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PROSPECTUS SUPPLEMENT NO. 30 Filed pursuant to Rule 424(b)(3)
To the Prospectus dated January 24, 1997, Registration No.: 333-01926
As Supplemented to Date
1,240 Shares
of
Class B Common Stock of Doctors Health, Inc.
This Prospectus Supplement No. 30 relates to the issuance by Doctors
Health, Inc., a Maryland corporation ("Doctors Health") of 1,240 shares of its
Class B Common Stock, par value $.01 per share (the "Class B Common Stock")
pursuant to the Primary Care Participation Agreement (the "Participation
Agreement") to be entered into between Dr. George F. Sengstack ("Physician"),
and Doctors Health. This Prospectus Supplement should be read in conjunction
with the Prospectus dated January 24, 1997, Prospectus Supplement No. 26 dated
August 29, 1997 which contains the form of Shareholders Letter, and the
Prospectus Supplement No. 29 dated October 1, 1997 which contains the Company's
Annual Report on Form 10-K for the year ended June 30, 1997.
Doctors Health's principal executive office is located at 10451 Mill Run
Circle, Tenth Floor, Owings Mills, Maryland 21117, telephone number (410)
654-5800. IPA's principal executive office is located at 10451 Mill Run Circle,
Tenth Floor, Owings Mills, Maryland 21117 telephone number (410) 654-5800.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS SUPPLEMENT AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED. THIS PROSPECTUS SUPPLEMENT DOES NOT CONSTITUTE AN OFFER OF ANY
PERSON TO EXCHANGE OR SELL, OR A SOLICITATION FROM ANY PERSON OF AN OFFER TO
EXCHANGE OR PURCHASE, THE SECURITIES OFFERED BY THIS PROSPECTUS SUPPLEMENT, OR
THE SOLICITATION OF A PROXY FROM ANY PERSON, IN ANY JURISDICTION IN WHICH IT IS
UNLAWFUL TO MAKE SUCH AN OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS
PROSPECTUS SUPPLEMENT NOR ANY DISTRIBUTION OF THE SECURITIES TO WHICH THIS
PROSPECTUS SUPPLEMENT RELATES SHALL UNDER ANY CIRCUMSTANCES CREATE ANY
IMPLICATION THAT THE INFORMATION CONTAINED THEREIN IS CORRECT AT ANY TIME
SUBSEQUENT TO THE DATE HEREOF.
_______________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROXY STATEMENT/PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
_______________
See "Risk Factors" referred to on page S-2 hereof for certain information
that should be considered in connection with an investment in securities of
Doctors Health.
The date of this Prospectus Supplement is October 3, 1997.
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RISK FACTORS
Financial Performance of Doctors Health
Doctors Health has a limited operating history and for the fiscal years
ended June 30, 1996 and June 30, 1997, recorded a net loss of $7.2 million and $
16.2 million, respectively. There can be no assurance that after the Closing
Date Doctors Health will earn operating profits.
Risk Factors set forth in the Prospectus dated January 24, 1997
The Risk Factors set forth in the Prospectus are incorporated herein by
reference and should be read carefully by investors.
PROPOSED PRIMARY CARE PARTICIPATION AGREEMENT AMONG DOCTORS HEALTH AND DR.
GEORGE F. SENGSTACK
The following description of the transactions contemplated by the
Participation Agreement does not purport to be complete and is qualified in its
entirety by reference to the Participation Agreement, a copy of which is
attached to this Prospectus Supplement as Annex A and is incorporated herein.
Physician is urged to read the Participation Agreement in its entirety.
General
Pursuant to the Participation Agreement, (i) Physician agrees to
participate in the managed care agreements that Doctors Health enters into with
Payors who have contracted with Doctors Health with respect to HMO managed care
products ("Doctors Health HMO Plans"), (ii) Physician agrees to provide eligible
persons who elect to enroll in Doctors Health HMO Plans (each, a "Doctors Health
HMO Member") with those primary care services customarily provided by primary
care physicians, as may be required by the Doctors Health HMO Plans, (iii)
Physician will be paid cash in the amount of $18,445 upon execution of the
Participation Agreement and satisfactory completion of credentialling of
Physician by Doctors Health, and (iv) Doctors Health will issue to the Physician
1,240 shares of its Class B Common Stock.
Access to Doctors Health Services; Credentialling
Pursuant to the Participation Agreement, Doctors Health agrees to provide
to Physician, once Physician has 100 Doctors Health Members in his medical
practice and at no cost to Physician, access to the managed care component of
Doctors Health's information system, which offers patient registration, referral
tracking and management and data management capabilities. Doctors Health will
also undertake to credential Physician, at no cost to Physician. Pursuant to
the Participation Agreement, Physician agrees to cooperate with the Doctors
Health credentialling and review process at no cost to Physician.
Medicare HMO Participation
Pursuant to the Participation Agreement, Physician agrees to participate in
the NYLCare 65 Medicare managed care product. Physician is required pursuant to
the Participation Agreement to cooperate with Doctors Health in accepting
Doctors Health HMO Members under the NYLCare 65 product, and agrees not to
participate or contract with any other Medicare HMO or other payor offering
Medicare managed care or other risk-type plans directly or indirectly; provided,
however, that if Doctors Health chooses not to pursue a contract with an
identified Medicare HMO or is unable to negotiate such a contract within a
commercially reasonable time period, Physician shall be free to pursue a
contract with the identified Medicare HMO.
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Capitation Rates; Bonus Pool
The Participation Agreement provides that Doctors Health will determine the
Medicare primary care base capitation rates using their good faith best efforts
to reflect the prevailing market rate for the county and city in which Physician
provides covered services (the "Primary Care Base Capitation Rates"). The
Primary Care Base Capitation Rates may be adjusted for age and sex of the
Doctors Health HMO members. The Primary Care Base Capitation Rate shall be
adjusted by a formula for Medicare HMO Members taking into account the number of
HMO Members served by Physician's medical practice. The Commercial and Medicare
formulas are set forth on Exhibit D-21 of the Participation Agreement.
Physician agrees pursuant to the Participation Agreement not to seek or collect
or accept any reimbursement from Doctors Health HMO Members or the Doctors
Health HMO Plans for any covered services provided to Doctors Health HMO
Members, except for copayments and coinsurance.
The Participation Agreement also provides that Physician may participate in
a bonus pool established by Doctors Health's affiliated physicians. The amount
of bonus awards are determined according to Doctors Health's primary care bonus
system, rewarding high clinical quality, appropriate utilization, patient
satisfaction and retention and the extent of cooperation with other
participating physicians, and Doctors Health. Based upon these factors,
Physician may receive a bonus based upon the surplus generated in Physician's
panel of Doctors Health HMO Members, after managed care expenses, up to a
maximum of 25% of all Primary Care Base Capitation payments received by
Physician that year or the limits provided by applicable health care
regulations. Bonus awards for a calendar year, if any, will be paid by April of
the following year. There can be no assurance that a bonus will be paid in any
given year or, if paid, as to the amount of any bonus. A copy of Doctors
Health's bonus system for primary care physicians is on file at the offices of
Doctors Health and will be made available at the request of Physician.
Obligations of Physician
Pursuant to the Participation Agreement, Physician agrees to abide by and
comply with the relevant provisions of the agreements between Doctors Health and
the Doctors Health HMO Plans. Doctors Health will provide Physician with all
relevant provisions that may apply to such Physician. In such connection, the
Participation Agreement provides that Physician shall work cooperatively and in
good faith with Doctors Health and the other Doctors Health affiliated
physicians providing services to the Doctors Health HMO members. Physicians are
required to (i) prepare and maintain customary medical records for services
provided to Doctors Health HMO Members and provide Doctors Health with access to
such records without charge, (ii) comply with and accept the payment conditions
of the Participation Agreement, (iii) comply with managed care medical standards
adopted by Doctors Health affiliated physicians as part of the arrangements with
the Doctors Health HMO Plans, and (iv) cooperate with Doctors Health's efforts
to contact eligible Medicare and adult medicine patients in Physician's
practice, including providing mailing lists and the use of Physician's name in
correspondence, and (v) sign and submit in a timely manner authorizations,
consents, encounter data and other forms adopted by Doctors Health.
Pursuant to the Participation Agreement, Physician will own and operate all
aspects of his medical practice and will remain responsible for all operations
of the medical practice, including all patient treatment decisions and employee,
office, lease and financial affairs. Doctors Health is not engaged in the
practice of medicine and will not interfere in any patient treatment decisions.
The Participation Agreement provides an agreement by Physician not to
differentiate or discriminate in the treatment of patients as to the quality of
services delivered because of race, sex, age, religion, place of residence,
health status or source of payment. Physician is required to make arrangements
for 24 hour seven day per week coverage to Doctors Health HMO Members through
other primary care physicians who participate in the Doctors Health provider
network.
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Doctors Health will provide to Physician a list of other physicians and
other health care providers who provide medical services in the Doctors Health
provider network. Other than in cases of a bona fide emergency, the
Participation Agreement requires Physician to utilize the Doctors Health
provider network when arranging for additional medical services required by
Doctors Health HMO Members. Doctors Health may use Physician's name, specialty,
telephone number and business location in marketing, descriptive and other
information relating to the Doctors Health HMO Plans. The Participation
Agreement provides that Physician may be precluded from participating in a
Doctors Health HMO product by one of the Doctors Health HMO Plans. In such
event, Doctors Health will notify Physician, in writing, within 30 days of
learning of such an action, and will assist Physician, if requested, in seeking
to overturn such an action.
Existing Primary Care Capitation Contracts
The Participation Agreement provides that if Physician is a party, directly
or indirectly, to any primary care capitation contract, Physician must notify
Doctors Health of such contract and must use his commercially reasonable best
efforts to assist Doctors Health in replacing such contract with a Doctors
Health HMO Plan, provided that the payment terms of such Doctors Health HMO Plan
are at or above the payment terms of such existing contract.
Quality Assurance/Utilization Review Programs
Pursuant to the Participation Agreement, Physician will participate in all
utilization review, quality assurance and credentialling programs operated by
Doctors Health to assure or improve the quality and effective utilization of
health care services to the Doctors Health HMO Members. In such connection,
Physician agrees (i) not to hold Doctors Health or any other participants in
such quality assurance/utilization review programs responsible for reasonable
recommendations made or actions taken in good faith with respect to Physician,
and (ii) to participate in all programs developed by Doctors Health that are
designed to resolve Doctors Health HMO Member grievances.
Doctors Health Protocols
Pursuant to the Participation Agreement, Physician agrees to follow the
protocols and practice procedures which have been developed by Doctors Health's
affiliated physicians which are applicable to physician participants in the
Doctors Health provider network. In such connection, if Physician should ever
deem any aspect of such protocols to be medically inappropriate or otherwise
inappropriate for utilization, Physician may notify Doctors Health in writing
with sufficient specificity to enable Doctors Health to respond to Physician's
concerns.
Term; Termination
The Participation Agreement will terminate five years from its effective
date unless earlier terminated pursuant to its terms.
Doctors Health may terminate the Participation Agreement by notice in
writing to Physician (i) if Physician materially breaches the Participation
Agreement and such breach continues for 30 days after written notice is given to
Physician by Doctors Health specifying the nature of such breach, or (ii) for
"good cause." The Participation Agreement defines "good cause " to mean the
occurrence of any one of the following: (a) Physician's membership in any
professional organization is terminated for cause related to professional
conduct, or Physician resigns from any professional organizations under the
threat of disciplinary action for professional conduct, (b) Physician is
indicted for a charge of committing a felony or any misdemeanor involving moral
turpitude, (c) Physician fails to comply with rules, regulations and policies
imposed with regard to Medicare programs or fails to preserve his or her
eligibility to participate in Medicare
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programs, (d) physician fails to comply with any material Doctors Health
protocols, (e) Physician takes any action which puts a Doctors Health HMO
Member's health at risk, or (f) Physician loses his or her license or
certificate to practice medicine.
Physician may terminate the Participation Agreement upon 90 days' written
notice to Doctors Health if Doctors Health fails to perform its obligations to
Physician to pay any amounts required to be paid by Doctors Health to Physician.
Maintenance of Liability Insurance
The Participation Agreement provides that Physician must maintain, at his
expense, general and professional liability insurance coverage of not less than
$1 million per claim and $3 million per year. Physician is required pursuant to
the Participation Agreement to provide Doctors Health with copies of such
policies or other evidence of compliance with such insurance requirements and is
required to notify Doctors Health of any changes or cancellations to any such
policy. In the event of a cancellation of a policy, Physician is required to
purchase an extension of coverage endorsement within 10 days of written notice
of discontinuance and must provide Doctors Health with a copy of such
endorsement. Pursuant to the Participation Agreement, Physician must also
notify Doctors Health promptly when any patient of Physician files a claim or
any notice of intent to commence legal action alleging professional negligence
against Physician, or of the settlement of any such claim, or if a judgment is
entered against Physician in any such claim.
RESALE OF CLASS B COMMON STOCK
The shares of Class B Common Stock offered by this Prospectus Supplement
have been registered under the Securities Act of 1933, as amended. The shares
will be subject to the Shareholders Letter Agreement attached hereto as Annex B
and therefore, will not be freely transferable. In addition, there is no public
market for the Class B Common Stock.
LEGAL MATTERS
The validity of the Class B Common Stock offered hereby have been passed
upon for the Company by Venable, Baetjer and Howard, LLP, Baltimore, Maryland.
ANNEXES
Annex A - Participation Agreement between Doctors Health System, Inc. and
George F. Sengstack
Annex B - Shareholders Letter Agreement, delivered to Physician as
Prospectus Supplement No. 26
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PRIMARY CARE PARTICIPATION AGREEMENT
1. This Participation Agreement is entered into on __________________, 1997
(the "Effective Date") by DOCTORS HEALTH, INC. ("DH") and the Physician
whose name appears below.
2. DH agrees to arrange for the provision of various management,
administrative and support services in connection with managed care
contracting, including contracting, marketing, care management and
information systems support. (For a description of these services see
Exhibit A-2 attached.)
3. Physician or the Physician's group practice entity, if the Physician
participates as a partner or employee of a group practice entity, will be
paid a Signing Bonus in part cash and part shares of DH Class B Common
Stock, as set forth on Exhibit B-3 attached hereto and made a part hereof.
This payment will be made upon execution of this Agreement, satisfactory
credentialing of Physician by DH and provision of Physicians' financial
statements and Medicare patient list and is subject to modification to the
extent the information received by DH differs from the information provided
on Exhibit B-3. This payment is made based upon Physician's assurance to
DH that he/she is an actively practicing primary care physician who intends
to enter into a cooperative relationship with other DH affiliated
physicians to manage care to DH HMO Members.
4. This Agreement will expire five (5) years from the Effective Date of this
Agreement (the "Term"), unless earlier terminated pursuant to the terms
hereof.
5. DH agrees to provide Physician, once Physician has at least 100 DH Members,
at no cost to the Physician, access to the DH Information System managed
care components, offering Enrollment, Eligibility, Referral Management and
Data Management capabilities.
6. Physician agrees to provide to eligible persons who elect to enroll in an
HMO Medicare managed care product offered by NYLCare 65, who has contracted
with DH (the "DH MEDICARE HMO Plans") those primary care services
customarily provided by primary care physicians to eligible patients, as
may be required by the DH HMO Plans and the Health Care Financing
Administration. These patients are referred to in this Agreement as the
"DH MEDICARE HMO Members".
7. DH will credential Physician. Physician agrees to cooperate with the DH
credentialing and review process, all at no cost to Physician.
8. Physician agrees to participate in the NYLCare 65 managed care agreements
that DH enters into with DH MEDICARE HMO Plans. Physician agrees to
cooperate with DH in accepting DH MEDICARE HMO Members under the DH
MEDICARE HMO Plan, and agrees not to participate or contract with any other
Medicare HMO or other payor offering Medicare managed care or other risk
type plans directly or through another similar entity or other IPA.
However, upon the expiration or termination of the NYLCare 65 Agreement,
Physician shall be free to contract directly with NYLCare 65.
9. If Physician, as of the Effective Date, is a party (directly or indirectly
through another similar entity or IPA) to any primary care capitation
contract (each an "Existing Primary Care Capitation Contract"), Physician
agrees to notify DH of such Existing
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Primary Care Capitation Contract. Physician agrees to use his or her
commercially reasonable best efforts to assist DH in replacing such
Existing Primary Care Capitation Contract with a DH Medicare HMO Plan,
provided the payment terms to the Physician under the DH Medicare HMO Plan
are at or above the payment terms of the Existing Primary Care Capitation
Contract. Until DH is able to replace the Existing Primary Care Capitation
Contract with a DH Medicare HMO Plan, the Physician shall be free to renew
the Existing Primary Care Capitation Contract for additional one year
terms.
10. Physician agrees to abide by and comply with the relevant provisions of the
agreements between DH and the DH Medicare HMO Plans. DH will provide all
relevant provisions that may apply to Physician.
11. Physician agrees to work cooperatively and in good faith with DH and the
other DH affiliated physicians providing services to the DH Medicare HMO
Members. To this end, Physician will use all reasonable efforts to:
- Prepare and maintain customary medical records for services provided
to DH Medicare HMO Members and provide the IPA with access to such
records without charge. DH agrees that all patient records will be
treated as confidential and will comply with laws and regulations
related to confidentiality and all ethical standards for physicians
regarding the confidentiality of patient records. This paragraph
shall survive the termination of this Agreement for any reason.
- Comply with and accept payment conditions of this Agreement.
- Comply with managed care medical standards adopted by DH affiliated
physicians as part of arrangements with the DH Medicare HMO Plans.
- Cooperate with DH' efforts to contact eligible Medicare patients in
Physician's practice, including providing mailing lists and use of
Physician's name in correspondence.
- Sign and submit in a timely manner authorizations, consents, encounter
data and other forms adopted by DH.
- Comply with DH policies and guidelines which DH provides to physician.
12. Physician will participate in all utilization review, quality assurance and
credentialing programs operated by DH and the IPA to assure or improve the
quality and effective utilization of health care services to the IPA
Medicare HMO Members ("QA/UR Programs"). Physician agrees not to hold DH
and other participants in the QA/UR Programs responsible for any reasonable
recommendations made or actions taken in good faith with respect to
Physician. Physician will participate in all programs developed by DH that
are designed to resolve DH Medicare HMO Member grievances.
13. Physician agrees not to differentiate or discriminate in the treatment of
patients as to the quality of services delivered to DH Medicare HMO Members
because of race, sex, age, religion, place of residence, health status or
source of payment, and to observe, protect and promote the rights of DH
Medicare HMO Members as patients.
14. Physician will in good faith make arrangements, with the support of
Physician's assigned DH representative, for twenty-four hours, seven days a
week coverage to
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DH Medicare HMO Members through other primary care physicians who
participate in the DH provider network to the extent the DH provider
network is adequate to provide such coverage in Physician's service area.
15. Physician agrees to respond within seven (7) days of receipt to any written
inquiry from DH regarding services provided to DH Medicare HMO Members or
any other matters relating to this Agreement, subject to all laws regarding
the confidentiality of medical records,.
16. DH will provide to Physician a list of other physicians and other health
care providers who provide medical services in the DH provider network.
Other than in cases of a bona-fide medical emergency or where DH and the
Physician have agreed the DH provider network is insufficient, Physician
agrees to utilize the DH provider network when arranging for additional
medical services required by DH Medicare HMO Members.
17. DH' affiliated physicians have developed protocols and practice procedures
applicable to fellow physician participants in the DH provider network (the
"DH Protocols"). Physician agrees to follow the DH Protocols when treating
DH Medicare HMO Members. If Physician should ever deem any aspect of the
DH Protocols to be medically inappropriate or otherwise inappropriate for
utilization by Physician, Physician may notify DH in writing, with
sufficient specificity to enable DH to respond to Physician's concerns.
18. Physician will own and operate all aspects of his or her medical practice
and will remain responsible for all operations of the medical practice,
including all patient treatment decisions and employee, office, lease and
financial affairs. DH is not engaged in the practice of medicine and will
not interfere in any patient treatment decisions.
19. DH may use Physician's name, specialty, telephone number(s), and business
location(s) in marketing, descriptive, and other information relating to
the DH Medicare HMO Plans, and will include Physician as a member of the DH
provider network during this Agreement. Physician may nonetheless be
precluded from participating in a DH Medicare HMO Product by one of the DH
Medicare HMO Plans. In such an event, DH will notify Physician, in
writing, within 30 days of learning of such an action, and will assist
Physician, if requested, in seeking to overturn such an action.
20. During the calendar year 1997, DH will pay to Physician, and Physician
agrees to accept from DH as compensation for all covered services provided
by Physician to DH Medicare HMO Members the Primary Care Base Capitation
Rates as shall be set forth on Exhibit C-20 to be attached hereto and made
a part hereof. For calendar year 1998 and beyond, DH shall establish in
cooperation with DH participating primary care physicians a Primary Care
Base Capitation Rate that shall reflect at least the prevailing market rate
for the county or city in which the Physician provides covered services.
21. The Primary Care Base Capitation Rates may be adjusted for age and sex of
the DH Meidcare HMO Members. The Primary Care Base Capitation Rates will
be increased by an amount up to ten percent (10%) (the "Capitation Rate
Modifier"),
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according to a Medicare and Commercial formula established by DH as set
forth on Exhibit D-21 attached hereto and made a part hereof.
22. Physician will, in addition to the Primary Care Capitation payment, be paid
on a fee for service basis for certain identified services which are not
considered covered services according to the DH fee schedule that will be
approximately equal to cost and less than alternative specialist
expenditures.
23. In order to provide economic incentives for Physicians to provide the best
possible health care to DH Meidcare HMO Members while fostering
efficiencies in utilization and quality assurance, DH' affiliated
physicians have established, and Physician will participate in, a bonus
pool. The amount of bonus awards are determined according to DH' primary
care bonus point system, rewarding high clinical quality, appropriate
utilization, patient satisfaction and retention and the extent of
cooperation with other participating physicians DH. Based upon this
system, DH will fund a primary care physician bonus pool which will be
credited with 25% of the managed care surplus remaining after deduction of
the actual costs associated with the provision of managed care services.
The Physician will receive a bonus based upon the net surplus in the bonus
pool that is generated in Physician's panel of DH Medicare HMO Members up
to the limits permitted by applicable health care regulations. The Primary
Care Capitation Rates for any year are guaranteed and never charged or
offset for any losses. Losses are the sole responsibility of DH. Bonus
Awards for calendar year 1996 will be paid by DH in April of 1997. Awards
for calendar year 1997 will be made in April of 1998 etc. (The DH "Bonus
Point System" for Primary Care Physicians is set forth on Exhibit F-23
attached hereto and made a part hereof.)
24. All Payments of the Primary Care Capitation Rate will be made by DH
directly to Physician, by the fifth business day of each month for the
prior month's enrollment. The Capitation Rate Modifier will be calculated
at the beginning of each quarter and used to determine the following
quarters' Primary Care Capitation Rate.
25. Physician understands that DH will be paid by the DH Medicare HMO Plans for
all services provided by Physician to DH Medicare HMO Members.
26. Physician agrees not to bill or collect any reimbursement from DH Medicare
HMO Members or the DH Medicare HMO Plans unless the service provided was
not a covered service under the DH Medicare HMO Plan and the DH Medicare
HMO Member was given prior written notice that the services would not be
covered. However, Physician may charge, bill, collect and keep from DH
Medicare HMO Members any copayments or coinsurance. Physician agrees that,
whether or not there is any unresolved dispute for payment, under no
circumstances, including but not limited to nonpayment by DH or DH
insolvency, will Physician make any claims, other than for copayments or
coinsurance, against any DH Medicare HMO Member for covered services.
27. Physician will maintain, at his or her expense, general and professional
liability insurance coverage of not less than $1,000,000 per claim and
$3,000,000 per year. Physician will provide DH with copies of the policies
or other evidence of compliance with the insurance requirements. Physician
will notify DH when any patient of Physician files a claim or any notice of
intent to commence legal action alleging professional negligence against
Physician or of the settlement of any such
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claim by Physician or if a judgment is rendered against Physician in any
such legal action. Physician will promptly notify DH in writing of any
changes in or cancellations of any policy of insurance maintained by
Physician. If such policy is written on a claims made basis and such
coverage is discontinued, Physician will purchase an "Extension of Coverage
Endorsement" within ten (10) days of written notice of discontinuance and
shall provide DH with a copy of this endorsement.
28. Each party shall indemnify, hold harmless and defend the other, its
officers, directors, employees, agents, successors and assigns, from and
against any liability, loss, damages, claim, cause of action, cost or
expense, including reasonable attorneys' fees, caused or asserted to have
been caused, directly or indirectly, by or as a result of the performance
or failure to perform its obligations under this Agreement.
29. This Agreement may be terminated by Physician upon 90 days prior written
notice to DH if DH fails to perform its obligations to Physician or to pay
any amounts required to be paid by DH to Physician.
30. DH may terminate this Agreement by notice in writing to Physician for good
cause, or if Physician materially breaches this Agreement and such breach
continues for a period of thirty (30) days after written notice is given to
Physician by DH specifying the nature of the breach. Good cause means:
- Physician's membership in any professional organization is terminated
for cause related to professional conduct, or Physician resigns from
any professional organizations under the threat of disciplinary action
for professional conduct.
- Physician is indicted upon a charge of committing a felony or any
misdemeanor involving moral turpitude.
- Physician fails to comply with rules, regulations and policies imposed
with regard to the Medicare programs or to preserve his or her
eligibility to participate in the Medicare programs.
-Physician fails to comply with any material DH Protocols.
-Physician takes any action which puts a DH Medicare HMO Members' health at
risk.
-Physician loses his/her license, certificate, permit or board approval to
practice medicine.
31. To the extent required to enable DH and the IPA to comply with Section 952
of the Medicare and Medicaid Amendments of 1980, or regulations promulgated
pursuant thereto, Physician shall until the expiration of four (4) years
after the furnishing of services under this Agreement, make available, upon
written request, to the Secretary of Health and Human Services or the
Comptroller General of the United States, or to any of their duly
authorized representatives, this Agreement and such of Physician's books,
documents and records as are necessary to certify the nature and extent of
costs under this Agreement.
32. Notwithstanding termination of this Agreement for any reason, Physician
shall, at DH's request, continue treatment of any DH Medicare HMO Member,
for the shorter of such periods of time (i) as may be required by law,
(ii)required by a Benefit Plan, or (iii) until the medically required
course of treatment has been completed, and
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Physician shall be entitled to payment hereunder for such purposes.
Physician shall continue to provide covered services for a period of thirty
(30) days notwithstanding the inability of DH or a Payor to pay amounts due
Physician, and Physician shall use its best efforts to assist in the
orderly transfer of such Members at DH's direction.
33. In the event that any state or federal laws or regulations, now existing or
enacted or promulgated after the effective date of this Agreement, are
interpreted by judicial decision, a regulatory agency or legal counsel to
either party in such a manner as to indicate that the structure of this
agreement may be in violation of such laws or regulations, the parties
shall amend this Agreement as necessary to bring it into compliance with
the law.
34. This Agreement shall be construed by and governed under the laws of the
State of Maryland.
35. DH shall have the right, upon giving prior written notice to Physician, to
assign its rights and obligations under this Agreement to a DH Affiliate.
Physician may not assign his rights and obligations under this Agreement
without the prior written consent of DH.
IN WITNESS WHEREOF, this Agreement is entered into and executed as of the date
first written above.
PRINTED NAME OF PHYSICIAN
PHYSICIAN
_____________________________
By:________________________(SEAL)
Please Attach Business Card
DOCTORS HEALTH, INC.
By:____________________________(SEAL)
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EXHIBIT A-2
Schedule of Services
I. Care Management includes:
A. Credentialing and Provider File Maintenance. In compliance with NCQA
standards, the credentialing process gathers information on our member
providers, performs primary source verification, provides automatic
recredentialing activities and alerts providers when items need to be
renewed and/or reevaluated.
B. Referral Management. The DH Referral Management Program provides for
the maintenance of referral directories; authorization of DH referrals
to network providers; clinical review of referrals for
appropriateness, according to DH physician approved criteria; and
tracking and reporting of referral patterns to identify outliers and
encourage recommendations for change.
C. Utilization Management. The DH Utilization Management Program reviews
and tracks the utilization of healthcare services, particularly
inpatient stays, to facilitate appropriate hospital admissions;
provides recommendations for alternate site care and assists with the
coordination of these services; provides clinical review of procedural
necessity; and works with the physician to identify practice pattern
trends.
D. Case Management. The DH Case Management Program offers to physicians
the skills of registered nurses and licensed clinical social workers
in order to assist in the coordination of the care and services
required by patients with catastrophic and/or chronic illnesses or
injuries. The case manager works in conjunction with the physician,
patient and family to identify healthcare needs, develop a plan of
care, establish realistic treatment goals, coordinate and monitor
necessary resources, and evaluate treatment progress.
II. Data Management. The DH Data Management service coordinates the receipt
and maintenance of payor eligibility and benefit plan information. It also
allows for the coordination and integration of a variety of data components
to yield meaningful reports which will reflect the overall performance of a
provider network, i.e., utilization, costs and quality.
III. Patient Services. DH provides all Participating Physicians, access to
nurse triage and patient advocacy services. Through these services,
specially trained nurses are available by phone to answer questions
regarding access to services, treatment alternatives and self care
options.
IV. Third Party Administration. The DH Third Party Administration services
provide for the appropriate adjudication of claims, coordination of
benefits, subrogation services and integration with the reinsurance
carrier.
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<PAGE>
EXHIBIT B-3
SIGNING BONUS
Physician's Signing Bonus is based upon the following representations made
by Physician:
1. Physician's gross primary care collections for the 1996 calendar year were
$ ________________________.
2. The number of Physician's active (1) Medicare patients is
__________________.
Based upon and subject to the accuracy of the information provided herein,
Physician's Signing Bonus shall be an amount equal to :
1. Cash in the amount of $ _________________.
2. ___________ shares of Class B Common Stock of Doctors Health.
A Prospectus describing Doctors Health and its affiliates is enclosed. Please
direct your attention to pages 8 to 16 of the Prospectus dated January 24, 1997
which describes the risk factors which you should consider in evaluating an
investment in the securities offered under the Prospectus and in this
Agreement. We will provide updated information about this company in the form
of a Prospectus Supplement.
(1) Patients who have made at least one office visit to Physician during the
last two years.
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