<PAGE> 1
EXHIBIT 10.11
PHYSICIAN PRACTICE MANAGEMENT PARTICIPATION AGREEMENT
1. PARTIES
This Physician Practice Management Participation Agreement
("Agreement") is made and entered into by and between:
a. Continucare Medical Management, Inc. (hereinafter referred to as
"PPM"), a professional physician practice management organization
licensed and/or organized under the laws of the State of Florida and
the principals of said party, all of whom are listed on the attached
Ownership Disclosure Statement (Attachment A); AND
b. Humana Medical Plan, Inc., PCA Health Plans of Florida, Inc. and PCA
Family Health Plan, Inc. (health maintenance organizations) and Humana
Health Insurance Company of Florida, Inc. (a Florida insurance company)
and Humana Insurance Company, Employers Health Insurance Company and
PCA Life Insurance Company (insurance companies) and their affiliates
who underwrite or administer health plans. All of said companies are
collectively referred to in this Agreement as "HUMANA". The joinder of
these companies under the designation "HUMANA" shall not be construed
as imposing joint responsibility or cross-guarantee between or among
HUMANA companies.
2. RELATIONSHIP
In performance of the duties and obligations of each of the parties to
this Agreement and in regard to any services rendered or performed by
either party for covered individuals designated by HUMANA (hereinafter
referred to as "Members"), including but not limited to those
individuals covered under HUMANA's Commercial plans, Medicare HMO and
POS plans, and other health care benefit plans, under designated HUMANA
contracts, and to all individuals covered under designated self-insured
employer, employer trust, or other health care benefit contracts whose
claims are either administered by HUMANA or where HUMANA administers
the provider network for another third party payor issuing and
administering the contract, it mutually is understood and agreed that
HUMANA and PPM and their respective employees and agents are at all
times acting and performing as independent contractors and that neither
party nor their respective employees and agents, shall be considered
the agent, servant, employee of or joint venturer with the other party.
Notice to, or consent from, any third party, including a Member or
other physician, shall not be required in order to make any termination
or modification of this Agreement effective. PPM is contracting for
itself, and as agent for and under authority granted to PPM by each of
its physicians ("PPM Physicians") employed by or under contract with
PPM, unless otherwise agreed to herein, the parties acknowledge and
agree that
<PAGE> 2
neither PPM nor HUMANA will be liable for the activities of the other
nor the agents and employees of the other, including but not limited
to, any liabilities, losses, damages, injunctions, suits, actions,
fines, penalties, claims or demands of any kind or nature by or on
behalf of any person, party or governmental authority arising out of or
in connection with: (I) any failure to perform any of the agreements,
terms, covenants or conditions of this Agreement; (II) any negligent
act or omission or other misconduct; (III) The failure to comply with
any applicable laws, rules or regulations; or (IV) any accident, injury
or damage to persons or property. PPM acknowledges and shall require
PPM Physicians to acknowledge that all patient care and related
decisions are the sole responsibility of the PPM Physicians and that
HUMANA does not dictate or control PPM Physicians' clinical decisions
with respect to the medical care or treatment of Members.
Notwithstanding anything to the contrary herein, PPM on behalf of
itself and each of its PPM Physicians further agrees to and hereby does
indemnify, defend and hold harmless HUMANA from any and all claims,
judgments, costs, liabilities, damages and expenses, including
reasonable attorneys' fees, whatsoever, arising from any acts or
omissions in the provision of medical services by PPM and/or PPM
Physicians under this Agreement. This provision shall survive
termination of this Agreement, regardless of the cause giving rise to
the termination.
3. NO THIRD PARTY BENEFICIARIES
With the exception of Article 27, the parties have not created and do
not intend to create by this Agreement any third party rights under
this Agreement, including but not limited to Members. The parties
acknowledge and agree that, with the exception of Article 27 of this
Agreement, there are no third party beneficiaries to this Agreement.
4. SCOPE OF THE AGREEMENT
4.1 This Agreement sets forth the rights, responsibilities, terms and
conditions governing: (I) PPM and PPM Physician's status as a health
care provider contracted and credentialed by HUMANA to provide health
care services (hereinafter "Participating Providers") to Members in
certain health care networks established or managed by HUMANA and (II)
PPM Physicians' services to Members. This Agreement applies only to
those health care benefit contracts and to those Members designated by
HUMANA.
4.2 Upon request, HUMANA agrees to provide PPM with a listing of all
other agreements under which PPM and PPM Physicians will be providing
services as required by this Agreement.
4.3 All rights and responsibilities arising in respect to Members shall
be applicable to only the company which issued the contract covering
the respective Members and may not be imposed or enforced upon any
other affiliated or related
2
<PAGE> 3
company. Further, with respect to self-insured contracts, unless
otherwise indicated, HUMANA's responsibilities are limited to those of
administration or claims processing.
4.4 PPM represents and warrants that PPM and all PPM Physicians and
their respective members, independent contractors and employees will
abide by the terms and conditions of this Agreement, and PPM shall
obtain acknowledgment of such from each PPM Physician member,
independent contractor and employee required to be credentialed under
the terms of this Agreement.
4.5 The parties agree that nothing contained in this Agreement is
intended to interfere with or hinder communications between
physician(s) and Members regarding patient treatment.
5. SUBCONTRACTING PERFORMANCE
5.1 PPM shall provide directly, or through appropriate arrangement with
PPM Physicians and other providers of medical services, medical
services to Members. It is understood and agreed that said PPM shall
maintain written agreements with the PPM Physicians, and other licensed
providers of medical care where applicable, in a form comparable to,
and consistent with, the terms and conditions established in this
Agreement, and in a form approved by HUMANA. A sample copy of the
agreement between PPM and PPM Physicians in effect at the time of the
signing of this Agreement is attached in Attachment I. In the event of
a conflict between the language of the PPM Physician agreements and
this Agreement, the language in this Agreement shall control. PPM
agrees to notify HUMANA of any material change(s) to the aforementioned
agreements at least thirty (30) days prior to implementing such
change(s), during which period, HUMANA may object to the change(s).
HUMANA's notice of objection shall not preclude PPM's implementation of
such change(s), but PPM agrees that any such change(s) shall not be
contrary to, in violation of, or inconsistent with the terms of this
Agreement. In the event HUMANA notifies PPM of its objection, both
parties agree to make a good faith effort to resolve such dispute n a
timely manner.
5.2 All PPM Physicians and other providers of medical services
providing services to HUMANA Members shall be subject to HUMANA's
credentialing process prior to receiving status as a HUMANA
Participating Provider.
5.3 PPM represents and warrants that it is authorized to negotiate
terms and conditions of physician agreements and further to execute
such agreements for and on behalf of PPM Physicians.
5.4 Upon request, PPM agrees to disclose to HUMANA within a reasonable
time period not to exceed thirty (30) days, or such lesser period of
time required for HUMANA to comply with all applicable state and
federal laws, rules and
3
<PAGE> 4
regulations, from such request, all of the terms and conditions of any
payment arrangement that constitutes a physician incentive plan as
defined by Health Care Financing Administration ("HCFA") and/or any
state or federal law, between PPM and PPM Physicians. Such disclosure
shall be in the form of a certification, or other form as required by
HCFA, by PPM and shall identify, at a minimum: (I) whether services not
furnished by the PPM Physician(s) are included; (II) the type of
incentive plan, including the amount, identified as a percentage, of
any withhold or bonus; (III) the amount and type of any stop-loss
coverage provided for or required of the PPM Physicians and (IV) the
PPM Physician(s) patient panel size, broken down by total PPM
Physicians panel and individual PPM Physician panel size, by the type
of insurance coverage (i.e. Commercial HMO, Medicare HMO and Medicaid
HMO).
5.5 PPM shall have, for the term of this Agreement, agreements with
licensed providers of medical services that: (I) shall be in writing
and on contract forms approved by HUMANA; and (II) shall include terms
and conditions which comply with all applicable requirements for
provider agreements under state and federal laws, rules and
regulations; and (Ill) shall appoint HUMANA as the PPM's authorized
agent for the payment of claims for Covered Services rendered to HUMANA
Members submitted by such licensed providers and (IV) shall contain
provisions for holding HUMANA harmless from and against any and all
disputes between such licensed providers and HUMANA concerning the
adjudication and the amount of the payment of the claims to the extent
HUMANA relies on PPM's adjudication of such claims submitted for
Covered Services rendered to HUMANA Members. In addition, from and
after the Effective Date hereof, agreements with independent contractor
PPM Physicians shall contain a provision to extend automatically at
HUMANA's election the terms of such agreements to HUMANA in the event
that this Agreement terminates for any reason for the lesser of the
remaining term of such agreements or one (1) year.
5.6 In the event PPM acquires, through an asset acquisition, merger,
consolidation, lease or other means, or enters into a management
agreement to manage the practice of physician(s) or physician groups in
Florida, and such practices or groups have in effect an agreement with
HUMANA to provide medical services to HUMANA Members on a capitated,
percentage of premium or other risk sharing basis at rates which are
more favorable to HUMANA than those contained herein, the rates
contained herein shall be adjusted to reflect a blended rate by product
weighted by the relative number of Members at the newly acquired or
managed practice(s); provided, however, such blended rate shall in no
event result in an increase in the total funding by HUMANA to PPM
hereunder regardless of whether the newly acquired practice's
reimbursement from HUMANA is more favorable or not.
5.7 In the event that a PPM Physician is a party to more than one
agreement with HUMANA for the provision of medical services to Members,
PPM or PPM
4
<PAGE> 5
Physician will be reimbursed for Covered Services by HUMANA under the
agreement selected by HUMANA. However, in the event that a physician
affiliated with PPM declines participation under this Agreement prior
to the execution of this Agreement, to the extent physician is a party
to another agreement with HUMANA, reimbursement for the provision of
Covered Services to Members shall be in accordance with such other
agreement between HUMANA and the physician.
6. LIQUIDATED DAMAGES
PPM acknowledges and shall require PPM Physicians to acknowledge that
HUMANA has invested and will invest substantial resources including
funds, time, effort and goodwill in building a roll of Medicare Members
to be treated by PPM Physicians. Therefore, PPM. agrees that PPM and
PPM Physicians, or any of PPM or PPM Physicians' employees, principals
or financially related entities, shall not solicit, persuade, induce,
coerce or otherwise cause the disenrollment of any Medicare Member at
any time, directly or indirectly. If thirty-five (35) or more Medicare
Members assigned to an individual PPM Physician disenroll from HUMANA
due to PPM or PPM Physicians' directly or indirectly soliciting,
persuading, inducing, coercing or otherwise causing the disenrollment
of such Medicare Members to be treated by PPM or any of PPM Physicians
or PPM/PPM Physicians' employees, principals or other financially
related entity under some other prepaid health care benefit plan other
than HUMANA's, PPM shall pay HUMANA the amount of three thousand
dollars ($3,000.00) for each disenrolled Medicare Member who is treated
by PPM, or any of PPM Physicians, or PPM/PPM Physicians' employees,
principals or any financially related entity.
PPM hereby agrees and shall require PPM Physicians hereby to agree that
this amount is not a penalty and constitutes liquidated damages in as
much as the actual damages are not and cannot be ascertained at the
time of the execution of this Agreement. PPM and PPM Physicians
understand that this liquidated damages clause does not apply to or
require payment from the Medicare Members under any circumstance.
HUMANA agrees with PPM and PPM Physicians that this paragraph shall not
be applicable in the case of any Medicare Member who disenrolls and is
treated by a PPM Physician or anyone else on a non-prepaid and
non-capitated fee-for-service basis as a private patient. In addition,
Medicare Members who were patients prior to PPM Physician's
participation as a HUMANA Participating Provider, are excluded from
this provision, if the PPM and/or PPM Physician can furnish
documentation to HUMANA in the form of a list of his/her patients prior
to becoming a HUMANA Participating Provider. PPM and PPM Physicians
have the obligation to and agree to notify HUMANA immediately of the
name of any Medicare Member or former Medicare Member treated by a PPM
Physician or any other person covered by this provision. This paragraph
shall survive for twelve (12) months following the termination or
expiration of this Agreement regardless of the cause giving rise to
termination.
5
<PAGE> 6
7. POLICIES AND PROCEDURES
7.1 PPM shall require PPM Physicians to agree to abide by all quality
assurance, quality improvement, accreditation, risk management,
utilization review, credentialing, recredentialing and other
administrative policies and procedures established and revised by
HUMANA from time to time, and such other administrative policies and
procedures as are set out in the Affiliated Provider Manual and/or the
Physician's Administration Manual ("Manual") and/or bulletins and
manuals that may be promulgated by HUMANA from time to time in order to
supplement the Manual, current copies of which hereby are acknowledged
as received. PPM shall be notified of any revisions to the policies and
procedures and they shall become binding upon PPM and PPM Physicians
thirty (30) days after HUMANA has notified PPM. Additionally, HUMANA
shall notify PPM of any other revisions to existing policies and
procedures, at which time of notice such revisions shall become binding
upon PPM and PPM Physicians. Any revisions affecting PPM and/or PPM
Physicians shall not be discriminatory and shall apply to all providers
similarly situated. PPM Physicians shall notify HUMANA's Pre-Admission
Certification department or designated personnel of any inpatient
admissions of HUMANA Members as required in the Manual. PPM
acknowledges and agrees that such notification shall be prior to the
inpatient admission(s) of any HUMANA Members not assigned to PPM
Primary Care Physicians.
7.2 PPM further agrees, in accordance with the Letter of Agreement to
be signed by each PPM Physician, an example of which appears in
Attachment H, that PPM and HUMANA may share information, including but
not limited to credentialing, recredentialing, quality management and
utilization management information as related to the treatment of
Members. However, it expressly is understood that the information shall
not be shared with anyone other than HUMANA and PPM, unless required by
law or pursuant to prior written consent of the PPM Physician involved.
7.3 PPM acknowledges and agrees that a signed Letter of Agreement, (in
a form substantially similar to that form attached hereto as Attachment
H), for each PPM Physician participating under this Agreement shall be
provided to HUMANA prior to execution of this Agreement, and prior to
the provision of services to HUMANA Members for those PPM Physicians
who join PPM and are approved by HUMANA and agree to participate under
this Agreement and/or whose credentialing applications are approved
subsequent to execution of this Agreement. Notwithstanding the above,
PPM acknowledges and agrees that PPM shall sign the Letter of Agreement
on behalf of those PPM Physicians that are employed by PPM, and all
other PPM Physicians shall sign a Letter of Agreement on an individual
basis. PPM Physicians who do not execute such Letter of Agreement shall
not be entitled to participate under this Agreement and will not be
listed in HUMANA's provider directories.
6
<PAGE> 7
7.4 All administrative services, including but not limited to
credentialing, recredentialing, utilization management, quality
assurance and fiscal services, shall be performed by HUMANA. However,
HUMANA in its sole discretion wilt discuss with PPM, PPM's provision of
such services at such time as PPM may demonstrate administrative or
information service capabilities acceptable to HUMANA.
8. CREDENTIALING
8.1 All PPM Physicians who will provide medical services to Members
hereunder are required to be credentialed, and shall be subject to the
credentialing process prior to receiving status as a HUMANA
Participating Provider.
8.2 Participation under this Agreement by PPM, and each of its PPM
Physicians, is subject to the satisfaction and maintenance, in HUMANA's
sole judgement, of all credentialing and recredentialing standards
established by HUMANA's credentialing and/or medical affairs
departments and adopted under the policies and procedures set out in
the Manual and other rules and regulations promulgated thereby. PPM
and/or PPM Physicians shall provide HUMANA with the information
necessary to ensure compliance with this Article 8 at no additional
expense to HUMANA and/or any vendor to whom HUMANA at its sole
discretion, may delegate the credentialing and/or recredentialing
process(es) to.
8.3 HUMANA reserves the right to approve new PPM Physicians and/or, as
applicable, other health care providers required to be credentialed, or
to terminate or suspend any PPM Physician or, other health care
providers required to be credentialed, who will be or is providing care
to HUMANA Members, who does not meet or fails to maintain HUMANA's
credentialing and/or recredentialing standards. HUMANA agrees to notify
PPM of its decision to terminate any PPM Physician or any other PPM
health care provider required to be credentialed under HUMANA standards
and, except in cases of immediate terminations, PPM shall have fourteen
(14) days from such notice to request reconsideration of such decision
by HUMANA's Medical Director. However, PPM acknowledges and agrees that
HUMANA shall have the final decision on the matter. PPM further
acknowledges and agrees and shall require PPM Physicians further to
acknowledge and agree that any limitation and/or suspension and/or
termination of his/her credentialing or recredentialing status by
HUMANA or any one or more of HUMANA's affiliates shall apply uniformly
to PPM Physician(s)' credentialing or recredentialing status with
HUMANA and all of its affiliates. In the event the limitation,
suspension and/or termination is for administrative reasons, HUMANA or
any of its affiliates may elect to reject the administrative action of
the acting HUMANA entity's determination.
7
<PAGE> 8
9. LICENSURE/CERTIFICATION
9.1 PPM shall require PPM Physicians, and all employees of PPM and/or
PPM Physicians required to be so licensed or certified, to procure and
maintain for the term of this Agreement such licensure and/or
certification as is required under HUMANA's policies and procedures,
under the terms and conditions of this Agreement, in compliance with
the provisions in the Manual, and in accordance with all applicable
state and federal laws. PPM shall and/or shall require PPM Physicians
to notify HUMANA immediately of any changes in licensure or
certification status of PPM Physicians, and their employees as
applicable.
9.2 PPM represents and warrants that it has obtained and shall maintain
any and all licenses, certificates and/or approvals required under
Florida and/or federal laws, rules and regulations, for the performance
by PPM of its duties and obligations under this Agreement. Further, PPM
shall maintain a valid Florida Third Party Administrator's License
during the term of this Agreement, where PPM is required to do so.
10. MEDICAL SERVICES TO BE PROVIDED
10.1 PPM on behalf of itself and PPM Physicians, desires to become a
Participating Provider under the terms of this Agreement and agrees to
provide and/or arrange for health care services for Members, in
accordance with this Agreement and the applicable Member health
benefits contract (hereinafter "Covered Services"). PPM Physicians'
responsibilities for providing and/or arranging Covered Services to
Members at the locations listed in Attachment C are set forth in the
Attachment D. PPM shall provide HUMANA with at least sixty (60) days
prior written notice of an proposed changes in the locations or the
proposed closing by PPM or PPM Physician(s) of any practice listed in
Attachment C and any such change or closing shall he subject to
HUMANA's approval, which shall not unreasonably be withheld. Failure to
obtain HUMANA's prior approval may result, at HUMANA's sole and
complete discretion, in the termination of such PPM Physician(s) and/or
office sites from participation under this Agreement.
10.2 In the event PPM and/or PPM Physician(s) dispute what services are
covered under the applicable health care benefits plan contract, the
Medical Directors of HUMANA and PPM shall make reasonable efforts to
resolve such disputes. However, PPM agrees that HUMANA shall have sole
and final authority to interpret and determine what services and/or
benefits are covered under the applicable health care benefits
contract.
11. STANDARDS OF PROFESSIONAL PRACTICE
11.1. PPM agrees to require PPM Physicians to provide Members with
medical services which are within the normal scope of PPM Physicians'
medical practices.
8
<PAGE> 9
These services shall be made available to Members without
discrimination on the basis of health care benefit plan, source of
payment, sex, age, race, color, religion, national origin, health
status or other handicap, and in the same manner as provided to PPM
Physicians' other patients. PPM agrees to require that PPM Physicians
provide medical services to Members in accordance with the prevailing
practices and standards of the profession.
11.2 PPM understands and agrees and shall require PPM Physicians to
agree that HUMANA may deny payment(s) for medical services rendered to
Members which are, in the opinion of HUMANA, determined not to be
medically necessary. "Medically Necessary" (or "Medical Necessity")
shall mean services or supplies provided by a hospital, physician or
other health care provider, licensed by the appropriate state agency,
or as otherwise approved as required, to diagnose or treat a condition,
disease, ailment, sickness or bodily, injury and which, in the opinion
of HUMANA, are: (I) consistent with the symptoms. Diagnosis and
treatment of such condition, disease, ailment, sickness or bodily
injury; (II) appropriate with regard to standards of accepted medical
practice; (III) not primarily for the convenience of the patient or the
qualified hospital, physician or other health care provider; (IV) the
most appropriate and cost-effective supply, setting, or level of
service which safely can be provided to the patient and (V)
substantiated by the records and documentation maintained by the
provider of services. When applied to an inpatient, it further means
that the patient's symptoms or condition requires that the services or
supplies cannot safely be provided to the patient as an outpatient. Any
disputes regarding Medical Necessity shall be handled in accordance
with Section 10.2 of this Agreement.
11.3 HUMANA may authorize payment for Medically Necessary Covered
Services for Members based on HUMANA's discretion and in accordance
with the applicable Member health care benefits contract. Such services
shall be paid for as if authorized by PPM and/or PPM Physicians and in
accordance with the applicable payment arrangements outlined herein. In
the event HUMANA so authorizes payment for Medically Necessary Covered
Services, HUMANA agrees to notify PPM concurrently of such
authorization.
12. USE OF PARTICIPATING PROVIDERS
12.1 Except in the case of a medical emergency, PPM shall require PPM
Physicians to admit, refer and cooperate with the transfer of Members
for Covered Services only to providers designated, specifically
approved or under contract with HUMANA.
12.2 In the event that a PPM Physician provides a Member non-covered
services or refers a Member to an out-of-network provider without
pre-authorization from HUMANA, PPM shall require PPM Physicians prior
to the provision of such non-covered services or such out-of-network
referral, to inform
9
<PAGE> 10
the Member: (I) of the services to be provided or referral to be made;
(II) that HUMANA will not pay (or may pay a reduced benefit in the case
of HUMANA's point of service (POS) and/or preferred provider
organization (PPO) products) or be liable financially for such
non-covered service or out-of-network referral and (III) that Member
will be responsible financially for non-covered service(s) and/or
out-of-network(s) referral that are requested by the Member. PPM
acknowledges and agrees and shall require PPM Physicians to acknowledge
and agree that the failure to inform Member(s) in accordance with this
Section 12.2 may result in the PPM's and/or PPM Physician's
responsibility and financial liability for the cost of such non-covered
service(s) and/or out-of-network referral incurred by HUMANA.
13. EQUAL ACCESS
PPM agrees and shall require PPM Physician(s) to agree to accept HUMANA
Members as patients within the normal scope of PPM Physicians' medical
practices. If for any reason, PPM Physician(s), individually and/or
collectively, close their practice(s), such closure will apply to all
prospective patients without discrimination or regard to payor or
source of payment for services, Should PPM Physician(s) subsequently
re-open their practices to new patients, PPM agrees and shall require
PPM Physician(s) to agree to accept HUMANA Members as patients are
accepted to the same extent non-HUMANA patients seeking PPM
Physician(s)' services. Notwithstanding the above, any such closure of
an PPM Physician(s)' practice to new patients is subject to the
limitation outlined in Section 10.1 and Attachment D of this Agreement.
14. PPM PHYSICIAN FACILITIES
PPM Physicians will establish and maintain regular business hours for
the provision of services to HUMANA Members. In establishing business
hours, PPM and PPM Physicians shall take into consideration the number
and type of Members assigned to and/or receiving services at the office
site. The business hours established by PPM and PPM Physicians are
noted in Attachment C of this Agreement. This does not relieve PPM
Physicians of their obligation to provide medical coverage for Members
twenty-four (24) hours a day, seven (7) days a week.
15. SOFTWARE USE
PPM and/or PPM Physicians may use certain software as may be identified
by HUMANA that is licensed to HUMANA and/or its subsidiaries, parent
and/or affiliates. Such use is conditioned upon PPM and PPM Physicians'
strict compliance with the HUMANA Security Guidelines, and upon use
solely as indicated by HUMANA, and treatment of the software as
confidential property of HUMANA's licensor and not subject to
disclosure to third parties without the prior written consent of
HUMANA. Such prohibition on disclosure shall not
10
<PAGE> 11
apply to disclosures to PPM's and/or PPM Physicians' employees provided
the disclosure reasonably is necessary to use the software, and
provided PPM, and PPM Physicians take all reasonable steps to ensure
the software is not duplicated or disclosed to third parties. If PPM
and/or PPM Physicians become aware of an unauthorized use, duplication
or disclosure, PPM and/or PPM Physicians shall provide full details to
HUMANA promptly and take all reasonable steps to prevent any such
recurrence. Upon request by HUMANA, PPM and/or PPM Physicians shall
return to HUMANA all copies of the software, purge all machine readable
media relating to such software and certify to HUMANA that the
foregoing duties have been performed. These obligations of
confidentiality, non-disclosure, non-reproduction and return of
material shall survive any termination or expiration of this Agreement.
16. PPM AND PPM PHYSICIANS INSURANCE
16.1 At all times, PPM will maintain and will require each PPM
Physician to maintain, at no expense to HUMANA, such policies of
comprehensive general liability, professional liability and workers'
compensation coverage, with such carriers and in such amounts as HUMANA
reasonably may approve, insuring PPM and each PPM Physician, their
officers, directors, members, employees, agents and subcontractors (as
applicable), against any claim or claims for damages arising as a
result of injury to property or person including death, occasioned
directly or indirectly, in connection with the performance of medical
services contemplated by this Agreement and/or the maintenance of PPM
and/or PPM Physicians' facilities and equipment. Prior to execution of
this Agreement, and at any time subsequently upon request, PPM and PPM
Physicians shall provide HUMANA with evidence of said coverage, of
which minimum professional liability coverage for PPM shall be five
million dollars ($5,000,000.00) and for each PPM Physician shall be one
million dollars ($1,000,000.00) per occurrence/three million dollars
($3,000,000.00) in the aggregate, or such amount as required by state
law, whichever is greater number. PPM shall provide and/or shall
require PPM Physicians to provide, or shall require the carrier(s) to
provide, HUMANA with ten (10) days prior written notice of any
suspensions, cancellations of, or modifications in the coverage. This
clause shall survive the expiration and/or termination of this
Agreement, regardless of the cause, for a period of time not less than
the applicable Statute of Limitations in this State.
16.2 PPM agrees to cooperate with HUMANA in assuring that any stop-loss
coverage required by law is made available. PPM agrees and shall
require PPM Physicians to agree that compensation received from HUMANA
shall be adjusted by the cost of any stop-loss coverage which HUMANA
may be required by law to provide.
11
<PAGE> 12
17. HUMANA INSURANCE
At all times, HUMANA will maintain such policies of comprehensive
general liability insurance and other insurance or self insurance, as
shall be necessary to insure HUMANA against any claim or claims for
damages arising in connection with the performance of HUMANA's
responsibilities under this Agreement. If requested by PPM, HUMANA
shall provide PPM evidence of such coverage upon execution of this
Agreement and thereafter at reasonable intervals as requested by PPM
during the term of this Agreement. This clause shall survive for a
period of time not less than the applicable Statute of Limitations in
this state.
18. MEDICAL RECORDS
18.1 PPM shall require PPM Physicians to prepare, maintain and retain
records relating to Members in such form and for such time periods as
required by applicable state and federal laws, licensing, accreditation
and reimbursement rules and regulations to which HUMANA is subject, and
in accordance with accepted medical practice and HUMANA standards
HUMANA, pursuant to authorization of the Member signed at time of
enrollment during the application process, the sufficiency of which
hereby is acknowledged, or any federal or state regulatory agency, as
permitted by law, may obtain, copy and have access, upon reasonable
request, to any medical, administrative or financial record of PPM
and/or PPM Physicians related to Covered Services provided by PPM
Physicians to any HUMANA Member. Copies of such records shall be at no
additional cost to HUMANA or the Member.
18.2 Upon request from Humana or a Member, PPM agrees and shall require
PPM Physicians to agree to transfer the complete original or a complete
acceptable copy of the medical records of any Member to another
physician or provider for any reason, including termination of this
Agreement. The transfer of medical records shall be at no cost to
either HUMANA or the Member and shall be made within a reasonable time
following the request but in no event less than five (5) business days
except in cases of emergency. PPM agrees and shall require PPM
Physicians to agree that such timely transfer of medical records is
necessary to ensure the continuity of care for Members. PPM agrees to
pay court costs and/or legal fees necessary for HUMANA to enforce the
terms of this provision.
18.3 PPM, PPM Physicians and HUMANA agree to maintain the
confidentiality of information contained in the medical records of
Members.
18.4 This Article 18 shall survive termination of this Agreement,
regardless of the cause for such termination.
19. MALPRACTICE CLAIMS
PPM shall require PPM Physicians to notify HUMANA in writing within
forty-
12
<PAGE> 13
eight (48) hours or such lesser period of time as required by the
applicable statute of this State of any Member claim alleging
malpractice or the occurrence of any incident involving a Member which
may result in legal action.
20. GRIEVANCE AND APPEALS PROCESS
PPM agrees and shall require PPM Physicians to agree to cooperate and
participate with HUMANA in its grievance and appeals processes to
resolve disputes which may arise between HUMANA and PPM/PPM Physicians
and/or HUMANA and it Members. PPM shall comply and shall require PPM
Physicians to comply with all final determinations made through the
grievance and appeals processes.
21. USE OF PPM AND PPM PHYSICIANS' NAME
21.1 HUMANA shall have the right to include the following information
in any and all marketing and administrative materials it distributes:
PPM and PPM Physicians' names, telephone numbers, addresses, hours of
operation and types of practices or specialties, and the names of all
physicians and physician extenders providing care at PPM Physicians'
facilities. HUMANA shall provide PPM with copies of any such
administrative or marketing materials upon request.
21.2 Neither party shall advertise nor utilize any marketing materials,
logos, trade names, service marks or other materials belonging to the
other party without its prior written consent. Neither party shall
acquire any right or title in or to the marketing materials, logos,
trade names, service marks or other materials of the other.
21.3 PPM agrees and shall require PPM Physicians to agree to: (I) allow
HUMANA to place HUMANA signage and/or brochures, excluding any
applications, in PPM Physicians' offices; (II) mail an announcement of
PPM and PPM Physicians new affiliation with HUMANA to their patients;
(III) furnish HUMANA with a complete list of the names and addresses of
PPM's or PPM Physicians' patients in the event PPM or PPM Physicians
provide such patient list to another payor and (IV) cooperate on a
regular basis, to the extent permitted under applicable state and
federal laws, rules and regulations, in joint marketing activities. PPM
acknowledges and agrees and shall require PPM Physicians to acknowledge
and agree that any communications between PPM and/or PPM Physicians and
Medicare Members which describe any HUMANA Medicare product in any way
requires the prior written approval of HUMANA and HCFA.
22. PAYMENT ARRANGEMENT
22.1 HUMANA shall pay PPM or PPM Physicians, as applicable, in
accordance with the PPM and PPM Physician Reimbursement described in
Attachment E. PPM shall collect or shall require PPM Physicians to
collect the
13
<PAGE> 14
payments owed by Members pursuant to their health benefits contract,
including but not limited to copayments, deductibles, coinsurance
and/or cost-share amounts (hereinafter referred to as "Copayments")
required directly from the Member, and shall not waive, discount or
rebate any such Copayment. The payment from HUMANA, plus any Copayments
due from Members, shall be accepted by PPM and at PPM's direction by
PPM Physicians as payment in full for all Covered Services.
22.2 HUMANA shall have the right to conduct, or have conducted by a
third party, audits and evaluations from time to time of all billing
and financial records of PPM and/or PPM Physicians related to medical
services provided to HUMANA Members. PPM shall allow HUMANA or its
designee access to PPM's billing and financial records and those of PPM
Physicians to conduct the audits and evaluations.
22.3 Notwithstanding anything to the contrary identified herein, PPM or
PPM Physicians, as applicable, have the right to dispute reimbursement
of a claim for a period of up to six (6) months from the date such
claim was paid by HUMANA or the end of the final Accounting Period, as
defined in Attachment E of this Agreement, whichever is less. In the
event of such a dispute, the parties agree to work toward a mutually
agreeable resolution of such dispute. PPM shall provide at a minimum
the following information if the PPM or a PPM Physician contests the
payment of a claim as set out herein: Member name and identification
number, date of service, relationship of the Member-patient to the
Member who completed the application for health care benefits coverage
with HUMANA, claim number, name of the provider of medical services,
charge amount, payment amount, the allegedly correct payment amount,
difference between the amount paid and the allegedly correct payment
amount and a brief explanation of the basis for the contestation.
HUMANA will review such contestation(s) and respond to PPM within sixty
(60) days of the date of receipt by HUMANA of such contestation. The
parties acknowledge and agree that HUMANA's decision on the matter will
be final. Failure to contest the amount of any claim paid hereunder
within the time specified above shall result in the waiver of PPM's and
PPM Physicians', where applicable, right to contest such claims amount
distributed.
22.4 PPM agrees and shall require PPM Physicians to agree to accept as
payment in full for Covered Services provided to Members not assigned
to a PPM Physician and who receive Covered Services from a PPM
Physician(s) the reimbursements outlined in Attachment E of the
Agreement. Further, in the event that Members assigned to PPM
Physicians receive services and/or treatment at another facility or
from another physician or health care provider, payment for such
services and/or treatment shall be in accordance with the contracted
rates with such other facility, physician or other health care
provider, to the extent such a contract exists between HUMANA and such
other facility, physician or other health care provider.
14
<PAGE> 15
22.5 Further, PPM acknowledges and agrees and shall require PPM
Physicians to acknowledge and agree that HUMANA may deny payment of
medical services rendered to Members, which are determined not to be
Medically Necessary by HUMANA. PPM agrees and shall require PPM
Physicians to agree that in the event of a denial of payment for
services rendered to Members that are determined not to be Medically
Necessary, PPM shall not and shall require PPM Physicians to agree not
to bill, charge, seek payment or have any recourse against Members or
persons other than HUMANA acting on their behalf for medical services
provided pursuant to this Agreement.
23. BILLING/ENCOUNTER PROCEDURES
23.1 PPM shall and/or shall require PPM Physicians to prepare and
submit to HUMANA, according to billing procedures established by
HUMANA, billing and/or encounter information for Members who have
received Covered Services. PPM shall require PPM Physicians to use the
standard billing and encounter forms required or agreed to by HUMANA.
23.2 PPM shall require PPM Physicians and PPM affiliated health care
providers to submit all claims and encounters to HUMANA electronically
by means available and accepted as industry standards that are mutually
agreeable, which may include claims clearinghouses, or IMS-Medacom, or
other technology that is mutually agreed upon by HUMANA and PPM, and in
accordance with published HUMANA claims policies, procedures and
guidelines on the earlier of the Effective Date of this Agreement or
six (6) months following execution of this Agreement. Should PPM and/or
PPM Physicians be unable to submit claims electronically upon execution
of this Agreement, PPM and/or PPM Physicians shall make such
arrangements as may be necessary, at their sole expense, to do so
within six (6) months from the date of execution of this Agreement. For
purposes of this Agreement, "claims" shall be defined as notification
to an insurance or managed health care company that payment of an
amount is due under the terms of this Agreement and in accordance with
the applicable Member health benefits contract.
23.3 Should PPM and/or PPM Physicians fail to comply with the terms of
Section 23.2 above, HUMANA may, at its sole discretion pend payment of
monies to PPM and/or PPM Physicians until completed claims are
submitted electronically. In no event will HUMANA's Members be
responsible for monies in addition to those Copayments due under the
applicable Member health care benefits contract.
23.4 PPM agrees and shall require PPM Physicians to agree to submit all
fee-for-service claims eligible for reimbursement as provided under
this Agreement within sixty (60) days from the date of service. HUMANA
may, at its sole discretion, deny payment for any such fee-for-service
claim(s) received after sixty
15
<PAGE> 16
(60) days from the date of service. PPM acknowledges and agrees and
shall require PPM Physicians to acknowledge and agree that at no time
shall HUMANA's Members be responsible for any payments in addition to
applicable Copayments for Covered Services provided to such Members. In
the event the penalty described herein is effected, the Member's
Copayment, if any, shall be adjusted accordingly.
23.5 In the event that PPM or PPM Physician(s), as applicable, are
reimbursed for Covered Services on a capitated basis, and no claims for
services are submitted to HUMANA at the time of service, PPM agrees and
shall require PPM Physicians to agree to provide HUMANA accurate and
complete information ("Encounter Data") regarding the provision of
Covered Services for Members in a form mutually to be agreed upon by
both parties. Encounter Data shall include at a minimum Member
identification and demographic information, PPM and/or PPM Physician
tax identification number, date of service, all applicable CPT-4 and
ICD-9 codes, and where applicable billed charges.
23.6 PPM acknowledges and agrees, and shall require PPM Physicians to
acknowledge and agree, that such Encounter Data shall be provided to
HUMANA on a monthly basis on or before the last day of each month for
encounters occurring in the immediately preceding month. In the event
PPM and/or PPM Physicians fail to provide, or arrange for the provision
of, the Encounter Data by the date specified above, and upon HUMANA's
notice to PPM of such failure, PPM shall have thirty (30) days from the
date of said notice to develop a corrective action plan acceptable to
HUMANA to insure compliance with the timely submission of the Encounter
Data. In the event the corrective action plan is unacceptable to
HUMANA, or the plan fails to correct the problem within sixty (60) days
of implementation of the corrective action plan, HUMANA, at its sole
discretion, may: (I) withhold PPM's and/or PPM Physicians', as
applicable, subsequent payments or (II) pend such payments until such
Encounter Data is submitted to HUMANA in an acceptable form, or (III)
terminate this Agreement upon at least sixty (60) days written notice
to PPM.
23.7 PPM shall and shall require all PPM Physicians to use the most
current procedural technology (CPT) codes on all forms. PPM and/or PPM
Physicians will abide by all CPT code rules and guidelines that are
applicable (including inclusive procedure codes).
23.8 HUMANA will deduct from payments to PPM or PPM Physician(s), as
applicable, the cost of any non-covered service and Copayment amounts
required by the applicable HUMANA Member health benefits contract.
Amounts deducted for non-covered services and Copayments will be
determined on the basis of the applicable Member health benefits
contract.
16
<PAGE> 17
24. OFF-SET
24.1 PPM shall be notified in writing by HUMANA of any monies PPM or
PPM Physician(s) may owe HUMANA, for any reason, and PPM shall have
thirty (30) days from receipt of such notification to refund monies
owed to HUMANA. If there is a dispute as to monies owed to HUMANA, PPM
shall provide a written response to HUMANA outlining the specific
nature of such dispute within such thirty (30) day notice period.
Notwithstanding the above, PPM authorizes and shall require PPM
Physician(s) to authorize HUMANA to deduct monies that otherwise may be
due and payable to HUMANA from any outstanding monies that HUMANA, for
any reason, may owe to PPM or PPM Physician(s), as applicable.
24.2 PPM agrees that HUMANA may make retroactive adjustments to the
payment and funding arrangement(s) outlined in the enclosed attachments
for changes in enrollment and other business reasons including but not
limited to claims payment errors, data entry errors, capitation errors
and incorrectly submitted claims.
25. PPM GUARANTEE
PPM shall provide HUMANA with a performance and financial guarantee
under the terms and in an amount to be agreed upon by the parties, and
secured through a letter of credit, performance bond or other
instrument approved by HUMANA, attached hereto and incorporated herein
as Attachment J. Such guarantee shall be provided to HUMANA prior to
the execution of this Agreement to ensure the performance of PPM's
obligations hereunder and payment of any deficits that may occur in the
PPM Settlement Fund(s) described herein.
26 COORDINATION OF BENEFITS/RECOVERY RIGHTS
26.1 Payment for Covered Services provided to each Member are subject
to reimbursement, or subrogation with other benefits payable or paid to
or on behalf of the Member, and to HUMANA's rights of recovery in third
party liability situations. PPM agrees and/or shall require PPM
Physicians to agree to accept any HUMANA capitation or other payment
amounts due under this Agreement, plus any Copayments due from Member,
as payment in full for all Covered Services provided to Members, and
PPM hereby assigns and shall require PPM Physicians to assign to HUMANA
all PPM's and/or PPM Physicians' recovery, reimbursement or subrogation
rights along with other benefits that may be payable with respect to a
Member.
26.2 In cases where a Member has coverage, other than with HUMANA,
which requires or permits coordination of benefits from a third party
payor in addition to HUMANA, HUMANA will coordinate its benefits with
such other payor(s). HUMANA will pay the lesser of: (I) the amount due
under this Agreement; or (II) the amount due under this Agreement less
the amount payable or to be paid by
17
<PAGE> 18
the other payor(s) or (III) the difference between allowed billed
charges and the amount paid by the other payor(s). In the event
Medicare is the primary payor, HUMANA shall pay PPM and/or PPM
Physicians, as applicable, the amount of deductible, coinsurance and/or
other plan benefits which are not covered services under Title XVIII of
the Social Security Act, as amended, subject to the benefit limits and
rates of the applicable health benefits contract. In no event will
HUMANA pay an amount which then combined with payments from the other
payor(s) exceeds the contracted rate provided in this Agreement. HUMANA
will in all cases coordinate benefits payments in accordance with
applicable statutes, laws and regulations and in accordance with its
health benefits contracts.
26.3 PPM agrees to use and shall require PPM Physicians to agree to use
their best efforts to determine the availability of other benefits,
including third party liability, and to obtain any information or
documentation required by HUMANA to facilitate HUMANA's coordination of
such other benefits.
27. NO LIABILITY TO MEMBERS FOR CHARGES
27.1 PPM agrees and shall require PPM Physicians to agree that in no
event, including, but not limited to non-payment by HUMANA, HUMANA's
insolvency or breach of this Agreement, PPM and/or PPM Physicians shall
bill, charge, collect a deposit from, seek compensation, remuneration
or reimbursement from, or have any recourse against Members of HUMANA
or persons other than HUMANA acting on their behalf for Covered
Services provided pursuant to this Agreement. This provision shall not
prohibit collection from Member for any non-covered service or
Copayment amounts in accordance with the terms of the applicable Member
health benefits contract and with the terms of this Agreement
27.2 PPM agrees and shall require PPM Physicians to agree that in the
event of HUMANA's insolvency or other cessation of operations, benefits
to Members will continue for the periods for which premiums have been
paid and benefits to Members confined in an inpatient facility on the
date of insolvency or other cessation of operations will continue until
their discharge.
27.3 PPM further agrees, and shall require PPM Physicians to agree
that: (I) this provision shall survive the termination of this
Agreement regardless of the cause giving rise to termination and shall
be construed to be for the benefit of the Member; (II) this provision
supersedes any oral or written contrary Agreement now existing or
hereafter entered into between PPM Physicians and Members or persons
acting on their behalf and (Ill) this provision shall apply to PPM
Physicians, and PPM shall obtain from such persons specific agreement
to this provision.
27.4 Any modification, addition or deletion to this Article 27 of the
Agreement shall not become effective until after the Commissioner of
Insurance has given
18
<PAGE> 19
HUMANA written notice of approval of such proposed changes, or such
changes are deemed approved in accordance with State laws.
28. MORE FAVORABLE AGREEMENTS
If during the term of this Agreement, PPM enters into any contract or
other arrangement under which the PPM renders and/or provides for the
provision of medical services through its PPM Physicians at a discount,
differential or other allowance which is more favorable than the
payment method or rates set out in Attachment E, then the PPM shall
notify HUMANA immediately, in accordance with Article 44, and HUMANA
shall be entitled to such discount, differential or other allowance
effective as of the effective date of such other contract or
arrangement. This provision shall not apply to medical services
provided under any government program.
29. CONFLICT OF INTEREST
29.1 PPM hereby represents and warrants that except as disclosed in
Attachment G, PPM, including all Principals of PPM, and PPM Physicians
do not have an interest, directly or indirectly, as a partner, officer,
member, director, including but not limited to medical director,
shareholder of more than five percent (5%) of the entity's outstanding
shares, financial, business and/or medical advisor, employee or in any
other employed, managerial, advisory, fiscal, ownership or control
capacity, in any other health maintenance organization, prepaid health
plan or similar entity providing prepaid health services, and/or any
affiliated companies thereof, hereafter referred to as "Competitive
Plan".
29.2 PPM agrees that PPM has a continuing obligation to update any and
all information in Attachment G and to notify HUMANA immediately of any
changes herein,
30. ACCESS TO INFORMATION
30.1 Upon request, PPM agrees and shall require PPM Physicians to agree
that HUMANA, or its designee, shall have reasonable access and an
opportunity to thoroughly examine, during normal business hours, on at
least twenty-four (24) hours' advance notice, or such shorter notice as
may be imposed on HUMANA by a federal or state regulatory agency or
accreditation organization, the facilities, books, records and
operations of PPM, PPM Physicians or any related entity or
organization, as they apply to obligations of PPM and/or PPM Physicians
under this Agreement. Related entity or organization shall be defined
as: (I) having influence or ownership. or control and (II) either a
financial relationship or a relationship for rendering of services. The
purpose of this clause is to permit HUMANA the right to assure
compliance by PPM and PPM Physicians of all financial, operational,
quality assurance, credentialing, as well as all other obligations of
PPM and PPM Physicians' under this Agreement and their
19
<PAGE> 20
continuing ability to meet such obligations. PPM shall require PPM
Physicians to consent to such access as a condition of its agreement
with PPM.
30.2 Failure to comply with any request for access, by HUMANA or its
agents, within seven (7) days of receipt of notification shall
constitute a material breach of this Agreement.
31. NEW PRODUCTS/PAYMENT MECHANISM
During the term of this Agreement, HUMANA may develop/implement new
products and/or payment mechanisms, from time to time. Should HUMANA
elect to offer PPM such new product and/or payment mechanism, PPM shall
be provided with thirty (30) days' written notice prior to the
implementation of such new products or payment mechanisms. If PPM does
not object to the implementation of such new product or payment
mechanism within such thirty (30) day notice period, PPM shall be
deemed to have accepted the new product or payment mechanism. In the
event PPM objects to any such new product or payment mechanism, the
parties shall confer in good faith to reach agreement. If such
agreement cannot be reached, such new product and/or payment mechanism
shall not apply to this Agreement, and HUMANA may, at its sole
discretion, terminate this Agreement upon ninety (90) days written
notice to PPM. Further, in the event that such agreement is not
reached, and HUMANA elects to continue this Agreement, PPM agrees to
waive any non-compete or exclusivity arrangement between PPM and its
independent contractor PPM Physicians, and that HUMANA, at its sole
discretion, may negotiate contracts with the independent contractor PPM
Physicians directly for such new product(s) or payment mechanism(s)
upon fourteen (14) calendar days notice to PPM.
32. ASSIGNMENT AND DELEGATION
32.1 This Agreement is entered into to secure the services of PPM and
PPM Physicians. Accordingly, any assignment by PPM and/or PPM
Physicians of their interest under this Agreement shall require the
prior written consent of HUMANA, which consent may be granted or denied
in HUMANA's sole and complete discretion. As used in this paragraph,
the term "assignment" shall also include a change of control in PPM
and/or PPM Physician(s) by merger, consolidation, transfer or the sale
of thirty-three percent (33%) or more stock or other ownership interest
in PPM and/or PPM Physician(s). Any attempt by PPM and/or PPM
Physician(s) to assign their interest under this Agreement without
complying with the terms of this paragraph shall be void and of no
effect, and HUMANA, at its option, may elect to terminate this
Agreement without any further liability or obligation to PPM and/or PPM
Physician(s). HUMANA may assign this Agreement in whole or in part to
any purchaser of all or a substantial portion of the book of business
in respect of which this Agreement is executed or to any affiliate of
HUMANA, provided that the assignee agrees to assume
20
<PAGE> 21
HUMANA's obligations under this Agreement.
32.2 Should HUMANA consent to an assignment or delegation of all or any
portion of PPM or PPM Physicians obligations under this Agreement, the
assignee, as a condition precedent to HUMANA's consent to assignment,
shall comply with all the terms and conditions of this Agreement
through the term of this Agreement in force at the time of the proposed
assignment plus one (1) additional year.
33. TERM AND TERMINATION OF AGREEMENT
This Agreement shall be effective only if and when HUMANA separately
has notified PPM of its acceptance of PPM Physicians applications. The
term of this Agreement and provisions for its termination are outlined
in Attachment F.
34. COMPLIANCE WITH REGULATORY REQUIREMENT
34.1 PPM acknowledges, understands and agrees that this Agreement is
subject to the review and approval of federal and applicable state
regulatory agencies. Any modification of this Agreement requested by
the agency(ies) shall he incorporated as provided in Article 35 of this
Agreement.
34.2 PPM Physicians shall be bound by and comply with the provisions of
applicable state and federal laws, rules and regulations. HUMANA may
terminate his Agreement immediately as to any individual PPM Physician,
in the event that a PPM Physician violates any of the provisions of
applicable state and federal laws, rules and regulations or commits any
act or engages in any conduct for which his/her medical license is
revoked or suspended, or otherwise is restricted by any state licensing
or certification agency by which the PPM Physician is licensed, or is
otherwise disciplined by such agency, department or any professional
organization of physicians.
34.3 PPM agrees to be bound by and comply with the provisions of
applicable state and federal laws, rules and regulations. If PPM
violates any of the provisions of applicable state and federal laws,
rules or regulations or commits any act or engages in any conduct
prohibited by any state licensing or certification agency HUMANA may
terminate this Agreement immediately.
35. SEVERABILITY
If any part of this Agreement should be determined to be invalid,
unenforceable, or contrary to law or professional ethics, that part
shall be reformed, if possible, to conform to law and ethics, and if
reformation is not possible, that part shall be deleted, and the other
parts of this Agreement shall remain fully effective.
21
<PAGE> 22
36. NOTIFICATION OF IMPAIRMENT
36.1 PPM shall notify HUMANA, and shall require PPM Physicians to
notify HUMANA immediately at any time if PPM and/or PPM Physician(s):
(I) makes a general assignment for the benefit of its creditors; (II)
becomes unable to pay its debts when due; (III) files a petition in
bankruptcy, whether voluntary or involuntary and/or (IV) otherwise is
impaired financially and is unable to perform its duties hereunder.
36.2 HUMANA shall notify PPM immediately at any time if HUMANA: (I)
makes an assignment for the benefit of its creditors; (II) becomes
unable to pay its debts when due; (III) files a petition in bankruptcy,
whether voluntary or involuntary and/or (IV) is otherwise impaired
financially and is unable to perform its duties hereunder.
37. RIGHT TO CONTRACT
37.1 PPM agrees that HUMANA shall be entitled to enter into contract
negotiations with PPM Physicians and that PPM Physicians shall be
entitled to enter into contracts with HUMANA for the direct provision
of services to Members, and that PPM hereby agrees that any covenant
not to compete or exclusivity arrangement between PPM and PPM
Physicians as it relates to HUMANA, is waived: (I) at the election of
PPM Physician; or (II) upon dissolution of PPM; or (III) in the event
of notice of termination of this Agreement.
37.2 Further, PPM agrees that HUMANA may enter into contract
negotiations with PPM Physicians at any time for, the provision of
medical services to HUMANA Members not covered under this Agreement.
37.3 Notwithstanding anything to the contrary outlined above, this
Article 37 shall apply to PPM Physicians directly employed or whose
practices are owned by PPM only in the event such PPM Physician(s)
terminate their employment with PPM regardless of the cause giving rise
to such termination.
38 INFORMATION
Subject to applicable legal limitations, PPM and HUMANA mutually agree
to share information necessary for the parties to meet their
obligations under this Agreement, including but not limited to
financial arrangements the parties may have with other health care
providers and claims data regarding the provision of services to HUMANA
Members covered under this Agreement. The parties agree that any such
information shared shall be held in strict confidence and shall not be
disclosed to any third party without the express written consent of the
other party, except in response to a valid court order or when
disclosure is required by a government agency.
22
<PAGE> 23
39. NON-COMPETE
39.1 During the term of this Agreement and for the one (1) year period
following termination of this Agreement, regardless of the cause giving
rise to such termination, PPM agrees and shall require PPM Physicians
to agree that it is in their respective legitimate business interests
to enter into the following restrictive covenants, such interests being
the preservation and fostering of goodwill and the substantial business
and other relationships the parties have with their respective Members,
customers, providers, patients and others. Therefore, the parties agree
to the following:
39.1.1 PPM agrees and shall require PPM Physicians to agree not to,
directly or indirectly: (I) engage in any activities which are in
competition with HUMANA's comprehensive health insurance, health
maintenance organization or comprehensive benefits plans business,
including hut not limited to obtaining a license to become a managed
health care plan offering HMO or POS products; or (II) acquire, manage,
establish or otherwise have any direct or indirect interest in any
provider sponsored organization or network (such organization or
network commonly and hereinafter referred to as a "PSN"), as now or in
the future defined or authorized by HCFA or any other federal or state
agency or enabling legislation or regulation, for the purpose of
administering, developing, implementing or selling Medicare, Medicaid
or other government sponsored heath insurance or benefit plans; or
(III) contract or affiliate with another party which is a licensed
managed care organization, where such affiliation or contract is for
the purpose of offering and sponsoring HMO or POS products, and where
PPM and/or PPM Physicians obtain an ownership interest in the HMO or
POS managed health care product to be marketed and (IV) not to enter
into agreements with other managed care entities and/or insurance
companies and/or provider sponsored networks/organizations for the
provision of health care services to Medicare HMO, Medicare P05 and/or
other Medicare replacement patients, at the same office sites where
services are to be provided to HUMANA Members and as listed in
Attachment C of this Agreement or at other office sites within a five
(5) mile radius of said office sites listed in Attachment C.
Notwithstanding the above, should PPM offer and/or contract or
affiliate with another party for the purpose of sponsoring HMO or POS
managed health care products at any of its locations, HUMANA, at its
sole discretion, may terminate this Agreement upon ninety (90) days
notice to PPM.
40. PATIENT SELF DETERMINATION ACT
The PPM and PPM Physicians acknowledge and agree to comply with the
laws of Florida respecting advance directives as defined in the Patient
Self Determination Act (P.L. 101-508). An advance directive, being for
example a living will or a durable power of attorney in which an
individual makes decisions concerning his/her medical care, including
the right to accept or refuse medical or surgical treatment.
23
<PAGE> 24
41. RIGHT TO INJUNCTION
In the event of an actual or threatened breach of this Agreement,
HUMANA shall be entitled to an injunction enforcing this Agreement in
addition to all other remedies available at law.
42. GOVERNING LAW
42.1 This Agreement shall be governed by and construed in accordance
with the laws of the State of Florida. In the event of a conflict
between the terms of this Agreement and the terms of any PPM and/or PPM
Physician agreement, the terms of this Agreement shall control.
42.2 Further, PPM acknowledges and agrees and shall require PPM
Physicians to acknowledge and agree that in the event of any conflict
between PPM subcontracts with PPM Physicians and state and federal
laws, rules and regulations to which HUMANA is subject, such state and
federal laws, rules and regulations shall control.
43. WAIVER
Waiver, whether expressed or implied, of any breach of any provision of
this Agreement shall not be deemed to be a waiver of any other
provision or a waiver of any subsequent or continuing breach of the
same provision. In addition, waiver of one of the remedies available to
either party in the event of a default or breach of this Agreement by
the other party, shall net at any time be deemed a waiver of a party's
right to elect such remedy(ies) at any subsequent time if a condition
of default continues or recurs.
44. NOTICES
Any notices, requests, demands or other communications, except notices
of changes in policies and procedures pursuant to Article 7, required
or permitted to be given under this Agreement shall be in writing and
shall be deemed to have been given: (I) on the date of personal
delivery or (II) provided such notice, request, demand or other
communication is received by the party to which it is addressed in the
ordinary course of delivery: (I) on the third day following deposit. in
the United States mail, postage prepaid, by certified mail, return
receipt requested, (ii) on the date of transmission by telegram, cable,
telex or facsimile transmission or (iii) on the date following delivery
to a nationally recognized overnight courier service, each addressed to
the other party at the address set forth below their respective
signatures to this Agreement, or to such other person or entity as
either party shall designate by written notice to the other in
accordance herewith. Unless a notice specifically limits its scope,
notice to any one party included in the term "HUMANA" or "PPM" shall
constitute notice to all parties included in the respective terms.
24
<PAGE> 25
45. CONFIDENTIALITY
PPM agrees to maintain in strict confidence the contents of this
Agreement, and any information regarding any dispute arising out of
this Agreement, and agree not to disclose the contents of this
Agreement or information regarding any dispute arising out of this
Agreement to any third party without the express written consent of
HUMANA, except pursuant to a valid court order, or when disclosure is
required by a governmental agency. Notwithstanding anything to the
contrary herein, the parties acknowledge and agree that PPM Physicians
may discuss the reimbursement methodology included herein with Members
requesting such information.
46. COUNTERPARTS AND HEADINGS
46.1 This Agreement may be executed in one or more counterparts, each
of which shall be deemed an original, and all of which together
constitute one and the same instrument.
46.2 The headings in this Agreement are for reference purposes only and
shall not constitute a part hereof.
47. INCORPORATION OF ATTACHMENTS
Attachments A, B, C, D, E, F, G, H, I, J, K, L and M are incorporated
herein by reference and made a part of this Agreement.
48. FORCE MAJEURE
No party to this Agreement shall be deemed to breach its obligations
under this Agreement if that party's failure to perform under the terms
of this Agreement is due to any act of God, riot, war or natural
disaster.
49. ENTIRE AGREEMENT
This Agreement, including the Cover Sheet, Manual, the Attachments and
Amendments hereto and the documents incorporated herein, constitutes
the entire agreement between HUMANA and PPM with respect to the subject
matter hereof, and it supersedes any other agreement, oral or written,
between HUMANA and PPM.
50. MODIFICATION OF THIS AGREEMENT
PPM acknowledges and agrees and shall require PPM Physicians to
acknowledge and agree, that this Agreement may be amended or modified
in writing as
25
<PAGE> 26
mutually agreed upon by the parties. In addition, HUMANA may modify or
amend this Agreement upon thirty (30) days written notice to PPM and,
if applicable, the compensation rates identified herein shall be
adjusted accordingly. Failure of PPM to object to such modification
during the thirty (30) day notice period shall constitute acceptance of
such modification. If PPM objects to such modification or amendment,
notwithstanding any provision in this Agreement to the contrary, HUMANA
may terminate this Agreement upon ninety (90) days written notice to
PPM.
26
<PAGE> 27
IN WITNESS WHEREOF, the parties have the authority necessary to bind the
entities identified herein and have executed this Agreement to be effective as
of this 1st day of August, 1998, thereafter known as "Effective Date." It is
provided, however, that HUMANA's execution of this Agreement shall not
constitute the acceptance required to make this Agreement effective pursuant to
Article 8.
<TABLE>
<CAPTION>
HUMANA PPM
------ ---
<S> <C>
By: By:
------------------------------- ------------------------------------
Print Name: Print Name:
----------------------- ----------------------------
Title: Title:
---------------------------- ---------------------------------
Date: Date:
----------------------------- ----------------------------------
Address for Notice: Address for Notice:
Joseph Berding. Regional Vice President Continucare Medical Management, Inc.
Humana 100 S.E. 2nd Street
3400 Lakeside Drive 36th Floor
Miramar, FL 33027 Miami, FL 33131
</TABLE>
COPY TO:
Humana Inc.
500 West Main Street
Louisville, KY 40201
Att.: Law Department
27
