LaSalle IPA Agreement


    


    LaSalle
      Medical Associates, Inc.

    ________________________________________________________________________

    


    


    ANCILLARY
      SERVICES AGREEMENT

    


    THIS
      ANCILLARY SERVICES AGREEMENT (this “Agreement”) is made this 1st day of March
      2005 by and between the following parties:

     

    LaSalle
      Medical Associates, Inc. (IPA), a California professional corporation, located
      at 1860 Colorado Blvd., #200, Los Angeles, CA 90041

    


    and

    


    Effective
      Health, Inc., dba Sespe Pharmacy (PROVIDER), a California Corporation,
      located at 552 Sespe Ave., Unit D, Fillmore, CA 93015

    


    This
      Agreement is made with reference to the following facts:

    


    A. IPA
      has
      entered into and will enter into Managed Care Agreements with the Payers that
      require IPA to provide or arrange to provide professional medical, surgical
      and
      related ancillary services to the Enrollees.

    


    B. IPA
      contracts with duly qualified Physician Contractors and qualified health care
      facilities to furnish professional medical, surgical and related professional
      ancillary services to the Enrollees.

    


    C. PROVIDER
      operates at Children’s Hospital of Los Angeles. The Facility is duly licensed
      (or exempt from licensure) under the Licensure Act, and the Facility is
      certified for participation in the Medicare program by JCAHO, or other national
      accreditation agency accepted by IPA.

    


    D. IPA
      desires to contract with PROVIDER to furnish the Professional Ancillary Services
      on an inpatient or outpatient basis to Enrollees properly referred by the
      Physician Contractors and PROVIDER desires to furnish the Professional Ancillary
      Services to Enrollees so referred by the Physician Contractors.

    


    NOW,
      THEREFORE, in consideration of the mutual covenants and promises contained
      herein, and for other good and valuable consideration the receipt and
      sufficiency of which are hereby acknowledged, the parties hereby agree as
      follows:

    


    



    
      
        
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    For
      purposes of this Agreement, the capitalized terms below shall have the following
      meanings:

    


    1.01 “Act”
      means the Knox-Keene Health Care Service Plan Act of 1975, as
      amended.

    


    1.02 “Action”
      means the actions described in Section 8.04 of this Agreement.

    


    1.03 “Agreement”
      means this Agreement.

    


    1.04 “Professional
      Ancillary Services~~ means the professional component of all

    services
      performed.

    


    1.05 “Approval
      Protocols” mean protocols and procedures that specify, among other

    matters,
      the requirement of prior approval/authorization of the medical director of
      IPA
      (or his or

    her
      designee) and the procedures to obtain such prior
      approval/authorization.

    


    1.06 “Arbitration
      Statute” means Section 1280 et seq. of the California Code of Civil

    Procedure.

    


    1.07 “CGL
      Insurance” means the policy or policies of insurance described in
      Section

    6.01(i)
      of this Agreement.

    


    1.08 “Civil
      Claims” mean any claim, action, allegation or suit arising out of or
      based

    on
      the
      Professional Ancillary Services furnished to Enrollees during the term of this
      Agreement.

    


    1.09 “Clean
      Claim” means a written claim from or on behalf of PROVIDER that

    contains
      the following information and documentation:

    


    a. Name
      of
      the Enrollee,

    


    b. Name
      of
      referring Physician Contractor,

    


    c. Name
      of
      Payer,

    


    d. Description
      of Ancillary Service(s),

    


    e. Date
      of
      service,

    


    f. Copy
      of
      written authorization and/or order, if applicable, and

    


    g. Any
      other
      identifying information that IPA reasonably requests or that may be necessary
      and desirable for IPA to process the claim.

    


    


    
      
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    1.10 “COB
      Monies” mean monies actually collected as a result of the coordination
      of

    benefits.

    


    1.11 “Confidential
      Information” means the information described in Section 5.09 of

    this
      Agreement.

    


    1.12 “Co-Pays”
      mean the applicable deductibles and co-payments due from Enrollees

    under
      the
      terms of the Managed Care Agreements.

    


    1.13 “Covenants”
      mean the restrictive covenants described in Section 5.09 of this

    Agreement.

    


    1.14 “Defaulting
      Party” means the party alleged to have breached a material tenn of

    this
      Agreement.

    


    1.15 “Department”
      means the California Department of Managed Health Care.

    


    1.16 “Effective
      Date” means March 1, 2005

    


    1.17 “Emergency”
      means a medical condition manifested by acute symptoms of

    sufficient
      severity (including severe pain) such that the absence of immediate medical
      attention

    could
      reasonably be expected to:

    


    a. Place
      the
      Enrollee’s health in serious jeopardy,

    


    b. Cause
      serious impairment to the Enrollee’s bodily functions, or

    


    c. Cause
      serious dysfunction to any one of the Enrollee’s bodily organs or

    parts.

    


    1.18 “Enrollees”
      or “IPA Patients” mean persons enrolled with the Payers.

    


    1.19 “Excess
      COB Amount” means the amount described in Section 4.04 of this

    Agreement.

    


    1.20 “Facility
      Fee” means payment in accordance with the Fee Schedule (Not
      Applicable).

    


    1.21 “Fee
      Schedule” means the schedule of fees set forth in Exhibit A attached
      hereto

    and
      incorporated herein by this reference.

    


    1.22 “Initial
      Term” means the 12-month period beginning on the Effective Date.

    


    1.23 “Interested
      Parties” mean the following (and their representatives and
      designees):

    


     

    
      
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    a. The
      Payers,

    


    b. The
      Department,

    


    c. The
      Department of Health and Human Services,

    


    d. The
      Center for Medicare and Medicaid, and

    


    e. The
      California Department of Health Services.

    


    


    1.24 “IPA”
      LaSalle Medical Associates, Inc.

    


    1.25 “IPA
      Administrative Office” means 1860 Colorado Blvd., #200, Los Angeles,
      CA

    90041

    1.26 “IPA
      Board” means the Board of Directors of IPA.

    


    1.27 “IPA
      Parties” mean IPA, its officers, directors, shareholders,
      employees,

    representatives
      and agents, and the Payers.

    


    1.28 “IPA
      Policies” mean the policies and procedures adopted, amended or restated
      by

    IPA
      from
      time to time.

    


    1.29 “JCAHO”
      means the Joint Commission on the Accreditation of Healthcare

    Organizations.

    


    1.30 “Licensure
      Act” means the California Health Facilities Licensure Act, as

    amended.

    


    1.31 “Malpractice
      Insurance” means the policy or policies of insurance described in

    Section
      6.0 l (iii) of this Agreement.

    


    1.32 “Managed
      Care Agreements” mean written contracts between IPA and the Payers.

    


    1.33 “Medically
      Necessary” means the performance of Ancillary Services that are:

    


    a. In
      accordance with generally accepted medical practice standards

    prevailing
      in the applicable professional community at the time of treatment,

    


    b. In
      conformity with the professional and technical standards adopted by
      the

    Payers,
      if any,

    


    c. Consistent
      with the physician order and diagnosis,

     


    
      
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    d. 
      Not
      furnished primarily for the convenience of the Enrollee, Physician

    Contractor
      or Facility, and

    


    e. Furnished
      at the most appropriate level that can be provided safely and

    effectively
      to the Enrollee.

    


    1.34 “Location”
      552 Sespe Ave., Unit D, Fillmore, CA 93015

    


    1.35 “Non-Defaulting
      Party” means the party alleging a breach of a material term of

    this
      Agreement.

    


    1.36 “Payers”
      mean health maintenance organizations and plans licensed under the

    Act.

    


    1.37 “Personnel”
      mean allied health professionals and paramedical and support

    personnel.

    


    1.38 “Physician
      Contractors” mean physicians and groups of physicians with which

    IPA
      contracts to furnish professional medical, surgical and related ancillary
      services to Enrollees.

    


    1.39 “Property
      Insurance” means the policy or policies of insurance described in

    Section
      6.01 (ii) of this Agreement.

    


    1.40 “PROVIDER”
      means Effective Health Inc., dba Sespe Pharmacy

    


    1.41 “Rehabilitated
      Claim” means a Clean Claim submitted by or on behalf of

    PROVIDER
      in response to the receipt of the Rejected Claim.

    


    1.42 “Rejected
      Claim” means a written claim from or on behalf of PROVIDER that

    contains
      some but not all of the information and/or documentation required of a Clean
      Claim, or

    that
      contains erroneous information and/or documentation.

    


    1.43 “Review
      Programs” mean the professional review programs that IPA may adopt

    or
      amend
      from time to time.

    


    1.44 “Subject
      Claim” means an otherwise Clean Claim submitted in a timely manner

    by
      PROVIDER and for which IPA denies reimbursement, in whole or in
      part.

    


    1.45 “Tangible
      Items” mean physical space, equipment, furniture, furnishings,

    instruments
      and medical and office supplies.

    


    1.46 “Treatment
      Protocols” mean the clinical protocols developed and/or amended by

    IPA
      from
      time to time for the conservative treatment of medical conditions.

    


    1.47 “Untimely
      Claim” means a Clean Claim submitted after the time period
      specified

    in
      Section 4.02 below, and. a Rehabilitated Claim submitted after the time period
      specified in

    Section
      4.07 below.

    


    
      
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    1.48 “UR/QI
      Programs” mean the utilization review and quality improvements

    programs
      adopted from time to time by IPA.

    


    ARTICLE
      2

    SERVICES
      TO BE FURNISHED BY PROVIDER

    


    2.01 In
      General.
       PROVIDER
      shall furnish Professional Ancillary Services to

    Enrollees
      on an “as needed” basis throughout the term of this Agreement. Except in the
      case of

    an
      Emergency, PROVIDER shall furnish Professional Ancillary Services only to those
      Enrollees

    presenting
      to PROVIDER with pre-authorization, and then only in accordance with the written
      or

    verbal
      order(s) of the Physician Contractor. PROVIDER shall obtain written confirmation
      of any

    verbal
      order(s) for Ancillary Services made by the Physician Contractor.

    


    2.02 Instrumentalities
      of Ancillary Services.
      PROVIDER shall provide or arrange to

    provide
      at its sole cost and expense the Tangible Items that are necessary and desirable
      to furnish

    the
      Professional Ancillary Services. PROVIDER shall at its sole cost and expense
      maintain the

    Tangible
      Items in good working order and repair, and PROVIDER shall replace any
      Tangible

    Items
      that become worn or obsolete.

    


    2.03 Hours
      of Operation.
      PROVIDER shall be open and available to furnish Ancillary

    Services
      on a non-Emergency basis beginning at 7:30 a.m. and ending at 5:00 p.m.,
      Monday

    through
      Friday (holidays excepted). PROVIDER shall be open and available to furnish
      Ancillary

    Services
      on an Emergency basis 24 hours per day, seven days per week.

    


    ARTICLE
      3

    PERSONNEL

    


    3.01 General
      Obligations. PROVIDER shall at its sole cost and expense provide or

    arrange
      to provide the Personnel in such numbers as may be required to furnish the
      Ancillary

    Services.
      PROVIDER shall ensure that the Personnel, and each of them, are duly trained
      and

    qualified
      in the performance of the Ancillary Services. PROVIDER shall cause the
      Personnel,

    and
      each
      of them, to devote the time, attention and energy necessary and desirable to
      furnish

    Ancillary
      Services in a quality, timely and professional manner. PROVIDER shall
      make

    available
      the Personnel, and each of them, to furnish the Ancillary Services during the
      hours

    specified
      in Article 2 above.

    


    


    


    
      
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    3.02 No
      Benefit Contribution.
      IPA
      shall have no obligation under this Agreement to

    compensate
      or pay applicable taxes for, or provide employee benefits of any kind
      (including

    contributions
      to government-mandated, employment-related insurance and similar programs)
      to

    PROVIDER,
      the Personnel or any other person employed or retained by PROVIDER. If IPA
      is

    required
      to make a payment(s) for or in respect of any of the foregoing, then PROVIDER
      shall

    reimburse
      IPA for any such expenditure within thirty (30) days of a request
      therefor.

    


    ARTICLE
      4

    COMPENSATION
      AND BILLING

    


    4.01 Compensation
      For Ancillary Services. IPA shall compensate PROVIDER in

    accordance
      with the rates set forth in the Fee Schedule. PROVIDER agrees and
      acknowledges

    this
      constitutes full and complete payment for the professional services rendered
      and
      Personnel

    furnished
      or made available by PROVIDER in connection with the performance of
      the

    Professional
      Ancillary Services. PROVIDER further agrees and acknowledges that it is
      not

    entitled
      to receive payment from IPA (or any other party) in consideration of the
      performance of

    unauthorized
      Professional Ancillary Services.

    


    4.02 Submission
      of Claim and Timing of Payment. PROVIDER shall submit to IPA a

    Clean
      Claim for authorized Ancillary Services furnished to each Enrollee. PROVIDER
      shall

    submit
      the Clean Claim to IPA within one hundred-twenty (120) days of the date of
      service. IPA

    shall
      remit payment to PROVIDER within thirty (30) days of receipt of a Clean Claim.
      The

    termination
      of this Agreement (other than on account of a breach by PROVIDER) shall
      not

    relieve
      IPA of the obligation to compensate PROVIDER for the Ancillary Services
      furnished to

    Enrollees
      prior to the effective date of termination. PROVIDER hereby authorizes IPA
      to
      offset

    amounts
      due and owing hereunder by the amount of the damages threatened or suffered
      by
      the

    IPA
      Parties, or any one of them, as a result of a material breach by PROVIDER of
      its
      obligations

    under
      this Agreement. The right to offset shall not be an exclusive remedy, and the
      exercise by

    IPA
      of
      such right shall not constitute an election of remedies by IPA (or construed
      as
      an election

    of
      remedies by IPA).

    


    4.03 Prohibition
      Against Billing Enrollees or Surcharges. PROVIDER shall look only

    to
      IPA
      for payment of services. Except for the collection of Co-Pays, PROVIDER shall
      refrain

    from
      directly billing the Enrollees, the Payers, or another third party for or in
      respect of the

    performance
      of the Ancillary Services. PROVIDER shall collect and retain the Co-Pays, if
      any,

    from
      the
      Enrollees. PROVIDER shall not maintain any action at law against any Enrollee
      to

    collect
      amounts due from IPA under the terms and conditions of this Agreement.
      PROVIDER

    shall
      not
      surcharge any Enrollee for the Tangible Items and Personnel furnished by
      PROVIDER

    in
      connection with the performance of the Ancillary Services. PROVIDER shall
      immediately

    refund
      any surcharge received from any Enrollee, failing that PROVIDER hereby
      authorizes IPA

    to
      offset
      the amount of the surcharge against the amount next due and owing from IPA
      to

    PROVIDER
      hereunder. PROVIDER shall cooperate fully with IPA in connection with
      the

    coordination
      of benefits with respect to the Enrollees.

    


    


    



    
      
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    4.04 Coordination
      of Benefits.
      PROVIDER has the right and responsibility to

    coordinate
      benefits available to Enrollees and to retain all COB Monies. PROVIDER
      shall

    promptly
      provide IPA with all information regarding its collection of COB Monies,
      including but

    not
      limited to the amount of COB Monies and the applicable payer. Notwithstanding
      the

    foregoing,
      if PROVIDER collects COB Monies from a payer whose obligation to provide
      (or

    arrange
      to provide) Ancillary Services to an Enrollee is primary to the obligation
      of
      the

    applicable
      Payer, then PROVIDER shall immediately refund to IPA the Excess COB
      Amount.

    PROVIDER
      hereby directs and authorizes IPA to offset any future payment due hereunder
      by
      the amount of the Excess COB Amount. The right to offset shall not be an
      exclusive remedy, and

    the
      exercise by IPA of such right shall not constitute an election of remedies
      by
      IPA (or

    construed
      as an election of remedies by IPA). For purposes of this Agreement, “Excess
      COB

    Amount”
      means the positive difference, if any, between the following:

    


    a. The
      sum
      of the COB Monies and the amount of the payment(s) received

    by
      PROVIDER for or in respect of the Ancillary Services furnished to the subject
      Enrollee, and

    


    b. The
      amount PROVIDER would have received for the subject Ancillary

    Services
      determined by reference to the Fee Schedule.

    


    4.05 Reduction
      Based on URIQI Recommendation.
      PROVIDER hereby authorizes

    IPA
      to
      reduce compensation otherwise payable for Ancillary Services for financial
      losses

    suffered
      by IPA that result from the failure of PROVIDER and/or the Personnel to comply
      with

    the
      requirements of the UR/QI Programs adopted or amended from time to
      time.

    


    4.06 Late
      Claims Submission.
      PROVIDER acknowledges that IPA assumes

    substantial
      financial risk in connection with the provision of professional services to
      the

    Enrollees,
      including the provision of Services. PROVIDER further acknowledges that
      IPA

    would
      suffer economic damages if PROVIDER fails to submit Clean Claims and
      Rehabilitated

    Claims,
      as the case may be, on a timely basis as required by the terms of this
      Agreement. In

    recognition
      of the foregoing, PROVIDER agrees that it is not entitled to receive the
      payment

    from
      the
      IPA Parties, or any one of them, for or in respect of Untimely Claims. In this
      regard,

    PROVIDER
      acknowledges that the foregoing provision does not constitute an improper
      penalty

    or
      operate as an improper forfeiture. PROVIDER further agrees to refrain from
      raising asserting

    any
      such
      claim in any action against the IPA Parties, or any one of them, to recover
      the
      payment

    for
      or in
      respect Untimely Claims.

    


    4.07 Resubmission.
      of Rejected Claims.
      IPA
      shall return the Rejected Claim to

    PROVIDER
      with an explanation of the reason(s) for the rejection. PROVIDER shall submit
      the

    Rehabilitated
      Claim to IPA by the later to occur of the following dates:

    


    a. Sixty
      days after the performance of the Ancillary Services described in
      the

    Rehabilitated
      Claim, or

    


    


    


    



    
      
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    b. One
      hundred-eighty days after PROVIDER receives the Rejected Claim,
      along

    with
      the
      explanation for the rejection, from IPA.

    


    4.08 Appeal
      of Reductions and Claims Denial.
      PROVIDER may initiate an appeal of

    any
      reduction in reimbursement or the denial of the Subject Claim by delivering
      to
      IPA a written

    request
      for reconsideration. PROVIDER must initiate the appeal within sixty (60) days
      of

    receipt
      of written notification (e.g., an explanation of benefits) of the reduction
      in
      reimbursement

    or
      the
      denial of the Subject Claim (in whole or in part), as the case may be. If
      PROVIDER fails

    to
      deliver the written notice in a timely manner, then PROVIDER forever waives
      its
      right to have

    IPA
      reconsider the reduction in reimbursement or the denial of the Subject Claim,
      as
      the case

    may
      be.
      Within thirty (30) days of receipt of a timely written request, IPA shall
      notify

    PRO
      VIDER
      in writing of the results of IPA’s reconsideration of the reduction in
      reimbursement

    or
      the
      denial of the Subject Claim, as the case may be. If IPA sustains the appeal,
      in
      whole or in

    part,
      then IPA shall include with the written decision a payment or payments (computed
      in

    accordance
      with the provisions of this Section 4) to PROVIDER that reflects the results
      of
      the

    appeal.
      If IPA denies the appeal, in whole or in part, then PROVIDER may initiate
      arbitration in

    accordance
      with the provisions of this Agreement to resolve the dispute with IPA concerning
      the

    reduction
      in reimbursement or the denial of the Subject Claim, as the case may be.
      The

    foregoing
      notwithstanding, the provisions of the IPA Policies shall control over any
      conflicting

    provision
      of this section.

    


    ARTICLE
      5

    ONGOING
      OBLIGATIONS OF PROVIDER

    


    5.01 Practice
      Standards.
      PROVIDER shall furnish Ancillary Services that are

    Medically
      Necessary and that conform to the generally accepted practices and
      standards

    prevailing
      at the time of service.

    


    5.02 Prior
      IPA Approval.
      PROVIDER shall comply with the Approval Protocols, as

    the
      same
      may be modified from time to time. PROVIDER agrees and acknowledges that
      IPA

    shall
      not
      be responsible to compensate PROVIDER for Ancillary Services furnished without
      the

    authorization
      required by the Approval Protocols. IPA acknowledges that Provider is
      providing

    pediatric
      specialty services at an acute tertiary hospital. IPA agrees to pay Provider
      the

    negotiated
      compensation amount based solely on the level of service provided. The
      Current

    Procedural
      Terminology (CPT Code). Prior written authorization shall not be restricted
      to
“low”

    or
      “moderate” complexity level visits or consults. Provider shall be reimbursed on
“high”

    complexity
      level visits and consults when billed and documented appropriately.

    


    5.03 Compliance
      With Laws and Licensing/Accreditation Requirements.
      At all
      times

    during
      the term of this Agreement, PROVIDER shall furnish the Ancillary Services
      in

    accordance
      with the following requirements (as the same may be modified from time to
      time):

    


    


    a.
      The
      applicable federal, state or municipal statutes or ordinances,

    


    


    
      
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    b. The
      applicable rules and regulations of the Medicare program

     

    c. The
      applicable requirements of the Licensing Act, and

    


    


    d. The
      applicable accreditation standards of JCAHO or other national

    accreditation
      agency accepted by IPA.

    


    5.04 Cooperation
      with Medical Directors.
      PROVIDER understands that the Payers

    place
      certain obligations on IPA regarding the quality of care received by
      Enrollees.

    PROVIDER
      further understands that the Payers in certain instances will have the right
      to
      oversee

    and
      review the quality of care administered to Enrollees. In recognition of the
      foregoing,

    PROVIDER
      shall cooperate, and shall cause the Personnel to cooperate, with the
      medical

    directors
      of the Payers and IPA in connection with the review of the quality of the
      Ancillary

    Services
      furnished to Enrollees.

    


    5.05 Cooperation
      with Utilization Review/Quality Improvement Programs.

    PROVIDER
      cooperate and comply with the policies and decisions adopted by the
      UR/QI

    Programs
      from time to time. Without limiting the generality of the foregoing, PROVIDER
      shall

    prepare
      and submit utilization reports regarding the Ancillary Services furnished to
      Enrollees as

    reasonably
      requested by IPA from time to time. PROVIDER shall cause the Personnel to
      attend

    meetings
      of the UR/QI Programs as reasonably requested by IPA.

    


    5.06 Cooperation
      with Professional Review Program.
      PROVIDER shall cause the

    Personnel
      to participate in and cooperate with the Review Programs that IPA may adopt
      or

    amend
      from time to time. PROVIDER shall cause the Personnel to assist IPA in
      reviewing

    existing
      clinical guidance procedures and to participate in clinical task forces
      pertinent to the

    area
      of
      expertise of the Personnel as reasonably requested by IPA from time to
      time.

    


    5.07 Non-Discrimination.
      PROVIDER shall not differentiate or discriminate in the

    performance
      of the Ancillary Services on the basis of race, color, national origin,
      ancestry, sex,

    marital
      status, age, Payer, or on any other basis prohibited by applicable federal
      and
      state laws.

    


    5.08 Record
      Keeping Requirements.
      PROVIDER shall maintain such books and

    records
      as may be reasonably necessary for the Payers and IPA to comply with the Act,
      as

    amended,
      and the regulations promulgated by the Department thereunder. PROVIDER
      shall

    promptly
      provide information to the Interested Parties (and/or their authorized
      representatives) as

    they
      specifically request in writing in accordance with the requirements of the
      applicable laws

    (including
      the Act and the Licensure Act). PROVIDER shall provide the Interested
      Parties

    (and/or
      their authorized representatives) with access to the books, records and other
      papers

    relating
      to Ancillary Services furnished to the Enrollees, and to the amount of payments
      received

    from
      Enrollees or from others on behalf of Enrollees. PROVIDER shall provide such
      access at

    all
      reasonable times following not less than five days prior written notice.
      PROVIDER agrees to

    retain
      such books and records for a period of not less than five (5) years from and
      after the

    effective
      date of termination of this Agreement.

    


    5.09 Restrictive
      Covenants. For good and valuable consideration the receipt and

    
      
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    sufficiency
      of which are hereby acknowledged, PROVIDER shall comply with the
      Covenants

    and
      shall
      cause the Personnel to comply with the Covenants. The Covenants shall
      apply

    throughout
      the term of this Agreement and for a period of two (2) years following the
      effective

    date
      of
      termination of this Agreement for any reason. PROVIDER agrees that IPA may
      enforce

    all
      or
      any one of the Covenants with a temporary and permanent injunction in an action
      in equity

    without
      the necessity of proving actual damages. PROVIDER further agrees that IPA
      may

    obtain
      an
      ex parte restraining order immediately upon the commencement of any such
      action

    without
      notice. In this regard, PROVIDER agrees that IPA’s remedy at law is inadequate
      in the

    event
      of
      an actual or threatened breach of the Covenants, or any one of them.
      Accordingly,

    PROVIDER
      agrees that it will not assert (and will prohibit the Personnel from asserting)
      as a

    defense
      to an action in equity that IPA’s remedy at law is adequate. The remedies set
      forth above

    shall
      be
      in addition to, and not in lieu of, any and all other legal and equitable
      remedies that may

    be
      available to IPA, each of which is expressly reserved. For purposes of this
      section,

    “Covenants”
      mean each of the following:

    


    a. Keep
      confidential and to refrain from disclosing the Confidential

    Information
      of IPA. For purposes of this Agreement, “Confidential Information” means
      the

    professional
      and business practices, trade secrets or other confidential or privileged
      information

    of
      IPA
      including, without limitation, the following:

    


    (i) The
      terms
      of the Managed Care Agreements,

    


    (ii) The
      terms
      of agreements between IPA and Physician Contractors,

    


    (iii)
      Business methods,

    


    (iv)
      Patient names and addresses,

    


    (v) Financial
      statements, and

    


    (vi)
      Procedures or protocols relating or pertaining to the practice of

    medicine
      or surgery.

    


    b. Refrain
      from soliciting, attempting to solicit, or otherwise encouraging in

    any
      manner whatsoever an Enrollee to terminate his or her relationship with IPA
      or
      any

    Physician
      Contractor.

    


    c. Refrain
      from making any statements one purpose of which is to encourage

    an
      Enrollee to terminate his or her enrollment with a Payer.

    


    d.
       Refrain
      from soliciting, attempting to solicit, or otherwise encouraging,
      in

    any
      manner whatsoever, any third party payer (including the Payers) to terminate
      a
      contract

    (including
      the Managed Care Agreements) with IPA, to refuse to enter into a contract with
      IPA,

    or
      to
      refuse to renew an existing contract with IPA.

    


    
      
        11

      

      
         

        
          

        

      

      
         

      

    

    e. Refrain
      from making any disparaging statements about IPA, the Payers, or

    the
      Physician Contractors.

    


    


    5.10 Grievance
      Procedure.
      IPA
      and/or the Payers shall establish a grievance procedure

    or
      procedures from time to time to process Enrollee complaints regarding the
      Ancillary Services,

    among
      other matters. PROVIDER shall comply with (and cause the Personnel to comply
      with)

    the
      terms
      of all such grievance procedures.

    


    ARTICLE
      6

    INSURANCE
      AND INDEMNIFICATION

    


    6.01 PROVIDER
      Insurance.
      PROVIDER shall procure and maintain at its sole cost

    and
      expense the following insurance coverage:

    


    (I) A
      policy
      or policies of comprehensive general liability insurance in the

    amount
      of
      at least One Million Dollars ($1,000,000) “per occurrence” and Three Million
      Dollars ($3,000,000) in the aggregate per calendar year. The CGL Insurance
      shall
      provide continuous coverage for injury to or death of any one or more persons
      in
      or on PROVIDER property.

    


    (ii) A
      policy
      or policies of insurance covering loss or damage to personal

    property,
      fixtures or equipment in or on PROVIDER property in an amount not to exceed
      the
      full replacement cost thereof, as the same may exist from time to time. The
      Property Insurance shall provide coverage against all perils included within
      the
      classification of fire, extended coverage, vandalism, malicious mischief,
      sprinkler leakage, flood, and special extended perils (“all risk” as such term
      is used in the insurance industry).

    


    (iii) A
      policy
      or policies of professional liability insurance in such amounts as

    may
      be
      commercially reasonable. The Malpractice Insurance shall provide continuous
      coverage for Civil Claims made or threatened against PROVIDER, the Personnel,
      and PROVIDER’s other agents, employees and representatives either during or
      following the expiration of the term of

    this
      Agreement.

    


    (iv) A
      policy
      or policies of worker’s compensation insurance for PROVIDER’s agents, servants,
      and employees, including the Personnel, in accordance

    with
      the
      laws of the state of California, as the same may be from time to time
      amended.

    


    6.02 Parties
      Responsible For Own Acts:
      Each
      party shall be responsible for its own

    acts
      or
      failures to act in connection with the performance of Covered Services.
      Accordingly,

    


    


    


    
      
        12

      

      
         

        
          

        

      

      
         

      

    

    


    


    


    


    neither
      party shall be responsible for the acts or failures to act of the other party
      in
      connection

    with
      the
      performance of Covered Services under this agreement.

    


    


    ARTICLE
      7

    PATIENT
      RECORDS

    


    7.01 Creation
      of Patient Records.
      PROVIDER shall ensure that a medical record is

    established
      and maintained for each Enrollee referred by the Physician Contractors for
      Ancillary

    Services.
      PROVIDER shall ensure that the medical record is created and maintained
      in

    accordance
      with applicable laws. PROVIDER shall keep the medical records of the
      Enrollees

    confidential,
      and shall take all reasonable and appropriate precautions to prevent
      the

    unauthorized
      disclosure of the medical and other records prepared or maintained by
      PROVIDER

    and
      relating to the Enrollees. PROVIDER shall at all times provide IPA and the
      Physician

    Contractors
      with access to all patient records of Enrollees.

    


    7.02 Ownership
      of and Access to Patient Records.
      IPA
      agrees and acknowledges that

    any
      and
      all medical records created by PROVIDER in connection with the performance
      of
      the

    Ancillary
      Services shall be the sole and exclusive property of PROVIDER. Notwithstanding
      the

    foregoing,
      PROVIDER shall provide or arrange to provide IPA, the Physician Contractors
      and

    the
      Payers with copies of any such medical records at PROVIDER’s sole cost and
      expense

    promptly
      following receipt of a request therefor.

    


    7.03 Confidentiality.
      PROVIDER
      shall take the appropriate precautions necessary and

    desirable
      to keep confidential and to prevent the unauthorized disclosure of all medical
      and other

    records
      prepared or maintairLed by PROVIDER and pertaining to Enrollees.

    


    7.04 Compliance
      with HIPAA.
      PROVIDER shall adopt and implement policies and

    procedures
      relating to the use or disclosure of individually identifiable health
      information,

    including
      but not limited to policies and procedures required by the privacy
      regulations

    promulgated
      under the Health Insurance Portability and Accountability Act of 1996, as
      amended.

    


    ARTICLE
      8

    TERMINATION
      OF TILE AGREEMENT

    


    8.01 Initial
      Term.
      The
      Initial Term will commence on the Effective Date. Thereafter,

    the
      Initial Term shall renew automatically for successive 12-month periods unless
      and until

    terminated
      in accordance with the terms of this Agreement.

    


    8.02 Termination
      With Cause.
      Either
      party shall be permitted to terminate this

    Agreement
      immediately upon a breach by such other party of a material provision of
      this

    Agreement.
      Notwithstanding the foregoing, the Non-Defaulting Party shall notify the
      Defaulting

    Party
      in
      writing of the alleged defect and allow the Defaulting Party a reasonable
      opportunity to

    cure
      the
      alleged defect. If the Defaulting Party falls to cure the defect within a
      reasonable time,

    or
      if the
      alleged defect is not susceptible to cure within such time, then the
      Non-Defaulting Party

    


    


    
      
        13

      

      
         

        
          

        

      

      
         

      

    

    shall
      be
      permitted to terminate this Agreement immediately with notice to the Defaulting
      Party.

     

    8.03 Termination
      With Notice.
      Either
      party may terminate this Agreement without

    cause
      and
      without penalty, by giving the other party not less than ninety (90) days prior
      written

    notice.

    


    8.04 Termination
      in the Event of Government Action.
      If
      either party receives notice of

    any
      Action, then the parties shall attempt to amend this Agreement in order to
      comply with the

    Action.
      If the parties, acting in good faith, are unable to make the amendments
      necessary to

    comply
      with the Action, or., alternatively, if the parties determine in good faith
      that
      compliance

    with
      the
      Action is impossible or infeasible, then this Agreement shall terminate
      immediate upon

    written
      notice by either party. For the purposes of this section, the term “Action”
means any

    legislation,
      regulation, rule or procedure passed, adopted or implemented by any federal,
      state or

    local
      government or legislative body or any private agency, or any notice of a
      decision, finding,

    or
      action
      by any governmental or private agency, court or other third party which, in
      the
      good

    faith
      opinion of counsel to either party, if or when implemented, would:

    


    a. Revoke
      or
      jeopardize any license granted to IPA or to PROVIDER,

    


    b. Revoke
      or
      jeopardize the federal, state or local tax-exempt status of

    PROVIDER
      or its tax-exempt financial obligations, if any,

    


    c. Impose
      any unrelated business income tax on PROVIDER, if

    applicable,

    


    d. Prevent
      IPA and/or the Physician Contractors from being able to

    access
      and use PROVIDER facilities,

    


    e. Prohibit
      Physician Contractors from referring patients, including

    Enrollees,
      to PROVIDER, or

    


    f. Subject
      PROVIDER, the IPA Parties, or the Physician Contractors

    to
      civil
      or criminal prosecution on the basis of their participation in executing this
      Agreement or

    performing
      their respective obligations under this Agreement.

    


    8.05 Continuing
      Payment Obligation.
      After
      the effective date of termination of this

    Agreement,
      IPA shall compensate PROVIDER for any and all Ancillary Services furnished
      to

    Enrollees
      prior to the effective date of termination of this Agreement in accordance
      with
      (and

    subject
      to) the provisions of Article 4 hereof. The foregoing notwithstanding, if IPA
      terminates

    this
      Agreement on account of a breach by PROVIDER, then IPA shall be entitled to
      offset any

    amounts
      due to PROVIDER, for the damages suffered or to be suffered by IPA as a result
      of such

    breach
      by
      PROVIDER. The right to offset shall not be an exclusive remedy, and the exercise
      by

    IPA
      of
      such right shall not constitute an election of remedies by IPA (or construed
      as
      an election

    of
      remedies by IPA).

    


    


    
      
        16

      

      
         

        
          

        

      

      
         

      

    

    ARTICLE
      9

    RELATIONSHIP
      OF PARTIES

    


    9.01 Independent
      Contractors.
      The
      parties agree and acknowledge that IPA is

    engaging
      PROVIDER and the Personnel as independent contractors in the performance of
      the

    Ancillary
      Services contemplated by this Agreement. It is further mutually understood
      that
      IPA

    shall
      neither have nor exercise any control or direction over the methods by which
      PROVIDER

    or
      the
      Personnel furnish the Ancillary Services. It is expressly agreed by the parties
      that no work,

    act,
      commission or omission of PROVIDER or the Personnel shall be construed to make
      or

    render
      IPA or the Physician Contractors the partner, agent, employee or servant of
      PROVIDER.

    PROVIDER
      shall pay or procure all salary, compensation, benefits, payroll taxes, and
      similar

    items
      to
      or for all of the Personnel.

    


    9.02 Non-Exclusive
      Arrangement.
      PROVIDER acknowledges that it is not the

    exclusive
      provider of Ancillary Services to Enrollees, and that Physician Contractors
      can
      refer

    Enrollees
      to any other party for the provision of Ancillary Services. PROVIDER
      acknowledges

    that
      IPA
      has the right to enter into agreements with other facilities that contemplated
      the

    provision
      of Ancillary Services on terms identical or substantially similar to the terms
      contained

    in
      this
      Agreement.

    


    ARTICLE
      10

    GENERAL
      PROVISIONS

    


    10.01 Notices.
      Any
      notice required or permitted to be given hereunder by a party to

    another
      party may be given by personal delivery in writing or by registered or certified
      mall,

    postage
      prepaid, with return receipt requested. Notices shall be addressed to the
      parties at the

    following
      addresses:

    


    To
      IPA:  LaSalle
      Medical Associates

    1860
      Colorado Blvd., #200

    Los
      Angeles, CA 90041

    


    To
      PROVIDER: Effective
      Health, Inc.

    Dba
      Sespe
      Pharmacy

    552
      Sespe
      Ave., Unit D

    Fillmore,
      CA 93015

    


    Each
      party may change such party’s address by written notice in accordance with this
      paragraph.

    Notices
      delivered personally will be deemed communicated as of actual receipt; mailed
      notices

    will
      be
      deemed communicated as of three (3) days after mailing.

    



    
      
        15

        


         

      

      
         

        
          

        

      

      
         

      

    


    10.02 Entire
      Agreement Of The Parties.
      This
      Agreement supersedes any and all

    agreements,
      either written or oral, between the parties hereto with respect to the subject
      matter

    contained
      herein as of the effective date of this Agreement. This Agreement contains
      all
      of the

    covenants
      and agreements between the parties with respect to the performance of the
      Ancillary

    Services.
      Each party acknowledges that no representation, inducements, promises,
      or

    agreements,
      orally or otherwise, have been made by either party, or anyone acting on behalf
      of

    either
      party, which are not embodied herein, and that no other agreement, statement,
      or
      promise

    not
      contained in this Agreement shall be valid or binding. Except as otherwise
      provided herein,

    any
      modification of this Agreement will be effective only if such modification
      is in
      writing

    signed
      by
      the party to be charged.

    


    10.03 Amendment.
      PROVIDER hereby consents upon notice from IPA to an

    amendment
      to this Agreement made necessary or desirable by the terms of the Managed
      Care

    Agreements,
      the Act, or any rule or regulation promulgated under the Act or by the
      Department.

    All
      other
      amendments to this Agreement must be mutually agreed to by the parties
      and

    confirmed
      in a written instrument signed by the party or parties to be
      charged.

    


    10.04 Arbitration.
      Any
      dispute arising out of or relating to this Agreement that cannot

    be
      resolved in good faith by the parties shall be resolved through binding
      arbitration pursuant to

    the
      Arbitration Statute. Each party shall have the rights to discovery as
      specifically set forth in

    Section
      1283.05 of the Arbitration Statute. A party seeking to arbitrate any such
      dispute shall

    serve
      a
      written notice to arbitrate pursuant to this section on the other party. An
      arbitration

    hearing
      shall be held before a single arbitrator jointly selected by the parties. The
      arbitrator shall

    be
      selected from a list of retired superior court judges from the County of Los
      Angeles. If the

    parties
      are unable to agree on the appointment of a single arbitrator within ten (10)
      days, then

    each
      party shall appoint one arbitrator (who need not be a retired superior court
      judge) within

    three
      (3)
      clays thereafter. The two arbitrators together shall select a third arbitrator
      who shall be a

    retired
      superior court judge and who shall serve as the sole arbitrator of the dispute.
      The

    arbitrator
      shall decide the dispute in accordance with the procedures set forth in the
      Arbitration

    Statute
      within fifteen (15) days following the conclusion of the hearing. The prevailing
      party in

    such
      action shall be entitled to recover all reasonably incurred costs and expenses
      accorded by

    the
      arbitrator, including reasonable attorneyst fees, incurred by such party in
      connection with

    such
      action. The decision of the arbitrator shall be final and binding on both
      parties for any and

    all
      purposes. Judgment upon any award rendered by the arbitrator may be entered
      in
      any court of

    competent
      jurisdiction. All arbitration proceedings pursuant to this Agreement shall
      be
      held and

    conducted
      in Los Angeles, California.

    


    10.05 Governing
      Law.
      This
      Agreement shall be governed by and construed in

    accordance
      with the laws of the state of California.

    


    


    


    


    


    


    



    
      
        16

        


         

      

      
         

        
          

        

      

      
         

      

    


    


    10.06 Assignment.
      This
      Agreement shall be binding upon and inure to the benefit of the

    successors,
      assigns, personal representatives, heirs and legatees of the respective parties
      hereto.

    The
      foregoing notwithstanding, neither party may assign or delegate their respective
      obligations

    hereunder
      without the prior written consent of the other party, which consent shall not
      be

    unreasonably
      withheld.

    


    10.07 Referrals.
      IPA and
      the Physician Contractors shall be entitled to refer Enrollees to

    any
      hospital or other facility or Provider for the provision of the Ancillary
      Services. No term of

    this
      Agreement shall be construed as requiring or inducing IPA or the Physician
      Contractors to

    refer
      Enrollees to PROVIDER.

    


    10.08 Ambiguities.
      The
      parties hereby agree and acknowledge that the terms of this

    Agreement
      were negotiated in good faith and at arms’ length. The parties further agree
      and

    acknowledge
      that they were afforded the opportunity to obtain the advice of legal counsel
      in

    connection
      with the negotiation of the terms of this Agreement. Accordingly, the parties
      agree

    and
      acknowledge that any ambiguous terms or conditions contained in this Agreement
      shall not

    be
      interpreted or construed against either such party.

    


    10.09 Severability.
      If any
      provision of this Agreement is determined to be illegal or

    unenforceable,
      then such provision shall be severed from this Agreement, and such
      severance

    shall
      have no effect upon the enforceability of the remainder of this
      Agreement.

    


    10.10 Survival.
      The
      obligations of the parties under this Agreement shall survive the

    Consummation
      of the transactions set forth in this Agreement, and shall continue to be
      binding on the parties after the termination of this Agreement.

    


    10.11 Waiver.
      No
      failure of a party to detect or protest a breach of any of its
      rights

    under
      this Agreement shall be deemed a waiver of any of the aggrieved party’s rights.
      A waiver

    of
      any
      provision of this Agreement shall not be construed as a waiver of any other
      provision.

    The
      waiver by a party of any breach of any provision of this Agreement shall not
      be
      deemed to

    be
      a
      waiver of such provision or any subsequent breach of the same or any other
      provision. Any

    waiver
      of
      fights shall only occur by a written document specifying the specific right
      waived and

    the
      specific circumstances covered by the waiver, and shall be signed by an
      authorized

    representative
      of the party granting the waiver.

    


    10.12 Confidentiality.
      Neither
      party shall disclose any of the terms of this Agreement to

    any
      other
      person or entity, except as required by law, without the prior written consent
      of the

    other
      party. The foregoing prohibition shall not apply to disclosures to the agents,
      professional

    advisors,
      representatives, or employees of either party with a good faith need to
      know.

    


    10.13 Duplicate
      Originals.
      This
      Agreement may be executed in one or more

    counterparts,
      each of which shall be deemed to be an original, but all of which together
      shall

    constitute
      one and the same instrument.

    


    10.14 Headings.
      The
      subject headings of the articles and sections of this Agreement are

    included
      for purposes of convenience only, and shall not effect the construction or
      interpretation

    of
      any of
      its provisions.

    


    
      
        17

      

      
         

        
          

        

      

      
         

      

    

    IN
      WITNESS WHEREOF, the parties have executed this Agreement as of the date
      and

    year
      first written above.

    


    


    IPA
       LaSalle
      Medical Associates

    Albert
      Arteaga, MD

    


    


    By: /s/
      Albert Arteager, MD

    


    Its: President

    


    


    


    PROVIDER
      Effective Health, Inc.

    


    


    By: /s/
      Steven Westlund

    


    Its:
       CEO

    


    


    Tax
      ID#

    


    


    


    


    


    
      
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    EXHIBIT
      A

    FEE
      SCHEDULE

     

     

    
      
        19