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EXHIBIT 10.9
QUALITY CARE SOLUTIONS, INC.
SOFTWARE LICENSE AND SUPPORT AGREEMENT
AND
CONFIDENTIALITY AGREEMENT
THIS AGREEMENT IS MADE AND ENTERED INTO AS OF THE 23RD DAY OF MAY, 1996, BETWEEN
QUALITY CARE SOLUTIONS, INC. ("QCSI" OR THE LICENSOR"), AN ARIZONA CORPORATION
WITH EXECUTIVE OFFICES IN PHOENIX, ARIZONA AND MOLINA MEDICAL CENTERS INC., A
CALIFORNIA CORPORATION (THE WITH PRINCIPAL OFFICES IN LONG BEACH, CA (THE
"LICENSEE").
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TABLE OF CONTENTS
DEFINITIONS............................................................... 3
THE LICENSE............................................................... 6
DELIVERABLES.............................................................. 8
SUPPORT SERVICES.......................................................... 9
SPECIAL RESPONSIBILITIES OF LICENSEE...................................... 12
RESTRICTIONS.............................................................. 13
WARRANTY, PATENT AND COPYRIGHT INFRINGEMENT,.............................. 14
LIMITATIONS ON LIABILITY AND REMEDIES, AND LICENSEE'S LIABILITY........... 14
TERMINATION AND DISCONTINUANCE............................................ 17
GENERAL PROVISIONS........................................................ 18
SPECIFICATIONS OF QMACS SOFTWARE.......................................... 23
CONFIDENTIALITY AGREEMENT................................................. 35
FEES, RATES AND PAYMENT SCHEDULES......................................... 39
HARDWARE/SOFTWARE ELEMENTS................................................ 43
LOCATION AND NOTICES:..................................................... 44
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WITNESSETH
WHEREAS, Licensor has created and developed computer software which operates on
micro computers and mid-range computers for financial, administrative and
operational uses in the managed care business, health maintenance organizations
and by third party administrators and is willing to grant Licensee a non
exclusive license to use such Software in accordance with the terms and
conditions hereof; and
WHEREAS, Licensee owns, controls and/or operates a Managed Care Organization, a
Health Maintenance Organization, a Third Party Administrator or other health
care business and wishes to obtain a non-exclusive license to use the Licensors
Software, as specified hereinafter; and
WHEREAS, Licensee and Licensor desire to enter into an Agreement formalizing the
terms and conditions of a license, the supply of future software and related
support and other services (the "Agreement"); and
WHEREAS, Licensor and Licensee are considered each to be a "Party" to this
Agreement and are hereinafter jointly referred to as the Parties.
NOW, THEREFORE, in consideration of the promises and mutual representations
herein contained, the Parties hereto agree to as follows:
ARTICLE I.
DEFINITIONS
"AGREEMENT FEES" shall mean any fee specified on Exhibit C.
An "APPLICATION" is defined as one or more Client Executables designed to
accomplish a specified business function as listed in Exhibit A.
An "APPROVED CLIENT" is defined as a computer whose hardware and software
configuration have been approved by Licensor as appropriate to execute the
Client portions of the QMACS(TM) Software.
An "APPROVED DATA SERVER" is defined as a computer whose hardware and
software configuration have been approved by Licensor as appropriate to
execute the Data Server portions of the QMACS(TM) Software.
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"APPROVED HARDWARE" means Approved Data Servers, Approved Clients and
Approved Operating Systems.
An "APPROVED OPERATING SYSTEM" is defined as a Microsoft's WindowsNT(TM)
AUTHORIZED LOCATION(S) means those locations where the Software is
authorized to be installed as specified on Exhibit _______.
A "BENEFIT PLAN" is any reimbursement plan administered by an
administrator that has members and pays claims.
A "BILLING MONTH" is defined as a monthly period for which the Licensor
and Licensee agree to for billing purposes.
A "CLIENT" is defined as a computer used generally by staff personnel,
which communicates with one or more Data Servers and runs Client
Executables to access, analyze and update databases stored on a Data
Server.
A "CLIENT EXECUTABLE" is defined as a program which is part of the
Software designed to execute on a computer operating as a Client on a
network connecting to and utilizing a Data Server.
"DATA BASE ADMINISTRATION" is defined as the Licensor's activities to
maintain on the Approved Data Server data table definitions, views, user
defined data types, triggers, stored procedures and other attributes of
the data base definitions integral to the Software.
A "DATA SERVER" is defined as a computer used to hold large amounts of
electronic data plus provide database management and access services to
Client computers on a computer network. Portions of the QMACS(TM) Software
reside on the Data Server.
A "DERIVATIVE WORK" means any modifications of QMACS(TM) Software or a
work which is based upon the QMACS(TM) Software code, either source or
object, or which requires the QMACS(TM) Software to function.
"DOCUMENTATION" is defined as manuals, training tapes, training workbooks,
help screens, quick reference guides and other written information that
explains the Software and its operations.
"EXECUTABLE CODE" is defined as a program which is part of the Software
and actually performs the functions in conjunction with the Client or the
Data Server as compared to source code which is the code developed to
create the Executable Code.
"EXECUTION DATE" means the date that the last Party hereto executes this
Agreement.
"ENHANCED SOFTWARE" means the revised Software that Licensor may, from
time to time, release which is a new version or updates of QMACS(TM)
Software, including
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Executable Code and which may, but is not required to, increase the
functionality, ease of use or productivity of the Software.
"HARDWARE AND SOFTWARE ELEMENTS" means the required computer hardware and
software identified in Exhibit D.
"IMPLEMENTATION" shall mean consulting services related to the conversion
of data as well as the set-up of operating system software, core
relational database software, database tables and training unless other
arrangements are agreed to and set forth in writing and signed by both
Parties.
"LICENSEE" is defined as not only Molina Medical Centers, Inc. but any
wholly owned affiliates.
"LICENSEE'S ADDRESS" means that address stated in Exhibit E of this
Agreement or changed from such address by giving Licensor proper written
notice.
"LICENSOR'S ADDRESS" means that address stated in Exhibit E of this
Agreement or changed from such address by giving Licensee proper written
notice.
"MATERIAL NONCONFORMITY" is defined as any operation of the Software which
causes material erroneous data or unrecoverable data loss due to the
execution of the Software's Applications.
"MEMBER" is defined as a person who is eligible for benefits under any
benefit plan managed by the Software.
"MEMBER ENROLLMENT" is defined as the active and enrolled Members in a
Benefit Plan using QMACS(TM) software. For purposes of Monthly Agreement
Fee computation, multiple enrollments by the same Member during the same
month shall be counted as a single enrollment.
"MONTHLY FEES" means the recurring Agreement Fees due each month specified
on Exhibit C.
"NEW SOFTWARE" means new Executable Code, new modules and new Applications
which would allow the Licensee to perform significant functions not listed
in the Specifications. By way of example, an Application that allowed the
Licensee to evaluate the quality of care members are receiving would be
considered New Software. New Software is not enhancements, modifications
and new versions of QMACS(TM) software.
"ON-SITE SUPPORT" means that consultation, assistance and similar services
provided by Licensor at the Authorized Location(s) or Licensee's main
premises. Any On site support is subject to Licensor's then current hourly
rates. The reasonable costs of travel, meals and lodging and other
expenses incurred by representatives (e.g., employees, subcontractors,
etc.) of Licensor in providing on-site support shall be paid by Licensee.
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"OUTSIDE EXECUTABLE CODE" means Executable Code relating to third party
applications which Licensor or Licensee has been granted the right to
sublicense.
"PER MEMBER PER MONTH(PMPM)" is defined as the average number of Member
Enrollments actively managed by the QMACS(TM) software during a Billing
Month.
"PLAN YEAR" is defined as a twelve month(12) period from when Member
Enrollments were first accepted into a specific benefit plan managed by
the QMACS(TM) software.
"QMACS(TM)" or the SOFTWARE is defined as all the current computer
software developed by the Licensor including but not limited to all Client
Executables, Applications, all display screens, the Source Code, any Data
Server Based Programs and any Schema, Stored Procedures, Triggers or
Wizards.
"QMACS(TM) EXECUTABLE CODE" means Executable Code relating to the Software
Applications which Licensor hereby licenses.
"SPECIFICATIONS" are defined as the features and functions of the
QMACS(TM)
Software delivered as described in Exhibit A attached hereto.
The "SOFTWARE" means the QMACS(TM) programs.
"VENDOR" is defined as a third party supplier of computer hardware,
software or services.
"WAN" is defined as a Wide Area Network.
ARTICLE II.
THE LICENSE
2.1 LICENSE GRANT. Licensor hereby grants to Licensee and Licensee
hereby accepts a nonexclusive, non-transferable license (the
"License") to use QMACS(TM) Software on Approved Clients and
Approved Data Servers using Approved Operating Systems. The License
is expressly made and granted subject to the terms, conditions,
limitations and restrictions of this Agreement. Licensee shall be
entitled to receive any Enhanced Software produced by Licensor
during the Term of this Agreement. Unless specified otherwise by
Licensor to Licensee in writing to Licensee's Address, this License
and all the other terms of this Agreement shall also apply to any
New Software or Enhanced Software supplied to Licensee by Licensor
after the Execution Date of this Agreement. This Section does not
entitle Licensee to New Software, customized versions or "beta"
versions of the QMACS(TM) Software not yet generally released to all
Licensees of QMACS(TM) Software. All Enhanced Software, or New
Software if licensed by Licensee, shall be covered under and
governed by the terms of this Agreement.
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2.2 USE OF THE QMACS EXECUTABLE CODE. If the Agreement Fees for the
QMACS Executable Code are fully paid by Licensee in accordance with
the terms established for such fees, Licensee shall have a
non-exclusive, non-transferable, limited License to use the QMACS
Executable Code related to the QMACS(TM) Software as expressly
permitted by this Agreement and said Executable Code shall be deemed
to be QMACS(TM) Software hereunder.
2.3 USE OF OUTSIDE EXECUTABLE CODE. Licensor may place a copy of Outside
Executable Code in magnetic form in the possession of Licensee for
Licensor's convenience and use in providing services or support to
Licensee. Such copy shall be clearly marked by Licensor as Outside
Executable Code under the License. Except as Licensor expressly
authorizes in writing in each instance, said copy of Outside
Executable Code shall be immediately returned to Licensor upon
Licensor's request. Regardless, such request shall be deemed given
upon expiration or termination of this License. The Parties agree
that Licensor is not responsible for maintenance, support, updates
or enhancement of said Outside Executable Code.
2.4 COPYING. Licensor will provide Licensee with a reasonable number of
back-up copies of the QMACS(TM) Software or Licensee may make a
reasonable number of controlled copies of the QMACS(TM) Software as
reasonably necessary to utilize the QMACS(TM) Software on the
Approved Hardware. In such case, Licensee may make a reasonable
number of copies of the Documentation for use by Licensee's
employees in connection with the duly authorized use of QMACS(TM)
Software (the "Copies"). Licensee shall reproduce and include in all
Copies made by it, whether of Software or Documentation, any and all
notices of copyright and other proprietary rights included by
Licensor in or on the QMACS(TM) Software and Documentation provided
to Licensee. All Copies of QMACS(TM) Software or Documentation or
rights granted hereunder to copy the Software and the Documentation
are provided to Licensee only for the duration of this License under
this Agreement and only for the purpose of facilitating the licensed
use by Licensee of QMACS(TM) Software. Licensee shall indemnify and
ensure Licensor that such Copies are not used for any other purpose.
2.5 OWNERSHIP. All Copies of QMACS(TM) Software and the Documentation
(including Copies under Section 2.4) are the sole property of
Licensor and Licensor shall hold sole title thereto. Licensee hereby
assigns to Licensor any title or ownership interest Licensee may
have or acquire in any Copies made in accordance hereunder.
2.6 RETURN OF COPIES. Upon expiration or termination of the License, all
Copies of the QMACS(TM) Software and the Documentation shall
promptly be delivered to Licensor or destroyed by Licensee. Within
15 days of termination or expiration of the License, Licensee shall
deliver to Licensor a certification in writing that all Copies have
been delivered to Licensor or destroyed.
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2.7 SAFEGUARD. Licensee shall safeguard all Executable Code and Copies
against non-Licensee use, copying or inspection by any third-party
and against transfer to any third-party. Licensee shall require all
persons and entities to whom Licensee has granted operations
authority to save data or who have access to any Executable Code to
execute and submit to Licensor a Confidentiality Agreement as set
forth in Exhibit B.
2.8 TERM OF THE AGREEMENT. Provided that all Agreement Fee(s) are paid
timely, and Licensee complies with the terms and conditions of this
Agreement, the initial term of this Agreement shall be for a period
of five (5) years beginning on the first of the month after the
Execution Date. Thereafter, this License shall be automatically
renewed under the terms of this Agreement on a month to month basis
assuming Agreement Fees are timely paid. Regardless, Licensee will
give Licensor a six months notice of Licensee's intent to cancel
this Agreement after its initial term.
2.9 FEES. To maintain its License hereunder, Licensee shall pay to
Licensor all Monthly Fees, Implementation Fees and other fees and
costs as provided in Exhibit C attached hereto or as otherwise
required by this Agreement.
ARTICLE III.
DELIVERABLES
3.1 DELIVERABLES. Prior to the completion of the Implementation,
Licensor will deliver at least one machine readable copy (in binary
or object code form) of each program for each QMACS(TM) Application
in accordance with the Specifications. Two (2) copies of any
Documentation corresponding to each Application shall be provided to
Licensee as such Documentation is published. At Licensee's option,
Licensee may purchase additional copies of Documentation from
Licensor at Licensor's list price in effect from time to time
3.2 IMPLEMENTATION. Licensor shall be responsible for the initial
installation of QMACS(TM) Software on the Approved Hardware and
Implementation. Licensee shall cooperate fully with Licensor in such
installation and Implementation. The Implementation shall proceed in
accordance with a mutually acceptable Implementation Schedule.
3.3 INITIAL TRAINING. Licensor shall provide initial training services
to Licensee's personnel. The initial training sessions will take
place in accordance with the mutually agreed Training Schedule.
Licensee shall pay all reasonable, travel, rooms, meals and other
expenses incurred by either Party as a result of such training.
3.4 SUBSEQUENT TRAINING. Subsequent training services, other that those
provided as initial training, shall only be supplied upon the mutual
agreement of the Parties.
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ARTICLE IV.
SUPPORT SERVICES
4.1 SUPPORT SERVICES GENERALLY. As part if its Monthly Fee Licensor
shall provide to Licensee the Certain support services as specified
below to unmodified QMACS(TM) Software (the "Support Services").
4.2 MAINTENANCE. Licensor's sole support services obligation hereunder
is to provide the programming or documentation services necessary to
conform any Application to the Specifications. This obligation shall
remain in effect until the expiration or termination of this
Agreement only if the Licensor can duplicate the defect. Upon the
detection of any Material Nonconformity with the Specifications,
Licensee shall provide to Licensor such output listings, data and
other assistance as Licensor shall request. Licensor shall remedy
any Material Nonconformity between the original QMACS(TM) Software,
or any Enhanced Software, and the Specifications within thirty (30)
days after notification in writing by Licensee. Upon receipt of such
notice, Licensor, at no cost to Licensee, shall remedy the Material
Nonconformity. This obligation of Licensor does not extend to
QMACS(TM) Software modified by Licensee or caused by running the
Software on non-Approved Hardware.
4.3 DATA BASE ADMINISTRATION. Licensor shall supply Data Base
Administration to Licensee. This obligation shall remain in effect
until the expiration or termination of this Agreement. Licensor may
terminate any obligation for Data Base Administration hereunder if
the Licensee or any third parties alter, add, delete or make any
structural or technical modifications to the database without
written permission of the Licensor. It is agreed that selection,
querying, access or reading of data contained in the database tables
by the Licensee is excluded from this Section 4.3. Licensor may also
choose, in it sole discretion, to terminate the License upon such
structural or technical modifications.
4.4 METHOD OF SUPPORT. Licensor shall provide support via WAN to
Licensee. This support will consist of direct line or WAN access to
the QMACS(TM) Software installed on the Approved Hardware. Licensee
shall obtain and maintain a direct line or WAN link and other
telecommunication equipment and software such as are required and
approved by Licensor to enable Licensor to supply Data Base
Administration, support and Maintenance of the Applications.
Licensor's approval of direct line or WAN link and telecommunication
equipment and software is necessary to ensure compatibility with
Licensor's modems and telecommunication equipment and software. The
Licensee's modems, WAN, telephone line and other telecommunication
equipment and software shall be the responsibility of Licensee.
Licensee shall reimburse Licensor for direct line, WAN or telephone
charges incurred by Licensor in connection with WAN or modem
support.
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4.5 HELP DESK SUPPORT. Licensor shall provide "help desk support" as
defined herein to Licensee during Licensor's normal business hours.
Help Desk support will consist of telephone consultation, WAN,
E-Mail or Internet communication with a representative of Licensor
to provide Licensee with information, advice and assistance with
respect to the operation and use of QMACS(TM) Software. Licensee may
obtain help desk support by communicating with Licensor's designated
representative or following Licensor's process for help desk
support. Licensee will use its best efforts to maintain the training
level of its employees on the software. Licensor's Help Desk is not
a substitute for training and Licensee agrees to maintain a
reasonable number of trained personnel to use the Software and train
other of Licensee's personnel.
4.6 SOFTWARE MODIFICATION PURSUANT TO GOVERNMENT REGULATION. After
notice to Licensor, Licensee shall be entitled to receive, without
additional charge, such modifications to the Applications as are
required to reflect any mandatory changes in federal or state
government managed care regulations that are applicable in any
states where Licensee is utilizing the QMACS(TM) Software. Licensor
shall be obligated to provide only a single solution which is
acceptable by the appropriate controlling government agency.
4.7 ADDITIONAL SERVICES. Subject to the mutual agreement of the Parties
and additional compensation as scheduled or agreed upon, Licensor
will provide to Licensee some or all of the following additional
services which shall be made available to Licensee for fees, terms
and conditions in effect concerning the following services.
A. On-Site Support;
B. New Software;
C. Custom Programming;
D. Special services.
These "Additional Services" are not "Support Services" and are not
covered by the Monthly Agreement Fees.
4.8 SPECIAL SERVICES. Licensor may offer Licensee other services
("Special Services") to enhance the utility, user-friendliness
and/or value of QMACS(TM) Software to Licensee. Such Special
Services may include, but are not necessarily limited to, consulting
services, training, classes, training modules, computer assisted
education modules, and the provision of Support Services for
modified QMACS(TM) Software. Fees and charges for the foregoing will
be quoted from time to time to Licensee by Licensor.
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4.9 EQUIPMENT AND ACCESS TO DATA. To facilitate the performance of
Support Service and any Additional Services, Licensee, at its
expense, shall:
A. Direct line or WAN. Acquire and maintain in good operating
condition at each Authorized Location a telecommunication
hardware/software configuration (including router, direct
telephone line link and other telecommunication equipment and
software) as Licensor shall reasonably require for
compatibility with Licensor's telecommunication
hardware/software configuration, Licensor may require Licensee
to upgrade said communication configuration from time to time
at the sole discretion of the Licensor,
B. Cooperation. Make available to Licensor such personnel, time,
supplies, equipment, assistance and cooperation of Licensee as
Licensor shall reasonably request;
C. Licensor Access to Software and Data. Permit Licensor support
personnel to have full and free access to the QMACS(TM)
Software installed on the Approved Hardware and data used in
connection with any QMACS(TM) Software. Such data shall be
held in confidence by Licensor and used exclusively to enable
Licensor support personnel to accomplish or facilitate Support
Services or any Additional Services. Licensee will provide
Licensor system password(s) necessary to operate and support
the QMACS(TM) applications and related databases;
D. Back-Up Data. Maintain adequate back-ups of all data provided
to Licensor support personnel in order to ensure continued
data security and retention. LICENSOR SHALL NOT BE OBLIGATED
TO RECREATE OR RESTORE, OR BE LIABLE IN ANY WAY FOR, LICENSEE
DATA IN THE EVENT OF LICENSEE'S FAILURE TO MAINTAIN ADEQUATE
BACK-UP OF ALL DATA;
E. Licensee Information. Provide Licensor's support personnel
access to all Licensee information specific to QMACS(TM)
Application(s) maintained on the Licensee's Data Server.
Licensor shall comply with all applicable laws relating to the
confidentiality of such information and promises to comply
with reasonable confidentiality policies of the Licensee;
F. Install Modifications. Promptly install or have installed all
new releases of QMACS(TM) Software required by Licensor for
continued support.
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ARTICLE V.
SPECIAL RESPONSIBILITIES OF LICENSEE.
5.1 LICENSEE PROVISIONS TO LICENSOR'S SUPPORT TEAM MEMBERS. Licensee
shall provide to Licensor's Support and Implementation staff the
following while on site performing installation, development,
Implementation or support work:
A. A business-like working environment including, but not limited
to, office space, desks, furnishings, telephone with access to
an outside line for business calls relating to Licensor's
performance under this Agreement. Licensee agrees to use
reasonable efforts to provide space and furnishings consistent
with the space and furnishing made available to Licensee's
employees' of similar responsibility.
B. An Approved Client connected to Licensee's Data Server(s) and
/or the WAN network.
C. Unrestricted access to the Approved Hardware shall be granted
to all members of the Licensor's Installation, Development,
Support or Implementation staff. Licensee shall provide to the
Licensors support manager system password clearance.
D. Licensee shall make available to Licensor's staff other
available equipment reasonably necessary for Licensor to
perform its services including but not limited to
communications equipment such as faxes, modems, telephones and
Internet connections, if available.
5.2 Licensee's Project Leader or Agent. Licensee shall provide a Project
Leader or agent. Such Project Leader shall be authorized by Licensee
to:
A. make decisions, approve plans and grant requests on behalf of
Licensee in connection with the Implementation of the
QMACS(TM) Software consistent with the terms of this
Agreement;
B. make management decisions and provide personnel, including the
appointment of Application Coordinators, and other
Representatives as reasonably required by Licensor, in order
to accomplish and facilitate the Implementation services
provided by Licensor in a proper and efficient manner;
C. maintain Licensee's Approved Hardware or cause the same to be
maintained in proper working order during the term of the
License; and
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D. exercise its best efforts in the performance of Licensee's
obligations hereunder in connection with the Implementation of
QMACS(TM) Software and preparation of the Authorized
Location(s) therefor.
5.3 HARDWARE AND SOFTWARE ELEMENTS. Licensee shall insure that the
minimal Hardware and Software Elements identified in Exhibit D
attached hereto are in place and operational at the Authorized
Location(s) prior to the Implementation commencement date set forth
herein. Licensee shall be responsible for the continued operation
and maintenance of such hardware and software elements and shall
comply with the operational, environmental and maintenance
recommendations and requirements of the vendors and manufacturers
thereof.
ARTICLE VI.
RESTRICTIONS
6.1 USE BY OTHERS. Licensee may use QMACS(TM) Software and the
Documentation only for Licensee's own internal purposes to process
data for Licensee. Licensee shall not allow any third-party to
access, copy or use QMACS(TM) Software or the Documentation.
Licensee shall not use the QMACS(TM) Software to provide
time-sharing or data processing services to a third-parties without
written permission of Licensor. Notwithstanding any other provisions
of this Agreement, Licensee may disclose the QMACS(TM) Software and
Documentation to any third party for the limited purpose of
maintenance or modification of computer hardware or software for use
by Licensee provided that such disclosure is pursuant to a
Confidentiality Agreement delivered to Licensor. Any software
modified or changed by a third party will not be covered under
Article VII without a separate written agreement.
6.2 DUTY TO SAFEGUARD. QMACS(TM) Software and the Documentation, and the
trade secrets and intellectual property embodied therein, are of
great value to Licensor. Accordingly, Licensee shall exercise
reasonable care and diligence to protect the same against any
unauthorized copying, piracy and misappropriation.
6.3 MODIFICATIONS. Licensee shall notify Licensor in writing on any
Derivative Work. Any and all such Derivative Works and modifications
shall be the property of Licensor and Licensee hereby assigns all
title and ownership interest therein to Licensor. Such Derivative
Works and modifications shall be deemed to be QMACS(TM) Software for
the purposes of this Agreement, provided, however, that Licensor's
representations, warranties and liabilities shall not extend to such
Derivative Works and modifications.
6.4 Confidentiality Breach. In the event of a breach or the threat of a
breach of any of the provisions of this Article, Licensor, in
addition to any other remedies it may have at law or in equity or
under this Agreement, shall be entitled to a restraining order,
preliminary injunction, and other appropriate relief so as to
specifically
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enforce the terms of this Article. The Parties agree that a breach
of this Article would cause Licensor injury not compensable in
monetary damages alone, and that the remedies provided herein are
appropriate and reasonable.
ARTICLE VII.
WARRANTY, PATENT AND COPYRIGHT INFRINGEMENT,
LIMITATIONS ON LIABILITY AND REMEDIES, AND LICENSEE'S LIABILITY.
7.1 WARRANTIES: Licensor warrants that it shall remedy any Material
Nonconformity within thirty (30) days after notification in writing
is received from Licensee only if Licensor can duplicate the defect.
Upon receipt of such notice, Licensor, at no cost to Licensee, shall
remedy the Material Nonconformity. This warranty does not extend to
QMACS(TM) Software modified by Licensee or for nonconformities due
to Licensee misuse. Licensor's warranty covers only service to
correct Material Nonconformities reported during the term of this
Agreement. Telephone and WAN support, and other services are
excluded from Licensor's warranty.
7.2 LIMITATIONS ON WARRANTY. Except as set forth in the Specifications,
Licensor does not warrant that the QMACS Software will meet
Licensee's requirements or will operate in the combinations which
may be selected for use by Licensee, or that the operation of the
QMACS(TM) Software will be uninterrupted or error free.
7.3 SCOPE OF WARRANTY. THE FOREGOING IS IN LIEU OF ALL OTHER WARRANTIES
EXPRESS OR IMPLIED. LICENSOR HEREBY DISCLAIMS ALL WARRANTIES NOT
EXPRESSLY SET FORTH IN THIS AGREEMENT INCLUDING BUT NOT LIMITED TO,
ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE. LICENSEE HEREBY DISCLAIMS ANY RELIANCE ON ANY
WARRANTY OR REPRESENTATION NOT EXPRESSLY SET FORTH IN THIS
AGREEMENT.
7.4 LICENSOR'S PATENT AND COPYRIGHT INDEMNIFICATION OF LICENSEE.
Licensor promises to indemnify Licensee, at Licensor's expense,
against any claim that the QMACS(TM) Software or the corresponding
manual(s) infringe on a valid patent or copyright in the United
States. Licensor will also pay all costs, damages, and attorneys'
fees that a court finally awards as a result of such claim, to the
limit of Licensor's liability as determined by the court. Licensor's
duties under this Section 7.4 are conditioned upon the following:
A. Licensee shall give to Licensor prompt written notice or any
actual or threatened claim;
B. Licensor shall have control of the defense of any claim and of
all negotiations for the settlement or compromise of such
claim;
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C. Licensee shall cooperate with Licensor in the defense or
settlement of any claim; and
D. The claim does not arise out of Licensee's modification of the
QMACS(TM) Software or the use of QMACS(TM) Software in
combination with anything not approved by Licensor.
7.5 LICENSOR'S OPTION IF INFRINGEMENT OCCURS. If a patent or copyright
infringement occurs, or in Licensor's judgment is likely to occur.
Licensor, at Licensor's option and expense, may either procure the
right for Licensee to continue using the QMACS(TM) Software and the
manual(s), or replace or modify them so that they become
non-infringing. If neither of the foregoing alternatives is
reasonably available in Licensor's judgment, Licensee shall return
all copies of the Application(s) in question and corresponding
manual(s) to Licensor upon written request.
7.6 LIMITATION. The above promise of indemnification extends only and
strictly to the QMACS(TM) Software and manual(s) in the forms
provided by Licensor and expressly precludes any indemnification
with respect to claims based upon the QMACS(TM) Software, manual(s)
or any software or documentation which has been modified by anyone
besides Licensor.
7.7 LIMITATIONS ON LIABILITY AND REMEDIES. Licensee expressly agrees
that Licensor's entire liability and Licensee's exclusive and sole
remedies shall be as follows:
A. CONFORMITY/NONCONFORMITY OF THE QMACS(TM) SOFTWARE. In all
situations involving conformance or nonconformity of the
QMACS(TM) Software during the period as set forth in Section
7.1 of this Software License Agreement, Licensee's sole remedy
is the correction by Licensor at its expense of any Material
Nonconformity with the Specifications provided written notice
of such nonconformity is received by Licensor, or Licensor
shall have no liability or obligation under this Agreement
with respect to any nonconformity with the Specifications not
reported in writing by Licensee to Licensor during the
applicable Warranty Period.
B. DISCLAIMER OF LIABILITY. IN NO EVENT WILL LICENSOR BE LIABLE
FOR ANY DAMAGES CAUSED BY LICENSEE'S FAILURE TO PERFORM
LICENSEE'S RESPONSIBILITIES, OR FOR ANY LOST PROFITS, LOST
SAVINGS, LOSS OF DATA, LOSS OF USE OF THE QMACS(TM)SOFTWARE,
COSTS OF RECREATING LOST DATA, OR ANY OTHER INDIRECT, SPECIAL
OR OTHER CONSEQUENTIAL DAMAGES, EVEN IF LICENSOR HAD BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, OR FOR ANY CLAIM
AGAINST LICENSEE BY ANY OTHER PARTY.
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C. MAXIMUM LIABILITY. LICENSOR'S AGGREGATE LIABILITY FOR DAMAGES
TO LICENSEE FOR ANY CAUSE WHATSOEVER, AND REGARDLESS OF THE
FORM OF ACTION, INCLUDING CONTRACT, TORT, COMPUTER
MALPRACTICE, PRODUCTS LIABILITY, STRICT LIABILITY, AND/OR
OTHERWISE SHALL BE LIMITED TO THE LESSER OF FIFTY THOUSAND
($50,000) DOLLARS OR THE APPLICABLE LICENSE FEES PAID TO
LICENSOR FOR THE APPLICATION THAT CAUSED THE DAMAGES OR THAT
IS THE SUBJECT MATTER OF, OR IS DIRECTLY RELATED TO, THE CAUSE
OF ACTION. THIS SUBSECTION SHALL NOT APPLY TO SECTIONS 7.4
"Licensor's Patent and Copyright Indemnification of Licensee"
OR Section 7.5 "Licensor's Option if Infringement Occurs".
D. CARE BY LICENSEE. After installation of the Application, it is
the duty solely of Licensee to verify the results and
information provided by the Application, that the Application
is operated properly by trained personnel, and to satisfy
itself that all such results and information are true,
complete and correct. Licensee shall indemnify and hold
Licensor harmless from third-party claims or lawsuits of
Licensee's failure to perform those responsibilities.
E. TIME LIMITATIONS. No action, regardless of form, arising out
of this Agreement may be brought by Licensee later than one
(1) year after the cause of action has arisen and Licensee has
(or should have) acquired knowledge thereof.
F. ALLOCATION OF RISK. This Agreement in general, and the
foregoing limitations on liabilities and warranties in
particular, represent a mutually agreed upon allocation of
risk and the consideration provided for in this Agreement has
been calculated to reflect such allocation of risk.
7.8 SOFTWARE MISUSE. Licensee agrees to indemnify Licensor from
liability due to Licensee's misuse of the Software.
7.9 SANCTIONS. The Licensor shall be liable for sanctions imposed on
Licensee by State, County or Federal governments or governmental
agencies as a result of the Licensor's failure to meet any of its
responsibilities under this agreement, to the extent such failure is
the fault of the Licensor. The Licensor's liability under the this
section during any plan year shall be limited to Twenty-Five percent
(25%) of the total Per Member Per Month fees paid by the Licensee
during the Plan Year. If there appears to be reasonable grounds to
appeal an imposed sanction, Licensor and Licensee will cooperate in
preparing and presenting the appeal. However, any sanctions that are
attributable to Licensee shall not be deemed as Licensor's
responsibility.
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ARTICLE VIII.
TERMINATION, DISCONTINUANCE AND REMEDIES
8.1 TERMINATION OF THE LICENSE. This Agreement may be terminated by
either Party if:
A. the other Party hereto fails to comply with the terms,
conditions or any covenant or agreement on its part under this
Agreement and fails to perform or cure the same within thirty
(30) days of receipt of written notice to cure (the "Cure
Date").
B. either Party shall commence a voluntary case or other
proceeding seeking liquidation, reorganization or other relief
with respect to itself or its debts under any bankruptcy or
similar law and such case shall remain undismissed and
unstayed for a period of sixty days subject to Bankruptcy Code
S,365(n).
In such events, the Party failing to perform or comply with the
terms or conditions of this Agreement will be deemed to be in
default, and the non-defaulting Party shall be entitled to the
remedies specified below.
8.2 LICENSOR REMEDIES.
A. Licensor may demand any money due and owning to it under this
Agreement.
B. Licensor may electronically terminate Licensor's use of the
Applications and Support Services.
C. Seek an injunction against the continued use of the Software
and to protect the Licensor's intellectual and proprietary
rights.
8.3 LICENSEE REMEDIES
A. Licensee can seek monetary damages from Licensor for breach of
this Agreement.
B. Licensee may defend itself against a termination claim by
Licensor by escrowing disputed funds. If the breach claimed is
related to disputes regarding payment, Licensee may interplead
the maximum funds due with a court of competent jurisdiction
in which case Licensor will consent to Licensee continuing to
use the Software until such dispute is resolved in accordance
with this Agreement.
8.4 OBLIGATIONS OF THE PARTIES UPON TERMINATION. Upon termination of the
License, neither Party shall have any further obligations hereunder
except for
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A. Obligations accruing prior to the Cure Date;
B. Obligations or promises contained herein which relate to the
protection or confidentiality of QMACS(TM) Software (including
Executable Code) or the Documentation, which arise hereunder
or which are expressly made to extend for ten years past the
Term of this Agreement; and
C. The obligation of Licensee to certify in writing to Licensor
within twenty (15) (SIC) days of expiration or termination of
the License that all copies of the QMACS(TM) Software and the
manual(s) have been destroyed by Licensee or delivered to
Licensor.
8.5 ESCROW STATEMENT. The Licensor shall maintain a copy of the most
recent Source Code for the QMACS(TM) Software with a trustee
mutually acceptable to Licensee and Licensor. In the event that
Licensor becomes insolvent, makes an assignment of assets for the
benefit of creditors, has a trustee or receiver appointed (either
voluntary or involuntarily), is adjudicated bankrupt, or involuntary
bankrupt proceedings are commenced against Licensor or receiver,
commences any dissolution or liquidation proceedings, or transfers
all or substantially all of either of their assets to another
entity, then the trustee shall be directed to deliver the Source
Code to Licensee. Licensor shall notify Licensee who the appointed
trustee is, and give notice prior to any of the actions mentioned
herein. Licensee shall reimburse Licensor for any costs of Source
Code escrow.
ARTICLE IX.
GENERAL PROVISIONS.
9.1 AGENCY. Except as specifically permitted under this Agreement,
neither Licensor nor Licensee shall make any representations
warranties or incur any liability on behalf of the other. Neither
party is the agent, representative, partner or joint venturee of or
with the other Party.
9.2 APPLICABLE LAW AND ARBITRATION. This Agreement shall be construed
and interpreted in accordance with the laws of the State of Arizona.
In the event that the Parties are unable to resolve within a
reasonable time any controversy, dispute or claim arising out of or
in connection with this Agreement, or its interpretation,
performance or termination, arbitration shall be conducted in
accordance with the rules of the American Arbitration Association.
Arbitration awards shall be binding and conclusive upon the Parties,
their successors and assigns and they shall comply with such awards
in good faith. If reasonably necessary, judgment upon an arbitration
award may be entered in any court having jurisdiction. In the event
of arbitration or litigation, the non-prevailing Party shall pay the
costs and expenses including reasonable attorneys fees, incurred in
arbitration or litigation, or in preparation therefor, by it and by
the prevailing Party.
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9.3 ASSIGNMENTS, SUB-LICENSES, ETC. BY THE LICENSEE. Licensee shall not
have the power or the right (1) to delegate any duty under this
Agreement, (2) to grant any sublicense under the License, or (3) to
assign or transfer the License, this Agreement or any right
thereunder, except to a parent corporation, holding company, or
subsidiary, or to a corporation, partnership or other entity which
succeeds to all or substantially all of the business or assets of
the Licensee, subject to the approval of the other party which shall
not be unreasonably withheld.
9.4 ASSIGNMENTS, SUB-LICENSES, ETC. BY THE LICENSOR. Licensor shall not
have the power or the right to delegate any duty under this
Agreement, except that either party may make such an assignment to a
parent corporation, holding company, or subsidiary, or to a
corporation, partnership or other entity which succeeds to all or
substantially all of the business or assets of the party, subject to
the approval of the other party which shall not be unreasonably
withheld. However, Licensor, in its sole discretion and without the
approval of the Licensee, may assign the economic benefits of this
Agreement. In no way is this Agreement restrict the rights of the
Licensor to grant licenses or enter into agreements with others.
9.5 AUTHORIZATION. Each Party represents and warrants to the other that
it is duly authorized to execute and perform under this Agreement
and that this Agreement constitutes its valid obligation,
enforceable according to the provisions hereof.
9.6 CALENDAR DAYS. Unless otherwise stated, all periods of days referred
to in this Agreement shall be measured in calendar days.
9.7 CONFIDENTIALITY-LICENSEE. Licensee shall not divulge any information
contained in this Agreement to any third-party during the term of
this License except as required by federal, state or local
regulatory agencies or in the course of sanctioned audits or
reviews. Any other release of information will be done only with
Licensor's prior written authorization.
9.8 CONFIDENTIALITY-LICENSOR. Licensor shall not divulge, furnish, or
make accessible to anyone else any trade secrets or data of
Licensee.
9.9 EXHIBITS. The following exhibits are hereby incorporated into this
Agreement by reference:
Exhibit A entitled "Specifications of QMACS(TM) Software:"
Exhibit B entitled "Confidentiality Agreement:"
Exhibit C entitled "Fees, Rates and Payment Schedules:"
Exhibit D entitled "Hardware and Software Elements:"
Exhibit E entitled "Locations and Notices"
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Exhibit F entitled "Data Conversion Plan"
Exhibit G entitled "Programming Services"
9.10 EXPORT ACT. Licensee hereby warrants and certifies that no part of
the QMACS(TM) Software, modifications thereof, documentation
thereto, applicable manual(s) or any related item or product will be
made available or exported to any country in contravention of any
law of the United States, including the Export Administration Act of
1979 and regulations relating thereto.
9.11 FORCE MAJEURE. Either Party shall be excused for failures and delays
in performance of their respective obligations under this Agreement
caused by war, riots or insurrections, laws and regulations,
strikes, floods, fires, explosions, or other catastrophes beyond the
control and Without the fault of such Party. This provision shall
not, however release such Party from using its best efforts to avoid
or remove such cause, and such Party shall continue performance
hereunder with the utmost dispatch whenever such causes are removed.
Upon claiming any such excuse or delay for nonperformance, such
Party shall give prompt written notice thereof to the other Party.
This Section 9.11 shall not apply to any obligation to pay money.
9.12 LATE PAYMENTS. In addition to any other rights it may have, Licensor
reserves the right to assess, and Licensee agrees to pay, an
interest charge on any undisputed fee or charge not timely paid
within thirty (30) days from the invoice date or in accordance with
the provisions of this Agreement including any Exhibit thereto. The
interest shall be applied at the rate of one percent (1.0%) per
month (or the highest rate allowed by applicable law if lower) to
the unpaid balance.
In the event that Licensee determines in its reasonable judgment
that a billing error has occurred, Licensee must notify Licensor in
writing within thirty (30) days of receipt of such erroneous items.
Licensee agrees to timely pay all undisputed items on any invoice
which may have disputed items contained thereon. Licensor agrees
that no late payment fee shall be applicable for contested invoice
items until thirty (30) days following Licensors response to
Licensee's notice of billing error.
9.13 LOSS OR DAMAGES TO QMACS(TM) SOFTWARE. In the event of loss, damage,
or destruction of any of the Licensed Software, the lost, damaged,
or destroyed QMACS(TM) Software shall be replaced by Licensor upon
the written request of Licensee. Licensee shall pay Licensor's
reasonable reproduction and delivery expenses for such replacement
unless the loss, damage, or destruction is caused by Licensor.
9.14 MODIFICATION OF THE AGREEMENT. This Agreement contains the entire
understanding of the Parties. Any modification, amendment,
cancellation, or waiver of rights under this Agreement shall be
effective only if in writing signed
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by an Officer of the Party against whom enforcement of the same is
sought. No waiver of any breach of this Agreement shall be construed
as a waiver of any other rights under this Agreement. No delay in
acting with regard to any breach shall be construed as a waiver of
the breach.
9.15 NOTICES. Any notices required or permitted hereunder shall be
sufficiently given if sent by registered or certified mail, postage
prepaid, addressed or delivered as set forth in Exhibit E, attached
hereto.
A Party hereto may change its address for notice purposes by
furnishing the new address in writing to the other Party. Any such
notice shall be deemed to have been given, if mailed to the last
known address as provided herein, on the fifth (5th) day after the
date on which the notice is mailed.
9.16 RESERVATION OF RIGHTS. All rights of Licensor not expressly granted
to Licensee in writing are reserved.
9.17 SECTION HEADINGS. The headings of Articles and sections herein are
used for convenience and ease of reference and shall not limit the
scope or intent of the Articles or Sections.
9.18 SEVERABILITY. In the event that any provision of this Agreement
shall become or be unenforceable, invalid, void or voidable, the
same shall be limited, construed or, if necessary, limited to the
extent necessary to remove such defect and the remaining provisions
shall continue to bind the Parties as though the unenforceable,
invalid, void or voidable part are not a part of the Agreement.
9.19 STATE AND FEDERAL LAWS. The Parties recognize that this Agreement is
at all times are subject to applicable state, local, and federal law
including, but not limited to, the National Health Planning and
Resources Development Act of 1974, the Social Security Act, and the
rules, regulations and policies of the Department of Health and
Human Services (including the light of the Secretary of HHS or his
designee to access for a period of four years from termination of
the License, Licensor's relevant books and records evidencing
Licensor's contractual relations with Licensee), all public health
and safety provisions of state law and regulations, the rules and
regulations of the applicable Health Systems Agency and applicable
Executive Orders. For example, the Equal Employment Opportunity
clause as required by Section 202 of Executive Order 11246 (1965)
and as contained in and required by 41 C.F.R, Section 60-1.4 (1984),
"Equal Opportunity Clause," is incorporated herein by reference, if
applicable. The Parties further recognize that the Agreement shall
be subject to Amendments in such laws and regulations and to new
legislation such as a new federal or state economic stabilization or
health insurance program. Any provisions of law that invalidate, or
otherwise are inconsistent with, the terms of this Agreement or that
would cause one or both of the Parties to be in violation of law,
shall be deemed to have superseded the terms of this Agreement,
provided, however, that the
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Parties shall exercise their best efforts to accommodate the terms
and the intent of this Agreement to the greatest extent possible
consistent with the requirements of law.
9.20 SUCCESSORS IN INTEREST. Subject to the foregoing provision on
assignability, this Agreement shall inure to the benefit of and be
binding upon the parties, their successors, trustees, assigns,
receivers, and legal representatives, and shall not inure to the
benefit of any other person, firm or corporation.
9.21 SUPERSEDING EFFECT. This Agreement supersedes all oral or written
agreements, if any, between the Parties and constitutes the entire
agreement between the parties with respect to the matters contained
herein.
9.22 TAXES AND DUTIES. The License Fees, Implementation Fees, and all
other fees, charges. and payments specified herein are exclusive of
any taxes, duties, or other tariffs imposed by any governmental
agency on the QMACS(TM) Software, the Manual(s) or Licensee's use
thereof, for any goods or services provided pursuant to this
Agreement. Licensee shall be liable for any such taxes, duties, or
tariffs, including, but not limited to, state and local sales, use,
and property taxes, exclusive of taxes based upon Licensor's or a
third-party vendor's income.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement which
is effective as of the 23rd day of May, 1996.
LICENSOR: Quality Care Solutions, Inc.
By: /s/ A. Bruce Oliver
Name: A. Bruce Oliver
Title: President
LICENSEE: Molina Medical Centers Inc.
By: /s/ John C. Molina
Name: John C. Molina
Title: Vice-President
This contract is contingent upon the QMACS System successfully completing the
test phase as outlined in Exhibit H and Licensor warrants that standards
achieved during the test phase shall be maintained throughout the life of the
contract.
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EXHIBIT A
SPECIFICATIONS OF QMACS(TM) SOFTWARE
These specifications apply only to the QMACS(TM) Software as originally provided
to Licensee under this Agreement. Updates, Enhancements and new versions of the
QMACS(TM) Software delivered after the Acceptance of any Application hereunder
which increase the function thereof, unless otherwise specifically and
exclusively provided for in the Agreement or agreed upon by the Parties, and
which may be offered by Licensor to Licensee, may not conform to these
Specifications.
The Parties recognize the possibility of differences in interpretation and
meaning between the questions included in the Licensee's Request for
Information(RFI) and Licensor's responses thereto as incorporated herein and
included in this Exhibit A, if applicable. The Parties therefore agree that in
the event of a difference of opinion as to the nature or extent of any function
to be performed by any of the Licensor's Applications or Licensor's reasonable
interpretation and meaning of a question and/or response in the RFI, then the
Licensor's interpretation shall prevail.
Further, if the matter of interpretation is of a material nature, it is agreed
the matter shall be resolved in accordance with the dispute resolution and
arbitration provisions set forth in the Agreement in Article IX section 9.2.
The following are the specifications and functions of the QMACS(TM) software
system:
1. QMACS(TM) is a software solution designed for Managed Care
Organizations (MCO's) requiring the following business processes:
2. QMACS(TM) was developed in Microsoft Visual Basic Version 3.0 and
4.0 to operate with Microsoft SQL Server database. The QMACS(TM)
software system requires the use of Microsoft WindowsNT server as an
operating system on the server and WindowsNT workstation the client
processor. The Licenses for Microsoft products are not included in
this agreement.
3. The QMACS(TM) Software system will accommodate the following
business functions of a Managed Care Organization as interpreted by
the Licensor.
GENERAL
The ability to report all claims expense information by the following:
A. Rate Code.
B. Month of Service.
C. Provider number (in excess of a user input dollar amount).
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D. Member.
E. Paid date range.
F. Plan
G. Provider Classification
The ability to report all authorized services for a member which have not yet
been paid for.
The ability to report all claims with a given diagnosis.
The ability to generate a membership per month report by:
A. Line of Business
B. Plan
C. Rate Code
D. Member coverage type
E. Employer Group
F. Member Delegation
The ability to report utilization by the following selection criteria:
A. By diagnosis.
B. By provider.
C. By facility.
D. By plan.
E. By category of service.
F. By provider specialty.
G. By place of service.
H. By member demographics (age, sex...)
I. By rate code.
J. By dollar amount
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K. By member coverage type
L. By member delegation
M. By Provider Category
BENEFIT PLAN CONFIGURATION
The ability to configure benefit plan packages to pay claims based on whether
the:
A. Members PCP must render service.
B. Service requires an authorization.
C. Provider of service is a plan participating provider.
D. Service is allowed/disallowed by the benefit plan as defined by
user specified:
1. Diagnosis code (ICD-9) (Enhancement to be delivered in late
1996)
2. Procedure code (CPT-4 or HCPCS).
3. Revenue code (UB92).
4. Range of the above codes.
5. Diagnosis/procedure combinations (Enhancement to be
delivered in late 1996)
E. Visit Limits
1. Rolling Year
2. Calendar Year
3. Plan Year
4. Rolling Months
5. Rolling Days
E.(SIC) Month coverage starts
F. Lifetime Limits
G. Per visit limits
H. Bill type (UB-92)
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I. Provider specialty
The ability to specify which edits to apply, and thus which edit code
descriptions, appear on claims and EOBs/remits.
The ability to specify the following by procedure:
A. Deductible.
B. Co-pay amount.
C. Cost Share amount
D. Dollar maximums allowed.
E. Unit maximum allowed.
F. Coinsurance
G. Benefit period (i.e. days, weeks, months, years).
The ability to adjudicate claims according to the following benefit plan and
member information:
A. The benefit plan rules for the date of service.
B. The member's eligibility for the date of service.
C. The member's benefit plan package for the date of service.
D. The eligibility of the member's contract group for the date of
service.
The ability to establish rates and bill benefit plan riders in the following
ways:
A. Bill riders separately from the member's benefit plan rate.
(Enhancement to be delivered in late 1996)
B. Include the price of the rider with the member's benefit plan
rate (Enhancement to be delivered in late 1996)
The ability to vary plan rates by the following:
A. Policy group.
B. Member age (provisions for unlimited age groups).
C. Member sex.
D. Medicare vs. Non-Medicare members (Secondary coverage)
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E. Medicare Part A vs. Part B (Secondary Coverage)
F. Member coverage dates,
The ability to maintain date of effective benefit plan rates.
The ability to identify different categories of benefit plan types (e.g.
medical, dental, vision, etc.)
BENEFIT PLAN ACCUMULATION
The ability to offer multiple benefit plans per contract group.
The ability to assign multiple benefit plans per member.
The ability to enroll all members in a specified benefit plan to another
specified benefit plan via batch process (i.e., Without having to enroll each
member individually).
THIRD PARTY ADMINISTRATION
The ability to administer claims adjudication and payment, authorizations,
utilization review, and financial reporting in a third party administration role
(TPA) for an entity with:
A. The same provider network as the HMO.
B. A different provider network from the HMO.
CAPITATION
The ability to assign capitation rates structures to specific providers.
The ability to process manual adjustments made to capitation pools.
The ability to have capitation rates vary by:
A. Group
B. Plan
C. Rate Code
D. Age/Sex
E. Provider
F. Service Zip Code
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G. Enrollment totals (Enhancement-No Charge)
The ability to process prorated capitations.
The ability to recon previous capitations
CLAIMS ENTRY/MAINTENANCE
The ability to adjudicate claims during on-line entry.
The ability to enter and adjudicate claims through a batch interface via tape
from an outside provider.
The ability for providers entering claims via modem to add, change, view and
delete only:
A. Their own provider information. (Enhancement to be delivered in
late 1996)
B. Members serviced by that provider. (Enhancement to be delivered
in late 1996)
C. Service plans for that member. (Enhancement to be delivered in
late 1996)
D. Referrals generated by that provider. (Enhancement to be
delivered in late 1996)
E. Their own claims information. (Enhancement to be delivered in
late 1996)
The ability to capture all HCFA 1500 information.
The ability to capture all UB 92 information
The ability to capture all Universal (Pharmacy) information (Enhancement to
be delivered in late 1996)
The ability to capture all information required by state Medicaid agencies.
CLAIMS ADJUDICATION/PRICING
The ability to adjudicate a claim based on the benefit plan of the member and
contract of the Provider.
The ability to pend a claim at the line item level.
The ability to pay, pend, or deny a claim based on the existence of a valid
authorization.
The ability to pend or deny a claim based on the provider number and a user
defined set of either valid or invalid values for that provider using the
following codes:
A. Procedure codes
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B. Service Location
C. Modifier Code
D. Age (Enhancement-No Charge)
E. Diagnosis (Enhancement-No Charge)
The ability to price claims based on the following payment mechanisms:
A. Provider Fee Schedule.
B. Percent of billed.
C. Per Diem.
D. Lesser of billed or covered.
E. Capitated
F. Pay claims up to a funded amount (a maximum dollar amount to be
spent) Enhancement
G. Per diem based on tiers
COORDINATION OF BENEFITS (Third Party Liability)
The ability to enter other insurance carrier information for members into the
system.
The ability to enter the amount of COB for a claim which has already been paid
by another insurance carrier.
The ability to calculate the paid amount by deducting the COB amount from
allowed amount.
CLAIMS INQUIRY
The ability to access the following information On line (windows) from the
claims window:
A. Referrals.
B. Service Plan (Enhancement to be delivered in late 1996).
C. Member Information.
D. Provider Information.
E. Code values (CPT, ICD, revenue codes).
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F. Historical claims
G. Member and Provider Memos and Alerts
H. Limit and deductible accruals
The ability to access claims by:
A. Claim number.
B. Member number
C. Member name.
D. Provider number
E. Provider name
F. Referral number
CLAIM PAYMENTS
The ability generate checks for claims.
The ability to generate remittances for both claims and encounters.
MEMBERSHIP INFORMATION INQUIRY/LISTING - On-line or Reports
The ability to view membership information and accumulate totals using the
following selection criteria:
A. Primary Care Physician
B. Zip Code
C. Age/User specified Age Range.
D. Rate Code
E. By benefit plan within all above mentioned criteria.
F. To obtain above statistics by Group Id calculating percentage of
totals.
G. Language spoken (Enhancement-No Charge)
The ability to produce a member enrollment analysis by Plan that lists the total
members enrolled by age group and sex within rate code.
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The ability to record, track and resolve member grievances. (Specified
Enhancement-No Charge)
GROUP POLICY MAINTENANCE
The ability to establish effective dated policy group (i.e., employer group)
policies to which members and benefit plan products can be assigned.
The ability to add/change/review/ the following policy group information
on-line:
A. Group demographics (name, address, contacts, etc.)
B. Plans/Riders offered by the group.
C. Billing information (billing cycle, etc.)
D. Rate Codes and corresponding premiums/member Capitation dollar
amounts for each plan assigned to the group.
The ability to assign multiple rate codes (codes that can be tied to a dollar
premium/capitation amount) to a benefit plan.
The ability to administer the following types of policies:
A. Per diems
B. Discounts off a set fee schedule.
C. Discounts off the provider's billed charges.
D. RBRVS, RVS, Set pricing.
E. DRG's
F. Per Unit
MEMBER MAINTENANCE
The ability to enroll, modify, and disenroll the following member information
on-line:
A. Demographic information (name, address, sex birthdate, etc.)
B. Plan/coverage information.
C. PCP.
D. Coordination of benefit (COB) information.
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E. Medicare coverage information.
F. Enrollment dates (enrollment and disenrollment dates.)
G. User definable alert flags.
PRIMARY CARE PHYSICIAN ASSIGNMENT
The ability to assign a Primary Care Physician(PCP) to each member.
The ability to indicate when a provider is not accepting new patients on the
provider's on-line a group by group basis on the provider's on-line profile.
The ability to automatically assign PCP's to a member, during enrollment,
based on the member's zip code. (age, sex, and language -(Enhancement- No
Charge)
The ability to assign a non-PCP provider to each member.
AUTHORIZATION MANAGEMENT
The ability to add/read/modify/delete the following authorization (referral)
information on-line:
A. Authorization control number.
B. Member ID number.
C. Carrier ID number other than member ID.
D. Referral service code (user maintainable).
E. Diagnosis (presenting signs and symptoms).
F. Accrued benefits relating to authorization in units
G. Provider of service (Referred to provider).
H. Referring provider.
I. Authorized service date range.
J. Authorized referral days/number of visits (units).
K. Option of indicating estimate cost of service.
L. Authorized cost of service.
M. Operator ID number to enter the authorization.
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N. Operator ID number to last change authorization.
O. Date of last change.
P. Deny days and reason for in patient authorizations.
Q. Deny request for services by referral service code (w/reason).
R. Emergency, non emergency, urgent care code indicator.
S. Screen alert for member special requirements.
T. Memo/comment area capabilities.
The ability to create temporary providers who are not on the system.
The ability to automatically generate a control number to uniquely identify an
authorization abstract.
The ability to access and display an authorization number on-line.
The ability to record, track and resolve appeals of denied services
(Enhancement-No Charge)
BILL PROCESSING
The ability to accommodate multiple tier premium structures (i.e., single,
family, etc.)
The ability to adjust the premium by:
A. Age.
B. Sex.
C. Medicare Vs non Medicare.
D. Contract Group.
E. Benefit Plan (rate code).
The ability to track current, historical, and future rate history and billing
provision.
The ability to process retroactive premium billing and credits for enrolls,
disenrolls, and changes.
The ability to accommodate COBRA billing.
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BILL PRINTING
The ability to process the following billing cycles:
A. Monthly.
B. Bimonthly
C. Quarterly.
D. Semi-Annually.
PROVIDER MAINTENANCE
The ability to add, change, review and delete provider demographic and contract
information online.
The ability to restrict deletion of any physician with claims, encounters, or
referrals for that physician.
The ability to delete terminated providers from the data file after a user
specified period of time.
The ability to maintain two separate addresses for each provider (i.e.,
service address vs billing address.)
The ability to maintain at least one provider specialty for which the provider
is authorized.
The ability to maintain at least two separate addresses for each provider (i.e.
service address & billing address). Can be expanded to as many as ten separate
addresses for each provider.
Ability to allow more than one provider specialty in the provider maintenance
file.
The ability to track facility inspections and approvals for each provider.
(Enhancement-No Charge)
The ability to classify providers as both PCP and Specialists.
The ability to generate Providers Directories based on:
A. Group Affiliation
B. Zip Code
C. Specialty
D. Other user defined categories
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EXHIBIT B
CONFIDENTIALITY AGREEMENT
B 1. AGREEMENT
The undersigned has received and will receive access to Licensor's
Software and Information subject to the terms and conditions set forth
below.
B 2. DEFINITIONS
Licensor refers to Quality Care Solutions, Inc. Licensee refers to Molina
Medical Centers Inc. and its affiliates, the other party signing this
Confidentiality Agreement. Licensor Product refers to a software product
and all documentation related thereto created and produced by Licensor and
its subsidies. Licensor Information refers to all information, whether
oral or written, manuals or on-line documentation, relating to Licensor
products and the business operations (e.g. management, methods, finances,
customers and business plans and strategies) of Licensor and its
subsidiaries, except such information which Licensee documents (A) is or
becomes generally known to Licensor's industry through no fault of
Licensee, (B) is already rightfully known by Licensee through means other
than disclosure by Licensor, (C)is rightfully received by Licensee from a
third party having no obligation of confidence regarding such information,
or (D) is independently developed by Licensee without breach of this
Confidentiality Agreement.
Licensor's use of particular information in its products and its business
operations is confidential, whether or not the particular information is
generally known, unless one of the exceptions applies to the fact of
Licensors use of that particular information. A combination of information
is confidential, even if exceptions apply to parts of the combination,
unless one of the exceptions applies to the combination and its principles
of operation and its economic value.
B 3. ACKNOWLEDGMENTS
B 3.1 Licensor Products and all techniques, algorithms, data models,
stored procedures, schema's, and processes contained therein or any
modification, extraction, or extrapolation thereof are the property and
trade secrets of Licensor. The expression thereof is also protected under
the copyright laws. The copyright notice on Licensor products does not
imply unrestricted or public access to these materials. No duplication,
usage, disclosure, or publication thereof, in whole or in part, for any
purpose is permitted, except that which is expressly permitted by this
Confidentiality Agreement or other written agreement with Licensor. All
rights are reserved.
B 3.2 Licensor information is the property and trade secret of Quality
Care Solutions, Inc.
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36
B 3.3 Licensee acknowledges that any Licensor Products or Information
which may have been disclosed to Licensee prior to the Confidentiality
Agreement is subject to the terms and conditions herein.
B 3.4 This Confidentiality Agreement does not grant a license or any other
right to Licensor Products or Information, except the disclosure rights
expressly set forth herein.
B 3.5 The provisions of this Confidentiality Agreement are in addition to
and not exclusive of any and all other obligations and duties of the
Licensee with respect to Licensor Products and Information, whether
express or implied, oral or written, in fact or in law.
B 3.6 For the sole purpose of Licensor enforcing this Confidentiality
Agreement through injunctive relief, Licensee acknowledges that the
unauthorized use or disclosure of Licensor Products or Information would
cause irreparable harm to Licensor. Such remedy shall not limit Licensor
from pursuing any other remedy, in law or in equity, available to Licensor
for a breach or anticipatory breach of this Confidentiality Agreement.
B 4. DISCLOSURE TERMS
B 4.1 Licensee shall hold in confidence all Licensor Products and
Information which Licensee has received or will receive, using at least
the same degree of care as Licensee exercises for its own trade secrets.
B 4.2 Licensee shall not use or disclose Licensor Products or Information
which Licensee has received or will receive, without Licensor's prior
written approval, except as set forth in Sections B 4.3 and 5.
B 4.3 Licensee may disclose appropriate portions of Licensor Products and
Information to such of Licensee's employees who have been informed of
Licensee's obligation to protect the intellectual property rights of
Licensor and who have a specific, legitimate need to access such portions
of Licensor's Product and Information for the purpose of evaluating
Licensor and Licensor Products. Licensee may copy the Licensor Product and
Information as reasonably necessary to accomplish such purpose with due
regard for Licensee's obligations herein (e.g. to limit use and disclosure
and to return all copies).
B 4.4 Licensee shall notify Licensor of any potential breaches of
security. Licensee agrees to reproduce Licensor's copyright and
proprietary notices on all copies or transmissions of Licensor Products
and information. Licensee shall not remove or obscure any copyright or
other proprietary notices from Licensor Products or Information. Licensee
shall not take any action inconsistent with Licensor's intellectual
property rights in the Licensor Products. Licensee shall not take any
action to reverse engineer any Licensor product or any part thereof.
Licensee and standard reports generated from QMACS(TM) software are
specifically excluded from requirements of displaying Copyright notices of
Licensor.
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B 5. DISCLOSURE REQUIRED BY LAW
B 5.1 If Licensee is ordered by a court or other governmental body of
competent jurisdiction to disclose Licensor Product information, Licensee
shall not be liable for disclosures required by such order if the Licensee
reasonably complies with the following requirements: (a) when Licensee
becomes aware of such an order or the possibility of such an order.
Licensee shall immediately notify Licensor by the most expedient means,
(b) Licensee shall join a motion by Licensor for an order protecting the
confidentiality of Licensor Products or Information, including a motion
for leave to intervene by Licensor, and if an issued order calls for
immediate disclosure, Licensee shall immediately request a stay of such
order to permit Licensor to respond as set forth in subparagraph(b).
B 6. TERMINATION
B 6.1 Within fifteen(15) days of notice or termination, Licensee agrees
to immediately return or destroy all copies of all Licensor Products and
Information as directed by Licensor and to provide written certification
to Licensor of having complied with Licensors direction.
B 6.2 Licensee's obligations under this Confidentiality Agreement shall
continue for a period of five (5) years after termination of License
Agreement.
B 7. GENERAL PROVISIONS
B 7.1 Governing Law. This Confidentiality Agreement shall be governed by
the laws of the State of Arizona, without regard to its choice of law
principles. Licensor and Licensee consent to the personal jurisdiction of
the federal courts located in the State of Arizona.
B 7.2 Modifications to Agreement. Licensor and Licensee acknowledge that
neither has been induced into this Confidentiality Agreement by any
condition, representation, or warranty not set forth in this
Confidentiality Agreement. Any modifications to this Agreement are invalid
unless confirmed in a writing which states that it amends this Agreement
and which is signed by an authorized officer of Licensee and Licensor's
President. Any subsequent agreements are invalid unless confirmed in a
writing which is signed by an authorized officer of the Licensee and
Licensor's President.
B 7.3 No Waiver. The failure of either party at any time to require
performance by the other party of any provision of the Confidentiality
Agreement shall in no way affect the right of such party to require
performance of that provision. Nor shall such failure be constructed as a
waiver of any continuing or succeeding breach of such provision, a wavier
of the provision itself, or a wavier of any right under this
Confidentiality Agreement.
B 7.4 Partial Invalidity. If any provision of this Agreement is held
invalid, such invalidity shall not affect other provisions of this
Agreement which can be given effect
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without the invalid provisions. Provisions deemed to be invalid shall be
reformed to the minimum extent necessary to render them valid at such time
and, to the extent possible, in accordance with the original intent of the
parties. For example, it is the intention of the parties that, if a court
deems any provision of this contract to be invalid because of the duration
of such provision or the area or matter covered thereby, such court shall
reduce the duration, area, or matter of such provision and, in its reduced
form, such provision shall be enforced.
B 7.5 Interpretation. "Include", "includes", and "including" shall be
interpreted as introducing a list of examples which do not limit the
generality of the concept they illustrate. "Modification" to the product
includes corrections to the product, additions to the product, and
translations of the product. "Intellectual property rights" refers to
patent right, copyright, or trade secret right.
B 7.6 Notice. Any notice given pursuant to this Confidentiality Agreement
shall be in writing, shall state that it is a notice given pursuant to
this Confidentiality Agreement, and shall be sent by certified mail to the
address indicated below
IN WITNESS WHEREOF, the parties hereto have caused this Confidentiality
Agreement to be written, and the persons signing warrant they are duly
authorized to sign on behalf of their respective parties.
For Licensee: Molina Medical Centers Inc.
By: /s/ John C. Molina
Name: John C. Molina
Title: Vice President
Address: One Golden Shore Drive, Long Beach, CA 90802
Date: May 24, 1996
For Licensor: Quality Care Solutions, Inc.
By: /s/ A. Bruce Oliver
Name: A. Bruce Oliver
Title: President
Address: 14440 W. 13th Place, Phoenix AZ 85048
Date: May 28, 1996
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EXHIBIT C
FEES, RATES AND PAYMENT SCHEDULES
C 1. SOFTWARE LICENSE AND SUPPORT FEE:
In consideration of the licenses granted hereunder, Licensee hereby agrees
to pay Licensor at the first of each month according to the following
Software License Fee schedule as defined in this Section 1 of Exhibit C.
Licensee hereby agrees to permit Licensor electronic access to Licensee's
enrollment database monthly for the purpose of determining the count of
members enrolled on the first day of the respective month for License Fee
billing purposes. In the event Licensor is unable to determine the proper
enrollment on the first of each month, Licensee agrees to accept and pay
an estimation of Licensee Fee provided by Licensor. All estimations of
monthly License Fees will be reconciled within ninety (90) days to a
corrected amount.
C 1.1 SOFTWARE LICENSE AND SUPPORT FEE SCHEDULE. [Confidential treatment
has been requested]
Licensee agrees to pay Licensor a Software and Support Fee for using the
QMACS(TM) Software in managing and administering its Benefit Plans.
Licensee agrees to pay the Software License and Support Fee schedule as
follows:
$ [****] Per Member Per Month ("PMPM") up to [****] members plus
$ [****] Per Member Per Month ("PMPM") from [****] to [****]
members plus
$ [****] PMPM from [****] members up to [****] members plus
$ [****] PMPM over [****] members.
The above rates are cumulative up to the respective total number of
Licensee's Members.
C 1.2 CLAIMS PROCESSING PRODUCTIVITY INCENTIVE (CPPI) [Confidential
treatment has been requested] - Licensee agrees to increase the payment of
the Software License and Support Fee by [****] (ten cents per member per
month) across each member category as defined in Section C1.1 if the
Software is capable of processing and adjudicating [****] claims per
claims examiner per month or [****] (*****************) adjudicated claims
per examiner per 8(eight) hour day.
The measurement for the CPPI is based on the following non-software
criteria:
a) A QMACS(TM) experienced claims examiner entering and
adjudicating claims from a mix of standard HCFA 1500 or UB-92
claim forms. The Licensor will be allowed to demonstrate to
Licensee the ability to reach the goal of [****] claims per 8
(eight) hour day using experienced Licensor personnel.
b) A Claims Data Server and Network configured according to
Licensor specifications.
39
**** - Confidential Treatment Requested
40
c) A Client Workstation configured according to Licensor
specifications.
d) A properly configured QMACS(TM) Software system.
The CPPI is payable when Licensor demonstrates the ability to process and
adjudicate [****] claims per 8 (eight) hour day. The CPPI can be reviewed
on a quarterly basis if deemed necessary.
C 1.3 LATE PAYMENT AND INTEREST - Licensee agrees any payment under this
Exhibit C which is more that thirty (30) days late will accrue interest at
the rate of Twelve (12%) percent per annum (or the highest rate of
interest allowed by applicable law if lower) until paid in full. Licensor
shall have the right to suspend all its obligations under this Contract in
the event that payment is more than thirty (30) days late. Licensor agrees
to notify Licensee in writing at least 15 days prior to suspending its
obligations for late or non payment. Notices of intent to suspend
obligations will be delivered in accordance with Exhibit E.
In the event that Licensee determines in its reasonable judgment that a
billing error has occurred. Licensee must notify Licensor in writing
within thirty (30) days of receipt of such erroneous items. Licensee
agrees to pay all undisputed items on an invoice which may have disputed
items contained thereon. Licensor agrees that no late payment fee shall be
applicable for contested invoice items until thirty (30) days following
Licensor's response to Licensee's notice of billing error.
C 2. DATA CONVERSION FEES: [Confidential treatment has been requested]
C 2.1 Licensee agrees to pay Licensor for Data Conversion work as
outlined in Exhibit F at the rate of [****] for the Test Phase and
[****] for subsequent data conversion plus reasonable and customary
travel, lodging and per diem expenses for Licensor's project
personnel not stationed within 75 miles of Licensor's work site.
Licensee hereby agrees to accept and abide by the Licensor's Travel
and Expense guidelines in Section 8 of Exhibit C for on site data
conversion work requested or authorized by Licensee.
C 3. IMPLEMENTATION SERVICE FEES:[Confidential treatment has been
requested]
C 3.1 Licensee agrees to pay Licensor for additional or optional
Implementation service fees at the following rate schedule:
Manual data entry for software set-up.............$ [****] per Hour
Report Design, Implementation and Production......$ [****] per Hour
Project Management Services.......................$ [****] per Hour
40
**** - Confidential Treatment Requested
41
Specific or Proprietary modification of basic
software...........................................$ Per Quotation
Construction of Interfaces to other software
applications......................................[****] per Hour
Exclusive development of new modules,
sub-systems.......................................[****] per Hour
Licensor and Licensee agree that additional and optional services
may be requested. Such requests will be in the form of written work
order requests, written quotations and signed authorizations before
any work will commence for the Licensee.
C 4. TRAINING FEES: [Confidential treatment has been requested]
Licensor agrees to provide Licensee start-up training of not more
than one hundred twenty (120) hours without training cost. Travel
and lodging costs for all training will be the responsibility of
Licensee as outlined in Section C8. Continuing education will be
charged according to the following fee schedule:
Additional Training Fees:
Licensor Application Training Fees.........................[****]
Third Party Application Training Fees......................[****]
Operating System, Language, Network Management, Database
Training, System Management, Systems Integration...........[****]
C 5. CONSULTING FEES:
Licensor agrees to provide technical consulting to Licensee upon
request of an authorized executive of the Licensee's organization on
a quoted time and material basis.
C 6. HARDWARE CONFIGURATION:
Licensor agrees to provide Licensee reasonable hardware
configuration consulting necessary to operate Licensor's software
products on Licensee's computer equipment without additional charge.
Licensor reserves the right to charge Licensee for hardware
consulting and servicing Licensor deems outside the scope and intent
of Licensor's service.
C 7. DELIVERY AND INSTALLATION:
Licensee agrees to the following terms and condition of the Licensor
if the Licensee requests or hires the Licensor to act as an agent to
procure, set-up and install computer hardware and equipment on
behalf of the Licensee.
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**** - Confidential Treatment Requested
42
C 7.1 The "delivery date" for each item of Vendor's Hardware and
Operating system software shall be the date on which Licensor
delivers and fully installs the specific item of hardware at
location specified in Exhibit E.
C 7.2 Shipment of the Vendor's hardware and software shall be F.O.B.
the location specified in Exhibit E. All freight charges on the
hardware and operating system software shall be the responsibility
of the Licensee.
C 7.3 The Licensee is responsible to ensure all wiring,
environmental, safety codes and equipment manufacturer's
installation specifications are met prior to installation. The
Licensee agrees to pay or reimburse Licensor for additional costs
incurred as a result of unsatisfactory installation preparation,
practices, procedures or site conditions corrected by Licensor.
C 7.4 Title to Vendor's Hardware and operating system software shall
pass to Licensee at the F.O.B. Point, but subject to a security
interest until the date the Licensee has fully paid for the Hardware
and operating system software.
C 8. TRAVEL AND EXPENSE GUIDELINES.
C 8.1 Travel and Lodging guidelines. Licensee agrees to reimburse or
pay Licensor for reasonable travel, meals, lodging, per diem
expenses which are incurred by Licensor on installation,
implementation, training, maintenance, support, consulting at the
Licensee's office or location defined in Exhibit E or if Licensee's
work location is in excess of seventy-five (75) miles of Licensor's
main office.
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EXHIBIT D
HARDWARE/SOFTWARE ELEMENTS
The following is the standard computer specification necessary to operate
the Licensor's QMACS(TM) software system:
DATA SERVER SPECIFICATIONS:
CLIENT SPECIFICATIONS:
TO BE DETERMINED AFTER THE TEST PHASE
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EXHIBIT E
LOCATION AND NOTICES:
Locations for Installation of QMACS(TM) software and Approved Computer(s)
will be listed below.
Any notices required or permitted hereunder shall be sufficiently given if
sent by registered or certified mail, postage prepaid, addressed or
delivered as follows:
NOTICES:
A. To Licensor: Quality Care Solutions, Inc.
14440 S. 13th Place
Phoenix, AZ 85048
Attention: Mr. J. Mikel Echeverria
B. To Licensee: Molina Medical Centers Inc.
One Golden Shore Drive
Long Beach, CA 90802
INSTALLATION LOCATIONS:
Molina Medical Centers Inc.
One Golden Shore Drive
Long Beach, CA 90802
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Licensor shall not bill for any time spent in the development or
preparation of written work orders, quotations for work or detail
specifications of program design.
C 3. TRAINING FEES: [Confidential treatment has been requested]
Licensor agrees to provide Licensee start-up training of [****] hours
without additional training cost. Travel and lodging costs for all
training will be the responsibility of Licensee as outlined in Section C7.
Continuing education will be charged according to the following fee
schedule:
Additional Training Fees:
Licensor Application Training Fees [****] Third Party
Application Training Fees [****]
Operating System, Language, Network Management, Database
Training, System Management, Systems Integration [****]
Additional Training required for implementation of Licensee
affiliated Health Plans beyond the establishment of Maryland Care,
Inc. shall be provided at rates [****] below each above identified
hourly rate.
C 4. CONSULTING FEES:
Licensor agrees to provide technical consulting to Licensee upon request
of an authorized executive of Licensee on a quoted time and material
basis.
C 5. HARDWARE CONFIGURATION:
Licensor agrees to provide Licensee reasonable hardware configuration
consulting necessary to operate Licensor's software products on Licensee's
computer equipment without additional charge.
Licensor reserves the right to charge Licensee for hardware consulting and
servicing Licensor deems outside the scope and intent of Licensor's
service.
C 6. DELIVERY AND INSTALLATION:
Licensee agrees to the following terms and conditions of the Licensor if
the Licensee requests or hires the Licensor to act as an agent to procure,
set-up or install computer hardware and equipment on behalf of the
Licensee. Vendors Hardware and Operating system refers to computers,
operating system software and database software listed in Exhibit D to be
procured from a third party supplier on behalf of the Licensee.
C 6.1 The "delivery date" for each item of Vendors Hardware and
Operating system software listed in Exhibit D shall be the date on
which Licensor delivers and fully installs the specific item of
hardware at locations specified in Exhibit E.
45
**** - Confidential Treatment Requested
46
C 6.2 Shipment of the Vendor's hardware and software shall be F.O.B.
the location specified in Exhibit E. All freight and handling
charges on the hardware and operating system software shall be the
responsibility of the Licensee.
C 6.3 The Licensee is responsible to ensure all wiring,
environmental, safety codes and equipment manufacturers'
installation specifications are met prior to installation. The
Licensee agrees to pay or reimburse Licensor for additional costs
incurred as a result of unsatisfactory installation preparation,
practices, procedures or site conditions corrected by Licensor.
C 6.4 Title to Vendor's Hardware and Operating system software shall
pass to Licensee at the F.O.B. Point, but subject to a security
interest until the date the Licensee has fully paid for the Hardware
and Operating system software.
C 7. TRAVEL AND EXPENSE GUIDELINES.
C 7.1 Travel and Lodging guidelines. Licensee agrees to reimburse or
pay Licensor for reasonable travel, meals, lodging, per diem
expenses which are incurred by Licensor on installation,
implementation, training, maintenance, support, consulting at the
Licensee's office or location defined in Exhibit E or if Licensee's
work location is in excess of seventy-five (75) miles of Licensor's
main office.
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EXHIBIT D
HARDWARE/SOFTWARE ELEMENTS
Attached to this Agreement is a mutually agreed upon computer
specification necessary to operate Licensor's QMACS(TM) Software system.
Utility Software, Operating System Software and Hardware Equipment
procurement are Licensee's responsibility.
Recognizing the fluid technological environment in existence relative to
available hardware and software, Licensor and Licensee mutually agree that
the listed hardware and operating/network software constitute an approved
operating platform and network topology to assure an acceptable level of
operating performance of the QMACS(TM) Software based on membership
projections and user topology provided by Licensee.
Licensor and Licensee mutually agree that this environment may, from time
to time, need to be updated to accommodate the then current industry
acceptable standards. Licensor warrants, however, that substantive changes
in the QMACS(TM) product which mandate upgrades of hardware and/or
operating or network software will not be implemented without concurrence
by Licensee in or on any Managed Health Plan and, further, that Licensor
will make every effort to allow at least a one hundred eighty (180) day
advance notice of such change requirements. Changes as described do not,
in any way, make null or void any obligation of Licensor as described in
this Agreement.
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EXHIBIT E
LOCATION AND NOTICES:
Locations for Installation of QMACS(TM) Software and Approved Computer(s)
will be listed below.
Any notices required or permitted hereunder shall be sufficiently given if
sent by registered or certified mail, postage prepaid, addressed or
delivered as follows:
NOTICES:
A. TO LICENSOR: Quality Care Solutions, Inc.
5030 E. Sunrise Drive
Phoenix, AZ 85044
Attention: Mr. A. Bruce Oliver
B. TO LICENSEE:
INSTALLATION LOCATIONS:
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EXHIBIT F
PROPOSED DATA CONVERSION PLAN: [Confidential treatment has been requested]
It is agreed that no data will be converted for the implementation of
[****]
Subsequent implementations of other Licensee affiliated Health Plans may
involve the conversion of data from other systems. Each such
implementation shall have a unique data conversion plan, the content of
which shall be mutually agreed upon by Licensor and Licensee and the cost
of which shall be defined and agreed upon prior to the initiation of the
implementation project.
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**** - Confidential Treatment Requested
50
EXHIBIT G
PROGRAMMING SERVICES
G 1. CUSTOM QMACS(TM) SOFTWARE. If Licensor shall agree in writing to
develop any customized software or modification of the QMACS(TM) Software
(the "Customized Software") for Licensee, such Customized Software or
modifications shall be deemed to be jointly owned by Licensor and Licensee
for purposes of this Agreement and shall not be made available to the
Licensor customer base, or licensed by Licensor without the express
written permission of Licensee. Licensor warrants that the Customized
Software will meet the specifications for Customized Software and be
covered by the warranty provisions of Article VII of the Software License
and Support Agreement. If Licensee shall cancel any Customized Software
request, Licensee shall be obligated to pay to Licensor an amount equal to
Licensors then current hourly fees multiplied by the number of hours
Licensor has expended on the Customized Software project up to the date of
receipt of Licensee's notice to terminate the project. In addition,
Licensee shall pay to Licensor all expenses (except for programming
expenses which shall be calculated as set forth in the preceding sentence)
incurred by Licensor to develop the Customized Software up to the time of
termination of the project. Such amounts shall be paid by Licensee to
Licensor within thirty (30) days of receipt by Licensee of Licensor's
invoice.
G 2. PROGRAMMING SERVICES. Upon Licensee's request, Licensor may provide
custom programming services for Licensee at Licensor's then current hourly
rates. The Support Services provided under the Monthly Fees do not cover
Support Services for programs and applications developed pursuant to this
Programming Services Section. Upon Licensee's request, Support Services
for such customized programs and applications may be provided to Licensee
at either Licensee's hourly rates as defined in the Software License and
Support Agreement or at a fixed cost to be determined and mutually agreed
upon on a per project basis. Unless the Parties agree otherwise in
writing, the programs and applications developed pursuant to this Section
in collaboration with each other and all corresponding copyrights and
intellectual property shall be owned and held by Licensor with Licensee
holding a paid up exclusive license to use and copy said programs and
applications as permitted in this Agreement but Licensee may not transfer
or disclose them to any third party.
G 3. INSTRUCTIONS FOR CUSTOM PROGRAMMING. In the event that Licensor
provides to Licensee Custom Programming by the mutual written agreement of
the Parties. Licensor shall provide brief written instructions on the
operation of the Customized Software requested by Licensee. Such
instructions may not be as detailed as those provided in Licensors
Documentation. Inasmuch as the mutually agreed upon specifications shall
serve as the basis for Custom Program development, Licensor shall still be
obligated to incorporate and provide standard documentation for any
customized program to a level and degree as provided with the base
QMACS(TM) Software. This documentation is to be made available to Licensee
upon acceptance, approval and implementation of such customized
programming into production for at least one Managed Health Plan.
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EXHIBIT H
STANDARD SUPPORT AND RELEASE POLICY
1. Released software will only be modified to handle problem fixes,
not enhancements.
2. Problems will be classified as urgency 1, 2, or 3 (L11, L12, L13)
A U1 problem is a problem (Material Non-Conformity) that prevents a
major function from working or causes data integrity issues, and for
which there are no workarounds. Any operation of the Software which
causes material erroneous data or unrecoverable data loss due to the
execution of the Software's Applications.
A U2 problem is a problem that prevents a non-major function from
working and for which there is no workaround.
A U3 problem is a problem that is an annoyance but does not prevent
a non-major function from working or there is a workaround.
a) Example of a U1 problem. Can't adjudicate a claim, can't
add or modify a provider, can't add or modify an
enrollment, etc.
b) Example of a U2 problem. Can't add a new licensing board
to the credentialing module.
c) Example of a U3 problem. Authorization history doesn't
refresh when a new authorization is issued.
3. Every attempt will be made to turn around U1 problem fixes within
eight (8) working days of duplication.
4. U2 problem fixes will be supplied within [****] working days.
5. U3 problem fixes will be released at the next major release, or, no
later than [****] days from the notification of such problem by
Licensee or Affiliates. [Confidential treatment has been requested]
6. Licensor's Customer service representative will be responsible
for clearly distinguishing between a problem fix and an enhancement
to the Licensee.
7. Enhancements require scheduling for design, development, testing,
documentation, release notes and training before they can be
released into a production environment for Licensee use.
8. Software released before testing, documentation, release notes and
training phases are complete is classified as 'beta test' software.
Beta test software will require beta test
51
**** - Confidential Treatment Requested
52
agreements to be signed and approved by Licensee before the beta test
software will be released for use by the Licensee.
9. All Software released for use or testing by Licensee shall be placed in
an agreed upon location on the Licensee's Approved Application Server for
appropriate disposition by Licensee.
10. The use and maintenance of an application test environment shall
be the sole responsibility of the Licensee.
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53
EXHIBIT I
CLAIMS, PROCEEDINGS, ACTIONS
Redpath Computer Services, Inc. v. Regional AHCCCS Health Providers,
Inc., Digital Sciences, Inc., Ventana Health Systems and Intergroup
Healthcare Com., Case No. CIV 96-1732-PHX-ROS.
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