Exhibit
10.135


 


 


NOTICE AMENDMENT


Contract Amendments Required by


SB 260, AB 1455, AB 2907 and AB 1286


 


This Notice Amendment supplements, amends, and is made a part of the
agreement (“Agreement”) presently in force between PacifiCare of California
(“PacifiCare”) and Prospect Medical Group/Central (“Medical Group”).  This Notice Amendment applies to
PacifiCare’s commercial Managed Care Plans and is issued by PacifiCare in
accordance with the provisions of the Agreement which permit PacifiCare to
issue notice amendments as necessary to maintain compliance with changes in
law, and this Notice Amendment does not require the consent of Medical Group.


 


Recitals


 


WHEREAS, the California legislature has enacted Senate Bill 260
(Speier) regarding financial standards and requirements for “risk bearing
organizations” that enter into “risk arrangements” with health care service
plans, the requirements of which are set forth at Section 1375.4 of the
California Health and Safety Code; and


 


WHEREAS, as a result of the passage of SB 260 and the adoption of
Section 1375.4, PacifiCare is required to conform with the financial
reporting requirements established by the California Department of Managed
Health Care that pertain to health care service plans and risk bearing organizations,
which requirements are set forth at Title 28 of the California Code of
Regulations, Sections 1300.75.4 through 1300.75.4.6; and


 


WHEREAS, the California legislature has enacted Assembly Bill 1455
(Scott) regarding claims settlement practices and dispute resolution mechanisms
for health care service plans, the requirements of which amend and supplement
the Knox-Keene Health Care Service Act of 1975; and


 


WHEREAS, as a result of the passage of AB 1455, PacifiCare is required
to conform with the requirements established by the Department of Managed
Health Care regarding claims resolution practices and dispute resolution
mechanisms, which requirements are set forth at Title 28 of the California Code
of Regulations, Sections 1300.71 and 1300.71.38; and


 


WHEREAS, the California legislature has enacted Assembly Bill 2907
(Cohn) regarding amendments to contracts between health care providers and
health care service plans, which supplement the Knox Knox-Keene Health Care
Service Plan Act of 1975 by adding Section 1375.7 to the California Health
and Safety Code; and


 


WHEREAS, the California legislature has enacted Assembly Bill 1286
(Frommer) regarding continuity of care for newly enrolled health plan members
affected by certain enumerated medical conditions whose existing providers do
not participate in the newly enrolled member’s health plan, and regarding
continuity of care for individuals


 


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affected
by such conditions whose providers are leaving a health plan’s provider
network, the provisions of which amend and supplement Section 1373.96 and
other sections of the Knox-Keene Health Care Service Plan Act of 1975; and


 


WHEREAS, the Agreement permits PacifiCare to amend the Agreement in
order to maintain compliance with State and Federal Law by giving notice of
such amendment to Medical Group;


 


NOW, THEREFORE, PacifiCare hereby amends the Provider Agreement as
follows:


 


Amendment


 


Article I


SB
260 REGULATIONS


(FINANCIAL
SOLVENCY)


 


1.                                       Definitions.


 


1.1                                 “IBNR Claims.” The term “IBNR Claims”
shall refer to claims for services provided to Members which are the financial
responsibility of Medical Group, and which have been incurred, but which have
not been reported to Medical Group.


 


1.2                                 “GAAP.” The term “GAAP” shall mean
generally accepted accounting principles, consistently applied.


 


2.                                       Obligations of Health Plan.


 


2.1                                 Monthly Membership Reports. 
Notwithstanding any different provisions of the Agreement, PacifiCare
shall provide the following information to Medical Group on a monthly basis for
Members assigned to Medical Group within ten (10) calendar days following the
start of each month:


 


(a)                                  Membership information containing the
following elements:


 


(i)                                     Member identification number;


(ii)                                  Name;


(iii)                               Birth Date;


(iv)                              Gender;


(v)                                 Address (including zip code);


(vi)                              Managed Care Plan selected;


(vii)                           Employer group identification;


(viii)                        Identity of other third party coverage, if
known;


(ix)                                Enrollment/disenrollment dates;


 


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(x)                                   Medical group/IPA number;


(xi)                                Provider effective date;


(xii)                             Type of change to coverage;


(xiii)                          Co-payment;


(xiv)                         Deductible;


(xv)                            Amount of capitation to be paid per enrollee
per month;


(xvi)                         Primary care physicians, when selection is
required by plan; and


 


(b)                                 The following additional information:


 


(i)                                     Member additions and terminations for the
month (including: Member name, Member identification number); 


(ii)                                  Number of additional Members under each
Managed Care Plan;


(iii)                               Number of deleted Members under each Managed
Care Plan;


 


(c)                                  PacifiCare shall submit all the information
enumerated at Sections 2.1(a) and (b) to Medical Group electronically unless
both PacifiCare and Medical Group agree in writing that written reports may be
submitted instead.


 


(d)                                 If the information from Sections 2.1(a) and (b) are provided in
more than one report, all such reports shall be processed as of the same date.


 


(e)                                  Within forty-five (45) calendar days of the
close of each calendar quarter, PacifiCare shall disclose to Medical Group
through electronic transmission, or in writing if agreed by both PacifiCare and
Medical Group, a reconciliation of any variances between the reports for
information listed in Sections 2.1(a) and (b).


 


2.2                                 Quarterly Risk-Sharing Reports. 
PacifiCare shall provide to Medical Group on a quarterly basis, within
forty-five (45) days of the close of each calendar quarter, a quarterly
risk-sharing report.  The risk sharing
report shall contain a detailed description of each and every amount (including
expenses and income) that is sufficient to allow verification of amounts
allocated to Medical Group and PacifiCare under the Agreement.  Where applicable, the following information,
at minimum, shall be provided in the quarterly risk-sharing report:


 


(a)                                  Total number of Member months;


 


(b)                                 Total budget allocation for the Member
months;


 


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(c)                                  Total expenses paid during the period;


 


(d)                                 A description of each and every amount of
expense allocated to the PacifiCare and to Medical Group by Member identification
number, date of service, description of service by claim codes, net payment,
and date of payment.


2.3                                 Annual Statement. 
PacifiCare shall provide Medical Group with a preliminary payment report
no later than one hundred fifty (150) days following the end of the contract
year consistent with the requirements of Section 2.2 and provide payment,
if any is due, to Medical Group no later than one hundred eighty (180) days
after the close of the contract year or the Agreement’s termination date, whichever
occurs first.


 


2.4                                 Annual Disclosures.  On
the Agreement anniversary date, PacifiCare shall disclose to Medical Group the
following information for each and every type of risk arrangement (traditional
commercial, point of service, small group, and individual plans), other than
the Secure Horizons Health Plan, which may be covered by the Agreement:


 


(a)                                  A matrix of responsibility for medical
expenses (physician, institutional, ancillary, and pharmacy) which will be
allocated to Medical Group, a facility or PacifiCare under the Agreement;


 


(b)                                 Expected/projected utilization rates and unit
costs for each major expense service group (inpatient, outpatient, primary care
physician, specialist, pharmacy, home health, durable medical equipment,
ambulance, and other), as well as the source of the data and the actuarial
methods employed in determining the utilization rates and unit costs by benefit
plan type.


 


(c)                                  All factors used to adjust payments or
risk-sharing targets, including but not limited to the following: age, sex,
localized geographic area, family size, experience rated, and benefit plan
design, including copayment/deductible levels;


 


(d)                                 The amount of payment for each and every
service to be provided under the contract, including any fee schedules or other
factors or units used in determining the fees for each and every service.  To the extent that reimbursement is made
pursuant to a specified fee schedule, the Agreement shall incorporate the fee
schedule by reference, and shall further specify the Medicare RBRVS year
if RBRVS is the methodology used for the fee schedule development.  For any proprietary fee schedule, the
Agreement


 


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shall include sufficient detail that payment amounts related to that
fee schedule can be accurately predicted.


 


(e)                                  In the case of Capitated Payment, PacifiCare
shall disclose the amount to be paid per Member per month and shall provide
details sufficient to allow Medical Group to verify the accuracy and
appropriateness of any deductions from Capitation Payments.


 


Article II


AB 1455 REGULATIONS

(CLAIMS PAYMENT and PROVIDER DISPUTES)


 


3.                                       Claims Adjudication.  In
processing claims, Medical Group shall accept and adjudicate claims for health
care service provided to PacifiCare Members in accordance with the provisions
of Sections 1371, 1371.1, 1371.2, 1371.22, 1371.35, 1371.36, 1371.37, 1371.38,
1371.4, and 1371.8 of the California Health and Safety Code and Sections
1300.71, 1300.71.38, 1300.71.4, and 1300.77.4 of Title 28 of the California
Code of Regulations.


 


4.                                       Quarterly Performance Report. 
Medical Group shall submit a quarterly performance report to PacifiCare
within thirty (30) days of the close of each calendar quarter, and during the
term of this Agreement.  Such report
shall, at minimum, meet the following requirements:


 


4.1                                 The report shall disclose the percentage of
claims paid timely and accurately by Medical Group consistent with Sections
1371, 1371.1, 1371.2, 1371.22, 1371.35, 1371.36, 1371.37, 1371.4, and 1371.8 of
the California Health and Safety Code and Sections 1300.71. 1300.71.38,
1300.71.4 and 1300.77.4 of Title 28 of the California Code of Regulations.


 


4.2                                 The report shall include a tabulated record
of each dispute received by Medical Group from a provider, categorized by date
of receipt, and shall include the identification of each provider, describe the
type of dispute, disposition of each dispute, and state the number of working
days for resolution of each such dispute. 
Each individual dispute contained in a provider’s bundled notice of
dispute shall be reported separately.


 


4.3                                 The report shall be signed by, and include
the written verification of, a principal officer of the Medical Group, as
defined in Section 1300.45(o) of Title 28 of the California Code of
Regulations.  Such verification shall
state that the report is true and correct to the best knowledge and belief of
such principal officer.


 


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5.                                       Provider Dispute Resolution Mechanism.


 


5.1                           Provider Dispute Resolution Mechanisms. 
Medical Group shall establish and maintain a fair, fast, and
cost-effective dispute resolution mechanism to process and resolve provider
disputes in accordance with the provisions of Sections 1371, 1371.1, 1371.2,
1371.22, 1371.35, 1371.36, 1371.37, 1371.4, and 1371.8 of the California Health
and Safety Code and Sections 1300.71, 1300.71.38, 1300.71.4, and 1300.77.4 of
Title 28 of the California Code of Regulations.  PacifiCare may assume responsibility for the administration of
Medical Group’s dispute resolution mechanism and for the timely resolution of
provider disputes in the event Medical Group fails to timely resolve its
provider disputes, including the issuance of a written decision.


 


5.2                           Access to Information. 
Medical Group shall make available to PacifiCare and to the Department
of Managed Health Care all records, notes, and documents regarding Medical
Group’s dispute resolution mechanism(s) and the resolution of all disputes
received from providers.


 


5.3                           Disputes Relating to Medical Necessity and
Utilization Review.  In the event that a provider disagrees with
the resolution of any dispute between such provider and Medical Group which
relates to medical necessity or utilization review, such Medical Group shall
have an unconditional right of appeal for such claim to PacifiCare’s dispute
resolution process for a de novo review and resolution for a period of sixty
(60) working days from Medical Group’s date of determination, as defined at
Section 1300.71(a) of Title 28 of the California Code of Regulations,
pursuant to the provisions of Section 1300.71.38(a)(4) of Title 28 of the
California Code of Regulations.


 


6.                                       Waiver Prohibited. 
Medical Group shall not require or permit a contracted provider to waive
any right conferred upon such provider or any obligation imposed on PacifiCare
by Sections 1371, 1371.1, 1371.2, 1371.22, 1371.35, 1371.36, 1371.37,.1371.4,
and 1371.8 of the California Health and Safety Code and Sections 1300.71,
1300.71.38, 1300.71.4, and 1300.77.4 of Title 28 of the California Code of
Regulations relating to claims processing or payment.  Any contractual provision or other agreement purporting to
constitute, create or result in such a waiver shall be null and void


 


Article III


AB 2907


(PROVIDER’S BILL OF RIGHTS)


 


7.                                 Amendments or Modifications to Agreement. 
Except as otherwise provided in this Article III, all amendments or
modifications to the Agreement shall be effective only upon mutual written
agreement of the parties.


 


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8.                                       Amendments
to Provider Manual.  PacifiCare may
by notice amend or change any or all
provisions of the Provider Manual by providing forty-five (45) business days’
prior written notice to Medical Group unless the amendment is material and is
not made in order to comply with a change in State or Federal Law or
Accreditation Standard, in which case the provisions of Section 11 of this
Amendment, below, shall apply.  Any
notice amendment pursuant to the terms of this Section shall be binding
upon Medical Group at the end of the forty-five (45) business day period.


 


9.                                       Amendments to Agreement to Comply with State
and Federal Law.  PacifiCare may amend this Agreement by
providing thirty (30) calendar days’ prior written notice to Medical Group in
order to maintain compliance with State and Federal Law.  Such amendment shall be binding upon Medical
Group at the end of the thirty (30) calendar day period and shall not require
the consent of Medical Group.


 


10.                                 Amendments to Managed Care Plans. 
PacifiCare may by notice amend or change any or all provisions of the
Managed Care Plans by providing forty-five (45) business days’ prior written
notice to Medical Group unless the amendment is material or it impacts Medical
Group and is not made in order to comply with a change in State or Federal Law
or Accreditation Standard, in which case the provisions of Section 11 of
this Amendment, below.  Any notice
amendment pursuant to the terms of this Section shall be binding upon
Medical Group at the end of the forty-five (45) business day period and shall
not require the consent of Medical Group.


 


11.                                 Material Changes. 
Medical Group and PacifiCare shall seek to agree to amendments to the
Agreement which satisfactorily address material changes proposed by PacifiCare
which are not permitted to be made by a notice amendment pursuant to the terms
of the Agreement or this Amendment or applicable State and Federal Law.  In such event, the applicable amendment
shall not be effective until the parties amend the Agreement through a written
amendment signed by both parties.  For
the purposes of this Section ”material” shall have the meaning set forth
in California Health and Safety Code Section 1375.7(f)(2), which at the
time of execution of this Agreement, states that “material” shall mean a change
to which a reasonable person would attach importance in determining action to
be taken upon such provision.


 


In the event PacifiCare has provided Medical Group with notice of an
amendment pursuant to Sections 8 or 10 of this Amendment, above, and such
amendment is material and the parties are not able to reach a mutual agreement
on the terms of the amendment, Medical Group retains its rights to terminate
the Agreement pursuant to California Health and Safety Code Section 1375.7(b).  If Medical Group desires to exercise its
right to terminate the Agreement pursuant to California Health and Safety Code
Section 1375.7(b), Medical Group agrees to


 


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provide PacifiCare with written notice of its intent to terminate the
Agreement not less than five (5) business days prior to the expiration of the
forty-five (45) business day notice period provided at Sections 8 and 10 and
Medical Group agrees that PacifiCare may withdraw its notice amendment on or
before the expiration of the forty-five (45) business day notice period thereby
canceling Medical Group’s termination right.


 


Article IV


AB
1286


(CONTINUING
CARE)


 


12.                                 Definitions.


 


12.1                           “Acute Condition” means a medical
condition that involves a sudden onset of symptoms due to an illness, injury,
or other medical problem that requires prompt medical attention and that has a
limited duration.


 


12.2                           “Newborn Child” means a newborn child
between birth and age thirty-six (36) months.


 


12.3                           “New Member” means a Member who has
become newly enrolled with PacifiCare and has been assigned to Medical Group.


 


12.4                           “Nonparticipating Provider” means,
with respect to a New Member, a licentiate, as defined in Section 805 of
the California Business and Professions Code, which is not employed by or
contracted with Medical Group for the provision of Covered Services to Members,
but who, at the time such New Member’s coverage with PacifiCare became
effective, was providing Covered Services for one of the Special Circumstances.


 


12.5                           “Pregnancy” means the three trimesters
of pregnancy and the immediate postpartum period.  “Pregnant” shall refer to the state of Pregnancy.


 


12.6                           “Serious Chronic Condition” refers to
a medical condition due to a disease, illness, or other medical problem or
medical disorder that is serious in nature and that persists without full cure
or worsens over an extended period of time or requires ongoing treatment to
maintain remission or prevent deterioration.


 


12.7                           “Special Circumstances” refers to an
Acute Condition, Serious Chronic Condition, Pregnancy, Terminal Illness,
Newborn Care, or Surgery/Other Procedure.


 


12.8                           “Surgery/Other Procedure” refers to a
surgical or other procedure that is authorized by PacifiCare as part of a
documented course of treatment which has been recommended and documented by a
“provider,” as defined


 


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at Section 1345(i) of the California Health and Safety Code, to
occur within one hundred eighty (180) days of the termination, nonrcnewal or
expiration of the Agreement between PacifiCare and Medical Group or an
agreement between Medical Group and one of its Participating Providers or (in
the case of a New Member) within one hundred eighty (180) days of the effective
date of coverage for such New Member.


 


12.9                           “Terminal Illness” refers to an
incurable or irreversible condition that has a high probability or causing
death within one (1) year or less.  “Terminally
III” refers to the state of Terminal Illness.


 


12.10                     “Termination” shall mean (i) the
termination, expiration, or nonrenewal, or any circumstance which results in
the termination, expiration, or nonrenewal, of any arrangement by which a
Participating Provider provides Covered Services to Members, or (ii) the termination,
expiration, or nonrenewal, or any circumstance which results in the
termination, expiration, or nonrenewal, of the Agreement.


 


13.                                 General Continuing Care Obligations of
Provider.  The provisions of this Article IV shall
amend only Medical Group’s obligations to continue to provide Covered Services
to Members in Special Circumstances. 
The provisions of this Article IV shall not modify Medical Group’s
general obligations to continue to provide Covered Services to Members, except
as necessary to modify Medical Group’s obligations to provide Covered Services
to Members in Special Circumstances. 
Notwithstanding the generality of the foregoing, all provisions of the
Agreement pertaining to (i) Medical Group’s general continuing care
obligations, (ii) Medical Group’s obligations to provide continuing care in the
event PacifiCare ceases operating or the Agreement is terminated for
nonpayment, (iii) the survival of all provisions of the Agreement pertaining to
Medical Group’s continuing care obligations, and (iv) Medical Group’s
obligation to provide services to Members transferred to Medical Group from a
terminated PacifiCare provider shall remain in full force and effect without
modification, except as necessary to modify Mcdical Group’s obligations to
provide Covered Services in Special Circumstances as set forth in this
Amendment.


 


14.                                 Special Circumstances Continuing Care
Obligations.


 


14.1                           Termination of Participating Provider. 
Following the Termination of any Participating Provider, Medical Group
shall, at the request of the applicable Member and in accordance with
PacifiCare’s policies and procedures, assure that such Participating Provider
shall provide Covered Services in Special Circumstances as required by this
Article IV.


 


14.2                           Termination of the Agreement. 
Following the Termination of the Agreement, Medical Group shall at the
request of the applicable Member and in accordance with PacificCare’s policies
and procedures, assure that


 


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all of its
Participating Providers shall provide Covered Services in Special Circumstances
to Members as required by this Article IV.


 


14.3                           New
Members.  Following the enrollment
of a New Member into a PacifiCare health plan, Medical Group shall, at the
request of such New Member and in accordance with PacifiCare’s policies and
procedures, assure that the applicable Nonparticipating Provider shall provide
Covered Services in Special Circumstances to New Members as required by this
Article IV.


 


14.4                           Exceptions.


 


(a)                                  Terminated
Participating Providers.  Medical
Group is not obligated to arrange for its terminated Participating Providers to
provide Covered Services in Special Circumstances to Members if the terminated
Participating Provider (i) was terminated for a medical disciplinary cause or
reason, as defined in paragraph (6) of subdivision (a) of Section 805 of
the California Business and Professions Code, or (ii) was terminated for fraud
or other criminal activity, (iii) does not agree to comply, or does not comply,
with the same contractual terms and conditions that were imposed upon such
Participating Provider prior to termination, including, but not limited to,
credentialing, hospital privileging, utilization review, peer review, and
quality assurance requirements, or (iv) has not agreed in advance to
compensation terms for the provision of Covered Services in Special
Circumstances to Members, or does not otherwise accept payment rates for such
services, at rates (and methods of payment) similar to those used by Medical
Group for currently contracting providers providing similar services who are
not capitated and who are practicing in the same or similar geographic area as
the terminated Participating Provider.


 


(b)                                 Nonparticipating
Providers.  Medical Group is not
obligated to arrange for Nonparticipating Providers to provide Covered Services
in Special Circumstances to New Members if the Nonparticipating Provider (i)
fails to agree in writing to be subject to the same contractual terms and
conditions that are imposed upon Medical Group’s currently contracted
participating providers providing similar services who are not capitated and
who are practicing in the same or a similar geographic region as the
Nonparticipating Provider, including, but not limited to, credentialing,
hospital privileging, utilization review, peer review, and quality assurance
requirements, or (ii) has not agreed in advance to compensation terms for the
provision of Covered Services in Special Circumstances to New Members, or does
not otherwise accept payment rates for such services, at rates (and


 


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methods of payment) similar to those used by Medical Group for
currently contracting providers providing similar services who are not
capitated and who are practicing in the same or a similar geographic area as
the Nonparticipating Provider.


 


14.5                           Time Periods for the Provision of Covered
Services in Special Circumstances.


 


(a)                                  Acute Condition.


 


(i)                                     In the case of a Member who has an Acute
Condition, the Covered Services in Special Circumstances shall be provided to
the Member by Medical Group (in the event of Termination of the Agreement), or
by the terminated Participating Provider (in the event of Termination of the
Participating Provider), as the case may be, for the duration of the Acute
Condition.


 


(ii)                                  In the case of a New Member who has an Acute
Condition, Medical Group shall assure that the Covered Services in Special
Circumstances shall be provided by the applicable Nonparticipating Provider for
the duration of the Acute Condition.


 


(b)                                 Serious Chronic Condition.


 


(i)                                     In the case of a Member who has a Serious
Chronic Condition, the Covered Services in Special Circumstances shall be
provided to the Member by Medical Group (in the event of Termination of the
Agreement), or by the terminated Participating Provider (in the event of
Termination of the Participating Provider), as the case may be, for a period
not to exceed twelve (12) months from the contract Termination date.


 


(ii)                                  In the case of a New Member who has a Serious
Chronic Condition, Medical Group shall assure that the Covered Services in
Special Circumstances shall be provided to the New Member by the applicable
Nonparticipating Provider for a period not to exceed twelve (12) months from
the effective date of such New Member’s coverage with PacifiCare.


 


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(c)                                  Pregnancy.


 


(i)                                     In the case of a Member who is Pregnant, the
Covered Services in Special Circumstances shall be provided to the Member by
Medical Group (in the event of Termination of the Agreement), or by the
terminated Participating Provider (in the event of Termination of the
Participating Provider), as the case may be, for the duration of the Pregnancy.


 


(ii)                                  In the case of a New Member who is Pregnant,
Medical Group shall assure that the Covered Services in Special Circumstances
shall be provided to the New Member by the applicable Nonparticipating Provider
for the duration of the Pregnancy.


 


(d)                                 Terminal Illness.


 


(i)                                     In the case of a Member who is Terminally
III, the Covered Services in Special Circumstances shall be provided to the
Member by Medical Group (in the event of Termination of the Agreement), or by
the terminated Participating Provider (in the event of Termination of the
Participating Provider), as the case may be, for the duration of the Terminal
Illness.


 


(ii)                                  In the case of a New Member who is Terminally
III, Medical Group shall assure that the Covered Services in Special
Circumstances shall be provided to the New Member by the applicable
Nonparticipating Provider for the duration of the Terminal Illness.


 


(e)                                  Newborn Child.


 


(i)                                     In the case of a Newborn Child of a Member,
the Covered Services in Special Circumstances shall be provided to the Member’s
Newborn Child by Medical Group (in the event of Termination of the Agreement),
or by the terminated Participating Provider (in the event of Termination of the
Participating Provider), as the case may be, for a period not to exceed twelve
(12) months from the contract termination date.


 


(ii)                                  In the case of a Newborn Child of a New
Member, Medical Group shall assure that the Covered Services in Special
Circumstances shall be provided by the applicable Nonparticipating Provider to
the New Member’s Newborn Child for a period not to exceed twelve (12) months
from


 


12

















 


the effective date of such New Member’s coverage with PacifiCare.


 


(f)                                    Surgery/Other Procedure.


 


(i)                                     In the case of a Surgery/Other Procedure, the
Covered Services in Special Circumstances shall be provided to the Member by
Medical Group (in the event of Termination of the Agreement), or by the
terminated Participating Provider (in the event of Termination of the
Participating Provider), as the case may be.


 


(ii)                                  In the case of a Surgery/Other Procedure for
a New Member, Medical Group shall assure that the Covered Services in Special
Circumstances shall be provided to the New Member by the applicable
Nonparticipating Provider.


 


15.                                 Compensation of Participating Providers. 
Medical Group shall be solely responsible for compensating any
terminated Participating Provider or Nonparticipating Provider for the
provision of Covered Services in Special Circumstances to Members and New Members
as agreed upon in writing between Medical Group and the terminated
Participating Provider or at the rate and method of payment used by Medical
Group for its contracting providers providing similar services who are not
capitated and who are practicing in the same or similar geographic area as the
terminated Participating Provider.


 


16.                                 Notifications Regarding Termination. 
Medical Group shall provide ninety (90) calendar days’ prior written
notice to PacifiCare of the termination of any of its Participating Providers
(or such longer time as may be required by the Agreement); provided, however,
that if any Participating Provider is terminated with less than ninety (90)
calendar days’ notice, then Medical Group shall provide written notice to
PacifiCare within five (5) business days of Medical Group becoming aware of
such termination.  Additionally, Medical
Group shall, and Medical Group shall cause the applicable Participating
Provider to, identify to PacifiCare, in writing, any Members who (i) are receiving
treatment from such Participating Provider for an Acute Condition, Serious
Chronic Condition, Pregnancy, or Terminal Illness, (ii) have a Newborn Child,
or (iii) have been authorized to receive a Surgery/Other Procedure.


 


17.                                 Survival.  Medical Group agrees that (i)
all of the provisions of this Article IV. 
as well as all provisions of the Agreement which relate to Medical
Group’s obligation to provide continuing care to PacifiCare Members (even in
the absence of any Special Circumstances), shall survive termination of the
Agreement regardless of the cause giving rise to such termination, and (ii) all
such provisions shall be construed for the benefit of PacifiCare Members.


 


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Article V

GENERAL PROVISIONS


 


18.                                 Applicability of Amendment.  This
Amendment shall not apply to PacifiCare’s Secure Horizons Medicare+Choice
Health Plan.


 


19.                                 Effective Date. 
This Amendment shall be effective on January 1, 2004.


 


20.                                 Construction of Terms. 
Terms used and not otherwise defined in this Amendment shall have the
meanings assigned to them in the Agreement.


 


21.                                 Agreement Remains Effective. 
Except as expressly modified by the terms of this Amendment, all of the
terms and conditions set forth in the Agreement shall remain in full force and
effect.


 


22.                                 Conflicting Terms.  In
the event that the terms or conditions of the Agreement and this Amendment are
in conflict, the terms of this Amendment shall control.


 


23.                                 Changes in Law. 
PacifiCare acknowledges that (i) Governor Schwarzeneggar has ordered a
review of all administrative regulations adopted, amended, or repealed since
January 6, 1999, for the purpose of determining the necessity, authority,
clarity, consistency, reference and non-duplication of such regulations, and
that (ii) the California Healthcare Association has filed a Petition for Writ
of Mandate challenging certain provisions of the regulations adopted by the
Department of Managed Health Care at Title 28 of the California Code of
Administrative Regulations, Sections 1300.71 and 1300.71.38.  Accordingly, PacifiCare reserves the right
to amend any provision(s) of the Agreement or of this Notice Amendment as
reasonable in light of these reviews or any other changes in applicable law or
regulation.


 


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