shall survive termination of this Agreement
for the period of time required by State and Federal Law.
2.7 INSURANCE. Medical Group, at its sole cost and expense, shall maintain
throughout the term of this Agreement and for a period of four years
following termination of this Agreement, professional liability insurance
(i.e., medical malpractice insurance) and managed care errors and
omissions insurance in the minimum amount of $1,000,000 per occurrence and
$3,000,000 annual aggregate, the annual aggregate to apply separately for
each physician and health care practitioner who is insured under the
policy (or policies) purchased by Medical Group. If the policy (or
policies) is canceled or not renewed and coverage is provided on a claims-
made basis, Medical Group agrees to exercise any option contained in the
policy (or policies) to extend the reporting period to the maximum period
permitted under the policy (or policies); provided, however, that Medical
Group need not exercise such option if the superseding insurer will accept
all prior claims.
Medical Group, at its sole cost and expense, shall also maintain
throughout the term of this Agreement, workers' compensation insurance as
required by the State of California and general liability insurance,
including but not limited to premises, personal injury and contractual
liability insurance, in a minimum amount of $1,000,000 per occurrence,
combined single limit, bodily injury and property damage, to insure
Medical Group and its employees, agents, and representatives against
claims for damages arising by reason of (i) personal injuries or death
occasioned in connection with the performance of any Covered Services
provided under this Agreement, (ii) the use of any property and
facilities of the Medical Group, and (iii) activities performed in
connection with this Agreement.
Medical Group's Participating Providers who are not insured under the
Medical Group's policy (or policies) shall maintain the same insurance
coverage required of Medical Group under this Section, unless otherwise
specified in the Provider Manual.
All insurance required under this Agreement shall be provided by insurers
who meet Health Plan's standards as set forth in the Provider Manual.
A certificate of insurance shall be issued to Health Plan prior to the
Commencement Date and upon the renewal of the insurance coverage specified
in this Section. The certificate shall provide that Health Plan shall
receive thirty (30) days prior written notice of cancellation or material
reduction in the insurance coverage specified in this Section.
Notwithstanding any other provision of this Agreement, failure to provide
the certificate of insurance shall be grounds for immediate termination of
this Agreement.
2.8 FINANCIAL STATEMENTS. Medical Group shall provide to Health Plan
within forty five (45) calendar days of the end of each calendar quarter
copies of its quarterly financial statements, which shall include a
balance sheet, statement of income and statement of cash flow (the
"Financial Statements") prepared in accordance with generally-accepted
accounting principles. Such quarterly Financial Statements shall be
certified by the chief financial officer of Medical Group as accurately
reflecting the financial condition of Medical Group for the period
indicated. In addition, Medical Group shall provide to Health Plan,
within forty five (45) calendar days of the end of each fiscal year,
copies of its audited annual Financial Statements.
2.9 ADMINISTRATIVE REQUIREMENTS
2.9.1 ADMINISTRATIVE GUIDELINES. Medical Group agrees to perform its
duties under this Agreement in accordance with the administrative
guidelines, policies and procedures set forth in the Provider Manual and
State and Federal Law. Medical Group shall be responsible for distributing
copies of the Provider Manual, as necessary, to its Participating
Providers.
2.9.2 MEDICAL DIRECTOR, HEALTH PLAN COORDINATOR, QUALITY IMPROVEMENT
COMMITTEE AND UTILIZATION MANAGEMENT COMMITTEE. Medical Group shall
designate one of its Participating Providers who is a physician or
osteopath to act as Medical Group's Medical Director and shall designate
an individual to act as the Health Plan coordinator with Health Plan.
The duties of Medical Group's Medical Director and Health Plan
coordinator shall be set forth in the Provider Manual. In addition,
Medical Group shall establish and maintain a quality improvement committee
and a utilization management committee to assist Health Plan in
implementing the QI Program and UM Program with respect to Medical Group
Members.
2.9.3 PARTICIPATION IN HEALTH PLAN ORIENTATION AND TRAINING PROGRAMS.
Medical Group shall require its administrative personnel and its
Participating Providers to participate in Health Plan's orientation and
training programs as described in the Provider Manual.
2.9.4 ENCOUNTER DATA. Medical Group shall maintain and provide to Health
Plan, no later than the fifteenth (15th) day of each month, the
utilization data pertaining to Covered Services provided or arranged by
Medical Group and its Participating Providers for Medical Group Members
during the preceding month as described in the Provider Manual (the
"Encounter Data"). Medical Group shall submit Encounter Data in
accordance with the procedures and standards set forth in the Provider
Manual.
2.9.5 OTHER DATA AND INFORMATION. Medical Group shall maintain and
provide to Health Plan, upon written request, any and all information
required by Health Plan, State and Federal Law, Government Agencies or
Accreditation Organizations for the administration of Managed Care Plans.
Medical Group shall submit such information and data to Health Plan in the
format and within the time periods specified by Health Plan.
2.10 MEDICAL GROUP'S FAILURE TO COMPLY WITH AGREEMENT, PROVIDER MANUAL
OR MANAGED CARE PLANS. If Medical Group fails to comply with any
provision(s) of this Agreement, the Provider Manual or the Managed Care
Plans, Health Plan may provide written notice of such failure to Medical
Group, specifying a date at least thirty (30) days following the date of
the notice by which Medical Group must be in compliance with such
provision(s), as reasonably determined by Health Plan. If Medical Group
fails to comply with such provision(s) by the date specified in the
notice, Health Plan shall have the right to cease marketing efforts on
behalf of Medical Group and/or discontinue enrollment of Members with
Medical Group until such time as Medical Group complies with such
provision(s), as reasonably determined by Health Plan. In addition,
Health Plan shall have the right to either (i) collect from Medical Group
or (ii) offset against amounts due Medical Group under this Agreement, any
penalties or other monetary amounts payable by Health Plan to Government
Agencies, Subscriber Groups, Participating Providers or any other health
care providers as a result of Medical Group's failure to comply with any
provision(s) of this Agreement, the Provider Manual or Managed Care Plans.
Health Plan's rights and remedies under this Section shall be in addition
to all other rights and remedies available to Health Plan to enforce this
Agreement, including the right of termination.
2.11 RECIPROCITY AGREEMENTS. Medical Group shall cooperate and develop
arrangements with Health Plan's Participating Providers and other Health
Plan-affiliated entities ("Health Plan Affiliates") to assure reciprocity
of health care services for Members who are not Medical Group Members.
2.11.1 SERVICES PROVIDED BY MEDICAL GROUP. Medical Group shall provide
Covered Services to Members who are not Medical Group Members, including
Members assigned
to other Health Plan Participating Providers, and Members enrolled in the
managed care and health benefit plans of Health Plan Affiliates. Payment
for such services shall be at the Cost of Care. Such services shall
include Emergency Services, Urgently Needed Services and Covered Services
provided upon referral from Health Plan's Participating Providers or
Health Plan Affiliates. Medical Group shall also provide services to
members of reciprocal HMO affiliates through Health Plan's participation
in UltraLink, a nation-wide HMO network, in compliance with UltraLink
reciprocity procedures, incorporated herein by reference, and
reimbursement for such members shall be in compliance with UltraLink
reciprocity procedures.
2.11.2 SERVICES PROVIDED BY HEALTH PLAN PARTICIPATING PROVIDERS. Health
Plan shall, where contractually available, provide reciprocity to Medical
Group at Health Plan rates for Covered Services provided to Medical Group
Members. Health Plan shall adjudicate and pay such referred claims on
behalf of Medical Group (at available reciprocity rates or, if reciprocity
rates are unavailable, at rates negotiated in consultation with Medical
Group), shall deduct the costs of such claims from Medical Group's monthly
Capitation Payments and shall provide Medical Group an accounting thereof.
If both Medical Group and Health Plan have agreements with Participating
Providers, Medical Group's agreements shall be utilized for the provision
of Covered Services under this Agreement and the rates set forth in
Medical Group's agreements shall apply.
2.12 HOSPITAL ADMISSIONS. In recognition of the need for coordination,
continuity and quality of care of Covered Services provided to Medical
Group Members and to ensure continuity and quality of care, Medical Group
agrees to utilize Hospital(s) as the provider of Hospital Services for
Medical Group Members, subject to the following exceptions:
(i) Medical Group Members admitted for Emergency Services or
Urgently Needed Services; and
(ii) Medical Group Members requiring Hospital Services not available
at Hospital.; and
(iii) Medical Group Members directed to any other Health Plan
Participating Provider in accordance with Health Plan's Utilization
Management Program.
Notwithstanding the foregoing, Medical Group Member requests for
treatment at another Health Plan Participating Provider may be granted due
to limited Hospital(s) bed capacity or if such request is in the Member's
best interest, as determined by Health Plan.
2.13 ADDITION OF NEW CLINICS. Medical Group agrees that Health Plan,
in its sole discretion, may add into this Agreement, under the terms and
conditions of this Agreement and within a reasonable time as established
mutually by Health Plan and Medical Group, any future medical group
practices the Medical Group acquires or new site locations the Medical
Group establishes, but any final agreement shall be subject to
the occurrence of the following conditions:
2.13.1 Health Plan has executed contracts with hospital and ancillary
service providers which collectively constitute a service delivery system;
2.13.2 Health Plan has not elected to delay or abandon the completion of
Managed Care Plans or networks that would provide additional Members to
be covered by this Agreement;
2.13.3 Health Plan has received approval from the appropriate local,
state and federal governmental or quasi-governmental agencies, which have
regulatory or quasi-regulatory powers over Health Plan or its programs,
including, but are not limited to, HCFA and the relevant state agencies;
2.13.4 The new Medical Group facility or location has obtained any and
all applicable licenses and permits and is approved by Health Plan
pursuant to Health Plan's credentialing program.
2.14 PARTICIPATION IN HEALTH PLAN PROGRAMS. Medical Group agrees to
participate in any and all Managed Care Plans, provided Health Plan has
requested Medical Group's participation. The addition of new Managed Care
Plans shall be subject to Section 7.9.1.
ARTICLE 3
ADMINISTRATIVE DUTIES OF HEALTH PLAN
3.1 ADMINISTRATION AND PROVISION OF DATA. Health Plan shall perform
administrative, accounting, enrollment, eligibility verification and other
functions necessary for the administration and operation of the Managed
Care Plans. Health Plan shall provide Medical Group with management
information and data reasonably necessary to carry out the terms and
conditions of this Agreement and for the operation of the Managed Care
Plans.
3.2 MARKETING. Health Plan shall make reasonable efforts to market the
Managed Care Plans. Medical Group agrees that Health Plan may, in its
discretion, use Medical Group's name, address and telephone number as well
as the names, addresses and telephone numbers and specialties of its
Participating Providers in Health Plan's marketing and informational
materials including, without limitation, Health Plan's directory of
Participating Providers. Nothing in this Agreement shall be deemed to
require Health Plan to conduct any specific marketing activities on behalf
of Medical Group and its Participating Providers or to identify Medical
Group or its Participating Providers in any specific Health Plan marketing
or informational materials.
3.3 ENROLLMENT AND ASSIGNMENT OF MEMBERS. Health Plan shall be responsible
for
distributing the Health Plan Enrollment Packet to all Members upon
enrollment and at open enrollment periods. Health Plan shall provide
benefit information to Members concerning the type, scope and duration of
benefits to which Members are entitled under the Managed Care Plans.
Nothing in this Agreement shall be construed to require Health Plan to
assign any minimum or maximum number of Members to Medical Group or to
utilize Medical Group for any Members in the Medical Group Risk Area.
3.4 ELIGIBILITY INFORMATION. Health Plan shall provide the Eligibility List
to Medical Group on the fifteenth (15th) day of each month.
3.5 BENEFIT DESIGN AND INTERPRETATION; COVERAGE DECISIONS. Health Plan shall
be solely responsible for the benefit design of all Managed Care Plans,
including establishing benefits, Premiums and Copayments. Health Plan
shall be solely responsible for interpreting the terms of and making final
coverage determinations under the Managed Care Plans.
3.6 CASE MANAGEMENT. Health Plan shall manage and coordinate Covered Services
for Members with complex medical conditions to ensure that care is
provided in a manner which encourages quality, continuity of care and
cost-effectiveness ("Case Management"). Medical Group shall cooperate
fully with Health Plan in providing information that may be required in
determining the need for Case Management and in the transfer of Members to
designated Health Plan Participating Providers for cost effective care.
3.7 OUT-OF-AREA MEDICAL SERVICES. Health Plan shall manage and coordinate
Out-of-Area Medical Services. Medical Group shall cooperate fully with
Health Plan in providing information that may be required for transferring
Members back into the Medical Group Risk Area, including promptly
notifying Health Plan of known or suspected Out-of-Area Medical Services,
and shall accept the prompt transfer of Members to the care of Medical
Group and its Participating Providers following the receipt of Out-of-Area
Medical Services.
ARTICLE 4
MANAGED CARE PROGRAM SERVICES
4.1 MANAGED CARE PROGRAM SERVICES. Health Plan shall be accountable for the
performance of the following services for all Managed Care Plans: (I)
quality management and improvement, (ii) utilization management, (iii)
credentialing, (iv) member rights and responsibilities, (v) preventive
health services, (vi) medical record review and (vii) payment and
processing of claims (collectively, "Managed Care Program Services").
Medical Group and its Participating Providers shall participate, cooperate
and comply with Health Plan in the performance of all Managed Care
Program Services. Specific activities related to utilization management,
credentialing and claims processing may be
delegated by Health Plan to Medical Group at such time as Medical Group
demonstrates to Health Plan's satisfaction the ability to perform these
functions in compliance with Health Plan's standards, as amended from time
to time. Before the performance of any activities is delegated to Medical
Group, Health Plan shall conduct a comprehensive audit of Medical Group's
ability and administrative capacity to perform such activities. Medical
Group shall provide all documentation requested by Health Plan and shall
provide Health Plan representatives with on-site access to Medical Group's
facilities and personnel for purposes of conducting such audit.
4.1.1 QUALITY MANAGEMENT AND IMPROVEMENT. Health Plan shall maintain an
ongoing Quality Management and Improvement Program ("QI Program") to
assess and improve the quality of clinical care and the quality of service
provided to Members under the Managed Care Plans. The QI Program shall be
maintained in accordance with the requirements of State and Federal Law
and the standards of Accreditation Organizations. Medical Group and its
Participating Providers shall participate, cooperate and comply with the
QI Program.
Medical Group shall, at the written request of Health Plan, make available
its Participating Providers who are physicians to serve on Health Plan's
QI Committee. Medical Group shall establish and maintain an independent
quality improvement committee which shall meet as frequently as necessary,
but at least monthly. A member of the Health Plan medical services staff
may participate in Medical Group's quality improvement committee meetings.
Medical Group shall keep minutes of its quality improvement committee
meetings, a copy of which shall be made available to Health Plan upon ten
(10) days written notice by Health Plan to Medical Group. If the
functions of the quality improvement committee are performed by the
Medical Group's utilization review committee, each committee must hold
separately convened meetings and the minutes of each meeting must be
separately maintained
Medical Group shall develop written procedures for focused review or
remedial action whenever it is determined by Health Plan's QI Committee
that inappropriate or substandard Covered Services have been furnished or
Covered Services that should have been furnished have not been furnished.
Upon request, Health Plan shall assist Medical Group in the formulation of
such focused review and remedial procedures.
4.1.2 UTILIZATION MANAGEMENT. Health Plan shall maintain an ongoing
Utilization Management Program ("UM Program") to address pre-
authorization, concurrent and retrospective review of the quality,
appropriateness, level of care and utilization of all Covered Services
provided or to be provided to Members under the Managed Care Plans. The
UM Program shall be maintained in accordance with the requirements of
State and Federal Law and the standards of Accreditation Organizations.
Medical Group and its Participating Providers shall participate, cooperate
and comply with the UM Program.
Medical Group shall establish and maintain a utilization review committee
which shall
meet as frequently as necessary, but at least weekly. A member of the
Health Plan medical services staff may participate in Medical Group's
utilization review committee meetings. Medical Group shall keep minutes
of its utilization review committee meetings, a copy of which shall be
made available to Health Plan upon ten (10) days written notice by Health
Plan to Medical Group. Medical Group's utilization review committee shall
review elective referrals and hospital and skilled nursing facility
admissions on a prospective basis, and Emergency Services and Urgently
Needed Services requiring hospital admissions on a retrospective basis.
The committee shall also be responsible for monitoring patterns of care,
isolating inappropriate utilization and performing other management and
review duties as specified in the UM Program.
4.1.3 CREDENTIALING. Health Plan shall maintain standards, policies and
procedures for credentialing and recredentialing physicians, hospitals and
other health care professionals and facilities that provide Covered
Services to Members under the Managed Care Plans ("Credentialing
Program"). The Credentialing Program shall be maintained in accordance
with the requirements of State and Federal Law and the standards of
Accreditation Organizations. Medical Group and its Participating
Providers shall participate, cooperate and comply with Health Plan's
Credentialing Program.
4.1.4 MEMBER RIGHTS AND RESPONSIBILITIES. Health Plan shall inform
Members of their rights and responsibilities under each Managed Care Plan,
provide Members with membership cards and member handbooks, distribute
periodic communications to Members, process Member complaints and
grievances and respond to inquiries and requests from Members regarding
Managed Care Plans (collectively "Member Services"). Medical Group and
its Participating Providers shall participate, cooperate and comply with
Health Plan's Member Services activities.
4.1.5 PREVENTIVE HEALTH SERVICES. Health Plan shall develop preventive
health guidelines for the prevention and early detection of illness and
disease ("Preventive Health Guidelines") and shall encourage Members to
use preventive health services. The Preventive Health Guidelines shall be
maintained in accordance with the standards of Accreditation Organizations
and shall be distributed to Participating Providers. Medical Group and its
Participating Providers shall provide preventive health services to
Medical Group Members in accordance with the Preventive Health Guidelines.
4.1.6 MEDICAL RECORD REVIEW. Health Plan shall on an ongoing basis
review medical records maintained by Medical Group and its Participating
Providers to assess compliance with the requirements of State and Federal
Law and the standards of Accreditation Organizations. Medical Group and
its Participating Providers shall maintain medical records in accordance
with the provisions of this Agreement regarding medical records and in
accordance with guidelines regarding medical records set forth in the
Provider Manual.
4.1.7 CLAIMS PROCESSING. Health Plan shall establish and maintain
standards, policies
and procedures for the timely and accurate processing and payment of
claims for Covered Services provided to Members ("Claims Processing
Guidelines"). The Claims Processing Guidelines shall be maintained in
accordance with the requirements of State and Federal Law and the Managed
Care Plans. Medical Group and its Participating Providers shall comply
with Health Plan's Claims Processing Guidelines.
4.2 PERFORMANCE OF DELEGATED ACTIVITIES. Health Plan may delegate to Medical
Group, and Medical Group shall perform, those activities which are
specified in EXHIBIT 3 to the Base Agreement relating to the following
Managed Care Program Services at such time as Medical Group demonstrates
to Health Plan's satisfaction the ability to perform these functions in
compliance with Health Plan's standards, as amended from time to time:
(I) Utilization Management; (ii) Credentialing; and (iii) Claims
Processing (collectively, the "Delegated Activities").
4.2.1 HEALTH PLAN POLICIES. For all Delegated Activities, Health Plan
shall provide Medical Group with Health Plan's standards and requirements
applicable to the Delegated Activities, as amended from time to time (the
"Health Plan Policies") and shall notify Medical Group of all substantive
changes to the Health Plan Policies. Medical Group may utilize its own
policies and procedures for the Delegated Activities, provided that such
policies and procedures are consistent with the Health Plan Policies. If
Medical Group's policies and procedures are inconsistent with the Health
Plan Policies, the Health Plan Policies shall apply.
4.2.2 SUB-DELEGATION. Medical Group shall not further delegate the
performance of Delegated Activities to any of its Participating Providers
or any other organization or entity without the prior written consent of
Health Plan. Medical Group acknowledges and agrees that Health Plan is
accountable for all Delegated Activities, and therefore, Medical Group and
its Participating Providers agree to participate, cooperate and comply
with Health Plan with respect to all Delegated Activities.
4.2.3 MAINTENANCE OF INFORMATION AND RECORDS. Medical Group shall
maintain all information and records reviewed or created in connection
with performing the Delegated Activities in a form acceptable to Health
Plan, provide Health Plan with access to such information and records, and
permit Health Plan to review and copy such information and records, in
accordance with the requirements of State and Federal Law and standards of
Accreditation Organizations.
4.2.4 REPORTING OBLIGATIONS. Medical Group shall provide Health Plan
with periodic written reports regarding all Delegated Activities in the
formats specified by Health Plan for each of the Delegated Activities.
4.2.5 MONITORING/AUDITS. Health Plan shall oversee Medical Group's
performance of Delegated Activities through review of periodic written
reports provided by Medical Group as described above and meetings with
appropriate Medical Group representatives and on-
site audits and assessments of Medical Group. Medical Group shall
cooperate, participate and comply with Health Plan in such monitoring and
oversight activities. Such audits and assessments will be performed in
accordance with the requirements of State and Federal Law and the
standards of Accreditation Organizations. Without limiting the foregoing,
Medical Group agrees that arrangements with its Participating Providers
will permit Medical Group to disclose to Health Plan its Participating
Provider credentialing files.
4.3 PAYMENT FOR PERFORMANCE OF DELEGATED ACTIVITIES. Payment for performance
of the Delegated Activities by Medical Group is included in Capitation
Payments made to Medical Group under this Agreement. The following
percentages of Capitation Payments have been allocated to the performance
of Delegated Activities and are included in the Capitation Payments:
DELEGATED ACTIVITY PERCENTAGE OF CAPITATION PAYMENTS
Utilization Management 2.0%
Credentialing 0.5%
Claims Processing 2.0%
For each month in which the performance of any Delegated Activity is
revoked by Health Plan as provided in this Article 4, the Capitation
Payments to Medical Group shall be reduced by the percentage specified
above for such Delegated Activity. However, for a period of twelve (12)
months following the Commencement Date (the "Grace Period"), Health Plan
will provide Claims Processing on behalf of Medical Group with no
reduction in Medical Group's Capitation Payment. Following expiration of
the Grace Period, Health Plan shall deduct the amounts specified above
from the Medical Group's Capitation Payment rate unless and until Medical
Group has assumed responsibility for such services. Health Plan may
modify the payment for Delegated Activities effective at the beginning of
any calendar year by providing Medical Group with sixty (60) calendar days
prior written notice.
4.4 REVOCATION OF DELEGATED ACTIVITIES. Health Plan may revoke any or
all Delegated Activities if Health Plan determines that they are not being
performed in accordance with the standards and requirements established by
Health Plan or if Medical Group's performance of Delegated Activities is
inconsistent with, or in violation of, State and Federal Law or threatens
Health Plan's accreditation by any Accreditation Organization. Health
Plan shall provide Medical Group with thirty (30) calendar days prior
written notice specifying the Delegated Activities which Health Plan
intends to revoke, unless Health Plan determines that Medical Group's
continued performance of Delegated Activities presents a risk of harm to
Health Plan Members, in which case the Delegated Activities shall be
revoked immediately. If Medical Group does not conform to the applicable
standards and requirements within such thirty (30) calendar day notice
period, Health Plan shall send a second written notice to Medical Group
confirming the
revocation of the Delegated Activities, the effective date of such
revocation and the period of time such revocation shall remain in effect.
During this period, Medical Group will take corrective action to conform
with applicable standards and requirements established by Health Plan. At
the end of such period, Health Plan shall evaluate Medical Group's
corrective action, determine whether Medical Group is able to resume
performance of the Delegated Activities, and provide written notice to
Medical Group of such determination.
The written notices from Health Plan to Medical Group under this Section
shall specify the adjustments to Capitation Payments as a result of the
revocation of any Delegated Activities in accordance with the allocations
set forth in this Article 4. If only a portion of a specific Delegated
Activity is revoked (e.g., Medical Group continues to perform some, but
not all, of a specific Delegated Activity), Health Plan shall have the
right to adjust the allocations set forth in this Article 4 to reflect the
portion of the specific Delegated Activity which continues to be performed
by Medical Group. Notwithstanding any other provision of the Agreement,
the written notices from Health Plan to Medical Group under this Section
shall be deemed valid and enforceable modifications to the Agreement,
whether or not signed by Medical Group.
Upon revocation of any of the Delegated Activities, Health Plan will
resume responsibility for performing such activities, and Medical Group
and its Participating Providers shall continue to cooperate, participate
and comply with Health Plan with respect to the performance of such
activities.
ARTICLE 5
COMPENSATION
5.1 CAPITATION PAYMENTS. Health Plan shall make monthly Capitation Payments
to Medical Group as payment for providing and arranging Covered Services
to Medical Group Members for each Managed Care Plan, as specified in this
Agreement and in the applicable Product Attachment.
5.1.1 DUE DATE. Except as provided in Exhibit B to Product Attachment B1
hereof, each Capitation Payment shall be due and payable on the fifteenth
(15th) day of the month for the current month's Covered Services.
5.1.2 DOCUMENTATION. Health Plan shall provide Medical Group appropriate
documentation in support of each Capitation Payment.
5.1.3 RETROACTIVE ADJUSTMENTS. Capitation Payments shall be subject to
retroactive adjustments either upward or downward due to retroactive
changes in the Premium for each Managed Care Plan as specified in the
applicable Product Attachment and retroactive changes in the number of
Medical Group Members for each Managed Care Plan. Retroactive adjustments
shall be made within thirty (30) days after the adjustment
is determined.
5.2 ADJUSTMENT FOR CLAIMS PROCESSING; DEPOSIT. Health Plan shall deduct from
Medical Group's monthly Capitation Payment an amount reasonably estimated
by Health Plan to be necessary for Health Plan to process and pay claims
for Medical Group Services which are not provided directly by Medical
Group and its employed Participating Providers (the "Claims Processing
Withhold"). Initially, the Claims Processing Withhold shall be equal to
the current average claims cost for outside providers as of the
Commencement Date. The Claims Processing Withhold shall be increased or
decreased each month to more accurately reflect Medical Group's actual and
expected claims experience. For any period in which Medical Group has
been delegated full responsibility for processing claims for Medical Group
Services which are not provided directly by Medical Group and its employed
Participating Physicians, the Claims Processing Withhold will be zero.
5.3 ADJUSTMENT FOR OUT-OF-AREA MEDICAL SERVICES. Medical Group shall be
responsible for twenty percent (20%) of the actual costs incurred by
Health Plan in providing Out-of-Area Medical Services to Medical Group
Members; provided, however, Medical Group shall be responsible for one
hundred percent (100%) of the actual costs incurred by Health Plan in
providing Out-of-Area Medical Services when Medical Group fails to
cooperate with Health Plan in the management of Out-of-Area Medical
Services. This amount shall be deducted from Medical Group's Capitation
Payment based on the actual costs incurred by Health Plan in paying claims
for Out-of-Area Medical Services during the previous month.
5.4 ADJUSTMENT FOR REVOCATION OF DELEGATED ACTIVITIES. Health Plan shall
deduct the amounts specified in Article 4, above, for any Delegated
Activity which is revoked by Health Plan in accordance with the provisions
of Article 4.
5.5 INCENTIVE PROGRAMS. Incentive programs are designed to ensure that Health
Plan, Medical Group and, for some programs, Hospital work collaboratively
to deliver Covered Services in an effective and efficient manner by
ensuring appropriate utilization of Covered Services. Incentive programs
for each Managed Care Plan are set forth in the applicable Product
Attachment.
5.5.1 INCENTIVE PROGRAM WITHHOLD. Health Plan shall establish a single
withhold from Medical Group's monthly Capitation Payment for purposes of
offsetting potential deficits for the combined incentive programs,
excluding the Split Capitation Commercial Hospital Incentive Program and
the Split Capitation Secure Horizons Hospital Incentive Program for which
separate withholds may be established. The monthly incentive withhold
shall initially be 0 percent (0%) of the Premium for each Managed Care
Plan, as described in the applicable Product Attachment. Health Plan, in
its sole discretion, shall prospectively adjust the withhold based on
Medical Group's experience under the combined incentive programs at the
time of the program settlements described below. In no event shall the
withhold exceed 0 percent (0%) of the monthly Capitation Payment.
5.5.2 INCENTIVE PROGRAM SETTLEMENTS. Health Plan shall conduct combined
settlements for all of the incentive programs for Managed Care Plans
applicable to Medical Group, excluding the Split Capitation Commercial
Hospital Incentive Program and the Split Capitation Secure Horizons
Hospital Incentive Program, for which separate settlements will be
conducted. Surpluses and deficits under each of the incentive programs
shall be aggregated and offset against one another. Health Plan will
conduct an estimated calculation after six (6) months (the "Interim
Calculation") and a final calculation annually (the "Final Calculation")
based on the calendar year. The incentive program withhold described
above shall be refunded to the Medical Group at the time of the incentive
program settlements, except that Medical Group's share of any incentive
program deficits shall be deducted from such refund. Except as otherwise
provided in the exhibits hereto, payments under the combined incentive
programs will be due from the owing party within one hundred and twenty
(120) days following the end of the six (6) months for the Interim
Calculation and within one hundred and eighty (180) days following the end
of the calendar year for the Final Calculation. Medical Group shall have
thirty (30) days from the date of written notice to audit and submit any
revisions to the incentive program settlement to Health Plan. Any
submitted revisions must be approved by Health Plan and such approval
shall not be unreasonably withheld. Health Plan shall then have thirty
(30) days to make any necessary adjustment to the calculation and return
the itemized calculation to Medical Group. Such calculation shall be
considered the final calculation unless Medical Group and Health Plan
agree to extend the calculation process. Any amounts owing shall be paid
to the appropriate party within thirty (30) days of the release of the
final itemized calculation. In the event that claims for non-
Participating Providers were incurred during the calendar year in question
but were not paid until after the final calculation, such costs shall be
carried forward and applied to the subsequent calendar year's Hospital
Incentive Program as an expense for that calendar year. Only claims to
non-contracted providers will be carried forward. For the Interim
Calculation, the payment due will be limited to seventy five percent (75%)
of the calculated amount due to account for incurred but not received
claims. To the extent a Medical Group deficit has been carried forward
from a prior settlement period, this deficit shall be offset against
amounts due to Medical Group hereunder.
Prior to the Commencement Date, the terms of Product Attachment C which
relate to the timing of incentive payments due Medical Group shall be
amended to reflect the terms of the applicable hospital agreement.
Notwithstanding any language to the contrary in the current Product
Attachment C, Health Plan shall not offset incentive payments among
capitated hospital funds.
5.5.3 INCENTIVE PROGRAM COMPLIANCE WITH STATE AND FEDERAL LAW. Health
Plan and Medical Group acknowledge and agree that the payments which may
be made directly or indirectly under the incentive programs described in
this Agreement are not made as an inducement to reduce or limit Covered
Services to any specific Member. Medical Group acknowledges and agrees
that any payments which may be made directly or indirectly
under physician incentive programs Medical Group may utilize with respect
to its Participating Providers shall not be made as an inducement to
reduce or limit Covered Services to any specific Member. Medical Group
further acknowledges and agrees that the incentive programs described in
this Agreement shall be subject to modification by Health Plan during the
term of this Agreement in order to comply with changes in State and
Federal Law, and Medical Group further agrees to modify any physician
incentive programs utilized with respect to its Participating Providers to
comply with such changes.
5.5.4 LIMITATION ON MEDICAL GROUP'S RISK. In the event Medical Group
incurs an obligation under the overall incentive program settlement
described above, Medical Group shall not be responsible for reimbursing
Health Plan nor shall Health Plan offset the Medical Group's obligation
against Medical Group's Capitation Payments due under this Agreement.
Health Plan shall carry forward any Medical Group obligations as the
result of an incentive program obligation and the amount carried forward
shall be offset against amounts otherwise due to Medical Group under
future settlements for the combined incentive programs. Notwithstanding
the foregoing, Medical Group shall be responsible for reimbursing Health
Plan for its portion of any deficit under the Pharmacy Incentive Program.
5.6 STOP-LOSS AND REINSURANCE PROGRAMS
5.6.1 INDIVIDUAL STOP-LOSS. Medical Group shall comply with the
applicable individual stop loss provisions set forth in the Product
Attachments.
5.6.2 SUBMISSION OF ISL AND REINSURANCE CLAIMS. Medical Group shall
submit all claims under the ISL Program and Reinsurance Program in
accordance with the procedures set forth in the Provider Manual. Health
Plan shall pay claims under the ISL Program and Reinsurance Program only
if such claims are submitted within one (1) year following the date the
claim is incurred.
5.6.3 NOTIFICATION OF CLAIMS. Medical Group shall provide written
notification to Health Plan when Medical Group Services or Hospital
Services for any Medical Group Member(s) equal fifty percent (50%) of the
ISL Deductible or fifty percent (50%) of the Reinsurance Deductible,
respectively. Such written notification shall be provided to Health Plan
no later than the fifteenth (15th) day of the month following the month in
which such threshold is reached. Medical Group acknowledges and agrees
that if Medical Group fails to provide the written notice required by this
Section within the time frame specified in this Section, Medical Group
shall be financially responsible for ten percent (10%) of all Medical
Group Services or ten percent (10%) of all Hospital Services provided to
the Medical Group Member(s) in excess of the ISL Deductible or Reinsurance
Deductible, as applicable, which amount shall be in addition to the ISL
Coinsurance or Reinsurance Coinsurance, as applicable.
5.6.3 OPT-OUT FROM ISL PROGRAM. Subject to Health Plan's approval,
Medical Group
may elect to opt out of the ISL Program effective upon the Commencement
Date or the beginning of any calendar year. In such event, Medical Group
shall be required to obtain stop-loss coverage from a third-party
insurance carrier acceptable to Health Plan and in the amounts required by
Health Plan and State and Federal Law. In order to opt-out of Health
Plan's ISL Program, Medical Group must provide written notice to Health
Plan at least thirty (30) days prior to the beginning of the calendar
year. Such notice shall specify the name of the third-party insurance
carrier, and proposed effective date, coverage levels and charges. If
Health Plan does not object to such coverage in writing within fifteen
(15) days of the date of the notice, Medical Group shall be required to
purchase such coverage as of the effective date specified in the notice.
5.7 PAYMENTS FOLLOWING TERMINATION OF AGREEMENT. Following termination of
this Agreement and continuing for each month in which the number of
Medical Group Members continues to be greater than or equal to two hundred
(200), Health Plan shall compensate Medical Group for providing and
arranging Covered Services to Medical Group Members under the same terms
and conditions which applied prior to termination of this Agreement. For
any month following termination of this Agreement in which the number of
Medical Group Members is less than two hundred (200), Health Plan shall
compensate Medical Group for providing Medical Group Services to Medical
Group Members at the Cost of Care.
5.8 COST OF CARE. Certain provisions of this Agreement require that Medical
Group provide health care services which are not covered by Capitation
Payments at Cost of Care and certain provisions of this Agreement require
that Medical Group Services be valued at Cost of Care. For purposes of
this Agreement, "Cost of Care" shall mean the amount determined under
Health Plan's fee schedule, attached as EXHIBIT 1 to the Base Agreement
for such services. Health Plan may revise its fee-schedule from time to
time by providing thirty (30) days prior written notice to Medical Group;
provided, however, that the fee schedule utilized under this Agreement
shall be no less favorable to Medical Group than the fee schedule utilized
by Health Plan for other Participating Providers in the state.
5.9 COLLECTION OF COPAYMENTS. Medical Group and its Participating Providers
shall be responsible for the collection of Copayments upon rendering
Medical Group Services to Members in accordance with the applicable
Subscriber Agreement. Any Copayments which are stated as a percentage
shall be calculated using the Cost of Care for such Medical Group
Services.
5.10 COLLECTION OF CHARGES FROM THIRD PARTIES. Except as provided in Section
5.11, procedures for collection of charges from third parties shall be
governed by the terms of the Provider Manual.
5.11 COORDINATION OF BENEFITS. Medical Group shall cooperate with and support,
as mutually agreed upon by the parties, Health Plan's coordination of
benefits rights. Coordination
of benefits procedures may be further defined in the Provider Manual.
5.11.1 PLAN IS PRIMARY. If a Member possesses health benefits coverage
through another policy which is secondary to Health Plan under applicable
coordination of benefits rules, including the Medicare secondary payor
program, Medical Group shall accept payment from Health Plan for Covered
Services as provided herein as full payment for such Covered Services,
except for applicable Copayments. Member shall have no obligation for any
fees, regardless of whether secondary insurance is available.
5.11.2 PLAN IS SECONDARY. If a Member possesses health benefits coverage
through another policy which is primary to Health Plan under applicable
coordination of benefits rules, including the Medicare secondary payor
program, or if Member is entitled to payment under a workers' compensation
policy or automobile insurance policy, Medical Group may pursue payment
from the primary payor or workers' compensation carrier consistent with
applicable law and regulations and Medical Group's contract, if any, with
the primary payor. In such event, Health Plan's responsibility shall
equal the amount of out-of-pocket expenses (i.e., Copayments and
deductibles) that Member would incur in the absence of Health Plan's
secondary coverage, minus the ISL Deductible and ISL Coinsurance.
5.12 OFFSETTING. Except as may otherwise be specifically provided in this
Agreement, Health Plan shall have the right to offset any and all amounts
owed by Medical Group to Health Plan against amounts, including Capitation
Payments, owed by Health Plan to Medical Group provided that Health Plan
provides ninety (90) days prior written notice of such amounts to Medical
Group and Medical Group does not pay such amounts within such ninety (90)
day period. This right to offset shall include, without limitation,
Health Plan's right to offset the following amounts owed to Health Plan by
Medical Group: (I) amounts owed by Medical Group under the incentive
programs described in this Agreement and in the Product Attachments, (ii)
amounts owed by Medical Group for Covered Services provided outside the
Medical Group Risk Area, and (iii) amounts owed by Medical Group due to
overpayments or payments made in error by Health Plan. Notwithstanding the
foregoing, Health Plan's right to offset shall not extend to Medical
Group's risk sharing arrangements with capitated hospitals.
5.13 ADEQUACY OF COMPENSATION. Medical Group agrees to accept payment as
provided herein as payment in full for providing and arranging the Covered
Services required under this Agreement, whether that amount is paid in
whole or in part by Member, Health Plan or any Subscriber, including other
health care plans that pay before Health Plan as required by applicable
state or federal coordination of benefits provisions. This Section does
not prohibit Medical Group from collecting applicable Copayments or
deductibles consistent with the Managed Care Plans.
5.14 SERVICES RENDERED TO INELIGIBLE SUBSCRIBERS - Health Plan agrees to
reimburse Medical Group for Covered Services provided to an ineligible
Member if the Member was listed as
eligible on the most current eligibility list provided to Medical Group by
Health Plan. If Health Plan is in receipt of billings to such ineligible
Member from Medical Group which demonstrate proof of having sent the
Member or the Member's legal guardian three (3) bills no less than thirty
(30) days apart, Health Plan will reimburse Medical Group for services
provided which would have been Covered Services if the Member had been
eligible. Reimbursement shall be at Cost of Care, minus any amounts
collected by Medical Group from other sources. If subsequent to payment by
Health Plan, Medical Group receives any payment from another source for
the services, then Medical Group shall reimburse Health Plan up to the
amount previously received from Health Plan so that Medical Group's full
payment does not exceed the Cost of Care.
5.15 RENEGOTIATION OF RATES AT THE END OF ONE YEAR. Either party may initiate
renegotiation of rates under this Agreement on the twelve (12) month
anniversary of the Commencement Date or, subsequently, at the expiration
of the Initial Term, by providing the other party prior written notice of
intent to renegotiate. Such notice of intent to renegotiate must be
provided at least ninety (90) days prior to the end of the twelve (12)
month anniversary of the Commencement Date or, for renegotiation at the
end of the Initial Term, ninety (90) days prior to the expiration of the
Initial Term. If proper notice is provided, the parties shall meet to
discuss rates in good faith and shall diligently pursue a prompt
resolution of the renegotiation. The rates under this Agreement shall
remain in effect unless and until the parties each agree through a written
amendment signed by both parties to revise the rates.
ARTICLE 6
TERM AND TERMINATION
6.1 TERM. The term of this Agreement shall be for one hundred twenty (120)
months commencing on the Commencement Date. Thereafter, the term of this
Agreement shall be automatically extended for one (1) year on each
anniversary of the Commencement Date ("Anniversary Date"), unless either
party provides the other with written notice of such party's intention not
to extend the term at least one hundred twenty (120) calendar days prior
to the Anniversary Date or until this Agreement is appropriately
terminated by either party as provided herein.
6.2 TERMINATION OF AGREEMENT WITH CAUSE. Either Health Plan or Medical Group
may terminate this Agreement for cause as set forth below, subject to the
notice requirement and cure period set forth below.
6.2.1 CAUSE FOR TERMINATION OF AGREEMENT BY MEDICAL GROUP. The following
shall constitute cause for termination of this Agreement by Medical Group:
(i) NON-PAYMENT. Failure by Health Plan to pay Capitation Payments
due Medical Group hereunder within thirty (30) days of the Capitation
Payment due date or failure by Health Plan to make any other payments due
Medical Group hereunder within
forty-five (45) days of any such payment's due date.
(ii) BREACH OF MATERIAL TERM AND FAILURE TO CURE. Health Plan's
breach of any material term, covenant, or condition and subsequent failure
to cure such breach as provided below.
6.2.2 CAUSE FOR TERMINATION OF AGREEMENT BY HEALTH PLAN. The following
shall constitute cause for termination of this Agreement by Health Plan:
(i) FINANCIAL FAILURE OF MEDICAL GROUP. Health Plan's reasonable
determination of Medical Group's anticipated inability to provide or
arrange for Covered Services as a result of the likelihood of Medical
Group's lack of financial resources, other than due to Health Plan's non-
payment of amounts due Medical Group hereunder. Medical Group shall have
the opportunity to dispute such determination by Health Plan by providing
reasonable evidence and assurances of financial stability and capacity to
perform under this Agreement.
(ii) FAILURE TO PROVIDE QUALITY SERVICES. Medical Group's failure to
arrange or provide Covered Services in accordance with the standards set
forth in this Agreement and Health Plan's QI Program and UM Program.
Notwithstanding the foregoing, Health Plan reserves the right to
immediately withdraw from Medical Group or any of its Participating
Providers any or all Members in the event the health or safety of Members
is endangered by the actions of Medical Group or any of its Participating
Providers or as a result of continuation of this Agreement.
(iii) BREACH OF MATERIAL TERM AND FAILURE TO CURE. Medical Group's
breach of any material term, covenant or condition of this Agreement and
subsequent failure to cure such breach as provided below.
6.2.3 NOTICE OF TERMINATION AND EFFECTIVE DATE OF TERMINATION. The party
asserting cause for termination of this Agreement (the "terminating
party") shall provide written notice of termination to the other party.
The notice of termination shall specify the breach or deficiency
underlying the cause for termination. The party receiving the written
notice of termination shall have thirty (30) calendar days from the
receipt of such notice to cure the breach or deficiency to the
satisfaction of the terminating party (the "Cure Period"). If such party
fails to cure the breach or deficiency to the satisfaction of the
terminating party within the Cure Period or if the breach or deficiency is
not curable, the terminating party shall provide written notice of failure
to cure the breach or deficiency to the other party following expiration
of the Cure Period. This Agreement shall terminate upon receipt of the
written notice of failure to cure or at such other date as may be
specified in such notice. During the Cure Period, Health Plan may cease
marketing efforts for Medical Group and discontinue enrollment of Members
with Medical Group.
6.3 AUTOMATIC TERMINATION UPON REVOCATION OF LICENSE OR CERTIFICATE. This
Agreement shall
automatically terminate upon the revocation, suspension or restriction of
any license, certificate or other authority required to be maintained by
Medical Group or Health Plan in order to perform the services required
under this Agreement or upon the Medical Group's or Health Plan's failure
to obtain such license, certificate or authority.
6.4 TRANSFER OF MEDICAL RECORDS. Following termination of this Agreement, at
Health Plan's request, Medical Group and its Participating Providers shall
copy all requested Member patient medical files in the possession of
Medical Group or its Participating Providers and forward such files to
another provider of Covered Services designated by Health Plan, provided
such copying and forwarding is not otherwise objected to by such Members.
The copies of such medical files may be in summary form. The cost of
copying the patient medical files shall be borne equally by Medical Group
and Health Plan. Medical Group shall cooperate with Health Plan in
maintaining the confidentiality of such Member medical records at all
times.
6.5 REPAYMENT UPON TERMINATION. Within one hundred eighty (180) calendar days
of the effective date of termination of this Agreement, an accounting
shall be made by Health Plan of the monies due and owing either party and
payment shall be forthcoming by the appropriate party to settle such
balance within thirty (30) calendar days of such accounting. Either party
may request an independent audit of such Health Plan accounting by a
mutually acceptable independent certified public accountant and such audit
shall be equally paid for by both parties. The parties agree to abide by
the findings of such independent audit. Appropriate payment, if any, by
the appropriate party shall be made within thirty (30) calendar days of
such independent audit.
6.6 TERMINATION NOT AN EXCLUSIVE REMEDY. Any termination by either party
pursuant to this Article is not meant as an exclusive remedy and such
terminating party may seek whatever action in law or equity as may be
necessary to enforce its rights under this Agreement.
6.7 PARTICIPATING PHYSICIAN SUBSTITUTION INTO AGREEMENT. Medical Group shall
require that its Participating Physicians who are independent contractors
("Independent Physicians") agree to be bound, at Health Plan's option, to
the terms and conditions of this Agreement in the event of dissolution or
insolvency of Medical Group or in the event of a termination of the
Agreement by Health Plan for cause. The Independent Physicians'
obligations shall continue through the last day of the initial term of the
Agreement (the "Physician Continuation Period"). In case of such
dissolution, insolvency or termination, Health Plan may, at its option,
assume the Medical Group's administrative responsibilities described in
the Agreement. The purpose of this provision is to ensure continuity of
care to Members. Payment to the Independent Physicians during the
Physician Continuation Period shall be at the Cost of Care rates.
ARTICLE 7
GENERAL PROVISIONS
7.1 INDEPENDENT CONTRACTOR RELATIONSHIP. The relationship between Health Plan
and Medical Group is an independent contractor relationship. Neither
Medical Group nor its Participating Providers, employees or agents are
employees or agents of Health Plan and neither Health Plan nor its
employees or agents are members, partners, employees or agents of Medical
Group. None of the provisions of this Agreement shall be construed to
create a relationship of agency, representation, joint venture, ownership,
control of employment between the parties other than that of independent
parties contracting solely for the purpose of effectuating this Agreement.
Nothing contained in this Agreement shall cause either party to be liable
or responsible for any debt, liability or obligation of the other party or
any third party unless such liability or responsibility is expressly
assumed by the party sought to be charged therewith.
7.2 INDEMNIFICATION. Medical Group shall defend, indemnify and hold harmless,
and shall cause each of its Participating Providers to defend, indemnify
and hold harmless Health Plan and its directors, officers, employees,
affiliates and agents against any claim, loss, damage, cost, expense or
liability arising out of or related to the performance or nonperformance
by Medical Provider, its Participating Providers, employees or agents of
any Medical Group Services and other services to be performed or arranged
by Medical Group and its Participating Providers under this Agreement.
Health Plan shall defend, indemnify and hold harmless Medical Group and
its directors, officers, employees, affiliates and agents against any
claim, loss, damage, cost, expense or liability arising out of or related
to the performance or nonperformance by Health Plan, its employees or
agents of any services to be performed by Health Plan under this
Agreement.
7.3 PHYSICIAN-PATIENT RELATIONSHIP. Health Plan and Medical Group
acknowledge and agree that Medical Group or each of Medical Group's
Participating Providers shall maintain the physician-patient relationship
with each Member. Nothing contained in this Agreement is intended to
interfere with such physician-patient relationship. Nothing in this
Agreement shall be interpreted to discourage or prohibit Medical Group and
its Participating Providers from discussing treatment options or providing
other medical advice or treatment deemed appropriate by Medical Group or
its Participating Providers. Medical Group or its Participating Providers
shall have the sole responsibility for the medical care and treatment of
Members.
7.4 MEMBER APPEALS AND GRIEVANCES. Health Plan shall be responsible for
resolving Member claims for benefits under the Managed Care Plans and all
other claims against Health Plan. Health Plan shall resolve such claims
utilizing the Member Appeals and Grievance Procedures set forth in the
Subscriber Agreement and the Provider Manual. Medical Group shall assist
Health Plan in the handling of Member complaints, grievances and appeals,
consistent with the Member Appeals and Grievance Procedures. In the event
an oral or written complaint, grievance or appeal is presented to Medical
Group or any of its Participating Providers relating to benefits or
coverage under a Managed Care Plan and
is not resolved within two (2) calendar days, Medical Group or its
Participating Provider will immediately deliver such complaint, grievance
or appeal to Health Plan for handling pursuant to the Member Appeals and
Grievance Procedures. At the end of each month, Medical Group shall
submit a report to Health Plan of all Member complaints and grievances
which were received and resolved by Medical Group and its Participating
Providers within two (2) calendar days during the previous month. The
monthly report shall include the Member's name and Health Plan
identification number, date of complaint, nature of complaint, and the
resolution of complaint. Medical Group and its Participating Providers
shall comply with all final determinations made by Health Plan through the
Member Appeals and Grievance Procedures. Member claims against Medical
Group or its Participating Providers, other than claims for benefits under
the Managed Care Plans, are not subject to the Member Appeals and
Grievance Procedures and are not governed by this Agreement.
7.5 DISPUTES BETWEEN MEDICAL GROUP OR ITS PARTICIPATING PROVIDERS AND MEMBER.
Any controversies or claims between Medical Group or its Participating
Providers and a Member arising out of the performance of this Agreement by
Medical Group or the Medical Group's Participating Provider, other than
claims for benefits under Managed Care Plans, are not governed by this
Agreement. Medical Group or its Participating Provider and the Member may
seek any appropriate legal action to resolve such controversy or claim
deemed necessary.
7.6 DISPUTES BETWEEN HEALTH PLAN AND MEDICAL GROUP
7.6.1 DISPUTE RESOLUTION PROCEDURE. Health Plan has established a
Provider Dispute Resolution Procedure, set forth in the Provider Manual,
to provide a mechanism by which Health Plan's Participating Providers,
including Medical Group and any of its Participating Providers, may submit
to Health Plan certain disputes arising out of the performance of this
Agreement or relating to the decisions made by Health Plan under this
Agreement for resolution on an informal basis. Any dispute submitted
pursuant to the Provider Dispute Resolution Procedure should be addressed
to the appropriate Health Plan person(s) or department(s) at the address
and/or telephone number identified in the Provider Manual. Any provider
dispute which is not resolved informally through the Provider Dispute
Resolution Procedure may be submitted for arbitration as provided in
Section 7.6.2 below.
7.6.2 ARBITRATION. Any controversy, dispute or claim arising out of the
interpretation, performance or breach of this Agreement which is not
resolved pursuant to the Provider Dispute Resolution Procedure specified
above shall be resolved by binding arbitration at the request of either
party, in accordance with the commercial rules of the American Arbitration
Association. Such arbitration shall occur in Los Angeles, California,
unless the parties mutually agree to have such proceeding in some other
locale. The arbitrators shall apply California substantive law and
federal substantive law where state law is preempted. Civil discovery for
use in such arbitration may be conducted in accordance
with the provisions of California law, and the arbitrator selected shall
have the power to enforce the rights, remedies, duties, liabilities and
obligations of discovery by the imposition of the same terms, conditions
and penalties as can be imposed in like circumstances in a civil action by
a court of competent jurisdiction of the State of California. The
provisions of California law concerning the right to discovery and the use
of depositions in arbitration are incorporated herein by reference and
made applicable to this Agreement.
The arbitrators shall have the power to grant all legal and equitable
remedies and award compensatory damages provided by California law, except
that punitive damages shall not be awarded. The arbitrators shall prepare
in writing and provide to the parties an award including factual findings
and the legal reasons on which the decision is based. The arbitrators
shall not have the power to commit errors of law or legal reasoning, and
the award may be vacated or corrected pursuant to the term of California
law for any such error.
Notwithstanding the above, in the event either Medical Group or Health
Plan wishes to obtain injunctive relief or a temporary restraining order,
such party may initiate an action for such relief in a court of law and
the decision of the court of law with respect to the injunctive relief or
temporary restraining order shall be subject to appeal only through the
courts of law. The courts of law shall not have the authority to review
or grant any request or demand for damages.
7.7 NOTICE. All notices required or permitted by this Agreement shall be in
writing and may be delivered in person or may be sent by registered or
certified mail or U.S. Postal Service Express Mail, with postage prepaid,
or by Federal Express or other overnight courier that guarantees next day
delivery, or by facsimile transmission, and shall be deemed sufficiently
given if served in the manner specified in this Section. The addresses
set forth on the signature page shall be the particular party's address
for delivery or mailing of notice purposes.
The parties may change the names and addresses through written notice in
compliance with this Section. Any notice sent by registered or certified
mail, return receipt requested, shall be deemed given on the date of
delivery shown on the receipt card, or if no delivery date is shown, the
postmark date. Notices delivered by U.S. Postal Service Express mail,
Federal Express or overnight courier that guarantees next day delivery
shall be deemed given twenty-four (24) hours after delivery of the notice
to the United States Postal Service, Federal Express or overnight courier.
If any notice is transmitted by facsimile transmission or similar means,
the notice shall be deemed served or delivered upon telephone confirmation
of receipt of the transmission, provided a copy is also delivered via
delivery or mail.
7.8 ASSIGNMENT. Except as specified in Section 7.12 below, this Agreement and
the rights, interests and benefits hereunder shall not be assigned,
transferred or pledged in any way
by Medical Group or Health Plan and shall not be subject to execution,
attachment or similar process. However, Health Plan may assign this
Agreement and its rights, interests and benefits hereunder to any entity
which is a corporate affiliate of Health Plan.
7.9 AMENDMENTS
7.9.1 AMENDMENTS TO MANAGED CARE PLANS. Health Plan may amend or change
any or all provisions of the Managed Care Plans by providing thirty (30)
calendar days prior written notice to Medical Group. Such amendment shall
be binding upon Medical Group at the end of the thirty (30) calendar day
period. However, Health Plan shall obtain Medical Group's written consent
to the terms governing Medical Group's provision of Covered Services under
a Managed Care Plan, if the Managed Care Plan is not, at the time of its
addition to this Agreement, one of the Product Attachments to this
Agreement.
7.9.2 AMENDMENTS TO PROVIDER MANUAL. Health Plan may amend the Provider
Manual by providing thirty (30) calendar days prior written notice to
Medical Group. Such amendments shall be binding upon Medical Group at the
end of the thirty (30) calendar day period, except as provided in Section
7.9.4 of this Agreement.
7.9.3 AMENDMENTS TO AGREEMENT. Health Plan may amend this Agreement by
providing thirty (30) calendar days prior written notice to Medical Group
in order to maintain compliance with State and Federal Law or to comply
with any directive from a Government Agency. Such amendment shall be
binding upon Medical Group at the end of the thirty (30) calendar day
period, except as provided in Section 7.9.4 of this Agreement. All other
amendments to this Agreement shall be effective only upon mutual written
agreement of the parties or as provided in Section 7.9.4 of this
Agreement.
7.9.4 MATERIAL AMENDMENTS. In the event Health Plan provides notice of
amendment to the Agreement or the Provider Manual or provides notice of a
material change in benefits under any Managed Care Plan, Medical Group
shall be bound by such amendment unless (i) Medical Group provides Health
Plan with notice of objection within the thirty (30) calendar day notice
period, and (ii) such change affects a material duty or responsibility of
Medical Group, and (iii) the change has a material adverse economic effect
upon Medical Group as reasonably demonstrated by Medical Group to Health
Plan. In such event, Medical Group and Health Plan shall seek to agree to
an amendment to this Agreement which satisfactorily addresses the effect
on Medical Group's material duty or responsibility and reimburses the
material economic detriment caused to Medical Group. In such event, the
amendment shall not be effective until the parties amend the Agreement
through a written amendment signed by both parties.
Notwithstanding the above, in the event that Health Plan disagrees with
Medical Group's notice of objection an seeks to enforce any amendment
despite such notice, Health Plan agrees that it will meet with Medical
Group in an attempt to resolve the disagreement and
if the disagreement cannot be resolved through meetings, Medical Group may
submit the disagreement to arbitration in accordance with the provisions
of this Agreement.
7.9.5 AMENDMENTS TO REFLECT SYSTEMS CHANGES. In the event Health Plan
undergoes systems changes which are not anticipated at the time of the
execution of the Agreement, the parties will negotiate in good faith to
revise the Agreement, to the extent amendments to the Agreement are
necessary, for the limited purpose of accommodating the necessary systems
changes.
7.10 CONFIDENTIAL AND PROPRIETARY INFORMATION
7.10.1 INFORMATION CONFIDENTIAL AND PROPRIETARY TO HEALTH PLAN. Medical
Group and its Participating Providers shall maintain confidential all
information designated in this Section. The information which Medical
Group and its Participating Providers shall maintain confidential (the
"Confidential Information") consists of: (i) the Eligibility List and any
other information containing the names, addresses and telephone numbers of
Members which has been compiled by Health Plan; (ii) lists or documents
compiled by Health Plan which include the names, addresses and telephone
numbers of employers, employees of such employers responsible for health
benefits and the officers and directors of such employers; (iii) Health
Plan's Provider Manual and any of Health Plan's member, employer and
administrative service manuals and all forms related thereto; (iv) the
financial arrangements between Health Plan and any of Health Plan's
Participating Providers; (v) Health Plan underwriting and rating
information and any other information utilized by Health Plan for
determining eligibility or rates for the Managed Care Plans; and (vi) any
other information compiled or created by Health Plan which is proprietary
to Health Plan and which Health Plan identifies in writing to Medical
Group.
7.10.2 NON-DISCLOSURE OF CONFIDENTIAL INFORMATION. Medical Group and its
Participating Providers shall not disclose or use the Confidential
Information for their own benefit or gain either during the term of this
Agreement or after the date of termination of this Agreement. Medical
Group and its Participating Providers may use the Confidential Information
to the extent necessary to perform their duties under this Agreement or
upon express prior written permission of Health Plan. Upon the effective
date of termination of this Agreement, Medical Group and its Participating
Providers shall provide and return to Health Plan the Confidential
Information in their possession in the manner specified by Health Plan.
7.10.3 INFORMATION CONFIDENTIAL AND PROPRIETARY TO MEDICAL GROUP.
Medical Group shall provide Health Plan with a written description of all
information proprietary to Medical Group which is confidential and
contains trade secrets of Medical Group (the "Medical Group Information").
Health Plan shall maintain and shall cooperate with Medical Group to
maintain the confidentiality of Medical Group Information. Health Plan
shall not disclose or use any Medical Group Information for its own
benefit either during the term of this Agreement or after the effective
date of termination of this Agreement. Upon
termination of this Agreement, Health Plan shall provide and return to
Medical Group all Medical Group Information in its possession in the
manner to be specified by Medical Group.
7.10.4 NAMES, LOGOS AND SERVICE MARKS. Medical Group shall obtain the
written consent of Health Plan prior to using Health Plan's name, product
names, logos and service marks in any of Medical Group's promotional,
marketing or advertising materials or for any other reason. Health Plan
shall obtain the written consent of Medical Group prior to using Medical
Group's name, product names, logos and service marks in any of Health
Plan's promotional, marketing or advertising materials or for any other
reason; provided, however, that Health Plan may utilize Medical Group's
name and address in any of Health Plan's publications which list the names
of Health Plan's contracting providers without Medical Group's specific
consent.
7.11 SOLICITATION OF HEALTH PLAN MEMBERS OR SUBSCRIBER GROUPS. Medical Group
and its Participating Providers shall not directly or indirectly engage in
the practice of solicitation of Members, Subscribers and Subscriber Groups
without Health Plan's prior written consent. Solicitation shall mean
conduct by an officer, agent, employee of Medical Group or its
Participating Providers or their respective assignees or successors during
the term of this Agreement, during any termination notice period and
during the continuing care period described in Section 8.3 which may be
reasonably interpreted as designed to persuade Members, Subscribers or
Subscriber Groups to disenroll from any Managed Care Plan or discontinue
their relationship with Health Plan for any reason. Notwithstanding any
other provision of this Agreement, Medical Group agrees that Health Plan
shall, in addition to any other remedies provided for under this
Agreement, have the right to seek a judicial temporary restraining order,
preliminary injunction, or other equitable relief against Medical Group
and its Participating Providers to enforce its rights under this Section.
7.12 APPROVAL BY HEALTH PLAN OF SALE OR CHANGE IN OWNERSHIP AND CONTROL OF
MEDICAL GROUP. For a period of two (2) years following the Commencement
Date of this Agreement, Health Plan shall have the right to consent to any
proposed sale or change in control of Medical Group or Talbert Medical
Management Corporation ("TMMC"), which consent shall not be unreasonably
withheld by Health Plan. A change in control of Medical Group or of TMMC
shall include any transfer of Medical Group management functions to a
successor entity which is a management company or any merger,
consolidation or sale of TMMC or Medical Group where any individual,
entity or group acquires beneficial ownership of fifty percent (50%) or
more of the voting common stock of TMMC or Medical Group or any
transaction in which TMMC or Medical Group sells its business or
substantially all of its material assets to a successor entity. The
parties acknowledge and agree that, during the two (2) year period
following the Commencement Date of this Agreement, Health Plan may
reasonably withhold its consent if the proposed sale or change of control
is to an individual, entity or group that operates HMOs or holds Medicare
risk contracts with HCFA.
Medical Group warrants and assures that (i) this Agreement will be assumed
by all successor entities to Medical Group, (ii) all successor entities to
Medical Group will be bound by the terms and conditions of this Agreement,
and (iii) all successor entities to TMMC shall execute a guaranty
identical in form to, that certain Guaranty of Performance, of even date
with this Agreement, executed by TMMC in favor of Health Plan. In the
event that any successor entities to Medical Group assume this Agreement
and have one or more existing provider agreements with Health Plan ("the
existing provider agreement"), Health Plan shall have the right, in its
sole discretion, to require that the successor entities to Medical Group
be bound by the provisions of either: (i) this Agreement; or (ii) the
existing provider agreement; or (iii) a combination of this Agreement and
the existing provider agreement, with respect to any or all Health Plan
Members assigned to Medical Group or successor entities to Medical Group,
as shall be specified by Health Plan by written notice to the successor
entities or management companies. The agreement or agreements elected by
Health Plan for coverage of Health Plan Members under this Section shall
supersede any and all other agreements for such coverage.
As a condition to Health Plan's consent under this Section, Health Plan
may require successor entities to execute documentation furnished by
Health Plan evidencing their agreement to abide by accordance with the
provisions of this Section.
7.13 CONFIDENTIALITY OF THIS AGREEMENT. To the extent reasonably possible,
each party agrees to maintain this Agreement as a confidential document
and not to disclose the Agreement or any of its terms without the approval
of the other party.
7.14 INVALIDITY OF SECTIONS OF AGREEMENT. The unenforceability or invalidity
of any paragraph or subparagraph of any section or subsection of this
Agreement shall not affect the enforceability and validity of the balance
of this Agreement.
7.15 CAPTIONS. Captions in this Agreement are descriptive only and do not
affect the intent or interpretation of the Agreement.
7.16 WAIVER OF BREACH. The waiver by either party to this Agreement of a
breach or violation of any provision of this Agreement shall not operate
as or be construed to be a waiver of any subsequent breach or violation
thereof.
7.17 ATTORNEYS' FEES AND COSTS. If any action at law or suit in equity is
brought to enforce or interpret the provisions of this Agreement or to
collect any monies due hereunder, the prevailing party shall be entitled
to reasonable attorneys' fees and reasonable costs, together with interest
thereon at the highest rate provided by law, in addition to any and all
other relief to which it may otherwise be entitled.
7.18 MEDICAL GROUP'S AUTHORIZED REPRESENTATIVE. Unless otherwise indicated in
writing to
Health Plan, Medical Group warrants and authorizes Talbert Medical
Management Corporation to act as its fully authorized representative to
represent Medical Group in this Agreement and to receive any and all
communications and notices hereunder.
7.19 NO THIRD PARTY BENEFICIARIES. This Agreement shall not create any rights
in any third parties who have not entered into this Agreement, nor shall
this Agreement entitle any such third party to enforce any rights or
obligations that may be possessed by such third party.
7.20 ENTIRE AGREEMENT. This Agreement, including all exhibits, attachments and
amendments hereto, contains all the terms and conditions agreed upon by
the parties regarding the subject matter of this Agreement. Any prior
agreements, promises, negotiations or representations of or between the
parties, either oral or written, relating to the subject matter of this
Agreement, which are not expressly set forth in this Agreement are null
and void and of no further force or effect.
7.21 INCORPORATION OF EXHIBITS, ATTACHMENTS AND PROVIDER MANUAL. The exhibits
and attachments to this Agreement and the Provider Manual are an integral
part of this Agreement and are incorporated in full herein by this
reference.
7.22 MEDICAL GROUP COVENANT NOT TO COMPETE - During the term of this Agreement,
including any renewal term, Medical Group and its Participating Providers
agree not to, directly or indirectly, seek or obtain a contract with the
Health Care Finance Administration for the purpose of offering a Medicare-
risk program or benefit plan. This section shall not be interpreted to
prevent Medical Group and its Participating Providers from providing or
arranging for Covered Services to Medical Group Members in coordination
with Health Plan under the terms specified in this Agreement or from
providing or arranging health care services pursuant to a contract between
Medical Group and any other licensed health maintenance organization or
competitive medical plan.
7.22.1 INDIRECTLY DEFINED. For purposes of this section, the use of the
term "indirectly" shall mean activity of , or conducted by, or through,
any subsidiary or affiliate of Medical Group.
7.22.2 EQUITABLE RELIEF. Medical Group acknowledges and agrees that it
would be difficult to measure the damage to Health Plan from any breach of
Medical Group's obligations under Section 7.22, that injury to Health Plan
from any such breach would be impossible to calculate and that money
damages would therefore be an inadequate remedy for any such breach.
Therefore, Medical Group acknowledges and agrees that Health Plan, in
addition to any of its other rights or remedies, shall be entitled to seek
injunctive and other equitable relief in the event of an actual or
threatened breach of Section 7.22.
7.23 LITIGATION TRACKING PROGRAM
7.23.1 Medical Group and TMMC currently have access to and utilize some
or all of a software program developed and owned by Health Plan's
affiliate, FHP, International Corporation ("FHP") to track claims and
litigation filed by and against Medical Group and FHP, to produce certain
reports and to collect and maintain related historical and other
information (the "Litigation Tracking Program"). The Litigation Tracking
Program is divided into a non-professional liability tracking module and a
professional liability tracking Medical Group and TMMC only have access to
and use of the professional liability tracking module. The non-
professional liability tracking module is used to monitor claims, suits
and proceedings including, but not limited to employment litigation,
contract disputes and slip and fall claims. The professional liability
tracking module is used to monitor matters generally arising from medical
treatment, including without limitation, medical malpractice, bad faith
claims and benefit denials. Certain of the information which is
maintained by the Litigation Tracking Program is confidential information
or is subject to protection from disclosure under the attorney-client and
attorney work product privileges.
7.23.2 For so long as TMMC remains a wholly owned or majority owned
subsidiary of FHP or a corporation controlled by or under common control
with FHP, TMMC and Medical Group shall continue to have access to and the
right to use the professional liability tracking module.
7.23.3 On or before the date TMMC ceases to be a wholly-owned or majority
owned subsidiary of FHP or a corporation controlled by or under common
control with FHP, TMMC and Medical Group shall discontinue all use of the
Litigation Tracking System, delete the Litigation Tracking System from all
computer systems and equipment owned, controlled, possessed or used by or
for TMMC or Medical Group and surrender to FHP or its successor all copies
(whether on disks or in hard copy or other form) of the Litigation
Tracking Program, all information contained in the Litigation Tracking
Program and all notes and summaries thereof. On the same date, TMMC and
Medical Group shall certify to FHP in a writing signed on behalf of
Medical Group and TMMC by Medical Group's and TMMC's highest ranking
corporate officer that TMMC and Medical Group have fully complied with the
provisions of this Section 7.23.3.
7.23.4 TMMC and Medical Group are advised, and hereby acknowledge and
agree that any breach of the provisions of Section 7.23.3 above shall
constitute a material breach of this Agreement, and that upon the
occurrence of such breach, Health Plan shall have the right to terminate
this Agreement and the right to pursue any and all relief available at law
or in equity, including the commencement of legal proceedings to enjoin,
or to recover damages, resulting from such breach.
7.23.5 Notwithstanding Section 7.23.3 above, TMMC and Medical Group shall
have the right to make and retain and to request and receive from FHP hard
copies of all information pertaining to professional and non-professional
liability matters which were asserted or filed against Medical Group on or
after February 15, 1996. In addition,
TMMC and Medical Group shall have the right from time to time to request
selected historical information from FHP to the extent such information is
required to meet specific regulatory or insurance requirements and FHP
shall provide such information in the form and to the extent it can do so
without violating any right or obligation of confidentiality or
jeopardizing its rights under the attorney-client and work product
privileges.
7.23.6 If requested by TMMC or Medical Group, FHP will grant to TMMC or
Medical Group a non-exclusive, non-transferable five (5) year license
subject to execution of a mutually agreeable license agreement, to use the
Litigation Tracking Program (without data installed) to track professional
and non-professional matters asserted or filed against Medical Group from
and after February 15, 1996. The license fee to be paid by TMMC or
Medical Group for such use shall be $100,000, said amount to be paid in
four (4) quarterly installments of $25,000 each, with the first
installment to be paid at the beginning of the third calendar quarter
following the beginning of the term of such license and the remaining
installments to be paid at the beginning of each calendar quarter
thereafter.
7.24 JOINT OPERATIONS COMMITTEE ("JOC"). Health Plan, Medical Group and
Hospital shall maintain a joint operations committee, consistent with
Health Plan's contracts with capitated Hospitals, if any. The committee
shall meet at regularly scheduled intervals and meetings may be called by
any committee member on at least three (3) days prior written notice. The
committee shall act by consensus.
7.25 CONVERSION. Medical Group recognizes that Health Plan intends to
substantially revise its systems, operations and programs on the
Conversion Date and that this will result in changes to the compensation
and other terms of this Agreement, primarily as defined in the Product
Attachments. Therefore, this Agreement includes one set of Product
Attachments (A1 through D1) which applies prior to the Conversion Date and
a second set of Product Attachments (A2 through D2) which applies
beginning on the Conversation Date.
Within ninety (90) days following the Conversion Date, Health Plan shall review
the percentage of Net Medical Premium specified in Section 3.1 of Product
Attachment A2 for Commercial Plan Members (the "Specified Percentage") and
shall make a one-time adjustment to the Specified Percentage, if
necessary, based upon the following guidelines, the intent being that
Medical Group's compensation for Commercial Plan Members should remain
economically equivalent as a result of the conversion to the Post-
Conversion Product Attachments:
1. Health Plan shall determine the per member per month ("PMPM") amount paid
to Medical Group for Commercial Plan Members for the calendar month
immediately prior to the Conversion Date (the "Target PMPM").
2. Health Plan shall determine the PMPM amount paid to Medical Group for
Commercial Plan Members for the calendar month in which the Conversion
Date falls (the "Post-Conversion Date PMPM").
3. Health Plan shall compare the Post-Conversion Date PMPM and the Target
PMPM and, if there is a difference between the two amounts, shall adjust
the Specified Percentage (the "Adjusted Percentage") such that when the
Adjusted Percentage is multiplied by Net Commercial Premium PMPM, the
resulting PMPM amount shall be equal to the Target PMPM.
4. The adjustment to the Specified Percentage (the "Adjusted Percentage")
shall be effective as of the Conversion Date and shall continue
throughout the remainder of the term of the Agreement.
7.26 MEMORIAL AGREEMENT. The parties acknowledge and agree that Health Plan
has entered into a long-term agreement with Memorial Health Services
("MHS") on December 19, 1995 (the "MHS Agreement") which requires, among
other things, Health Plan to assign certain Members to MHS hospitals. The
parties agree that should any provision or requirement in this Agreement
be inconsistent with any requirements in the MHS Agreement, the parties to
this Agreement shall perform their duties and responsibilities under this
Agreement in a manner that is consistent with, and will enable Health Plan
to fulfill its obligations under the MHS Agreement. If Medical Group
breaches this Agreement and thereby places Health Plan in default of the
MHS Agreement, Medical Group shall be responsible for any damages Health
Plan incurs and Medical Group agrees to indemnify, defend and hold
harmless Health Plan from any and all such damages and Health Plan may
elect to offset is damages from Health Plan's payments to Medical Group.
Medical Group further agrees for those Medical Group facilities in the zip
code areas in which Health Plan, is required to send Members to MHS
hospitals, as provided in the MHS Agreement, Medical Group will use its
best efforts to send all Medical Group patients requiring services in a
hospital to MHS hospitals, consistent with the patient's medical needs and
the MHS hospitals' capabilities.
7.27 CHANGES IN DESIGNATED HOSPITAL.
(a) USE OF SADDLEBACK. Effective 7/1/98, Members assigned to the Laguna
Hills Talbert facility will be reassigned to Saddleback Hospital, and the
terms of Exhibit A-1 and C-1 for Memorial facilities shall apply.
(b) CHARTER HOSPITAL. Effective 2/1/97, Members assigned to the Plaza, Long
Beach, Charter, and Anaheim Talbert facilities using Charter Hospital will
reassigned to hospitals affiliated with the Memorial Health System, and
the terms of Exhibit A-1 and C-1 for Memorial facilities shall apply.
(c) MEMBERS ASSIGNED TO DOWNEY TALBERT FACILITY. Effective 2/1/97, Members
assigned to the
Downey Talbert facility will be reassigned and the terms of Exhibit A-3
and C-3 will apply.
(d) MEMBERS ASSIGNED TO COMPTON FACILITY. Effective 1/1/98, Members assigned
to Compton Talbert facility will be reassigned to a hospital affiliated
with the Memorial Health System, and the terms of Exhibit A-1 and C-1
shall apply.
7.28 GUARANTY OF PERFORMANCE BY TMMC. Notwithstanding anything to the contrary
herein, this Agreement shall not become effective unless and until Talbert
Medical Management Corporation executes a Guaranty of Performance in favor
of Health Plan, in a form acceptable to Health Plan, which unconditionally
guarantees all of the obligations of Medical Group under this Agreement.
7.29 AUDIT. Health Plan agrees that Medical Group shall, upon request and
provision of reasonable notice, have the right to audit claims processed
by the Health Plan on behalf of Medical Group under this Agreement.
7.30 BOARD APPROVAL. This Agreement shall be subject to the prior approval of
the Boards of Directors for TMMC and FHP International Corporation, the
ultimate parent of Health Plan, which approval shall be considered at
board meetings of each corporation.
ARTICLE 8
GOVERNING LAW AND REGULATORY REQUIREMENTS
8.1 GOVERNING LAW. This Agreement and the rights and obligations of the
parties hereunder shall be construed, interpreted, and enforced in
accordance with, and governed by, the laws of the State of California and
the United States of America, including, without limitation, the Knox-
Keene Health Care Service Plan Act of 1975, as amended, and the
regulations adopted thereunder by the California Department of
Corporations, the federal Health Maintenance Organization Act of 1973, as
amended, and the regulations adopted thereunder by the United States
Department of Health and Human Services. Any provisions required to be in
this Agreement by State and Federal Law or by Government Agencies shall
bind Health Plan and Medical Group whether or not expressly provided in
this Agreement.
8.2 NO BILLING OF MEMBERS (MEMBER HOLD HARMLESS PROVISION. With the exception
of Copayments and charges for non-covered services delivered on a fee-for-
service basis to Members, Medical Group shall in no event, including,
without limitation, non-payment by Health Plan, insolvency of Health Plan,
or breach of the Agreement, bill, charge, collect a deposit from, or
attempt to bill, charge, collect or receive any form of payment from any
Member for Covered Services provided or arranged pursuant to this
Agreement.
Medical Group and its Participating Providers shall not maintain any
action at law or equity against a Member to collect sums owed by Health
Plan to Medical Group. Upon
notice of any such action, Health Plan may terminate this Agreement as
provided above and take all other appropriate action consistent with the
terms of this Agreement to eliminate such charges, including, without
limitation, requiring Medical Group and its Participating Providers to
return all sums collected as Surcharges from Members or their
representatives. For purposes of this Agreement, "Surcharges" are
additional fees for Covered Services which are not disclosed to Members in
the Subscriber Agreement, are not allowable Copayments and are not
authorized by this Agreement. Nothing in this Agreement shall be
construed to prevent Medical Group from providing non-Covered Services on
a usual and customary fee-for-service basis to Members.
Medical Group's obligations under this Section shall survive the
termination of this Agreement with respect to Covered Services provided or
arranged during or after the term of this Agreement, regardless of the
cause giving rise to such termination.
8.3 CONTINUING CARE OBLIGATIONS OF MEDICAL. In the event of termination of
this Agreement for any reason, Medical Group and its Participating
Providers shall continue to provide or arrange Covered Services to
Members, including any Members who become eligible during the termination
notice period, beginning on the effective date of termination and
continuing until the termination or next renewal date of the Member's
Subscriber Agreement, unless Health Plan arranges for the transfer of the
Member to another Health Plan Participating Provider and provides written
notice to Medical Group of such transfer prior to the termination or next
renewal date of the Subscriber Agreement. Notwithstanding the foregoing,
Medical Group and its Participating Providers will continue to provide or
arrange Covered Services to any Members who cannot be transferred within
the time period specified above in accordance with Health Plan's legal and
contractual obligations to (I) provide Covered Services under the Managed
Care Plans and Subscriber Agreements, (ii) provide notice of termination
to Members and (iii) ensure continuity of care for its Members.
Notwithstanding the above or any other provisions to the contrary, Medical
Group agrees that in the event Health Plan ceases operations for any
reason, including insolvency, Medical Group shall provide or arrange
Covered Services and shall not bill, charge, collect or receive any form
of payment from any Member for Covered Services provided after Health Plan
ceases operations. This continuation of Covered Services obligation shall
be for the period for which Premium has been paid, but shall not exceed a
period of thirty (30) calendar days, except for those Members who are
hospitalized on an inpatient basis as provided below.
In the event Health Plan ceases operations or Medical Group terminates
this Agreement on the basis of Health Plan's failure to make timely
Capitation Payments, Medical Group shall continue to arrange for Covered
Services to those Members who are hospitalized on an inpatient basis at
the time Health Plan ceases operations or Medical Group terminates this
Agreement until such Members are discharged from the hospital. Medical
Group may file a claim with Health Plan for such services as previously
specified in this Section.
Medical Group agrees that the provisions of this Section and the
obligations of Medical Group and its Participating Providers herein shall
survive termination of this Agreement regardless of the cause giving rise
to such termination, and shall be construed to be for the benefit of
Members.
8.4 INSPECTION AND AUDIT OF RECORDS AND FACILITIES. Medical Group and its
Participating Providers shall provide access at reasonable times upon
demand by Health Plan, Accreditation Organizations and Governmental
Agencies to periodically audit or inspect the facilities, offices,
equipment, books, documents and records of Medical Group and its
Participating Providers relating to the performance of this Agreement and
the Covered Services provided to Members, including, without limitation,
all phases of professional and ancillary medical care provided or arranged
for Members by Medical Group and its Participating Providers, Member
medical records and financial records pertaining to the cost of operations
and income received by Medical Group for Covered Services rendered to
Members. Medical Group and its Participating Providers shall comply with
any requirements or directives issued by Health Plan, Accreditation
Organizations and Government Agencies as a result of such evaluation,
inspection or audit of Medical Group and its Participating Providers. The
provisions of this Section shall survive termination of this Agreement for
the period of time required by State and Federal Law.
8.5 NONDISCRIMINATION. Medical Group assures that Covered Services shall be
provided to Members in the same manner as such services are provided to
other patients of Medical Group and its Participating Providers, except as
required pursuant to this Agreement. Medical Group and its Participating
Providers shall not unlawfully discriminate against any Member on the
basis of source of payment or in any manner in regards to access to, and
the provision of, Covered Services. Medical Group and its Participating
Providers shall not unlawfully discriminate against any Member, employee
or applicant for employment on the basis of race, religion, color,
national origin, ancestry, physical handicap, medical condition, marital
status, age or sex.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement in
, on , 199 .
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FHP, INC.
By:
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Title:
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Address (for purposes of receiving notice)
18000 Studebaker Road
Cerritos, California 90703
Attention: President
For and on Behalf of MEDICAL GROUP
By:
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Title:
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Address (for purposes of receiving notice)
3540 Howard Way
Costa Mesa, California 92626
Attn: Business Development