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
Date of Report (Date of earliest event reported) July 18, 1997
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MAXICARE HEALTH PLANS, INC.
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(Exact name of registrant as specified in its charter)
Delaware 0-12024 95-3615709
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(State or other jurisdiction (Commission (IRS Employer
of incorporation or File Number) Identification No.)
organization)
1149 South Broadway Street, Los Angeles, California 90015
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (213) 765-2000
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Item 5. Other Events.
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Maxicare Health Plans, Inc. (the "Company") reported that
its California HMO has signed a definitive agreement with
Molina Medical Centers ("MMC") and has been advised that
all the necessary regulatory approvals have been granted to
assign or transfer MMC's Medi-Cal contracts for the
provision of services in San Bernardino and Riverside
Counties (the "San Bernardino/ Riverside Contract") and
Sacramento County (the "Sacramento Contract"), with the
State of California to Maxicare, effective July 1, 1997 for
approximately 40,000 and 30,000 members, respectively.
MMC will become Maxicare's exclusive Medi-Cal provider in
those service areas. The Company is awaiting receipt of
fully executed documents from the regulatory bodies
reflecting their consent to the foregoing assignment and
transfer. The term for both the San Bernardino/Riverside
Contract and the Sacramento Contract is for the period
through June 30, 1998.
It is the Company's understanding that the state of
California currently intends to implement a new Medi-Cal
managed care program (the "Two-Plan Model") with an
approximate effective date of January 1, 1998 in the San
Bernardino and Riverside Counties. Under the Two-Plan
Model, the state of California through the Department of
Health Services will contract on a multi-year basis with a
commercial health plan and a publicly-sponsored health plan
to provide HMO services to Medicaid recipients. This Two-
Plan Model has been designed in part as a replacement to
the existing Medicaid managed care program in San
Bernardino and Riverside Counties and upon implementation
of the Two-Plan Model the San Bernardino/Riverside Contract
assigned to the Company will be effectively discontinued.
At this point in time the Company cannot be certain when
the Two-Plan Model will be implemented, and if implemented
what level of participation the Company will have in the
Two-Plan Model, if any.
This Form 8-K contains forward-looking information. The
forward-looking statements are made pursuant to the safe
harbor provisions of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements may be
significantly impacted by certain risks and uncertainties
including regulatory approval, the number of beneficiaries
and the reimbursement rates paid by the State of California
during the term of the MMC Medi-Cal contracts referred to
above.
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Item 7. Financial Statements, Pro Forma Financial Information and
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Exhibits.
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(a) Financial Statements of Businesses Acquired.
None.
(b) Pro Forma Financial Information.
None.
(c) Exhibits.
Exhibit No. 10.85 - Health Services Agreement
Between Maxicare, a California Health Plan and Molina
Medical Centers.
Exhibit No. 99.5 - Press release reporting the
Company's California HMO has signed a definitive
agreement with Molina Medical Centers.
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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.
Maxicare Health Plans, Inc.
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(Registrant)
August 12, 1997 /s/ EUGENE L. FROELICH
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Eugene L. Froelich
Chief Financial Officer
and Executive Vice President -
Finance and Administration
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Exhibit 10.85
HEALTH SERVICES AGREEMENT
BETWEEN MAXICARE, A CALIFORNIA HEALTH PLAN
AND MOLINA MEDICAL CENTERS
This Health Services Agreement ("Agreement) is entered into
by and between Maxicare, a California corporation ("Maxicare"), and
Molina Medical Centers, a California corporation ("Molina").
RECITALS
A. Maxicare is a prepaid full-service health care service
plan licensed under the Knox-Keene Health Care Services Plan Act of
1975, as amended (the "Knox-Keene Act").
B. Molina is also a prepaid full-service health care
service plan licensed under the Knox-Keene Act, with a Medi-Cal
service area defined in Addendum A (the "Molina Service Area").
C. Molina has established staff-model facilities and
contracted with a network of Participating Physicians and
Participating Facilities for the rendering of Health Care Services.
D. Maxicare and Molina intend to establish a long term
relationship through which they will participate in the Medi-Cal
Managed Care Program in Sacramento, Riverside and San Bernardino
Counties.
E. The parties intend to initially implement the
relationship by using best efforts to obtain State approval to
assign the Molina GMC (Sacramento) and PHP (San Bernardino and
Riverside) contracts from Molina to Maxicare.
F. In the event the parties are unable to effect the
assignment of either or both of Molina's existing GMC or PHP
Contracts, the parties intend to effect the assignment of either or
both of the contracts that can be assigned, and as to the other
contract, the parties intend that Maxicare will contract directly
with the California Department of Health Services under the Medi-
Cal Managed Care Program to provide Health Care Services to Medi-
Cal enrollees in those counties, including but not necessarily
limited to, the enrollees currently being served by Molina's Medi-
Cal Managed Care Plan.
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G. The parties then intend that, through this subcontract,
Maxicare will assure Molina's continued participation in the Medi-
Cal program, as Maxicare's exclusive physician network, to whom
Maxicare will assign all of the enrollees who enroll in the
Maxicare Medi-Cal Managed Care Plan, provided that Molina has not
materially failed to comply with the terms of this Agreement,
especially the terms governing the availability, accessibility and
quality of Health Care Services.
NOW, THEREFORE, in consideration of the promises and mutual
covenants contained herein, the parties agree as follows:
ARTICLE I - DEFINITIONS
1.01 Capitation Payment - is a fixed monthly payment
negotiated by the parties that is payable to Molina by Maxicare for
each Molina Member, in exchange for the provision of Health Care
Services, provided in accordance with the terms of this Agreement
and the performance of other duties described in this Agreement .
1.02 DHS - is the California Department of Health Services.
1.03 DHHS - is the United States Department of Health and
Human Services.
1.04 DOC - is the California Department of Corporations.
1.05 DOJ - is the United States Department of Justice.
1.06 Eligibility List - is a list of all Molina Members to
be provided by Maxicare on a monthly basis to Molina.
1.07 Emergency Services - are those Health Care Services
required for alleviation of severe pain or immediate diagnosis and
treatment of unforeseen medical conditions, which, if not
immediately diagnosed and treated, would lead to disability or
death.
1.08 Maxicare Enrollment Packet - The information provided
by Maxicare to Molina Members upon enrollment in the Medi-Cal Plan
which summarizes the Maxicare Medi-Cal Plan offered to Molina
Members and which includes, but may not be limited to, an Evidence
of Coverage, Disclosure Form, and Participating Provider Directory
for Sacramento, Riverside and/or San Bernardino Counties. The
Evidence of Coverage is attached hereto and incorporated herein as
Addendum B, the Disclosure Form is attached hereto and incorporated
herein as Addendum C, and the Participating Provider Directory is
attached hereto and incorporated herein as Addendum D.
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1.09 Maxicare Medi-Cal Plan - is the Maxicare benefit plan
covering the provision of Health Care Services to Medi-Cal Members
pursuant to the Medi-Cal Agreement. The benefits of the Maxicare
Medi-Cal Plan are set forth in the Medi-Cal Agreement.
1.10 Health Care Services - are all medical, hospital and
ancillary services, including Emergency Services, which are covered
benefits under the Maxicare Medi-Cal Plan and which Molina has
agreed to provide and/or arrange and pay for in accordance with the
terms of this Agreement, including but not limited to the terms of
Addendum E, which provides a more detailed description of Health
Care Services.
1.11 Knox-Keene Act - is the Knox-Keene Health Care Service
Plan Act of 1975, as amended, and the rules and regulations
promulgated by DOC thereunder.
1.12 Medi-Cal - is a federal and state funded health care
program established by Title XIX of the Social Security Act, as
amended, which is administered in California by the DHS.
1.13 Medi-Cal Agreement - means the agreement(s)
(individually and collectively) between Maxicare and DHS pursuant
to the Waxman-Duffy Act, under which Maxicare will agree to provide
health benefits under the Medi-Cal Managed Care Program to
Sacramento, Riverside and San Bernardino County Medi-Cal
beneficiaries, including but not limited to, those beneficiaries
who are currently enrolled in the Molina Medi-Cal Plan. The Medi-
Cal Agreement may be the GMC and/or PHP Contracts, if the State
approves assignment of those contracts to Maxicare. If any of
those contracts is not assignable, then the Medi-Cal Agreement may
include a new Agreement(s) entered into between Maxicare and DHS to
enable Maxicare to accept the transfer of Molina's current Medi-Cal
membership under the nonassignable contract. A copy of the Medi-
Cal Agreement will be provided to Molina by Maxicare upon
execution.
1.15 Medi-Cal Member - is an individual residing in
Sacramento, Riverside and/or San Bernardino Counties who is
eligible for Medi-Cal and is enrolled in the Maxicare Medi-Cal Plan
pursuant to the GMC or PHP Contracts.
1.16 Monthly DHS Payment - is the revenue received by
Maxicare each month from DHS, as determined by DHS, for the Health
Care Services each Molina Member is to be provided under the
Maxicare Medi-Cal Plan.
1.17 Primary Care Physician - is either an internist,
pediatrician, OB-Gyn, or family practitioner who has been selected
by or assigned to a Molina Member for the purpose of providing
primary care services and coordinating other Health Care Services
under the Maxicare Medi-Cal Plan.
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1.18 Primary Hospital - is the hospital: which meets the
definition of a Molina Participating Facility; which has agreed to
provide hospital Health Care Services to Molina Members who select
or are assigned to a Primary Care Physician who admits or arranges
for admission primarily to that hospital; and where most hospital
Health Care Services will be provided to those Molina Members.
1.19 Molina Member - is a Medi-Cal Member who has been
assigned to or selected a Molina Participating Physician as his or
her Primary Care Physician.
1.20 Molina Participating Facility - is an acute-care
facility, licensed in the State of California, accredited by the
Joint Commission on the Accreditation of Health Care Organizations
and certified for participation in Medi-Cal, which is owned by or
has entered into a written contract with Molina to furnish hospital
and/or other facility component Health Care Services to Molina
Members.
1.21 Molina Participating Physician - is a physician or
osteopath or group of physicians or osteopaths, who meets NCQA
credentialing standards and is licensed in the State of California
and certified for participation in Medi-Cal, which has contracted
with or is employed by Molina to provide or arrange Health Care
Services to Molina Members.
1.22 Molina Participating Providers - are Molina
Participating Physicians, Molina Participating Facilities and other
providers, such as ancillary service providers, who meets Maxicare
credentialing standards, and to the extent required, and certified
for participation in the State of California, which contract with
Molina to provide Health Care Services to Molina Members.
1.23 Molina Service Area - The geographic area in
Sacramento, Riverside and/or San Bernardino County in which, as of
the Commencement Date of this Agreement, Molina is licensed by the
DOC and approved by DHS to provide or arrange Health Care Services
for its Medi-Cal Members. The Molina Service Area is described in
Addendum A, attached hereto and incorporated herein. The Molina
Service Area may be revised upon the approval of Maxicare, the DOC
and DHS.
1.24 Molina Subcontracts - are the contracts, in writing to
the extent required by law, that are entered into between Molina
and Molina Participating Providers for the performance of Health
Care Services.
1.25 Waxman-Duffy Act - is the Waxman-Duffy Prepaid Health
Plan Act (commencing at Section 14200 of the California Welfare and
Institutions Code), and the rules and regulations promulgated
thereunder by the DHS.
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1.26 NCQA - is the National Committee for Quality Assurance,
an agency responsible for accrediting health maintenance
organizations and from which Maxicare is preparing to seek
accreditation.
1.27 HCFA - is the Health Care Financing Administration
within the U.S. Department of Health and Human Services.
1.28 GMC and PHP Contracts - are the contracts entered into
by and between Molina and DHS pursuant to the Waxman-Duffy Act,
under which Molina has been providing health benefits under the
Medi-Cal Managed Care Program to Sacramento, Riverside and San
Bernardino County Medi-Cal beneficiaries, and which Molina is,
through separate agreement, assigning to Maxicare, subject to State
approval.
ARTICLE II - MOLINA'S DUTIES
2.01 Assign GMC and PHP Contracts - Simultaneously with the
execution of this Agreement, Maxicare and Molina are entering into
an Assignment Agreement in which, subject to State approval, Molina
is assigning its GMC (Sacramento County) and PHP (San Bernardino
and Riverside Counties) Medi-Cal contracts to Maxicare. Molina
shall use its best efforts to obtain all necessary State approvals
to assign the GMC and PHP Medi-Cal contracts to Maxicare.
2.02 Arrange Health Care Services - Molina shall provide or
arrange all Health Care Services to Molina Members as identified on
the Eligibility List provided by Maxicare pursuant to Section 3.04
of this Agreement.
2.03 Participating Providers.
2.03.01 Standards. Molina agrees to provide or
arrange and pay for the provision of Health Care Services to Molina
Members in accordance with the terms of this Agreement. Molina
shall assure that all Health Care Services are provided by duly
credentialed Molina Participating Providers who will provide such
services consistent with the scope of their license, certification
or accreditation and in accordance with generally accepted
standards of medical practice. In addition, Molina Participating
Providers shall satisfy the standards for participation and all
applicable requirements for providers of health services under the
Medi-Cal Program as set forth in Title 22 of the California Code of
Regulations, Article 4, Section 51200 et seq. Molina agrees that
Molina Facilities shall comply with the facility standards
established by DHS as set forth in Title 22, California Code of
Regulations and with Maxicare standards. To the extent requested
by Maxicare, and provided Molina has received a satisfactory score
on Maxicare's delegation audit, Molina shall credential, conduct
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precontractual audits of and recredential all Molina Participating
Providers in accordance with Maxicare, DHS and NCQA standards. All
Molina Participating Physicians must have privileges at a Molina
Participating Hospital(s), unless the Maxicare Medical Director
agrees otherwise in writing. Molina shall cooperate with
inspections of Molina Participating Providers, as conducted by DHS
or Maxicare staff, that are required to assure compliance with DHS,
DOC, NCQA and/or Maxicare standards. Maxicare agrees that it will
conduct the delegation audit, referenced above and elsewhere in
this Agreement, in accordance with Maxicare written policies and
procedures regarding such audits. Those policies and procedures
will be provided to Molina prior to the conduct of the audit.
Maxicare and Molina understand that the delegation of claims
payment responsibility to Molina by Maxicare, which is inherent in
a capitation payment arrangement, does not relieve Maxicare of its
responsibility under Section 1371 of the Knox Keene Act to assure
that payment is made within the time periods specified in, and in
accordance with the other requirements of, that Section of the Act.
2.03.02 Adequacy and Availability. Molina shall
demonstrate the continuous availability and accessibility of
adequate numbers of Molina Participating Providers to provide
Health Care Services to Molina Members on a 24-hour basis, seven
(7) days a week, including the provision of Emergency Services.
Molina will have as a minimum meet all federal, state, Maxicare and
NCQA standards regarding the availability, accessibility and/or
continuity of care. Maxicare's current standards are included in
the Maxicare Provider Manual, a copy of which will be separately
provided to Molina, and which is subject to change by Maxicare upon
five (5) days prior written notice to Molina, unless shorter notice
is required to comply with law. Molina agrees to comply with the
standards of availability and accessibility that Maxicare has filed
with the DOC and DHS, and with State standards. A copy of
Maxicare's standards will be provided to Molina prior to the
execution of this Agreement. Currently, State availability
standards require the Plan to meet the following practitioner-
patient ratios and availability/accessibility standards:
(i) One full-time equivalent Primary Care
Physician per two thousand (2,000) prepaid persons;
(ii) One full-time equivalent physician per one
thousand two hundred (1,200) prepaid persons;
(iii) One full-time equivalent non-physician
medical practitioner per one thousand (1,000) prepaid persons;
(iv) One (1) designated Emergency Services
facility in Sacramento County, providing care on a 24-hour basis,
seven (7) days a week;
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(v) Travel distance to a Primary Care Physician
and/or hospital must be no more than five miles in an urban area;
thirty in a rural area, unless longer or shorter distances are
customary in the community, in which case the community standard
applies;
(vi) Wait times for emergency, urgently needed
and/or elective office visits must conform to the standards which
Maxicare has filed with DHS and DOC; and,
(vii) Wait times to see a physician once the
member arrives in the office must also conform to the standards
which Maxicare has filed with the DHS and DOC, as must telephone
wait time.
2.03.03 List of Providers. Molina shall provide to
Maxicare prior to the date that Maxicare must file its notice of
material modification with the Department of Corporations seeking
approval for the Molina - Maxicare contractual relationship a
complete list of the names, addresses, specialties, license
numbers, telephone numbers, hospital privileges, board
certification, Medi-Cal certification number, DEA number, normal
hours of operation and other information as Maxicare may reasonably
request for each Molina Participating Physician and the names,
addresses, license or certification numbers, scope of services,
accreditation status, Medi-Cal certification number and other
information as Maxicare may reasonably request regarding each
Molina Participating Provider other than a Molina Participating
Physician who will be providing Health Care Services under the
Maxicare Medi-Cal Plan. Molina agrees to provide Maxicare with any
additional provider information required by the DHS and DOC.
2.03.04 Changes in Provider Network. Molina will
provide Maxicare an updated list of Molina Participating Providers
on a monthly basis and Maxicare shall publish periodically either a
new Participating Provider Directory or an amendment to the
existing Participating Provider Directory as required by DHS.
Molina's updated monthly list shall identify those Molina
Participating Providers which have been added or deleted from the
previous monthly list of Molina Participating Providers, and those
Molina Participating Providers that have changed office locations,
phone numbers or other information disclosed in the Directory.
Molina shall immediately inform Maxicare of the termination of any
Molina Primary Care Physician so that Maxicare may reassign all
Molina Members assigned to that Primary Care Physician. When a
Molina Participating Provider moves to a new facility, Molina shall
conduct an on-site inspection of such new facility as required by
law, provided Molina has passed Maxicare's delegation audit and
entered into a delegation agreement with Maxicare to provide such
inspections and/or audits.
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In addition, Molina shall immediately inform Maxicare
of any other type of provider change that may impact Maxicare's
responsibilities under the Medi-Cal Agreement of law. In the event
of termination of a Molina Participating Provider for any reason,
Molina remains responsible for the continued provision of Health
Care Services to all Molina Members, including those who are
receiving Health Care Services from the terminated Molina
Participating Provider.
2.03.05 Primary Care Physician. Molina shall
ensure that an appropriate Primary Care Physician is available for
each Molina Member. A Molina Member may select a Primary Care
Physician or Maxicare may assign a Molina Member to a Primary Care
Physician.
2.04 Insurance. Molina shall maintain professional
liability insurance and general liability and errors and omissions
liability insurance in the minimum amounts of five million dollars
($5,000,000) per person and ten million dollars ($10,000,000) total
liability for coverage of Molina, its agents and employees. In the
event Molina procures a claims made policy, as distinguished from
an occurrence policy, Molina shall procure and maintain prior to
termination of such insurance, continuing extended reporting
coverage for the maximum term provided in the professional
liability policy. Molina shall notify Maxicare of any material
changes in insurance coverage and shall provide a certificate of
such insurance to Maxicare upon request. Molina shall require
Molina Participating Providers to maintain insurance consistent
with the standards of the relevant community.
2.05 Acceptance of Members. Molina shall accept as Molina
Members all Maxicare Medi-Cal Members who chose a Molina Primary
Care Physician or who are assigned to Molina in accordance with
Medi-Cal and Maxicare procedures.
2.06 Coordination of Benefits. Molina may recover the costs
of Health Care Services rendered to a Molina Member and provided or
paid for by Molina, to the extent a Molina Member is covered for
such services under any other state or federal medical care program
or under other contractual or legal entitlement, including, but not
limited to, private group or individual indemnification programs,
in accordance with applicable coordination of benefits laws.
2.07 Third Party Liability. Neither Molina nor any Molina
Participating Provider(s) may attempt to recover costs of Health
Care Services in circumstances involving casualty insurance, tort
liability or workers' compensation. Molina shall notify Maxicare
within five (5) calendar days of discovering any circumstances
involving a Molina Member which may result in the Molina Member
recovering tort liability payments, casualty insurance payments or
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workers' compensation awards. Molina shall also provide to
Maxicare such other related information as required under the Medi-
Cal Agreement (see Section 3.41 of the draft Medi-Cal Agreement).
The parties understand and agree that the Medi-Cal Agreement
provides that said recoveries are the exclusive property of the
DHS.
2.08 Molina Licensure and Compliance.
2.08.01 Knox-Keene License; Medi-Cal Certification.
Throughout the term of this Agreement, Molina shall maintain Knox-
Keene licensure in good standing with the DOC, so that Molina can
assume full risk under this Agreement, and Medi-Cal certification.
2.08.02 Regulatory Approval. Molina shall have and
maintain throughout the term of this Agreement, via appropriate
approval by all applicable regulatory bodies, including, without
limitation, the DOC, approval for Molina to participate in the
Maxicare Medi-Cal Plan and to provide Health Care Services under
this Agreement within the Molina Service Area. Molina shall
provide to Maxicare written evidence of such approval prior to
enrolling any Molina Members pursuant to this Agreement.
2.08.03 Approved Molina Service Area. Molina shall
accept assignment of persons under this Agreement only within the
Molina Service Area for Medi-Cal enrollees, unless the parties
agree otherwise in a written amendment to this Agreement.
2.08.04 Licensure Changes/Limitations. Molina
shall notify Maxicare in writing within five (5) working days in
the event of any suspension, restriction or limitation is placed on
its license by the DOC or its certification by DHS or the
licensure, certification or accreditation of any Molina
Participating Provider.
2.09 Quality Assurance and Remedial Procedures. The parties
shall mutually agree upon and implement a quality assurance program
for application to Maxicare Medi-Cal Members, in accordance with
the requirements of the Knox-Keene Act, the Waxman-Duffy Act, the
Medi-Cal Agreement, and Maxicare's notice of material modification
filed with the DOC. The Maxicare Plan quality assurance program
shall include maintenance of a Maxicare Medi-Cal Plan Quality
Assurance Committee which shall be responsible for oversight of all
Health Care Services provided to Maxicare Medi-Cal Members. A
Molina designated physician shall participate in the Maxicare Plan
Quality Assurance Committee. Molina shall additionally maintain an
independent Quality Assurance Committee for reviewing matters
related to Molina Members which shall meet at least monthly.
Molina may satisfy this requirement by establishing a Subcommittee
to the Molina Quality Assurance Committee. Molina shall, through
its Medi-Cal Plan Quality Assurance Committee or Subcommittee,
perform quality assurance reviews of Health Care Services provided
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to Molina Members in compliance with the Maxicare Medi-Cal Plan
quality assurance program as brought before Molina internally or
from Maxicare's Medi-Cal Plan Quality Assurance Committee, the
NCQA, DOC, DHS and any other governmental agencies with regulatory
or enforcement jurisdiction over this Agreement. The Molina
Quality Assurance Committee shall keep minutes of the committee
meetings, a copy of which shall be made available to the Maxicare
Medi-Cal Plan Quality Assurance Committee. A Maxicare designated
physician may participate in the Molina Quality Assurance
Committee's review of Molina Member matters. Maxicare shall conduct
quality improvement and quality assurance functions, and/or, if
Molina passes Maxicare's delegation audit and enters into a written
delegation agreement with Maxicare in which Molina accepts
responsibility for performing quality improvement or quality
assurance functions, Maxicare shall monitor and oversee the
performance of quality of care functions by Molina.
Molina and Molina Participating Providers shall abide by
Maxicare's written Quality Management Program, and Maxicare's
policies and procedures, including, but not limited to, any
addressing the following subjects: (1) Oversight of Quality
Management Functions Delegated to Molina ; (2) Assessment of
Medical Groups and IPAs for Delegated Quality Management; (3)
Monitoring and Oversight of Quality Management Activities of
Network Providers; (4) Delegation of Quality Management - HMO
Coalition Studies; (5) Delegation of Quality Management - Medical
Records Audits; (6) Delegation of Quality Management - Medi-Cal
Facility Inspections; and (7) Standards for Delegated Quality
Improvement.
2.10 Utilization Review. Molina shall develop a utilization
review program in conformance with the requirements of the DOC,
DHS, HCFA, NCQA, Maxicare's notice of material modification filed
with DOC, and the Maxicare Medi-Cal Plan Quality Assurance
Committee. Molina shall maintain a Utilization Review Committee
which shall meet as frequently as necessary. The Utilization
Review Committee shall keep minutes of the committee meetings,
copies of which shall be made available to Molina. Molina shall
review elective referral and hospital admissions on a concurrent
and prospective basis and Emergency Services on a retrospective
basis. Maxicare shall conduct utilization management functions,
and/or, if Molina passes Maxicare's delegation audit and enters
into a delegation agreement with Maxicare accepting responsibility
for performing utilization management functions, Maxicare shall
monitor and oversee the performance of those functions by Molina.
Molina and Molina Participating Providers shall comply with
Maxicare's Policies and Procedure regarding utilization management.
2.11 Credentialing. Molina shall be responsible for
credentialing Molina Participating Providers in accordance with the
standards of the NCQA, HCFA, DOC and DHS and the Maxicare Medi-Cal
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Plan Quality Assurance Committee, provided that Molina achieves a
satisfactory score on Maxicare's delegation audit and enters into a
written delegation agreement with Maxicare covering credentialing
and recredentialing of providers. Maxicare shall conduct
credentialing and recredentialing functions, and/or, if Molina
passes Maxicare's delegation audit and is delegated responsibility
for performing credentialing and recredentialing functions,
Maxicare shall monitor and oversee the performance of those
functions by Molina.
2.12 Non-discrimination. Molina and Molina Participating
Providers shall not unlawfully discriminate against any employee
nor applicant for employment because of race, religion, color,
national origin, ancestry, physical handicap, medical condition,
marital status, age (over 40) or sex. Molina and Molina
Participating Providers shall ensure that the evaluation and
treatment of their employees and applicants for employment are free
of such discrimination. Molina and Molina Participating Providers
shall comply with the provisions of the Fair Employment & Housing
Act (California Government Code, Section 12990, et seq.) and the
applicable regulations promulgated thereunder (CCR, Title 2,
Section 7285.0, et seq.). The applicable regulations of the Fair
Employment and Housing Commission implementing Government Code,
Section 12990, set forth in Chapter 5 of Division 4 of Title 2 of
the CCR are incorporated into this Agreement by reference and made
a part hereof as if set forth in full. Molina and Molina
Participating Providers shall give written notice of their
obligations under this clause to labor organizations with which
they have a collective bargaining or other agreement. Molina shall
include the non-discrimination and compliance provisions of this
Section in all subcontracts to perform services under this
Agreement.
Molina and Molina Participating Providers shall not
discriminate against Medi-Cal Members because of race, color,
creed, religion, ancestry, marital status, sexual orientation,
national origin, age, sex, economic status, or physical or mental
handicap in accordance with Title VI of the Civil Rights Act of
1964, 42 USC Section 2000d, rules and regulations promulgated
pursuant thereto, or as otherwise provided by law or regulation.
2.13 Accounts Payable System.
2.12.01 Provider Claims. Molina agrees to operate
its accounts payable system in a manner which assures that
providers of authorized Health Care Services, including Molina
Participating Providers and noncontracting providers, receive
timely payment for Health Care Services rendered to Molina Members.
For purposes of this Agreement, timely payment shall mean payment
within the time specified in the applicable agreement between
Molina and the provider. If such agreement does not specify a time
period or if no agreement is in place, timely payment shall mean
payment within the time periods required by California law.
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2.13.02 Member Claims. Molina shall pay, within
the time periods required by law, all uncontested claims for
Emergency Services or other Health Care Services for which a Molina
Member has been billed. If the claim is contested by Molina,
Molina shall notify the Provider Member that the claim is contested
within the time period specified in this paragraph and shall
provide Maxicare a copy of the notice. The notice shall identify
the portion of the claim that is contested and the specific reasons
for contesting the claim. All such notices shall be in a form
acceptable to Maxicare and shall contain the disclosures required
by law. Maxicare shall oversee Molina's performance of these and
all delegated functions and, as part of its overall member
grievance process, shall be responsible for expedited review of
member grievances concerning nonpayment or late payment of claims.
2.14 Protection of Members. Neither Maxicare, Molina, nor
any Molina Participating Provider may request, demand, require or
seek directly or indirectly the transfer, discharge, removal or
nonreferral of any Medi-Cal Member for reasons of the Medi-Cal
Member's need for, or utilization of, Health Care Services or the
cost of those Health Care Services. Maxicare is responsible for
approving and implementing any Molina Member transfer, in
accordance with the process outlined in the Evidence of Coverage.
Molina agrees to look only to Maxicare for payment of Health Care
Services, except for amounts collected through COB. Molina may not
bill, charge, collect a deposit from, seek remuneration from,
surcharge or have any recourse against a Maxicare member or Molina
Member or persons acting on the member's behalf (other than
Maxicare or the COB payer). In the event that Molina surcharges
any Maxicare member or Molina Member, or if any Molina
Participating Provider does so, Molina shall refund the money to
the member within fifteen (15) days. Molina agrees not to maintain
any action at law or in equity against Maxicare members or Molina
Members to collect sums owed by Maxicare, even if Maxicare fails to
pay, becomes insolvent, or otherwise breaches the Agreement. This
Section shall survive termination of this Agreement. This Section
supersedes any oral or written agreement to the contrary now
existing or hereinafter entered into between Molina and a member or
persons acting on the member's behalf, insofar as the agreement
relates to payment for Health Care Services. Molina shall ensure
that a provision consistent with the terms of this Section is
included in all Molina Subcontracts.
2.15 Child Health and Disability Prevention ("CHDP") Program
Services. Molina agrees to maintain and operate a system which
ensures the provision of CHDP services to Medi-Cal Members under
the age of 21 in accordance with Title 17, California Code of
Regulations, Section 6800 et seq. Maxicare shall have the right
and duty to monitor and oversee Molina's performance.
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2.16 Identification of Officers, Owners, Stockholders,
Creditors. As required by DHS, Molina shall identify the names of
the following persons by listing them on Addendum F to this
Agreement: (i) Molina officers and owners; (ii) Molina shareholders
owning greater than ten percent (10%) of any stock issued by
Molina; and (iii) major creditors holding more than five percent
(5%) of any debts owed by Molina. Molina shall notify Maxicare
within thirty (30) days of any changes in the information provided
in Addendum F. Molina shall also complete a Maxicare Physician
Network Application, update any information in the completed
Application as it changes, and provide such other information as
Maxicare reasonably needs regarding Molina and Molina Participating
Providers as Maxicare needs to: conduct credentialing,
recredentialing and/or credentialing and/or to oversee the
performance of those functions by Molina; to produce the Provider
Directory; and to comply with applicable government reporting
requirements.
2.17 Molina Subcontracts.
2.17.01 Subcontracts. Molina shall maintain and
make available to DHS and Maxicare copies of all executed Molina
Subcontracts. Molina shall have written subcontracts with all
usually or frequently used providers. Through the use of
statements on the referral form or confirming letters, Molina shall
ensure that all referral providers who have not entered into
written subcontracts with Molina are bound to hold members,
Maxicare and the State harmless in the event Molina does not pay
for services. All Molina Subcontracts shall be in writing and
shall be consistent with the terms and provisions of this Agreement
and in compliance with applicable State and federal laws. Each
Molina Subcontract shall contain the amount of compensation which
the Molina Subcontractor will receive under the term of the Molina
Subcontract. Each Molina Subcontract shall also provide that the
State of California, DHS, Maxicare and Molina Members are held
harmless in the event Molina does not pay for services under the
Molina Subcontract. All Molina Subcontracts shall contain the
additional clauses required by the DHS to be in all subcontracts,
which are set forth in Addendum I and incorporated herein by
reference and which apply to Molina as well as its subcontractors.
Molina shall complete and/or require its Participating Physicians
to complete the risk calculation worksheets and attestations
required to be submitted by Maxicare to HCFA pursuant to 61 FR
13431, as amended. A copy of the worksheets and disclosure
statement will be separately provided to Molina if Molina does not
have the documents. Copies of the completed worksheets and
attestation forms shall be submitted to Maxicare for submission to
HCFA. If the risk calculation worksheets show that Molina or any
Molina Participating Physician is at substantial risk, as defined
in the regulation, and that the patient panel size is less than
20,000 patients, using one of the calculation methods set forth in
the regulations, then Molina shall purchase, or require its
Participating Physicians to purchase, stop loss coverage at the
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levels required by the regulation. To assure compliance with these
regulations, each Molina contract shall require the Participating
Physicians to obtain such stop loss coverage, at Molina's expense
or at the Participating Provider's expense, to the extent required
by Federal rules concerning physician incentive plans (61 FR 13430)
and at the levels required by those regulations.
2.17.02 Records. Molina shall require all Molina
Subcontractors to make their books and records pertaining to Health
Care Services available at all reasonable times for inspection,
examination, or copying by the DHS, DOC, DOJ, DHHS and Maxicare.
Molina shall also require all Molina Subcontractors to retain such
books and records for a term of at least five years from the close
of the fiscal year in which the Molina Subcontract is in effect.
2.17.03 Continuing Care Requirements. Molina shall
require all Molina Participating Providers to assist Molina and
Maxicare in the orderly transfer of the medical care of Molina
Members in the event of termination of the Medi-Cal Agreement,
including, without limitation, making available to DHS copies of
medical records and any other pertinent information necessary for
efficient case management of Medi-Cal Members, as determined by
DHS.
2.17.04 Continuing Obligations. The obligations of
Molina and Molina Subcontractors under this Section 2.17 shall not
terminate upon the termination of this Agreement.
2.18 Local Health Department Coordination. As more fully
set out in the Medi-Cal Agreement, Maxicare will enter inter an
agreement for the specified public health services with the Local
Health Department ("LHD") in Sacramento, Riverside and/or San
Bernardino Counties. The agreement will specify the scope and
responsibilities of the County, Maxicare and Molina billing and
reimbursements, reporting responsibilities, and medical record
management to ensure coordinated health care services. The
specified public health services under the agreement are as
follows:
2.18.01 Family planning services, as specified
under the Medi-Cal Agreement.
2.18.02 Sexually transmitted disease ("STD")
services diagnosis and treatment of disease episode of the
following STDS: syphilis, gonorrhea, chlamydia, herpes simplex,
chancroid, trichomoniasis, human papilloma virus, non-gonococcal
urethritis, lymphogranuloma venereum and granuloma inguinale.
2.18.03 Confidential HIV testing, as specified
under the Medi-Cal Agreement.
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2.18.04 Immunizations, as specified under the Medi-
Cal Agreement.
2.18.05 California Children Services.
2.18.06 Maternal and Child Health.
2.18.07 Child Health and Disability Prevention
Program.
2.18.08 Tuberculosis Direct Observed Therapy.
2.18.09 Women, Infants, and Children Supplemental
Food Program.
2.18.10 Population based Prevention Programs:
collaborate in LHD community based prevention programs.
The services specified in Sections 2.18.01 through
2.18.04 require reimbursement to the LHD. The parties understand
and agree that, subject to Maxicare oversight, Molina shall be
responsible for the arrangement, support and coordination of said
services, billing and reimbursements, reporting responsibilities,
and medical record management to ensure coordinated health care
services involving Molina Members.
2.19 Pharmacy and Formulary Compliance. In accordance with
Title 22, California Code of Regulations, Section 53214, Molina
shall comply with DHS standards for the appropriate use, storage
and handling of pharmaceutical items. Molina shall permit periodic
audits upon reasonable notice by Maxicare or DHS to measure
Molina's compliance with DHS standards and to provide
recommendations regarding improvement.
2.20 Additional Responsibilities. Provided Molina passes
the delegation audit conducted by Maxicare and enters into a
delegation agreement with Maxicare setting forth the terms for the
delegation, Molina shall have additional responsibilities as
identified in the Matrix of Responsibilities attached hereto and
incorporated herein as Addendum G.
ARTICLE 3 - DUTIES OF MAXICARE
3.01 Medi-Cal Agreement. Maxicare will endeavor to maintain
the GMC Agreement in effect throughout the term of this Agreement.
Maxicare will administer the Medi-Cal Agreement and will be
responsible for government relations functions pertaining to the
Medi-Cal Agreements, including but not limited to, acting as the
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liaison with DOC and DHS, for all purposes related to the
provision of Health Care Services to Molina Members under the Medi-
Cal Agreement. Molina shall cooperate with Maxicare in regard to
all government relations functions and shall provide Maxicare with
such information and assistance as it needs to maintain compliance
with Federal, State and local requirements. Maxicare agrees to
cooperate with Molina in efforts to secure the assignment of all
GMC and PHP Agreements from Molina to Maxicare.
3.02 Licensure. Throughout the term of this Agreement,
Maxicare will remain a licensed health care service plan in good
standing with the DOC. Maxicare shall notify Molina in writing
within five (5) working days in the event of any suspension,
restriction or limitation placed on its license or approved service
area by the DOC.
3.03 Enrollment and Exclusivity. Maxicare will enroll Medi-
Cal Members into the Maxicare Medi-Cal Plan in accordance with
applicable State and federal laws and the Medi-Cal Agreement.
During the current term of the assigned GMC and PHP Contracts,
Maxicare will assign all Medi-Cal Members to Molina as Maxicare's
exclusive provider, provided that Molina is in material compliance
with the terms of this Agreement, including but not limited to the
requirements to provide Health Care Services in a manner that
assures the availability, accessibility, continuity and quality of
care. In the event Molina is in material breach of this Agreement,
Maxicare may contract with other provider networks to assure the
availability, accessibility, continuity and quality of care to
Medi-Cal Members.
3.04 Verification of Eligibility. Within five (5) days
after receipt of the monthly Eligibility List from DHS, Maxicare
will provide to Molina a copy of such Eligibility List listing the
Molina Members based on DHS information. Such Eligibility List for
Molina Members shall be provided to Molina in a mutually agreeable
electronic data submission format.
3.05 Member Information and Identification Cards. Within
the time period required by law, after Maxicare receives notice of
the effective date of enrollment, Maxicare shall distribute to new
Molina Members: (i) the information required to be provided to
Molina Members under applicable State laws, including, without
limitation, the Maxicare Evidence of Coverage, Disclosure Form, and
Participating Provider Directory; and (ii) an identification card
which identifies the Molina Member as a Maxicare Medi-Cal Member
assigned to a Molina Primary Care Physician.
3.06 Insurance. Maxicare shall maintain professional
liability insurance, general liability insurance and directors and
officers liability insurance to the extent required by law.
Maxicare shall notify Molina of any material changes in insurance
coverage and shall provide a certificate of such insurance to
Maxicare upon request.
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3.07 Management of Delegated Quality Improvement Activities.
As more fully set out in the Medi-Cal Agreement, Maxicare will
maintain a system to help ensure accountability of delegated
quality improvement ("QIP") activities including, but not
necessarily limited to:
3.07.01 Maintenance of written and procedures which
describe delegated activities, QIP authority, function, and
responsibilities, how Molina will be informed of the scope of QIP
responsibilities, and Molina's accountability for delegated
activities.
3.07.02 Establish reporting standards to include
findings and actions taken by Molina as a result of QIP activities
with the reporting frequency to be at least quarterly.
3.07.03 Maintenance of written procedures and
documentation of continuous monitoring and evaluation of the
delegated functions, evidence that the actual quality of care being
provided meets professionally recognized standards.
3.07.04 Audit and document that Molina has the
administrative capacity, task experience, and budgetary resources
to fulfill its responsibilities and take, or require Molina to
take, necessary corrective action if it does not.
3.07.05 Maxicare will have the right to approve, or
require revisions of, Molina's QIP, including its policies and
procedures, to assure that the QIP and policies and procedures meet
Maxicare's standards and the requirements of DHS, DOC, HCFA and
NCQA.
3.07.06 Maxicare will use its best efforts to
ensure that the quality of care being provided is being
continuously monitored and evaluated. Molina shall promptly
provide Maxicare with the access to all records, facilities,
equipment, encounter data and other information of Molina or
Molina's Participating Providers, as may be needed by Maxicare to
perform such monitoring and evaluation.
3.07.07 Maxicare will investigate all potential
quality issues involving Molina Members and Molina Participating
Providers and shall take appropriate action upon finding an actual
quality issue. Molina and its Participating Providers shall report
to Maxicare any actual or potential quality of care issues of which
they become aware. Molina and its Participating Providers shall
cooperate with such investigations and abide by Maxicare's
determinations.
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3.08 Management of Delegated Credentialing Activities. As
more fully set out in the Medi-Cal Agreement, Maxicare is
responsible for the implementation and maintenance of policies and
procedures which delineate the credentialing activities which are
delegated to Molina under this Agreement, and Maxicare shall
monitor and/or verify such activities. The parties understand and
agree that, to the extent that Maxicare enters into a delegation
agreement with Molina, delegating responsibility for these
credentialing activities to Molina, Molina shall ensure the
qualification of all Molina Participating Providers, approve new
providers and sites, and terminate or suspend individual providers,
in accordance with the standards of the DOC, DHS, HCFA, NCQA and
Maxicare. Maxicare shall perform on-site audits, inspections and
investigations of Molina Participating Providers as required by the
DHS and as necessary to investigate a potential quality issue
involving a Molina Participating Provider, and Molina and Molina
Participating Providers shall cooperate with Maxicare's audits,
inspections and investigations. Molina shall maintain a provider
appeals process through which Molina Participating Providers can
appeal adverse credentialing, recredentialing or disciplinary
actions. The appeals process must provide due process to the
physician and meet the requirements of the Federal Health Care
Quality Improvement Act and NCQA.
3.09 Management of Delegated Utilization Review Activities.
As more fully set out in the Medi-Cal Agreement, Maxicare is
responsible for the implementation and maintenance of a utilization
management program which meets the requirements of the Medi-Cal
Agreement. To the extent that Maxicare enters into a delegation
agreement with Molina covering these activities, Molina shall
develop a utilization review program in conformance with the
requirements of the Medi-Cal Agreement, DOC, DHS, NCQA and
Maxicare. Molina shall maintain a Utilization Review Committee
which shall meet as frequently as necessary. The Utilization
Review Committee shall keep minutes of the committee meetings,
copies of which shall be made available to Maxicare. Molina shall
review elective referral and hospital admissions on a concurrent
and prospective basis and Emergency Services on a retrospective
basis. Maxicare shall ensure that said delegated utilization
management activities are regularly evaluated and approved or
corrected and that the such process is documented.
3.10 Member Satisfaction Surveys. Maxicare will conduct
member satisfaction surveys of Molina Members as required under the
Medi-Cal Agreement.
3.11 Additional Responsibilities. Maxicare shall have
additional responsibilities as identified in the Matrix of
Responsibilities attached hereto and incorporated herein as
Addendum G. The specific details for these additional
responsibilities shall be mutually agreed upon by the parties and
consistent with the notice of material modification filed by
Maxicare with the DOC.
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ARTICLE 4 - JOINT RESPONSIBILITIES
4.01 Solicitation of Enrollment. The parties may mutually
develop a plan for marketing the Maxicare Medi-Cal Plan and
Molina's participation in the Maxicare Medi-Cal Plan. Any
marketing plan shall be developed in compliance with all applicable
laws.
4.02 Agency Inquiries and Complaints. If Molina receives
any inquiry, complaint, deficiency notice or request for corrective
action from HCFA, DHS, DOC, DOJ or the DHHS or from a Molina
Member relating to Molina's arrangement of Health Care Services
under this Agreement, Molina's performance of delegated functions
hereunder, or relating to the administration of the Maxicare Medi-
Cal Plan or to the arrangement of Health Care Services to Medi-Cal
Members, Molina shall notify Maxicare within one (1) working day of
the receipt of the matter. If Maxicare receives any inquiry,
complaint, deficiency notice or request for corrective action from
DHS, DOC, DOJ, DHHS or from a Member relating to Molina's
arrangement of Health Care Services or performance of delegated
duties under this Agreement, Maxicare shall notify Molina, so that
Molina may promptly provide Maxicare with such records and/or other
information as Maxicare requires to respond to the complaintant.
The parties shall cooperate fully and as necessary to resolve such
matters.
4.03 Member Grievance Procedures. Molina shall abide by
Maxicare's Member Grievance Procedures as may be amended from time
to time, with approval of DOC and DHS which are briefly summarized
in the Evidence of Coverage attached as Addendum B and a more
complete copy of which will be separately provided, along with any
updates thereto, by Maxicare.. Molina shall abide by, and implement
upon request, all Maxicare, DOC and DHS determinations on Molina
Member appeals and grievances. To the extent that Maxicare
delegates any member relations functions to Molina, Maxicare shall
oversee the performance of those functions. Molina shall assure
that Maxicare is notified within one (1) day of any Molina Member
complaint or grievance received by Molina or any Molina
Participating Provider. A copy of Maxicare's current Member
Grievance Procedure is attached hereto as Addendum J and is
incorporated by reference herein. Notwithstanding the terms of
Section 11.02, Addendum J may be amended by Maxicare, by providing
Molina with written notice of the change, provided the change has
been approved by DHS and DOC.
4.05 Additional Responsibilities. The parties shall have
additional responsibilities as identified in the Matrix of
Responsibilities attached hereto and incorporated herein as
Addendum G. The specific details for these additional
responsibilities shall be mutually agreed upon by the parties and
shall be included in a Policies and Procedures Manual that will be
jointly developed by the parties.
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ARTICLE 5 - COMPENSATION
In exchange for the provision of Health Care Services to
Molina Members and the performance of other duties in accordance
with the terms of this Agreement, Maxicare shall pay Molina
Capitation Payments at the rates and according to the procedures
set forth in Addendum H attached hereto and incorporated herein.
Maxicare's obligation to make Capitation Payments to Molina shall
not begin until the first month in which a Maxicare Medi-Cal Member
has been assigned to Molina under the Medi-Cal Agreement. The
Capitation Payment rates specified in Addendum H were established
on the assumption that Molina will pass the delegation audit and
will perform delegated duties as discussed in this Agreement and in
the Responsibility Matrix attached hereto. Should Maxicare and
Molina not enter into a delegation agreement and should Maxicare
instead perform the functions intended to be delegated to Molina,
then the Capitation Payment rate shall be reduced by an actuarially
determined amount to reflect the additional duties to be performed
by Maxicare. In the event the parties are unable to agree on the
amount of adjustment, the dispute shall be submitted to arbitration
in accordance with the terms of this Agreement. In the event that
any DHS quarterly audit shows that Molina's "administrative costs",
as defined in the amended GMC and/or PHP contracts assigned to
Maxicare, is at a level that, when combined with Maxicare's
administrative costs, exceeds the fifteen percent (15%) limit
placed on those combined costs in the applicable GMC or PHP
contract, Molina agrees to use best efforts to reduce its
administrative costs. In the event that, on an annual aggregate
basis, Molina's administrative costs, when combined with
Maxicare's, exceed the fifteen percent (15%) annual aggregate
permitted in the assigned contracts, Molina shall pay Maxicare a
penalty equal to the penalty imposed on Maxicare by DHS or CMAC, if
any, except that, if Maxicare's current administrative costs exceed
the budgeted costs, Maxicare will pay its pro rata share of the
penalty. Such payment shall be made within five (5) business days
of Maxicare receiving notice of penalty from DHS or CMAC. The
failure of Molina to maintain administrative costs at a level that,
when combined with Maxicare's administrative costs, complies with
the limit in GMC and/or PHP contracts, shall be considered a
material breach of this Agreement if not cured within one quarter.
ARTICLE 6 - TERM
The initial term of this Agreement shall commence
concurrently with the effective date of the Medi-Cal Agreement (the
"Commencement Date"), subject to Department of Corporations,
approval of the Letter of Agreement between Maxicare and Molina and
shall continue for a period of five years. This Agreement shall
thereafter automatically renew for additional one year terms,
unless sooner terminated as set forth in Article 7 below.
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ARTICLE 7 - TERMINATION
7.01 Molina's Right to Termination. Subject to the prior
written approval of DHS and the medically appropriate transfer of
all Molina Members to other Maxicare participating providers,
Molina shall have the right to terminate this Agreement at the end
of the month in which written notice of termination is delivered
to Maxicare in the following circumstances:
(i) revocation, suspension or expiration of
Maxicare's license as a health care service plan pursuant to the
Knox-Keene Act;
(ii) Maxicare's breach of any material term, covenant
or condition of this Agreement and subsequent failure to cure such
breach within thirty (30) calendar days after notice by Molina of
such breach. The remedy of such breach within thirty (30) calendar
days of receipt of such notice shall continue this Agreement in
full force and effect for the remaining term, subject to any of the
rights of termination contained in this or any other provision of
this Agreement; or
(iii) Maxicare's material failure to comply with the
Medi-Cal Agreement, the Knox-Keene Act or the Waxman-Duffy Act or
the rules and regulations promulgated thereunder, as evidenced by a
deficiency notice or cease and desist letter from HCFA, DOC or DHS,
and failure to cure such material failure within forty-five (45)
days of the receipt of such notice from DOC or DHS or such longer
period as is specified in the HCFA, DOC or DHS notice.
7.02 Maxicare's Right to Termination. Subject to the prior
written approval of DHS and the medically appropriate transfer of
all Molina Members to other Maxicare participating providers,
Maxicare shall have the right to terminate this Agreement at the
end of the month in which written notice is delivered to Molina,
in the following circumstances:
(i) revocation, suspension or expiration of Molina's
license as a health care service plan pursuant to the Knox-Keene
Act or certification for participation in Medi-Cal;
(ii) the revocation, suspension or expiration of the
licenses and/or Medi-Cal certifications of, or termination of
their Molina subcontracts by, a significant number of Molina's
Participating Providers. For purposes of this Section, the number
of providers will be deemed significant if the loss of those
providers results in noncompliance with availability and/or
accessibility standards or if it results in the transfer of more
than ten percent (10%) of all Molina Members;
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(iii) Molina's breach, or the breach by any Molina
Participating Provider, of any material term, covenant or condition
of this Agreement or of any delegation agreement entered into
between Maxicare and Molina, and subsequent failure to cure such
breach within thirty (30) calendar days after notice by Maxicare of
such breach; or
(iv) Molina's material failure, or the material
failure of any Molina Participating Provider, to comply with the
Federal HMO Act, the Medi-Cal Agreement, the Knox-Keene Act or the
Waxman-Duffy Act or the rules and regulations promulgated
thereunder, or NCQA requirements, as evidenced by a deficiency
notice or cease and desist letter from DOC HCFA, DHS or NCQA, and
the failure of Molina to cure such material failure within forty-
five (45) days of the receipt of such notice from DOC, DHS, HCFA,
or NCQA or such longer period as may be specified in the notice.
7.03 Termination of Medi-Cal Agreement. Subject to any
continuation of care obligations set forth in this Agreement or the
Medi-Cal Agreement, this Agreement may be terminated upon mutual
consent of the parties upon the termination, nonrenewal, transfer
or assignment of the Medi-Cal Agreement.
7.04 Termination Without Cause. Subject to the prior
written approval of DHS, either party may terminate this Agreement
with or without cause effective upon the renewal date of this
Agreement by giving written notice to the other party at least one
hundred eighty (180) days prior to the renewal date.
7.05 Notification of DHS of Amendment or Termination.
Molina shall notify DHS in the event of an amendment or termination
of this Agreement. Notice shall be given by properly addressed
letter deposited in the United States Postal Service as first-class
postage-prepaid registered mail. Any termination under Sections
7.01, 7.02 or 7.04 above is subject to the prior written approval
of DHS.
7.06 Termination of Enrollment of a Molina Member.
Termination of enrollment of a Molina Member shall be in accordance
with the terms of the Maxicare Medi-Cal Plan.
7.07 Continuing Care Period. Molina shall continue to
provide Health Care Services to Molina Members as required by this
Agreement after the effective date of termination of this Agreement
until either: (i) such services are complete or the Molina Member
can be safely transferred to the care of another provider and such
transfer does not violate State laws regarding abandonment of
patients; or (ii) Maxicare has made provisions for the assumption
of such services, whichever occurs first. Maxicare will use its
best efforts to provide for the assumption of such services as soon
as is reasonably practicable, taking into account the best
interests of the Molina Member and the availability of appropriate
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providers. Compensation to Molina on behalf of Molina
Participating Providers during this continuing care period will be
compensated at sixty percent (60%) of the DHS Medi-Cal fee
schedule, which shall be accepted by Molina and Molina
Participating Providers as payment in full. Notwithstanding the
above, in the event that Maxicare should become insolvent, Molina
agrees to continue providing Health Care Services to Molina Members
in accordance with the terms of this Agreement even though Maxicare
cannot pay for the care, until the sooner of: (a) The duration of
the period for which the Members' premiums have been paid to
Maxicare and until the time of discharge for Members confined in an
inpatient facility; or (b) The date the Member becomes covered
under another plan of health insurance with similar benefits. This
Section and all other Sections of the Agreement are subject to the
Member hold harmless clause and shall survive termination of the
Agreement. Maxicare shall notify Molina in a timely manner in the
event Maxicare becomes insolvent.
7.08 Other Remedies. In the event that Molina loses its
license or fails to meet Maxicare or DOC standards for assuming
full risk for the provision of Health Care Services, Maxicare may,
in its sole discretion, in lieu of termination, offer Molina the
opportunity to continue participation in Maxicare's Medi-Cal Plan
on a shared risk basis. In the event that Maxicare notifies
Molina of a breach of this Agreement or of the Delegation Agreement
that is not necessarily a material breach, Maxicare may demand that
Molina take appropriate corrective action. The failure of Molina
to take appropriate corrective action within the reasonable time
specified in the corrective action notice shall be considered a
material default of this Agreement.
ARTICLE 8 - DISPUTE RESOLUTION
8.01 Arbitration. The parties agree to meet and confer in
good faith to resolve any problems or disputes that may arise under
this Agreement. Such negotiation shall be a condition precedent to
the filing of any arbitration demand by either party. Any
controversy, dispute or claim between the parties arising out of or
relating to interpretation, performance or breach of this Agreement
shall be resolved by mandatory, binding arbitration at the request
of either party, in accordance with the California Arbitration Act,
California Code of Civil Procedure, Sections 1280-1294.2 and
subject to the terms of this Section of the Agreement. The
arbitration shall be conducted in Los Angeles, California by a
single, neutral arbitrator who is licensed to practice law in the
State of California and who has a expertise in the field of health
law and/or health care. The arbitration shall be conducted under
the auspices of National Health Lawyers Association. ("NHLA"),
except that if NHLA is nor longer in existence or is otherwise
unable to appoint a neutral arbitrator, the parties shall conduct
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arbitration in accordance with the Commercial Rules of the American
Arbitration Association ("AAA") as supplemented by the provisions
in this Section 8.01. If the parties are unable to agree on the
choice of the arbitrator, then the parties agree that either NHLA
or AAA shall appoint a neutral arbitrator.
The arbitrator shall apply California substantive law and
federal substantive law where State law is preempted. Civil
discovery for use in such arbitration may be conducted in
accordance with the California Code of Civil Procedure and the
California Evidence Code, and the arbitrator selected shall have
the power to enforce the rights, remedies, duties, liabilities, and
obligations of discovery by the imposition of the same terms,
conditions and penalties as can be imposed in like circumstances in
a civil action by a superior court of the State of California. The
provisions of California Code of Civil Procedure Section 1283 and
1283.05 concerning the right to discovery and the use of
depositions in arbitration are incorporated herein by reference and
made applicable to this Agreement. Each party shall have the right
to take no more than ten (10) depositions of individuals or
entities, including depositions of expert witnesses, and copies of
all exhibits and demonstrative evidence to be used at the
arbitration. However, rebuttal and impeachment evidence need not
be exchanged until presented at the arbitration hearing.
The arbitrator shall have the power to grant all legal and
equitable remedies and award compensatory damages provided by
California law, except that punitive damages may not be awarded.
The arbitrator shall prepare in writing and provide to the parties
an award including factual findings and the legal reasons on which
the decision is based. The arbitrator shall not have the power to
commit errors of law or legal reasoning, and the award may be
vacated or corrected pursuant to California Code of Civil Procedure
Sections 1286.2 or 1286.6 for any such error. The costs of
arbitration shall be borne equally by the parties. Each party
shall pay their own attorney's fees.
Notwithstanding the above, in the event either party wishes
to obtain injunctive relief or a temporary restraining order, such
party may initiate an action for such relief in a court of law and
the decision of the court of law with respect to the injunctive
relief or temporary restraining order shall be subject to appeal
only through the courts of law. The courts of law shall not have
the authority to review or grant any request or demand for damages
or declaratory relief.
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ARTICLE 9 - RECORDS AND DATA COLLECTION
9.01 Maintenance of Records. Molina shall maintain and
provide, and require Molina Participating Providers to maintain and
provide, to the DHS, DOC, DOJ, DHHS and Maxicare all books,
records, patient records, encounter data (in a format approved by
Maxicare), and other information as may be necessary for compliance
by the parties with the Knox-Keene Act, the Waxman-Duffy Act, and
all other applicable law. Such books and records shall be
maintained in a form in accordance with the general standards and
laws applicable to such book or record keeping, including medical
histories, records and reports from other providers, hospital
discharge summaries, records of Emergency Services and such other
information as said parties may require or as necessary to disclose
the quality, appropriateness or timeliness of Health Care Services
provided to Molina Members under this Agreement. The obligations
under this Section shall not terminate upon the termination of this
Agreement, whether by rescission or otherwise.
The parties shall keep and maintain their books and records
on a current basis in accordance with general standards for book
and record keeping. The parties shall retain said records for a
term of at least five years from the close of the fiscal year in
which this Agreement is in effect.
9.02 Right to Inspect. Molina shall make available, and/or
require Molina Participating Providers to make available, for
inspection, examination or copying by the DHS, DOC, DOJ, DHHS and
Maxicare at reasonable times at Molina's usual place of business,
or at such other mutually agreeable place in California, all books,
records, patient records, encounter data, and other information
relating to the services provided pursuant to this Agreement,
including, but not limited to, Molina Member patient records,
subject to the confidentiality restrictions set forth in Section
9.03, and financial records pertaining to the cost of operations
and income received for Health Care Services provided to Molina
Members. The right of Maxicare and/or the governmental agencies to
inspect, evaluate and audit such records shall extend through five
(5) years from the date of termination of this Agreement or such
longer period as may be required by law. Molina shall provide
Maxicare with copies of any Molina Member medical record to the
extent that Maxicare needs such record to respond to a Molina
Member grievance. Such records shall be provided promptly enough
to enable Maxicare to meet the statutory and regulatory time
periods pertaining to member grievances, including but not limited
to those pertaining to expedited reviews of care denials.
9.03 Confidentiality. The parties shall maintain the
confidentiality of Molina Member medical records and related
information in accordance with applicable federal, State and local
laws, including, without limitation, Title 45, Section 250.50 of
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the Code of Federal Regulations, and Welfare and Institutions Code
Section 1400.2 and the regulations promulgated thereunder. Where
required by law, the parties shall obtain a specific written
authorization from the Molina Member prior to releasing the Molina
Member's medical records. The parties shall establish and maintain
procedures and safeguards so that no information pertaining to
MediCal Members contained in the parties' records or obtained from
DHS in carrying out the terms of this Agreement shall be used or
disclosed by the parties or their agents or employees other than
for purposes directly connected with the administration of the
Maxicare Medi-Cal Plan.
9.04 Financial Statements. Molina shall provide to Maxicare
copies of the quarterly financial reports submitted by Molina to
the DOC. Maxicare shall provide to Molina copies of the quarterly
financial reports submitted by Maxicare to the DOC
9.05 Provision of Data. The parties shall jointly and
separately maintain statistical records and data relating to the
utilization of Health Care Services by Molina Members as required
for the administration of the Maxicare Medi-Cal Plan and in
compliance with all HCFA, DHS, DOC and NCQA statistical, financial
and encounter data reporting requirements. Encounter data shall be
submitted by Molina to Maxicare in a format approved by Maxicare
and on a timely basis so that Maxicare can meet its regulatory
reporting requirements.
ARTICLE 10 - RELATIONSHIP OF PARTIES
10.01 Independent Contract Relationship. The relationship
between the parties is one of independent contractors. Nothing in
this Agreement is intended to create nor will be deemed or
construed to create any relationship between the parties other than
that of independent contracts. Neither of the parties, nor any of
their respective officers, directors or employees, shall act as nor
be construed to be the partner, agent, employee or representative
of the other. The relationship between the parties, as a
subcontractor of Maxicare, and DHS and the State of California are
independent contractor relationships. Neither Maxicare nor Molina
nor any agents, officers or employees of Maxicare or Molina are
agents, officers, employees, partners or associates of DHS or the
State of California. None of the provisions of this Agreement
shall be construed to create a relationship of partnership, agency,
joint venture or employment between Maxicare or Molina, as a
subcontractor of Maxicare, and DHS and the State of California.
10.02 Indemnification. The parties will indemnify and hold
each other harmless against any claims, demands, damages,
liability, judgments and expenses, including reasonable attorney
fees, as follows:
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10.02.01 To the extent that any allegations against
Molina are based on alleged fault by Molina (or its agents,
employees or providers) in providing or failing to provide Health
Care Services to Molina Members or in administrative dealings with
Molina Members, or in otherwise failing to perform under the Medi-
Cal Agreement, the Delegation Agreement or under the Maxicare Medi-
Cal Plan and the allegations against Maxicare are based on
vicarious, passive or secondary liability, including, without
limitation, allegations of apparent or ostensible agency and
negligent selection, Molina will fully indemnify Maxicare against
such claims, including reasonable attorney fees and costs.
10.02.02 To the extent that any allegations against
Maxicare are based on alleged fault by Maxicare (or its agents or
employees) in arranging or failing to arrange Health Care Services
to Molina Members or otherwise failing to perform under the Medi-
Cal Agreement or under the Maxicare Medi-Cal Plan, and the
allegations against Molina are based on vicarious, passive or
secondary liability, including, without limitation, allegations of
apparent or ostensible agency and negligent selection, Maxicare
will fully indemnify Maxicare against such claims, including
reasonable attorney fees and costs.
10.02.03 To the extent of any other claims, the
parties will mutually indemnify each other, including reasonable
attorney fees and costs, in proportion to the relative degree of
each party's fault that contributed to the claim. In interpreting
this paragraph, the principals of comparative fault shall apply.
10.03 Cooperation. The parties shall maintain an effective
liaison and close cooperation with one another to ensure smooth
working relationships with Medi-Cal Members, effective
communication between providers, and maximum benefits to each Medi-
Cal Member at the most reasonable cost, consistent with quality of
Health Care Services.
ARTICLE 11 - MISCELLANEOUS
11.01 Assignment. This Agreement and the rights, interests,
and benefits hereunder shall not be assigned, transferred, pledged,
or hypothecated in any way by the parties and shall not be subject
to execution, attachment or similar process nor shall the duties
imposed herein be subcontracted or delegated without the written
consent of the other party. Any assignment or delegation of the
Agreement shall be void unless prior written approval is obtained
from the DHS.
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11.02 Amendments. The parties may amend this Agreement only
by a written amendment executed by two (2) officers of Maxicare and
an authorized representative of Molina. Any amendment must be filed
with the DHS at least thirty (30) days prior to its effective date,
except as otherwise required by law.
11.03 Confidentiality of this Agreement. To the extent
possible, and unless otherwise required by law, each party agrees
to maintain the terms of this Agreement confidential. Disclosure
of the terms of this Agreement, other than disclosures required by
the DOC or DHS, shall not be made without the approval of the other
party.
11.04 Notices. All notices required or permitted by this
Agreement shall be in writing and may be delivered in person or may
be sent by regular, registered or certified mail or United States
Postal Service Express Mail, with postage prepaid, or by facsimile
transmission, and shall be deemed sufficiently given if served in
the manner specified in this Section 11.04. The addresses below
shall be the particular party's address for delivery or mailing of
notice purposes:
To Molina: Molina Medical Centers
One Golden Shore
Long Beach, California 90802
ATTENTION: J. Mario Molina, M.D.
To Maxicare: Maxicare Health, a California Corporation
1149 South Broadway, Suite 819
Sacramento, CA 90015
ATTENTION: Vice President and General Manager
The parties may change the names and addresses noted above
through written notice in compliance with this Section 11.04. Any
notice sent by registered or certified mail, return receipt
requested, shall be deemed given on the date of delivery shown on
the receipt card, or if delivery is rejected or no delivery date is
shown, the postmark date. If sent by regular mail, the notice
shall be deemed given forty-eight (48) hours after the notice is
addressed and mailed with postage prepaid, to the correct notice
address. Notices delivered by United States Express Mail or
overnight courier that guarantee next day delivery shall be deemed
given on the date of delivery shown on the receipt card, or if
delivery is rejected or no delivery date is shown, twenty-four (24)
hours after delivery of the notice to the United States Postal
Service or other courier. If any notice is transmitted by
facsimile transmission or similar means, the notice shall be deemed
served or delivered upon telephone confirmation of receipt of the
transmission, provided a copy is also delivered via delivery or
mail.
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11.05 Entire Agreement. This Agreement contains all the
terms and conditions between Molina and Maxicare concerning the
subject matter of this Agreement and supersedes all other
agreements, oral or otherwise, except that any delegation agreement
entered into by the parties shall be deemed an addendum to this
Agreement, once fully executed, and shall not be superseded by this
Agreement except to the extent that it is inconsistent with the
terms of this Agreement.
11.06 Provisions Separable. The invalidity or
unenforceability of any term or provision of this Agreement will in
no way affect the validity or enforceability of any other term or
provision.
11.07 Headings. The headings of the various sections of
this Agreement are inserted merely for the purpose of convenience
and do not expressly, or by implication, limit or define or extend
the specific terms of the section so designated.
11.08 Waiver of Breach. The waiver by either party of a
breach or violation of any provision of this Agreement shall not
operate as or be construed to be a waiver of any subsequent breach
thereof, except as otherwise provided in the Arbitration Section of
this Agreement.
11.09 Applicable Law and Compliance with Medi-Cal
Agreement. This Agreement shall be governed in all respects by the
laws of the State of California and applicable federal law,
including, without limitation: (i) the Knox-Keene Act and the
regulations promulgated thereunder by the DOC; (ii) the Waxman-
Duffy Act and the regulations promulgated thereunder by DHS; and
(iii) the Federal HMO Act and the regulations promulgated
thereunder by HCFA. Molina shall comply with the terms and
conditions of the Medi-Cal Agreement as it relates to the
arrangement of Health Care Services to Molina Members and shall
cooperate fully with Maxicare to assist Maxicare to remain in
compliance with the Medi-Cal Agreement. Any provision that any
law, regulation or the Medi-Cal Agreement requires to be in this
Agreement shall bind the parties whether or not specifically
provided herein.
11.10 Exhibits. The addenda attached to this Agreement are
an integral part of this Agreement and are incorporated herein by
reference.
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IN WITNESS WHEREOF, the parties have executed this Agreement
on the date(s) set forth below.
MOLINA MEDICAL CENTERS MAXICARE
By: /s/ J. Mario Molina By: /s/ Warren Foon
________________________ _________________________
Title: President Title: V.P./General Manager
_____________________ ______________________
Date: June 30, 1997 Date: June 28, 1997
______________________ ______________________
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SCHEDULE OF ADDENDA
ADDENDUM A MOLINA SERVICE AREA
ADDENDUM B EVIDENCE OF COVERAGE
ADDENDUM C DISCLOSURE FORM
ADDENDUM D PARTICIPATING PROVIDER
DIRECTORY FOR SACRAMENTO,
RIVERSIDE AND/OR SAN
BERNARDINO COUNTIES
ADDENDUM E HEALTH CARE SERVICES
ADDENDUM F OFFICERS, OWNERS,
STOCKHOLDERS, CREDITORS
ADDENDUM G MATRIX OF RESPONSIBILITIES
ADDENDUM H COMPENSATION
ADDENDUM I REQUIREMENTS OF MEDI-CAL
SUBCONTRACTS
ADDENDUM J MAXICARE GRIEVANCE PROCESS
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ADDENDUM A
MOLINA SERVICE AREA
The entirety of Sacramento County, inclusive of all ZIP Codes and
the following ZIP Codes in San Bernardino and Riverside Counties:
Zip code detail omitted from filing.
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ADDENDUM B
EVIDENCE OF COVERAGE
Please see the attached Evidence of Coverage and Disclosure
Statement. This document was created and approved for Maxicare's
Los Angeles Medi-Cal program. Maxicare will seek approval to use
the same document for San Bernardino, Riverside and Sacramento
Counties, subject to any changes that may be required by regulatory
authorities.
Evidence of Coverage and Disclosure Statement omitted from filing.
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ADDENDUM C
DISCLOSURE FORM
Please see Addendum B, which contains the combined Evidence of
Coverage and Disclosure Form.
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ADDENDUM D
PARTICIPATING PROVIDER DIRECTORY FOR SACRAMENTO, RIVERSIDE AND/OR
SAN BERNARDINO COUNTIES
Provider Directories omitted from filing.
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ADDENDUM E
HEALTH CARE SERVICES TO BE PROVIDED OR ARRANGED
AND PAID FOR BY MOLINA
Molina shall be responsible for providing, or arranging and paying
for, all Covered Services (as defined in the Medi-Cal Agreement
between Maxicare and DHS) provided to Molina Members, except to the
extent that the parties mutually agree otherwise in writing.
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ADDENDUM F
OFFICERS, OWNERS, STOCKHOLDERS, CREDITORS
Name and address of each person with an ownership or control
interest:
Name
Address
Percent of Ownership
Molina Family Trust
One Golden Shore
Long Beach, California
90802
100%
Officers:
Name
Title
J. Mario Molina, MD
President
John C. Molina
Secretary & Vice President
M. Martha Molina, MD
Vice President, Staff Model Operations
Richard Rodriguez, MD
Vice President, Medical Affairs
C. Joseph Heinz
Chief Administrative Officer
Harvey Fein
Chief Financial Officer
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ADDENDUM G
MATRIX OF RESPONSIBILITIES
Addendum G omitted from filing.
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ADDENDUM H
COMPENSATION
Addendum H omitted from filing.
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<PAGE>
ADDENDUM I
ADDITIONAL PROVISIONS REQUIRED BY DHS TO BE IN ALL SUBCONTRACTS
AND WHICH APPLY TO MOLINA AND ITS SUBCONTRACTORS
The following provisions are required to be in all Medi-Cal
subcontracts. They apply to this Medi-Cal Agreement and to any
subcontract entered into by Molina in the performance of its duties
under this Agreement. As used in this Section the word "plan"
refers to Maxicare and the word "Subcontractor" refers to Molina
and/or any health care provider from which PN obtains usual or
frequently used health care services on behalf of Members. The
term "Department" shall mean DHS unless otherwise indicated. The
term CCR refers to the California Code of Regulations.
1. All subcontracts shall be in writing and shall be entered
into pursuant to the requirements of the Knox Keene Health Care
Services Plan Act of 1975 and regulations promulgated thereunder,
if licensed pursuant to that Act, and to applicable federal laws
and regulations.
2. Subcontracts and subcontract amendments shall be submitted
by the Plan to the Department for prior approval at least 30 days
before the effective date of any proposed changes governing
compensation, services or term. Proposed changes which are neither
approved nor disapproved by the Department, shall become effective
by operation of law 30 days after the Department has acknowledged
receipt or upon the date specified in the subcontract amendment,
whichever is later.
3. A subcontract shall not be entered into if the compensation
or other consideration which the subcontractor will receive under
the terms of the subcontract is determined by a percentage of the
plan's payment from the Department. This subsection shall not be
construed to prohibit subcontracts in which compensation or other
consideration is determined on a capitation basis.
4. A subcontractor providing any basic health care service to
members shall meet all of the requirements of Chapters 3 and 4 of
Subdivision 1, Division 3, of Title 22, CCR, related to the
services the subcontractor is required to perform.
5. Subcontracts enter into by a plan and all information
received in accordance with this subsection shall be public records
on file with the Department. The names of the officers and owners
of the subcontractor, stockholders owning more than 10 percent of
the stock issued by the subcontractor and major creditors holding
more than 5 percent of the debt of the subcontractor shall be
attached to the subcontract at the time the subcontract is
presented to the Department.
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6. Each subcontract submitted subject to Department approval
pursuant to paragraph 2 of this Section shall contain at least the
elements required by paragraph 8 and the following:
a. Full disclosure of the method and amount of compensation
or other consideration to be received by the subcontractor from the
plan.
b. Specification of the services to be provided.
c. Specification that the subcontract shall be governed by
and construed in accordance with all laws, regulations and
contractual obligations of the plan.
d. Specification that the subcontract or subcontract
amendments shall become effective only as set forth in paragraph 2
of this Section.
e. Specification of the terms of the subcontract including
the beginning and ending dates, as well as the methods of
extension, renegotiation and termination.
f. Subcontractor's agreement to submit reports as required
by the Contractor.
7. Subcontracts entered into by a plan which is a qualified HMO
shall include:
a. The subcontractor's agreement to make all of its books
and records, pertaining to the goods and services furnished under
the terms of the subcontract, available for inspection, examination
or copying:
(1) By the Department, HHS and the DOC.
(2) At all reasonable times at the subcontractor's
place of business or at such other mutually agreeable location in
California.
(3) In a form maintained in accordance with general
standards applicable to such books or record keeping.
(4) For a term of at least five years from the close of
the Department's fiscal year in which the subcontract was in
effect.
b. Full disclosure of the method and amount of compensation
or other consideration to be received by the subcontractor from the
plan.
c. Subcontractor's agreement to maintain and make available
to the Department, upon request, copies of all subcontracts and to
ensure that all sub-subcontracts are in writing and require that
the sub-subcontractor:
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(1) Make available all applicable books and records
available at all reasonable times for inspection, examination, or
copying by the Department.
(2) Retain such books and records for a term of at
least five years from the close of the Department's fiscal year in
which the subcontract is in effect.
d. Subcontractor's agreement to notify the Department in
the event the agreement with the Contractor is amended or
terminated. Notice is considered given when properly addressed and
deposited in the United States Postal Service as first-class
registered mail, postage attached.
e. Subcontractor's agreement that assignment or delegation
of the subcontract shall be void unless prior written approval is
obtained from the Department.
f. Subcontractor's agreement to hold harmless both the
State and plan members in the event the plan cannot or will not pay
for services performed by the subcontractor pursuant to the
subcontract.
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ADDENDUM J
MAXICARE MEMBER GRIEVANCE PROCESS
Addendum J omitted from filing.
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Exhibit 99.5
MAXICARE TO ADD 70,000 MEDI-CAL MEMBERS JULY 1, 1997
LOS ANGELES, JUNE 16, 1997 ---- MAXICARE HEALTH PLANS, INC. (NASDAQ
- - NMS: MAXI) announced today that its California HMO has signed a
definitive agreement with Molina Medical Centers ("MMC") and has
received all the necessary regulatory approvals to assign or
transfer MMC's Medi-Cal contracts for the provision of services in
San Bernardino, Riverside and Sacramento Counties, with the State
of California to Maxicare, effective July 1, 1997 for approximately
70,000 members. MMC will become Maxicare's exclusive Medi-Cal
provider in those service areas. The length of the contracts and
other conditions are still subject to further negotiations and
necessary regulatory approvals.
Maxicare is a managed health care company that operates in seven
states, serving members in California, Indiana, Illinois,
Louisiana, North Carolina, South Carolina and Wisconsin.
This press release contains forward-looking information. The
forward-looking statements are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements may be significantly impacted by certain
risks and uncertainties including the number of beneficiaries and
the reimbursement rates paid by the State of California during the
term of the MMC Medi-Cal contracts referred to above.
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