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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): March 12, 1997
(February 6, 1998)
COVENTRY CORPORATION
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(Exact name of registrant as specified in its charter)
Tennessee 0-19147 62-1297579
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(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
501 Corporate Drive, Suite 400
Franklin, Tennessee 37067
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (615) 771-4141
53 Century Boulevard, Suite 250
Nashville, Tennessee 37214
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(Former name or former address, if changed since last report)
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Item 5. Other Events
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Coventry Corporation (the "Company") entered into a Risk Sharing
Agreement (the "AHERF Agreement") dated as of March 31, 1997 by and among
HealthAmerica Pennsylvania, Inc., the Company and Allegheny Health, Education
and Research Foundation. The AHERF Agreement is included as Exhibit 10.1 to
this report.
The Company entered into three amendments to the AHERF Agreement. The
first amendment, dated June 11, 1997, is included as Exhibit 10.2 to this
report. The second amendment, dated June 30, 1997, is included as Exhibit 10.3
to this report. The third amendment, dated July __, 1997, is included as
Exhibit 10.4 to this report.
Group Health Plan, Inc. and Healthcare USA of Missouri, LLC,
wholly-owned subsidiaries of the Company, entered into a Global Capitation
Agreement, dated March 12, 1997 (the "BJC Agreement"), with BJC Health System.
The BJC Agreement is included as Exhibit 10.5 to this report.
Item 7. Financial Statements and Exhibits
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(c) Exhibit:
10.1 Risk Sharing Agreement dated as of March 31, 1997 by
and among HealthAmerica Pennsylvania, Inc., Coventry
Corporation and Allegheny Health, Education and
Research Foundation
10.2 First Amendment to Risk Sharing Agreement, dated June
11, 1997, by and between Coventry Corporation and
Allegheny Health, Education & Research Foundation
10.3 Second Amendment to Risk Sharing Agreement, dated June
30, 1997, by and between Coventry Corporation and
Allegheny Health, Education & Research Foundation
10.4 Third Amendment to Risk Sharing Agreement, dated July
__, 1997, by and between Coventry Corporation and
Allegheny Health, Education & Research Foundation
10.5 Global Capitation Agreement, dated March 12, 1997, by
and among Group Health Plan, Inc., HealthCare USA
of Missouri, LLC and BJC Health System
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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.
COVENTRY CORPORATION
Date: February 6, 1998 By: /s/ Shirley R. Smith
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Shirley R. Smith
Vice President, Corporate General Counsel
and Secretary
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]
EXHIBIT INDEX
<TABLE>
<CAPTION>
NO. EXHIBIT
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<S> <C>
10.1 Risk Sharing Agreement dated as of March 31, 1997 by
and among HealthAmerica Pennsylvania, Inc., Coventry
Corporation and Allegheny Health, Education and
Research Foundation
10.2 First Amendment to Risk Sharing Agreement, dated June
11, 1997, by and between Coventry Corporation and
Allegheny Health, Education & Research Foundation
10.3 Second Amendment to Risk Sharing Agreement, dated June
30, 1997, by and between Coventry Corporation and
Allegheny Health, Education & Research Foundation
10.4 Third Amendment to Risk Sharing Agreement, dated July
__, 1997, by and between Coventry Corporation and
Allegheny Health, Education & Research Foundation
10.5 Global Capitation Agreement, dated March 12, 1997, by
and among Group Health Plan, Inc., HealthCare USA
of Missouri, LLC and BJC Health System
</TABLE>
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EXHIBIT 10.1
RISK-SHARING AGREEMENT
This Agreement is effective the 31st day of March, 1997, by and between
HEALTHAMERICA PENNSYLVANIA, INC., a Pennsylvania corporation licensed to operate
a health maintenance organization ("HealthAmerica"), COVENTRY CORPORATION, a
Delaware corporation ("Coventry") for and on behalf of the MEMBER COMPANIES (as
hereinafter defined) other than HealthAmerica, and ALLEGHENY HEALTH, EDUCATION
AND RESEARCH FOUNDATION, a Pennsylvania nonprofit corporation ("AHERF").
WHEREAS, HealthAmerica and affiliated companies, and AHERF, through its
affiliated entities and its network of integrated health care providers, have
entered into provider agreements and related documents to provide health care
services for participants in managed care programs;
WHEREAS, HealthAmerica and AHERF desire to enter into this Agreement to
confirm their commitment to enhance quality and cost effective managed care
through their cooperative efforts;
WHEREAS, HealthAmerica and AHERF mutually desire to preserve and
enhance patient dignity.
NOW, THEREFORE, in consideration of the mutual covenants, promises, and
undertakings herein and intending to be legally bound hereby, the parties agree
as follows:
1. Definitions
For purposes of this Agreement, the following capitalized words and
phrases shall have the meaning specified.
1.1 "AHERF Affiliated Provider" means Allegheny General Hospital,
Allegheny Integrated Health Group, Allegheny University
Medical Centers, Allegheny University of the Health Sciences,
Allegheny University Hospitals, St. Christopher's Hospital for
Children, Penn Group Medical Associates, any provider of
healthcare services employed by any of the foregoing, and any
other provider of health care services, including hospitals,
physicians, and other providers and facilities by and at which
health care services are made available, which is now or
hereafter directly or indirectly controlled by, controlling,
or under common control with (or, in the case of a
professional corporation, managed by) AHERF.
1.2 "AHERF Contracted Provider" means: (i) any provider of health
care services, including hospitals, physicians, and other
providers and facilities by and at which health care services
are made available, which is not an AHERF Affiliated Provider,
but with which AHERF or an AHERF Affiliated Provider has an
arrangement for the provision of health care services to
payers contracting with AHERF or such AHERF Affiliated
Provider, including but not limited to the Third
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*CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE COMMISSION.
Parties; and (ii) any other HealthAmerica Participating
Provider which provides Covered Services to an Covered
Individual, for which AHERF shall assume risk at the
HealthAmerica provider contracted rate.
1.3 "AHERF Premium Amount" means the amount of compensation to be
paid to AHERF in a Risk Year (or, if computed with respect to
a monthly or quarterly period during a Risk Year, in such
monthly or quarterly period) under this Agreement,which shall
be (i) [__]* of Total Premiums for Risk Years 1-5 and [__]* of
Total Premiums for Risk Years 6 through the end of this
Agreement for the Commercial HMO Program (ii) [__]* of
Total Premiums for the PPO Program and POS Program and (iii)
[__]* of Total Premiums for the Medicare HMO Risk Program.
The AHERF Premium Amount may be adjusted during the term
hereof pursuant to Section 2.4.1 and Section 5.2.
1.4 "AHERF Provider," "AHERF Providers" means individually AHERF
Contracted Providers or AHERF Affiliated Providers, as
applicable, and collectively, AHERF Contracted Providers and
AHERF Affiliated Providers.
1.5 "Central Pennsylvania Region" means the area served by a
Member Company in the Central portion of the Commonwealth of
Pennsylvania, which area includes the following Pennsylvania
counties: Adams, Berks, Blair, Centre, Clearfield, Clinton,
Columbia, Cumberland, Dauphin, Franklin, Fulton, Huntingdon,
Juniata, Lackawanna, Lancaster, Lebanon, Lehigh, Luzerne,
Mifflin, Northampton, Northumberland, Perry, Schuykill,
Snyder, Union, Wyoming, York.
1.6 "Coinsurance" means that percentage portion of the fee for
Covered Services provided to Covered Individuals that is to be
paid by the Covered Individual or by another payor as required
under the applicable Plan.
1.7 "Commercial HMO Program" means the commercial health
maintenance organization program offered by HealthAmerica to
employers, unions, or other purchasers of group health
insurance plans. The parties understand and agree that
Commercial HMO Program does not include any self-insured
health maintenance organization plans administered by
HealthAmerica, including, without limitation, any self-insured
health benefit plans offered by an AHERF Provider to its
employees, unless there is mutual agreement to add any such
plans subsequent to this Agreement.
1.8 "Copayment" means the fixed dollar amount that a AHERF
Provider collects from a Covered Individual, if allowed under
the applicable Plan.
1.9 "Covered Individual" means any person, and his or her eligible
dependents, who is enrolled in a Plan and is eligible to
receive the Covered Services set forth in the
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Plan, except for persons residing in HealthAmerica's Central
Pennsylvania Region or in the State of Ohio.
1.10 "Covered Services" means all health care services and supplies
that a Member Company is obligated to provide to Covered
Individuals pursuant to the applicable Plan.
1.11 "Deductible" means that amount which must be incurred by a
Covered Individual for Covered Services prior to a Covered
Individual's eligibility for payment for Covered Services.
1.12 "Emergency," "Emergency Medical Services," etc. shall have the
same meaning set forth in the applicable Plan unless
otherwise required by law, in which case such terms shall
have the meaning required by law.
1.13 "HealthAmerica Participating Provider" means any provider of
health care services, including hospitals, physicians, and
other providers and facilities by and at which health care
services are made available, which meets HealthAmerica's
participation criteria and has entered into a provider
contract to provide Covered Services to Covered Individuals
participating in one of HealthAmerica's or other Member
Company's Plans.
1.14 "Medically Necessary" means all medical, surgical or other
related treatment which a Covered Individual requires in the
professional opinion of an AHERF Provider who is a physician
in consultation with HealthAmerica's Medical Director, from
time to time, in conformity with generally accepted medical
and surgical practices in effect at the time of determination
of treatment, the applicable Plan, and in conformity with the
professional and technical standards adopted by the quality
improvement and utilization review and management programs of
HealthAmerica.
1.15 "Medicare" means the Medicare program administered by the
Health Care Financing Administration of the United States of
America ("HCFA").
1.16 "Medicare HMO Risk Program" means the prepaid health care
plan(s) offered by HealthAmerica, pursuant to a contract with
HCFA, to individuals eligible to participate in Medicare.
1.17 "Member Company" shall mean HealthAmerica or any other direct
or indirect subsidiary of Coventry that offers a Program to
Covered Individuals in the Commonwealth of Pennsylvania,
including Coventry HealthCare Management Corporation d.b.a.
HealthAssurance ("HealthAssurance") and Coventry Health &
Life Insurance Company ("CHL").
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1.18 "Plan" means a health care plan offered by HealthAmerica or
other Member Company which provides, among other things, a
Program to Covered Individuals. The parties understand and
agree that in no event shall Plan include any self-insured
health care benefits plans administered by HealthAmerica or
other Member Company, including, without limitation, any
self-insured health benefit plans offered by an AHERF Provider
to its employees.
1.19 "POS Program" means the commercial point of service plan
(sometimes referred to as a coordinated care program or
gatekeeper preferred provider organization) offered by CHL
(and administered by HealthAssurance) to employers, unions or
other purchasers of group insurance; provided, however, POS
Program does not include any self-insured point of service
plans.
1.20 "PPO Program" means the commercial preferred provider
organization plan offered by HealthAssurance to employers,
unions or other purchasers of group health insurance;
provided, however PPO Program does not include any
self-insured preferred provider organizations.
1.21 "Primary Care Physicians" means physicians who specialize in
general or family practice medicine, internal medicine, or
pediatric medicine and are participating providers in a Member
Company's network other than in the Central Pennsylvania
Region or Ohio.
1.22 "Program" or "Programs" means individually the Commercial HMO
Program, PPO Program, POS Program or the Medicare HMO Risk
Program, as applicable, and collectively, the Commercial HMO
Program, PPO Program, POS Program and the Medicare HMO Risk
Program.
1.23 "Risk Year" means the period commencing with the date of
consummation of the Asset Purchase Agreement dated February
26, 1997 by and among AHERF, HealthAmerica and Coventry
Corporation, ("Asset Purchase Agreement") and December 31,
1997, and each successive one (1) year period thereafter so
long as this Agreement is in effect.
1.24 "Third Parties" shall mean the ancillary service providers
listed on Exhibit A, who, as of the Effective Date, have
entered into contracts for provision of certain Covered
Services to Covered Individuals under contractual terms with
HealthAmerica which are assumed by AHERF.
1.25 "Total Premiums" means the total dollar amount of premiums
received by Member Companies for the coverage of, or provision
of Covered Services to Covered Individuals for a Risk Year.
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1.26 "Total Provider Payments" means the total dollar amount of
payments made by Member Companies, directly or on behalf of
AHERF, to any providers, including AHERF Providers, for the
performance of Covered Services to Covered Individuals
incurred during the applicable period less any recoveries of
payments subsequently determined not to be owed to such
providers.
1.27 "Urgently Needed Services" shall have the same meaning, if
any, set forth in the applicable Plan unless otherwise
required by law, in which case such terms shall have the
meaning required by law.
1.28 "Western Region" shall mean the following Pennsylvania
counties: Allegheny, Washington, Greene, Fayette, Somerset,
Westmoreland, Armstrong, Beaver, Butler and Indiana.
2. SCOPE OF AGREEMENT
2.1 AHERF Network. On or before the effective date of this
Agreement, AHERF shall provide to HealthAmerica a complete
list of AHERF Providers as of the date of this Agreement and
the usual and customary capitation, percentage of premium or
fee schedule under which they are to be paid. If such
information is not provided with respect to an AHERF Provider,
the fee schedule in the standard provider agreements of the
Member Companies will be used to determine payments to such
provider. It is generally understood that it may take up to 45
days from date of receipt before payments can be processed.
The parties understand and agree that AHERF shall as soon as
possible use its best efforts to contract and include in its
network all physicians who have active medical staff
privileges at hospitals that are AHERF Affiliated Providers.
2.2 Provider Leaving Network. AHERF shall notify HealthAmerica or
other Member Company within 10 days of being notified that any
AHERF Provider has or will discontinue providing Covered
Services to Covered Individuals. If such AHERF Provider is
simultaneously discontinuing participation in a HealthAmerica
or affiliated product, the parties shall cooperate in
transitioning the care of such Covered Individuals to another
HealthAmerica Participating Provider within a reasonable
amount of time; provided, however, such transfer shall take
place immediately if such discontinuance is due to quality of
care or HealthAmerica determines that continuation of care may
negatively affect care rendered to Covered Individuals.
2.3 Becoming a HealthAmerica Provider. AHERF shall cause each
current or future AHERF Affiliated Provider, and shall make a
good faith effort to cause any current or future AHERF
Contracted Provider not already participating with
HealthAmerica, to apply for participation with the Member
Companies in
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*CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE COMMISSION.
Programs offered within such Provider's service area, and the
Member Companies agree to use their best efforts to accept as
soon as possible and in any event within 30 days of receipt of
a completed application, for participation any such provider
that meets the Member Companies' participation criteria and
agrees to the Member Companies' contract terms.
AHERF shall notify HealthAmerica or other Member Company of
any new AHERF Providers and the fee schedule under which such
providers are to be paid. If AHERF provides notification to
HealthAmerica prior to the 15th day of any month,
HealthAmerica shall implement such fee schedule in the
following month. In the event that AHERF fails to notify a
Member Company of the fee schedule under which a AHERF
Provider is to be paid, a Member Company shall pay such
provider under the Member Company's then current applicable
fee schedule.
The parties understand and agree that under no circumstances
may an AHERF Provider provide Covered Services hereunder
unless it is first accepted by HealthAmerica for participation
and agrees to the Member Companies' contract terms.
2.4 Programs.
2.4.1 [__]*
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*CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE COMMISSION.
2.4.2 [__]*
2.5 Termination of a AHERF Provider.
2.5.1 In the event of AHERF's termination or suspension of
an AHERF Provider's contract with AHERF, AHERF shall
immediately cause such AHERF Provider to cease
providing Covered Services to Covered Individuals,
notify Health America of the foregoing and if the
reason for such termination or suspension is required
to be reported to the National Practitioner Data
Bank, such notice shall state the reason for such
termination or suspension.
2.5.2 In the event that one of the events listed below
occurs as to an AHERF Provider, HealthAmerica may
notify AHERF that such Provider is no longer eligible
to provide Covered Services to Covered Individuals
and AHERF shall thereafter immediately cause such
AHERF Provider to cease providing Covered Services to
Covered Individuals:
2.5.2.1 Any action involving termination of or
limitation on an AHERF Physician's or
Provider's hospital privileges related
to quality of care or ability to admit
patients to any hospital or inpatient
facility.
2.5.2.2 Any situation that requires an AHERF
Provider to notify a state or federal
agency or licensing board that may
result in the termination, revocation or
suspension of the Provider's license or
certification.
2.5.2.3 Any situation involving an investigation
conducted or complaint filed by a state
or federal agency or licensing board
that may jeopardize or restrict an AHERF
Hospital's ability to operate an
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acute care hospital, an AHERF Physician's license to practice medicine or
osteopathy or an AHERF Ancillary Provider's license or certification to provide
professional services.
2.5.2.4 A change in any AHERF Physician's
license to practice medicine or
osteopathy, any form of reportable
discipline against such license, a
change in any AHERF Hospital's
accreditation by JCAHO, or
certifications including, but not
limited to, those under Titles XVIII or
XIX of the United States Code, or a
change in any AHERF Ancillary Provider's
license or certification to provide
professional services or any form of
reportable discipline against the same.
2.5.2.5 Any lawsuit or claim filed or asserted
against an AHERF Provider alleging
professional malpractice involving a
Covered Individuals, provided that
HealthAmerica shall consult with AHERF
prior to terminating an AHERF Provider
under this Section 2.5.2.5.
2.5.2.6 Any felony conviction of an AHERF
Provider.
2.5.2.7 Any AHERF Provider's suspension or
termination from participation in
Medicare or the Medical Assistance
program of any state.
2.5.2.8 HealthAmerica determines in good faith
that the AHERF Provider's continued
provision of services to Members may
result in, or is resulting in, an
imminent danger to the health, safety or
welfare of Covered Individuals.
2.5.2.9 HealthAmerica determines in good faith
that, after notice from HealthAmerica
and opportunity to cure, the AHERF
Provider has not materially complied
with the provisions of HealthAmerica's
or AHERF's quality improvement or
utilization management programs.
2.5.2.10 One of the events of default set forth
in the applicable AHERF Provider
Agreement occurs and HealthAmerica has
complied with the applicable notice
provisions set forth therein.
2.6 Corrective Action. If terminated for one of the items set
forth immediately above, an AHERF Provider may utilize
HealthAmerica's then current applicable
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*CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE COMMISSION.
Corrective Action Program if such AHERF Provider would have otherwise been
entitled to utilize such Corrective Action Program.
2.7 [__]*
2.8 [__]*
2.9 [__]*
2.10 HealthAmerica Network. AHERF shall take all reasonable steps
to maintain in Health America's Western Region network
("Network") the providers listed on Exhibit B attached hereto
so long as this Agreement is in effect. The parties hereto
understand and agree that those providers listed in Exhibit B
with an asterisk associated therewith shall not be removed
from the Network except upon the mutual agreement of the
designated representatives of the parties comprising the
Operating Committee, taking into account quality, location and
impact on marketing the Programs. Further, it is understood
and agreed that those providers listed in Exhibit B without an
asterisk associated therewith, shall not be removed from the
Network except upon the mutual agreement of the designated
representatives of the parties comprising the Operating
Committee, taking into account quality and location. In no
event will a provider be terminated from the Network unless
such termination may be effected without legal liability and
appropriate notice to Covered Individuals. In the event that a
Member Company desires to add a particular physician or
practice group to its physician provider panel, or desires to
add physician providers in a particular geographic area within
the Western Pennsylvania Region or in a particular type of
practice or specialty, it will identify its specific needs in
writing to AHERF, including the rationale for the proposed
provider addition. AHERF will use its best efforts to meet the
Member Company's identified need through employment, practice
acquisition, contractual affiliation or otherwise.
3. DUTIES OF AHERF.
3.1 AHERF shall perform the following duties:
3.1.1 Arrange for provision of all Covered Services
delivered to Covered Individuals, at the Covered
Individuals's request or otherwise, including such
Covered Services as are provided at providers which
are not AHERF Providers.
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3.1.2 Ensure that AHERF Affiliated Providers take any and
all actions required to be bound by the terms of this
Agreement and to permit AHERF to comply herewith and
AHERF Providers to comply with the agreements they
have executed with AHERF or HealthAmerica. AHERF and
HealthAmerica shall cooperate as necessary to
establish compliance with such agreements, and
subsequent negotiation or renegotiation of such
agreements should be conducted by HealthAmerica
personnel or AHERF personnel with appropriate
HealthAmerica oversight.
3.1.3 Comply with all applicable federal and state laws and
regulations related to this Agreement and the
services to be provided hereunder; including but not
limited to, statutes and regulations related to fraud
and abuse, discrimination, disabilities,
confidentiality, self-referral, false claims, and
prohibition of kickbacks. Comply with all applicable
NCQA and HCFA requirements.
3.1.4 Review administrative and management services related
to the provision of services by AHERF Providers.
3.1.5 AHERF shall cause each of AHERF Affiliated Providers
to offer to their employees any Program that a Member
Company chooses to offer within such AHERF Affiliated
Provider's service area on terms, including, without
limitation, employer contributions, at least as
favorable as those for any health benefit programs
with comparable benefits and premiums as are offered
on behalf of any other third party payor. Such
Program(s) shall be offered during each AHERF
Affiliated Provider's next health plan open
enrollment but in no event to become effective for
coverage later than January 1, 1998. The parties
understand and agree that AHERF Affiliated Providers
shall not promote or favor a competing health benefit
program with benefits comparable to any Program
offered in the AHERF Affiliated Providers' service
area so long as the cost to the applicable AHERF
Affiliated Provider for the competing health benefit
program is no greater than the cost of the Program.
In addition, an AHERF Affiliated Provider shall not
agree with another third party payor to exclude
HealthAmerica or any of its affiliates from the
health care benefits offered to the AHERF Affiliated
Provider's employees. AHERF shall cause each AHERF
Affiliated Provider to immediately inform
HealthAmerica in the event that it intends to offer
any other third party payor's health benefits plan on
terms more favorable than a Program.
3.1.6 AHERF shall contract with the Third Parties under or
assume as provided in Section 1.2 the terms and
conditions of the contracts listed in Exhibit A for
provision to Covered Individuals of such Covered
Services as are within
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the specialty of the ancillary providers who are
parties to the contracts. Upon the termination of any
contracts with a Third Party, AHERF may cause an
AHERF Provider to provide such Covered Services. In
the event AHERF determines to terminate any of such
agreements, it agrees to indemnify and hold harmless
Coventry, HealthAmerica, any Member Company, or any
subsidiary of the foregoing which is a party to such
agreement, and any of their officers, directors,
agents or employees, from any loss, expense, damages
or other costs incurred by them arising out of such
termination, including all costs and expenses
(including reasonable attorneys fees in connection
with any action, suit, proceeding in connection
therewith).
3.1.7 AHERF shall maintain continuity of care for Covered
Individuals, including permitting admissions and/or
referrals to all HealthAmerica Participating
Providers (so long as such providers have contracted
with HealthAmerica to provide care to Covered
Individuals).
3.1.8 HealthAmerica, HCFA, NCQA and the Commonwealth of
Pennsylvania shall have the right to review AHERF's
books and records pertaining to provision of services
to Covered Individuals, including, but not limited
to, quality improvement and utilization management
programs, and all data on utilization of medical
services and providers of those services pertaining
to Covered Individuals. AHERF shall have the right to
review HealthAmerica's books and records pertaining
to its premium collection activities, coordination of
benefits, subrogation, and claims payment activities,
in each case to the extent pertaining to Covered
Individuals and to the extent such functions have not
been delegated to AHERF hereunder.
4. DUTIES OF HEALTHAMERICA.
4.1 HealthAmerica or other Member Company shall perform the
following duties.
4.1.1 Utilization. Utilization review and management
services and the obligations imposed upon
HealthAmerica or other Member Company by federal and
state statute and regulation.
4.1.2 Member Services. Member services, including
enrollment, dedicated member services phone line,
member grievance process and collection of premium
and processing will continue to be the responsibility
of HealthAmerica or other Member Company.
4.1.3 Provider Services. Provider services, including a
dedicated provider relations telephone line, and
Medical Director interface.
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4.1.4 Marketing. Marketing services, including projections
by product or plan, and underwriting services.
4.1.5 Quality Improvement. Quality improvement services,
including provider credentialing and recruiting, NCQA
accreditation, member satisfaction surveys (related
to primary care physicians, provider sanctioning,
specialists and hospital services) and data
collection, analysis and reporting. In performing
credentialing activities with respect to AHERF
Providers, HealthAmerica shall not discriminate
against any AHERF Provider in comparison to any other
HealthAmerica Participating Provider, and such
credentialing program shall be reasonable,
consistently and uniformly applied to each
HealthAmerica Participating Provider, including AHERF
Providers.
Notwithstanding anything herein to the contrary,
AHERF shall have the right, subject to and in
accordance with AHERF's credentialing and
recredentialing programs and procedures and subject
to applicable law, to terminate any provider as an
AHERF Provider if such provider fails to meet AHERF
standards and criteria. AHERF shall promptly notify
HealthAmerica in writing of any such termination, and
upon such notice, such AHERF Provider will cease to
be an AHERF Provider for purposes of the risk
reconciliation provisions of this Agreement as of the
last day of the month in which the effective date of
the termination occurs.
4.1.6 Information Systems. The parties shall work closely
together to facilitate efficient transfer of
information which is needed for performance of their
duties under this Agreement. HealthAmerica or other
Member Company shall provide the information systems
mutually agreed upon by the parties, including access
-- electronic on-line access if feasible -- to
HealthAmerica's authorization system for purposes of
communicating to HealthAmerica or other Member
Company authorizations for provision of health care
services to Covered Individuals.
HealthAmerica or other Member Company shall provide
to AHERF on a monthly basis, and to the extent
reasonably feasible, in mutually acceptable computer
readable format, claims information and reports to be
agreed upon with respect to Covered Individuals who
have received Covered Services from AHERF Providers.
At a minimum, HealthAmerica or other Member Company
will provide AHERF all of the claim data in the
HealthAmerica claims system needed by AHERF to
complete the data fields listed on Exhibit C. Data
will be provided on an independent practice basis and
on a system basis in accordance with mutually
determined specifications.
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4.1.7 Claims Processing. AHERF shall provide HealthAmerica
with all information required for HealthAmerica or
other Member Company to process and reconcile claims
presented for payment by AHERF Providers. Subject to
the provisions of Section 5, HealthAmerica or other
Member Company shall be responsible for processing
and paying such claims and for otherwise paying on
behalf of Covered Services provided to Covered
Individuals, including the coordination of benefits
and payment of other claims from other providers to
Covered Individuals. HealthAmerica or other Member
Company shall provide such claims information to
AHERF on a monthly basis, and shall use its
reasonable efforts to provide the information in
mutually acceptable electronic format. HealthAmerica
or other Member Company will use its best efforts to
process such claims within 30 days of receipt of a
clean claim as mutually agreed by HealthAmerica and
AHERF.
4.1.8 Risk Pools. HealthAmerica shall be responsible for
the administration of mutually agreed upon interest
bearing risk pools relating to Covered Individuals.
4.1.9 Eligibility, and Benefit Verification. HealthAmerica
or other Member Company shall be responsible for the
determination under each Program as to whether (i) a
person receiving services, supplies, products or
accommodations from an AHERF Provider is a Covered
Individual, and (ii) the services, supplies, products
and accommodation provided to a Covered Individual
are Covered Services. The Member Company shall use
its reasonable efforts to provide AHERF and AHERF
Providers with real time access to the Member
Company's eligibility files to verify a Covered
Individual's eligibility and coverage. HealthAmerica
agrees that such verification process shall be
reasonable and consistently and uniformly applied to
each HealthAmerica Participating Provider.
HealthAmerica shall make eligibility determinations
according to its then current policies.
As to AHERF Providers being compensated on a
capitation basis, if a Covered Individual's
eligibility has been canceled retroactively,
HealthAmerica may deduct from payments to be made to
the AHERF Provider an amount equal to the capitation
payments paid to the AHERF Provider on account of
such Covered Individual after the date of the
retroactive cancellation: provided, however, such
amount shall not exceed an amount equal to three (3)
months of capitation payments for such Covered
Services. The AHERF Provider may bill such Covered
Individual for services rendered during such period
of ineligibility, which billing shall not constitute
a violation of Sections 5.9. If a Covered
Individual's enrollment in an AHERF Provider's
practice has been added retroactively
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for three (3) or more months, HealthAmerica shall
make a capitation payment equal to three months of
capitation payments for such Covered Individual. The
foregoing financial terms and conditions shall be
AHERF Provider's sole and exclusive remedy for
failing to notify HealthAmerica or Member Company of
a Covered Individual's enrollment in an AHERF
Provider's practice.
AHERF Providers shall provide health care services to
Covered Individuals without prior verification of
eligibility or authorization in cases of an
emergency.
4.2 Delegation. The Parties acknowledge that for all Programs
covered by this Agreement, certain functions may be most
effectively performed by AHERF. Therefore, the parties agree
that the services set forth in this Section 4.2 may be
delegated to AHERF in accordance with the provisions of this
Section 4.2.
4.2.1 Delegated Functions Pre-requisites/Oversight. Subject
to the terms and conditions set forth in this Section
4.2.1, HealthAmerica or another Member Company shall
delegate the performance of a function listed in
Section 4.2.1.6 below (individually a "Delegated
Function" and collectively the "Delegated
Functions"), to AHERF with regard to the Programs in
the Western Region.
4.2.1.1 HealthAmerica Pre-delegation Evaluation.
HealthAmerica or another Member Company
shall not be required to delegate a
Delegated Function hereunder unless and
until HealthAmerica has performed a
pre-delegation audit and determined, in its
sole discretion, that AHERF shall perform
such Delegated Function in accordance with
the standards set forth in this Section
4.2.1.
4.2.1.2 Work Plan. HealthAmerica or another Member
Company shall not be required to delegate a
Delegated Function hereunder unless and
until AHERF has submitted to HealthAmerica
or another Member Company and HealthAmerica
or another Member Company has approved a
work plan satisfactory to it setting forth
in sufficient detail the tasks to be
performed by AHERF in performing the
Delegated Function.
4.2.1.3 HealthAmerica Oversight. The parties
understand and agree that pursuant to state
requirements regarding integrated delivery
systems and NCQA, a Member Company is
required
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to retain oversight of the Delegated
Functions. A Member Company shall not be
required to delegate a Delegated Function
hereunder unless and until the Member
Company and AHERF mutually agree to the
frequency and content of periodic reports to
be provided by AHERF to the Member Company
in order to assist HealthAmerica in
performing its oversight duties hereunder. A
Member Company shall conduct an annual
on-site audit of AHERF to ensure compliance
with HealthAmerica's, DOH and NCQA
standards.
4.2.1.4 Standard of Performance. All Delegated
Functions shall be performed in accordance
with standards satisfactory to the Member
Company, which standards shall be no less
than the standards required by NCQA, the
Pennsylvania Department of Health ("DOH") or
the Pennsylvania Insurance Department
("DOI"), including, without limitation, the
requirements set forth in the DOH's
Statement of Policy and the DOI's Statement
of Policy, each as amended from time to
time, respectively set forth at 28 Pa.
Code ss.9.401 et seq. and 31 Pa.
Code ss.301.301 et seq. (collectively the
"Statement of Policy"). Further, all
Delegated Functions shall be subject to
performance monitoring by the Member Company
and the
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DOH, and is subject to independent
validation by the Member Company, DOH and an
independent quality review/assessment
approved by the DOH. HealthAmerica may elect
to rescind any delegated duties if, in
HealthAmerica's sole opinion, AHERF's
performance of such functions may jeopardize
either the health or safety of
HealthAmerica's members, or HealthAmerica's
compliance with applicable regulations or
other certification requirements.
4.2.1.5 Consideration. The parties shall mutually
agree to the amount of consideration to be
paid to AHERF for performance of a Delegated
Function prior to delegation of the
Delegated Function, provided that in no
event shall a Member Company agree to
consideration that does not provide the
Member Company with a substantial savings,
as determined by the Member Company, in its
cost in directly performing the Delegated
Function. At a Member Company's request,
AHERF shall provide the Delegated Function
on behalf of a Member Company's other
products, including self insured products,
at the same consideration.
4.2.1.6 Delegated Functions.
4.2.1.6.1 Utilization Review/Management.
The parties hereto shall use
their best efforts to delegate
utilization review/management
to AHERF within six (6) months
of the effectiveness of date of
this Agreement.
4.2.1.6.2 Provider Recruitment/Network
Maintenance. The parties hereto
shall negotiate in good faith
to delegate provider
recruitment/network maintenance
to AHERF. The parties
understand and agree that in
no event shall a Member Company
be required to include in its
network of participating
providers, providers that do
not meet it's standard
credentialing standards or that
it reasonably believes may
endanger the health and welfare
of Covered Individuals.
HealthAmerica and other Member
Companies retains the right,
based on quality issues, to
approve new practitioners,
providers and sites, and to
terminate or suspend individual
practitioners.
4.2.1.6.3 Quality Improvement. The
parties hereto shall negotiate
in good faith to delegate
quality improvement to AHERF.
4.2.1.6.4 Claims Payment. The parties
hereto shall negotiate in good
faith to delegate claims
payment to AHERF.
4.2.1.6.5 No Delegation of Member
Services. Member Companies
shall continue to perform
member service, including,
without limitation, member
grievance functions.
4.2.2 Approval of Charters. HealthAmerica shall
review and approve the quality improvement,
utilization management and credentialing
charters and policy and procedure manuals
which shall be developed by AHERF.
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4.2.3 Access to Records. AHERF shall provide, and
cause practitioners and providers to
provide, any Member Company, DOH and an
independent review/assessment organization
with access to medical and other records
concerning the provision of Covered Services
to Covered Individuals by and through AHERF
and AHERF Providers.
4.2.4 Confidentiality. AHERF and Member Companies
shall maintain, in strict confidence, the
records and information of Covered
Individuals. AHERF and Member Companies
shall afford Covered Individuals the
opportunity to approve or deny the release
of identifiable personal information by
AHERF or the Member Companies, except where
such release is required by law.
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4.2.5 Other Duties
4.2.5.1 AHERF shall provide quarterly
performance reports according to
HealthAmerica specifications
regarding quality improvement
and utilization management.
4.2.5.2 Representatives from
HealthAmerica shall be included
as voting members of all
committees of AHERF including
but not limited to the committee
which addresses the development
of quality improvement standards,
provided, such participation
shall be limited to matters
relating to Covered Individuals
and shall not jeopardize any peer
review protection granted under
applicable law.
4.2.6 Failure to Perform Delegated Functions to
the Satisfaction of a Member Company. In the
event that AHERF fails to perform a
Delegated Function in accordance with this
Agreement, a Member Company shall so notify
AHERF, which notice shall set forth in
detail the reasons for such failure. Within
fifteen (15) days of the date of the Member
Company's notice to AHERF, AHERF shall
provide to the Member Company a written plan
for correcting the items detailed in the
Member Company's notice. In the event that
such failure is not corrected within fifteen
(15) days of the date of AHERF's written
plan, the Member Company may notify AHERF
that the Member Company shall perform the
affected Delegated Function and shall
discontinue payment for the same effective a
date certain to be chosen by the Member
Company.
4.3 Contractual Responsibilities to Covered Individuals. The
parties recognize that regulatory requirements provide that
HealthAmerica and other Member Companies will remain
ultimately responsible to Covered Individuals, financially or
otherwise, for AHERF's functions and responsibilities under
the terms of this Agreement and that HealthAmerica will retain
oversight authority over such functions and responsibilities.
5. FINANCIAL TERMS.
5.1 Financial Responsibility. All Covered Services rendered for
Covered Individuals are to be either directly provided by or
paid for by AHERF. AHERF shall be responsible for the total
costs of Covered Services whether provided within or outside
of AHERF's system. Covered Services for which AHERF shall be
financially responsible will include without limitation
Emergency Medical Services or Urgently Needed Services.
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5.2 Percent of Premium. In consideration of AHERF's arranging for
the provision of Covered Services to Covered Individuals under
the Programs, its assumption of risk of financial loss
associated with the provision of those Covered Services and
its performance of the other duties set forth in this
Agreement, HealthAmerica or a Member Company, as appropriate,
shall pay AHERF the AHERF Premium Amount, subject to
applicable terms and conditions set forth elsewhere in this
Agreement.
If the average per member, per month premium in a Risk Year
for the aggregate of Covered Individuals enrolled in a Program
is more than two percent (adjusted for change in benefit
design and demographic mix) less than the average per member,
per month premium for the previous Risk Year for the aggregate
of Covered Individuals enrolled in such Program, the parties
hereto shall negotiate in good faith to execute and deliver a
mutually satisfactory amendment to this Agreement to adjust
the percent of premium paid to AHERF hereunder for such
Program, subject to Section 2.5.1.
5.3 Reconciliation. The parties understand and agree that because
the percentage of premium allocated to AHERF differs for each
Program, the calculations and reconciliations under this
Section 5 shall not be aggregated and shall be made separately
for the Commercial HMO Program, the Medicare Risk HMO Program,
the PPO Program and POS Program and, if implemented, the
Medicaid HMO Program and the Private Label Program.
5.4 Interim Premium Reconciliation. In order to facilitate prompt
reconciliation of differences between amounts paid and amounts
owed between the parties during each Risk Year, the Member
Companies shall perform interim premium reconciliations for
each of the first three quarters of each Risk Year ("Interim
Reconciliation Periods") commencing on the effective date.
Within one hundred thirty five (135) days after the end of
each Interim Reconciliation Period, the Member Companies shall
calculate the difference between (i) the AHERF Premium Amount
for such Interim Reconciliation Period plus any payments made
by AHERF pursuant to Section 5.10.6 ("Shortfall Payments") and
(ii) the amount of Total Provider Payments incurred by the
Member Company for services provided during such Interim
Reconciliation Period plus an amount for claims incurred but
not reported ("IBNR"), calculated consistently with the Member
Company's other IBNR claims calculations, less any amounts
recovered by AHERF from an applicable reinsurer (the "Interim
Premium Reconciliation Amount"). Detailed lag schedules
relating to the IBNR calculation will be provided with each
reconciliation, with the intention to migrate to an AHERF
specific IBNR calculation where practically feasible. There
will be no interim payments due to or from either party in the
initial year. Subsequent years will include a provision
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<PAGE> 20
for interim payments only if the final reconciliation for the
prior year resulted in an amount due to and from either party
in excess of ten percent (10%) of the total premium for that
period. If the Interim Premium Reconciliation Amount is a
positive number the Member Company shall pay that amount to
AHERF within fifteen (15) days of the completion of the
reconciliation. In the event the Interim Premium
Reconciliation Amount is a negative number AHERF shall pay
that amount to the Member Company within fifteen (15) days
after receipt from the Member Company of the results of the
reconciliation.
5.5 Annual Premium Reconciliation. Within one hundred eighty (180)
days after the end of each Risk Year, HealthAmerica shall
calculate the difference between (i) the AHERF Premium Amount
plus Shortfall Payments in the Risk Year and (ii) the amount
of Total Provider Payments made by Member Companies for
services provided to Covered Individuals during such Risk Year
plus IBNR claims less any amounts recovered by AHERF from an
applicable reinsurer (the "Premium Reconciliation Amount").
Upon completion of the reconciliation, the parties agree to
meet and review the results and supporting documentation.
Either party may perform further diligence in the sixty (60)
days following presentation of the reconciliation. Absent
material differences, the party owing the other shall pay one
hundred percent (100%) of the amount due by the end of the
sixty (60) day period. Any claims presented to a Member
Company for payment following completion of the Annual Premium
Reconciliation for a given Risk Year shall be entirely AHERF's
financial responsibility, paid by the Member Company and
reimbursed through the Account.
5.6 Final Premium Reconciliation. In the event of termination of
this Agreement a Member Company shall within twenty-four (24)
months of the effective date of termination calculate for any
periods for which Premium Reconciliation Amounts have not
already been calculated and paid (the "Final Reconciliation
Period") the difference between: (i) the AHERF Premium Amount
plus Shortfall Payments for such Final Reconciliation Period
and (ii) the amount of Total Provider Payments made by the
Member Company for services provided to Covered Individuals
during the Final Reconciliation Period plus IBNR claims,
calculated consistently with the Member Company's other IBNR
claims calculations for such Final Reconciliation Period less
any amounts recovered by AHERF from an applicable reinsurer
not already calculated (the "Final Premium Reconciliation
Amount"). Any Final Premium Reconciliation Amounts owed by
either party shall be paid within ninety (90) days of receipt
of notice of the Final Premium Reconciliation Amount. Any
Premium Reconciliation Amounts previously calculated as due
from one party to the other, but not yet paid, shall be paid
at the same time.
5.7 Supporting Information; Audit. Within one hundred eighty
(180) days after the end of each Risk Year and within 180 days
of the effective date of termination of
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<PAGE> 21
this Agreement, the Member Companies shall provide to AHERF
information establishing: (i) the Total Premium in respect of
such Risk Year; (ii) the Total Provider Payments in respect of
such Risk Year; and (iii) the Member Company's calculation of
the AHERF Premium amount and the Premium Reconciliation for
such Risk Year. AHERF shall be entitled to review and to
conduct an audit (either by AHERF or by independent auditors
acceptable to HealthAmerica) of the Member Company's books and
records to verify such amounts and calculations as claimed by
the Member Company. The cost of any such review and/or audit
conducted by independent auditors shall be shared equally
between the Member Company and AHERF. If, as the result of any
such review or audit, it is determined that the Premium
Reconciliation as conducted by the Member Company was
incorrect, AHERF and HealthAmerica shall promptly correct the
Premium Reconciliation. In the event AHERF and the Member
Company are unable after good faith efforts for at least 60
days to resolve a dispute with regard to any such amount or
calculation, such dispute shall be settled in accordance with
the dispute resolution provisions of this Agreement.
5.8 Insurance. Each party shall secure and maintain or cause to be
secured and maintained comprehensive general professional and
directors and officers liability insurance through a program
of self-insurance or through the purchase of insurance
providing minimum limits of liability of the greater of (i)
one million dollars ($1,000,000) per claim and three million
dollars ($3,000,000) in the annual aggregate or (ii) such
amount as shall be required by law covering the acts or
omissions of itself, its employees, officers and agents within
the scope of and during the term of this Agreement. Each party
shall provide the other with proof of the foregoing on written
request. In addition AHERF shall secure and maintain
reinsurance policies (also known as stop-loss insurance) to
insure costs of health care services required for specific
cases at least to the minimum amounts required by law or set
forth in HFCA physician incentive plan regulations and shall
report to the Member Companies recoveries on such policies as
provided under the reconciliation provisions above and the
premiums on such policies as provided in 5.10.4 below.
5.9 No Balance Billing. AHERF hereby agrees that in no event,
including but not limited to, non-payment by a Member Company,
a Member Company insolvency or breach of the Agreement, shall
AHERF bill, charge or collect a deposit from, seek
compensation, remuneration or reimbursement from, or have any
recourse against, Covered Individuals or persons other than a
Member Company acting on their behalf for Covered Services.
This Section shall not prohibit collection of Copayments,
Coinsurance, Deductibles or Financial Penalties made in
accordance with the terms of the applicable Covered
Individual's contract with a Member Company nor billing for
non-Covered Service for which Covered Individuals have had
prior notification and approved.
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AHERF further agrees that: (i) the no balance billing
provision herein shall survive the termination of the
Agreement regardless of the cause giving rise to termination
and shall be construed to be for the benefit of Covered
Individuals; and (ii) this no balance billing provision
supersedes any oral or written contrary Agreement now existing
or hereafter entered between AHERF and a Covered Individual or
a person acting on his/her behalf.
Any modification, addition or deletion to the provisions of
this Section shall become effective on a date no earlier that
sixty (60) days after the Pennsylvania Secretary of Health has
received written notice of such proposed change.
5.10 Assurances of Claims Payment.
5.10.1 Controlled Disbursement Account. On or before the
effective date of this Agreement, AHERF shall open
one or more interest bearing bank accounts, over
which HealthAmerica or the appropriate Member Company
shall have signature authority (the "Account"), at
bank to be agreed to by the parties. Separate
accounts will be established for each Program
hereunder to the extent administratively appropriate.
AHERF understands and agrees that under no
circumstances may AHERF withdraw any moneys from the
Account without the previous written consent of the
Member Companies, which consent shall not be
unreasonably withheld.
5.10.2 Premium Deposits. On the fifteenth (15th) day of
each calendar month or the next business day in the
event the fifteenth (15th) day of the month is a
Saturday, Sunday or bank holiday, the Member
Companies shall deposit into the account an amount
equal to the AHERF Premium Amount during the previous
calendar month.
5.10.3 HealthAmerica Claims Withdrawals. The Member
Companies may withdraw from the Account amounts due
to health care providers and Third Parties (as
defined in Section 3.1.6) for Covered Services,
including without limitation, fee-for-service,
provider incentive and/or capitation payments (such
amounts are hereinafter collectively referred to as
"Claims"). The Member Companies shall provide to
AHERF reports regarding Claims as required elsewhere
in this Agreement.
5.10.4 Administrative Expenses and Reinsurance Premiums. No
more frequently than once each calendar month, AHERF
shall notify the Member Companies in writing
regarding: (i) administrative expenses incurred as a
result of performing the administrative services set
forth in this Agreement, (ii) reinsurance premiums
due for Covered Services
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*CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE COMMISSION.
provided to Covered Individuals (such administrative
expenses and reinsurance premiums are hereinafter
collectively referred to as "Expenses"); and (iii) if
not otherwise previously paid, capitation payments
due to providers other than primary care physicians
for Covered Services ("Other Capitation Payments").
Within fifteen (15) days of its receipt of such
notice the Member Companies shall withdraw from the
Account and forward to AHERF an amount equal to the
amount set forth in such notice, provided: (i)
Expenses are substantiated by AHERF by third party
invoice, contract or some other form of reliable
documentation; (ii) the notice lists the providers
that shall receive Other Capitation Payments and the
amounts to be received by such providers; and (ii)
such amount does not exceed ten percent (10%) of the
previous monthly deposit to the Account.
5.10.5 Restriction of Account Funds. The Member Companies
shall not withdraw moneys from the Account other than
for the purposes described in Section 5 of this
Agreement.
5.10.6 Account Shortfall. In the event that moneys in the
Account do not exceed 15 days of the daily average of
total claims for the preceding three (3) month
period, the Member Companies shall immediately notify
AHERF which notice shall include the amount of such
insufficiency (the "Shortfall"). Within three
business days of the receipt of such notice, AHERF
shall deposit in the Account an amount equal to the
Shortfall. Failure to make such payment within such
time period shall constitute a material breach under
Section 7.2.2. The obligation hereunder shall survive
termination of this Agreement.
5.10.7 Reimbursement. Within ten (10) days of its receipt
of notice from the Member Companies, AHERF shall
reimburse the Member Companies in full for any
reasonable administrative expenses incurred by the
Member Companies, as mutually determined, due to
AHERF's failure to pay any Shortfall amounts,
including, without limitation, expenses incurred as a
result of processing duplicate claims.
5.10.8 Reconciliations. Any amounts required to be paid
under Section 5 of this Agreement shall first be paid
out of any amounts remaining in the Account in excess
of the then due and outstanding Claims and Other
Capitation Payments. Any amounts remaining in the
Account after performance of all of the
reconciliations required under this Section 5 shall
be the property of AHERF.
5.11 [___]*
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*CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE COMMISSION.
5.11.1 [___]*
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6. INDEMNIFICATION.
AHERF hereby agrees to indemnify and hold HealthAmerica, Coventry and
the other Member Companies harmless against and in respect of (i) any
loss, liability or damage suffered or incurred by HealthAmerica,
Coventry or the other Member Companies due to breach of any obligation
of AHERF incurred under this Agreement or any act, error or omission of
AHERF, its employees, agents or representatives; and (ii) all
reasonable costs and expenses (including attorneys' fees) incurred by
HealthAmerica, Coventry or the other Member Companies in connection
with any action, suit, proceeding, demand, assessment or judgment
incident to any of the matters indemnified against in this Section;
provided, however, that AHERF shall not be responsible for any actions
taken by AHERF Providers at the direction of HealthAmerica, Coventry or
the other Member Companies.
HealthAmerica, Coventry and the other Member Companies hereby agree to
indemnify and hold AHERF harmless against and in respect of (i) any
loss, liability or damage suffered or incurred by AHERF due to breach
of any obligation of HealthAmerica, Coventry or the other Member
Companies incurred under this Agreement or any act, error or omission
of HealthAmerica, Coventry or the other Member Companies as their
employees, agents or representatives; and (ii) all reasonable costs and
expenses (including
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attorneys' fees) incurred by AHERF in connection with any action, suit,
proceeding, demand, assessment or judgment incident to any of the
matters indemnified by HealthAmerica, Coventry or the other Member
Companies in this Section.
7. TERM AND TERMINATION.
7.1 Term. This Agreement shall be effective as of the date first
stated above (the "Effective Date") and shall continue in full
force and effect for a period which shall end at the close of
business ten (10) years after the Effective Date. This
Agreement shall automatically be extended, on each anniversary
of the Effective Date ("Anniversary") for an additional year
so that the Agreement shall have a term of ten (10) years on
each Anniversary unless either party notifies the other, in
writing, no less than ninety (90) days in advance of any
Anniversary, of the intention not to extend this Agreement.
Thereafter, this Agreement shall terminate upon the last day
of the then current ten (10)-year term in which such notice
was given. If no such notice or other notice of termination
permitted hereunder is given, this Agreement shall
automatically be extended for an additional one (1)-year
period, instituting a new ten (10)-year term.
7.2 Termination.
7.2.1 For Material Breach. In the event that either party
notifies the other party in writing of its intent
to terminate this Agreement due to the other
party's material breach of this Agreement and such
breach has not been cured within sixty (60) days
following the date of such notice, this Agreement
shall terminate on the ninetieth (90th) day
following the date of the notice, provided that
such periods shall be five days and thirty days in
the case of a breach of Section 5.10.6.
7.2.2 For Cause. Either party, on 30 days written notice
to the other party, may terminate this Agreement in
the event of a "for cause" action by the other
party. For cause action shall mean the following:
7.2.2.1 The withdrawal, expiration or
non-renewal of state license,
essential certificate, approval or
authorization (and continuance without
cure or reinstatement for more than 30
days) necessary for a party (or their
successor or assigns hereunder) being
able to conduct its operations in the
normal course of its business.
7.2.2.2 The loss of or material limitation of
a party's general or professional
liability insurance.
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7.2.2.3 The dissolution (other than in
connection with a transaction
described in 7.2.4) of a party (or
their successors or assigns
hereunder).
7.2.2.4 A good faith determination by a party
that the continued participation of
the other party in this Agreement will
materially adversely affect patient
care.
7.2.2.5 The debarment of a party from
participation in any governmental
sponsored health-care program.
7.2.3 Insolvency/Bankruptcy. Either party may terminate
this Agreement immediately if: (i) the other party
files a petition in voluntary bankruptcy or
corporate reorganization, makes an assignment for
the benefit of creditors, admits in writing to its
insolvency or inability to pay debts as they come
due, consents to or has appointed on its behalf a
trustee or receiver, or otherwise ceases to do
business; or (ii) any court of competent
jurisdiction assumes custody or control of the
other party's assets.
7.2.4 No Termination for Change in Control. In the event
that either party shall merge or consolidate with
another party, engage in a sale of substantially
all of its assets, or if a majority of the shares
of capital stock shall be transferred to another
party, or a majority of the directors of a party
shall change in connection with a transaction, such
events shall not be the basis for in a termination
of this Agreement.
7.3 Actions Following Termination. Upon termination of this
Agreement, the parties hereof shall perform the following
duties and obligations and have the following rights:
7.3.1 Continuation Period. For purposes of this Section,
the period beginning upon the date of the notice of
termination and ending on the last day of the month
one year following the date of such termination
shall be referred to as the "Continuation Period."
7.3.2 Continuation of Covered Services. AHERF shall cause
AHERF Providers to continue to perform Covered
Services in accordance with this Agreement or the
applicable Agreement then in effect by and between
such AHERF Providers and AHERF during the
Continuation Period.
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If termination of this Agreement occurs for any
reason, any Covered Individual who is an inpatient
as of the end of the Continuation Period shall
continue to be provided all Covered Services by an
AHERF Provider, and HealthAmerica shall pay such
AHERF Provider for such inpatient Covered Services
in accordance with this Agreement until such
Covered Individual is transferred to another
facility per HealthAmerica's request or is properly
discharged.
7.3.3 Continuation of Payment. Within one hundred eighty
(180) days of the end of the Continuation Period,
HealthAmerica or another Member Company shall pay
the AHERF Providers all sums due and outstanding112
for services rendered to Covered Individuals
between the date of termination of the Agreement
and the end of the Continuation Period. For
services rendered during that period, or another
Member Company agrees to pay the AHERF Providers at
the rates in effect at the time of termination of
the Agreement to the extent such services would
have been Covered Services had this Agreement not
been terminated.
7.3.4 Direct Contracting with Affiliated Providers. A
Member Company or another Member Company may
recruit and contract directly with AHERF Providers
to provide Covered Services upon the commencement
of the Continuation Period. In any case such
contracts by and between the Member Company and
AHERF Providers shall not become effective until
the termination of this Agreement. AHERF shall not
take any action to prevent AHERF Providers from
contracting directly with HealthAmerica or a
Member Company.
7.3.5 Nondisclosure. Neither party shall discuss the
circumstances of the termination of this Agreement
with third parties or refer to the other party
hereto in any negative or disparaging manner or in
any way which may negatively affect the image or
reputation of the other party. Further, AHERF will
take reasonable steps to prevent AHERF Providers
from making any such references to a Member
Company.
7.3.6 ISS. The Member Companies shall continue to provide
AHERF and AHERF Providers with all applicable
information support services as required by this
Agreement during the Continuation Period.
7.3.7 Risk Assumption. Upon the termination of this
Agreement for any reason, the risk assumption by
AHERF under the procedures described in Section 5
shall apply up to and including such date of
termination. Upon the termination of this
Agreement, AHERF and the Member Companies shall
cooperate in good faith to cause an orderly wind up
of
28
<PAGE> 29
the operations contemplated by this Agreement so as
not to cause unnecessary disruption to Covered
Individuals or AHERF Providers. Termination of this
Agreement has no effect upon the rights,
obligations or remedies at law or in equity of the
parties under any other Agreement.
Upon termination of this Agreement and subject to
applicable law regarding confidentiality of medical
records, each party shall for a period of seven (7)
years from the date of termination provide the
other party with full access to (and such other
party shall be entitled to make and use
computer-readable and hard copies of) all data and
information of the first party relating to the
Member Companies members developed during the term
of this Agreement relating to (i) the performance
by AHERF Providers under the UM/QA program and (ii)
claims, utilization, case management, payment and
outcome data with respect to each Covered
Individual provided any Covered Services during the
term of this Agreement. During the Continuation
Period and thereafter, each party shall have the
unrestricted ability to contact or otherwise have
access to all such Covered Individuals provided the
other party does not in any manner disparage the
other party (or any AHERF Provider) or any products
or services of such other party (or any AHERF
Provider).
8. CONFIDENTIALITY.
8.1 The parties recognize and acknowledge that performance of this
Agreement and related provider agreements shall result in the
disclosure to the other party of trade secrets, proprietary
information and confidential information including this
Agreement and its terms, conditions and financial terms and
schedules (collectively referred to as "Confidential
Information"). The non-disclosing party agrees that it and its
owned, controlled or managed entities and their employees,
representatives and agents, shall treat Confidential
Information as strictly confidential and shall:
8.1.1 protect the Confidential Information from
unauthorized use or disclosure, either directly or
indirectly, and keep it confidential;
8.1.2 use the Confidential Information only for purposes
related to this Agreement;
8.1.3 not disclose or otherwise permit any third person
or entity access to the Confidential Information
without prior written authorization by the
disclosing party; and
29
<PAGE> 30
8.1.4 limit disclosure to necessary individuals and
ensure that individuals exposed to Confidential
Information are advised of its confidential nature
and their obligations thereunder.
8.2 Information shall not be considered to be Confidential
Information if:
8.2.1 it is already, or otherwise becomes, publicly known
by third persons other than as a result of an act
or omission of the non-disclosing party;
8.2.2 it is lawfully received from a third person having
the right to disseminate the information without
restriction on disclosure;
8.2.3 it is furnished to others by the disclosing party
without restriction on disclosure;
8.2.4 it can be shown by the receiving party to have been
independently developed by such party; or
8.2.5 it is required to be disclosed by law or court
order.
8.3 This Section 8 shall survive termination of this Agreement.
The parties agree that the breach or prospective breach of
this provision will cause irreparable harm for which money
damages may not be adequate. The parties therefore agree that
in addition to any other remedies, the non-breaching party
shall be entitled to injunctive or other equitable relief to
restrain the breach hereof.
9. RESTRICTIVE COVENANTS.
9.1 Restriction on AHERF Activities
So long as this Agreement is in effect and for a period of one
year following its termination, AHERF will not, and will cause
any subsidiary or affiliate of AHERF to not offer, and to not
own a controlling interest in, manage or otherwise direct or
control any entity which offers, any health care benefits plan
on a direct or "retail" basis (including on an employer
self-funded or self-insured basis) to employers or other
purchasers of health care services in AHERF's aggregate
service area or in the geographic area in which HealthAmerica
presently engages in the offering of health care benefit
plans, other than to the employees of AHERF or any AHERF
provider. The foregoing sentence shall not prohibit AHERF or
any AHERF subsidiary or affiliate from providing or arranging
to provide health care services on a risk or non-risk basis
under any product of any other health maintenance
organization, preferred provider organization or other entity,
and AHERF's or its affiliates' continued passive ownership
interest of Gateway and Health Partners (so long as such
interest shall not be increased materially from that existing
on the date of this agreement, or constitute a controlling
interest).
9.2 Restrictions on HealthAmerica Activities
So long as this Agreement is in effect and for a period of one
year following its termination, Coventry and HealthAmerica
agree that Coventry and HealthAmerica will not, and will cause
each of their subsidiaries to not, provide healthcare services
directly to the public, or acquire practices which provide
such services to the public within the service area of the
AHERF Affiliated Providers (except in the Central Pennsylvania
Region).
9.3 This Section 9 shall survive termination of this Agreement.
The parties agree that the breach or prospective breach of
this provision will cause irreparable harm for which money
damages may not be adequate. Therefore, the parties agree that
in addition to any other remedies, the non-breaching party
shall be entitled to injunctive or other equitable relief
without being required to post bond.
30
<PAGE> 31
10. NO SOLICITATION.
So long as this Agreement is in effect and for a period of two (2)
years after the date of termination of this Agreement (whether for
material breach or for other cause or by expiration of the term)
neither party shall directly or indirectly in any capacity whatsoever
solicit, attempt to solicit or encourage any person who was employed by
the other party on a full or part-time basis while this Agreement is in
effect or to encourage such person to leave the employ of the other
party hereto without the prior written consent of the other party. For
purposes of this Agreement, indirect solicitation shall not include
advertising in professional journals and newspapers provided the party
so advertising does not request or advise such employee to make
application for such advertised positions.
11. COOPERATION OF THE PARTIES.
11.1 AHERF and the Member Companies will maintain an effective
liaison and close cooperation with each other to provide
maximum benefits at reasonable costs to Covered Individuals
consistent with high standards of medical practice. AHERF and
the Member Companies will comply with the others
administrative policies and procedures including those related
to the delivery of medical services and will keep and make
available such medical, financial and other records as each
party requires for Covered Individuals.
11.2 AHERF agrees, and will cause AHERF Affiliated Providers to
ensure, that each Primary Care Physician shall remain open to
Covered Individuals during the term of this Agreement. This
provision shall not apply when both parties have
31
<PAGE> 32
reasonably determined that a particular office has reached its
capacity provided that:
11.2.1 the office is closed to all new patients; and
11.2.2 AHERF demonstrates that the physician office is
attempting to hire additional staff/physicians in
order to increase capacity, if feasible.
11.3 The Member Companies will provide AHERF with relevant
information to assist AHERF in evaluation of potential
physician offices for acquisition to the extent permitted
under applicable contracts and regulations.
11.4 The Member Companies will provide advance copies of relevant
Member Company policies and procedures and updates to AHERF as
applicable.
11.5 The foregoing shall not prevent an AHERF Affiliated Provider
that is a physician from terminating his/her relationship with
a Covered Individual provided that such termination is not due
to age, race, color, creed, religion, sex, sexual preference,
national origin, health status, income level, credit history,
or on the basis that he/she is a Medicare or Medicaid
beneficiary or enrolled in a prepaid health plan. By way of
explanation of the foregoing and not by limitation, such
physician shall not terminate his/her relationship with a
Covered Individual due to the amount of Medically Necessary
Covered Services required by the Covered Individual.
12. AGREEMENT ADMINISTRATION.
12.1 Operating Committee. The parties shall designate an Operating
Committee to oversee the operation of this Agreement and the
related provider contracts. The Operating Committee shall
consist of equal representation from Coventry/HealthAmerica/
Member Companies (as a single party) and AHERF. The Operating
Committee shall meet no less than quarterly. The Committee
shall have the authority to create temporary committees
necessary for the implementation and/or effective operation of
this Agreement.
12.2 Dispute Resolution. If any dispute or controversy shall arise
between the parties hereto with respect to the making,
construction, terms, or interpretation of this Agreement; or
the rights of any party hereto; or with respect to any
transaction involved; the Operating Committee shall make good
faith efforts to settle the dispute or controversy. If the
Operating Committee is unable to resolve such dispute within
60 days, the Operating Committee shall request the President
of each party (or his or her designee) to resolve the dispute
and, if the Operating Committee is able to agree, make
recommendations of possible resolution methodologies to the
Presidents.
32
<PAGE> 33
13. SEVERABILITY.
In the event that any provision of this Agreement conflicts with the
law under which this Agreement is to be construed, or if any such
provision is held invalid or overly broad by a court with jurisdiction
over the parties to this Agreement, such provision shall be deemed to
be restated to reflect as nearly as possible the original intentions of
the parties in accordance with applicable law. The remainder of this
Agreement shall remain in full force and effect. If it is not possible
to restate the provision in a valid and legal manner, then the invalid,
illegal or overly broad portion shall be deleted from this Agreement
and the remaining parts, terms and provisions shall remain in full
force and effect.
14. MODIFICATION AND AMENDMENT.
This Agreement may be amended or modified only by written Agreement
signed on behalf of each of the parties.
15. ENTIRE AGREEMENT.
This Agreement (including all Exhibits hereto which are hereby
incorporated by reference herein and all individual Provider
Agreements) constitutes the entire understanding of the parties hereto
and no changes, amendments, waivers or alterations shall be effective
unless signed by both parties. In the event the terms and conditions of
this Agreement are inconsistent with the terms and conditions of any
Exhibit and/or Schedule hereto, the terms and conditions of this
Agreement shall govern.
16. ASSIGNMENTS.
Subject to Section 7.2.4, neither party shall assign this Agreement or
any rights hereunder without the written consent of the other. However,
either party may assign this Agreement to a corporate entity with which
it is either directly or indirectly affiliated provided that such
entity is financially capable of fulfilling the party's obligations
hereunder and meets all applicable regulatory requirements. No such
assignment shall relieve the assigning party of its obligations
hereunder.
17. NOTICES.
Any notice required to be given pursuant to the terms and provisions
hereof shall be in writing and shall be sent by certified or registered
mail to AHERF at:
33
<PAGE> 34
Allegheny Health, Education and Research Foundation
Fifth Avenue Place, Suite 2900
120 Fifth Avenue
Pittsburgh, PA 15222-3009
Attn: Chief Financial Officer
to HealthAmerica or another Member Company at:
HealthAmerica Pennsylvania, Inc.
Five Gateway Center
60 Blvd. of the Allies
Pittsburgh, PA 15222
Attn: Chief Operating Officer
and to Coventry at:
Coventry Corporation
53 Century Boulevard, Suite 250
Nashville, TN 37214
Attn: Chief Financial Officer
18. RELATIONSHIP PARTIES.
None of the provisions of this Agreement is intended to create nor
shall be deemed or construed to create any relationship between the
parties hereto other than that of independent entities contracting with
each other hereunder solely for the purpose of effecting the provisions
of this Agreement. Neither of the parties herein nor any of their
respective employees shall be construed or represent themselves to be
the agent, employee, servant, employer or representative of the other.
This Agreement is not a joint venture between the parties.
19. AFFIRMATIVE ACTION.
Each party hereunder is an Equal Opportunity Employer which maintains
an Affirmative Action Program. The parties shall comply with Executive
Order 11246, the Vietnam Era Veterans Readjustment Act of 1974, the
Drug Free Workplace Act of 1988, the Vocational Rehabilitation Act and
similar legislation in transactions relating to any government
contract. The parties further agree to take affirmative action to
ensure that applicants are employed and that employees are treated
during employment without regard to their race, color, religious,
creed, ancestry, national origin, sex, sexual orientation, or
disability. Each party will ensure that all of its subcontractors will
abide by these requirements and the requirements imposed on state
contractors and subcontractor under the Contract Compliance Regulation
issued by the Pennsylvania Human Relations Commission as set
34
<PAGE> 35
forth at 16 Pa. Code Chapter 49, each of which will be incorporated in
this Agreement and those subcontracts by reference.
20. CAPTIONS.
The section headings contained in this Agreement are for convenience
purposes only and shall in no way limit, define or describe the scope
or intent of this Agreement.
21. NO WAIVER.
The failure of any party to strictly enforce any provisions of this
Agreement shall not be construed as a waiver thereof or as excusing the
defaulting party from future performance.
22. GOVERNING LAW.
This Agreement shall be governed by the laws of the Commonwealth of
Pennsylvania. Any action lawsuit or claim brought by either party
pertaining to breach, reformation or interpretation of this Agreement
shall be exclusively brought in Pittsburgh, Pennsylvania.
23. APPROVALS.
Notwithstanding anything else contained herein, this Agreement shall
not take effect except and until all requisite regulatory approvals
have been received from the Commonwealth of Pennsylvania, including but
not limited to, the Pennsylvania Department of Health. The parties
shall, in good faith, cooperate with each other and the Commonwealth in
providing requested information, including but not limited to, specific
documentation as deemed necessary to obtain said approvals.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
35
<PAGE> 36
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the 31st day of March, 1997.
ALLEGHENY HEALTH, EDUCATION HEALTHAMERICA PENNSYLVANIA,
AND RESEARCH FOUNDATION INC.
By: /s/ David W. McConnell By: /s/ Robert A. Mayer
-------------------------------------- ------------------------------
Print Name: /s/ David W. McConnell Print Name: /s/ Robert A. Mayer
------------------------------ ----------------------
Title: /s/ Executive Vice President, Title: /s/ Chief Operating Officer
----------------------------------- ---------------------------
Chief Financial Officer & Treasurer
COVENTRY CORPORATION
By: /s/ Robert A. Mayer
------------------------------
Print Name: /s/ Robert A. Mayer
----------------------
Title: /s/ Senior Vice President
---------------------------
36
<PAGE> 37
EXHIBIT A
CAPITATED PROVIDERS
1. Mainstay of Central Pennsylvania, Inc. ("Mainstay") providing for mental
health and chemical dependency professional services, pursuant to an
Agreement dated as of June 1, 1996 by and among HealthAmerica, Mainstay and
Coventry (to the extent of the Plans and Covered individuals covered by the
Risk Sharing Agreement:).
2. National Imaging Associates ("NIA") providing for Diagnostic Imaging
Services pursuant to an Agreement dated as of January 1, 1996 by and
between NIA and HealthAmerica (to the extent of the Plans and Covered
Individuals covered by the Risk Sharing Agreement).
3. Omega MSD ("Omega") providing for specified orthopedic surgery, general
surgery and gastroenterology speciality services and supplies pursuant to
an Agreement dated as of July 1, 1996, between HealthAmerica and Omega (to
the extent of the Plans and Covered Individuals covered by the Risk Sharing
Agreement).
4. Ultra Healthcare Network, Inc. ("Ultra") providing for physical therapy
specialty services and supplies pursuant to an Agreement dated as of July
1, 1996 by and between Health America and Ultra (to the extent of the Plans
and Covered Individuals covered by the Risk Sharing Agreement).
5. Laboratory Corporation of America Holdings ("Labcorp") providing for
certain reference laboratory services pursuant to letter agreements between
Labcorp and HealthAmerica dated June 7, 1996, June 21, 1996, August 23,
1996, September 3, 1996, December 30, 1996 and January 8, 1997 (to the
extent of the Plans and Covered Individuals covered by the Risk Sharing
Agreement).
6. RX Oxygen Supply Company, Inc. ("RX") providing for certain homecare
services and supplies pursuant to an Agreement between HealthAmerica and RX
dated as of August 23, 1996 (to the extent of the Plans and the Covered
Individuals covered by the Risk Sharing Agreement).
7. Main Medical Inc. ("Main") providing for radiology services in each of the
medical offices owned or leased by HealthAmerica (except Brooktree Commons)
pursuant to an agreement dated as of July 1, 1996 by and between Main and
HealthAmerica (to the extent of the Plans and Covered Individuals covered
by the Risk Sharing Agreement).
37
<PAGE> 38
EXHIBIT B
PCPs - All Primary Care Physicians practices where HealthAmerica has 100
or more Covered Individuals.
* Allegheny General Hospital
* Allegheny Valley Hospital
* Childrens Hospital of Pittsburgh
* Forbes Regional Health Center
* Jefferson Hospital
* Magee-Womens Hospital
Passavant Hospital - The Parties shall mutually determine within the
30 days following the date of this Agreement
whether Passavant Hospital shall remain within
HealthAmerica's network of participating
providers.
* Sewickley Valley Hospital
* St. Clair Memorial Hospital
Mercy Hospital
* The Medical Center, Beaver
Butler Memorial Hospital
* Uniontown Hospital
Ellwood City Hospital
Jameson Memorial Hospital
* Sharon Regional Health System
Ganonsburg General Hospital
Jeannette District Memorial
* Either Latrobe Area Hospital or Westmoreland Regional Hospital
38
<PAGE> 1
EXHIBIT 10.2
*CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE COMMISSION.
FIRST AMENDMENT
OF
RISK SHARING AGREEMENT
BY AND BETWEEN
ALLEGHENY HEALTH, EDUCATION & RESEARCH FOUNDATION
AND
COVENTRY CORPORATION
ON BEHALF OF MEMBER COMPANIES
THIS AMENDMENT of Risk Sharing Agreement ("Agreement") by and between Allegheny
Health, Education & Research Foundation ("AHERF") and Coventry Corporation
("Coventry"), on behalf of its Member Companies, is entered into this 11th day
of June, 1997.
The parties agree that Section 4.2.1.6, Delegated Functions, shall be amended
to include the following:
4.2.1.5.6 [___]*
<PAGE> 2
Page 2 of 2
The parties agree that Section 4.2.1.4., Standard of Performance, shall be
incorporated herein by references, and further the parties agree to negotiate
in good faith to develop formal performance standards, upon mutually acceptable
terms, which standards shall be memorialized in a subsequent amendment.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the date
first above written.
Allegheny Health, Education HealthAmerica Pennsylvania, Inc.
& Research Foundation
/s/ David W. McConnell /s/ Robert A. Mayer
- ---------------------------- -------------------------------------
Executive Vice President and Robert A. Mayer
Chief Financial Officer President and Chief Executive Officer
Coventry Corporation
/s/ Robert A. Mayer
-------------------------------------
Robert A. Mayer
Senior Vice President
<PAGE> 1
EXHIBIT 10.3
SECOND AMENDMENT
TO
RISK SHARING AGREEMENT
BY AND BETWEEN
ALLEGHENY HEALTH, EDUCATION & RESEARCH FOUNDATION
AND
COVENTRY CORPORATION
ON BEHALF OF MEMBER COMPANIES
THIS AGREEMENT is executed the 30th day of June 1997, by and between
HealthAmerica Pennsylvania, Inc., a Pennsylvania corporation licensed to operate
a health maintenance organization ("HealthAmerica"), Coventry Corporation, a
Delaware corporation ("Coventry") for and on behalf of the Member Companies (as
hereinafter defined) other than HealthAmerica, and Allegheny Health, Education
and Research Foundation, a Pennsylvania nonprofit corporation ("AHERF").
WHEREAS, HealthAmerica and Coventry entered into a Risk Sharing Agreement with
AHERF on March 31, 1997; and
WHEREAS, the parties to said Agreement desire to amend said Agreement to
incorporate additional Coventry Corporation subsidiaries with service areas in
both the state of Ohio and the state of West Virginia.
NOW, THEREFORE, in consideration of the mutual covenants, premises and
undertakings herein and intending to be legally bound hereby, the parties agree
as follows:
1. Section 1.17, DEFINITIONS, which defines "Member Company" shall be
modified to read as follows:
"Member Company" shall mean HealthAmerica or any other direct
or indirect subsidiary of Coventry that offers a program to
cover individuals in the Commonwealth of Pennsylvania, the
State of Ohio and the State of West Virginia, including
HealthAmerica Pennsylvania, Inc., d/b/a HealthAssurance HMO
("HealthAssurance HMO"), relative to the State of Ohio and
Coventry Health Plan of West Virginia, Inc. ("West Virginia
HMO"), relative to the State of West Virginia, Coventry Health
Care Management Corporation, d/b/a HealthAssurance
("HealthAssurance") and Coventry Health and Life Insurance
Company ("CHL") relative to Pennsylvania, Ohio and West
Virginia.
2. Section 1.28 DEFINITIONS, shall be amended to read as follows:
"Western Region" shall be expanded to mean the following:
Pennsylvania counties: Allegheny, Washington, Greene,
Somerset, Fayette, Westmoreland, Armstrong, Beaver, Butler and
Indiana; the following Ohio counties: Belmont, Jefferson,
Mahoning, Trumbull, Harrison, Carroll, Astabula and
Columbiana, subject to receipt of any requisite regulatory
approvals; the following West
<PAGE> 2
*CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE COMMISSION.
Virginia counties: Barbour, Brooke, Doddridge, Hancock,
Harrison, Lewis Marion, Marshall, Monongalia, Ohio, Preston,
Taylor, Upshur, and Wetzel.
3. Wherever HealthAmerica is mentioned in the Agreement, the Agreement shall
be deemed to read as follows:
"HealthAmerica or Member Company".
4. Section 2.4.1., [___]*
5. Section 3.1.8, DUTIES OF AHERF, shall be revised to read as follows:
"HealthAmerica or Member Company, HCFA, NCQA and the
Commonwealth of Pennsylvania, State of Ohio and State of West
Virginia shall have the right to review AHERF's book and
records pertaining to provision of services to Covered
Individuals, including, but not limited to, quality
improvement and utilization management programs, and all data
on utilization of medical services and providers of those
services pertaining to Covered Individuals. AHERF shall have
the right to review HealthAmerica's and Member Company's books
and records pertaining to its premium collection activities,
coordination of benefits, subrogation, and claims payment
activities, in each case to the extent pertaining to Covered
Individuals and to the extent such functions have not been
delegated to AHERF hereunder."
<PAGE> 3
6. Section 3, DUTIES OF AHERF, shall be expanded, specifically for purposes
of compliance with West Virginia Code Section 114-43-3, as it relates to
West Virginia HMO, to add the following terms and conditions:
3.1.9 AHERF shall provide to West Virginia HMO regular written
reports prepared on a West Virginia statutory accounting
basis, at least quarterly, stating AHERF's current assets and
identifying in the aggregate all payments made or owed to its
providers in sufficient detail for West Virginia HMO and the
Commissioner to determine if the payments are being made in a
timely manner and which identify in the aggregate the
reasonably estimated incurred but not reported health care
costs. West Virginia HMO shall monitor said reports referred
to in this Section 3.1.9.
3.1.10 AHERF shall permit West Virginia HMO and the
Commissioner, both singularly and jointly, upon reasonable
prior notice, to audit, inspect and copy its books, records,
and other evidence of its operations which are, in the
discretion of West Virginia HMO or the Commissioner, relevant
to AHERF's obligations under the Agreement for the purpose of
determining its compliance with all requirements legally
mandated by statute, rule or the Agreement. Any review is
subject to any confidentiality requirements imposed by State
or Federal law.
7. Section 4.2.1.3, HEALTHAMERICA OR MEMBER COMPANY OVERSIGHT, shall be
amended to read as follows:
"The parties understand and agree that pursuant to state
requirements regarding integrated delivery systems and NCQA, a
Member Company is required to retain oversight of the
Delegated Functions. A Member Company shall not be required to
delegate a Delegated Function hereunder unless and until the
Member Company and AHERF mutually agree to the frequency and
content of periodic reports to be provided by AHERF to the
Member Company in order to assist HealthAmerica in performing
its oversight duties hereunder. A Member Company shall conduct
an annual on-site audit of AHERF to ensure compliance with
HealthAmerica's, or Member Company's Pennsylvania's, Ohio's or
West Virginia's as appropriate, and NCQA standards."
8. Section 4.2.1.4, STANDARD OF PERFORMANCE, shall be revised to read as
follows:
"All Delegated Functions shall be performed in accordance with
standards satisfactory to the Member Company, which standards
shall be no less than the standards required by NCQA, the
Pennsylvania Department of Health ("DOH") or the Pennsylvania
Insurance Department ("DOI"), including, without limitation,
the requirements set forth in the DOH's Statement of Policy
and the DOI's Statement of Policy, each as amended from time
to time, respectively set forth at 28 Pa. Code '9.401 et seq.
and 31 Pa. Code '301.301 et seq. (collectively the "Statement
of Policy"); the State of Ohio
<PAGE> 4
and the State of West Virginia, including the requirements
set forth in West Virginia Code Section 114-43 et. seq.
Further, all Delegated Functions shall be subject to
performance monitoring by the Member Company and the DOH,
the State of Ohio, and the State of West Virginia and is
subject to independent validation by the Member Company,
DOH, the State of Ohio and the State of West Virginia and an
independent quality review/assessment approved by the DOH,
the State of Ohio and the State of West Virginia.
HealthAmerica or Member Company may elect to rescind any
delegated duties if, in HealthAmerica's or Member Company's
sole opinion, AHERF's performance of such functions may
jeopardize either the health or safety of HealthAmerica's or
Member Company's members, or HealthAmerica's or Member
Company's compliance with applicable regulations or other
certification requirements."
9. Section 4.2.3, ACCESS TO RECORDS, shall be amended to read as follows:
"AHERF shall provide, and cause practitioners and providers to
provide, any Member Company, DOH, the State of Ohio, and the
State of West Virginia and an independent review/assessment
organization with access to medical and other records
concerning the provision of Covered Services to Covered
Individuals by and through AHERF and AHERF Providers."
10. Section 5.9, NO BALANCE BILLING, shall be amended to read as follows:
"AHERF hereby agrees that in no event, including but not
limited to, non-payment by a Member Company, a Member Company
insolvency or breach of the Agreement, shall AHERF bill,
charge or collect a deposit from, seek compensation,
remuneration or reimbursement from, or have any recourse
against, Covered Individuals or persons other than a Member
Company acting on their behalf for Covered Services. This
Section shall not prohibit collection of Copayments,
Coinsurance, Deductibles or Financial Penalties made in
accordance with the terms of the applicable Covered
Individual's contract with a Member Company nor billing for
non-Covered Service for which Covered Individuals have had
prior notification and approved.
"AHERF further agrees that: (i) the no balance billing
provision herein shall survive the termination of the
Agreement regardless of the cause giving rise to termination
and shall be construed to be for the benefit of Covered
Individuals; and (ii) this no balance billing provision
supersedes any oral or written contrary Agreement now existing
or hereafter entered between AHERF and a Covered Individual or
a person acting on his/her behalf.
"Any modification, addition or deletion to the provisions of
this Section shall become effective on a date no earlier that
sixty (60) days after the Pennsylvania Secretary of Health and
the requisite governmental body of the State of Ohio and the
State of West Virginia, have received written notice of such
proposed change."
<PAGE> 5
11. Section 17, NOTICES, shall be amended to include the following additional
companies:
HealthAmerica Pennsylvania, Inc. d/b/a/ HealthAssurance HMO
2601 Market Place
Harrisburg, PA 17110-9339
and
Coventry Health Plan of West Virginia, Inc.
887 National Road
Wheeling, WV 26003
12. Section 19, AFFIRMATIVE ACTION, shall be amended to read as follows:
"Each party hereunder is an Equal Opportunity Employer which
maintains an Affirmative Action Program. The parties shall
comply with Executive Order 11246, the Vietnam Era Veterans
Readjustment Act of 1974, the Drug Free Workplace Act of 1988,
the Vocational Rehabilitation Act and similar legislation in
transactions relating to any government contract. The parties
further agree to take affirmative action to ensure that
applicants are employed and that employees are treated during
employment without regard to their race, color, religious,
creed, ancestry, national origin, sex, sexual orientation, or
disability. Each party will ensure that all of its
subcontractors will abide by these requirements and the
requirements imposed on state contractors and subcontractor
under the Contract Compliance Regulation issued by the
Pennsylvania Human Relations Commission as set forth at 16 Pa.
Code Chapter 49 and the applicable statutes and regulations
for the State of Ohio and the State of West Virginia, each of
which will be incorporated in this Agreement and those
subcontracts by reference."
13. Section 22, GOVERNING LAW, shall be amended to read as follows:
"This Agreement shall be governed by the laws of the
Commonwealth of Pennsylvania as it pertains to HealthAmerica
Pennsylvania, Inc., the State of Ohio as it pertains to
HealthAmerica Pennsylvania, Inc. d/b/a HealthAssurance HMO,
and the State of West Virginia as the Agreement pertains to
Coventry Health Plan of West Virginia, Inc. Any actions,
lawsuit or claim brought by either party pertaining to breach,
reformation or interpretation of this Agreement as it relates
to HealthAmerica Pennsylvania, Inc. shall be exclusively
brought in Pittsburgh, Pennsylvania."
14. Paragraph 23, APPROVALS, shall be amended to read as follows:
"Notwithstanding anything else contained herein, this
Agreement shall not take effect except and until all requisite
regulatory approvals have been received from the Commonwealth
of Pennsylvania, including but not limited to, the
Pennsylvania
<PAGE> 6
Department of Health, the State of Ohio and the State of
West Virginia. The parties shall, in good faith, cooperate
with each other and the respective governmental bodies for
the respective states of Ohio, West Virginia and
Pennsylvania in providing requested information, including
but not limited to, specific documentation as deemed
necessary to obtain said approvals."
15. ALL OTHER TERMS. Notwithstanding anything contained herein, all other
terms of the Agreement shall remain unaltered and in full force and
effect.
[REST OF PAGE INTENTIONALLY BLANK]
<PAGE> 7
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the day
and year first above written.
Allegheny Health, Education HealthAmerica Pennsylvania, Inc.
& Research Foundation
/s/ David W. McConnell /s/ Robert A. Mayer
- --------------------------- ------------------------------------
David W. McConnell Robert A. Mayer
Executive Vice President and President and Chief Executive Officer
Chief Financial Officer
Coventry Corporation
/s/ Robert A. Mayer
------------------------------------
Robert A. Mayer
Senior Vice President
HealthAmerica Pennsylvania, Inc. d/b/a
HealthAssurance HMO
/s/ Robert A. Mayer
------------------------------------
By: Robert A. Mayer
Title: President and Chief Executive
Officer
Coventry Health Plan of West Virginia, Inc.
/s/ Robert A. Mayer
------------------------------------
By: Robert A. Mayer
Title: President and Chief Executive
Officer
<PAGE> 1
EXHIBIT 10.4
THIRD AMENDMENT
TO
RISK SHARING AGREEMENT
BY AND BETWEEN
ALLEGHENY HEALTH, EDUCATION & RESEARCH FOUNDATION
AND
COVENTRY CORPORATION
ON BEHALF OF MEMBER COMPANIES
THIS AGREEMENT is executed the ______ day of JULY 1997, by and between
HealthAmerica Pennsylvania, Inc., a Pennsylvania corporation licensed to operate
a health maintenance organization ("HealthAmerica"), Coventry Corporation, a
Delaware corporation ("Coventry") for and on behalf of the Member Companies (as
hereinafter defined) other than HealthAmerica, and Allegheny Health, Education
and Research Foundation, a Pennsylvania nonprofit corporation ("AHERF").
WHEREAS, HealthAmerica and Coventry entered into a Risk Sharing Agreement with
AHERF on March 31, 1997; and
WHEREAS, on June 11, 1997 HealthAmerica and Coventry entered into a First
Amendment to Risk Sharing Agreement with AHERF; and
WHEREAS, on June 30, 1997 HealthAmerica and Coventry and Coventry Health Plan of
West Virginia, Inc. d/b/a HealthAssurance HMO entered into a Second Amendment to
Risk Sharing Agreement with AHERF; and
WHEREAS, the parties to said Agreement desire to further amend said Agreement to
incorporate additional compliance language in order to comport with certain
regulatory requirements of the state of West Virginia.
NOW, THEREFORE, in consideration of the mutual covenants, premises and
undertakings herein and intending to be legally bound hereby, the parties agree
as follows:
1. Incorporation of Amendments. To the extent not modified by this Third
Amendment, the Second Amendment, First Amendment and Risk Sharing Agreement
are incorporated herein by reference.
2. Section 3, Duties of AHERF, shall be expanded, specifically for purposes of
compliance with West Virginia Code Section 114-43-1 et seq, as it relates
to West Virginia HMO, to add the following terms and conditions:
3.1.11 AHERF shall adhere to all quality and accessibility
standards to which West Virginia HMO is subject. Further,
to the extent AHERF subcontracts for the provision of
health care services it is agreed that all subcontractors
must adhere
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to the quality and accessibility standards to which West
Virginia HMO is subject.
3.1.12 AHERF shall maintain records which are adequate to
clearly differentiate the transactions which relate to the
provision of health care services on behalf of West
Virginia HMO.
3.1.13 AHERF and any Contracted Providers with which it
contracts for the provision of health care services shall
obtain and provide to West Virginia HMO no later than the
first day of June of each year an annual audited financial
report prepared by an independent certified public
accountant.
3.1.14 AHERF will only provide services on behalf of West
Virginia HMO in counties where West Virginia HMO is
authorized to operate by the West Virginia Department of
Insurance.
3.1.15 AHERF shall maintain working capital in the form of
cash or equivalent liquid assets at least equal to one
month's claims calculated by using the monthly average of
actual and estimated claims for the prior six months for
all health services provided under the Agreement.
3.1.16 AHERF shall create a segregated fund, which may be
aggregated, equal to the entire monthly IBNR as of the
first day of each month as actuarially determined by West
Virginia HMO.
3. Section 4 DUTIES OF HEALTHAMERICA/WEST VIRGINIA HMO, shall be expanded,
specifically for purposes of compliance with West Virginia Code Section
114-43-1 et. seq., as it relates to West Virginia HMO, to add the following
terms and conditions:
4.1.10 West Virginia HMO shall be responsible for maintaining
appropriate levels of capital, surplus, claims reserves and other financial
criteria as established pursuant to statute or rule.
4.1.11 All Covered Individuals or Covered Individual group
contracts will be entered into directly with West Virginia HMO and
specifically not with AHERF.
4. Section 5.9, NO BALANCE BILLING, shall be amended to read in its entirety
as follows:
"AHERF hereby agrees, on behalf of itself and its Affiliated
and Contracted Providers, that in no event, including but not
limited to, non-payment by a Member Company, a Member Company
insolvency or breach of the Agreement, shall AHERF bill,
charge or collect a deposit from, seek compensation,
remuneration or reimbursement from, or have any recourse
against, Covered Individuals or persons other than a Member
Company acting on their behalf for Covered Services. This
Section shall not prohibit collection of Copayments,
Coinsurance, Deductibles or Financial Penalties made in
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<PAGE> 3
accordance with the terms of the applicable Covered
Individual's contract with a Member Company nor billing for
non-Covered Service for which Covered Individuals have had
prior notification and approved.
"AHERF further agrees that: (i) the no balance billing
provision herein shall survive the termination of the
Agreement regardless of the cause giving rise to termination
and shall be construed to be for the benefit of Covered
Individuals; and (ii) this no balance billing provision
supersedes any oral or written contrary Agreement now existing
or hereafter entered between AHERF and a Covered Individual or
a person acting on his/her behalf.
"Any modification, addition or deletion to the provisions of
this Section shall become effective on a date no earlier that
sixty (60) days after the Pennsylvania Secretary of Health and
the requisite governmental body of the State of Ohio and the
State of West Virginia, have received written notice of such
proposed change."
5. Section 5.11 of the Risk Sharing Agreement is intentionally deleted for
purposes of West Virginia HMO.
6. Section 22, GOVERNING LAW, shall be amended to read in its entirety as
follows:
"This Agreement shall be governed by the laws of the
Commonwealth of Pennsylvania as it in any way pertains to
HealthAmerica Pennsylvania, Inc., the State of Ohio as it in
any way pertains to HealthAmerica Pennsylvania, Inc. d/b/a
HealthAssurance HMO, and the State of West Virginia as the
Agreement in any way pertains to Coventry Health Plan of West
Virginia, Inc. Any actions, lawsuit or claim brought by either
party pertaining to breach, reformation or interpretation of
this Agreement as it relates to HealthAmerica Pennsylvania,
Inc. shall be exclusively brought in Pittsburgh,
Pennsylvania."
7. EFFECTIVE DATE. The effective date of this Agreement for purposes of West
Virginia HMO shall be July 1, 1997.
8. ALL OTHER TERMS. Notwithstanding anything contained herein, all other terms
of the Agreement and the First and Second Amendments shall remain unaltered
and in full force and effect.
[REST OF PAGE INTENTIONALLY BLANK]
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<PAGE> 4
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the day
and year first above written.
Allegheny Health, Education HealthAmerica Pennsylvania, Inc.
& Research Foundation
/s/ David W. McConnell
- --------------------------- ------------------------------------------
David W. McConnell Robert A. Mayer
Executive Vice President and President and Chief Executive Officer
Chief Financial Officer
Coventry Corporation
-----------------------------------------
Robert A. Mayer
Senior Vice President
HealthAmerica Pennsylvania, Inc. d/b/a
HealthAssurance HMO
------------------------------------------
By:
--------------------------------------
Title:
------------------------------------
Coventry Health Plan of West Virginia, Inc.
------------------------------------------
By:
--------------------------------------
Title:
-----------------------------------
<PAGE> 1
EXHIBIT 10.5
GLOBAL CAPITATION AGREEMENT BETWEEN
GROUP HEALTH PLAN, INC. AND
BJC HEALTH SYSTEM
THIS AGREEMENT, executed this 12th day of March, 1997 is between GROUP
HEALTH PLAN, INC. ("GHP") on behalf of itself and its affiliated company,
HEALTHCARE USA OF MISSOURI, LLC ("HCUSA") (collectively "Plan") and BJC HEALTH
SYSTEM ("BJC") for the purpose of setting forth the terms and conditions under
which BJC shall provide certain services to Plan, as defined herein. This
Agreement shall become effective on the actual date of closing of the Asset
Purchase Agreement between the GHP and BJC of even date herewith ("Effective
Date"). For services rendered on or after its Effective Date, this Agreement
supersedes and replaces any existing agreements between Plan and BJC, and
between Plan and BJC Providers (as defined herein), relating to the same subject
matter.
SECTION 1
DEFINITIONS
1.1 BENEFIT PLAN: The group agreement, certificate of coverage ("COC") and other
documents that describe the terms and conditions of a Member's health care
coverage and identifies the Covered Services that the Plan or a Payor has agreed
to pay for on behalf of Members. For purposes of this Agreement unless otherwise
specifically limited in an Exhibit, the term "Benefit Plan" shall include
without limitation coverage provided under governmental and commercial insured
products, (including without limitation Medicare Risk, Medicare Cost and
Medicaid) or self-funded employer "administrative services only" arrangements
("ASO"), and other products offered or administered by Plan during the term of
this Agreement and any extensions or renewals thereof.
1.2 BJC PROVIDER: A physician, facility or other health care provider, duly
licensed and/or qualified under the laws of the jurisdiction in which Covered
Services are rendered, that is an entity owned or controlled by, or under common
control or affiliated with BJC, or is an employee of or under contract with such
entity, and/or that has entered into an agreement with BJC for the provision of
Covered Services to Members pursuant to this Agreement (including those
providers listed in EXHIBIT B and those providers credentialed by BJC now or in
the future pursuant to this Agreement).
1.3 BJC PROVIDER AGREEMENT: The agreement between a BJC Provider and BJC that
describes such Provider's rights and obligations regarding the provision of
Covered Services to Members, including BJC Members, in accordance with this
Agreement. All BJC Provider Agreements shall comply with applicable state and
federal laws and BJC shall use its best efforts to assure that all BJC Provider
Agreements include a provision requiring compliance with the terms of this
Agreement. To the extent BJC is able with best efforts to include such a
provision, BJC agrees that it shall enforce the terms of BJC Provider
Agreements.
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<PAGE> 2
1.4 BJC SERVICE SITES: The locations where BJC has established or will
establish BJC Providers or networks of BJC Providers which will be made
available to Members under this Agreement. BJC's Service Sites are more
specifically identified in EXHIBIT C.
1.5 COVERED SERVICES: All of the health care services and supplies covered
under the Member's Benefit Plan and which are within the scope of services
normally provided by any particular BJC Provider to patients other than Members.
1.6 EMERGENCY/EMERGENCY MEDICAL SERVICES: Term shall have the same meaning as
that set forth in the applicable Benefit Plan, unless otherwise required by law,
in which case such term shall have the meaning required by law.
1.7 MEDICAL CENTERS: The Medical Centers and accompanying assets and physician
group practice transferred to BJC by Plan pursuant to that certain Asset
Purchase Agreement between the parties of even date herewith.
1.8 MEDICALLY NECESSARY: Term shall have the same meaning as that set forth in
the applicable Benefit Plan, unless otherwise required by law, in which case
such term shall have the meaning required by law.
1.9 MEMBER: An individual who is properly enrolled in or through GHP and who is
eligible to receive Covered Services under any Benefit Plan offered by or
through Plan, it being the intent of the parties that this Agreement shall
govern all services rendered by and between the parties on an "all product, all
payor, all membership" basis. The term "Member" (including BJC Member, BJC
Medicaid Member and BJC Medicare Member) is more specifically defined in
EXHIBITS A-1, A-2, A-3 AND A-4.
1.10 OPERATING COMMITTEE: The group jointly formed by the parties and consisting
of an equal number of representatives from each party (which shall include the
Contact Persons identified by each party pursuant to the terms of this
Agreement) and which will perform the advisory functions delineated in Section
10.8 of this Agreement.
1.11 PARTICIPATING PROVIDER: A health care professional or facility, including
BJC Providers, that has or is governed by a written participation agreement
which is in effect with Plan, directly or through another entity, to participate
in one or more networks of providers for the purpose of rendering Covered
Services to one or more groups of Members.
1.12 PAYOR: The entity, organization, agency or persons authorized by Plan to
access one or more of Plan's networks of Participating Providers and that has
the financial responsibility for payment of Covered Services covered by a
Benefit Plan (and for certain types of Benefit Plans, Payor shall include Plan).
1.13 PLAN'S SERVICE AREA: Those counties in Missouri and Illinois in which Plan
is now or in the future will be licensed, certified or otherwise authorized to
offer Benefit Plans to Members. Plan's current Service Area is more fully
described in EXHIBIT D.
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<PAGE> 3
1.14 PRIMARY CARE PHYSICIAN/PCP: A Doctor of Medicine (M.D.) or a Doctor of
Osteopathy (D.O.) who (1) is a pediatrician, family practitioner, internist, or
such other practitioner as required by law or authorized by Plan, (2) is duly
licensed and qualified under the laws of the jurisdiction in which Covered
Services are rendered; and (3) has been selected by a Member to provide or
arrange for the provision of all Covered Services to that Member. To the extent
a particular provision in this Agreement or any Exhibit refers only to a PCP who
is a part of the BJC network of providers covered by this Agreement, such
provision shall use the term "BJC PCP." To the extent a particular provision in
this Agreement or any Exhibit refers only to PCPs who participate in one or more
GHP networks of providers but who are not BJC PCPs, such provision shall use the
term "Participating PCP."
1.15 REFERRAL AUTHORIZATION: The approval by a Member's PCP (or, for Medicaid
Members, by HCUSA) in a format determined by Plan, which may be an electronic
format, for a health professional or facility to render certain Covered Services
to a Member.
1.16 REFERRAL PHYSICIAN: An M.D. or a D.O. (1) who is a BJC Provider or a
Participating Provider, (2) who is duly licensed and qualified under the laws of
the jurisdiction in which Covered Services are rendered, (3) who is not a PCP,
and (4) to whom a Member has been referred by a PCP for the provision of
specified Covered Services.
1.17 UTILIZATION REVIEW ("UR") AND/OR UTILIZATION MANAGEMENT ("UM"): Processes
by which Plan (or, if applicable, by which BJC) reviews and determines the
Medical Necessity and appropriateness of Covered Services provided or to be
provided, to Members on a prospective, concurrent, or retrospective basis.
SECTION 2
OBLIGATIONS OF PLAN OR PAYOR
2.1 PAYMENT TO BJC. For the services rendered by BJC pursuant to this Agreement,
and for the provision of Covered Services to Members (including without
limitation BJC Members) by providers (including without limitation BJC and
Participating Providers), Plan/Payor shall pay BJC as provided in EXHIBITS A-1,
A-2, A-3 AND A-4 depending on the type of Benefit Plan under which the Member to
whom Covered Services is rendered is covered.
2.2 PLAN CONTACT PERSON. Plan shall provide BJC with the name of a Plan
representative who shall be assigned to BJC to respond to questions regarding
for Covered Services and other services under this Agreement (including without
limitation claims, Member Services, eligibility, UM, credentialing and peer
review). The name, title, address, telephone/fax number and, if available,
accessible e-mail address of the Plan Contact Person shall be specified in
EXHIBIT M.
2.3 MEMBER SERVICES. Plan shall perform Member services, including enrollment,
responding to Member telephone and written inquiries, complaints, grievances and
appeals, Member and Provider grievance processes, billing and collection of
premium payments. BJC agrees that the Plan or Payors shall have the final
discretionary authority to make all decisions
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<PAGE> 4
with respect to claims related (and not professional liability or personal
injury related) Member grievances and appeals whether pursued by Member through
the Plan's Member and Provider grievance process or through regulatory
authorities. The Plan shall act reasonably and in good faith in making all such
determinations. The parties agree that to the extent BJC disagrees with a Plan
grievance determination it shall be subject to the dispute resolution process
delineated in Section 8 of this Agreement; however, any resolution to the
dispute shall be enforceable only between the parties and shall not change the
effect upon the Member involved in such grievance process who shall be protected
by provisions set forth in Section 5 of this Agreement.
2.4 PROVIDER SERVICES. Plan shall retain oversight and review of BJC's
performance of services relating to BJC Providers, including monitoring and
oversight of recruitment and credentialing activities performed by BJC at such
time as and to the extent such activities are delegated to BJC by Plan, and
BJC's expansion, if any, of BJC's Service Sites during the term of this
Agreement to provide Members additional access to BJC Providers within Plan's
Service Area.
2.5 MARKETING, FINANCE AND UNDERWRITING. Plan shall perform sales and marketing,
finance and underwriting functions in conformance with Plan's previous
performance levels, including development and regulatory approval of new Benefit
Plans, and underwriting services. Plan's underwriting services generally shall
be performed in conformance with Plan's underwriting guidelines, standard Plan
practices and sound business judgment with respect to the acceptance of new
groups covered by this Agreement.
2.6 QUALITY IMPROVEMENT. Plan shall perform quality improvement functions
including without limitation NCQA related activities as determined by Plan.
2.7 INFORMATION SYSTEMS. The parties shall work closely together to facilitate
efficient transfers of information needed for performance of each of their
duties under this Agreement. The parties agree that they shall use their best
efforts to determine within 90 days from the date this Agreement is executed the
forms of reports which shall be exchanged during the term of this Agreement.
Such forms of reports, when completed, shall be attached as EXHIBIT E.
2.8 CLAIMS PROCESSING. Plan shall be responsible for processing claims for
Covered Services provided to Members. Plan shall provide claims processing
information to BJC in accordance with the timetables for and forms of reports
set forth in EXHIBIT E, and shall use its reasonable efforts to provide the
reports in mutually acceptable format, which may include an electronic format.
Plan shall use the same efforts with respect to BJC Members as it uses with
other Members (but in no event less than reasonable efforts in the ordinary
course of business) to conduct coordination of benefits and other third party
claims and subrogation recovery to the extent permitted by law (including
without limitation the rules of the State of Missouri applicable to Medicaid
Members).
2.9 REPRESENTATIONS AND WARRANTIES. Plan represents and warrants that (1) it has
been and will continue to be properly formed, licensed, and certified pursuant
to the laws of the jurisdiction in which the services in this Agreement are
rendered; (2) it has the unqualified
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<PAGE> 5
authority to and hereby binds itself to all of the terms and conditions of this
Agreement, including any Appendices, Attachments and Exhibits, as applicable;
(3) the reports showing the number of Members who have selected a PCP whose
principal practice is located at a Medical Center provided to BJC through the
due diligence process that preceded the Effective Date of this Agreement are
true and accurate as of the date on which such reports were generated (a copy of
the reports are attached hereto as EXHIBIT F; (4) it shall maintain adequate
capital and surplus, and operate in a financially sound fashion such that it
remains in compliance with applicable state and federal laws.
2.10 REFERRAL CONTRACTS. From and after the Effective Date of this Agreement,
Plan agrees that it shall not execute or renew a contract for the provision of
Covered Services to BJC Members which requires an exclusive referral
arrangement, or which requires BJC and/or BJC Providers to make referrals in
connection with a BJC Member to any individual Participating Provider, or group
of Participating Providers in the absence of BJC's express written consent,
which consent shall not be unreasonably withheld.
2.11 ADDITIONAL PLAN OR PAYOR OBLIGATIONS. Additional obligations and
performance standards of Plan or Payor are set forth in the Exhibits to this
Agreement.
SECTION 3
OBLIGATIONS OF BJC
3.1 PROVIDER REQUIREMENTS: BJC shall arrange for BJC Providers to provide
Covered Services to all Members regardless of the type of Benefit Plan or Payor
covering such Member and regardless of the frequency or degree such Members
utilize Covered Services. BJC shall, and shall use its best efforts to cause BJC
Providers to, cooperate with all medical management, utilization management,
credentialing, quality assessment, peer review, or other similar programs
established by Plan and/or by BJC under this Agreement. BJC shall use its best
efforts to assure that BJC Providers comply with all applicable obligations set
forth in this Agreement and BJC shall assure that BJC Providers comply with the
member protection/no balance billing provisions set forth in this Agreement,
with applicable obligations set forth in BJC Provider Agreements, including
without limitation the following:
(1) BJC Providers shall provide Covered Services to all Members, and
shall accept all Members as new patients in accordance with the terms
of this Agreement and at least on the same basis as BJC Provider is
accepting non-Members as new patients without regard to type of Benefit
Plan or Payor, race, religion, gender, color, national origin, age or
physical or mental health status.
In addition, BJC agrees that each of the Medical Centers shall remain
adequately staffed with BJC Providers and BJC PCPs to provide
continuous capacity to serve no less than 1000 Members per Medical
Center in addition to the number of Members served as of the Effective
Date. Employed, owned, and controlled BJC Providers (including those
under common control with BJC) shall not, in any event, close their
provider panel to Members and simultaneously remain open to payors not
covered by this Agreement.
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<PAGE> 6
(2) BJC Provider may inquire regarding the current status of the
Member's eligibility for Covered Services by requesting presentation by
the Member of his or her identification card or by contacting Plan
during normal office hours. However, if Plan subsequently learns or
determines that the individual was not eligible for coverage for the
services rendered, those services shall not be eligible for payment
under this Agreement. BJC Provider may then directly bill the
individual for such services. Notwithstanding the foregoing, in the
event Plan confirms eligibility to a BJC Provider after 45 days
following the effective date for the eligibility change, and BJC and
BJC Provider use reasonable efforts to collect its fees for such
services using customary collection practices (to include at least
billing the Member through 2 billing cycles) and is unsuccessful in
collecting such amounts from the Member, BJC and BJC Provider may
submit such claims to Plan for payment at a rate of 50% of the fee
schedules set forth in Exhibit A-4.
(3) BJC Provider shall comply with protocols of Plan and/or BJC,
including without limitation the following:
(i) Referral of Members only to other Participating
Providers or BJC Providers unless otherwise authorized by Plan
and BJC pursuant to the Member's Benefit Plan.
(ii) Compliance with approved billing procedures of Plan.
(iii) Obtain prior authorization and/or precertification for
certain Covered Services as defined by Plan.
(iv) Compliance with any provider administrative manual,
credentialing plan or contracting standards, as modified from
time to time by Plan and/or BJC.
(4) If the Member's Benefit Plan requires the Member to receive all or
any Covered Services from or upon Referral Authorization by a PCP or
Plan, the following additional protocols must be adhered to when those
Covered Services are provided by ancillary and referral providers and
Referral Physicians: (i) Referrals to other Participating Providers,
non-Participating Providers, and BJC Providers must first be authorized
by the Member's PCP (or for Medicaid Members, by HCUSA); and (ii)
Covered Services must be provided pursuant to the terms and limitations
of the Referral Authorization issued by or on behalf of the Member's
PCP or by HCUSA, as applicable.
(5) BJC Provider shall comply with the following requirements for
admitting Members to a hospital:
(i) Admit Members on the day of surgery, unless the Member's
medical condition requires otherwise and BJC Provider has
obtained prior authorization from Plan.
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<PAGE> 7
(ii) Notify Plan by telephone prior to a scheduled authorized
admission of a Member.
(iii) In the event of an Emergency admission under the
direction of BJC Provider, notify Plan within 24 hours of the
admission or, for admissions occurring during a weekend or
holiday, by the end of the first working day thereafter.
(iv) If BJC Provider is a Referral Physician and the Member's
Benefit Plan requires the Member to receive all or any Covered
Services from or upon Referral Authorization by a PCP or Plan,
such BJC Provider also must notify the Member's PCP of all
admissions and comply with applicable Plan required protocols
when those Covered Services are provided.
Failure to comply with the protocols of Plan may result in sanctions
against BJC Provider, including without limitation loss of
reimbursement to BJC in accordance with the performance standards and
sanctions set forth in EXHIBIT G, and upon repeated failure to comply
by a specific BJC Provider, sanctions up to and including termination
of that BJC Provider's participation under this Agreement as set forth
in EXHIBIT G.
(6) BJC Provider and BJC shall cooperate with the Plan's (and for
Medicaid Members, with the State of Missouri's) coordination of
benefits, third party claims recovery and subrogation rules to the
extent permitted by law.
3.2 PAYMENT TO PROVIDERS. BJC shall be solely financially responsible for the
compensation remitted to BJC Providers and Participating Providers for all
Covered Services rendered to BJC Members whether provided in or outside of
Plan's Service Areas and BJC's Service Sites. BJC shall and shall ensure that
BJC Providers hold harmless and indemnify Plan and Payor against any claims for
compensation by a BJC Provider. BJC shall hold harmless and indemnify Plan and
Payor against any claims for compensation by a Participating Provider for
Covered Services for which GHP has made payment to BJC out of the Claims Payment
Account. BJC shall and shall assure that Providers provide Plan with Referral
Authorizations and other information required for Plan to process and reconcile
claims presented for payment by Providers within no later than 60 days from the
date of service. Failure to submit claims within 90 days of the date of service
or inpatient discharge may result in BJC and BJC Providers forfeiting the right
to payment for such claims (member protection provisions in Section 5 below
apply). The process by which BJC Providers and Participating Providers are paid
shall comply with the terms and conditions set forth in this Agreement
(including without limitation Section 3.4 and Section 3.1) and in EXHIBIT A-1,
AND A-2, A-3, AND A-4.
3.3 PROVIDER PARTICIPATION. BJC shall require that its BJC Providers who are
PCPs participate solely with BJC for the purpose of rendering Covered Services
to Members. BJC shall notify Plan promptly in the event it knows or becomes
aware of PCPs who participate with more than one (1) medical group, IPA or PHO
for the purpose of rendering Covered Services to Members. The parties understand
and agree that BJC shall as soon as possible after the Effective
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<PAGE> 8
Date but not later than October 1, 1997 use its reasonable efforts to contract
and include in its network all physicians that are affiliated or under contract
with BJC. Notwithstanding anything herein to the contrary, Plan may request that
BJC recruit and, if such physician meets BJC criteria, accept as a BJC Provider
a specific physician(s) who meets Plan's participation requirements. In the
event Plan makes such a request and Plan demonstrates a reasonable need for such
a physician, BJC shall use its best efforts to recruit such physician as a
Provider. Plan agrees not to contract directly with such physician until 30 days
after Plan makes such a request of BJC.
3.4 REPRESENTATIONS AND WARRANTIES. BJC represents and warrants that (1) it and
BJC Providers have been and will continue to be properly formed, licensed, and
certified pursuant to the laws of the jurisdiction in which the services in this
Agreement are rendered; (2) it has the unqualified authority to and hereby binds
itself and BJC Providers to all of the terms and conditions of this Agreement,
including any Appendices, Attachments and Exhibits, as applicable; (3) BJC will
enforce and include the required Member Protection and "no balance billing"
provisions set forth in Section 5 of this Agreement in each of its contracts or
other agreements with BJC Providers, and Members and Plan will explicitly be
made beneficiaries of such provision; and (4) all documents reviewed by Plan
prior to execution of this Agreement, including without limitation any balance
sheets and financial statements, are true and accurate as of the date shown on
such balance sheets and financial statements; and (5) BJC shall at all times
remain in compliance with all covenants under all debt agreements and if BJC at
any time is not in compliance with such covenants, BJC shall notify Plan
simultaneously with any notification to any creditors, agencies, and/or
regulators. BJC also agrees that if any terms in any BJC documents (including
BJC Provider Agreements) conflict or appear to conflict with this Agreement, the
terms in this Agreement (including any Appendices, Attachments and Exhibits, as
applicable) shall prevail.
3.5 LAWS, REGULATIONS, LICENSURE. At all times during the term of this Agreement
and any extensions thereof, BJC shall and shall assure that BJC Providers
maintain and comply with all federal, state and local licenses, certifications
and permits, without material restriction, which are required to provide the
services BJC and BJC Providers are obligated to provide under this Agreement. At
all times during the term of this Agreement and any extensions thereof, BJC
shall (and shall assure that BJC Providers and BJC Provider Agreements) comply
with all applicable federal and state laws and regulations related to this
Agreement and the services to be provided hereunder; including but not limited
to statutes and regulations related to fraud and abuse, physician incentive plan
regulations, discrimination, disabilities, confidentiality, self-referral, false
claims, NCQA and HCFA requirements (for example, PIP rules and prohibited
marketing practices).
3.6 BJC CONTACT PERSON. BJC shall provide Plan with the name of a BJC
representative who shall be assigned to Plan to respond to questions regarding
Covered Services and other services under this Agreement (including without
limitation claims, Member Services, eligibility, cash transfers to accounts
established under the Exhibits to this Agreement, UM, credentialing and peer
review). The name, title, address, telephone/fax number and, if available, an
accessible e-mail address of the BJC Contact Person are set forth in the
attached EXHIBIT M.
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3.7 ADDITIONAL BJC OBLIGATIONS. Additional obligations and performance standards
of BJC and BJC Providers are set forth in the Exhibits to this Agreement.
SECTION 4
DELEGATED FUNCTIONS
The parties acknowledge that it is their intent that subject to Plan's
reasonable determination based on BJC meeting Plan standards, BJC will assume
delegated responsibilities for certain functions under this Agreement.
Therefore, at such time as BJC meets all Plan standards (including NCQA
standards) related to the delegation of certain Credentialing and UM functions,
and to the extent the parties mutually agree to delegate one or more other
functions from Plan to BJC (such as, for example, claims processing) upon BJC
meeting all mutually agreeable Plan standards, the function, the
responsibilities and rights of both parties shall be set forth in EXHIBIT H to
this Agreement.
SECTION 5
MEMBER PROTECTION PROVISIONS
BJC shall assure that BJC and all BJC Providers comply with the terms of this
Section 5. BJC Provider shall accept as payment in full for Covered Services
rendered to Members such amounts as are paid by BJC, and BJC shall accept as
payment in full for Covered Services rendered by BJC Providers to Members such
amounts as are paid by Plan/Payor pursuant to this Agreement. In no event,
(including without limitation non-payment by BJC or Plan/Payor for Covered
Services rendered to Members by Provider for whatever reason, including claim
submission delays and/or UM sanctions, insolvency of BJC or Plan/Payor, or
breach by BJC or Plan/Payor of any term or condition of this Agreement), shall
BJC Provider or BJC bill, charge, collect a deposit from, seek compensation,
remuneration or reimbursement from, or have any recourse against any Member for
Covered Services eligible for payment under this Agreement, nor shall BJC or a
BJC Provider bill a Member for the difference between BJC Provider's or BJC's
charges and the amount BJC Provider/BJC has agreed to accept as full payment
under this Agreement. BJC Provider shall collect from the Member and may retain
collected Copayments, Deductibles or charges for services which are not Covered
Services (whether by reason of an exclusion, exhaustion of benefits, benefit
maximums, ineligibility of the Member to the extent permitted by the Exhibits to
this Agreement, or similar bases, but not by reason of a UR determination) under
the Member's Benefit Plan. Failure to comply with the provisions of this Section
may result in sanctions including without limitation loss of reimbursement,
payment of any Member's or Plan/Payor's costs of defense or collection arising
out of such failure, up to and including financial penalties and/or termination
of participation under this Agreement as described in the performance standards
and sanctions provisions in EXHIBIT G.
BJC further agrees that: (i) the no balance billing provision herein shall
survive the termination of the Agreement regardless of the cause giving rise to
termination and shall be construed to be for the benefit of Members and
Plan/Payor; and (ii) this no balance billing provision supersedes any oral or
written contrary agreement now existing or hereafter entered between BJC and/or
a BJC Provider and a Member or a person acting on his/her behalf.
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Any modification, addition or deletion to the provisions of this Section shall
become effective on a date no earlier that sixty (60) days after the appropriate
State Department of Insurance or applicable state and federal regulatory agency
received written notice of such proposed change and has approved such change.
SECTION 6
LIABILITY OF PARTIES
6.1 RESPONSIBILITY FOR DAMAGES. Each party shall retain responsibility for its
own negligence and intentional misconduct. Each party shall be responsible for
any and all third party damages, claims, liabilities, settlements, or judgments
("Actions") of the other party to the extent such Actions arise out of the
party's breach of this Agreement, negligence or intentional wrongdoing. Any
costs for such Actions incurred at any time by a party as a result of the other
party's breach of this Agreement, negligence or intentional wrongdoing shall be
paid for or reimbursed by the breaching party to the extent such costs arise out
of the breaching party's breach, negligence or intentional wrongdoing provided
that the breaching party has received reasonable and timely notice of and been
given the opportunity to select counsel of its choice and defend against such
Actions. In addition, the BJC and BJC Providers shall indemnify and hold
harmless Plan from imputed, constructive or vicarious liability for any loss,
expense or attorneys' fees incurred in the settlement or satisfaction of any
personal injury or professional malpractice Action to the extent such liability
proximately results from the negligent acts or omissions of BJC or BJC
Providers, or their respective employees, agents or contractors ("Responsible
Party"). This Section shall survive the termination of this Agreement.
6.2 BJC INSURANCE.
(1) Professional Liability: BJC shall, and shall require BJC Providers
to, procure and maintain professional liability insurance or
self-insurance arrangements reasonably acceptable to Plan which covers
the services BJC and BJC Providers are rendering under this Agreement,
with minimum limits in the amounts of $1,000,000 per occurrence and
$3,000,000 annual aggregate per facility which is a BJC Provider and,
in the case of a BJC Provider physician, an equal to the greater of the
applicable state required minimum or the standard then prevailing in
the community in which such BJC Provider is located. BJC and
facility/hospital BJC Providers also shall procure and maintain
comprehensive general and/or umbrella liability insurance or
self-insurance arrangement reasonably acceptable to Plan in the amount
of $1,000,000 per occurrence and aggregate. BJC's and BJC Provider's
professional liability insurance (or reasonably acceptable
self-insurance) shall be either occurrence or claims made with an
extended period reporting option under such terms and conditions as may
be reasonably required by Plan and available for BJC and/or BJC
Providers to purchase or arrange at a reasonable cost. Prior to or
within 30 days following execution of this Agreement by BJC and at each
policy renewal thereafter, BJC shall submit to Plan in writing evidence
of the aforementioned coverages and of each BJC Provider's coverage.
BJC shall notify Plan in writing within 15 days of any changes in
carriers, termination of, renewal of, or other material changes in
BJC's and/or BJC
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Providers' liability insurance or coverage arrangement, including
reduction of limits, erosion of aggregate, changes in retention or
non-payment of premium.
(2) Stop Loss: BJC shall provide for stop loss coverage in such amounts
and types required in applicable statutes and regulations for any BJC
Providers placed at Substantial Financial Risk (as that term is defined
in applicable statutes and regulations, including without limitation
the Health Care Financing Administration ("HCFA") Physician Incentive
Plan ("PIP") regulations) in connection with this Agreement.
(3) Errors and Omissions: BJC shall secure and maintain Errors and
Omissions ("E & O") Coverage with such coverage limits as are
reasonably acceptable to Plan and attached hereto as EXHIBIT I for any
managed care delegated function, as defined herein, BJC undertakes
pursuant to this Agreement.
In the event BJC fails to comply with the terms of this Section 6.2 after 30
days prior written notice from Plan to BJC, Plan may elect (but shall not be
obligated to BJC or to BJC Providers) to purchase the appropriate insurance
coverage on BJC's and/or BJC Provider's behalf and deduct the cost of such
insurance coverage from amounts payable to BJC under this Agreement.
6.3 PLAN'S INSURANCE. Plan, at its sole cost and expense, shall procure and
maintain comprehensive general liability, professional liability and other
necessary insurance standard in the insurance industry and as required by
applicable regulatory authorities to insure Plan and its employees, acting
within the scope of their duties, against claims for damages caused by the
negligence or intentional misconduct of Plan or its employees in connection with
the performance of Plan's responsibilities under this Agreement. Such insurance
shall have minimum limits of one $1 million per claim and three $3 million in
the aggregate. Plan shall use its best efforts to provide BJC with written
evidence of such coverage within 15 days of BJC's written request. Plan shall
notify BJC within 15 days any cancellation, termination, non-renewal or material
modification of any coverage maintained pursuant to this provision.
SECTION 7
BOOKS AND RECORDS
7.1 MAINTENANCE OF AND PLAN ACCESS TO/AUDIT OF INFORMATION. BJC shall (and shall
cause BJC Providers) to maintain, in accordance with standard and accepted
practices, such medical, financial, accounting and other records ("Records") as
shall be necessary or appropriate for Plan to monitor and review BJC's services
under this Agreement, or to perform UR, QI, credentialing, billing/claims
verification functions, or to prepare for the defense of a law suit in which
Plan deems such records relevant, and to perform any other functions necessary
for the administration of this Agreement, including without limitation ongoing
medical chart reviews and access to other Records for purposes of HEDIS
reporting, statistical reporting required by employer groups, and NCQA related
activities. During regular business hours and upon reasonable notice and demand,
Plan shall have access to, the right to audit and obtain copies of all
information and records within the possession of or reasonably accessible to or
under the control of BJC or BJC Providers which are related to the services
provided under this Agreement, including those
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relating to Covered Services rendered by BJC Providers. Unless a longer time
period is required by applicable statutes or regulations, Plan shall have such
access during the term of this Agreement and for 10 years following its
termination. Records or copies of records requested by Plan shall be provided
within no more than 7 days from the date such request is made, except in the
case of an audit or site visit by Plan where records or copies of records shall
be provided at the time of the audit or site visit. Plan's access to peer review
records of BJC Providers shall be granted only in accordance with Section 7.3
below.
BJC's or a BJC Provider's unreasonable refusal to grant access to its books,
documents, subcontracts or records as requested by the Plan or as required by
any Federal or State law or regulations shall constitute a breach of this
Agreement, and may result in the imposition of sanctions up to and including
financial penalties to the extent permitted by and described in the EXHIBIT G to
be determined by the parties covering performance standards and sanctions, or in
the case of repeated failure to comply by a specific BJC Provider, sanctions up
to and including termination of that BJC Provider's participation under this
Agreement to the extent permitted by and described in EXHIBIT G. In the event of
a BJC Provider termination under such circumstances, BJC and/or a BJC Provider,
as applicable, will not be entitled to any consequential, general or specific
costs, expenses or damages of any kind, but shall be entitled to remuneration
according to the terms of this Agreement for Covered Services rendered prior to
the termination date.
7.2 AGENCY ACCESS TO INFORMATION. The federal, state and local government,
accrediting organizations, and any of their authorized representatives shall
have access to, and Plan, BJC and BJC Providers are authorized and hereby
required to release, in accordance with applicable statutes, regulations,
accrediting standards and guidelines, all information and records or copies of
such, within their possession, under their control or accessible to them without
undue burden, which are pertinent to and involve transactions related to this
Agreement, and access which is necessary to comply with statutes, regulations,
standards, and guidelines applicable to Plan, BJC or BJC Providers.
7.3 PLAN'S RIGHT TO BJC PROVIDER INFORMATION. Upon reasonable notice by Plan,
BJC shall provide Plan with all reasonably requested information regarding each
BJC Provider to the extent Plan's request pertains to a Member and BJC possesses
such information or can obtain it without undue effort or expense. Plan reserves
the right upon reasonable advance notice to review and obtain copies of any
files related to the credentialing of any current or future BJC Providers during
the term of this Agreement to the extent Plan's request pertains to a Member, or
to the extent Plan has delegated applicable functions to BJC. Plan reserves the
right to approve the Participation, on-site review and location, or require the
imposition of sanctions upon or termination of any BJC Provider rendering
services hereunder. Notwithstanding the foregoing, Plan shall not be provided
copies of or access to the actual minutes of peer review proceedings conducted
by or on behalf of a BJC Provider.
7.4 MAINTENANCE OF AND BJC ACCESS TO/AUDIT OF INFORMATION. Plan shall maintain,
in accordance with standard and generally accepted practices, such medical,
financial, accounting and other records ("Records") as shall be necessary or
appropriate for BJC to monitor and review
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Plan's services under this Agreement, or to perform other functions as may be
delegated by Plan to BJC from time to time, or to prepare for the defense of a
law suit in which BJC deems such records relevant, or to perform any other
functions necessary for the administration of this Agreement. During regular
business hours and upon reasonable notice and demand, BJC shall have access to,
the right to audit and obtain copies of all information and records within the
possession of or reasonably accessible to or under the control of Plan which are
related to the services provided under this Agreement, including records
relating to Members' claims processed by Plan. Unless a longer time period is
required by applicable statutes or regulations, BJC shall have such access
during the term of this Agreement and for ten (10) years following its
termination. Records or copies of records requested by BJC shall be provided
within no more than seven (7) days from the date such request is made, except in
the case of an audit by BJC where records or copies of records shall be provided
at the time of the audit.
Plan's unreasonable refusal to grant access to its books, documents, or records
as requested by BJC or as required by any Federal or State law or regulations
shall constitute a breach of this Agreement, and may result in the imposition of
sanctions up to and including financial penalties to the extent permitted by and
described in EXHIBIT G to be developed by the parties setting forth performance
standards and related sanctions/penalties.
7.5 BJC'S RIGHT TO PARTICIPATING PROVIDER INFORMATION. Plan shall inform BJC of
the termination of a Participating Provider (who is not a BJC Provider) who
participates with or accepts referrals from BJC and BJC Providers the earlier of
sixty (60) days prior to such Participating Provider's termination with Plan, or
as soon after Plan receives notice of such Participating Provider's termination
as possible.
7.6 PHYSICIAN INCENTIVE PLANS INFORMATION. Upon request, BJC shall provide Plan
with information pertaining to its compensation arrangements ("Arrangements")
that provide physician BJC Providers with incentive payments for referral
services not directly provided by BJC Providers. The information furnished by
BJC to Plan shall be of such type and in such form as the Plan may require to
enable it to comply with federal law. In the event Plan permits BJC to provide
Plan with an attestation concerning the type and scope of such Arrangements,
Plan reserves the right but not the obligation to audit and inspect such
documents of BJC as Plan deems necessary to substantiate the basis for BJC's
attestation in accordance with the audit rights identified in this Section.
Failure to timely comply with this section shall constitute a material breach of
this Agreement and may result in sanctions up to and including financial
penalties imposed upon BJC by Plan pursuant to an EXHIBIT G to be developed by
the parties setting forth performance standards and related sanctions/penalties.
7.7 PRIVACY OF INFORMATION. BJC, Plan, Payor and BJC Provider shall maintain the
privacy of all information regarding Members and BJC Providers in accordance
with applicable statutes and regulations, standards and guidelines.
(1) CONFIDENTIAL INFORMATION. The Plan, BJC and BJC Providers
acknowledge that the terms and conditions of this Agreement in addition
to certain information provided among themselves is confidential
information, including without limitation Members'
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medical record information, rate and reimbursement information, product
information, Membership lists, policies and procedures regarding all
aspects of operations, including without limitation UM, QI,
credentialing, claims processing and other strategic information
whether made available in paper, electronic, computer or other form
(the "Information"), and shall be treated as confidential, privileged
or trade secret information. Such information shall be and remain the
property of the party disclosing the information ("Disclosing Party").
The party receiving the information ("Receiving Party") shall promptly
return such Information upon reasonable request by the Disclosing
Party.
A party may release Information only to: its affiliates, directors,
partners, officers, employees, advisors and other representatives (its
"Representatives"), who have a need to know such Information to perform
duties pursuant to this Agreement, after informing them of their
obligation to maintain the confidentiality of such Information as to
third parties. BJC additionally agrees that Information shall not be
disclosed to any Representative or to any employed, contracted or
otherwise affiliated person or entity that directly or indirectly
conducts or is related to any BJC managed care, insurance, health care
financing, TPA, or related BJC activities or businesses without Plan's
consent. BJC shall assure that no employee and no entity owned or
controlled or under common control with BJC that Plan reasonably views
as its competitor will have access to Information. Notwithstanding the
foregoing, an employee or an entity owned or controlled or under common
control with BJC that does not have access to the Information shall be
excluded from the restrictions set forth in the previous 2 sentences to
the extent BJC takes reasonable steps to assure that no such individual
has access to the Information of any other entity (whether owned or
affiliated) which can reasonably be characterized as a competitor of
Plan (which steps shall be at least as stringent as those taken by BJC
to protect its own Information). Each party shall be responsible if
it's Representatives breach this Section. Neither party shall otherwise
release nor disclose Information to third parties without the other
party's prior written consent, except as required by law.
Notwithstanding anything herein to the contrary and with the exception
of Members' medical information, this Section shall not be applicable
to Information that: (a) is or becomes generally available to the
public other than as a result of a disclosure by a party or its
Representatives; or (b) was or becomes available to the parties on a
non-confidential basis prior to its disclosure by a party or its
Representatives.
(2) REQUEST FOR INFORMATION. In the event the Plan, BJC or BJC
Providers receive (the "Receiving Party") a court order, subpoena or
other governmental agency request for Information ("Request")
pertaining to the Disclosing Party, the Receiving Party shall, as soon
as practicable, but in no event more than two (2) working days after
the receipt of such Request, notify the Disclosing Party of such
Request. The Receiving Party may respond to such Request after it has
given the Disclosing Party's General Counsel (or other attorney
representing the Disclosing Party) an opportunity to review and make
recommendations regarding the Receiving Party's response or take other
appropriate action regarding such Request. In acknowledgment of the
time-sensitive nature of such
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Requests, the Disclosing Party's General Counsel shall perform his or
her review of such Request as expeditiously as possible.
(3) RESTRICTIONS ON USE OF INFORMATION. A party and its Representatives
may use Information only for the limited purpose of performing its
obligations under this Agreement. BJC additionally agrees that
Information shall not be used by BJC or any Representative or by any
employed, contracted or otherwise affiliated person or entity that
directly or indirectly conducts or is related to any BJC managed care,
insurance, health care financing, TPA, or related BJC activities or
businesses without Plan's consent. BJC shall assure that no employee
and no entity owned or controlled or under common control with BJC that
Plan reasonably views as its competitor will have access to
Information. Notwithstanding the foregoing, an employee or an entity
owned or controlled or under common control with BJC that does not have
access to the Information shall be excluded from the restrictions set
forth in the previous 2 sentences to the extent BJC takes reasonable
steps to assure that no such individual has access to the Information
of any other entity (whether owned or affiliated) which can reasonably
be characterized as a competitor of Plan (which steps shall be at least
as stringent as those taken by BJC to protect its own Information).
(4) POST-TERMINATION INFORMATION OBLIGATIONS AND RESTRICTIONS. For a
period of ten (10) years following the termination of this Agreement,
the parties agree that they shall not disclose, or allow the improper
use of, Information or the substance or terms of this Agreement to or
by any third parties, except to the extent such information is
necessary to perform the parties' post-termination duties, if any,
under this Agreement or comply with applicable statutes, regulations,
standards and guidelines. The parties also shall be permitted to
disclose the terms of this Agreement to its attorneys, consultants and
accountants, so long as these individuals are held to the
confidentiality requirements and use restrictions set forth in this
Section. Any use or disclosure of Information or the terms of this
Agreement beyond the scope of this Section shall require the consent of
the parties.
Each party acknowledges the unique nature of the other party's
Information and agrees that the other party will suffer irreparable
harm in the event that the recipient of Information fails to comply
with all of its obligations hereunder, and that in the event of breach
of such obligations there would be no adequate remedy at law to fully
compensate the non-breaching party. Accordingly, the parties hereby
agree that the non-breaching party will be entitled to injunctive
relief to enforce the terms hereof upon breach or anticipated breach by
a party or by those with respect to whom that party has a duty to
prevent disclosure or unauthorized use/misuse of Information, such
injunctive relief to be cumulative with all other legal and equitable
remedies available to the non-breaching party. Notwithstanding the
foregoing, and in addition to any injunctive or other relief which may
be available at or in equity, the parties agree that any breach of this
Section shall entitle the non-breaching party to liquidated damages in
the amount of One Million Dollars ($1,000,000).
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This Section 7 (including without limitation subsection 7.7) shall survive the
termination of this Agreement.
SECTION 8
RESOLUTION OF DISPUTES
If any dispute or controversy shall arise between the parties hereto with
respect to the making, construction terms, or interpretation of this Agreement;
or the rights of any party hereto; or with respect to any transaction involved
("Dispute"); the parties involved shall make good faith efforts to settle the
Dispute by negotiations by the Operating Committee designated in Section 10.8
below.
In the event a Dispute between Plan and/or Payor, and BJC and/or BJC Provider
arises out of or is related to this Agreement (including without limitation the
amount or type of sanctions one party imposes upon the other, or whether an
"Adverse Change in the Law" has occurred which would entitle either party to
terminate this Agreement, the parties involved shall make good faith efforts to
settle the Dispute by negotiations by the Operating Committee. For purposes of
this Agreement, the term Adverse Change in the Law shall mean new legislation,
regulation, or a controlling decision by a court in the jurisdiction in which
services are rendered under this Agreement that, in the opinion of Plan's and
BJC's legal counsel, will substantively deprive one or both parties of the
benefit of its or their bargain under this Agreement.
If the Operating Committee is unable to resolve a Dispute within thirty (30)
days, the Operating Committee shall request the President of each party or his
or her designee to resolve the Dispute. In the event the Dispute is not resolved
within forty-five (45) days of the date one party initially sends written notice
of the Dispute to the other party, and if any party wishes to pursue the
Dispute, it shall be submitted to binding arbitration in accordance with the
rules of the National Health Lawyers Association. In no event may arbitration be
initiated more than one year following the initial sending of written notice of
the Dispute. Any arbitration proceeding under this Agreement shall be conducted
in St. Louis County, Missouri. The arbitrators shall have no authority to award
any punitive or exemplary damages, or to vary or ignore the terms of this
Agreement, and shall be bound by controlling law. If the Dispute pertains to a
matter which is generally administered by certain Plan or BJC procedures, such
as, for example, a credentialing, utilization management or quality improvement
plan, the procedures set forth in that plan must be fully exhausted before any
right to arbitration under this section may be invoked. Notwithstanding the
foregoing, neither party shall be precluded from seeking injunctive or other
relief in connection with the other party's breach or threatened breach of the
terms of Section 6, Section 7.3, Section 7.7 or Section 10.3. This section shall
survive termination of this Agreement.
SECTION 9
TERM AND TERMINATION
9.1 TERM. The term of this Agreement shall be from the Effective Date through
and including March 31, 2007.
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9.2 RENEWAL PROCEDURE. On or before January 1, 2006, the parties shall commence
good faith negotiations regarding the terms and conditions (including without
limitation financial rates and/or arrangements) ("Renewal Conditions") for
renewal of this Agreement and the time period of any renewal (the "Renewal
Term"). The negotiation of Renewal Conditions and of the first Renewal Term
shall be completed by the parties on or before July 1, 2006.
9.3 TERMINATION. This Agreement may be terminated as follows:
(1) NONRENEWAL. If the parties have not reached final agreement
regarding Renewal Conditions for the first Renewal Term on or before
July 1, 2006, this Agreement shall expire on March 31, 2007. Either
party may elect not to renew this Agreement at the end of any Renewal
Term(s) by giving written notice of such election at least one hundred
eighty (180) days prior to the end of such Renewal Term(s). Thereafter,
this Agreement shall terminate upon the last day of the Renewal Term in
which such notice was given.
(2) FOR CAUSE.
(i) Material Breach. By either party, for the breach of a
material term, condition or provision of this Agreement, after
one hundred twenty (120) days advance written notice
("Notice"), specifying such material breach, to the other
party provided that the breaching party shall have a minimum
of thirty (30) days or longer reasonable period agreed to by
the parties to correct or cure such material breach. If the
breaching party fails or refuses to cure the material breach
within such time, then the nonbreaching party may elect to
terminate this Agreement. The remedy herein provided shall not
be exclusive of, but shall be in addition to, any remedy
available at law or in equity to the nonbreaching party.
(ii) Failure to pay/maintain financial obligations. BJC may
terminate this Agreement after 30 days prior written notice to
Plan in the event Plan fails to deposit funds into any Claims
Payment Account(s) (as defined in and in accordance with the
Exhibits to this Agreement) provided that Plan shall have 30
days to correct or cure its failure to pay. GHP may terminate
this Agreement after 30 days prior written notice to BJC in
the event BJC fails to maintain the required amount of
continuously available funds accessible under one or more
Letters of Credit required by the Exhibits to this Agreement.
(3) UPON NOTICE. BJC may terminate this Agreement upon 180 days prior
written notice in the event GHP is acquired by a provider based
organization (or a subsidiary or affiliate of such organization) in the
St. Louis market that is not a BJC Provider.
(4) PLAN REQUEST FOR TERMINATION OF BJC PROVIDERS UPON NOTICE. With
respect to a BJC Provider's participation in the provision of Covered
Services hereunder, in the event the Plan requires by thirty (30) days
prior written request that BJC terminate any individual BJC Provider's
participation. Such termination shall not result in a termination of
this Agreement. If appropriate to support compliance with adequate
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access standards applicable to Plan, in the event a BJC Provider is
terminated from participation in this Agreement upon the request of the
Plan, BJC shall use its best efforts to replace such BJC Provider as
soon as practicable, but in no event in excess of sixty (60) days from
the date of such BJC Provider's termination, and in the interim, shall
promptly make appropriate arrangements to ensure the provision of
Covered Services to Members.
(5) IMMEDIATE TERMINATION OF INDIVIDUAL PROVIDERS. In the event that
one of the events listed below occurs as to a BJC Provider, Plan may
notify BJC that such BJC Provider is no longer eligible to provide
Covered Services to Members and BJC shall thereafter immediately cause
such BJC Provider to cease providing Covered Services to Members:
(i) The events referenced herein include:
A. BJC's termination or suspension of a BJC
Provider's membership in BJC. Any notice required by
this Section shall state the reason for such
termination, or suspension, as the case may be.
B. Any action involving termination of or substantial
limitation on a BJC Physician's or Provider's
hospital privileges related to quality of care or
ability to admit patients to any hospital or
inpatient facility.
C. Any situation that requires a BJC Provider to
notify a state or federal agency or licensing board
that results in the termination, revocation or
suspension of the BJC Provider's license or
certification.
D. Any situation involving an investigation conducted
or complaint filed by a state or federal agency or
licensing board that restricts a BJC Hospital's
ability to operate an acute care hospital, results in
termination or substantial limitation being placed on
a BJC Physician's license to practice medicine or
osteopathy or a BJC Ancillary Provider's license or
certification to provide professional services,
provided that Plan shall consult with BJC prior to
terminating a BJC Provider under this Section
9.3(5)(D).
E. A change in any BJC Provider's license to practice
medicine or osteopathy, any form of reportable
discipline against such license, a change in any BJC
Provider's accreditation by JCAHO, or certifications
including, but not limited to, those under Titles
XVIII or XIX of the United States Code, or a marked
change in any BJC Provider's license or certification
to provide professional services or any form of
reportable discipline against the same.
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F. After Plan consults with BJC, in appropriate
circumstances Plan may require the termination of a
BJC Provider who or which is a defendant in a lawsuit
or claim filed alleging professional malpractice
involving a Member.
G. Any felony conviction of a BJC Provider.
H. Any BJC Provider's suspension or termination from
participation in Medicare or any BJC Provider's
suspension or involuntary termination from
participation in the Medical Assistance program of
any state.
I. Plan determines in good faith that the BJC
Provider's continued provision of services to Members
may result in, or is resulting in, danger to the
health, safety or welfare of Members.
J. Plan determines in good faith that, after notice
from Plan and opportunity to cure to BJC Provider and
after consultation with BJC, the BJC Provider has not
materially complied with the provisions of Plan's or
BJC's Quality Improvement or Utilization Management
Programs or the BJC Provider is unwilling or unable
to work cooperatively in a managed care environment.
K. One of the events of default set forth in the
applicable BJC Provider Agreement, occurs and
Plan/BJC has complied with the applicable notice
provisions set forth therein.
(ii) Reapplication. In the event that a BJC Provider is
terminated hereunder, he/she may reapply to participate in the
Plan network in accordance with Plan's standard policies and
procedures. The parties understand and agree that Plan's
standard policies and procedures may prohibit or delay
reapplication in certain instances.
(iii) Corrective Action. If terminated for one of the items
set forth immediately above, a BJC Provider may utilize Plan's
then current applicable appeal procedure or other corrective
action program, if such BJC Provider would otherwise have been
entitled to utilize such appeal procedure or corrective action
program (if such program exists at the time of termination).
(6) RIGHT TO TERMINATE AGREEMENT IMMEDIATELY. Nothing herein will be
construed as limiting the right of either party to terminate this
Agreement immediately upon delivery of written notice if:
(i) Either party is unable to secure and/or fails to
maintain the necessary governmental licenses or authority
required for the performance of its duties under this
Agreement, or
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(ii) By Plan if BJC is unable to secure and/or fails to
maintain the required professional liability coverage required
under this Agreement, or (in addition to any remedies set
forth in the Exhibits to this Agreement) if BJC fails to
maintain the required Irrevocable Letter of Credit required by
the Exhibits to this Agreement, or
(iii) The Plan determines, in its reasonable discretion, that
the health, safety, or welfare of Members is jeopardized by
continuation of this Agreement, or
(iv) In the event of fraud, intentional wrongdoing, or
misrepresentation by either party with respect to a material
term or obligation under this Agreement.
(v) In the event either party is prohibited from
participation in a governmental sponsored Benefit Plan.
(vi) In the event either party files a petition in voluntary
bankruptcy or corporate debt reorganization, makes an
assignment for the benefit of creditors, admits in writing to
its insolvency or inability to pay debts as they come due,
consents to or has appointed on its behalf a trustee or
receiver, or otherwise ceases to do business, or in the event
any court of competent jurisdiction assumes custody or control
of either parties' assets, or has an involuntary proceeding
commenced under bankruptcy or liquidation law which is not
dismissed within 60 days after the date of commencement of
that proceeding.
9.4 OBLIGATIONS FOLLOWING TERMINATION.
(1) CONTINUATION OF SERVICE. If this Agreement is terminated due to the
insolvency of the Plan, BJC shall continue to provide or arrange for
the provision of Covered Services to Members for the period of time
through which payment for Covered Services has been received by the
Plan from a Payor for that Member or those Members or the period of
time required by law, whichever is greater. BJC shall be paid for
Covered Services rendered at the rate that is in effect between the
parties during the period immediately preceding termination on this
basis.
(2) COMMUNICATION WITH MEMBERS. If this Agreement is terminated, the
Plan may notify Members, Payors, participating employers and
Participating and BJC Providers that BJC no longer participates with
the Plan in the provision of Covered Services to Members. If Members
seek services, or Participating or BJC Providers, or non-Participating
Providers order tests or seek services from BJC or BJC Providers after
the date of termination, BJC shall inform such Members and BJC
Providers that BJC no longer has an agreement with Plan to arrange for
Covered Services to Members.. BJC shall otherwise not initiate
communications with Members, verbally or in writing, concerning the
termination of its participation with the Plan, unless the parties have
agreed in writing to the content of such communications. Nothing in
this Section or in
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this Agreement shall be construed to limit Physician-Patient
communications regarding medical treatment or informed consent for
treatment.
(3) RESPONSIBILITY FOR MEMBERS AT TERMINATION. In the event of
termination of this Agreement other than as provided in subsection
9.4(1) above, BJC and BJC Providers shall continue to provide Covered
Services to Members in accordance with this Agreement for one year from
the effective date of termination. Any such Covered Services rendered
by BJC or BJC Providers to Members on a post-termination basis pursuant
to this Section shall be reimbursed by the Plan or the appropriate
Payor at the rate at which BJC and BJC providers are compensated during
the period immediately preceding such termination.
(4) TERMINATION OF PROVIDER UPON NOTICE. In the event a BJC Provider is
terminated from participation in this Agreement upon notice, such
termination will occur on the last day of the month in which the
ninetieth (90th) day following the requisite notice occurs. In the
event of such termination, and upon Plan's reasonable request taking
into account the access and service needs of Members, BJC shall replace
the terminated BJC Provider with a BJC Provider that meets the
credentialing criteria specified in this Agreement and all of the
Plan's Medical Management Program and Credentialing Plan requirements
as soon as reasonably possible. While BJC is in the process of securing
said replacement BJC Provider, BJC shall promptly make all necessary
and appropriate arrangements to ensure that the access and service
needs of Member receiving Covered Services under this Agreement are
fulfilled.
(5) PARTICIPATION AGREEMENTS. Upon termination of this Agreement, Plan
shall have the right to contract directly with any BJC Provider upon
terms to be agreed upon between Plan and such BJC Provider. BJC agrees
that it shall not in any way interfere with Plan's contracting efforts.
BJC further agrees that it shall include in any BJC Provider Agreement
or impose as a condition of continued affiliation with BJC a clause,
policy or provision prohibiting such BJC Provider from directly
contracting with GHP upon termination of this Agreement.
(6) INFORMATION SYSTEMS. Plan shall continue to provide BJC and BJC
Providers with applicable information support services as required by
this Agreement during the continuation period described in this Section
9.4.
(7) ACCESS TO RECORDS. Consistent with the terms of Section 7.8(4)
above, upon termination of this Agreement and for a period of 10 years
from the date of termination, each party shall provide the other party
with full access to (including the right to make copies of and/or use
computer-readable and hard copies of) all data and information of the
requesting party developed during the term of this Agreement relating
to (i) the performance by BJC Providers under the Credentialing, UM/QA
and related programs, and (ii) claims utilization case management
payment and outcome data with respect to each Member provided any
Covered Services during the term of this Agreement. During the
Continuation Period and thereafter, each party agrees that it shall not
in any manner
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disparage the other party (or any BJC or Participating Provider) or any
products or services of such other party (or any BJC or Participating
Provider).
SECTION 10
MISCELLANEOUS
10.1 NO SOLICITATION OF MEMBERS. The parties agree that during (1) the initial
term of this Agreement, plus (2) any Renewal Term(s) of this Agreement, plus (3)
the expiration of the continuation period set forth in Section 9.4(3) above, BJC
and BJC Providers shall not, directly or through employed or contracted brokers,
agents or producers, solicit, encourage, suggest, or otherwise communicate with
("Solicit") Members, or attempt to Solicit Members regarding changing such
Members' health care coverage from Plan to another insurer, managed care, health
care financing, TPA or similar entity or organization, ("Competitor") regardless
of whether such Competitor is related to, under contract with, or otherwise
affiliated with BJC. This Section shall survive termination of this Agreement.
Nothing in this Section shall be construed to limit the physician/patient
relationship or interfere with physician/patient communications regarding a
patient's medical condition or informed consent to treatment.
10.2 NO SOLICITATION OF EMPLOYEES. Each party hereto agrees that so long as this
Agreement is in effect and for a period of two (2) years after the date of
termination of this Agreement whether for cause or by expiration of the term it
shall not either directly or indirectly in any capacity whatsoever Solicit or
attempt to Solicit any person who was employed by the other party hereto on a
full or part-time basis while this Agreement was in effect to leave the employ
of the other party hereto without the prior written consent of the other party.
For purposes of this Agreement, indirect Solicitation shall not include
advertising in professional journals and newspapers, provided the party so
advertising does not request or advise such employee to submit an application
for such advertised positions. This Section shall survive termination of this
Agreement.
10.3 AMENDMENT. This Agreement may be amended only in writing, and the amendment
must be executed by both parties. Modification by Plan of its Provider Manual,
Credentialing Plan, Utilization Management Plan, Administrative Manual,
Underwriting Guidelines, Sales and Marketing Plan, or other such internal
documents, policies and procedures, shall not constitute an Amendment to this
Agreement unless such modification materially conflicts with the provisions of
this Agreement or materially increases BJC's responsibilities or financial
obligations under this Agreement.
10.4 REGULATORY AMENDMENT. Plan also may amend this Agreement after discussion
with BJC to comply with applicable statutes and regulations, standards and
guidelines, and shall give notice to BJC of such amendment and its effective
date. Such amendment will not require agreement by BJC.
10.5 ASSIGNMENT. Either party may assign all or any of its rights and
responsibilities under this Agreement to any entity controlling, controlled by,
or under common control with such party upon the other party's prior written
consent which consent may be withheld or granted after
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<PAGE> 23
taking into account the proposed assignee's ability to perform its obligations
under this Agreement, including without limitation any and all financial
obligations and the financial stability of such proposed assignee.
Notwithstanding the foregoing, to the extent BJC agrees to provide a corporate
guarantee acceptable to Plan of all representations, warranties, and obligations
(including without limitation financial obligations) under this Agreement in
connection with an assignment to an entity controlling, controlled by, or under
common control with BJC, after 30 days prior written notice to Plan, BJC may
complete such an assignment unless the Plan reasonably determines that the
proposed assignee is a competitor of Plan. The form of such Corporate Guarantee
is attached hereto as EXHIBIT J. The parties agree that in the event Plan
believes the proposed assignee is a competitor of Plan, Plan shall so notify BJC
within the 30 day notice period referenced herein. If BJC does not agree with
Plan's designation of the proposed assignee as a competitor, the parties shall
submit the issue to the dispute resolution process set forth in Section 8 this
Agreement. Neither party may assign any of its rights and responsibilities under
this Agreement to any other person or entity without the prior written consent
of the other party, which consent may be withheld or granted after giving
reasonable consideration to the proposed assignee's ability to perform its
obligations under this Agreement, including without limitation any and all
financial obligations and the financial stability of such proposed assignee.
10.6 RELATIONSHIP BETWEEN PLAN AND BJC AND PLAN AND BJC PROVIDERS. The
relationships between Plan and BJC and between Plan and BJC Providers are solely
that of independent contractors, and nothing in this Agreement or otherwise
shall be construed or deemed to create any other relationship, including one of
employment, agency or joint venture, or to interfere with the physician-patient
relationship or with physician-patient communications regarding informed consent
to medical treatment.
10.7 COOPERATION OF THE PARTIES. Plan and BJC will maintain an effective liaison
and close cooperation with each other to facilitate each party's compliance with
obligations under this Agreement. Plan will provide to BJC in advance when
feasible copies of relevant Plan policies and procedures and updates as
applicable.
10.8 AGREEMENT ADMINISTRATION/OPERATING COMMITTEE. The parties shall designate
an Operating Committee to oversee the operation of this Agreement and the
related provider contracts and to serve in an advisory capacity to the parties
regarding implementation of this Agreement and ongoing concerns such as, for
example, Benefit Plan design, information systems, underwriting guidelines,
premium floor corridors, and delegated functions, if any. The Operating
Committee shall consist of equal numbers of representatives from each party, in
addition to the Contact Persons designated by the parties pursuant to Sections
2.2 and 3.6 above. The Operating Committee shall meet as frequently as necessary
but no less than quarterly. The Committee shall have the authority to create
temporary committees necessary for the implementation and/or effective operation
of this Agreement.
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10.9 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement between
the parties in regard to its subject matter and replaces and supersedes any
existing agreements between Plan and BJC, and between Plan and BJC Providers
related to the same subject matter.
10.10 NAME, SYMBOL AND SERVICE MARK. During the term of this Agreement, BJC
Provider, BJC, Plan and Payor shall have the right to use each other's name and
make public reference to BJC Provider and BJC as a Participating Provider. BJC
Provider, Plan, BJC and Payor shall not otherwise use each other's name, symbol
or service mark without prior written approval.
10.11 GOVERNING LAW. To the extent not preempted by Federal Law, this Agreement
shall be governed by and construed in accordance with the laws of the State of
Missouri and the United States of America; including any provisions made
applicable because of the Plan's participation in governmental benefit programs
such as, for example, ERISA plans, the Federal Employee Health Benefit, Medicare
or Medicaid programs.
10.12 SEVERABILITY. If any provision of this Agreement or an Exhibit, appendix,
attachment, addendum or amendment is deemed to be unenforceable or invalid by a
court or regulatory agency of competent jurisdiction, the remaining provisions
shall remain in full effect unless the severance of that provision shall
substantially deprive the parties of the benefits of their bargain.
10.13 REMEDIES. Any remedies available upon the breach of this Agreement shall
be cumulative.
10.14 IMPOSSIBILITY OF PERFORMANCE. Neither party shall be deemed to be in
violation of this Agreement if it is prevented from performing its obligations
for reasons beyond its control, including without limitation, acts of God,
disasters, strikes, Adverse Changes in the Law, applicable statutes or the
actions of a governmental agency.
10.15 NOTICES. Any written notice required or contemplated by this Agreement
shall be delivered or sent by hand-delivery or certified mail, return receipt
requested, to the address given on the signature page of this Agreement or to
such other address as the parties may specify, upon not less than thirty (30)
days advance written notice, during the term of this Agreement. Notice shall be
deemed to have been given on the date such notice is sent.
10.16 CONDITIONS PRECEDENT: The parties agree that (1) obtaining all required
regulatory approvals of the form of this Agreement and (2) obtaining all
required regulatory approvals of and closing upon that certain Asset Purchase
Agreement between the parties shall be conditions precedent to the Effective
Date and the implementation of this Agreement.
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10.17 AFFIRMATIVE ACTION. Plan is an Equal Opportunity Employer which maintains
an Affirmative Action Program. On or before 120 days from the effective date of
this Agreement, BJC shall implement an Affirmative Action Plan and shall comply
with Executive Order 11246, the Vietnam Era Veterans Readjustment Act of 1974,
the Drug Free Workplace Act of 1988, the Vocational Rehabilitation Act and
similar legislation in transactions relating to any government contract. The
parties further agree to take affirmative action to ensure that applicants are
employed and that employees are treated during employment without regard to
their race, color, religious, creed, ancestry, national origin, sex, sexual
orientation, or disability. Each party will ensure that all of its
subcontractors will abide by these requirements and the requirements imposed on
contractors and subcontractors under laws applicable due to Plan's participation
in programs such as, for example, FEHBP, NCQA Medicare, Medicare Risk, and/or
Medicaid. BJC further acknowledges receipt of Plan's Certificate of Compliance
with Laws Relating to Equal Employment Opportunity, attached hereto as EXHIBIT
K.
THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION THAT MAY BE ENFORCED BY
THE PARTIES.
IN WITNESS WHEREOF, the parties have executed this Agreement on the 11th day of
March, 1997.
GROUP HEALTH PLAN, INC. BJC HEALTH SYSTEM
By: By:
------------------------------------ --------------------------------
Richard H. Jones Edward Case
Its: President & Chief Executive Officer Its: Executive Vice President of
Finance and Administration
940 West Port Plaza, Suite 300 4444 Forest Parkway
St. Louis, Missouri 63146 St. Louis, Missouri 63108
HEALTHCARE USA OF MISSOURI, LLC
By:
------------------------------------
Davina Lane
Its: President
100 S. Fourth Street, Suite 1100
St. Louis, Missouri 63102
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EXHIBIT A-1
GLOBAL CAPITATION PAYMENTS
SECTION 1: DEFINITIONS
COPAYMENT: The amount a Member is required to pay and BJC Provider shall collect
for certain Covered Services in accordance with the Member's Benefit Plan.
CUSTOMARY CHARGE: The reasonable and customary fees charged by a provider,
Participating Provider or BJC Provider ("billed charges") which do not exceed
the billed charges such provider would charge any other person regardless of
whether the person is a Member.
DEDUCTIBLE: The annual amount of charges for Covered Services, as provided in
the Member's Benefit Plan, which the Member is required to pay and which, to the
extent applicable to Covered Services provided by BJC Provider, BJC Provider may
collect in accordance with the Member's Benefit Plan.
BJC MEMBER: A Member who has selected or has been assigned to a BJC Provider
(including without limitation a BJC Provider located in or associated with a
Medical Center) as his or her PCP.
BJC PREMIUM: The amount of compensation to be paid to BJC for the services to
be provided by or through BJC and BJC Providers, including without limitation,
Covered Services rendered to BJC Members. BJC Premium shall be stated in this
Exhibit as a percentage of Total Premium per BJC Member per month (see section
3.1 below). BJC Providers shall collect from Members and may retain collected
Copayments, Deductibles or charges for services which are not Covered Services
(whether by reason of an exclusion, exhaustion of benefits, benefit maximums,
and recoveries from coordination of benefits, third party claims and subrogation
to the extent permitted by law, and similar bases, but not amounts not paid by
reason of a UM determination) under a Member's Benefit Plan. Such collected
amounts shall be in addition to and shall not be deemed part of the BJC Premium.
TOTAL PREMIUM: The gross amount of premium actually collected by Plan for each
BJC Member per month including the premium actually collected by Plan for each
BJC Member for the issuance of a Rider attached to or made part of the BJC
Member's Benefit Plan. The parties acknowledge that due to systems issues, as
of the Effective Date of this Agreement for purposes of calculating the amount
of monthly deposits into the Claims Payment Account, (1) for the first month
under this Exhibit A-1, GHP is depositing an amount determined as the average
gross premium per Member per month multiplied by the total number of Members who
selected a Medical Center physician as such Member's PCP for the immediately
preceding month (i.e., pre-execution/Effective Date); (2) for the second and
subsequent months under this Exhibit A-1, GHP is depositing an amount determined
as the average gross premium per BJC Member per month multiplied by the total
number of BJC Members for the immediately preceding month plus or minus the
adjustment for the amount determined as the amount of gross premium billed plus
retroactive accretions and minus retroactive deletions, if any, (to the extent
permitted in accordance with Section 3.5 of this Exhibit A-1) billed by Plan for
each BJC Member per month for the immediately preceding month.
TOTAL PROVIDER PAYMENTS: The total amount of payments made by Plan to any
providers, including BJC Providers, for the provision of Covered Services to BJC
Members incurred during the applicable period (e.g., calendar year).
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*CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION.
TOTAL PROVIDER PAYMENTS: The total amount of payments made by Plan to any
providers, including BJC Providers, for the provision of Covered Services to BJC
Members incurred during the applicable period (e.g., calendar year).
SECTION 2: SCOPE OF EXHIBIT
The provisions of this Exhibit apply to Covered Services rendered to BJC Members
who are covered by all commercial insured products (Benefit Plans) sponsored or
issued by all Payors, regardless of whether such BJC Members receive Covered
Services from BJC Providers, Participating Providers or non-Participating
Providers within or outside of BJC's Service Sites or within or outside of
Plan's Service Area.
SECTION 3: PAYMENT OBLIGATION
[_]*
3.1 [__]*
3.2 INCENTIVE AND MINIMUM PREMIUM FLOOR. [SEE SCHEDULE A-1]
3.3 PAYMENT PROCESS FOR BJC MEMBERS. The parties agree that the following
process shall be used to assure the timely payment of claims for BJC Members
covered by Benefit Plans within the scope of this Exhibit:
(1) Establishment of Claims Payment Account. The parties shall mutually
agree upon the bank and type of account into which GHP shall deposit
BJC Premium and out of
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which GHP shall process claims for Covered Services for BJC Members
(the "Claims Payment Account"). The parties acknowledge that the Claims
Payment Account may contain BJC Premium and BJC Medicare Premium (as
that term is defined in Exhibit A-3) but not BJC Medicaid Premium (as
that term is defined in Exhibit A-2). BJC shall complete such forms as
may be required by the Bank to grant GHP the right to access funds
necessary to pay claims from the Claims Payment Account. BJC and GHP
shall jointly complete any forms necessary to allow BJC and GHP access
to Claims Payment Account information (including without limitation
monthly balance statements). The parties acknowledge that the Claims
Payment Account shall remain the property of BJC and that any interest,
earnings or other income derived or accrued on the investment of such
account funds shall also be the property of BJC; provided, however,
that BJC understands and agrees that under no circumstances may BJC
directly withdraw funds from the Claims Payment Account without the
prior written consent of Plan, which consent shall not be unreasonably
withheld. Plan may withdraw from the Claims Payment Account amounts due
to health care providers for the provision of Covered Services to BJC
Members, including without limitation, amounts due to BJC Providers,
Participating Providers and non-Participating providers under
applicable fee schedules, Customary Charges and other fees-for-services
and applicable capitation payments (such amounts are hereafter
collectively referred to as "Claims") in accordance with the Claims
payment procedures set forth in this Section 3.3. Plan shall not
withdraw or access funds or any moneys from the Claims Payment Account
or the BJC ILOC other than for the purposes described in this Section
3. Plan shall provide BJC reports regarding Claims as required
elsewhere in this Agreement.
(2) Calculation of Claims Payment Account. On the fifteenth (15th) day
of each calendar month or the next business day in the event the
fifteenth (15th) day of the month is a Saturday, Sunday or bank
holiday, GHP shall, after calculating Total Premiums and BJC Premium
for the purpose of determining the deposit amount for each BJC Member
per month, calculate and deposit into the Claims Payment Account an
amount equal to the applicable BJC Premium that Plan collected from or
on behalf of BJC Members.
(3) Letter of Credit. BJC shall at all times maintain an Irrevocable
Letter of Credit (the "BJC ILOC") (the form of which shall be attached
hereto as EXHIBIT L attached to the Claims Payment Account which may be
drawn upon directly by GHP in the event the Claims Payment Account does
not have sufficient funds to pay for claims for Covered Services
rendered to BJC Members. The BJC ILOC shall be continuously maintained
in an amount equal to three months of claims for BJC Members averaged
over the immediately preceding 6 months. BJC shall assure at any time
and at all times during the any term of this Agreement and any
extensions thereof, that (1) GHP at any time and from time to time may
directly access the BJC ILOC, (2) GHP at any time and at all times has
access to information on the BJC ILOC and (3) the BJC ILOC maintains a
continuous minimum available and accessible amount equal to 3 months of
claims for BJC Members averaged over the immediately preceding 6
months.
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(4) Claims Payment Procedures and Access to BJC ILOC.
(i) Non-Capitation Payment Procedures. On a weekly basis, GHP
shall perform a check run and determine the amount necessary
to cover non-capitation Claims adjudicated for BJC Members
during the immediately preceding week. GHP shall determine by
confirming with the bank that the Claims Payment Account
contains sufficient funds to cover the total amount of that
non-capitation Claims check run and, upon receiving such
confirmation, GHP shall release all checks for such Claims
adjudicated for BJC Members during the immediately preceding
week. In the event GHP receives information from the bank that
the Claims Payment Account does not have sufficient funds to
cover such non-capitation Claims check run, GHP shall notify
the BJC Contact Person identified pursuant to Section 3 of
this Agreement of the amount of the shortfall. BJC shall then
have one business day to transfer the necessary amount via ACH
transfer from an alternative BJC account into the Claims
Payment Account. In the event BJC does not complete the ACH
transfer, GHP may without further notice to BJC access the BJC
ILOC in the amount necessary to cover the total amount of that
non-capitation Claims check run and release the checks to
cover the total amount of that check run. Within 2 business
days of GHP's completion of accessing the BJC ILOC, BJC shall
complete any and all steps necessary to maintain the
continuous minimum BJC ILOC amount available to and accessible
by GHP as required by subsection (3) above.
(ii) Capitation Payment Procedures. On a monthly basis, GHP
shall perform a check run and determine the amount necessary
to cover Capitation payments applicable to BJC Members during
the current month. GHP shall determine by confirming with the
bank that the Claims Payment Account contains sufficient funds
to cover the total amount of the Capitation check run and,
upon receiving such confirmation, GHP shall initiate an ACH
transfer of sufficient funds from the Claims Payment Account
into an account to be designated by GHP and, upon receiving
confirmation of the ACH transfer, GHP shall release all checks
for that Capitation check run. In the event GHP receives
information from the bank that the Claims Payment Account does
not have sufficient funds to cover that Capitation check run,
GHP shall notify the BJC Contact Person identified pursuant to
Section 3 of the Agreement of the amount of the shortfall. BJC
shall then have one business day to transfer the necessary
amount via ACH transfer from an alternative BJC account into
the Claims Payment Account. In the event BJC does not complete
the ACH transfer, GHP may without further notice to BJC
directly access the BJC ILOC in the amount necessary to cover
the total amount of that Capitation check run and release the
checks to cover the total amount of that Capitation check run.
Within 2 business days of GHP's completion of accessing the
BJC ILOC, BJC shall complete any and all steps necessary to
maintain the continuous minimum BJC ILOC amount available to
and accessible by GHP as required by subsection (3) above.
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(5) Provider Submission of and Adjustments to Claims for Covered
Services. BJC shall assure that BJC Providers submit claims for BJC
Member Covered Services to Plan in a manner and format prescribed by
Plan. At Plan's request, BJC Provider may be required to submit such
claims electronically in a manner and form agreed to by the parties and
on at least 60 days notice to the BJC Provider. BJC Member Covered
Services claims must be received by Plan no more than 60 days from the
date the Covered Services were rendered. Provider agrees that claims
received from and after 90 days from the date BJC Member Covered
Services were rendered may be rejected for payment, at Plan's
discretion; provided, however, that corrections or additions to such
claims shall be considered by Plan if made within 30 days from BJC
Provider's receipt of the initial claim payment.
Unless otherwise directed by Plan, BJC shall assure that BJC Providers
submit claims using current HCFA 1500 or UB92 forms with current HCPCS
coding, if applicable, current ICD9 coding and current CPT coding. BJC
Providers shall include in a claim the BJC Member number and BJC
Provider's Customary Charge for the Covered Services rendered to a BJC
Member during a single instance of service. If requested by Plan, BJC
Provider shall also submit BJC Provider's Federal Tax I.D. number
and/or other identifiers.
Plan shall have the right to make corrective adjustments to any
previous BJC Provider payment for a claim for Covered Services;
provided, however, that any corrections shall be made either (1) within
6 months from receipt by Plan of such claim; (2) as part of an annual
reconciliation procedure; or (3) at any time as part of a Plan audit of
BJC's or BJC Provider's claims to the extent such claims adjustments
arise out of billing errors, or improper, fraudulent or abusive billing
practices.
(6) Claims Responsibility. The parties understand and agree that under
state and/or federal statutes and regulations governing insurers, HMOs
and claims turnaround times/payment procedures, Plan may be required to
pay any due and outstanding Claims even in the event that amounts then
in the Claims Payment Account are unavailable to Plan and/or
insufficient to pay such Claims, putting Plan at risk for Claims
responsibility contrary to the intent of this Agreement. In the event
Plan is required to make Claims payments under the circumstances
described in this subsection 6, BJC agrees that to the extent the funds
necessary to pay the Claims were not directly and timely available to
GHP under the BJC ILOC, then , BJC shall hold harmless and indemnify
Plan for any and all payments, losses, claims, liabilities, actions,
suits, causes of action, administrative or regulatory proceedings,
costs and expenses arising out of or related to such Claims payments.
In addition, BJC shall assure that BJC Providers do not bill any Member
for Covered Services if BJC Provider fails to submit claims in
accordance with the terms and conditions set forth in this Agreement
(including without limitation this and any other applicable Exhibits,
appendices, addendums or attachments), and BJC shall indemnify and hold
harmless Plan and BJC Member for all payments, losses, liabilities,
claims, suits, actions, causes of action, costs and expenses incurred
by Plan and BJC Member arising out of BJC Providers' failure to comply
with the prohibition on billing contained
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in this Agreement, including without limitation this and any other
Exhibits, appendices or attachments.
3.4 ELIGIBILITY AND BENEFIT VERIFICATION. Plan shall be responsible for the
determination under each Benefit Plan covered under the scope of this Exhibit as
to whether (i) a person receiving services, supplies, products or accommodations
from a BJC Provider is a BJC Member, and (ii) the services, supplies, products
and accommodation provided to a BJC Member are Covered Services. Plan shall
provide BJC with the claims, eligibility and other reports identified in EXHIBIT
E and Plan shall use its reasonable efforts to provide BJC and BJC Providers in
the future with real time access to Plan's eligibility files to verify BJC
Member eligibility and coverage. Plan agrees that eligibility verification
processes shall be reasonable and consistently and uniformly applied to each BJC
Provider. Plan shall make eligibility determinations according to its then
current policies.
3.5 ADJUSTMENTS FOR RETROACTIVE ELIGIBILITY AND BENEFIT DETERMINATIONS: The
parties acknowledge that Plan may from time to time make retroactive adjustments
to eligibility and benefit determinations. Plan agrees to use reasonable efforts
to keep such retroactive determinations to a minimum, and to enforce Benefit
Plan provisions prohibiting such practices by employers to the extent reasonably
possible using sound business judgment considering the particular employer group
and Benefit Plan.
(1) Retroactive Eligibility Cancellations. If a BJC Member's
eligibility has been canceled retroactively, Plan may deduct from
deposits to be made into the Claims Payment Account an amount equal to
the BJC Premium previously deposited into the Claims Payment Account on
account of such BJC Member after the date of the retroactive
cancellation: provided, however, such amount shall not exceed an amount
equal to 6 months of BJC Premium for such BJC Member. BJC shall assure
that Plan may recoup from a BJC Provider any claims payments made to
BJC Providers on behalf of such BJC Member during such time as the BJC
Member was not eligible. BJC and BJC Providers may then bill such BJC
Member for services rendered during such period of ineligibility, which
billing shall not constitute a violation of the member protection and
no balance billing provisions set forth in this Agreement.
(2) Retroactive Eligibility Additions. If a BJC Member's enrollment in
a BJC Provider's practice has been added retroactively, Plan shall make
a deposit into the Claims Payment Account in an amount equal to the BJC
Premium received (and Plan shall deduct from the Claims Payment Account
an amount equal to the claims for Covered Services paid on behalf of
such BJC Member) during the time period such BJC Member was eligible
but not treated as a BJC Member for claims payment purposes. Such
retroactive adjustments shall be made for a period not to exceed 6
months. BJC shall assure that Plan may offset and/or recoup from a BJC
Provider any claims payments made to BJC Providers under another
agreement or another Exhibit to this Agreement during such time as the
BJC Member was eligible but not treated as a BJC Member for claims
payment purposes.
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The financial terms and conditions set forth in this Section 3.5 shall be BJC
Provider's sole and exclusive remedy for failing to notify Plan of a BJC
Member's enrollment in BJC Provider's practice.
SECTION 4: RECONCILIATION PROCEDURES
4.1 ACKNOWLEDGMENT. The parties understand and agree that because the BJC
Premium and resulting amount paid into the Claims Payment Account differs for
each Benefit Plan and BJC Member, and because the payment procedures differ for
BJC Members and for BJC Medicaid Members, the calculations and reconciliations
under this Section 4 shall not be aggregated and shall be made separately for
the Medicaid Benefit Plan, and other Benefit Plans included under Section 2 of
this Exhibit.
4.2 BJC QUARTERLY WITHDRAWALS FROM CLAIMS PAYMENT ACCOUNT. The parties agree
that from and after the fifteenth month of this Agreement, BJC may request
quarterly withdrawals from the Claims Payment Account. GHP shall grant BJC's
request if the Claims Payment Account has sustained a continuous minimum balance
of at least 110% of the average monthly claims payment averaged over the
immediately preceding 12 month period experience.
4.3 ANNUAL PREMIUM RECONCILIATION. Within 180 days after the end of each
calendar year (the "Annual Premium Reconciliation Period") identified in Section
3.1 of this Exhibit, Plan shall calculate the difference between (i) the BJC
Premium Amount for the Annual Premium Reconciliation Period less any BJC
Quarterly Withdrawals actually paid to BJC plus any amounts that were funded
directly by BJC upon request of Plan or drawn upon or accessed via the BJC ILOC
for the same period and (ii) the amount of Total Provider Payments made by Plan
for Covered Services provided to BJC Members during such calendar year plus IBNR
claims less any amounts actually recovered by Plan from an applicable reinsurer
(the "Premium Reconciliation Amount"). In the event that the Premium
Reconciliation Amount is a positive number Plan shall pay that amount to BJC
within 15 days of the completion of the Annual Premium Reconciliation. In the
event the Premium Reconciliation Amount is a negative number BJC shall pay that
amount to Plan within 15 days after receipt from Plan of the results of the
Annual Premium Reconciliation. Any claims for Covered Services provided to BJC
Members which have been presented for payment or which have otherwise been
identified but have not been paid within 150 days after the end of such calendar
year shall be appropriately accrued for and included in the Annual Premium
Reconciliation. Any such claims presented to Plan for payment following
completion of the Annual Premium Reconciliation for a given calendar year shall
be forwarded to BJC and payment of such claims shall be entirely BJC's
responsibility. To the extent that Plan is required to pay any such claims it
may offset such payments against BJC Premium amounts due to BJC in the future.
Any premium payments received by Plan for a given calendar year from which BJC
Premiums are required to be calculated and which are received after the
completion of the Annual Premium Reconciliation for that calendar year shall be
forwarded to BJC.
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4.4 FINAL PREMIUM RECONCILIATION. In the event of termination of this Agreement
Plan shall within 180 days of the effective date of termination calculate for
any periods for which Premium Reconciliation Amounts have not already been
calculated and paid (the "Final Reconciliation Period") the difference between:
(i) the BJC Premium Amount for such Final Reconciliation Period less any BJC
Quarterly Withdrawals actually paid to BJC during the Final Reconciliation
Period, plus any amounts that were actually funded directly by BJC upon request
of Plan or drawn upon or accessed via the BJC ILOC for the same period and (ii)
the amount of Total Provider Payments made by Plan for Covered Services provided
to BJC Members during the Final Reconciliation Period plus claims for such Final
Reconciliation Period less any amounts recovered by Plan from an applicable
reinsurer not already calculated (the "Final Premium Reconciliation Amount")
calculated consistently with Plan's other IBNR claims calculations. Any Final
Premium Reconciliation Amounts owed by either party shall be paid within 90 days
of receipt of notice of the Final Premium Reconciliation Amount. Any Premium
Reconciliation Amounts previously calculated as due from one party to the other,
but not yet paid shall be paid at the same time.
4.5 SUPPORTING INFORMATION; PREMIUM RECONCILIATION AUDIT RIGHTS. Within 180 days
after the end of each calendar year and within 180 days of the effective date of
termination of this Agreement Plan shall provide to BJC information
establishing: (i) the Total Premium in respect of such calendar year; (ii) the
Total Provider Payments in respect of such calendar year; and (iii) Plan's
calculation of the BJC Premium amount and the Premium Reconciliation for such
calendar year. BJC shall be entitled to review and to conduct an audit (either
by BJC or by independent auditors acceptable to Plan) of Plan's books and
records to verify such amounts and calculations as claimed by Plan. Any such
review and/or audit shall be conducted at BJC's expense. If as the result of any
such review or audit it is determined that the Premium Reconciliation as
conducted by Plan was incorrect, Plan shall promptly correct the Premium
Reconciliation. In the event BJC and Plan are unable after good faith efforts
for at least 60 days to resolve a dispute with regard to any such amount or
calculation such dispute shall be settled in accordance with the dispute
resolution provisions of this Agreement.
4.6 ANNUAL CLAIMS AUDIT RIGHTS. From and after October 1, 1997, BJC shall have
the right to conduct quarterly audits of Plan's performance of the claims
processing and claims payment function under this Agreement, but not more
frequently than two times per year. Such an annual audit shall be conducted at
BJC's sole expense, shall be completed within 180 days of the end of each year
for the immediately preceding year, and shall be performed by a nationally
recognized third party reasonably acceptable to Plan in view of Plan's
reasonable competitive concerns. Such third party shall have access to and be
entitled to review Plan's applicable Participating Provider agreement fee
information, if any, and other books and records necessary to verify whether
claims were correctly paid by Plan. Plan shall be given the opportunity to
comment on the auditor's report prior to release, and all such comments shall be
disclosed to BJC. The auditor's report to BJC shall specifically not include any
blanket references to or specific or general disclosures of Plan's fee schedules
or other rate or payment arrangements with non BJC Providers, but shall instead
confirm to BJC whether Plan correctly paid the amount of the claim in accordance
with the bill or the Plan Participation Agreement in effect with such claimant,
as applicable. In the event the auditor's report to BJC states that Plan has not
paid specific claims
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correctly, Plan shall use the same efforts it uses in the ordinary course of
business with respect to non-BJC claims to recover the amount incorrectly paid.
Any amounts recovered by Plan shall be deposited into the Claims Payment
Account.
{Remainder of page intentionally left blank}
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*CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION.
SCHEDULE A-1
INCENTIVE AND MINIMUM PREMIUM ADJUSTMENTS
It is the intent of the parties to incent BJC, BJC Providers and GHP to grow the
size and enrollment of BJC Members in Benefit Plans covered by Exhibit A-1,
while maintaining high patient and member satisfaction and appropriate Benefit
Plan pricing in comparison to GHP's St. Louis market competitors' pricing
practices for substantially similar employer groups and Benefit Plans, adjusted
by age/sex/industry/benefit package.
[_]*
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<PAGE> 36
*CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION.
[__]*
36
<PAGE> 37
*CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION.
[_]*
37
<PAGE> 38
EXHIBIT A-2
PAYMENT FOR BJC MEDICAID MEMBERS
SECTION 1: DEFINITIONS
COPAYMENT: The amount a Member is required to pay, if any, and BJC Provider
shall collect for certain Covered Services in accordance with the Member's
Benefit Plan.
COVERED SERVICES: All health care services and supplies covered by or on behalf
of a BJC Medicaid Member except for transportation services as defined in the
Medicaid Benefit Plan which shall be retained by HealthCare USA of Missouri, LLC
("HCUSA").
CUSTOMARY CHARGE: The reasonable and customary fees charged by a provider,
Participating Provider or BJC Provider ("billed charges") which do not exceed
the then-current Medicaid Fee Schedule.
DEDUCTIBLE: The annual amount of charges for Covered Services, if any is
provided in the Member's Benefit Plan, which the Member is required to pay and
which, to the extent applicable to the Covered Services provided by BJC
Provider, BJC Provider may collect in accordance with the Member's Benefit Plan.
BJC MEMBER: A Member who has selected or has been assigned to a BJC Provider
(including without limitation a BJC Provider located in or associated with a
Medical Center) as his or her PCP.
BJC MEDICAID MEMBER: A BJC Member covered by the Missouri MC Plus program and
enrolled in HCUSA. The parties acknowledge that not all BJC Providers may
participate in the Medicaid program or agree to provide Covered Services for BJC
Medicaid Members under the terms of this Exhibit A-2.
BJC PREMIUM: The amount of compensation to be paid to BJC for the services to be
provided by or through BJC and BJC Providers, including Covered Services
rendered to BJC Medicaid Members. BJC Premium shall be stated in this Exhibit as
a percentage of Total Premium per BJC Medicaid Member per month (see section 3.1
below), which percentage shall be reduced by $.81 per BJC Medicaid Member per
month, to reflect HCUSA's retention of responsibility for transportation
services from Covered Services as defined herein. BJC Providers shall collect
from BJC Medicaid Members and may retain collected Copayments. Deductibles or
charges for services which are not Covered Services (whether by reason of an
exclusion, exhaustion of benefits, benefits maximums, and recoveries from
coordination of benefits, third party claims and subrogation to the extent
permitted by law, and similar bases, but not amounts not paid by reason of a UM
determination) under a BJC Medicaid Member's Benefit Plan. Such collected
amounts shall be in addition to and shall not be deemed part of the BJC Premium.
TOTAL PREMIUM: The amount of premium actually collected by Plan from the State
of Missouri for each BJC Medicaid Member per month and such other payments
actually collected by Plan from the State of Missouri for each BJC Medicaid
Member (i.e., Kick payments) to the extent the parties agree such payments are
permitted by law. The parties acknowledge that due to systems issues, as of the
Effective Day of this Agreement, for purposes of calculating the amount of
monthly deposits into the Claims Payment Account, HCUSA is depositing an amount
determined as the amount of premium received plus retroactive accretions and
minus retroactive deletions Plan for each BJC Medicaid Member per month.
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<PAGE> 39
*CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION.
TOTAL PROVIDER PAYMENTS: The total amount of payments made by Plan to any
providers, including BJC Providers, for the provision of Covered Services to BJC
Medicaid Members incurred during the applicable period (e.g., calendar year).
SECTION 2: SCOPE OF EXHIBIT
The provisions of this Exhibit apply to Covered Services rendered to BJC
Medicaid Members, regardless of whether such BJC Medicaid Members receive
Covered Services from BJC Providers, Participating Providers or
non-Participating Providers within or outside of BJC's Service Sites or within
or outside of Plan's Service Area.
SECTION 3: PAYMENT OBLIGATION
[_]*
3.1 [__]*
3.2 PAYMENT PROCESS FOR BJC MEDICAID MEMBERS. The parties agree that the
following process shall be used to assure the timely payment of claims for BJC
Medicaid Members covered by Benefit Plans within the scope of this Exhibit:
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<PAGE> 40
(1) Establishment of Claims Payment Account. The parties shall mutually
agree upon the bank and type of segregated account into which HCUSA
shall deposit only BJC Premium and out of which HCUSA shall process
claims only for Covered Services for BJC Medicaid Members (the "Claims
Payment Account"). BJC shall complete such forms as may be required by
the Bank to grant HCUSA the right to access funds necessary to pay
claims from the Claims Payment Account. BJC and HCUSA shall jointly
complete any forms necessary to allow BJC and HCUSA access to Claims
Payment Account information (including without limitation monthly
balance statements). The parties acknowledge that the Claims Payment
Account shall remain the property of BJC and that any interest,
earnings or other income derived or accrued on the investment of such
account funds shall also be the property of BJC; provided, however that
BJC understands and agrees that under no circumstances may BJC directly
withdraw funds from the Claims Payment Account without the prior
written consent of HCUSA, which consent shall not be unreasonably
withheld. HCUSA may withdraw from the Claims Payment Account amounts
due to health care providers for the provision of Covered Services to
BJC Medicaid Members, including without limitation, amounts due to BJC
Providers, Participating Providers and non-Participating providers
under applicable fee schedules, Customary Charges and other
fees-for-services and PCP capitation payments (such amounts are
hereafter collectively referred to as "Claims") in accordance with the
Claims payment procedures set forth in this Section 3.2. HCUSA shall
not withdraw or access funds or any moneys from the Claims Payment
Account or access the BJC Irrevocable Letter of Credit other than for
the purposes described in this Section 3. HCUSA shall provide BJC
reports regarding Claims as required elsewhere in this Agreement. At no
time shall funds in the Claims Payment Account established pursuant to
this Exhibit A-2 be commingled with funds from any other account or
Benefit Plans covered under this Agreement or any other Exhibit to this
Agreement.
(2) Calculation of Claims Payment Account. On the twentieth (20th) day
of each calendar month or the next business day in the event the 20th
day of the month is a Saturday, Sunday or bank holiday, HCUSA shall,
after collecting and reconciling the premium payment from the State of
Missouri, calculate and deposit into the Claims Payment Account an
amount equal to the applicable BJC Premium for all BJC Medicaid Members
for the immediately preceding calendar month.
(3) Letter of Credit. BJC shall at all times maintain an Irrevocable
Letter of Credit (the "BJC ILOC") (the form of which shall be attached
hereto as EXHIBIT L-2) attached to the Claims Payment Account
specifically established for BJC Medicaid Member claims pursuant to
this Exhibit A-2, which may be drawn upon directly by HCUSA in the
event the Claims Payment Account does not have sufficient funds to pay
for claims for Covered Services rendered to BJC Medicaid Members. The
BJC ILOC shall be continuously maintained in an amount equal to three
months of claims for BJC Medicaid Members averaged over the immediately
preceding 6 months. BJC shall assure at any time and at all times
during the any term of this Agreement and any extensions thereof, that
(1) HCUSA at any time and from time to time may directly access the BJC
ILOC, (2) HCUSA at any time and at all times has access to information
on the BJC ILOC and (3)
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<PAGE> 41
the BJC ILOC maintains a continuous minimum available and accessible
amount equal to 3 months of claims for BJC Medicaid Members averaged
over the immediately preceding 6 months.
(4) Claims Payment Procedures and Access to BJC ILOC. On a weekly
basis, HCUSA shall perform a check run and determine the amount
necessary to cover the claims adjudicated for BJC Medicaid Members
during the immediately preceding week. HCUSA shall determine by
confirming with the bank that the Claims Payment Account contains
sufficient funds to cover the total amount of that check run and, upon
receiving such confirmation, HCUSA shall release all checks for claims
received for BJC Medicaid Members during the immediately preceding
week. In the event HCUSA receives information from the bank that the
Claims Payment Account does not have sufficient funds to cover the
claims, HCUSA shall notify the BJC Contact Person identified pursuant
to Section 3 of this Agreement of the amount of the shortfall. BJC
shall then have one business day to transfer the necessary amount via
ACH transfer from an alternative BJC account into the Claims Payment
Account. In the event BJC does not complete the ACH transfer, HCUSA may
without further notice to BJC access the BJC ILOC in the amount
necessary to cover the total amount of that check run and release the
checks to cover the total amount of that check run. Within 2 business
days of HCUSA's completion of accessing the BJC ILOC, BJC shall
complete any and all steps necessary to maintain the continuous minimum
BJC ILOC amount available to and accessible by HCUSA as required by
subsection (3) above.
(5) Provider Submission of and Adjustments to Claims for Covered
Services. BJC shall assure that BJC Providers submit claims for BJC
Medicaid Member Covered Services to Plan in a manner and format
prescribed by Plan. At Plan's request, BJC Provider may be required to
submit such claims electronically in a manner and form agreed to by the
parties and on at least 60 days notice to the BJC Provider. BJC
Medicaid Member Covered Services claims must be received by Plan no
more than 60 days from the date the Covered Services were rendered. BJC
and BJC Provider agrees that claims received from and after 90 days
from the date BJC Medicaid Member Covered Services were rendered may be
rejected for payment, at Plan's discretion; provided, however, that
corrections or additions to such claims shall be considered by Plan if
made within 30 days from BJC Provider's receipt of the initial claim
payment.
Unless otherwise directed by Plan, BJC shall assure that BJC Providers
submit claims using current HCFA 1500 or UB92 forms with current HCPCS
coding, if applicable, current ICD9 coding and current CPT coding. BJC
Providers shall include in a claim the BJC Medicaid DCN Member number
and BJC Provider's Customary Charge for the Covered Services rendered
to a BJC Medicaid Member during a single instance of service. BJC
Provider also shall submit BJC Provider's Federal Tax I.D. number
and/or other identifiers.
Plan shall have the right to make corrective adjustments to any
previous BJC Provider payment for a claim for Covered Services;
provided, however, that any corrections shall
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<PAGE> 42
be made either (1) within 6 months from receipt by Plan of such claim;
(2) as part of an annual reconciliation procedure; or (3) at any time
as part of a Plan audit of BJC's or BJC Provider's claims to the extent
such claims adjustments arise out of billing errors, or improper,
fraudulent or abusive billing practice.
(6) Claims Responsibility. The parties understand and agree that under
state and/or federal statutes and regulations governing insurers, HMOs
and claims turnaround times/payment procedures, Plan may be required to
pay any due and outstanding Claims even in the event that amounts then
in the Claims Payment Account are unavailable to Plan and/or
insufficient to pay such Claims, putting Plan at risk for Claims
responsibility contrary to the intent of this Agreement. In the event
Plan is required to make Claims payments under the circumstances
described in this subsection 6, BJC agrees that to the extent the funds
necessary to pay the Claims were not directly and timely available to
HCUSA under the BJC ILOC, then , BJC shall hold harmless and indemnify
Plan for any and all payments, losses, claims, liabilities, actions,
suits, causes of action, administrative or regulatory proceedings,
costs and expenses arising out of or related to such Claims payments.
In addition, BJC shall assure that BJC Providers do not bill any BJC
Medicaid Member for Covered Services if BJC Provider fails to submit
claims in accordance with the terms and conditions set forth in this
Agreement (including without limitation this and any other applicable
Exhibits, appendices, addendums or attachments), and BJC shall
indemnify and hold harmless Plan and BJC Medicaid Member and the
Missouri Department of Medical Services for all payments, losses,
liabilities, claims, suits, actions, causes of action, costs and
expenses incurred by Plan and BJC Medicaid Member arising out of BJC
Providers' failure to comply with the prohibition on billing contained
in this Agreement, including without limitation this and any other
Exhibits, appendices or attachments.
3.3 ELIGIBILITY AND BENEFIT VERIFICATION. Plan shall be responsible for the
determination whether (i) a person receiving services, supplies, products or
accommodations from a BJC Provider is a BJC Medicaid Member, and (ii) the
services, supplies, products and accommodation provided to a BJC Medicaid Member
are Covered Services. Plan shall provide BJC with the claims and eligibility
reports attached hereto as EXHIBIT E and Plan shall use its reasonable efforts
to provide BJC and BJC Providers in the future with real time access to Plan's
eligibility files to verify BJC Medicaid Member eligibility and coverage. Plan
agrees that its eligibility verification processes shall be reasonable and
consistently and uniformly applied to each BJC Provider. Plan shall make
eligibility determinations according to its then current policies.
3.4 ADJUSTMENTS FOR RETROACTIVE ELIGIBILITY AND BENEFIT DETERMINATIONS: The
parties acknowledge that Plan may from time to time make retroactive adjustments
to eligibility and benefit determinations. Plan agrees to use reasonable efforts
to keep such retroactive determinations to a minimum; eligibility, however, is
controlled by the State of Missouri.
(1) Retroactive Eligibility Cancellations. If a BJC Medicaid Member's
eligibility has been canceled retroactively, Plan may deduct from
deposits to be made into the Claims
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<PAGE> 43
Payment Account an amount equal to the BJC Premium previously deposited
into the Claims Payment Account on account of the retroactive
cancellation. BJC shall assure that Plan may recoup from a BJC Provider
any claims payments made to BJC Providers on behalf of such BJC
Medicaid Member during such time as the BJC Medicaid Member was not
eligible. BJC and BJC Providers may then bill State of Missouri if the
BJC Medicaid Member has become eligible under the Medicaid
Fee-For-Service program. In the event the BJC Medicaid Member is not
eligible under the Medicaid Fee-For-Service program, BJC Provider may
bill the BJC Medicaid Member for services rendered during such period
of ineligibility using customary billing procedures, which billing
shall not constitute a violation of the member protection and no
balance billing provisions set forth in this Agreement.
(2) Retroactive Eligibility Additions. If a BJC Medicaid Member's
enrollment in a BJC Provider's practice has been added retroactively,
Plan shall make a deposit into the Claims Payment Account in an amount
equal to the BJC Premium received (and Plan shall deduct from the
Claims Payment Account an amount equal to the claims for Covered
Services paid on behalf of such BJC Medicaid Member) during the time
period such BJC Medicaid Member was eligible but not treated as a BJC
Medicaid Member for claims payment purposes. BJC shall assure that Plan
may offset and/or recoup from a BJC Provider any claims payments made
to BJC Providers under another agreement or another Exhibit to this
Agreement during such time as the BJC Medicaid Member was eligible but
not treated as a BJC Medicaid Member for claims payment purposes.
The financial terms and conditions set forth in this Section 3.4 shall be BJC
Provider's sole and exclusive remedy for failing to notify Plan of a BJC
Medicare Member's enrollment in BJC Provider's practice.
SECTION 4: RECONCILIATION PROCEDURES
4.1 ACKNOWLEDGMENT. The parties understand and agree that because the BJC
Premium and resulting amount paid into the Claims Payment Account differs for
each Benefit Plan covered by this Agreement, and because the payment procedures
differ for BJC Medicare Members, for BJC Members, and for BJC Medicaid Members,
the calculations and reconciliations under this Section 4 shall not be
aggregated and shall be made separately for the Medicaid Benefit Plan, and other
Benefit Plans, if any, included under Section 2 of this Exhibit.
4.2 BJC QUARTERLY WITHDRAWALS FROM CLAIMS PAYMENT ACCOUNT. The parties agree
that from and after the fifteenth month of this Agreement, BJC may request
quarterly withdrawals from the Claims Payment Account. HCUSA shall grant BJC's
request if the Claims Payment Account has sustained a continuous minimum balance
of at least 110% of the average monthly claims payment averaged over the
immediately preceding 12 month period experience.
4.3 ANNUAL PREMIUM RECONCILIATION. Within 180 days after the end of each
calendar year identified in Section 3.1 of this Exhibit, Plan shall calculate
the difference between (i) the BJC Premium Amount for such calendar year less
any BJC Quarterly Withdrawals actually paid to
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BJC plus any amounts that were actually funded by BJC upon request or drawn upon
or accessed by the BJC ILOC and (ii) the amount of Total Provider Payments made
by Plan for Covered Services provided to BJC Medicaid Members during such
calendar year plus IBNR claims less any amounts actually recovered by Plan from
an applicable reinsurer (the "Premium Reconciliation Amount"). In the event that
the Premium Reconciliation Amount is a positive number Plan shall pay that
amount to BJC within 15 days of the completion of the Annual Premium
Reconciliation. In the event the Premium Reconciliation Amount is a negative
number BJC shall pay that amount to Plan within 15 days after receipt from Plan
of the results of the Annual Premium Reconciliation. Any claims for Covered
Services provided to BJC Medicaid Members which have been presented for payment
or which have otherwise been identified but have not been paid within 150 days
after the end of such calendar year shall be appropriately accrued for and
included in the Annual Premium Reconciliation. Any such claims presented to Plan
for payment following completion of the Annual Premium Reconciliation for a
given calendar year shall be forwarded to BJC and payment of such claims shall
be entirely BJC's responsibility. To the extent that Plan is required to pay any
such claims it may offset such payments against BJC Premium amounts due to BJC
in the future. In the event Plan receives any premium payments for a given
calendar year from which BJC Premiums are required to be calculated after the
completion of the Annual Premium Reconciliation for that calendar year, Plan
shall forward BJC Premiums to BJC.
4.4 FINAL PREMIUM RECONCILIATION. In the event of termination of this Agreement
Plan shall within 180 days of the effective date of termination calculate for
any periods for which Premium Reconciliation Amounts have not already been
calculated and paid (the "Final Reconciliation Period") the difference between:
(i) the BJC Premium Amount for such Final Reconciliation Period less any BJC
Quarterly Withdrawals actually paid to BJC during the Final Reconciliation
Period plus any amounts that were actually funded by BJC upon request or drawn
upon or accessed by the BJC ILOC and (ii) the amount of Total Provider Payments
made by Plan for Covered Services provided to BJC Medicaid Members during the
Final Reconciliation Period plus claims for such Final Reconciliation Period
less any amounts recovered by Plan from an applicable reinsurer not already
calculated (the "Final Premium Reconciliation Amount") calculated consistently
with Plan's other IBNR claims calculations. Any Final Premium Reconciliation
Amounts owed by either party shall be paid within 90 days of receipt of notice
of the Final Premium Reconciliation Amount. Any Premium Reconciliation Amounts
previously calculated as due from one party to the other, but not yet paid shall
be paid at the same time.
4.5 SUPPORTING INFORMATION; PREMIUM RECONCILIATION AUDIT RIGHTS. Within 180 days
after the end of each calendar year and within 180 days of the effective date of
termination of this Agreement Plan shall provide to BJC information
establishing: (i) the Total Premium in respect of such calendar year; (ii) the
Total Provider Payments in respect of such calendar year; and (iii) Plan's
calculation of the BJC Premium amount and the Premium Reconciliation for such
calendar year. BJC shall be entitled to review and to conduct an audit (either
by BJC or by independent auditors acceptable to Plan) of Plan's books and
records to verify such amounts and calculations as claimed by Plan. Any such
review and/or audit shall be conducted at BJC's expense. If as the result of any
such review or audit it is determined that the Premium Reconciliation as
conducted by Plan was incorrect BJC and Plan shall promptly correct the
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Premium Reconciliation. In the event BJC and Plan are unable after good faith
efforts for at least 60 days to resolve a dispute with regard to any such amount
or calculation such dispute shall be settled in accordance with the dispute
resolution provisions of this Agreement.
4.6 ANNUAL CLAIMS AUDIT RIGHTS. From and after October 1, 1997, BJC shall have
the right to conduct quarterly audits of Plan's performance of the claims
processing and claims payment function under this Agreement, but not more
frequently than two times per year. Such an annual audit shall be conducted at
BJC's sole expense, shall be completed within 180 days of the end of each year
for the immediately preceding year, and shall be performed by a nationally
recognized third party reasonably acceptable to Plan in view of Plan's
reasonable competitive concerns. Such third party shall have access to and be
entitled to review Plan's applicable Participating Provider agreement fee
information, if any, and other books and records necessary to verify whether
claims were correctly paid by Plan. Plan shall be given the opportunity to
comment on the auditor's report prior to release, and all such comments shall be
disclosed to BJC. The auditor's report to BJC shall specifically not include any
blanket references to or specific or general disclosures of Plan's fee schedules
or other rate or payment arrangements with non BJC Providers, but shall instead
confirm to BJC whether Plan correctly paid the amount of the claim in accordance
with the bill or the Plan Participation Agreement in effect with such claimant,
as applicable. In the event the auditor's report to BJC states that Plan has not
paid specific claims correctly, Plan shall use the same efforts it uses in the
ordinary course of business with respect to non-BJC claims to recover the amount
incorrectly paid. Any amounts recovered by Plan shall be deposited into the
Claims Payment Account.
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EXHIBIT A-3
PAYMENT FOR BJC MEDICARE MEMBERS
SECTION 1: DEFINITIONS
COPAYMENT: The amount a Member is required to pay and BJC Provider shall collect
for certain Covered Services in accordance with the Member's Benefit Plan.
CUSTOMARY CHARGE: The reasonable and customary fees charged by a provider,
Participating Provider or BJC Provider ("billed charges") which do not exceed
the billed charges such provider would charge any other person regardless of
whether the person is a Member.
DEDUCTIBLE: The annual amount of charges for Covered Services, as provided in
the Member's Benefit Plan, which the Member is required to pay and which, to the
extent applicable to Covered Services provided by BJC Provider, BJC Provider may
collect in accordance with the Member's Benefit Plan.
BJC MEMBER: A Member who has selected or has been assigned to a BJC Provider
(including without limitation a BJC Provider located in or associated with a
Medical Center) as his or her PCP.
BJC MEDICARE MEMBER: A BJC Member who is covered by a Medicare Cost or a
Medicare Risk product offered by or through Plan.
BJC PREMIUM: The amount of compensation to be paid to BJC for the services to be
provided by or through BJC and BJC Providers, including Covered Services
rendered to BJC Medicare Members. BJC Premium shall be stated in this Exhibit as
a percentage of Total Premium per BJC Medicare Member per month (see section 3.1
below). BJC Providers shall collect from BJC Medicare Members and may retain
collected Copayments, Deductibles or charges for services which are not Covered
Services (whether by reason of an exclusion, exhaustion of benefits, benefit
maximums, and recoveries from coordination of benefits, third party claims and
subrogation to the extent permitted by law, and similar bases, but not amounts
not paid by reason of a UM determination) under a Member's Benefit Plan. Such
collected amounts, if any, shall be in addition to and shall not be deemed part
of the BJC Premium.
TOTAL PREMIUM: The amount of gross premium actually collected and other payments
actually received by Plan to the extent permitted by law for each BJC Medicare
Member per month. The parties acknowledge that due to systems issues, as of the
Effective Date of this Exhibit A-3, for purposes of calculating the amount of
monthly deposits into the Claims Payment Account, (1) for the first month under
this Exhibit A-3 GHP is depositing an amount determined as the average gross
premiums per Member per month for Medicare Risk and for Medicare Cost Members
multiplied by the number of Medicare Risk and Medicare Cost Members who selected
a PCP whose practice was located in the Medical Centers for the immediately
preceding month; (2) for the second and subsequent months of this Exhibit A-3,
GHP is depositing an amount for each Medicare Risk and Medicare Cost Member an
amount determined as the average gross premium
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*CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION.
per Member per month multiplied by the total number of BJC Medicare Members for
the immediately preceding month plus or minus the adjustment for the amount
determined as the amount of premium billed plus retroactive accretions and minus
retroactive deletions, if any, (but only to the extent permitted in accordance
with Section 3.6 of this Exhibit A-3) billed by Plan for each BJC Medicare
Member per month who has enriched benefits, plus or minus the adjustment for the
reconciliation for the amount of premium actually collected from the Health Care
Financing Administration ("HCFA") by Plan for each BJC Medicare Member per month
for the immediately preceding month.
TOTAL PROVIDER PAYMENTS: The total amount of payments made by Plan to any
providers, including BJC Providers, for the provision of Covered Services to BJC
Medicare Members incurred during the applicable period (e.g., calendar year).
SECTION 2: SCOPE OF EXHIBIT
The provisions of this Exhibit apply to Covered Services rendered to BJC
Medicare Members, regardless of whether such BJC Medicare Members receive
Covered Services from BJC Providers, Participating Providers or
non-Participating Providers within or outside of BJC's Service Sites or within
or outside of Plan's Service Area.
SECTION 3: PAYMENT OBLIGATION
[___]*
3.1 [___]*
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3.2 PAYMENT PROCESS FOR BJC MEDICARE MEMBERS. The parties agree that the
following process shall be used to assure the timely payment of claims for BJC
Medicare Members covered by Benefit Plans within the scope of this Exhibit:
(1) Establishment of Claims Payment Account. The parties shall mutually
agree upon the bank and type of account into which GHP shall deposit
BJC Premium and out of which GHP shall process claims for Covered
Services for BJC Medicare Members (the "Claims Payment Account"). The
parties acknowledge that the Claims Payment Account may contain BJC
Premium and BJC Medicare Premium (as that term is defined in Exhibit
A-3) but not BJC Medicaid Premium (as that term is defined Exhibit
A-2). BJC shall complete such forms as may be required by the Bank to
grant GHP the right to access funds necessary to pay claims from the
Claims Payment Account. BJC and GHP shall jointly complete any forms
necessary to allow BJC and GHP access to Claims Payment Account
information (including without limitation monthly balance statements).
The parties agree that the Claims Payment Account shall remain the
property of BJC and that any interest, earnings or other income derived
or accrued on the investment of such account funds shall also be the
property of BJC; provided, however, that BJC understands and agrees
that under no circumstances may BJC directly withdraw funds from the
Claims Payment Account without the prior written consent of Plan, which
consent shall not be unreasonably withheld. Plan may withdraw from the
Claims Payment Account amounts due to health care providers for the
provision of Covered Services to BJC Medicare Members, including
without limitation, amounts due to BJC Providers, Participating
Providers and non-Participating providers under applicable fee
schedules, Customary Charges and other fees-for-services and applicable
capitation payments (such amounts are hereafter collectively referred
to as "Claims") in accordance with the Claims payment procedures set
forth in this Section 3.2. Plan shall not withdraw or access funds or
any moneys from the Claims Payment Account or the Claims Assurance
Account other than for the purposes described in this Section 3. Plan
shall provide BJC reports regarding Claims as required elsewhere in
this Agreement.
(2) Calculation of Claims Payment Account. On the fifteenth (15th) day
of each calendar month or the next business day in the event the
fifteenth (15th) day of the month is a Saturday, Sunday or bank
holiday, GHP shall, after calculating Total Premiums and BJC Premium
for the purpose of determining the deposit amount for each BJC Medicare
Member per month, calculate and deposit into the Claims Payment Account
an amount equal to the applicable BJC Premium that Plan collected from
or on behalf of BJC Medicare Members.
(3) Letter of Credit. BJC shall at all times maintain an Irrevocable
Letter of Credit (the "BJC ILOC") (the form of which shall be attached
hereto as EXHIBIT L) attached to the Claims Payment Account which may
be drawn upon directly by GHP in the event the Claims Payment Account
does not have sufficient funds to pay for claims for Covered Services
rendered to BJC Medicare Members. The BJC ILOC shall be continuously
maintained in an amount equal to three months of claims for BJC
Medicare Members averaged over the immediately preceding 6 months. BJC
shall assure at any time and at
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<PAGE> 49
all times during the any term of this Agreement and any extensions
thereof, that (1) GHP at any time and from time to time may directly
access the BJC ILOC, (2) GHP at any time and at all times has access to
information on the BJC ILOC and (3) the BJC ILOC maintains a continuous
minimum available and accessible amount equal to 3 months of claims for
BJC Medicare Members averaged over the immediately preceding 6 months.
(4) Claims Payment Procedures and Access to BJC ILOC.
(i) Non-Capitation Payment Procedures. On a weekly basis, GHP
shall perform a check run and determine the amount necessary
to cover non-capitation Claims only adjudicated for BJC
Medicare Members during the immediately preceding week. GHP
shall determine by confirming with the bank that the Claims
Payment Account contains sufficient funds to cover the total
amount of that non-capitation Claims check run and, upon
receiving such confirmation, GHP shall release all checks for
such Claims received for BJC Medicare Members during the
immediately preceding week. In the event GHP receives
information from the bank that the Claims Payment Account does
not have sufficient funds to cover such non-capitation Claims
check run, GHP shall notify the BJC Contact Person identified
pursuant to Section 3 of this Agreement of the amount of the
shortfall. BJC shall then have one business day to transfer
the necessary amount via ACH transfer from an alternative BJC
account into the Claims Payment Account. In the event BJC does
not complete the ACH transfer, GHP may without further notice
to BJC access the BJC ILOC in the amount necessary to cover
the total amount of that non-capitation Claims check run and
release the checks to cover the total amount of that check
run. Within 2 business days of GHP's completion of accessing
the BJC ILOC, BJC shall complete any and all steps necessary
to maintain the continuous minimum BJC ILOC amount available
to and accessible by GHP as required by subsection (3) above.
(ii) Capitation Payment Procedures. On a monthly basis, GHP
shall perform a check run and determine the amount necessary
to cover Capitation Claims applicable to BJC Medicare Members
during the current month. GHP shall determine by confirming
with the bank that the Claims Payment Account contains
sufficient funds to cover the total amount of the Capitation
check run and, upon receiving such confirmation, GHP shall
initiate an ACH transfer of sufficient funds from the Claims
Payment Account into an account to be designated by GHP and,
upon receiving confirmation of the ACH transfer, GHP shall
release all checks for that Capitation check run. In the event
GHP receives information from the bank that the Claims Payment
Account does not have sufficient funds to cover that
Capitation check run, GHP shall notify the BJC Contact Person
identified pursuant to Section 3 of the Agreement of the
amount of the shortfall. BJC shall then have one business day
to transfer the necessary amount via ACH transfer from an
alternative BJC account into the Claims Payment Account. In
the event BJC does not complete the ACH transfer, GHP may
without further notice to BJC directly access the BJC ILOC in
the amount necessary to cover the total amount
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<PAGE> 50
of that Capitation check run and release the checks to cover
the total amount of that Capitation check run. Within 2
business days of GHP's completion of accessing the BJC ILOC,
BJC shall complete any and all steps necessary to maintain the
continuous minimum BJC ILOC amount available to and accessible
by GHP as required by subsection (3) above.
(5) Provider Submission of and Adjustments to Claims for Covered
Services. BJC shall assure that BJC Providers submit claims for BJC
Medicare Member Covered Services to Plan in a manner and format
prescribed by Plan. At Plan's request, BJC Provider may be required to
submit such claims electronically in a manner and form agreed to by the
parties and on at least 60 days notice to the BJC Provider. BJC
Medicare Member Covered Services claims must be received by Plan no
more than 60 days from the date the Covered Services were rendered. BJC
and BJC Provider agrees that claims received from and after 90 days
from the date BJC Medicare Member Covered Services were rendered may be
rejected for payment, at Plan's discretion; provided, however, that
corrections or additions to such claims shall be considered by Plan if
made within 30 days from BJC Provider's receipt of the initial claim
payment.
Unless otherwise directed by Plan, BJC shall assure that BJC Providers
submit claims using current HCFA 1500 or UB92 forms with current HCPCS
coding, if applicable, current ICD9 coding and current CPT coding. BJC
Providers shall include in a claim the BJC Medicare Member number and
BJC Provider's Customary Charge for the Covered Services rendered to a
BJC Medicare Member during a single instance of service. If requested
by Plan, BJC Provider shall also submit BJC Provider's Federal Tax I.D.
number and/or other identifiers.
Plan shall have the right to make corrective adjustments to any
previous BJC Provider payment for a claim for Covered Services;
provided, however, that any corrections shall be made either (1) within
6 months from receipt by Plan of such claim; (2) as part of an annual
reconciliation procedure; or (3) at any time as part of a Plan audit of
BJC's or BJC Provider's claims to the extent such claims adjustments
arise out of billing errors, or improper, fraudulent or abusive billing
practices.
(6) Claims Responsibility. The parties understand and agree that under
state and/or federal statutes and regulations governing insurers, HMOs
and claims turnaround times/payment procedures, Plan may be required to
pay any due and outstanding Claims even in the event that amounts then
in the Claims Payment Account are unavailable to Plan and/or
insufficient to pay such Claims, putting Plan at risk for Claims
responsibility contrary to the intent of this Agreement. In the event
Plan is required to make Claims payments under the circumstances
described in this subsection 6, BJC agrees that to the extent the funds
necessary to pay the Claims were not directly and timely available to
GHP under the BJC ILOC, then, BJC shall hold harmless and indemnify
Plan for any and all payments, losses, claims, liabilities, actions,
suits, causes of action, administrative or regulatory proceedings,
costs and expenses arising out of or related to such Claims payments.
In addition, BJC shall assure that BJC Providers do not bill any BJC
Medicare
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<PAGE> 51
Member for Covered Services if BJC Provider fails to submit claims in
accordance with the terms and conditions set forth in this Agreement
(including without limitation this and any other applicable Exhibits,
appendices, addendums or attachments), and BJC shall indemnify and hold
harmless Plan and BJC Medicare Member for all payments, losses,
liabilities, claims, suits, actions, causes of action, costs and
expenses incurred by Plan and BJC Medicare Member arising out of BJC
Providers' failure to comply with the prohibition on billing contained
in this Agreement, including without limitation this and any other
Exhibits, appendices or attachments.
3.3 ELIGIBILITY AND BENEFIT VERIFICATION. Plan shall be responsible for the
determination under each Benefit Plan covered under the scope of this Exhibit as
to whether (i) a person receiving services, supplies, products or accommodations
from a BJC Provider is a BJC Medicare Member, and (ii) the services, supplies,
products and accommodation provided to a BJC Medicare Member are Covered
Services. Plan shall provide BJC the claims and eligibility reports set forth in
EXHIBIT E and shall use its reasonable efforts to provide BJC and BJC Providers
in the future with real time access to Plan's eligibility files to verify BJC
Medicare Member eligibility and coverage. Plan agrees that its eligibility
verification processes shall be reasonable and consistently and uniformly
applied to each BJC Provider. Plan shall make eligibility determinations
according to its then current policies.
3.4 ADJUSTMENTS FOR RETROACTIVE ELIGIBILITY AND BENEFIT DETERMINATIONS: The
parties acknowledge that Plan may from time to time make retroactive adjustments
to eligibility and benefit determinations. Plan agrees to use reasonable efforts
to keep such retroactive determinations to a minimum, to the extent reasonably
possible using sound business judgment considering the particular Benefit Plan.
(1) Retroactive Eligibility Cancellations. If a BJC Medicare Member's
eligibility has been canceled retroactively, Plan may deduct from
deposits to be made into the Claims Payment Account an amount equal to
the BJC Premium previously deposited into the Claims Payment Account on
account of such BJC Medicare Member after the date of the retroactive
cancellation: provided, however, such amount shall not exceed an amount
equal to 6 months of BJC Premium for such BJC Medicare Member. BJC
shall assure that Plan may recoup from a BJC Provider any claims
payments made to BJC Providers on behalf of such BJC Medicare Member
during such time as the BJC Medicare Member was not eligible. BJC and
BJC Providers may then bill such BJC Medicare Member for services
rendered during such period of ineligibility using customary billing
procedures, which billing shall not constitute a violation of the
member protection and no balance billing provisions set forth in this
Agreement.
(2) Retroactive Eligibility Additions. If a BJC Medicare Member's
enrollment in a BJC Provider's practice has been added retroactively,
Plan shall make a deposit into the Claims Payment Account in an amount
equal to the BJC Premium received (and Plan shall deduct from the
Claims Payment Account an amount equal to the claims for Covered
Services paid on behalf of such BJC Medicare Member) during the time
period such BJC Medicare Member was eligible but not treated as a BJC
Medicare Member for
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<PAGE> 52
claims payment purposes. Such retroactive adjustments shall be made for
a period not to exceed 6 months. BJC shall assure that Plan may offset
and/or recoup from a BJC Provider any claims payments made to BJC
Providers under another agreement or another Exhibit to this Agreement
during such time as the BJC Medicare Member was eligible but not
treated as a BJC Medicare Member for claims payment purposes.
The financial terms and conditions set forth in this Section 3.4 shall be BJC
Provider's sole and exclusive remedy for failing to notify Plan of a BJC
Medicare Member's enrollment in BJC Provider's practice.
3.5 HCFA REQUIRED BENEFIT EXPANSIONS. The parties agree that in the event as the
result of a review by HCFA of Plan's annual filing of the specific Benefit Plan
and range of Covered Services for BJC Medicare Members, HCFA requires Plan to
increase specific Covered Services provided under Plan's Benefit Plan for BJC
Medicare Members, the parties will meet to discuss in good faith a reasonable
resolution to the issue of allocation of financial responsibility for such
specific increased Covered Services.
SECTION 4: RECONCILIATION PROCEDURES
4.1 ACKNOWLEDGMENT. The parties understand and agree that because the BJC
Premium and resulting amount paid into the Claims Payment Account differs for
each Benefit Plan and BJC Medicare Member, and because the payment procedures
differ for BJC Medicare Members, for BJC Members, and for BJC Medicaid Members,
the calculations and reconciliations under this Section 4 shall not be
aggregated and shall be made separately for the Medicare Benefit Plan, and other
Benefit Plans included under Section 2 of this Exhibit.
4.2 BJC QUARTERLY WITHDRAWALS FROM CLAIMS PAYMENT ACCOUNT. The parties agree
that from and after the fifteenth month of this Agreement, BJC may request
quarterly withdrawals from the Claims Payment Account. GHP shall grant BJC's
request if the Claims Payment Account has sustained a continuous minimum balance
of at least 110% of the average monthly claims payment averaged over the
immediately preceding 12 month period experience.
4.3 ANNUAL PREMIUM RECONCILIATION. Within 180 days after the end of each
calendar year identified in Section 3.1 of this Exhibit (the "Annual Premium
Reconciliation Period"), Plan shall calculate the difference between (i) the BJC
Premium Amount for such calendar year less the amount of any BJC Quarterly
Withdrawals actually paid to BJC during the Annual Premium Reconciliation
Period, plus the amounts that were actually funded upon request by Plan or drawn
upon or accessed by Plan through the BJC ILOC, and (ii) the amount of Total
Provider Payments made by Plan for Covered Services provided to BJC Medicare
Members during such calendar year plus IBNR claims less any amounts actually
recovered by Plan from an applicable reinsurer (the "Premium Reconciliation
Amount"). In the event that the Premium Reconciliation Amount is a positive
number Plan shall pay that amount to BJC within 15 days of the completion of the
Annual Premium Reconciliation. In the event the Premium Reconciliation Amount is
a negative number BJC shall pay that amount to Plan within 15 days after receipt
from Plan of the results of the Annual Premium Reconciliation. Any claims for
Covered Services provided to BJC
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<PAGE> 53
Medicare Members which have been presented for payment or which have otherwise
been identified but have not been paid within 150 days after the end of such
calendar year shall be appropriately accrued for and included in the Annual
Premium Reconciliation. Any such claims presented to Plan for payment following
completion of the Annual Premium Reconciliation for a given calendar year shall
be forwarded to BJC and payment of such claims shall be entirely BJC's
responsibility. To the extent that Plan is required to pay any such claims it
may offset such payments against BJC Premium amounts due to BJC in the future.
Any premium payments received by Plan for a given calendar year from which BJC
Premiums are required to be calculated and which are received after the
completion of the Annual Premium Reconciliation for that calendar year shall be
forwarded to BJC.
4.4 FINAL PREMIUM RECONCILIATION. In the event of termination of this Agreement
Plan shall within 180 days of the effective date of termination calculate for
any periods for which Premium Reconciliation Amounts have not already been
calculated and paid (the "Final Reconciliation Period") the difference between:
(i) the BJC Premium Amount for such Final Reconciliation Period less any BJC
Quarterly Withdrawals actually paid to BJC during the Final Reconciliation
Period, plus any amounts actually funded upon request by Plan or amounts
actually drawn upon or accessed by Plan through the BJC ILOC, and (ii) the
amount of Total Provider Payments made by Plan for Covered Services provided to
BJC Medicare Members during the Final Reconciliation Period plus claims for such
Final Reconciliation Period less any amounts recovered by Plan from an
applicable reinsurer not already calculated (the "Final Premium Reconciliation
Amount") calculated consistently with Plan's other IBNR claims calculations. Any
Final Premium Reconciliation Amounts owed by either party shall be paid within
90 days of receipt of notice of the Final Premium Reconciliation Amount. Any
Premium Reconciliation Amounts previously calculated as due from one party to
the other, but not yet paid shall be paid at the same time.
4.5 SUPPORTING INFORMATION; PREMIUM RECONCILIATION AUDIT RIGHTS. Within 180 days
after the end of each calendar year and within 180 days of the effective date of
termination of this Agreement Plan shall provide to BJC information
establishing: (i) the Total Premium in respect of such calendar year; (ii) the
Total Provider Payments in respect of such calendar year; and (iii) Plan's
calculation of the BJC Premium amount and the Premium Reconciliation for such
calendar year. BJC shall be entitled to review and to conduct an audit (either
by BJC or by independent auditors acceptable to Plan) of Plan's books and
records to verify such amounts and calculations as claimed by Plan. Any such
review and/or audit shall be conducted at BJC's expense. If as the result of any
such review or audit it is determined that the Premium Reconciliation as
conducted by Plan was incorrect BJC and Plan shall promptly correct the Premium
Reconciliation. In the event BJC and Plan are unable after good faith efforts
for at least 60 days to resolve a dispute with regard to any such amount or
calculation such dispute shall be settled in accordance with the dispute
resolution provisions of this Agreement.
4.6 ANNUAL CLAIMS AUDIT RIGHTS. From and after October 1, 1997, BJC shall have
the right to conduct quarterly audits of Plan's performance of the claims
processing and claims payment function under this Agreement, but not more
frequently than two times per year. Such an annual audit shall be conducted at
BJC's sole expense, shall be completed within 180 days of the end of
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<PAGE> 54
each year for the immediately preceding year, and shall be performed by a
nationally recognized third party reasonably acceptable to Plan in view of
Plan's reasonable competitive concerns. Such third party shall have access to
and be entitled to review Plan's applicable Participating Provider agreement fee
information, if any, and other books and records necessary to verify whether
claims were correctly paid by Plan. Plan shall be given the opportunity to
comment on the auditor's report prior to release, and all such comments shall be
disclosed to BJC. The auditor's report to BJC shall specifically not include any
blanket references to or specific or general disclosures of Plan's fee schedules
or other rate or payment arrangements with non BJC Providers, but shall instead
confirm to BJC whether Plan correctly paid the amount of the claim in accordance
with the bill or the Plan Participation Agreement in effect with such claimant,
as applicable. In the event the auditor's report to BJC states that Plan has not
paid specific claims correctly, Plan shall use the same efforts it uses in the
ordinary course of business with respect to non-BJC claims to recover the amount
incorrectly paid. Any amounts recovered by Plan shall be deposited into the
Claims Payment Account.
{Remainder of page intentionally left blank}
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EXHIBIT A-4
FEE FOR SERVICE PAYMENTS/SCHEDULES
SECTION 1: DEFINITIONS
COPAYMENT: The amount a Member is required to pay and BJC Provider shall collect
for certain Covered Services in accordance with the Member's Benefit Plan.
CUSTOMARY CHARGE: The reasonable and customary fees charged by a provider,
Participating Provider or BJC Provider ("billed charges") which do not exceed
the billed charges such provider would charge any other person regardless of
whether the person is a Member.
DEDUCTIBLE: The annual amount of charges for Covered Services, as provided in
the Member's Benefit Plan, which the Member is required to pay and which, to the
extent applicable to Covered Services provided by BJC Provider, BJC Provider may
collect in accordance with the Member's Benefit Plan.
SECTION 2: SCOPE OF EXHIBIT
The provisions of this Exhibit apply during the term and any Renewal Term(s) of
this Agreement, Covered Services rendered to Members (i) who have not chosen a
BJC Provider as his or her PCP (and therefore are are not BJC Members, BJC
Medicaid Members or BJC Medicare Members), and (ii) who are covered by all Plan
Benefit Plans including without limitation insured and self-funded (ASO)
products (Benefit Plans) sponsored or issued by all Payors (excluding those
Benefit Plans covered by Exhibits A-1, A-2 and A-3), (iii) when such Members
receive Covered Services from BJC Providers or at a BJC Service Site.
The terms of this Exhibit A-4 and the attached schedules also shall determine
the amounts to be paid to BJC Providers out of the Claims Payment Account(s)
referenced in Exhibits A-1, A-2 and A-3 of this Agreement.
The terms of this Exhibit A-4 and the attached schedules also shall determine
the rates to be paid to BJC Providers during the continuation period reference
in Section 9.4 and Section 10.1 of the Agreement.
SECTION 3: SERVICE DELIVERY AND PAYMENT OBLIGATIONS
3.1 COVERED SERVICE DELIVERY. BJC and BJC Providers acknowledge and will perform
the obligation to deliver Covered Services to Members in accordance with the
terms of the Agreement and of this Exhibit A-4, including without limitation
Section 3 and Section 4 of the Agreement.
3.2 PAYMENT FOR SERVICES. In consideration of BJC Providers providing or
arranging for the provision of Covered Services to Members covered by Benefit
Plans within the scope of this Exhibit, Payor shall pay BJC Providers in
accordance with the lesser of BJC Provider's
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<PAGE> 56
Customary Charges or the payment schedules and procedures set forth in Schedule
A-4 of this Exhibit A-4. In the event a Member possesses other insurance
coverage for Covered Services rendered by a BJC Provider, which pays such BJC
Provider an amount less than the amounts due such BJC Provider under this
subsection 3.2, then the Plan or Payor shall pay such BJC Provider the
difference between what amounts are due under this subsection 3.2 and the amount
paid by to the BJC Provider by the other insurer. The parties agree that to the
extent BJC Providers render Covered Services to Members covered by self-funded
Benefit Plans for which administrative services agreements are entered into by
Plan from and after the Effective Date, Plan shall use its best efforts to
include in its Payor administrative services agreements and obtain from the
Payor an acknowledgment substantially in the form of Schedule A-4 (1) under
which the Payor acknowledges it's obligations as a Payor under the Plan's
provider participation agreements and global capitation arrangements. Plan shall
additionally notify BJC in the event such a self-funded Payor has terminated its
administrative services agreement with Plan or has not satisfied its obligation
to fund the payment of claims. BJC Providers may then pursue payment of Covered
Services from such Members and Payors directly.
3.3 SUBMISSION OF AND ADJUSTMENTS TO CLAIMS FOR COVERED SERVICES. BJC shall
assure that BJC Providers submit claims for Member Covered Services to Plan in a
manner and format prescribed by Plan. At Plan's request, BJC Provider may be
required to submit such claims electronically in a manner and form agreed to by
the parties and on at least 60 days notice to the BJC Provider. Member Covered
Services claims must be received by Plan no more than 60 days from the date the
Covered Services were rendered. BJC Provider agrees that claims received from
and after 90 days from the date Member Covered Services were rendered may be
rejected for payment, at Plan's discretion and may not be directly billed to the
Member or any Payor; provided, however, that corrections or additions to such
claims shall be considered by Plan if made within 30 days from BJC Provider's
receipt of the initial claim payment.
Unless otherwise directed by Plan, BJC shall assure that BJC Providers submit
claims using current HCFA 1500 or UB92 forms with current HCPCS coding, if
applicable, current ICD9 coding and current CPT coding. BJC Providers shall
include in a claim the Member number and BJC Provider's Customary Charge for the
Covered Services rendered to a Member during a single instance of service. If
requested by Plan, BJC Provider shall also submit BJC Provider's Federal Tax
I.D. number and/or other identifiers.
Plan shall have the right to make corrective adjustments to any previous BJC
Provider payment for a claim for Covered Services; provided, however, that any
corrections shall be made either (1) within 6 months from receipt by Plan of
such claim; (2) as part of an annual reconciliation procedure; or (3) at any
time as part of a Plan audit of BJC's or BJC Provider's claims to the extent
such claims adjustments arise out of billing errors, or improper, fraudulent or
abusive billing practices.
3.4 ELIGIBILITY AND BENEFIT VERIFICATION. Plan shall be responsible for the
determination under each Benefit Plan covered under the scope of this Exhibit as
to whether (i) a person receiving services, supplies, products or accommodations
from a BJC Provider is a Member, and
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(ii) the services, supplies, products and accommodation provided to a Member are
Covered Services.
3.5 ADJUSTMENTS FOR RETROACTIVE ELIGIBILITY AND BENEFIT DETERMINATIONS: The
parties acknowledge that Plan may from time to time make retroactive adjustments
to eligibility and benefit determinations. Plan agrees to use reasonable efforts
to keep such retroactive determinations to a minimum, and to enforce Benefit
Plan provisions prohibiting such practices by employers to the extent reasonably
possible using sound business judgment considering the particular employer group
and Benefit Plan. The parties acknowledge that subject to the terms of Section
3.1(2) of the Agreement, services provided to an individual when such individual
was not eligible to be a Member will not be Covered Services as defined in this
Agreement or in this Exhibit A-4.
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================================================================================
*CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION.
SCHEDULE A-4
All of the Covered Services referenced below shall be identified using the
applicable CPT series procedure codes ("Codes") as identified in the 1997
Physicians' Current Procedural Terminology Reference ("Reference") as such
Reference may be modified or updated from time to time. All such Codes shall be
automatically updated to reflect changes in such Codes as such Codes may be
modified, added to or deleted in subsequent editions or revisions to the
Reference.
A. [_]*
B. Clinical Laboratory and Radiology Services. The Plan shall reimburse BJC for
Clinical Laboratory and Radiology Services (as further defined below) provided
in any Medical Center by a BJC Provider to Commercial, Medicare and Medicaid
Non-BJC Members [_]*
C. Pharmacy Services. The Plan shall reimburse BJC for Pharmacy products and
services (as further defined below) provided in any Medical Center to
Commercial, Medicare and Medicaid Non-BJC Members as follows:
[_]*
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*CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION.
[_]*
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SCHEDULE A-4 (1)
PAYOR ACKNOWLEDGMENT
The undersigned hereby acknowledges its status as a "Payor" under GHP's provider
agreements and global capitation arrangements and its resulting obligation to
provide funds to GHP with which to pay claims. Payor further acknowledges that
in the event Payor fails to meet its claims funding obligations or termination
of its agreement with GHP, that GHP may notify its providers of such
termination.
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EXHIBIT B
SCHEDULE OF BJC PROVIDERS
All BJC employed physicians, and network physicians who have contracted with
BJC or a contracting organization formed by BJC including but not limited to
the Washington University Physician Organization which includes PPHO.
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EXHIBIT C
BJC'S SERVICE SITES
NEED DEFINITION BY ZIP CODE, COUNTY, AND A MAP
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EXHIBIT D
PLAN'S SERVICE AREA
SEE ATTACHED
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EXHIBIT E
FORMS OF I.S. REPORTS
[see attached]
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EXHIBIT F
MEDICAL CENTER MEMBERSHIP LIST
[See attached]
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EXHIBIT G
PERFORMANCE STANDARDS AND SANCTIONS
[needs to be developed by parties]
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EXHIBIT H
DELEGATED FUNCTIONS
TO BE DEVELOPED BY THE PARTIES
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EXHIBIT I
BJC'S ERRORS AND OMISSIONS INSURANCE
DECLARATION PAGE ATTACHED
68
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EXHIBIT J
BJC'S CORPORATE GUARANTEE
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EXHIBIT K
CERTIFICATE OF COMPLIANCE WITH LAWS IN RELATION TO
EQUAL EMPLOYMENT OPPORTUNITY
SUPPLEMENT TO CONTRACTS AND PURCHASE ORDERS
As a supplier of goods and services to Group Health Plan, Inc. (GHP), or any of
its subsidiaries or affiliates, which may be used in the performance of U.S.
Government contracts, Contractor agrees that the following provisions will,
unless inapplicable under Federal rules and regulations, apply to all contracts
and purchase orders for goods and services which have been or will be entered
into between Contractor and GHP. This agreement is given by Contractor in
consideration of purchases by GHP from Contractor and is hereby incorporated by
reference as a supplement of each past and future contract or purchase order.
EQUAL EMPLOYMENT OPPORTUNITY. If the aggregate total contract or purchase order
value exceeds $10,000, Contractor agrees that Contractor will not discriminate
against any employee or applicant for employment because of race, color,
religion, sex or national origin; and that Contractor will take affirmative
action to ensure that applicants are employed, and that employees are treated
during employment, without regard to their race, color, religion, sex, or
national origin. Without limiting the foregoing, Contractor agrees to and shall
be bound by the provisions of the equal opportunity clause set forth at 41 CFR
60-1.4, which is Incorporated by reference.
CERTIFICATION OF NONSEGREGATED FACILITIES. If the total contract or purchase
order value exceeds $10,000, Contractor agrees as follows:
Contractor certifies that it does not and will not maintain or provide for its
employees any segregated facilities at any of its establishments, and that it
does not and will not permit its employees to perform their services at any
location under its control where segregated facilities are maintained.
Contractor agrees that a breach of this certification is a violation of the
Equal Opportunity clause required by Executive Order 11246 of September 24,
1965. As used in this certification, the term "segregated facilities" means any
waiting rooms, work areas, rest rooms and wash rooms, restaurants and other
eating areas, time clocks, locker rooms and other storage or dressing areas,
parking lots, drinking fountains, recreation or entertainment areas,
transportation, and housing facilities provided for employees which are
segregated by explicit directive or are in fact segregated on the basis of race,
color, religion, or national origin because of habit, local custom, or
otherwise.
Contractor further agrees that (except where it has obtained identical
certifications from proposed subContractors for specific time periods) it will
obtain identical certifications from proposed subContractors prior to the award
of subcontracts exceeding $10,000 which are not exempt from the provisions of
the Equal Opportunity Clause; that it will forward the following notice to such
proposed subContractors (except where the proposed subContractors have submitted
identical certifications for specific time periods):
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Notice to Prospective SubContractors of Requirement For Certification of
NonSegregated Facilities
A Certification of Nonsegregated Facilities, as required by the May 21, 1968,
order on Elimination of Segregated Facilities, by the Secretary of Labor (33
Fed. Reg. 7804, May 28,1968), must be submitted prior to the award of a
subcontract exceeding $10,000 which is not exempt from the provisions of the
Equal Opportunity Clause. The certification may be submitted either for each
subcontract or for all subcontracts during a period (i.e., quarterly,
semiannually, or annually). NOTE: The penalty for making false statements in
offers is prescribed in 18 U.S.C. Section 1001.
AFFIRMATIVE ACTION COMPLIANCE PROGRAM. If the total contract or purchase order
value is $50,000 or more and Contractor has 50 or more employees, Contractor
will develop a written Affirmative Action Compliance Program for each of its
establishments consistent with the rules and regulations of the Department of
Labor at 41 CFR 60-1 and 60-2, as such rules and regulations may be amended from
time to time.
EQUAL EMPLOYMENT OPPORTUNITY REPORTING REQUIREMENTS. If the total contract or
purchase order value is $50,000 or more and Contractor has 50 or more employees,
Contractor will complete and file Government Standard Form 100, Equal Employment
Opportunity Employer Information Report EEO-1, in accordance with the
instructions contained therein.
EQUAL EMPLOYMENT OPPORTUNITY - VETERANS. If the total contract or purchase order
value is $10,000 or more, Contractor agrees to take affirmative action to employ
and advance in employment qualified disabled veterans and veterans of the
Vietnam era consistent with the rules and regulations of the Department of Labor
at 41 CFR 60- 250.4, as such rules and regulations may be amended from time to
time. Without limiting the foregoing, Contractor agrees to and shall be bound by
the provisions of the affirmative action clause set forth at 41 CFR 60-250.4,
which is incorporated by reference.
EQUAL EMPLOYMENT OPPORTUNITY - HANDICAPPED. If the total contract or purchase
order value is $2,500 or more, Contractor agrees to take affirmative action to
employ, advance in employment, and otherwise treat qualified handicapped
individuals without discrimination consistent with the rules and regulations of
the Department of Labor at 41 CFR 60-741, as such rules and regulations may be
amended from time to time. Without limiting the foregoing, Contractor agrees to
and shall be bound by the provisions of the affirmative action clause set forth
at 41 CFR 60- 741.4, which is incorporated by reference.
EXAMINATION OF RECORDS. If the total contract or purchase order value exceeds
$10,000, Contractor agrees that the Controller General of the United States or a
duly authorized representative of the General Accounting Office shall have
access to, and the right to examine books, documents, papers or other records
pertaining to such contracts or purchase order(s).
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Contractor will furnish all information and reports required by Executive Order
No. 11246, as amended, and by the rules and regulations promulgated thereunder,
and will permit access to its books, records and accounts by the contracting
agency and the Secretary of Labor for purposes of investigating compliance with
such rules and regulations.
CLEAN AIR AND WATER. Contractor certifies as follows:
(a) No facility to be utilized in the performance of its contracts with GHP has
been listed on the Environmental Protection Agency List of Violating Facilities
for one or more violations of the Clean Air Act (42 U.S.C. 7401 et seq.) or the
Clean Water Act (33 U.S.C. 1251 et seq.).
(b) Contractor will promptly notify GHP of the receipt of any communication from
the Director, Office of Federal Activities, Environmental Protection Agency,
indicating that any facility which Contractor proposes to use for the
performance of its contracts with GHP is under consideration to be listed on the
EPA list of Violating Facilities.
(c) Contractor will include substantially this certification, including this
paragraph (c), in every nonexempt subcontract.
UTILIZATION OF SMALL BUSINESS AND SMALL DISADVANTAGED BUSINESS CONCERNS.
Contractor understands that it is the policy of the United States that small
business and small business concerns owned and controlled by socially and
economically disadvantaged individuals shall have the maximum practicable
opportunity to participate in the performance of contracts let by any Federal
agency.
Contractor hereby agrees to carry out this policy in the awarding of
subcontracts to the fullest extent consistent with the efficient performance of
its contracts with GHP. Contractor further agrees to cooperate in any studies or
surveys as may be conducted by the United States Small Business Administration
or the awarding agency of the United States as may be necessary to determine the
extent of Contractor's compliance with this clause.
The term "small business concern" shall mean a small business as defined
pursuant to Section 3 of the Small Business Act and relevant regulations
promulgated under that Act. The term "small business concern owned and
controlled by socially and economically disadvantaged individuals" shall mean a
small business Concern(a) which is at least 51 per centum owned by one or more
socially and economically disadvantaged individuals; or, in the case of any
publicly owned business, at least 51 per centum of the stock of which is owned
by one or more socially and economically disadvantaged individuals; and (b)whose
management and daily business operations are controlled by one or more of such
individuals. The Contractor shall presume that socially and economically
disadvantaged individuals include Black Americans, Hispanic Americans, Native
Americans, Asian-Pacific Americans, and other minorities, or any other
individuals found to be disadvantaged by the Small Business Administration
pursuant to Section 8(a) of the Small Business Act.
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Contractor acting in good faith may rely on written representations by its
subContractors regarding their status as either a small business concern or a
small business concern owned and controlled by socially and economically
disadvantaged individuals.
If the total contract or purchase order value exceeds $500,000, Contractor
agrees to adopt and comply with a small business and small disadvantaged
business subcontracting plan containing all the terms and provisions required of
such plans by the Small Business Act, as amended, and all pertinent regulations
promulgated under that Act.
CERTIFICATION AND DISCLOSURE REGARDING PAYMENTS TO INFLUENCE CERTAIN FEDERAL
TRANSACTIONS. If the total contract or purchase order value exceeds $100,000,
Contractor agrees as follows: Contractor certifies to the best of its knowledge
and belief on or after December 23, 1989, that:
(a) No Federal appropriated funds have been paid or will be paid to any person
for influencing or attempting to influence an officer or employee of any agency,
a Member of Congress, an officer or employee of Congress, or an employee of a
member of Congress on his or her behalf in connection with the awarding of any
Federal grant, the making of any Federal grant, the making of any Federal ban,
the entering into of any cooperative agreement, and the extension, continuation,
renewal, amendment or modification of any Federal continuation, renewal,
amendment.
(b) If any funds other than Federal appropriated funds (including profit or fee
received under a covered Federal transaction) have been paid, or will be paid,
to any person for influencing or attempting to influence an officer or employee
of any agency, a member of Congress, an officer or employee of Congress, or an
employee of a Member of Congress on his or her behalf in connection with any
solicitation of the Federal government, the Contractor shall complete and
submit, with its offer, OPM Standard Form LLL, Disclosure of Lobbying
Activities, to the contracting officers.
(c) The definitions and prohibitions contained in FAR 52.203-12 are hereby
incorporated by reference in this certification.
REQUESTED INFORMATION. As a Federal Government Contractor, GHP is required to
exercise its best efforts to carry out certain policies of the Federal
Government regarding utilization of small business concerns, small business
concerns owned and controlled by socially and economically disadvantaged
individuals, labor surplus area concerns, and woman-owned small business
concerns. Accordingly, would you please indicate below whether or not your
company is a "small business concern," as defined in Section 3 of the Small
Business Act, as amended, 15 U.S.C. 632 and regulations issued under that Act; a
"small business concern owned and controlled by socially and economically
disadvantaged individuals," as defined in Section 8(d) of the Small Business
Act, as amended, 15 U.S.C. 637(d) and regulations issued under that Act; a
"labor surplus area concern," as defined In 41 CFR 1-1.801 and 32 CFR 7-104.20;
and/or a "woman-owned small business," as defined in Federal Acquisition
Regulation issued in Executive Order 12138 of May 18, 1979. If you have any
questions concerning your status with
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regard to these categories, you can consult the office of the Small Business
Administration servicing your area.
[ ] Contractor is [ ] Contractor is not a Small Business* Concern
[ ] Contractor is [ ] Contractor is not a Small Business Concern Owned and
Controlled by Socially and Economically Disadvantaged Individuals
[ ] Contractor is [ ] Contractor is not a Labor Surplus Area Concern
[ ] Contractor is [ ] Contractor is not a Woman-Owned Small Business
Contractor's Name:
By:
-----------------------------
Title:
---------------------------
Date:
----------------------------
*NOTE: The Small Business Administration (SBA) establishes small business size
standards on an industry-by-industry basis in its regulations at 13 CFR 121, as
amended (the "SBA regulations"). For each industry classification, the SBA
regulations set forth the maximum number of employees or annual receipts that
are allowed for a concern (including affiliates) to still be considered small,
but these thresholds vary by industry. For example, the number of employees
allowed generally ranges from 500 to 1,000 depending on the industrial
classification. Contractor should refer to the SBA regulations to assist it in
answering these questions.
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EXHIBIT L
FORM OF BJC LETTER OF CREDIT FOR EXHIBITS A-1 AND A-3
NEED FORM
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EXHIBIT L-1
FORM OF BJC LETTER OF CREDIT FOR EXHIBIT A-2
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EXHIBIT M
PLAN AND BJC CONTACT PERSONS
GHP: Patricia Harger
BJC: Zach Gerbarg, M.D.
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EXHIBIT H
DELEGATED FUNCTIONS
SECTION 1: DELEGATION OF CREDENTIALING
The parties agree that if BJC's credentialing procedures meet Plan standards and
guidelines, and the standards and guidelines of any Plan accrediting
organizations including without limitation NCQA, Plan shall delegate the
responsibility for credentialing Providers to BJC; however, Plan retains the
right to approve new health care providers and sites and to terminate or suspend
individual Providers. If such such function is delegated to BJC, BJC shall
comply with the followng requirements:
1.1 BJC agrees that current and future health care providers that join BJC must
be properly credentialed before they may render Covered Services to Members
pursuant to this Agreement. In addition, BJC shall immediately notify Plan in
writing of all new Providers who become affiliated with and are credentialed by
BJC, as well as those who are no longer affiliated with BJC, and BJC shall
cooperate with Plan's timelines and schedules related to the production of
accurate provider directories.
1.2 BJC shall maintain all records necessary for Plan to monitor the
effectiveness of BJC's credentialing and recredentialing process, including
without limitation records related to the credentialing of all current or future
Providers ("Provider Records"). Annually, BJC shall provide the Plan with its
Credentialing Policies for review and evaluation and shall permit and cooperate
with the Plan's on-site review of BJC's Provider Records, which shall be
conducted by the Plan during BJC's normal business hours and with reasonable
prior notice given. The Plan's on-site review shall consist of its review of the
greater of five percent (5%) or fifty (50) of BJC's Provider Records to ensure
compliance with the standards of the Plan, NCQA and any other of Plan's
accrediting organizations, and all applicable Federal and state laws and
regulations. BJC shall furnish the Plan with each Provider's signed
authorization permitting the Plan to review such Provider Records, in a form
that provides a release of liability to the Plan and its authorized
representatives in conjunction with conducting such reviews.
1.3 BJC shall submit to Plan credentialing and recredentialing reports
("Reports") that identify those Providers credentialed/recredentialed, the
effective date of such action, the most recent prior date of
credentialing/recredentialing and the effective date of such Providers'
participation with the Plan and the other information set forth in the
incorporated Schedule H. Such reports shall be furnished to the Plan by BJC on a
quarterly basis.
1.5 Plan shall provide BJC written notice and description of any deficiencies in
BJC's credentialing process and recommendations regarding correction of same.
BJC agrees to correct, within 60 days, any such deficiencies and provide Plan
written notice of such correction within the same time period, after which Plan
will provide BJC with a date for re-review of such corrected issue.
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1.6 Plan shall have the right, upon 30 days written notice to BJC, to revoke and
take over some or all of the credentialing responsibilities delegated to BJC.
SECTION 2: DELEGATION OF UTILIZATION MANAGEMENT
The parties agree that if BJC's UM policies and procedures meet Plan standards
and guidelines, and the standards and guidelines of any Plan accrediting
organizations including without limitation NCQA, Plan shall delegate the
responsibility for initial UM determinations to BJC; however, Plan retains the
right to address and resolve any Member appeals of BJC's UM determinations and
for all Provider UM determinations. If such such function is delegated to BJC,
BJC shall comply with the followng requirements:
2.1 The parties agree that if BJC's Utilization Management ("UM")
policies and procedures meet Plan standards and guidelines, and the
standards and guidelines of any Plan accrediting organizations
including without limitation NCQA, Plan shall delegate the
responsibility for initial UM determinations to BJC; however, Plan
retains the right to address and resolve all Member and Provider UM
appeals.
2.2 If the Plan delegates the responsibility of making initial
utilization management ("UM") determinations ("Determinations") to BJC
pursuant to this Agreement, BJC shall make such Determinations in
accordance with the UM policies prepared or approved by the Plan, the
terms of the Member's Benefit Plan and the Employee Retirement Income
and Security Act of 1974 ("ERISA").
2.3 In the event of such delegation, BJC shall maintain a UM program
description and policies and procedures that are in compliance with the
Plan's standards and the NCQA standards for Utilization Management. The
UM program description will include BJC's mechanism for handling
initial determinations and denials and the communication and provision
of all information pertaining to same to Plan for its handling of UM
appeals. Annually, BJC shall provide the Plan with a current UM program
description, policies and procedures, and the criteria used for medical
review. BJC shall also provide the Plan with monthly UM reports in such
time frames as are mutually agreed to by the parties in such form and
content as specified in the incorporated Schedule H.
2.4 The Plan shall provide written feedback to BJC following its review
and evaluation of the UM program descriptions and policies and
procedures within thirty (30) days of the receipt of BJC's documents.
2.5 Upon rendering an initial determination ("Determination"), BJC
shall promptly notify a Member, in writing, of Determination, along
with an explanation of his or her right to appeal that Determination to
the Plan in accordance with the Member grievance procedure of his or
her their Benefit Plan. In the event of such appeal, BJC shall
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promptly furnish the Plan with all relevant information and
documentation regarding the Member's complaint/grievance, all relevant
information and documentation pertaining to BJC's Determination and the
Member's request for appeal. The form of such Member notification shall
be in accordance with the form set forth in the incorporated Schedule
H-1.
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