Exhibit 10.184


 


 












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


 

















 


CALIFORNIAKIDS


 


 


MEDICAL SERVICES AGREEMENT


 

















 


CALIFORNIAKIDS


 


MEDICAL SERVICES AGREEMENT


 


TABLE OF CONTENTS


 


	
  I.

  	
  RECITALS

  	
   

  
	
   

  	
   

  	
   

  
	
  II.

  	
  DEFINITIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  III.

  	
  RELATIONSHIP BETWEEN BLUE CROSS AND
  PARTICIPATING MEDICAL GROUP

  	
   

  
	
   

  	
   

  	
   

  
	
  IV.

  	
  PARTICIPATING MEDICAL GROUP SERVICES AND
  RESPONSIBILITIES

  	
   

  
	
   

  	
   

  	
   

  
	
  V.

  	
  BLUE CROSS SERVICES AND RESPONSIBILITIES

  	
   

  
	
   

  	
   

  	
   

  
	
  VI.

  	
  ELIGIBILITY LISTINGS

  	
   

  
	
   

  	
   

  	
   

  
	
  VII.

  	
  COMPENSATION TO PARTICIPATING MEDICAL GROUP

  	
   

  
	
   

  	
   

  	
   

  
	
  VIII.

  	
  ENROLLMENT PROTECTION

  	
   

  
	
   

  	
   

  	
   

  
	
  IX.

  	
  PROFESSIONAL SERVICES RENDERED TO MEMBERS
  WHO ARE INPATIENTS

  	
   

  
	
   

  	
   

  	
   

  
	
  X.

  	
  TERM OF AGREEMENT TERMINATION

  	
   

  
	
   

  	
   

  	
   

  
	
  XI.

  	
  ARBITRATION OF DISPUTES BETWEEN BLUE CROSS
  AND PARTICIPATING MEDICAL GROUP

  	
   

  
	
   

  	
   

  	
   

  
	
  XII.

  	
  CALIFORNIAKIDS MEMBER GRIEVANCE SYSTEM

  	
   

  
	
   

  	
   

  	
   

  
	
  XIII.

  	
  MISCELLANEOUS PROVISIONS

  	
   

  



 


	
  EXHIBITS

  
	
   

  
	
  Exhibit A

  	
   

  	
  Division of
  Financial Responsibilities

  
	
  Exhibit B

  	
   

  	
  Criteria for
  Satellites

  
	
  Exhibit C

  	
   

  	
  Facilities

  
	
  Exhibit D

  	
   

  	
  CALIFORNIAKIDS
  Contracting Hospitals (Outpatient Services
  only)

  
	
  Exhibit E

  	
   

  	
  Administrative
  Responsibilities of PARTICIPATING MEDICAL GROUP

  
	
  Exhibit F

  	
   

  	
  Criteria for
  PARTICIPATING MEDICAL GROUPS

  
	
  Exhibit G

  	
   

  	
  Ambulatory
  Services Encounters

  
	
  Exhibit H

  	
   

  	
  Physician
  Fee Schedule

  
	
  Exhibit I

  	
   

  	
  Capitation

  



 

















 


CALIFORNIAKIDS


 


MEDICAL SERVICES AGREEMENT


 


This AGREEMENT is effective on
2-1-00 between


 


BLUE CROSS OF CALIFORNIA and
Affiliates (jointly and severally “BLUE CROSS”) and Gateway Medical Group Inc.
(“PARTICIPATING MEDICAL GROUP”)


 


I.              RECITALS


 


1.01                           BLUE
CROSS is a California corporation licensed by the California Commissioner of
Corporations to operate a health care service plan pursuant to the Knox-Keene
Health Care Service Plan Act of 1975 and the Rules of the California
Commissioner of Corporations promulgated thereunder (California Health &
Safety Code, Sections 1340 to 1399-64 and California Code of Regulations,
Sections 1300.43 to 1300.99, collectively, the “Knox-Keene Act”), including
without limitation to issue Benefit Agreements covering the provision of health
care services and to enter into agreements with PARTICIPATING MEDICAL GROUP.


 


1.02                           PARTICIPATING
MEDICAL GROUP is a
                                                                                            ,
a legal entity organized under the laws of the State of California and
comprised of physicians who desire to provide and arrange for health services
to persons who are enrolled in BLUE CROSS CALIFORNIAKIDS Program.


 


II.            DEFINITIONS


 


2.01                           “Affiliate”
means a corporation or other organization owned or controlled, either directly
or through parent or subsidiary corporations, by BLUE CROSS, or under common
control with BLUE CROSS.


 


2.02                           “Benefit
Agreement” means the written agreement entered into between BLUE CROSS and
CALIFORNIAKIDS HEALTHCARE FOUNDATION, INC., a California non-profit public
benefit corporation, under which BLUE CROSS provides, indemnifies, or
administers health benefits to persons enrolled in the CALIFORNIAKIDS Program.


 


2.03                           “CALIFORNIAKIDS
Coordinator” means an employee of PARTICIPATING MEDICAL GROUP as set forth
in Section 4.19.


 


2.04                           “CALIFORNIAKIDS
Program” means the managed care health maintenance organization or children
of low income families, offered by BLUE CROSS under contract with
CALIFORNIAKIDS HEALTHCARE FOUNDATION, INC.


 


2.05                           “CALIFORNIAKIDS
Quality Management Representative” means an employee of BLUE CROSS
responsible for the CALIFORNIAKIDS Quality Management Program.


 


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2.06                           “Capitation”
means a uniform prepayment fee per Member per month.


 


2.07                           “Capitation
Services” means all CALIFORNIAKIDS Covered Medical Services which are not
otherwise defined or otherwise designated as the responsibility of BLUE CROSS
in the Division of Medical Responsibilities (Exhibit A hereto).


 


2.08                           “Covered
Medical Services” means the services and benefits covered under the Benefit
Agreement.  A matrix of financial
responsibility for services and benefits to Members enrolled in the
CALIFORNIAKIDS Program is set forth in Exhibit A.


 


2.09                           “Customary
and Reasonable Charges” (C&R) means:


 


A.                                   “Customary”
means the fee that falls within the range of prevailing fees charged by
physicians and surgeons or other licensed providers of the same service within
the same area for the performance of a specific service or procedure, and


 


B.                                     “Reasonable”
means the fee that meets the requirements of Customary and is justified
considering complications or special circumstances with respect to the
performed services of procedure


 


C&R charges are determined by BLUE CROSS.


 


2.10                           “Emergency”
means a sudden unexpected onset of a medical condition manifesting itself by
acute symptoms of sufficient severity (including, without limitation, sudden
and unexpected severe pain such that the absence of immediate medical attention
could reasonably result in any of the following:


 


A.                                   Placing
the patients health in serious jeopardy,


 


B.                                     Serious
impairment to bodily functions,


 


C.                                     Other
serious medical consequences, or


 


D.                                    Serious
and or permanent dysfunction of any bodily organ or part.


 


2.11                           “Extension
of Benefits” means extended benefits which may be available to Members who
are totally disabled on the date of termination of their Benefit
Agreement.  Extended benefits shall have
the meaning set forth in the agreement applicable to the Member.


 


2.12                           “Health
Professional” means any of the following: 
A doctor of medicine or osteopathy, licensed to practice medicine or
osteopathy where the care is received, or a dentist, an optometrist, a
podiatrist or chiropodist, a clinical psychologist, a chiropractor, a clinical
social worker, a marriage family and child counselor, a physical therapist, a
speech pathologist, an audiologist, an occupational therapist, a physician
assistant, a registered nurse, a nurse practitioner and/or nurse midwife
providing services within the scope of practice as defined by the appropriate
clinical License and or regulatory board.


 


2.13                           “Healthcare
Facility” means a facility licensed pursuant to Section 1250 et. seq. of the California Health and
Safety Code.


 


2.14                           “Independent
Practice Association” means an incorporated association of independent
physicians which has entered into an agreement with BLUE CROSS to provide and
arrange for health services to Members.


 


2

















 


2.15                           “Institutional
Services” means those healthcare facility services provided and billed by a
duly licensed Healthcare Facility exclusive of any professional services).


 


2.16                           “Medically
Necessary” means services or supplies which, under the provisions of this
Agreement, are determined to be:


 


A.                                   Appropriate
and necessary for the symptoms, diagnosis or treatment of the medical
condition, and;


 


B.                                     Provided
for the diagnosis of direct care and treatment of the medical condition, and;


 


C.                                     Within
standards of good medical practice within the organized medical community, and;


 


D.                                    Not
primarily for the convenience of the Member, the Member’s physician, or another
provider, and;


 


E.                                      The
most appropriate supply or level of service which can safely be provided.  For hospital stays, this means that acute
care as an inpatient is necessary due to the kinds to services the Member is
receiving or the severity of the Member’s condition, and that safe and adequate
care cannot be received as an outpatient or in a less intensified medical
setting.


 


2.17                           “Member”
means an individual who has qualified and is covered by a CALIFORNIAKIDS
Benefit Agreement.


 


2.18                           “Out-of-Area
Emergency Services” means Emergency services which are rendered to a Member
at a distance of more than twenty (20) miles from the medical offices of
PARTICIPATING MEDICAL GROUP or the Satellite Facility to which the Member is
assigned.  When PARTICIPATING MEDICAL
GROUP is organized as in Independent Practice Association, Out-of-Area
Emergency Services are those Emergency services which are rendered to a Member
at a distance of more than twenty (20) mile radius from a hospital designated
in Exhibit D.


 


2.19                           “PARTICIPATING
MEDICAL GROUP Physician” means a duly licensed physician who is a
shareholder, partner, associate, contractor or employee of PARTICIPATING
MEDICAL GROUP.


 


2.20                           “Primary
Care Physician” means the PARTICIPATING MEDICAL GROUP physician responsible
for coordinating and controlling the delivery of Covered Medical Services to
the Member.  Primary Care Physicians
include general and family practitioners, internists and pediatricians, and
such other specialists as BLUE CROSS may approve in writing to be designated
Primary Care Physicians.


 


2.21                           “Quality
Management Program” means a program which provides review by physicians and
other health professionals of the appropriateness and adequacy of the delivery
of health services.


 


2.22                           “Referral
Services” means Capitation Services which are rendered to Members through
referral as authorized by PARTICIPATING MEDICAL GROUP Physicians.


 


2.23                           “Satellite
Facility” means a medical facility separate from PARTICIPATING MEDICAL
GROUP’s principal place of business. 
Which is dependent upon, and responsible to PARTICIPATING MEDICAL
GROUP.  It is a facility that meets the
CALIFORNIAKIDS Satellite Criteria set forth in Exhibit B and is approved by
BLUE CROSS prior to being designated a CALIFORNIAKIDS Satellite Facility.


 


3

















 


2.24                           “Service
Area” means the geographical area within a thirty (30) mile radius of the
medical offices of PARTICIPATING MEDICAL GROUP or any Satellite Facility to
which the Member is assigned, or in the case of an Independent Practice
Association, the medical office of the PARTICIPATING MEDICAL GROUP
Physician.  The designation of a
particular geographical area shall not be construed as giving PARTICIPATING
MEDICAL GROUP an exclusive right to that Service Area.


 


2.25                           “Utilization
Management Program” means a program approved by BLUE CROSS and designed to
review and manage the utilization of Covered Medical Services.


 


III.           RELATIONSHIP BETWEEN BLUE CROSS AND
PARTICIPATING MEDICAL GROUP


 


3.01                           BLUE
CROSS and PARTICIPATING MEDICAL GROUP are independent entities.  Nothing in this Agreement shall be
construed, or be deemed to create, a relationship of employer and employee or
principal and agent, or any relationship other than that of independent parties
contracting with each other solely for the purpose of carrying out the
provisions of this Agreement.


 


3.02                           BLUE
CROSS and PARTICIPATING MEDICAL GROUP agree that PARTICIPATING MEDICAL GROUP
Physicians shall maintain a physician-patient relationship with each Member assigned
to PARTICIPATING MEDICAL GROUP. 
PARTICIPATING MEDICAL GROUP shall be solely responsible to the Member
for treatment and medical care with respect to the provision of Capitation
Services.


 


3.03                           Nothing
in this Agreement is intended to be construed, or be deemed to create, any
rights of remedies in any third party including, but not limited to, a Member
or a provider of services, other than PARTICIPATING MEDICAL GROUP.


 


IV.           PARTICIPATING MEDICAL GROUP SERVICES AND
RESPONSIBILITIES


 


PARTICIPATING
MEDICAL GROUP and PARTICIPATING MEDICAL GROUP Physicians agree:


 


4.01                           To
promptly provide or arrange for available and accessible CALIFORNIAKIDS Covered
Medical Services for each Member enrolled in the CALIFORNIAKIDS Program and
assigned to PARTICIPATING MEDICAL GROUP, in accordance with that Member’s
Benefit Agreement and this Agreement, and to provide those services in and
through the facilities designated in Exhibit C and further, to coordinate the
Member’s admission to a Healthcare Facility in the event the Member requires
services as an inpatient.


 


4.02                           In
the event the Member requires hospitalization, to arrange to have the Member
admitted to one of the hospitals listed in Exhibit D.


 


4.03                           To
comply with all CALIFORNIAKIDS administrative policies and procedures in the
areas listed in Exhibit E as set forth in the CALIFORNIAKIDS Operations Manual
(incorporated by reference) and to comply with all applicable state and federal
laws and regulations relating to the delivery of Covered Medical Services.


 


4

















 


4.04                           To
assure that Members shall not be subject to discrimination in access to Covered
Medical Services PARTICIPATING MEDICAL GROUP shall comply with State of
California non-determination requirements.


 


4.05                           To
maintain a sufficient number of Primary Care Physicians to guarantee that there
is the equivalent of at least one full-time Primary Care Physician to each two
thousand (2,000) Members served by PARTICIPATING MEDICAL GROUP.  All Primary Care Physicians shall be
PARTICIPATING MEDICAL GROUP Physicians.


 


4.06                           To
use a referral request process by which Capitation Services are to be rendered
by Health Professionals other than the Member’s Primary Care Physician,
including PARTICIPATING MEDICAL GROUP Physicians or other Health Professionals
who do not belong to PARTICIPATING MEDICAL GROUP.  This process shall assure that:


 


(1)                                  All
Health Professionals who provide Referral Services follow appropriate billing
procedures.


(2)                                  That
the Health Professional must look only to PARTICIPATING MEDICAL GROUP for
payment of Covered Medical Services and shall not bill the Member, except for
applicable co-payments and for non-Covered Medical Services.


(3)                                  Primary
Care Physicians who determine that a referral is necessary, may issue a
referral without the prior authorization of PARTICIPATING MEDICAL GROUP’s
Utilization Management Program to physicians in the following specialties:
Cardiology, Dermatology, Endocrinology, Ear, Nose and Throat, Gastroenterology,
General Surgery, Hematology, Neurology, Obstetrics-Gynecology, Oncology,
Ophthalmology, Orthopedic Surgery, Podiatry, Routine Laboratory, Routine X-ray
and Urology.


(4)                                  For
referrals to specialists or providers, or services other than those listed in
(3) above, PARTICIPATING MEDICAL GROUP shall review and issue an authorization
or dental of a request for referral within five (5) business days of receipt of
such request or admission to hospital.


 


4.07                           To
promptly provide, arrange through referral, or authorize all Capitation Services,
and further, to accept full financial responsibility for all Capitation
Services provided, authorized or arranged through referral by PARTICIPATING
MEDICAL GROUP in accordance with the provisions of this Agreement.


 


4.08                           To
accept the monthly Capitation payment from BLUE CROSS as payment in full for
Capitation Services (including all Referral Services) provided or arranged
hereunder, and not to seek additional payments or compensation from Members for
Covered Medical Services.  The foregoing
restriction shall not apply to co-payments, which may be collected by
PARTICIPATING MEDICAL GROUP in accordance with the applicable provisions of the
Benefit Agreement(s), nor shall it apply to billings and collections with
respect to non-Covered Medical Services rendered to Members by PARTICIPATING
MEDICAL GROUP.  However, to the extent
that PARTICIPATING MEDICAL GROUP’s billing office is aware of the Member’s
payment responsibility, PARTICIPATING MEDICAL GROUP agrees to advise the Member
of that payment responsibility prior to rendering any service requiring a
co-payment, or any non-Covered Medical Service.


 


If
PARTICIPATING MEDICAL GROUP should receive any surcharge or payment from a
Member, in addition to those permissible charges set forth above, PARTICIPATING
MEDICAL GROUP shall promptly refund the full amount thereof to the Member.


 


4.09                           To
never charge any Member for any health service which has been deemed not
Medically Necessary or not appropriate after utilization review by
PARTICIPATING MEDICAL GROUP,


 


5

















 


unless the
Member specifically requests the service and acknowledges in writing that the
service is not a Covered Medical Service under the Member’s Benefit Agreement.


 


4.10                           To
accept any and all Members who select PARTICIPATING MEDICAL GROUP until such
time as PARTICIPATING MEDICAL GROUP shall have provided ninety (90) days prior
written notice to BLUE CROSS that it has reached its maximum capacity as set
forth in Article XIII.  MISCELLANEOUS
PROVISIONS Section 13.08 herein, or that it anticipates reaching such
maximum within ninety (90) days from the date of the notice to BLUE CROSS.  The maximum capacity of PARTICIPATING
MEDICAL GROUP designated in Article XIII shall be reduced only upon ninety (90)
days written notice to BLUE CROSS.  The
parties acknowledge their understanding that enrollment from individual
accounts, or changes in selection of PARTICIPATING MEDICAL GROUP by Members,
are not entirely within the control of BLUE CROSS.


 


4.11                           That
all information shall be provided to each party to this Agreement pursuant to
procedures designed to protect the confidentiality of patient medical records
in accordance with applicable legal requirements, recognized standards of
professional practice and generally accepted procedures followed by health
maintenance organizations (HMOs).


 


4.12                           BLUE
CROSS shall be access all reasonable times upon demand to the books, records
and papers of PARTICIPATING MEDICAL GROUP relating to the services
PARTICIPATING MEDICAL GROUP provides to Members to the cost thereof, and to
payments PARTICIPATING MEDICAL GROUP receives from Members or others on their
behalf.  PARTICIPATING MEDICAL GROUP
shall maintain such records and provide such information to BLUE CROSS the
Commissioner of Corporations as may be necessary for BLUE CROSS compliance with
the requirements of the Knox-Keene Act. 
PARTICIPATING MEDICAL GROUP shall maintain such records for at least
five (5) years, and such obligations shall not be terminated upon a termination
of this Agreement, whether by rescission or otherwise.


 


4.13                           To
maintain financial reserves adequate to cover all risks assumed by
PARTICIPATING MEDICAL GROUP hereunder, including, but not limited to,
unanticipated claims for Referral Services that are the potential
responsibility of PARTICIPATING MEDICAL GROUP. 
PARTICIPATING MEDICAL GROUP agrees to provide BLUE CROSS with audited
financial statements of PARTICIPATING MEDICAL GROUP no later than three (3)
months after the end of its fiscal year, and, BLUE CROSS shall maintain strict
confidentiality of said records. 
Audited financial statements shall illustrate net operating surplus or
profit (after taxes).  Documents shall
include the following:


 


(1)           Balance sheets


(2)           Statements of revenues
and expenses


(3)           Statements of cash flow


 


PARTICIPATING
MEDICAL GROUP further agrees that BLUE CROSS shall have the right to require
audited financial statements, in addition to the latest fiscal year, at any
time, upon request, with reasonable notice, if BLUE CROSS pays for the audit.


 


4.14                           To
provide patent education of the subjects of wellness and disease prevention.


 


4.15                           To
permit the Medical Director of BLUE CROSS of an authorized employee of
[ILLEGIBLE] BLUE CROSS, and any governmental agency serving jurisdiction over BLUE
CROSS, upon written notice of not less than ten (10) working days, to inspect
the premises and equipment of PARTICIPATING MEDICAL GROUP and review all
operational phases of the Covered Medical Services provided to Members,
including medical records of PARTICIPATING MEDICAL 


 


6

















 


GROUP, as
authorized by each Member.  BLUE CROSS
shall arrange for copies of any documents requested, at BLUE CROSS expense.


 


4.16                           Upon
termination of this Agreement, PARTICIPATING MEDICAL GROUP shall, upon advance
written notice from BLUE CROSS, make available to BLUE CROSS and permit BLUE
CROSS to copy, at BLUE CROSS expense, the medical records of each Member who
has been assigned to PARTICIPATING MEDICAL GROUP.


 


4.17                           To
require each PARTICIPATING MEDICAL GROUP Physician to agree to provide
Capitation Services, in accordance with the provisions of this Agreement, and
further, to coordinate Member’s admission to a hospital(s) listed in
Exhibit D.


 


4.18                           To
provide a Primary Care Physician selected by the Member to oversee the
continuity of care for each Member who appears on PARTICIPATING MEDICAL GROUP’s
Eligibility Report.


 


4.19                           To
provide a CALIFORNIAKIDS Coordinator who will create a liaison with BLUE CROSS
and assist Members in accordance with the procedures set forth in the
CALIFORNIAKIDS Operations Manual, and who will be available to Members during
all regular office hours of PARTICIPATING MEDICAL GROUP for the purpose of
assisting Members to resolve any problems which may arise or be perceived by
the Member.


 


4.20                           To
notify BLUE CROSS within fifteen (15) days concerning:


 


A.                                   Any
material change in the bylaws, membership, ownership or officers of
PARTICIPATING MEDICAL GROUP which might affect BLUE CROSS or this Agreement.


 


B.                                     Any
legal or governmental action initiated against a PARTICIPATING MEDICAL GROUP
Physician or against PARTICIPATING MEDICAL GROUP which might affect BLUE CROSS
or this Agreement including, but not limited to any change in PARTICIPATING
MEDICAL GROUP Physician(s) licensure, insurance, certification, malpractice,
disciplinary experience or physical or mental health status.


 


C.                                     Any
other situation that may interfere with PARTICIPATING MEDICAL GROUP’s duties
and obligations under this Agreement.


 


4.21                           To
obtain BLUE CROSS’ prior written approval for any literature related to
CALIFORNIAKIDS and intended for Members.


 


4.22                           To
only engage the Referral Services of duly licensed board certified consultants,
specialists and duly certified allied health professionals, responsible for
delivering CALIFORNIAKIDS Covered Medical Services to Members.  A list of all referral physicians to whom
PARTICIPATING MEDICAL GROUP refers Members for Referral Services shall be
provided to BLUE CROSS upon request.


 


4.23                           To
ensure that all PARTICIPATING MEDICAL GROUP Physicians and all PARTICIPATING
MEDICAL GROUP employees responsible for delivering Covered Medical Services to
Members, continually meet all applicable state laws and regulations and all
legal standards of care.


 


4.24                           To
continually meet all criteria for PARTICIPATING MEDICAL GROUPS, set forth in
Exhibit ? and to continually meet all criteria for Satellite Facilities, (if
applicable) set forth in Exhibit B.


 


7

















 


4.25                           That
PARTICIPATING MEDICAL GROUP will not request, demand, require or otherwise seek
the transfer or removal of any Member from the care of PARTICIPATING MEDICAL
GROUP, based on that Member’s need of, or utilization of, Medically Necessary
services.


 


4.26                           That
BLUE CROSS and PARTICIPATING MEDICAL GROUP respectively acknowledge that the
authority and responsibility for coordination of benefits shall be carried out
in accordance with the provisions set forth in the Benefit Agreements and the
CALIFORNIAKIDS Operations Manual.


 


4.27                           To
maintain appropriate insurance programs or policies as follows:


 


PARTICIPATING
MEDICAL GROUP agrees to maintain professional liability insurance, or other
risk protection program, acceptable as defined under A and B below to BLUE
CROSS.  Notification by PARTICIPATING
MEDICAL GROUP of cancellation or material modification of the coverage under
such professional liability insurance or other risk protection program is to be
made to BLUE CROSS within thirty (30) days prior to any cancellation or modification
Copies of the agreements or documents evidencing professional liability
insurance or other risk protection required under this section shall be
provided to BLUE CROSS upon execution of this Agreement.


 


A.                                   Professional
Liability Insurance


 


The coverage
to be provided under this section shall be in minimum amounts of ONE MILLION
DOLLARS ($1,000,000.00) for any one (1) incident, THREE MILLION DOLLARS
($3,000,000.00) annual aggregate, PARTICIPATING MEDICAL GROUPs which are
organized as Independent Practice Associations shall ensure that PARTICIPATING
MEDICAL GROUP Physicians maintain professional liability insurance in minimum
amounts of ONE MILLION DOLLARS ($1,000,000.00) for any one incident, THREE
MILLION DOLLARS ($3,000,000.00) annual aggregate.  Furthermore, PARTICIPATING MEDICAL GROUPs organized as
Independent Practice Associations shall maintain directors and officers
liability insurance in minimum amounts of ONE MILLION DOLLARS ($1,000,000.00)
for any one incident, THREE MILLION DOLLARS ($3,000,000.00) annual aggregate.


 


B.            Other Insurance


 


(1)                                  General
Liability Insurance.  In addition to
Subsection A, above PARTICIPATING MEDICAL GROUP shall also maintain a policy or
program of comprehensive general liability insurance (or other risk protection)
with minimum coverage including no less than ONE HUNDRED THOUSAND DOLLARS
($100,000.00) for PARTICIPATING MEDICAL GROUP’s property, together with
combined single limit bodily injury and property damage insurance of not less
that SIX HUNDRED THOUSAND DOLLARS ($600,000.00).


 


(2)                                  Worker’s
Compensation.  PARTICIPATING MEDICAL
GROUP’s employees shall be covered by Worker’s Compensation Insurance in an
amount and form meeting all requirements of applicable provisions of the California Labor Code.


 


4.28                           That
PARTICIPATING MEDICAL GROUP facilities shall be reasonably accessible to the
physically handicapped.


 


4.29                           That
all Covered Medical Services, (including consultation and Referral Services),
ambulatory care services diagnostic laboratory, diagnostic imaging and preventive
health services shall be available to Members a minimum of forty (40) hours per
week, except for weeks including


 


8

















 


holidays.  The foregoing services shall be available
beyond normal business hours during additional hours to be scheduled by
PARTICIPATING MEDICAL GROUP.


 


4.30                           To
promptly provide, arrange or authorize all Emergency services for each Member
assigned to PARTICIPATING MEDICAL GROUP. 
Authorization of any Emergency services, as set forth in Section 2.10
herein, shall not be withheld by PARTICIPATING MEDICAL GROUP regardless of
whether PARTICIPATING MEDICAL GROUP is notified within forty-eight (48) hours
from the time such Emergency services were rendered.  PARTICIPATING MEDICAL GROUP shall comply with all requirements
set forth in California Health and Safety Code Section 1371.4(a)(4).


 


4.31                           That
PARTICIPATING MEDICAL GROUP shall manage and facilitate access to Emergency
services within a twenty (20) mile radius of each Satellite Facility and
PARTICIPATING MEDICAL GROUP’s main facility: at all times, twenty-four (24)
hours a day seven (7) days a week.


 


4.32                           To
adopt and maintain a Quality Management Program consistent with BLUE CROSS
standards and approved by BLUE CROSS. 
This program will cover all Covered Medical Services provided or
arranged by PARTICIPATING MEDICAL GROUP for Members.  PARTICIPATING MEDICAL GROUP agrees to allow on-site review(s) of
its Quality Management Program by BLUE CROSS staff.


 


A.                                   The
Quality Management Program shall:


 


(1) 
Provide for Quality Management review by PARTICIPATING MEDICAL GROUP
Physicians and other Health Professionals.


(2) 
Provide for review of all services provided to Members by PARTICIPATING
MEDICAL GROUP.


(3) 
Stress health outcomes by providing health education and wellness
programs for Members.


 


B.                                     The
Quality Management Program shall include, but not be limited to the following
activities:


 


(1) 
Credentialing, recredentialing and peer review of all PARTICIPATING
MEDICAL GROUP Physicians and allied Health Professional providers.


(2) 
Credentialing, recredentialing and peer review of all Health
Professionals or providers under contract with or employed by PARTICIPATING
MEDICAL GROUP.


(3) 
Incident identification and risk management.


(4) 
Member grievance resolution.


(5) 
General and focused health care audits.


(6) 
Development and implementation of appropriate recommendations.


(7) 
Documentation of remedial procedures for instances of inappropriate or
substandard service(s) and/or failure to provide needed Medically Necessary
Covered Medical Service(s).


 


C.                                     BLUE
CROSS shall validate PARTICIPATING MEDICAL GROUP’s development and
implementation of the Quality Management Program through regular audit
activities in accordance with the CALIFORNIAKIDS Operations Manual and as
follows:


 


(1) 
BLUE CROSS, Quality Management Department shall review PARTICIPATING
MEDICAL GROUP’s Quality Management Program on an annual basis through a
scheduled on-site audit.


 


9

















 


(2) 
The BLUE CROSS Quality Management Representative shall notify
PARTICIPATING MEDICAL GROUP of any deficiencies or areas needing improvement.


(3) 
PARTICIPATING MEDICAL GROUP shall take corrective action to eliminate
any deficiencies in areas needing improvement within a reasonable period of
time.


(4) 
BLUE CROSS shall conduct follow-up reviews as necessary.


 


D.                                    PARTICIPATING
MEDICAL GROUP shall:


 


(1) 
Make available to BLUE CROSS all minutes and notes from any and all
Quality Management Committees and/or activities which specifically relate to
Members.


(2) 
Provide BLUE CROSS with access to all PARTICIPATING MEDICAL GROUP
Quality Management data directly or indirectly relating to Members.


(3) 
Make available to BLUE CROSS all composite Quality Management Program
data which include Members in the composite data set and provide such detail as
is available regarding those Members.


(4) 
Make known to BLUE CROSS any and all actions taken against a
PARTICIPATING MEDICAL GROUP Physician when such action is the result of
deficiencies in quality of medical care.


(5) 
Provide the BLUE CROSS Medical Director (or the Medical Director’s
clinical designee) with a schedule designating the time and place of all
Quality Management Committee meetings that relate to Members, in order that he
or she shall, in the Medical Director’s discretion, attend.  The BLUE CROSS Medical Director shall notify
the PARTICIPATING MEDICAL GROUP in advance of his or her attendance and shall
not be excluded from any deliberation on activities related to Members.


(6) 
Permit BLUE CROSS to evaluate and utilize the data obtained from the
Quality Management Program in a manner that satisfies BLUE CROSS, requirements
for quality assurance, for BLUE CROSS internal use only.


(7) 
Implement any necessary changes in procedures, in order to fully comply
with all quality assurance standards, as mutually agreed by the parties, and
provide BLUE CROSS with the minutes of Quality Management Committee meetings
and reviews that relate to Members.


(8) 
Report to BLUE CROSS quarterly on activities or actions of PARTICIPATING
MEDICAL GROUP’s Quality Management Committee as such activities or actions
relate to Members.


 


4.33                           To
adopt and maintain a Utilization Management Program consistent with BLUE CROSS
standards and approved by BLUE CROSS. 
This program will cover all Covered Medical Services provided or
arranged by PARTICIPATING MEDICAL GROUP for Members.  PARTICIPATING MEDICAL GROUP agrees to allow on-site review(s) of
the Utilization Management Program by BLUE CROSS staff.


 


A.            The Utilization
Management Program shall:


 


(1) 
Include the development and implementation of appropriate
recommendations.


(2) 
Include documentation as described in the CALIFORNIAKIDS Operations
Manual of remedial procedures for instances of inappropriate or substandard
services(s) and or failure to provide Medically Necessary Covered Medical
Services.


(3) 
Assure that PARTICIPATING MEDICAL GROUP’s primary consideration is the
quality of services rendered to Members.


(4) 
Assure that all services provided to Members are Medically Necessary.


(5) 
Work closely with Healthcare Facilities to assure continuity of care for
Members receiving inpatient services.


(6) 
Encompass outpatient and ancillary care.


 


10

















 


(7) 
Utilize prospective, concurrent, and retrospective review.


(8) 
Assure that all adverse utilization review decisions are made by a
licensed physician, and no denial of a requested service shall be made except
by a licensed physician, experienced in the area being reviewed.  Denial decisions shall be provided to
Members in writing.


(9) 
Permit BLUE CROSS to have access to all PARTICIPATING MEDICAL GROUP
Utilization Management data directly or indirectly relating to Members.


 


B.                                     BLUE
CROSS shall valuate PARTICIPATING MEDICAL GROUP’s development and
implementation of the Utilization Management Program through regular audit
activities in accordance with the CALIFORNIAKIDS Operations Manual and as
follows:


 


(1) 
BLUE CROSS, Quality Management Department shall review PARTICIPATING
MEDICAL GROUP’s Utilization Management Program on an annual basis through a
scheduled on-site audit.


(2) 
The BLUE CROSS Quality Management Representative shall notify
PARTICIPATING MEDICAL GROUP of any deficiencies or areas needing improvement.


(3) 
PARTICIPATING MEDICAL GROUP shall take corrective action on eliminate
any deficiencies in areas needing improvement within a reasonable period of
time.


(4) 
BLUE CROSS shall conduct follow-up reviews as necessary.


 


C.                                     PARTICIPATING
MEDICAL GROUP shall:


 


(1) 
Make available to BLUE CROSS all minutes and notes from any and all
Utilization Management Committees and/or activities which relate to Members.


(2) 
Make available to BLUE CROSS upon request all composite Utilization Management
data which include Members in the composite data set and provide such detail as
is available regarding those Members.


(3) 
Provide the BLUE CROSS Medical Director (or the Medical Director’s
clinical designee) with a schedule designating the time and place of all
Utilization Management Committee meetings that relate to Members, in order that
he or she shall, in the Medical Director’s discretion attend.  The BLUE CROSS Medical Director shall notify
the PARTICIPATING MEDICAL GROUP in advance of his or her attendance and shall
not be excluded from any deliberation on activities related to Members.


 


4.34                           To
provide BLUE CROSS, on a monthly basis, all ambulatory patient encounter data
either directly or through PARTICIPATING MEDICAL GROUP’s billing agent in the
format as shown in Exhibit G.


 


4.35                           That
all financial terms of this Agreement shall be and remain confidential and
shall not be disclosed to any third party, except as required by law or as
required to supply information required by any financial institution.


 


4.36                           To
pay all Health Professionals who have rendered Referral Services to Member
within forty five (45) working days following receipt of a clean, undisputed
claim, consistent with the regulations of the Commissioner of Corporations
governing BLUE CROSS.


 


4.37                           To
cooperate with BLUE CROSS administration of its internal quality of care review
and grievance procedures.  The parties
acknowledge and agree that authority to perform Utilization Management Program
activities and Quality Management Program activities under this Agreement is a
delegation of BLUE CROSS authority pursuant to Sections 1370 and 1370 ??? of
the Health & Safety Code, and all or part of this authority may be revoked
at any time.  The scope of delegated
authority shall be as set forth in the Utilization Management Program
guidelines and


 


11

















 


the Quality
Management Program guidelines issued by BLUE CROSS and provided to
PARTICIPATING MEDICAL GROUP.  The
proceedings of the Utilization Management and Quality Management Committees
shall be strictly confidential between BLUE CROSS and PARTICIPATING MEDICAL
GROUP and are subject to the protections set forth in Sections 1370 and 1370.1.


 


4.38                           That
if BLUE CROSS determines in good faith that any PARTICIPATING MEDICAL GROUP
Physician(s):


 


(1) 
does not meet the requirements specified herein; or


(2) 
that the health, safety or welfare of Members is jeopardized by
continuation of any PARTICIPATING MEDICAL GROUP Physician to provide services
to Members; or


(3) 
if PARTICIPATING MEDICAL GROUP Physician(s) furnishes false, incomplete,
or inaccurate information to BLUE CROSS in the application to participate; or


(4) 
at any time during the term of this Agreement, a PARTICIPATING MEDICAL
GROUP Physician(s) suffers revocation, termination or suspension of Physician’s
medical license or medical staff privileges; or


(5) 
the ability of the PARTICIPATING MEDICAL GROUP Physician(s) to perform
the services covered by this Agreement is otherwise imparted;


 


PARTICIPATING
MEDICAL GROUP warrants that upon written request of BLUE CROSS said
PARTICIPATING MEDICAL GROUP Physician(s) shall be excluded from providing
services to Members under this Agreement. 
PARTICIPATING MEDICAL GROUP and PARTICIPATING MEDICAL GROUP Physician(s)
may present to BLUE CROSS for further consideration any additional information
or explanation regarding PARTICIPATING MEDICAL GROUP Physician’s compliance
with the requirements set forth herein. 
However, BLUE CROSS retains the right to make the final decision
regarding a PARTICIPATING MEDICAL GROUP Physician’s participation under this
Agreement.


 


4.39                           That
visits to the Member’s home within the PARTICIPATING MEDICAL GROUP Service Area
by a Primary Care Physician, shall occur as necessary within that Physician’s
discretion.


 


4.40                           That
PARTICIPATING MEDICAL GROUP will not request, demand, require or otherwise seek
the transfer or removal of any Member from the care of PARTICIPATING MEDICAL
GROUP based on that Member’s need of, or utilization of, Medically Necessary
services.


 


4.41                           That
unless agreed to in writing by BLUE CROSS, this Agreement shall not apply to
organized physician groups (including, but not limited to, Independent Practice
Associations) that PARTICIPATING MEDICAL GROUP acquires, manages or affiliates
with subsequent to the effective date of this Agreement.


 


V.            BLUE CROSS SERVICES AND RESPONSIBILITIES


 


BLUE CROSS
agrees:


 


5.01                           To
perform, or arrange for the performance of, all necessary accounting and
enrollment functions with respect to marketing and administering the
CALIFIORNIAKIDS Program, and to issue a CALIFORNIAKIDS identification card to
each Member.  However, CALIFORNIAKIDS
Program enrollment shall be determined by CALIFORNIAKIDS HEALTHCARE FOUNDATION,
INC.


 


12

















 


5.02                           To
provide PARTICIPATING MEDICAL GROUP with Member Eligibility Reports, as set
forth in Article VI


 


5.03                           That,
to the extent compatible with its obligations to BLUE CROSS hereunder,
PARTICIPATING MEDICAL GROUP reserves the right to provide professional services
to persons who are not Members.


 


5.04                           To
provide PARTICIPATING MEDICAL GROUP with claims paid data, in a format to be
mutually agreed upon.


 


5.05                           To
make trained personnel available to PARTICIPATING MEDICAL GROUP to assist in
Quality Management activities.


 


5.06                           To
notify and consult with PARTICIPATING MEDICAL GROUP with respect to the
development of any material changes, as determined by BLUE CROSS, or amendments
to the Benefit Agreements, and to obtain PARTICIPATING MEDICAL GROUP’s consent
to changes that BLUE CROSS believes may materially affect PARTICIPATING MEDICAL
GROUP, except for changes required by law. 
The foregoing consent will not be unreasonably withheld by PARTICIPATING
MEDICAL GROUP, so long as Capitation payments are adjusted as mutually agreed
to reflect any additional services which may be required due to any amendment
or change in Member benefits.


 


5.07                           To
accept sole responsibility for filing reports, obtaining approval and complying
with the applicable laws and regulations of state, federal and other regulatory
agencies having jurisdiction over BLUE CROSS, on the condition that
PARTICIPATING MEDICAL GROUP cooperates in providing BLUE CROSS with any
information and assistance reasonably required. PARTICIPATING MEDICAL GROUP is
not required to provide information which is confidential in any other existing
contract of PARTICIPATING MEDICAL GROUP.


 


5.08                           That
nothing contained in this Agreement is intended to interfere with the
professional relationship between any Member and the Member’s PARTICIPATING
MEDICAL GROUP Physician(s).


 


5.09                           To
collect, or arrange to have collected, all premiums, Member payments and other
items of income to which BLUE CROSS is entitled under its contracts or
otherwise, except for (a) co-payments, (b) payments for non-Covered Medical
Services, (c) coordination of benefits payments for professional services which
may be collected by PARTICIPATING MEDICAL GROUP under the conditions set forth
in the Member’s CALIFORNIAKIDS Benefit Agreement, and (d) third party liability
payments for professional services. 
BLUE CROSS shall assign its right to collect such payments for
professional services to PARTICIPATING MEDICAL GROUP.  PARTICIPATING MEDICAL GROUP’s methods of collection of such
payments shall be conducted in a reasonable and nonegregious manner and only
proper legal procedures may be used to enforce such payment.


 


5.10                           To
consult with PARTICIPATING MEDICAL GROUP regarding any changes, as determined
by BLUE CROSS, in operating procedures and policies, as set forth in the
CALIFORNIAKIDS Operations Manual, and to provide PARTICIPATING MEDICAL GROUP
with an opportunity to comment on any policy and procedural changes which may
have a substantial impact on PARTICIPATING MEDICAL GROUP.


 


13

















 


VI.           ELIGIBILITY LISTINGS


 


6.01                           Eligibility
listings of Members assigned to PARTICIPATING MEDICAL GROUP shall be provided
in the following manner:


 


A.                                   BLUE
CROSS shall maintain, update and distribute monthly, Member Eligibility Reports
listing the persons who are eligible to receive Covered Medical Services during
the applicable month.


 


B.                                     PARTICIPATING
MEDICAL GROUP shall receive copies of the Eligibility Reports.


 


C.                                     In
the event care is provided to an ineligible person, based on an erroneous or
delayed Eligibility Report, BLUE CROSS shall be financially responsible for all
care provided by PARTICIPATING MEDICAL GROUP prior to the time PARTICIPATING
MEDICAL GROUP received notice of that person’s inteligibility, on the condition
that PARTICIPATING MEDICAL GROUP shall supply BLUE CROSS with evidence that
PARTICIPATING MEDICAL GROUP has unsuccessfully sought payment for all or a
portion of the charges from the ineligible person, or the person having legal
responsibility for the ineligible person, through two billing cycles, or
through a period of sixty (60) days, whichever is greater.  In that event, BLUE CROSS’ responsibility
for physician compensation shall be measured as set forth in Exhibit H or the
actual billed amount, whichever is less. 
The obligations of BLUE CROSS under this Subsection C shall be
conditioned upon the exercise of prudent judgment by PARTICIPATING MEDICAL
GROUP evidenced by reasonable efforts to contact BLUE CROSS for verification of
the eligibility of each Member prior to providing or arranging Covered Medical
Services.


 


VII.          COMPENSATION TO PARTICIPATING MEDICAL
GROUP


 


7.01                           Exhibit
I sets forth the Capitation payments for new and renewing business.  The applicable Capitation for each
CALIFORNIAKIDS Member assigned to PARTICIPATING MEDICAL GROUP shall be paid
monthly, prorated in accordance with Member eligibility.


 


7.02                           Compensation
shall be paid in consideration for providing Capitation Services and arranging
non-Capitation Services designated as BLUE CROSS’ responsibility in Exhibit A,
in a manner consistent with this Agreement for each CALIFORNIAKIDS Member
assigned to PARTICIPATING MEDICAL GROUP, and in consideration for all
Capitation Services arranged through referral for Members by PARTICIPATING
MEDICAL GROUP.  The Capitation payment
shall be made by the tenth of each month and shall be computed on the basis of
the most current information available. 
In the event an error is made in the computation of the Capitation payment,
resulting in an overpayment or underpayment to PARTICIPATING MEDICAL GROUP,
BLUE CROSS reserves the right to adjust subsequent Capitation payments to
PARTICIPATING MEDICAL GROUP to offset such overpayment or underpayment.


 


Each
Capitation payment shall be accompanied by a remittance summary.  The remittance summary identifies the total
Capitation amount payable, including retroactivity and identities those Members
whose retroactivity had a financial impact on the total Capitation
payment.  A complete listing of Members
that are eligible for Capitation Services is provided in the monthly
Eligibility Report, as set forth in Article VI.


 


14

















 


7.03                           PARTICIPATING
MEDICAL GROUP agrees that in no event shall any allowable co-payment or
reimbursement amount, or sum thereof, due PARTICIPATING MEDICAL GROUP, exceed
the cost to PARTICIPATING MEDICAL GROUP of providing the service or item which
was billed.


 


7.04                           PARTICIPATING
MEDICAL GROUP agrees to continue to provide or arrange for all Covered Medical
Services and benefits to any Member, or former Member, who is eligible for
coverage under the Extension of Benefits provision of the Benefit Agreements,
in exchange for the then current Capitation amount per Member per month.


 


7.05                           PARTICIPATING
MEDICAL GROUP agrees to be responsible for professional and technical charges,
as described in Exhibit A, for laboratory procedures and diagnostic imaging
examinations rendered to Members, as a part of, and concurrent with benefits
set forth in this Agreement, whether billed by the hospital or by a qualified
Health Professional.


 


7.06                           In
the event a referral provider has not been reimbursed for authorized Referral
Services or that any other provider has not been reimbursed by PARTICIPATING
MEDICAL GROUP as required under their Agreement for services provided to
Members within forty-five (45) working days following receipt of a clean,
undisputed claim, then after notice BLUE CROSS shall have the option to pay a
clean and uncontested claim and deduct such payment (including any interest
payable under Health & Safety Code Section 1371), plus an administrative
charge equal to ten percent (10%) of the claim amount, from any monies due from
BLUE CROSS to PARTICIPATING MEDICAL GROUP.


 


VIII.        ENROLLMENT PROTECTION


 


8.01                           Enrollment
Protection is a program designed to limit PARTICIPATING MEDICAL GROUP’s
liability for Capitation Services expense.


 


8.02                           The
liability of PARTICIPATING MEDICAL GROUP for expenses for Capitation Services
rendered to any single Member during the calendar year shall be limited to the
first SIX THOUSAND DOLLARS ($6,000.00) of Capitation Services expenses, which
have been incurred by PARTICIPATING MEDICAL GROUP for that Member.


 


8.03                           The
total expense of PARTICIPATING MEDICAL GROUP for Capitation Services rendered
to any single Member during the calendar year shall be calculated according to
the fee schedule set forth in Exhibit H. 
In the event the foregoing calculation for any given procedure results
in a figure greater than the actual cost of the procedure as billed by a third
party, then the actual cost for that procedure shall be deemed to be the amount
actually paid by PARTICIPATING MEDICAL GROUP.


 


8.04                           Expenses
in connection with the following services shall not be included as Capitation
Services expenses incurred by PARTICIPATING MEDICAL GROUP in reaching the
Enrollment Protection level:


 


A.                                   Services
rendered in connection with Workers’ Compensation cases.


 


B.                                     Services
for which payment in obtained from third-party sources.


 


C.                                     Services
for which payment is obtained from BLUE CROSS through any coverage other than
CALIFORNIAKIDS.


 


15

















 


All
co-payments applicable to Capitation Services rendered to Members shall be subtracted
from Capitation Services expenses.  When
the PARTICIPATING MEDICAL GROUP is capitated by two coverages for one Member,
the PARTICIPATING MEDICAL GROUP agrees to coordinate all related co-payments
under the Coordination of Benefits rules in the Member’s Benefit Agreement.


 


8.05                           PARTICIPATING
MEDICAL GROUP shall maintain records necessary to evidence having reached the
Enrollment Protection level.  After
reaching the Enrollment Protection level with regard to any CALIFORNIAKIDS
Member, during the remainder of the calendar year PARTICIPATING MEDICAL GROUP
shall bill BLUE CROSS for one hundred percent (100%) of services rendered, or
provided, to that Member by PARTICIPATING MEDICAL GROUP, calculated in
accordance with Sections 8.02, 8.03 and 8.04. 
Reimbursement to PARTICIPATING MEDICAL GROUP for Enrollment Protection
shall be made by BLUE CROSS in accordance with the lesser of (i) actual billed
charges; (ii) the fee schedule set forth in Exhibit H; (iii) the rate
negotiated between BLUE CROSS and the provider of services; or (iv) the amount
actually paid by PARTICIPATING MEDICAL GROUP. 
Such reimbursement shall be made on a monthly basis, within forty-five
(45) working days of submission of complete and accurate documentation by
PARTICIPATING MEDICAL GROUP.  Services
which are not set forth in Exhibit H shall be reimbursed by BLUE CROSS at the
actual charges paid by PARTICIPATING MEDICAL GROUP.


 


8.06                           PARTICIPATING
MEDICAL GROUP and BLUE CROSS acknowledge and agree that PARTICIPATING MEDICAL
GROUP limitations of liability as set forth in this Article VIII shall be
conditioned upon submission of clean undisputed claims to BLUE CROSS no later
than twelve (12) months after the date of the service rendered to Members.  Any claims under the Enrollment Protection
program which would otherwise be the responsibility of BLUE CROSS under this
Agreement shall be the financial responsibility of PARTICIPATING MEDICAL GROUP
if a clean undisputed claim is not submitted within twelve (12) months of the
date of service.  For the purpose of
this Agreement, a clean claim shall mean a claim that meets all BLUE CROSS
requirements with respect to back-up information.


 


IX.           PROFESSIONAL SERVICES RENDERED TO MEMBERS
WHO ARE INPATIENTS


 


9.01                           PARTICIPATING
MEDICAL GROUP shall provide continuity of professional care for each Member
assigned to PARTICIPATING MEDICAL GROUP, during the term of this
Agreement.  Such care shall include
coordination of admission of the Member to a Healthcare Facility whenever
Medically Necessary.  BLUE CROSS shall
have no financial responsibility for such services.


 


X.            TERM
OF AGREEMENT, TERMINATION


 


10.01                     This
Agreement shall be in effect for a one (1) year period (“Initial Term”) from
the date noted on page 1.  Unless
written notice of intent not to renew or of intent to modify this Agreement is
provided at least ninety (90) days prior to completion of the Initial Term or
any subsequent renewal period, this Agreement shall renew upon the same terms
and conditions for consecutive one year periods each year thereafter.


 


10.02                     This
Agreement may be terminated by either party at any time upon at least one
hundred twenty (120) days prior written notice to the other party.


 


16

















 


10.03                     Should
this Agreement be terminated, PARTICIPATING MEDICAL GROUP agrees to continue to
provide Capitation Services and to arrange for access to Institutional
Services, when required, for all Members assigned to PARTICIPATING MEDICAL
GROUP, including any Members who become eligible during the notice periods set
forth in Sections 10.01 or 10.02 above, and to provide these services
consistent with the terms and conditions of the applicable Benefit
Agreements.  In such case, Capitation
Services rendered to Members shall be compensated at the applicable rates set
forth in Exhibit H after termination.


 


In the event
this Agreement is terminated, BLUE CROSS shall have the right, but not the
obligation, to directly pay any bills for expenses for Referral Services
rendered to Members assigned to PARTICIPATING MEDICAL GROUP which remain
outstanding on the date of termination. 
BLUE CROSS shall immediately be notified in writing of all such
outstanding bills for Referral Services and BLUE CROSS shall have the right to
set off the amount of such payments against any amount due PARTICIPATING
MEDICAL GROUP for Capitation Services, or any other payments due PARTICIPATING
MEDICAL GROUP.


 


The right to
set off such payments against any amounts due under this Agreement shall be in
addition to any other rights BLUE CROSS may have under this Agreement, or in
law or in equity.


 


10.04                     Termination
of this Agreement shall not affect any rights or obligations hereunder which
shall have previously accrued, or shall thereafter arise, with respect to any
occurrence prior to termination, and such rights and obligations shall continue
to be governed by the terms of this Agreement.


 


Without
limiting the foregoing, if this Agreement is terminated, PARTICIPATING MEDICAL
GROUP shall continue to provide and be compensated under the terms of this
Agreement for Covered Medical Services provided to each Member who is under the
care of PARTICIPATING MEDICAL GROUP at the time of that termination, until the
services being rendered to that Member are completed or reasonable and medically
appropriate provision is made for the assumption of such services by another
contracting provider.


 


10.05                     In
the event of a material breach of this Agreement the party claiming the breach
shall give written notice to the other, with registered or certified mail.  The notice shall specify the breach with as
much detail as possible.  The party
receiving the notice shall then have thirty (30) days to commence curing the
breach.  If the breach is not cured to
the satisfaction of the complaining party within sixty (60) days after the
notice is received by the other party, this Agreement shall terminate at the
end of the sixtieth (60th) day or if the breach is by PARTICIPATING MEDICAL
GROUP, BLUE CROSS may in the alternative withhold fifteen percent (15%) of the
Capitation until such breach is cured to BLUE CROSS’ satisfaction.


 


XI.           ARBITRATION OF DISPUTES BETWEEN BLUE
CROSS AND PARTICIPATING MEDICAL GROUP


 


11.01                     PARTICIPATING
MEDICAL GROUP and BLUE CROSS agree to meet and confer in good faith to resolve
any problems or disputes that may arise under this Agreement.


 


17

















 


11.02                     Any
problem of dispute arising under this Agreement and or concerning the terms of
this Agreement that is not satisfactorily resolved under Section 11.01 shall be
arbitrated.  The arbitration shall be
initiated by either party making a written demand for arbitration on the other
party.  The arbitration shall be conducted
by the American Arbitration Association (AAA) under the Commercial Rules of the
AAA.  The arbitration shall also be
subject to California Code of Civil Procedure, Title Nine, Section 1280, et. seq., unless otherwise mutually
agreed.  The parties agree that the
decision of the arbitrator shall be final and binding as to each of them,
except to the extent that California or Federal law provide for the review of
arbitration proceedings.  Issues as to
whether malpractice was committed by a physician shall not be subject to
arbitration by the AAA unless otherwise agreed in writing by the parties and
the AAA.


 


11.03                     Arbitration
Fee.  In all cases submitted to AAA,
the parties agree to share equally the AAA administrative fee as well as the
arbitrator’s fee, if any, unless otherwise assessed by the arbitrator.  The administrative fee shall be advanced by
the initiating party subject to final apportionment by the arbitrator in the
award.


 


11.04                     Enforcement
of Award.  The parties agree that
the arbitrator’s award may be enforced in any court having jurisdiction thereof
by the filing of a petition to enforce said award.  Costs of filing may be recovered by the party that initiates the
action to have an award enforced.


 


11.05                     Alternative
Dispute Settlement Techniques. 
Should the parties, prior to submitting a dispute to arbitration, desire
to utilize other impartial dispute settlement techniques, such as mediation or
fact-finding, a joint request for such services may be made to the AAA, or the
parties may initiate such other procedures as they may mutually agree upon.


 


11.06                     Limitation.  Nothing contained herein is intended to
create, nor shall it be construed to create, any right of any Member to
independently initiate the arbitration procedure established in this
Article.  This limitation shall not
prevent BLUE CROSS from initiating such procedures as the representative of its
Members, or PARTICIPATING MEDICAL GROUP from initiating such procedures on
behalf of Members for whom they have assumed responsibility for the provision
of Capitation Services, and for arranging for access to Institutional Services,
provided that in any such case BLUE CROSS or PARTICIPATING MEDICAL GROUP,
respectively, shall be considered the initiating party for the purposes of
Section 11.03 hereof.


 


11.07                     Each
party hereto agrees to notify the other at the earliest reasonably time in the
event of any dispute which may be arbitrated, and in the event either party
becomes aware of facts or circumstances which indicate a reasonable possibility
of litigation with any third person or entity, and which are relevant to any rights,
obligations, or other responsibilities under this Agreement.


 


XII.         CALIFORNIAKIDS MEMBER GRIEVANCE SYSTEM


 


12.01                     In
the event a Member perceives a problem which the CALIFORNIAKIDS Coordinator is
unable to satisfactorily resolve, the Member shall be advised to complete a
Grievance Form and submit it to the CALIFORNIAKIDS Coordinator.  The grievance shall be reviewed and resolved
if possible, by the PARTICIPATING MEDICAL GROUP’s Quality Management Committee.


 


12.02                     PARTICIPATING
MEDICAL GROUP shall maintain a log of all grievances heard by PARTICIPATING
MEDICAL GROUP’s Quality Management Committee filed by Members who are assigned
to PARTICIPATING MEDICAL GROUP and shall regularly forward a copy of each
grievance to the CALIFORNIAKIDS Quality Management Representative.


 


18

















 


12.03                     PARTICIPATING
MEDICAL GROUP shall provide a written response to Member within fifteen (15)
working days of receipt of grievance. 
In the event a grievance cannot be resolved by the PARTICIPATING MEDICAL
GROUP’s Quality Management Committee to the complaining Member’s satisfaction
within fifteen (15) working days of receipt, the Member may appeal to BLUE
CROSS using the procedures in the Member’s Benefit Agreement and in the CALIFORNIAKIDS
Operations Manual.  In the event that
the Member appeals to BLUE CROSS, PARTICIPATING MEDICAL GROUP agrees to provide
BLUE CROSS with a response to the grievance and the pertinent medical records
within ten (10) days from the date of such request by BLUE CROSS.


 


12.04                     The
Member and PARTICIPATING MEDICAL GROUP shall be notified of the disposition of
the complaint by BLUE CROSS within fifteen (15) working days of making the
appeal.


 


XIII.        MISCELLANEOUS PROVISIONS


 


13.01                     Amendment.  This Agreement or any part or section of it
may be amended at any time during the term of the Agreement by mutual written
consent of duly authorized representatives of BLUE CROSS and PARTICIPATING
MEDICAL GROUP.


 


13.02                     Assignment.  BLUE CROSS and PARTICIPATING MEDICAL GROUP,
pursuant to mutual written agreement, may assign rights and duties established
under this Agreement, provided that no such assignment shall adversely affect
the rights or duties of Members or be in conflict with the requirements of
state or federal laws or regulations under which BLUE CROSS is licensed or
regulated.


 


13.03                     Marketing,
Advertising and Publicity.  BLUE
CROSS shall have right to use the name of PARTICIPATING MEDICAL GROUP for
purposes of informing Members and prospective Members of the identity of
PARTICIPATING MEDICAL GROUP.


 


Except as
provided above, BLUE CROSS and PARTICIPATING MEDICAL GROUP each reserve the
right to control the use of their respective names and all symbols, trademarks
or service marks presently existing, or later established.  In addition, except as provided above,
neither BLUE CROSS nor PARTICIPATING MEDICAL GROUP shall use the other party’s
name, symbols, trademarks or service marks in advertising or promotional
materials, or otherwise, without the prior written consent of that party, and
shall cease any such usage immediately upon written notice of the party, or on
termination of this Agreement, whichever first occurs.


 


13.04                     Sole
Agreement.  This Agreement with its
Exhibits and the CALIFORNIAKIDS Operations Manual, represents the entire
agreement between the parties hereto and supersedes any and all prior or
contemporaneous, written or oral agreements, representations or understandings.


 


13.05                     Independent
Contractors.  PARTICIPATING MEDICAL
GROUP shall furnish care or other benefits to Members as an independent
contractor, and BLUE CROSS shall not be liable for any claim or demand on
account of damages arising out of, or in connection with, any injuries suffered
by any Member while receiving care from, or care authorized by, PARTICIPATING
MEDICAL GROUP or any of its member Physicians.


 


13.06                     Severability.  If any term, provision, covenant or
condition of this Agreement is held by a court of competent jurisdiction to be
invalid, void or unenforceable, the remainder of the provisions hereof shall
remain in full force and effect and shall in no way be affected, impaired, or
invalidated as a result of such decision.


 


19

















 


13.07                     Notices.  Any notice which is required or permitted to
be given pursuant to this Agreement shall be in writing and shall either be
personally delivered, or sent by registered or certified mail, in the United
States Postal Service, return receipt requested, postage prepaid, addressed to
each party at its principal office or at the address provided in writing to the
other.  Notices shall be effective when
received.


 


13.08                     Maximum
Capacity.  The maximum capacity of
PARTICIPATING MEDICAL GROUP during the term of this Agreement shall be
                                        Members.


 


13.09                     Knox-Keene
Act.  BLUE CROSS is subject to the
requirements of the Knox-Keene Act and any provision required to be in this
Agreement thereunder shall bind BLUE CROSS and PARTICIPATING MEDICAL GROUP,
whether or not expressly provided in this Agreement.


 


13.10                     Confidentiality.  PARTICIPATING MEDICAL GROUP and BLUE CROSS
agree to keep confidential, except as otherwise required by applicable law or
this Agreement, the terms and conditions of this Agreement and any amendments
thereto.  Violation of the above shall
be deemed a material breach.


 


13.11                     Waiver.  The waiver by either party of a failure to
perform any covenant or condition set forth in this Agreement shall not act as
a waiver of performance for a subsequent breach of the same or any other
covenant or condition set forth in this Agreement.


 


13.12                     Governing
Law.  This Agreement shall be
construed and enforced in accordance with the laws of the State of California.


 


13.13                     Exhibits.  All exhibits attached to this Agreement are
incorporated herein by this reference.


 


IN WITNESS HEREOF, the parties
hereto have executed this Agreement by their officers thereunto duly authorized
on the date and year first above written.


 


 


	
  BLUE CROSS OF CALIFORNIA

  	
  Gateway Medical Group, Inc.

  
	
   

  
	
   

  
	
  Signature:

  	
    /s/ Lorraine
  Salvatore

  	
   

  	
  Signature:

  	
    /s/ Marlean
  Free

  
	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
  Lorraine
  Salvatore

  	
   

  	
  Name:

  	
  MARLEAN FREE

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Vice
  President

  	
   

  	
   

  
	
  Title:

  	
  Network
  Development/Management & Medicare

  	
   

  	
  Title:

  	
  DIRECTOR

  
	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
  1/7/00

  	
   

  	
  Date:

  	
  12/27/99

  
						



 


20

















 


EXHIBIT A


 


CALIFORNIAKIDS PROGRAM


 


DIVISION OF FINANCIAL RESPONSIBILITIES


 


	
  List of Benefits / Services

  	
   

  	
  Capitation

  	
   

  	
  BLUE

  CROSS

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ACUPUNCTURE

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AIDS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Inpatient Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ALLERGY TESTING & TREATMENT

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Serums

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AMBULANCE: Air or Ground

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  In-Area

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Out-of-Area

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AMNIOCENTESIS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Outpatient Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ANESTHETICS,
  Administration of

  (Outpatient Surgery Only)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTIFICIAL EYE

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTIFICIAL INSEMINATION

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTIFICIAL LIMBS (Prosthetic Device)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  BIOFEEDBACK

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  BLOOD AND BLOOD PRODUCTS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  From Blood Bank

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Autologous Blood Donation

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  CHEMICAL DEPENDENCY REHABILITATION

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Inpatient Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Inpatient Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Outpatient Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Outpatient Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  



 


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


 


A-1

















 


	
  List of Benefits / Services

  	
   

  	
  Capitation

  	
   

  	
  BLUE

  CROSS

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  CHEMOTHERAPY DRUGS (intravenously
  administered)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Chemotherapy Drugs

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  CHIROPRACTIC (Referred Service only)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  COLOSTOMY SUPPLIES

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Inpatient Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Outpatient Dispensing

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  In Conjunction with Home Health

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  DENTAL
  SERVICES

  (accidental injury to sound natural teeth
  and dental work

  necessary for the construction of non-dental structures)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Inpatient Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  DETOXIFICATION

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Inpatient Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  DURABLE MEDICAL EQUIPMENT (DME)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EMERGENCY ADMISSIONS: In-Area

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EMERGENCY ADMISSIONS: Out-of-Area

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EMERGENCY ROOM: In-Area

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  



 


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


 


A-2

















 


	
  List of Benefits / Services

  	
   

  	
  Capitation

  	
   

  	
  BLUE

  CROSS

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EMERGENCY ROOM: Out-of-Area

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EMPLOYMENT PHYSICAL EXAMS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ENDOSCOPIC STUDIES

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Outpatient Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EXPERIMENTAL PROCEDURES

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  FAMILY PLANNING SERVICES

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Inpatient Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Outpatient Clinic or Non-Hospital Facility
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  FETAL MONITORING

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Inpatient Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  GENETIC TESTING

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  HEALTH EDUCATION

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  HEALTH
  EVALUATIONS/PHYSICALS

  (required by third party or outside agency)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  HEARING AIDS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  HEARING SCREENING

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  HEMODIALYSIS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Inpatient / Outpatient Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  HEPATITIS B VACCINE / GAMMA GLOBULIN

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  HOME HEALTH (including medications)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  



 


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


 


A-3