Exhibit
10.180


 


LETTER OF AGREEMENT

SERVING AS ADDENDUM TO THE 1997 MEDICAL SERVICES AGREEMENT

BETWEEN BLUE CROSS OF CALIFORNIA AND

GATEWAY MEDICAL GROUP

FOR

CALIFORNIACARE, BLUE CROSS PLUS AND PERSONAL CALIFORNIACARE


 


 


This will serve as confirmation that
BLUE CROSS OF CALIFORNIA (“BLUE CROSS”) has agreed to the following terms of
the CaliforniaCare Medical Services Agreement between BLUE CROSS and GATEWAY
MEDICAL GROUP (“PARTICIPATING MEDICAL GROUP”) effective January 1, 1997.


 


Effective January 1 1997, BLUE
CROSS shall increase professional capitation rates (excluding Durational
Benefit Plans, AIM, CalKids, and non-commercial products such as Workers’
Compensation, Medi-Cal and Medicare Risk) for PARTICIPATING MEDICAL GROUP by 1
% (one percent), which rates shall remain in effect through December 31,
1997.


 


Effective January 1, 1998 BLUE
CROSS shall increase the above mentioned rates by another 1 % (one percent) to remain in effect
through December 31, 1999.


 


Upon acceptance of the parties, this
Addendum shall become part of the CaliforniaCare Medical Services Agreement
between PARTICIPATING MEDICAL GROUP and BLUE CROSS effective January 1,
1997.


 


 


	
  BLUE CROSS

  	
  PARTICIPATING MEDICAL

  GROUP

  
	
   

  	
   

  
	
  Name:

  	
  Ferial Bahremand

  	
   

  	
  Name:

  	
  RAJ TAKHAR

  
	
   

  	
   

  	
   

  	
   

  
	
  Signature:

  	
   /s/ Ferial
  Bahremand

  	
   

  	
  Signature:

  	
   /s/ Raj
  Takhar

  
	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  Vice President

  	
   

  	
  Title:

  	
  COO

  
	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
  2/7/97

  	
   

  	
  Date:

  	
  11-26-96

  
								



 












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


 

















 


EXHIBIT A



CALIFORNIAKIDS PROGRAM



DIVISION OF FINANCIAL RESPONSIBILITIES


 


	
  List of Benefits / Services

  	
   

  	
  Capitation

  	
   

  	
  BLUE
CROSS

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  HOSPICE
  (in lieu of acute inpatient or SNF care)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Inpatient
  Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  HOSPITAL BASED
  PHYSICIANS

  (Outpatient Surgery Only)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Anesthesiology

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Audiology
  

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Cardiology

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Emergency
  Medicine

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  General
  Surgery

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Neonatology

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Nephrology

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Neurology

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Neurosurgery

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Gynecology

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Orthopedic
  Surgery

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Pathology

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Pediatrics

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Physical
  Medicine

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Pulmonary
  Medicine

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Radiology

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Radiation
  Oncology (Interpretation Only)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Urology

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  HOSPITALIZATION
  / INPATIENT SERVICES, SUPPLIES & TESTING

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  In-Area

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Out-of-Area
  (Emergency)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  IMMEDIATE
  CARE / URGENT CARE CENTER

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Facility
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  



 












***         All references to the division of
financial responsibility have been deleted.


 


A-4

















 


	
  IMMUNIZATION SERUMS (pediatric)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  IMMUNIZATION SERUMS (Adult)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  INFANT APNEA MONITOR
  (DME)

  (in
  conjunction with or concurrent with authorized inpatient admission)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  OUTPATIENT INFANT APNEA MONITOR

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  INFERTILITY(Diagnosis / Treatment)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Inpatient Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  INFUSION THERAPY

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Inpatient / Outpatient Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Infused Substances

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  INJECTABLE
  MEDICATIONS: Outpatient

  (excluding take-home insulin,
  Norplant & Depo-Provera)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  LABORATORY
  SERVICES

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Inpatient
  Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Outpatient
  Hospital Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Outpatient
  Clinic or Non-Hospital Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  LITHOTRIPSY

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Outpatient
  Hospital Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  MAMMOGRAPHY

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Technical
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  MENTAL
  HEALTH

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Inpatient
  Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Inpatient
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Outpatient Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  



 












***         All references to the division of
financial responsibility have been deleted.


 


A-5

















 


	
  NUTRITIONIST / DIETICIAN

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  OBSTETRICAL SERVICES

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Inpatient Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Inpatient Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Outpatient Diagnostic Services

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  OFFICE VISIT SUPPLIES, SPLINTS, CASTS, BANDAGES,
  DRESSINGS etc.

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  ORGAN TRANSPLANTS (non-experimental)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Inpatient Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  OUTPATIENT DIAGNOSTIC SERVICES & TREATMENTS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Primary Care Physicians

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Specialty Physicians

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  OUTPATIENT CLINIC OR NON-HOSPITAL FACILITY
  COMPONENT FOR DIAGNOSTIC SERVICES & TREATMENTS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  These services include, but are not limited to the
  following:

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Angiograms

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  CAT Scan

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  2-D Echo

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  EEG

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  EKG (aka: ECG)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  EMG

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Holter Monitor

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  MRI

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Treadmill

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Ultrasound

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  OUTPATIENT DIAGNOSTIC SERVICES & TREATMENTS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Professional Component for:

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Anesthesiology

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Audiology

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  



 












***         All references to the division of
financial responsibility have been deleted.


 


A-6

















 


	
  Cardiology

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Emergency Medicine

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  General Surgery

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Neonatology

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Nephrology

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Neurology

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Gynecology

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Orthopedics

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Pathology

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Pediatrics

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Physical
  Medicine

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Pulmonary
  Medicine

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Radiation
  Oncology (Interpretation Only)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Radiology

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Urology

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  OUTPATIENT SURGERY

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Professional Component for:

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Anesthesiology

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Audiology

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Cardiology

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Emergency Medicine

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Neonatology

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Neurology

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Nephrology

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Orthopedics

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Pathology

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Pediatrics

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Physical Medicine

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Pulmonary Medicine

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Radiation
  Oncology (Interpretation Only)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  



 












***         All references to the division of
financial responsibility have been deleted.


 


A-7

















 


	
  Radiology

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Urology

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  PEDIATRIC SERVICES (newborn)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  PHYSICAL THERAPY

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Inpatient Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Outpatient Clinic or Non-Hospital Facility
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Outpatient Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  PHYSICIAN VISITS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  To Hospital

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  To Skilled Nursing Facility

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  To Patient Home

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  PHYSICIAN OFFICE VISITS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Consultations

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Specialty Visits

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  PODIATRY SERVICES

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  PREADMISSION TESTING (Inpatient Only –  does
  not apply for Outpatient Surgery)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Inpatient Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Outpatient Hospital Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Outpatient Clinic or Non-Hospital Facility
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Inpatient / Outpatient Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  PRE-EXISTING PREGNANCY

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Inpatient Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  PREGNANCY SERVICES

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Inpatient Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  PROSTHETIC DEVICES

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  



 












***         All references to the division of
financial responsibility have been deleted.


 


A-8

















 


	
  RADIATION THERAPY (Treatment Only)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Inpatient Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Outpatient Hospital Facility Component 

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Outpatient Clinic Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  RADIOLOGY SERVICES

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Inpatient Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Outpatient Hospital Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Outpatient Clinic or Non-Hospital Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  RECONSTRUCTIVE SURGERY

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Inpatient Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  REFRACTIONS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  REHABILITATION SERVICES

  (Short
  Term: Physical Therapy, Occupational Therapy, Speech Therapy, Cardiac
  Therapy)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Inpatient Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Inpatient Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Outpatient Clinic or Non-Hospital Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Outpatient Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  ROUTINE PHYSICAL EXAMINATIONS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  SKILLED NURSING FACILITY (SNF)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  SPECIALIST CONSULTATIONS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  SURGICAL SUPPLIES

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Inpatient Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Outpatient Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  



 












***         All references to the division of
financial responsibility have been deleted.


 


A-9

















 


	
  TEMPORO-MANDIBULAR JOINT SYNDROME (TMJ)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Dental Treatment

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Professional Component

  (for the diagnosis and medically
  necessary correction)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Inpatient Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  TRANSFUSIONS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  From Blood Bank

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Autologous Blood Donations

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  URGENT CARE / IMMEDIATE CARE CENTERS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  VISION SCREENING

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  VISION CARE

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Medically Necessary Care

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Refraction

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Lenses / Frames (covered by optional rider)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Contact lenses (Fitting after Cataract Surgery
  Only)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  



 












***         All references to the division of
financial responsibility have been deleted.


 


A-10

















 


EXHIBIT B


 


CRITERIA FOR PARTICIPATING MEDICAL GROUP SATELLITES

OF BLUE CROSS OF CALIFORNIA’S CALIFORNIAKIDS PROGRAM


 


The following list of criteria covers
the elements of a PARTICIPATING MEDICAL GROUP (“PMG”) satellite that are
appropriate to make the satellite eligible to be considered for the
CALIFORNIAKIDS Program.  The primary
considerations in satellite approval will be quality of care and convenience to
CALIFORNIAKIDS Members.


 


1.                                       The
satellite clinic (“satellite”) must have, as a minimum, one full-time
equivalent Primary Care Physician.  The
satellite must meet the ratio of one primary care full-time equivalent per
2,000 patients served, and at least one physician of the following specialties
must be available at all times during the regular working hours of 8:30
a.m.  to 5:00 p.m., Monday through
Friday: Pediatric Practice.  All routine
primary care has to be available. 
Routine X-ray and lab must either be available in the satellite or
contracted for in the immediate vicinity of the satellite.  If the satellite is not self-contained, the
distance of the satellite from the main clinic (“parent PMG”) shall be within
reasonable driving time according to local community standards.


 


2.                                       The
satellite must provide access to specialists.


 


3.                                       Most
specialty referrals should be to the parent PMG.  If the specialty required is not available at the parent PMG,
referral contracts should be made as close to the satellite as practical.


 


4.                                       Medical
records may be maintained at the satellite if data can be easily communicated
to and from central medical records at the parent PMG.  Documented procedures for such communication
should accompany application for satellite approval.


 


5.                                       Satellites
are required to have ample parking.


 


6.                                       Physicians
or mid-level practitioners permanently based at the satellite should be trained
by the Medical Director of the parent PMG with respect to CALIFORNIAKIDS
operations.  Written procedures
indicating the functions delegated to the Associate Medical Director and those
retained by the Medical Director of the parent PMG should be prepared and submitted
with the satellite application.


 


7.                                       A
receptionist or other non-physician employee at the satellite should be trained
by the CALIFORNIAKIDS Coordinator to function as a CALIFORNIAKIDS Coordinator,
on a part-time basis, at the satellite.


 


Because geographic and demographic
situations vary from one PMG to another, BLUE CROSS will consider special
circumstances that may exist for any individual satellite approval
request.  However, the decision of BLUE
CROSS with respect to each application shall be final.


 


 


B-1

















 


EXHIBIT C


 


PARTICIPATING MEDICAL GROUP FACILITIES


 


 


C-1

















 


EXHIBIT D


 


CALIFORNIAKIDS CONTRACTING HOSPITALS


 


 


INPATIENT HOSPITALIZATION IS NOT COVERED IN THIS PROGRAM


 


 


D-1

















 


EXHIBIT E


 


ADMINISTRATIVE RESPONSIBILITIES OF PARTICIPATING MEDICAL
GROUP


 


This exhibit lists the areas in which
PARTICIPATING MEDICAL GROUP and PARTICIPATING MEDICAL GROUP Physicians will
have administrative responsibility.  The
extent and type of responsibility to be undertaken will be agreed upon by the
PARTICIPATING MEDICAL GROUP and BLUE CROSS.


 


A.                                   PROFESSIONAL
SERVICES ADMINISTRATION


 


Professional Services - Schedule,
control, process and report encounter information


 


Outside Referrals - Control,
process and report encounter information


 


Ancillary - Control, process and
report encounter information


 


B.                                     UTILIZATION
REVIEW


 


C.                                     PEER
REVIEW, EDUCATION AND CREDENTIALING


 


D.                                    QUALITY
MANAGEMENT


 


E.                                      GRIEVANCE
PROCEDURE COMPLIANCE


 


F.                                      MONITOR
AND REVISE SPECIALIST/OTHER REFERRAL CONTRACTS


 


G.                                     PATIENT
EDUCATION


 


 


E-1

















 


EXHIBIT F


 


CRITERIA FOR PARTICIPATING MEDICAL GROUPS OF

BLUE CROSS CALIFORNIAKIDS PROGRAM


I.                                         Organization


 


A.                                   The PMG
must be a legal entity (such as a corporation, partnership or sole
proprietorship) recognized in the State of California, and must have been in
existence and operating for at least two years, be the direct successor of an
entity with such experience or otherwise be able to demonstrate that the
medical group physicians operate together efficiently and harmoniously.


 


B.                                     The PMG
must demonstrate that it can grow as its patient population grows.


 


II.                                     Location


 


A.                                   PMG
must be in an area determined by BLUE CROSS to be a demographic area with
sufficient market potential capable of attracting enough of that market to make
a significant economic contribution to the CALIFORNIAKIDS Program (the
“Program”).


 


III.                                 Interest


 


A.                                   The PMG
must demonstrate that it will practice medicine by providing maximum benefit
for the most people at a minimum cost. 
Factors such as extensive use of Primary Care Physicians instead of
specialists and of health care paraprofessionals shall be taken into account.


 


IV.                                 Facilities/Operations


 


A.                                   The
PMG/outpatient facilities must have the capacity to provide quality medical
care to CALIFORNIAKIDS Members.  Each
site must be reasonably self-contained. 
If the PMG has satellite operations to be used for Members, each site
must be capable of providing quality primary care for Members, and each site
must be approved by BLUE CROSS.


 


B.                                     The PMG
must have a central medical records system. 
A central appointment desk will be encouraged.


 


C.                                     The PMG
must provide access to Medically Necessary Emergency services 24 hours a day, 7
days a week.


 


D.                                    The PMG
must be able to provide a choice of Primary Care Physicians to oversee and
coordinate the overall health care of Members. 
Access to specialists must be provided to Members only upon referral by
the Primary Care Physician.


 


E.                                      The PMG
must provide a Medical Director or a lead physician to oversee and manage the
delivery of health care to all Members.


 


F.                                      The PMG
must provide a CALIFORNIAKIDS Coordinator for Members and provide appropriate
health education for Members.


 


G.                                     If the
clinic has one or more satellites, that is, a facility separate from the
principal place of business that is dependent upon, and responsible to the PMG,
the satellite must meet the BLUE CROSS


 


 


F-1

















 


Satellite Criteria (Exhibit B)
and be approved by BLUE CROSS before it can be designated as a CALIFORNIAKIDS
facility.


 


V.                                     Capability


 


A.                                   The
existing and reasonably projected physical capacity of the PMG facilities must
be large enough to provide primary health care for the projected number of
patients being served by the PMG. 
Factors to be considered shall include growth record, floor space,
parking, equipment, patient load per doctor, financial standing and the number
of Health Maintenance Organizations which have contracted with the PMG.


 


B.                                     The
existing and reasonably projected staff capacity of the PMG must be  of sufficient size and flexibility to
provide additional Primary Care Physicians, who are PMG members, to provide
Members high quality health care, as Program enrollment increases.  Factors to be considered include growth
record, contractual arrangement between PMG and individual specialists,
previous ability to obtain and keep physicians and ancillary personnel, patient
load per doctor, and professional standing.


 


VI.                                 Staff
Qualifications


 


A.                                   All of
the PMG physicians who treat Members must be licensed to practice in the State
of California.  Not less than 80% of the
PMG physicians must be board certified or eligible for certification by the
appropriate voluntary accreditation agency. 
BLUE CROSS encourages accreditation.


 


B.                                     Minimum
acceptable full-time equivalent Primary Care Physician will be based on a
patient load per physician of not more than 2,000 patients enrolled per
full-time Primary Care Physician.


 


C.                                     Each
PMG should have at least one Pediatrician.


 


D.                                    The PMG
must have the capability for referring Members to convenient, board certified
specialists.  Contracts must be approved
by BLUE CROSS on file for each specialist not part of the PMG.  Either as PMG Members or on a
fee-for-service basis with the PMG, the following qualified or certified
specialists as a minimum, must be readily and conveniently available to serve
Members as medically indicated on referral: cardiologist, cardiovascular
surgeon, thoracic surgeon, dermatologist, hematologist, orthopedist,
neurologist, obstetrician, orthopedic surgeon and neurosurgeon.


 


The PMG/specialist contracts will
provide that the:


 


1.                                       Specialist
will agree to accept CALIFORNIAKIDS patients upon referral from PMG Primary
Care Physicians.


 


2.                                       Specialist
will agree to accept payment from PMG, for services rendered to CALIFORNIAKIDS
patients referred to them, as full payment, and will agree not to bill BLUE
CROSS or CALIFORNIAKIDS Members for such services.


 


3.                                       Specialist
will agree not to hospitalize CALIFORNIAKIDS patients without the agreement of
the referring Primary Care Physician.


 


4.                                       Specialist
will maintain in force adequate malpractice insurance and hold the PMG and BLUE
CROSS harmless.


 


F-2

















 


NOTE:                                    Contracting
Referral Specialists must be located within reasonable proximity to the PMG to
assure ease of access by Members.


 


E.                                      The PMG
must demonstrate that it can make available to Members (either as PMG Members
or on a fee-for-service basis with the PMG) other licensed, qualified health
professionals necessary to provide all medical services that a PMG agrees to
provide Members as set forth in the PMG Medical Services Agreement.


 


F.                                      The PMG
must provide or contract for qualified licensed nursing personnel, X-ray and
laboratory technicians in sufficient number to serve all its patients,
including enrolled Members.


 


The PMG must have (or be
affiliated with the owner of) a laboratory certified by a nationally recognized
quality care program.  A laboratory
shared with other physicians will meet this criteria.  The laboratory must be under the supervision of a qualified
director and technical supervision must be by a certified technologist.


 


The PMG also must have (or be
affiliated with the owner of) X-ray facilities which must be under the
supervision of a board certified radiologist who also performs diagnostic
procedures and interprets films.  The X-ray
facilities shared with other physicians will meet this criteria.  The radiology equipment must be maintained
in compliance with all applicable laws.


 


G.                                     The PMG
must be willing to make maximum use of qualified, licensed physician’s
assistants, nurse practitioners or other paramedical personnel to assist the
Primary Care Physicians.


 


H.                                    The PMG
must provide quality medical care and must not have an unfavorable history of
malpractice claims against it.


 


I.                                         The PMG
must contract only with physicians that have experienced no unfavorable history
of malpractice claims or awards.  At
regular intervals, the contract physicians shall be able to prove that they
have current professional liability insurance in force, and that they will hold
BLUE CROSS harmless in the event of liability suit relating to patient care of
any Member.


 


VII.                             Peer
Review/Utilization Review


 


A.                                   The PMG
must collect and review outpatient encounter data to help assure a coordinated
effort to maintain the health of Members and to educate providers regarding
appropriate treatment plans.


 


B.                                     The PMG
must conduct quality assurance procedures with emphasis on outcome of care.


 


VIII.                         Payments


 


The PMG must agree to all terms
of the Medical Services Agreement.


 


F-3

















 


IX.                                Administration


 


A.                                   The PMG
must have workable internal administrative mechanisms for providing salaries to
PMG Physicians and other health professionals and for paying contracting or
non-contracting physician specialists who have accepted referral patients from the
PMG.


 


B.                                     PMG
must have its own first level grievance procedure.


 


C.                                     To the
extent not otherwise specified in the Medical Services Agreement, the PMG must
be willing to comply with the complaint and Grievance Procedures of the
Program.


 


D.                                    The PMG
must be willing to provide BLUE CROSS with the encounter information as
provided in the Medical Services Agreement.


 


X.                                    Financial
Condition


 


A.                                   The PMG
must be able to demonstrate that it is financially sound.  An audited financial statement should be
available upon request, pursuant to Section 4.13 of this CALIFORNIAKIDS
Medical Services Agreement.


 


B.                                     The PMG
will be subject to audit by BLUE CROSS of that portion of the books that
pertain to Program business.


 


C.                                     The PMG
must make books and records relating to Program business accessible to state
and federal regulatory agencies.


 


F-4

















 


EXHIBIT G


 


AMBULATORY SERVICES ENCOUNTERS


 


PARTICIPATING MEDICAL GROUP will
provide BLUE CROSS with all ambulatory patient Encounter Data in summary form
as shown on the attached form. 
Encounter Data will be provided on a monthly basis, and will show
aggregate data (encounter with all CALIFORNIAKIDS Members).  This includes contracting specialists or
other referral providers.  BLUE CROSS
has contracted with a third party vendor - Integrated Medical Systems (IMS) -
to establish the necessary connectivity with contracted providers for
electronic submission of HMO encounter records.  They will accept various HMO encounter data formats from
providers and translate into the required format for BLUE CROSS.


 


IMS works with each medical group
identified by BLUE CROSS for implementation of electronic encounter
submission.  The process is:


 


1.               Provider
Contracting Department sends a letter to the HMO provider advising them that
their encounter records are to be submitted to IMS, who will transmit them to
BLUE CROSS.  IMS also receives a copy of
this letter.


 


2.               Based
on the BLUE CROSS letter, IMS calls on the provider to initiate the process for
electronic encounter submission.  This
process includes:


 


a.               Analysis
of provider system


b.              Provider
enrollment with IMA and BLUE CROSS for electronic submission


c.               Testing


d.              Implementation


e.               Support
to provider throughout this process


f.                 Coordination
with Blue Cross for tracking of provider implementation


 


ACCEPTED FORMATS


 


Integrated Medical Systems receives
encounter data in the following formats. 
IMS then translates these into the ANSI-X12 837 format for transmission
to BLUE CROSS.


 


1.               NSF
(National Standard Format)


2.               EZCAP


3.               Western
Region HMO


4.               CaliforniaCare
Proprietary


 


DATA ELEMENTS FOR
ENCOUNTER SUBMISSION


 


Medical groups must report on all
providers rendering care to CALIFORNIAKIDS Members, including contracting
specialists and other referral providers. 
Data submitted should include the following:


 


 


G-1

















 


Encounter Data Elements


 


	
  Data type

  	
   

  	
  Mandatory

  	
   

  	
  Optional

  
	
  Submitter
  Data

  	
   

  	
  Submitter Name

  	
   

  	
  Submitter Phone Number

  
	
   

  	
   

  	
  Submitter Address

  	
   

  	
   

  
	
   

  	
   

  	
  Submitter City

  	
   

  	
   

  
	
   

  	
   

  	
  Submitter State

  	
   

  	
   

  
	
   

  	
   

  	
  Submitter ZIP

  	
   

  	
   

  
	
  Provider
  Data

  	
   

  	
  Provider Tax ID

  	
   

  	
  Provider Middle Initial

  
	
   

  	
   

  	
  Provider Organizational Name

  	
   

  	
  Provider SVC Address

  
	
   

  	
   

  	
  Provider Last Name

  	
   

  	
  Provider SVC City

  
	
   

  	
   

  	
  Provider First Name

  	
   

  	
  Provider SVC State

  
	
   

  	
   

  	
   

  	
   

  	
  Provider SVC ZIP

  
	
  Patient
  Data

  	
   

  	
  Patient Last Name

  	
   

  	
  Patient Middle Initial

  
	
   

  	
   

  	
  Patient First Name

  	
   

  	
  Patient Address

  
	
   

  	
   

  	
  Patient Date of Birth

  	
   

  	
  Patient City

  
	
   

  	
   

  	
  Patient Sex

  	
   

  	
  Patient State

  
	
   

  	
   

  	
   

  	
   

  	
  Patient ZIP

  
	
  Insurance
  Information

  	
   

  	
  Payor Name

  	
   

  	
  Assignment of Benefit Indicator

  
	
   

  	
   

  	
  Payor ID No.

  	
   

  	
  Insured Middle Initial

  
	
   

  	
   

  	
  Patient Relation to Insured

  	
   

  	
   

  
	
   

  	
   

  	
  Insured ID No.

  	
   

  	
   

  
	
   

  	
   

  	
  Insured Last Name

  	
   

  	
   

  
	
   

  	
   

  	
  Insured First Name

  	
   

  	
   

  
	
   

  	
   

  	
  Insured Date of Birth

  	
   

  	
   

  
	
  Claim/Service
  Record

  	
   

  	
  Diagnosis Code I

  	
   

  	
  Diagnosis Code 2,3 and 4*

  
	
   

  	
   

  	
  SVC Date

  	
   

  	
  Line Charges

  
	
   

  	
   

  	
  Place of Service

  	
   

  	
  Total Charges

  
	
   

  	
   

  	
  HCPCS/Procedure Codes

  	
   

  	
  HCPCS/Procedure Modifier*

  
	
   

  	
   

  	
  Diagnosis Code Pointer

  	
   

  	
  Referring Physician License No.*

  
	
   

  	
   

  	
  Units of Occurrence

  	
   

  	
  Rendering Physician License No.*

  



 












*
Conditional


 


THE BLUE CROSS MEDICAL
EDI DEPARTMENT


 


Blue Cross’ Medical EDI Services
Department offers additional support to medical groups submitting encounter
data.  Medical EDI Services providers
coordination between IMS and the medical group, weekly analysis of implementation
status and appropriate follow-up, monthly analysis of rejected encounter data
and medical group follow-up, monthly analysis of encounter volumes with
appropriate medical group follow-up, monthly management reporting detailing
encounter data and submissions by the medical group.


 


G-2

















 


EXHIBIT I


 


CALIFORNIAKIDS PROGRAM


Children
Ages 2 through 18, Inclusive


 


CAPITATION AMOUNT


 


***
Per Member, per month


 


MEMBER CO-PAYMENT AMOUNT


 


(To be
paid by the Member directly to

PARTICIPATING MEDICAL GROUP)


 


***
PER OFFICE VISIT


 


***
PER HOME VISIT

determined Medically Necessary

by PARTICIPATING MEDICAL GROUP


 


 


I-1

















 


EXHIBIT
H


 


PHYSICIAN
PAYMENT STRUCTURE


 


AREA 5


 


Blue Cross of California established
and, from time to time, revises unit values based on observed charge patterns
by CPT-4 procedure code.  The maximum
allowable for physician claims shall be calculated using the unit values as  in effect, multiplied by the following
conversion factors:


 


CONVERSION FACTORS


 




	
  Surgery

  	
   

  	
   

  
	
  •                  CPT-4
  CODES 59400-59622

  	
   

  	
  ***

  
	
  •                  All other CPT-4 codes

  	
   

  	
  ***

  
	
   

  	
   

  	
   

  
	
  Medicine

  	
   

  	
  ***

  
	
   

  	
   

  	
   

  
	
  Anesthesia

  	
   

  	
  ***

  
	
   

  	
   

  	
   

  
	
  Radiology

  	
   

  	
  ***

  
	
   

  	
   

  	
   

  
	
  Pathology/Lab

  	
   

  	
   

  
	
  •     CPT
  codes 88100-88399

  	
   

  	
  ***

  
	
  •     All
  other Path./Lab CPT codes

  	
   

  	
  ***

  






 


Reimbursement for HCPCS Level II Codes


 


Pharmacy (including
infusion therapy drugs): maximum allowable reimbursement based
on average wholesale price (AWP) according to Blue Cross selected published
market data, including, but not limited to, sources such as the Drug Topics Red
Book.  Oral prescription drugs dispensed
in the physician’s office will be denied as not payable, and the Member may not
be billed by physician.


 


Durable Medical
Equipment, Supplies (including, but not limited to, infusion therapy supplies),
Prosthetics and Orthotics: maximum allowable reimbursement
will be determined by Blue Cross using claims data and/or external data.  Reimbursement rates will be based on whether
the equipment is new, used or rented, as identified by the appropriate HCPCS
code modifier.  Codes not identified by
modifier will be considered as rentals.


 


All other HCPCS Codes: For
all other HCPCS codes the maximum allowable reimbursement will be determined by
Blue Cross using claims data and/or external data.


 












***         All references to the physician payment
structure have been deleted.


 


I-2