================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
April 4, 2001
(Date of Report)
March 31, 2001
(Date of earliest event reported)
-------------------------
Commission File Number 0-26816
IDX SYSTEMS CORPORATION
(Exact name of registrant as specified in its charter)
Vermont 03-0222230
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1400 Shelburne Road
South Burlington, VT 05403
(Address of principal executive offices)
Registrant's telephone number, including area code: (802-862-1022)
================================================================================
Exhibit Index on Page 2
ITEM 5. OTHER EVENTS
On March 31, 2001, the Company and WebMD Corporation entered into
Addendum I to their Agreement dated as of June 6, 2000.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits.
EXHIBIT NO. DESCRIPTION PAGE
----------- ----------- ----
99.1 Addendum I to Agreement by and 4
between IDX Systems Corporation and
WebMD Corporation as of
March 31, 2001
Page 2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
IDX SYSTEMS CORPORATION
(Registrant)
Date: April 4, 2001 By: /S/ JOHN A. KANE
___________________________________________
John A. Kane
Vice President, Finance and Administration
Chief Financial Officer, and Treasurer
Page 3
Exhibit 99.1
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
ADDENDUM I TO AGREEMENT
================================================================================
This Addendum I ("Addendum I") to the Agreement by and between WebMD and IDX,
effective as of June 6, 2000 (the "Agreement") is entered into by IDX and WebMD
as of March 31, 2001. The Agreement shall continue in full force and effect as
modified by this Addendum I, and in the event of any inconsistency or conflict
between the terms of the Agreement and this Addendum I, this Addendum I shall
control and govern. The identities of the parties named above and other
capitalized terms used herein are defined in the glossary found in the Glossary
section of this Addendum I.
1. SERVICES
- --------------------------------------------------------------------------------
1.1. ELECTRONIC TRANSACTIONS.
Delete Section 1.1 of the Agreement in its entirety and insert the following in
lieu thereof:
Through its Transaction Services Division known as "TSD," WebMD or a
WebMD Affiliate shall be a non-exclusive source of, and shall provide,
Financial EDI Transactions for IDX's Practice Management Systems as
set forth in the Agreement as modified by Addendum I. IDX shall be
entitled to promote and market WebMD as a source of Financial EDI
Transactions for IDX Practice Management Systems, and WebMD shall be
entitled to promote and market the fact that IDX makes WebMD's gateway
available as a source of Financial EDI Transactions, in accordance
with this Agreement. IDX has no obligation to require any customer to
submit any Financial EDI Transaction to WebMD or to the IDX Gateway.
So long as WebMD meets the Featuring Conditions:
(a) During the Exclusive Period, IDX (i) shall direct Participating
Payer Batch Claim Transactions to WebMD for transmission to such
payers, but only if and to the extent that IDX or any of its
Affiliates is entitled to aggregate and direct such transactions
through the IDX Gateway or such transactions are subject to being so
aggregated and directed by IDX or any of its Affiliates, and (ii)
shall not promote, market, or recommend Participating Payer Batch
Claim Transactions other than those of WebMD.
(b) During the Featuring Period, IDX shall promote, market, and
recommend the use of those Financial EDI Transactions that are for
Participating Payers, not less favorably than those of any other
source of such transactions. The fact that an alternative source
(other than IDX or an Affiliate of IDX) of financial EDI transactions
for Participating Payers that is made available by IDX during the
Featuring Period may be offered on pricing or other terms (which
pricing or other terms represent the terms of the source of such
transactions and not IDX or an Affiliate of IDX) that differ from
those of WebMD shall not, in and of itself, constitute more favorable
promotion, marketing, or recommendation by IDX. Notwithstanding
anything to the contrary herein, to the extent that Participating
Payer Batch Claim Transactions or Participating Payer Real Time
Transactions are delivered through the IDX Gateway during the
Featuring Period, IDX shall deliver to WebMD for delivery to such
Participating Payers not less than [**], as the case may be, [**] to
any [**] including, without limitation, [**]. With respect to [**],
however, [**]to terminate the effect of the preceding sentence by
giving WebMD [**] month's advance written notice containing an
explanation of its reasons for doing so.
1.2. GENERAL INTEGRATION OF SERVICES.
Delete Section 1.2 of the Agreement in its entirety and insert the
following in lieu thereof: IDX and WebMD shall do the following in furtherance
of this Agreement:
(a) Through TSD, WebMD shall work with IDX to assist it in
integrating, and IDX shall integrate, Financial EDI Transactions into
IDX Practice Management Systems, through the IDX Gateway or otherwise,
in IDX's discretion, as a standard feature available to customers of
IDX Practice Management Systems. Notwithstanding the foregoing, IDX
shall [**] as of the date of this Addendum I, [**].
- --------------------------------------------------------------------------------
Page 1 of 16
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
If subsequent to the date hereof, [**] or otherwise, [**] that are
[**] IDX shall [**].
(b) Through TSD, WebMD shall support IDX's marketing efforts for
Financial EDI Transactions for Participating Payers.
(c) With respect to customers of IDX Practice Management Systems
submitting transactions through the IDX Gateway, IDX shall have
responsibility for the enrollment, registration and installation of
new customers of Financial EDI Transactions, and TSD shall provide
reasonable assistance at its own expense.
(d) Through TSD, WebMD shall provide service levels at least as high
as set forth on the Financial Transactions Service Level Schedule
attached hereto.
(e) IDX shall notify TSD in writing of any Payers that it wants WebMD
to add as a Participating Payer, and WebMD shall use reasonable
efforts to promptly do so. If any such payer is not added within 60
days of notice from IDX, then IDX shall not be bound by the provisions
set forth in Subsection 1.1(a) and 1.1(b) of Addendum I with respect
to such payer.
1.3. PHYSICIAN PORTAL SERVICES.
Delete Section 1.3 of the Agreement in its entirety.
1.4. OUTREACH SERVICES.
Delete Section 1.4 of the Agreement in its entirety.
1.5. RIGHTS NECESSARY TO CARRY OUT OBLIGATIONS.
(No change.)
1.6. BRANDING.
(No change.)
1.7. NON-EXCLUSIVITY.
From Section 1.7 of the Agreement, delete "Nothing contained in this Agreement,"
and insert, "Except for Section 1.1(a) of this Addendum I, nothing contained in
the Agreement or this Addendum I," in lieu thereof.
1.8. NON-AGGREGATION OF FINANCIAL EDI TRANSACTIONS.
[**], IDX shall [**] and IDX shall [**] pursuant to the terms hereof, [**] or
otherwise, unless such [**]. In the event that [**] or any of [**] in violation
of the prior sentence, [**] and at any time, [**] this Agreement, subsequent to
[**] for IDX [**]. The foregoing shall [**] to an IDX [**] IDX may [**] of an
IDX [**], including without [**], that also [**] [**] or from [**] as a business
[**]
2. PRICING AND PAYMENT
- --------------------------------------------------------------------------------
2.1. PAYMENTS.
Delete Section 2.1 of the Agreement in its entirety and replace it with the
following: "The parties shall pay to each other the fees and revenue shares set
out in the Payment Schedule attached to this Addendum I.
- --------------------------------------------------------------------------------
Page 2 of 16
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
2.2. PAYMENT TERMS.
Delete "At" in the first line of Section 2.2 and insert, "Unless provided to the
contrary in the Payment Schedule, at" in lieu thereof.
2.3. RECORDS.
(No change.)
2.4. AUDIT RIGHTS.
(No change.)
2.5. TAXES.
(No change.)
3. MANAGEMENT
- --------------------------------------------------------------------------------
3.1. EXECUTIVE SPONSORSHIP.
(No change.)
3.2. PERSONNEL RESOURCES.
(No change.)
3.3. RELATIONSHIP BETWEEN THE PARTIES.
(No change.)
4. TERM AND TERMINATION
- --------------------------------------------------------------------------------
4.1. INITIAL TERM.
(No change.)
4.2. RENEWAL TERMS.
(No change.)
4.3. EARLY TERMINATION.
Insert, at the end of subsection (f) of Section 4.3, "in which event IDX may
exercise such right to terminate after [**].
4.4. EFFECTIVE DATE OF TERMINATION.
Delete the second occurrence of "4.3(e)" in line 3 of Section 4.4 and insert
"4.3(f)" in lieu thereof.
4.5. EFFECT OF TERMINATION.
(No change.)
4.6. POST-TERMINATION SUPPORT.
Delete "than" after "up to" in line 2 of Section 4.6. Delete "companies
comparable to IDX," in line 4 of Section 4.6 and insert "any vendor of systems
similar to Practice Management Systems" in lieu thereof.
4.7. TERMINATION OF CERTAIN OBLIGATIONS.
Delete the first sentence of Section 4.7(a) and replace with the following:
(a) IDX may terminate one or more of its obligations under Section 1.1(a) and
1.1(b) if: (i) [**] that are [**] are [**] as to [**], or (ii) within [**] after
- --------------------------------------------------------------------------------
Page 3 of 16
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
[**] of [**]that are for [**] are [**] at [**], or (iii) within [**]that are for
[**] that are [**] as is set forth on the Financial Transactions Service Level
Schedule annexed hereto.
5. INTELLECTUAL PROPERTY.
- --------------------------------------------------------------------------------
5.1. INTELLECTUAL PROPERTY RETAINED.
(No change.)
5.2. INTERFACES.
(No change.)
5.3. TRADEMARKS.
In line 2 of Section 5.3, insert, "or as otherwise may be contemplated pursuant
to Sections 6.3 and 11.4 of the Agreement and Sections 1.1 and 1.2 of the
Addendum I," after "otherwise expressly provided in this Agreement."
5.4. JOINTLY DEVELOPED MATERIALS.
Delete "or" in line 2 of Section 5.4 and insert "of" in lieu thereof.
6. CONFIDENTIALITY.
- --------------------------------------------------------------------------------
6.1. CONFIDENTIALITY OBLIGATIONS.
In line 12 of Section 6.1, insert "not" between "shall" and "create." Delete "a"
after "limit" in line 14 of the same section. Add the following to the end of
the Section: Under no circumstances shall any of IDX's Confidential Information
be disclosed to any Affiliate of WebMD, or any operating unit within WebMD or
under WebMD's Control, that is in the business of marketing any Practice
Management System.
6.2. CONFIDENTIALITY OF DATA.
Delete Section 6.2 in its entirety and replace it with the following:
Each party acknowledges that data it transmits as part of the Financial EDI
Transactions may include customers' confidential information and confidential
medical information relating to patients. Accordingly, each party agrees to use
commercially reasonable and legally required efforts to protect the
confidentiality of such information and prevent the disclosure of such
information to third parties, except as may be necessary to carry out its
obligations under this Agreement. The parties acknowledge and agree that nothing
contained in this Agreement shall be construed as requiring either party to this
Agreement to disclose data to any other person or entity in violation of
applicable law, and each party agrees not to disclose any data if not permitted
to do so by applicable law. IDX agrees that WebMD and all other persons or
entities involved in the operation of the Financial EDI Transactions as WebMD's
agents, have the right, subject to applicable laws and consent of third parties
supplying data, to transmit, monitor, retrieve, store and use data as may be
necessary to carry out its obligations to provide Financial EDI Transactions
pursuant to this Agreement as modified by Addendum I and to De-Identify data.
Nothing in this Agreement shall prohibit WebMD from using or disclosing
De-Identified Data unless prohibited by law.
[**] the use of [**] any person or entity [**], then the provisions of Section
1.1 and 1.2 shall [**] that such [**] to such [**] shall be [**]this Agreement.
- --------------------------------------------------------------------------------
Page 4 of 16
6.3. AGREEMENT CONFIDENTIAL.
(No change.)
6.4. DISCLOSURE REQUIRED TO COURT OR GOVERNMENT.
(No change.)
6.5. NO REMOVAL OF PROPRIETARY LEGENDS.
(No change.)
7. REPRESENTATIONS AND WARRANTIES.
- --------------------------------------------------------------------------------
7.1. SERVICES.
(No change.)
7.2. NON-INFRINGEMENT.
(No change.)
7.3. SYSTEM ENVIRONMENTS.
(No change.)
7.4. COMPLIANCE WITH LAWS.
Delete Section 7.4 in its entirety and replace it with the following:
Each party represents, warrants and covenants to the other that, at all times
during the term of this Agreement and thereafter, it shall be responsible for
complying with all laws that are directly applicable to its operations and the
operations of its Affiliates involved in performing this Agreement, but makes no
representation or warranty as to any other person's operations. Each party's
warranty extends (without limitation) to (a) laws governing its use or operation
of the Financial EDI Transactions, (b) laws governing the gathering, use,
transmission, processing, receipt, reporting, disclosure, privacy, security,
maintenance, and storage of data, such as HIPAA, (c) anti-kickback laws, and (d)
laws governing the submission of claims for reimbursement of medical services.
7.5. DATA.
Delete Section 7.5 in its entirety and replace with the following:
IDX represents and warrants to WebMD that IDX will use commercially reasonable
efforts to obtain in its contracts with physicians all rights, authority,
consents or permissions legally necessary for IDX and, at IDX's request, WebMD
to submit, view, access, disclose, process, retrieve, and transmit data in
connection with the Financial EDI Transactions. IDX hereby appoints WebMD, and
WebMD accepts such appointment, as IDX's limited agent for the purpose of
transmitting patient medical data to other payers, physicians, and other medical
service providers using Financial EDI Transactions for such patient. WebMD and
IDX each represent to the other that they have not been prohibited from
participating in any Federal of state program applicable to the transactions
contemplated hereunder and if it shall become so prohibited, the other may
immediately terminate this Agreement.
WebMD and IDX shall enter into mutually acceptable agreements as may be
required by final regulations promulgated under the Health Insurance Portability
and Accountability Act of 1996.
7.6. DUE ORGANIZATIONS.
(No change.)
7.7. NO BANKRUPTCY.
(No change.)
7.8. DISCLAIMERS.
(No change.)
- --------------------------------------------------------------------------------
Page 5 of 16
8. LIMITATION ON REMEDIES.
- --------------------------------------------------------------------------------
(No change.)
9. DEFENSE AND INDEMNIFICATION.
- --------------------------------------------------------------------------------
9.1. LIMITED COVENANT TO DEFEND.
Delete Section 9.1 in its entirety and insert the following in lieu thereof:
Each party (the "Defending Party"), at its own expense and subject to the terms
and conditions of this Section 9.1, will defend claims brought against the other
party (the "Invoking Party") in the United States by third parties (other than
affiliates of the Invoking Party) to the extent that (a) bodily injury, death,
wrongful disclosure of patient or confidential information, or tangible property
damage proximately results from the Defending Party's (i) breach of a duty,
representation, warranty or obligation of this Agreement, or (ii) tortious
negligence or misconduct, (b) the claim, if true, would constitute a breach by
the Defending Party of the representations, warranties, covenants set forth in
Section 7.2, 7.4, or (c) the claim, if true, arises from a wrongful act or
omission of WebMD as agent of IDX pursuant to Section 7.5 above. The defense
shall only extend to those portions of the claim.
9.2. CONDITIONS FOR DEFENSE.
(No change.)
9.3. INJUNCTIONS OBTAINED BY THIRD PARTIES.
(No change.)
9.4. EXPENSES AND MONETARY AWARDS.
(No change.)
9.5. ADDITIONAL COUNSEL.
(No change.)
9.6. EXCEPTIONS TO DUTIES TO DEFEND AND INDEMNIFY.
(No change.)
10. DISPUTE RESOLUTION.
- --------------------------------------------------------------------------------
10.1. DISPUTE RESOLUTION.
(No change.)
10.2. EXCEPTIONS.
(No change.)
10.3. PROGRESSIVE DISPUTE NEGOTIATION PROCEDURES.
(No change.)
11. MISCELLANEOUS.
- --------------------------------------------------------------------------------
11.1. NO REIMBURSEMENT.
(No change.)
11.2. FORCE MAJEURE.
Add the following to the end of this Section:
- --------------------------------------------------------------------------------
Page 6 of 16
Each party acknowledges that the other's ability to provide data under this
Agreement may be delayed or prevented by third parties, and neither party shall
be responsible for such delay.
11.3. ASSIGNMENT.
(No change.)
11.4. NO WAIVER.
(No change.)
11.5. GOVERNING LAW; JURISDICTION; VENUE.
(No change.)
11.6. HEADINGS.
(No change.)
11.7. SEVERABILITY.
(No change.)
11.8. NO BIAS.
(No change.)
11.9. COSTS, ATTORNEYS' FEES, AND EXPERTS' FEES.
(No change.)
11.10. COUNTERPARTS.
(No change.)
11.11. NOTICES.
Delete the words "on the first page of this Agreement" and replace with "in the
definitions of 'IDX' and 'WebMD' respectively."
11.12. ADEQUACY OF CONSIDERATION.
(No change.)
11.13. INSURANCE.
(No change.)
11.14. PUBLICITY.
(No change.)
11.15. ENTIRE AGREEMENT.
Insert at the beginning of Section 11.15, "This Addendum I shall have no effect
whatsoever on the agreement between WebMD and ChannelHealth."
11.16. NO THIRD PARTY BENEFICIARIES.
(No change.)
11.17. NON-HIRE.
(No change.)
11.18. STOCK OPTION AGREEMENT.
- --------------------------------------------------------------------------------
Page 7 of 16
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
Delete Section 11.18 in its entirety.
11.19. PAYMENTS.
Insert the following additional section:
11.19. Payments.
Not later than [**], WebMD shall pay IDX the sum of $[**] in full and
final satisfaction of all amounts due on account under the Agreement
for the period from [**]. IDX shall pay WebMD the sum of $[**] in full
and final satisfaction for all claims for amounts due on account for
the period from [**]. For charges incurred after such dates, the
parties shall make payments according to the rates and schedule as set
forth in the Agreement and as modified by Addendum I.
11.20. MUTUAL RELEASES.
Insert the following additional section:
11.20 Mutual releases.
(a) By IDX. IDX and its Affiliates hereby fully and forever release
WebMD, its Affiliates, officers, agents, directors and employees and
officers, directors and employees of each Affiliate of WebMD, from all
actions, causes of action, suits, debts, dues, expenses, sums of
money, accounts, costs, reckonings, interests, deficiencies, bonds,
bills, specialties, covenants, commission contracts, controversies,
agreements, promises, variances, trespasses, damages, judgments,
executions, claims, and demands whatsoever in law, admiralty or
equity, against WebMD and its Affiliates ("IDX Claims"), which IDX and
its Affiliates (or any of them) ever had, now have or hereafter can,
shall or may have for, upon or by reason of any manner, cause, thing,
claim, contention or allegation whatsoever that arose or occurred
prior to the Effective Date of the addendum based upon, in whole or in
part, this Agreement, other than IDX Claims arising on or after the
Effective Date of Addendum I due to a breach by WebMD on or after the
Effective Date of Addendum I.
(b) By WebMD. WebMD and its Affiliates fully and forever release IDX
and its Affiliates, officers, agents, directors and employees and
officers, directors and employees of each Affiliate of IDX from all
actions, causes of action, suits, debts, dues, expenses, sums of
money, accounts, costs, reckonings, interests, deficiencies, bonds,
bills, specialties, covenants, commission contracts, controversies,
agreements, promises, variances, trespasses, damages, judgments,
executions, claims, and demands whatsoever in law, admiralty or
equity, against IDX and its Affiliates ("WebMD Claims"), which WebMD
and its Affiliates (or any of them) ever had, now have or hereafter
can, shall or may have for, upon or by reason of any manner, cause,
thing, claim, contention or allegation whatsoever that arose or
occurred prior to the Effective Date of Addendum I based upon, in
whole or in part this Agreement, other than WebMD Claims arising on or
after the Effective Date of Addendum I due to a breach by IDX on or
after the Effective Date of Addendum I.
12. AMENDED AND RESTATED GLOSSARY
- --------------------------------------------------------------------------------
Delete the Glossary set forth in Section 12 of the Agreement and insert the
following in lieu thereof.
Amended and Restated Glossary
"Affiliate" has the meaning set forth in rule 12(b) of the Securities
Act of 1934. For the purposes of calculating fees due to IDX from
WebMD, "Affiliates" shall not include any clearinghouse or claims
processing service to which WebMD pays fees, provided WebMD does not
Control, is not Controlled by, or is not under common Control with,
such clearinghouse or claims processing service. Affiliates of IDX
shall not include Allscripts Healthcare Solutions, Inc., Channelhealth
Incorporated, or any entity Controlled by, Controlling, or under common
Control with either of them.
"Confidential Information" means (i) any data or information, oral or
written, that relates to any party's business practices or activities;
(ii) any information, ideas, know-how, trade secrets, specifications,
designs, plans, flow-charts, drawings, research and development,
processes, procedures and market research; (iii) any source code or
executable code versions of software; and (iv) any other information,
regardless of form, for which a party would have a reasonable
expectation of confidentiality. Confidential Information shall also
include the terms and conditions of this Agreement.
- --------------------------------------------------------------------------------
Page 8 of 16
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
"Control," "Controlled by," "Controlling" and similar terms shall
mean, with respect to an Entity:
(i) The acquisition (other than from the Entity under consideration)
by any person, entity or "group", within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934 (the
"Exchange Act"), of beneficial ownership, (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of fifty percent (50%) or
more of either the then outstanding shares of common stock or the
combined voting power of the Entity's then outstanding voting
securities entitled to vote generally in the election of directors; or
(ii)Approval by the stockholders of the party of a reorganization,
merger, consolidation, in each case, with respect to which persons who
were the stockholders of the party immediately prior to such
reorganization, merger or consolidation do not, immediately
thereafter, own more than fifty percent (50%) of the combined voting
power entitled to vote generally in the election of directors of the
reorganized, merged or consolidated Entity's then outstanding voting
securities, or a liquidation or dissolution of the Entity or of the
sale of all or substantially all of the assets of the Entity.
"Current Volume" means the volume of Participating Payer Batch Claim
Transactions submitted during the month of April 2001, whether
submitted via the IDX Gateway or otherwise from an IDX Practice
Management System, determined as set forth in Section 5 of the Payment
Schedule attached to Addendum I.
"De-Identified Data" means data from which information has been
removed as required by law (including without limitation HIPAA), or if
no law is applicable, removed according to a commercially recognized
standard, so that what remains of such data cannot be used to
personally or otherwise identify the individual or entity that is the
subject of such data (such as names, social security numbers, employer
I.D. numbers, addresses, and other identifying data).
"Effective Date" means June 6, 2000 with respect to the Agreement and
March 31, 2001 with respect to Addendum I.
"Entity" means any legal or natural person and any Affiliate thereof.
"Exclusive Period" means the period from the date of this Addendum I
until [**].
"Featured" shall be a term that applies only with respect to Financial
EDI Transactions that are for Participating Payers and shall mean with
respect to promotion and integration of WebMD's related transaction
services, the obligations of IDX to perform as set forth in Section
1.1(b) of Addendum I.
"Featuring Conditions" means Sections 4.7(a)(i),(ii), and (iii) of the
Agreement as amended by Addendum I.
"Featuring Period" means the period from the date of Addendum I
through [**].
"Financial EDI Transactions" means the following of WebMD's
financial-related, medical electronic transactions accomplished by
electronic data interchange or the Internet: medical claims and
encounters, UB-92 claims originating from providers but not hospitals,
electronic remittance advice, eligibility, referrals, and claims
status updates.
"HIPAA" means the Health Insurance Portability and Accountability Act
of 1996, as amended.
"IDX" means IDX Systems Corporation, a Vermont corporation, with
principal offices at 40 IDX Drive, South Burlington, Vermont 05403.
"IDX Gateway" means a system provided by IDX for aggregating and
switching electronic data interchange transactions.
"Intellectual Property" means patents, copyrights, trademarks, service
marks, trade names, trade dress, domain names, Web sites, logos or
other proprietary rights.
"Interfaces" means data maps, software, protocols, translations and
other functionality that facilitate the organization and transfer of
data.
"Marks" means trademarks, service marks, trade names, logos and such
other business identifiers.
"Non-Participating Payer" means any Payer that is not a Participating
Payer.
"Non-Participating Payer Batch Claim Transaction" means electronic
batch claim transactions (excluding UB-92 claims originating from
- --------------------------------------------------------------------------------
Page 9 of 16
hospitals as distinguished from providers) originating from IDX
Practice Management System and sent via the IDX Gatewayto WebMD or any
Affiliates of WebMD for submission in batches and not in Real Time for
processing by or for a Non-Participating Payer.
"Non-Participating Payer Real Time Transaction" means electronic
non-batch (Real-Time) eligibility and referrals transaction
originating from IDX Practice Management Systems and that is sent to
WebMD or any Affiliate of WebMD via the IDX Gateway for processing by
or for a Non-Participating Payer.
"Participating Payer" means any Payer that pays any consideration to
WebMD for transactions, regardless of the method or form of payment.
However, for the purpose of calculating fees due to IDX from WebMD on
Transactions with Participating Payers, such term shall not include a
clearinghouse or claims processing service to which WebMD pays fees
and which is not an Affiliate of WebMD.
"Participating Payer Batch Claim Transaction" means electronic batch
claim transactions (excluding UB-92 claims originating from hospitals
as distinguished from providers) originating from IDX Practice
Management Systems and sent to WebMD or any Affiliates of WebMD for
submission in batches and not in real time to Participating Payers for
processing by or for such Participating Payers. However, for the
purpose of calculating fees due to IDX from WebMD on Transactions with
Participating Payers, "Participating Payer Batch Claim Transaction"
shall not include transactions submitted to WebMD by a clearinghouse
or claims processing service to which WebMD pays fees and which is not
an Affiliate of WebMD.
"Participating Payer Real Time Transaction" means electronic non-batch
(Real-Time) eligibility and referrals transaction originating from IDX
Practice Management Systems and that is sent to WebMD or any Affiliate
of WebMD for processing by or for a Participating Payer. However, for
the purpose of calculating fees due to IDX from WebMD on Transactions
with Participating Payers, "Participating Payer Real Time Transaction"
shall not include transactions submitted to WebMD by a clearinghouse
or claims processing service to which WebMD pays fees and which is not
an Affiliate of WebMD.
"Payer" means any entity, such as an insurance company, managed care
organization, fiscal intermediary, fiscal carrier, fiscal agent, or
information services, that pays claims resulting from EDI Financial
Transactions.
"Payment Schedule" means the new payment schedule attached to this
Addendum I in lieu of the Payment Schedule attached to the Agreement.
"Practice Management System" shall mean any software application
expressly designed and/or marketed by IDX, or any of its Affiliates,
to automate the business processes of physician billing, physician
scheduling, managed care contract administration, hospital clinical
practice, physician clinical practice, hospital patient
administration, or hospital billing, including by way of example and
not in limitation, as embodied in the products currently marketed
under the trademarks "GPMS" and "IDXtendR."
"Real-Time" means not in a batch mode.
"Term" means collectively the Initial Term and each Renewal Term as
defined in Sections 4.1 and 4.2 of the Agreement.
"WebMD" means WebMD Corporation, a Delaware corporation (formerly
known as Healtheon/WebMD Corporation) with principal offices at 669
River Drive, Center Two, Elmwood Park, New Jersey 07407.
- --------------------------------------------------------------------------------
Page 10 of 16
IN WITNESS WHEREOF , the parties hereto have executed this Agreement.
IDX SYSTEMS CORPORATION
By: /S/ RICHARD E. TARRANT
------------------------------------------
(authorized signature)
Name: Richard E. Tarrant
----------------------------------------
(printed)
Title: C.E.O.
---------------------------------------
Date: 3/30/01
----------------------------------------
WebMD CORPORATION
By: /S/ MICHAEL B GLICK
------------------------------------------
(authorized signature)
Name: Michael B. Glick
----------------------------------------
(printed)
Title: Senior Vice President - Legal
---------------------------------------
Date: 3/30/01
----------------------------------------
- --------------------------------------------------------------------------------
Page 11 of 16
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
PAYMENT SCHEDULE
1. PARTICIPATING PAYER BATCH CLAIM TRANSACTION FEES.
(a) PREFERRED RATE. For Participating Payer Batch Claim Transactions
submitted prior to [**], [**], the fees payable by WebMD to IDX for
every such claim shall be [**] the fees collected by webmd and all
Affiliates of WebMD from Participating Payers for such claims or (ii)
$[**]. This shall be referred to as the "Preferred Rate."
(b) ORDINARY RATE. From and after [**], the applicable rate for fees
payable by WebMD for Participating Payer Batch Claim Transactions
shall be calculated pursuant to Table I below. This shall be referred
to as the "Ordinary Rate."
(c) ADJUSTMENT. IDX's claims volume for Participating Payer Batch
Claim Transactions shall be measured for the month of [**]. If during
such month, IDX's claims volume for such transactions shall be less
than [**] times the Current Volume, then for the [**] period, the fees
payable to IDX by WebMD for Participating Payers Batch Claim
Transactions shall not be calculated at the Preferred Rate, but shall
be calculated at the Ordinary Rate. However, the preceding sentence
shall not apply if the volume is greater than [**]transactions in such
month. If for any month prior to [**], IDX's claim volume is such that
it would receive greater fees at the Ordinary Rate, then that rate
shall apply for such month.
(d) CERTAIN MINIMUM RATE. Notwithstanding the foregoing, for any month
from and after [**] during the term of the Agreement that IDX's total
monthly volume of Participating Payer Batch Claim Transactions is
equal to or exceeds [**] times the Current Volume, or in any case if
such volume exceeds [**] million claims, then the fees payable by
WebMD for such transactions during such month shall be the greater of
(i) the Preferred Rate and (ii) the Ordinary Rate.
2. OTHER PARTICIPATING PAYER TRANSACTIONS.
Notwithstanding anything to the contrary herein, WebMD shall not be liable
to make any payments to IDX pursuant to this Section 2 of the Payment
Schedule [**]submits [**].
(a) ELIGIBILITY AND REFERRAL TRANSACTIONS. For every Participating
Payer Real Time Transaction, WebMD shall pay IDX [**] of the fees
collected by WebMD and all Affiliates of WebMD from Participating
Payers for such transaction.
(b) ELECTRONIC REMITTANCE TRANSACTIONS. In recognition of the evolving
nature of remittance transactions, the parties shall attempt to
negotiate fees for remittances involving Participating Payers. There
shall be no obligations with respect to such transactions hereunder
until and unless such fees are negotiated.
3. NON-PARTICIPATING PAYER TRANSACTIONS FEES.
(a) BATCH CLAIMS AND REAL TIME TRANSACTIONS. For every
Non-Participating Payer Batch Claim Transaction, and Non-Participating
Payer Real Time Transaction, IDX shall pay WebMD the greater of (x)
[**] of fees collected by IDX [**] or (y) (i) $[**], per transaction
in which the aggregate amount of such transactions are less than or
equal to [**] million; (ii) $[**] per transaction in which the
aggregate amount of such transactions are less than or equal to [**]
million; or (iii) $[**] per transaction in any month in which the
aggregate amount of such transactions are greater than [**] million.
Notwithstanding the foregoing, for all such transactions submitted by
IDX during the period from the date of Addendum I through [**],
regardless of the volume of such transactions, IDX shall pay WebMD
$[**] per transaction.
(b) CERTAIN ADJUSTMENTS. The foregoing fee arrangement set forth in
Section 3(a) of this Payment Schedule shall apply to such a
transaction when [**], but in such event , IDX shall [**] for all
amounts paid [**], up to the amount otherwise payable to WebMD
pursuant to Section 3(a) of this Payment Schedule, and any amount
payable in excess of such amount [**] pursuant to Table 1. To the
extent that after the date hereof WebMD obtains an agreement with a
Non-commercial Payer (defined below) to submit claims to [**], then
for purposes of Section 3 of this Payment Schedule, such fee shall be
treated as set forth in the foregoing sentence. "Non-commercial Payer"
means a Payer of claims under government programs and Blue Cross/Blue
Shield.
- --------------------------------------------------------------------------------
Page 12 of 16
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
(c) ELECTRONIC REMITTANCE TRANSACTIONS. In recognition of the evolving
nature of remittance transactions, the parties shall attempt to
negotiate fees for remittances involving Non-Participating Payers.
There shall be no obligations with respect to such transactions
hereunder until and unless such fees are negotiated.
4. PAYMENTS.
(a) MONTHLY PAYMENTS. All payment shall be made monthly in arrears, except
as provided below.
(b) MONTHLY STATEMENTS. Not later than the [**] day of each calendar month
of the Term, WebMD shall send to IDX and IDX shall send to WebMD a
written statement of the actual activity and fees owed with respect
thereto during the prior calendar month, signed by an officer of WebMD
or an officer of IDX, as the case may be, determined in accordance with
the terms hereof together with the data and assumptions, if any, used
to calculate the fees owed by WebMD to IDX or IDX to WebMD, as the case
may be.
(c) PAYMENTS. Not later than the [**] day of each calendar month commencing
with the calendar month of the Effective Date of Addendum I, WebMD pay
all amounts due to IDX for the prior calendar month and IDX shall pay
all amounts due to WebMD for the prior calendar month.
(d) OBJECTION; ESTIMATED PAYMENTS. If either party objects in writing to
the amounts claimed payable as set forth in a monthly statement
provided by the other party, then such other party shall make
nevertheless make an estimated payment not later than the end of the
month in which the objection is made, which estimated payment shall
include an amount on account for transactions that shall be equal to
the average daily rate for such transactions as determined with
reference to the previous Monthly Statement, times the number of
business days during the month in dispute.
(e) DISPUTE RESOLUTION. The parties shall meet and confer to resolve any
payment disputes within 30 days thereafter. Any overpayment shall be
credited to the next month's payment.
5. DETERMINATION OF CLAIMS ORIGINATING FROM AN IDX PRACTICE MANAGEMENT
SYSTEM.
(a) Within [**]days from the date hereof [**] with the following additional
information: [**]. This list shall be Confidential Information.
(b) In the Envoy system the Tax ID number is used to create the Submitter
ID Number. WebMD shall confirm how the other WebMD clearinghouses
assign Submitter IDs.
(c) [**] an Envoy Submitter Number or other WebMD clearinghouse Submitter
ID Number. WebMD shall cooperate with IDX [**] is in [**] in cases
[**].
(d) WebMD shall [**] for whom it can identify a WebMD clearinghouse
Submitter ID Number except (a) for and only to the extent that [**]
that is already associated with a clearinghouse that is [**] through a
Submitter ID Number; or (b) for and to the extent that [**] [**] is
submitting claims through a different vendor (such as POMIS vendor,
claims aggregator; repricer or other entity) that is receiving a
payment [**]. A Parent Account Number shall be assigned [**] and shall
be associated with each account [**].
(e) Upon the request of IDX, WebMD shall provide IDX [**].
(f) On a monthly basis WebMD shall provide a report to IDX (the "Monthly
Activity Report") showing the claims activity for each submitter [**].
The payments to IDX from WebMD and from IDX to WebMD shall be
determined by this Monthly Activity Report. IDX shall have [**] days
from the receipt of each Monthly Activity Report to challenge the
reported activity for any submitter on such report or the omission of
any submitter from such report.
(g) If requested by a party, the parties shall repeat the process set
forth herein to validate volumes from time to time.
- --------------------------------------------------------------------------------
Page 13 of 16
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
Payment Schedule - Table 1 (Ordinary Rate)
TABLE 1 (ORDINARY RATE)
WebMD shall pay IDX the portion of fees set forth in the column headed "%
of Fees"*:
PER CLAIM VOLUME REBATE % OF FEES
FROM TO
[**] [**] [**]%
[**] [**] [**]%
[**] [**] [**]%
[**] [**] [**]%
[**] [**] [**]%
* Fees do not include fees generated with the intervention of another (non-
WebMD Affiliate) clearinghouse or claims processing services to which WebMD
pays fees.
- --------------------------------------------------------------------------------
Page 14 of 16
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
FINANCIAL TRANSACTIONS SERVICE LEVEL SCHEDULE
This Schedule describes the minimum service levels necessary for support of EDI
Financial Transactions by WebMD (TSD).
ISSUE TYPES
- --------------------------------------------------------------------------------
Each issue reported to the WebMD Support Team is subject to the following
turn-around times stated below. WebMD must meet these turn-around times in
[**]% of all cases.
TYPE OF ISSUE TURN-AROUND TIME
------------- -----------------
Question [**] business days
Problem [**] business days1
Critical [**] business day average
Request Evaluated on a case-by-case basis
QUESTION
A QUESTION is any inquiry about the basic functioning of the service
that is not answered or documented in a manual.
PROBLEM
A PROBLEM is any situation within the control of WebMD where the
service is not in accordance with WebMD's documentation and whose
solution may require data modification or software modification by
WebMD. Problems include enrollment issues, report availability,
inappropriate claim rejections, any payer-specific problem, etc.
CRITICAL
These are certain issues within the control of WebMD that WebMD
considers critical and gives immediate attention to as they are
reported. CRITICAL issues are "business stoppers" for the customer and
are the cases that IDX considers a priority for eCommerce Support.
Critical issues include those that would disable all IDX customers from
submitting claims to WebMD or WebMD is unable to submit all claim files
of IDX customers to all payers.
- ----------------------------
1 Where a problem can only reasonably be addressed through software
modification, that will be communicated within[**] days, and the problem
will be fixed in the next scheduled release or modification.
- --------------------------------------------------------------------------------
Page 15 of 16
REQUEST
A REQUEST is a need for additional service/setup that is part of the
standard implementation and support cycle. An example would be
adding new providers or groups in the enrollment process.
- --------------------------------------------------------------------------------
Page 16 of 16