Exhibit
10.116


 


 


Fully Executed


 


AMENDMENT NO. 1


 


The HMO IPA/Medical Group Shared Savings Provider Agreement between
California Physicians’ Service dba Blue Shield of California (“BSC-HMO”), and PROFESSIONAL CARE IPA MEDICAL GROUP (“Medical
Group’), with an effective date of January 1, 2003 is further amended
effective January 1, 2003 as follows:


 


Section 2. 1 Capitated Professional Services is amended in full
to read as follows:


 


Group shall provide or arrange for the provision of all Medically
Necessary Capitated Professional Services to Members and shall be fully
financially responsible for same as outlined in Exhibit B. Such services
shall be provided through Group Providers who have been credentialed as
required by this Agreement and as more fully described in the Provider Manual.
Without limiting the foregoing, Group shall: (i) be financially responsible for
Emergency and Urgent Care Services provided by healthcare providers in addition
to Group Providers, as set forth in Exhibit B., (ii) refer Members, at Group’s
cost and when Group Providers are not available to provide Medically Necessary
Capitated Services, to non-Group Providers; (iii) provide all preventive health
services to which a Member is entitled under his/her Benefit Plan; and, (iv)
make available to Members those health education programs routinely provided by
Group and Group Providers at no charge to their patients.


 


Section 2.3 (d) Availability is amended in full to read as
follows:


 


Group shall ensure that at any given time, the practices of an adequate
number of its PCPs are open to Members to meet all access standards required by
Blue Shield, and its regulatory agencies. Each PCP, whether or not his/her
practice is closed to new patients, shall accept each Member (and such Member’s
immediate family members) who is or had been a patient of PCP at anytime during
the two (2) years immediately prior to such Member selecting physician as
his/her PCP.  Without limiting the
foregoing, Group shall ensure that at anytime that a PCP is accepting new
patients of other health care service plans, such PCP accepts Members
hereunder. In the event a PCP, during the term of this Agreement, elects to
close his/her practice to new Members, Group shall give Blue Shield sixty (60)
days prior written notice of such closure or notice as soon as Group becomes
aware of the closure. In the event a PCP, during the term of this
Agreement, ceases to be a Group Provider, Group shall give Blue Shield sixty
(60) days prior written notice of such closure.


 


Section 2.10 (c) Reciprocity. Affiliates is amended in full to
read as follows:


 


In the event that Group or a Group Provider provides services to an
individual who is not a member of Blue Shield, but who is entitled to coverage
for or payment of the services so provided by virtue of enrollment in a health
plan of an Affiliate of Blue Shield, then Group and Group Providers agree to
render services and to accept payment of the Blue Shield Allowable Rates
(Exhibit E.) from the Affiliate as full and complete payment for such services
less any copayment, coinsurance or deductible owed by the individual under the
Affiliate health plan. Group agrees to look solely to the Affiliate and not to
Blue Shield for payment for such services. In the event Group is unable to
collect reimbursement from Affiliate, Group may contact Blue Shield to provide
reasonable assistance in obtaining reimbursement. For purposes of this
Paragraph, “Affiliate” means an organization that is: (i) wholly owned by Blue
Shield, or, (ii) under common ownership or control with Blue Shield (a sister
corporation), or, (iii) a joint venturer with Blue Shield in an enterprise
under which the Affiliate is obligated to provide coverage for/pay for the
services in question.


 


Section 2.13 (b) Disclosures is amended in full to read as
follows:


 


Annually, within sixty (60) days following the end of Group’s fiscal
year or thirty days following such information being available to Group, Group
shall provide to Blue Shield a copy of its most recent annual income statement,
balance sheet, and statement of cash flow, which shall be prepared in
accordance with generally accepted accounting principles and shall be certified
by Group’s chief executive officer or chief financial officer. Group shall
provide a copy of any audited financial statements it may have to Blue Shield.
A narrative or work sheet describing the calculation of Group’s IBNR shall
accompany the submitted financial statements. The information set forth in this
paragraph shall also be provided by Group to Blue Shield in the event there is
an actual change in ownership of Group. Group shall also, upon request,


 












*** Confidential Information omitted and filed separately with the
Securities and Exchange Commission.


 


 


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provide Blue Shield with
copies of quarterly financial statements, which shall include a balance sheet,
statement of income and statement of cash flow prepared in accordance with
generally accepted accounting principles


 


Section
3.2 Failure to Make Payment is amended in full to read as follows:


 


(a)                                  In the event that Group occasionally fails to
pay a Group Provider or other healthcare provider for Capitated Professional
Services within the time frames set forth in this Agreement, and Blue Shield
reasonably determines that such amount is due and payable by Group, Blue Shield
may, after best efforts to notify the Group and provide the Group the
opportunity to pay, pay the amount due, and deduct and offset such payment
from any amount then or thereafter payable by Blue Shield to Group


 


(b)                                 In the event of Group’s continued or repeated
failure to compensate Group Providers or other healthcare providers within the
time limits required by this Agreement as set forth in Section 13.4, Blue
Shield may elect to pay claims on behalf of Group and offset the amount of such
payments, along with a monthly administrative fee *** of monthly Capitation)
from any amounts then or thereafter owed by Blue Shield to Group, including
capitation. Prior to any such action, Blue Shield shall have provided Group
with written notice of the repeated failures and an opportunity to cure the
noncompliance.


 


(c)                                  Group acknowledges that any such direct
payments to Group Providers by Blue Shield constitute partial mitigation of
damages incurred by Blue Shield for Group’s failure to perform its obligations
under this Agreement


 


Section
4.3 (d) Termination of Delegation is added to read as follows:


 


In
the event Blue Shield terminates the delegation granted to the Group for all
claims payment and invokes the All Claims Payment withhold stated in Exhibit F,
Group shall have the option to terminate the contract with ninety (90) calendar
days written notice of termination. The termination shall become effective the
first day of the month following the expiration of the notice period.


 


Section
5.4 Administrative Services is amended in full to read as follows:


 


Blue
Shield shall perform those services incident to the administration of a health
care service plan including, but not limited to, the processing of enrollment
applications, assignment of Members to PCPs, and the administration of claims
for Covered Services which are not Capitated Professional Services.


 


Section
7.1 (b) Capitation Payments. Medicare Primary is amended in full to read
as follows:


 


For
those Members for whom Medicare is primary, Group or Group Providers shall bill
Medicare as the primary payor for Medicare covered benefits. For such Members,
Blue Shield shall pay a reduced Capitation as set forth in Exhibit C., and
in accordance with timeframes outlined in Section 7.1 (a), and Group shall
be financially responsible for all Capitated Professional Services (including
those which are not Medicare benefits) which are Covered Services for said
Members. In addition, neither Group nor Group Providers may charge or collect
from such Members the Member’s Medicare coinsurance and deductible. The
Medicare Primary Member, however, shall be responsible for his/her applicable
Copayment set forth in the applicable Health Services Contract and Evidence of
Coverage.


 


Section
9.1 Medical Records is amended in full to read as follows:


 


Group
and Group Providers shall maintain the usual and customary records for Members
in the same manner as for other patients of Group and Group Providers. Group
will require that all Group Physicians establish and maintain in an accurate
and timely manner for each Member who has obtained care from such physician a
medical record which is organized in a manner which contains such demographic
and clinical information as is necessary, in the opinion of the Blue Shield
medical director and the Group medical director, to provide documentation as to
the medical problems and medical services provided to the Member. Such


 


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record shall include a
historical record of diagnostic and therapeutic services recommended or
provided by, or under the direction of, the provider. Such records shall be in
such a form as to allow trained health professionals, other than the provider,
to readily determine the nature and extent of the Member’s medical problem and
the services provided and permit peer review of the care provided. Such records
shall, on request, and within reasonable time requirements, be made available
without charge to Blue Shield and its designated agents. However, if the
request is for a large number of member records, twenty-five (25) records or
more.  Blue Shield shall
reimburse Group for such expense at ten cents ($.10) per page. Without
limiting the foregoing, Group shall, without charge, transmit Member’s medical
records information to a Member’s other providers, to Government Officials, and
to Blue Shield for purposes of utilization management, quality improvement and
other Blue Shield administrative purposes. Upon termination of this Agreement,
or the reassignment or transfer of Members, one copy of such records shall be
provided without charge to the Member’s new medical group upon request. However,
if the request is for a large number of member records, twenty-five (25)
records or more,  Blue Shield shall reimburse Group for such expense at
ten cents ($.10) per page


 


Section
12.1 Term is amended in full to read as follows:


 


When
executed by both parties, this Agreement shall become effective as of the
Effective Date, and shall continue in effect for one year (1) year
thereafter, unless earlier terminated as set forth below. Unless either party
notifies the other party at least one hundred fifty (150) days prior to
the expiration of said initial one (1) year term, this Agreement shall,
following expiration of the initial term, continue in effect for additional one
(1) year terms until terminated as set forth below.


 


Section
12.2 Termination Without Cause is amended in full to read as follows:


 


Either
party may terminate this Agreement at anytime without cause by giving to the
other party at least one hundred fifty (150) calendar days written
notice of termination. The termination shall become effective the first day of
the month following the expiration of the notice period.


 


Section
12.3 (a) Termination for Cause is amended in full to read as follows:


 


By
Group if: (i) Blue
Shield fails to pay Group the Capitation due to Group hereunder within twenty
(20) days of such payment’s due date; or, (ii) revocation of Blue Shield’s
license necessary for the performance of this Agreement; or, (iii) Blue Shield
breaches any material term, covenant, or condition of this Agreement; or,
(iv) Blue Shield files for bankruptcy or if Blue Shield at any time fails to
comply with the tangible net equity requirements set forth in the Knox-Keen Act
and Regulations.


 


Section
12.6 (b) Effect of Termination is amended in full to read as follows:


 


Group
shall, at Blue Shield’s option, continue rendering Capitated Professional
Services after the termination of this Agreement to Members assigned to Group
at the Blue Shield Allowable Rates (Exhibit E) in effect immediately
prior to the date of termination, for the duration of the contracts in effect
with Blue Shield through which Members are enrolled with Blue Shield, not
to  exceed  ninety (90) days, or until such time as Blue
Shield has arranged for an alternative source of services for each such Member
from other contracting providers, not to exceed  ninety (90) days.


 


Section
12.6 (d) Effect of Termination is amended in full to read as follows:


 


The
following paragraphs of this Agreement shall survive the termination of this
Agreement, whether such termination is the result of rescission or otherwise:
Paragraphs 2.9(b), 3.1, 8.3, 8.4, 8.6, 8.7, 8.8, 10.1, 11.1, 11.2, 14.9, and
14.10.


 


Section
14.2 Amendments is amended in full to read as follows:


 


Except
as provided in this Paragraph 14.2 and in Paragraphs 1.5 and 5.2, this
Agreement may be amended only by mutual, written consent of Blue Shield and
Group’s duly authorized representatives. Notwithstanding the foregoing, or if
Blue Shield’s legal counsel determines in good faith that this Agreement must
be modified to be


 


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in compliance with applicable federal or state law or to meet the
requirements of accreditation organizations which accredit Blue Shield and its
providers, Blue Shield may amend this Agreement by delivering to Group (the
“Notice Date”) a copy of the modifications (the “Legally-Required Modifications”)
along with the reasons therefore, and such modification(s) shall be deemed
accepted by Group and an amendment to this Agreement if Group does not, within forty-five
(45) days following said Receipt Date, deliver to Blue Shield its
written objection of such Legally-Required Modification(s). In the event that
Group timely objects to such Legally-Required Amendment, such amendment shall
nevertheless become effective as of the date set forth in said amendment, and
Group, in the event Group and Blue Shield cannot resolve Group’s objection, may
terminate this Agreement on ninety (90) days prior written notice to Blue
Shield.


 


Section 14.7 Assignment, Subcontracting and Addition of PCPs is
amended in full to read as follows:


 


(a)           Neither Blue Shield nor Group shall
assign, transfer, or subcontract its rights, duties, or obligations under this
Agreement without the prior written consent of the other party. Such consent
shall not be unreasonably withheld.


 


(b)           For purposes of providing services to
Members hereunder, Group may not add as PCPs any physician whose principal
medical office is located outside the postal zip codes set forth as PCP Zip
Codes in Exhibit A., without Blue Shield’s prior written consent, which consent
may be granted or withheld by Blue Shield in its sole discretion. Such
consent shall not be unreasonably withheld.


 


Section 14.9 Confidentiality/Trade Secret is amended in full to
read as follows:


 


The compensation terms of this Agreement and all terms relating to
compensation shall be confidential. Neither Blue Shield nor Group shall
disclose such terms (other than to Government Officials) except with the prior
written consent of the other party. However, nothing herein shall
prohibit Group or Group Providers from disclosing to Members and others the
method by which they are compensated (e.g., capitation, fee-for-service, etc.);
it is the precise compensation amounts for which confidential treatment is
required by this provision.


 


Section 14.10 Non-Solicitation is amended in full to read as
follows:


 


During the term of this Agreement, and for eight (8) months
thereafter, neither Group nor Group Providers shall solicit, induce, or
encourage any Member to disenroll from Blue Shield or select another health
care service plan for healthcare services. Notwithstanding the foregoing, Group
and Group Providers shall be entitled to freely communicate with Members
regarding any aspect of their health status or treatment.


 


	
  BLUE SHIELD OF CALIFORNIA

  	
  PROFESSIONAL CARE IPA MEDICAL GROUP

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   /s/ Lisa
  Farnan

  	
   

  	
  By:

  	
  /s/Richard Shinto

  
	
   

  	
  Lisa Farnan

  	
   

  	
  Richard Shinto

  
	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
   Vice President, Provider Relations

  	
   

  	
  Title:

  	
   Medical Director

  
	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
   2-25-03

  	
   

  	
  Date:

  	
   2-19-03

  



 


 


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