Exhibit 10.139


 


 


AMENDMENT

to the

PARTICIPATING PHYSICIAN GROUP

PROVIDER SERVICES AGREEMENT


between

FOUNDATION HEALTH SYSTEM AFFILIATES

and

SIERRA MEDICAL GROUP


 


The Participating Physician Group Provider
Services Agreement (“Agreement”) dated January 1, 1998 between Prospect Medical
Group, Inc. on behalf of SIERRA MEDICAL GROUP (“PPG”) and Foundation Health
Systems Affiliate(s) (“FHS”) is hereby amended effective November 1, 2000.


 


FHS and PPG hereby agree to amend the
Agreement as follows:


 


1.               Addendum B to the Agreement, Section B. STANDARD HMO. Subsection 1.1 Capitation
Rates shall be deleted in its entirety and replaced with the following:


 


1.1  Capitation Rates.  PPG Capitation for Standard HMO Members
shall be determined on a monthly basis by multiplying the following normalized
PMPM rates by the age, sex and benefit plan factors set forth in Addendum B for
each assigned Member.  Normalized rates
represent the PMPM prior to the adjustment for PPG’s assigned Members’ age, sex
and benefit plan.  Actual PPG gross
Capitation shall fluctuate from month to month to the extent that PPG’s age,
sex and benefit plan mix fluctuates.


 


	
  Effective Date

  	
   

  	
  Standard
  HMO

  Capitation

  
	
  November 1, 2000

  	
   

  	
  $

  	
  *** PMPM

  
	
  May l, 2001

  	
   

  	
  $

  	
  *** PMPM

  



 


2.               Addendum B to the Agreement, Section B.  STANDARD
HMO,  Subsection 3.1
Shared Risk Budgets shall be deleted in its entirety and replaced with
the following:


 


3.1                               Shared Risk Budget.  HMO
shall fund the Shared Risk Budget for Members, with normalized rates.  These normalized rates shall be adjusted for
PPG’s assigned Members by the age, sex and benefit plan factors as set forth in
Addendum B.  Actual Shared Risk Budget
shall fluctuate from month to month to the extent that PPG’s age, sex and
benefit plan mix fluctuates.


 


	
  Standard HMO Shared Risk

  Budget-

  Entire Calendar Year 2000

  
	
  $

  	
  *** PMPM

  



 


3.               Addendum B to the Agreement, Section C. SMALL GROUP HMO. Subsection 1.1 Capitation
Rates shall be deleted in its entirety and replaced with the following:


 


1.1                               Capitation Rates.  PPG
Capitation for Small Group HMO Members shall be determined on a monthly basis
by multiplying the following normalized PMPM rates by the age,  sex and benefit plan factors set forth in
Addendum B for each assigned Member. 
Normalized PMPM rates represent the PMPM prior to the


 












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


 


1

















 


adjustment for PPG’s assigned
Members’ age, sex and benefit plan. 
Actual PPG gross Capitation shall fluctuate from month to month to the
extent that PPG’s age, sex and benefit plan mix fluctuates.


 


	
  Effective Date

  	
   

  	
  Small
  Group HMO

  Capitation

  
	
  November 1, 2000

  	
   

  	
  $

  	
  *** PMPM

  
	
  May l, 2001

  	
   

  	
  $

  	
  *** PMPM

  



 


4.               Addendum B to the Agreement, Section C. SMALL GROUP HMO. Subsection 3.1 Shared
Risk Budget shall be deleted in its entirety and replaced with the
following:


 


3.1                               Shared Risk Budget.  HMO
shall fund the Shared Risk Budget for Members, with normalized rates.  These normalized rates shall be adjusted for
PPG’s assigned Members by the age, sex and benefit plan factors as set forth in
Addendum B.  Actual Shared Risk Budget
shall fluctuate from month to month to the extent that PPG’s age, sex and
benefit plan mix fluctuates.


 


	
  Small Group HMO Shared

  Risk Budget

  Entire Calendar Year 2000

  
	
  $

  	
  *** PMPM

  



 


5.               Addendum B to the Agreement, Section D. INDIVIDUAL HMO. Subsection 1.1 Capitation
Rates shall be deleted in its entirety and replaced with the following:


 


1.1                               Capitation Rates.  PPG Capitation
for Individual HMO Members shall be determined on a monthly basis by
multiplying the following normalized PMPM rates by the age, sex and benefit
plan factors set forth in Addendum B for each assigned Member.  Normalized PMPM rates represent the PMPM
prior to the adjustment for PPG’s assigned Members’ age, sex and benefit
plan.  Actual PPG gross Capitation shall
fluctuate from month to month to the extent that PPG’s age, sex and benefit
plan mix fluctuates.


 


	
  Effective Date

  	
   

  	
  Individual
  HMO

  Capitation

  
	
  November 1, 2000

  	
   

  	
  $

  	
  *** PMPM

  
	
  May l, 2001

  	
   

  	
  $

  	
  *** PMPM

  



 


6.               Addendum B to the Agreement, Section D. INDIVIDUAL HMO. Subsection 3.1 Shared
Risk Budget shall be deleted in its entirety and replaced with the
following:


 


3.1                               Shared Risk Budget.  HMO
shall fund the Shared Risk Budget for Members, with normalized rates.  These normalized rates shall be adjusted for
PPG’s assigned Members by the age, sex and benefit plan factors as set forth in
Addendum B.  Actual Shared Risk Budget
shall fluctuate from month to month to the extent that PPG’s age, sex and
benefit plan mix fluctuates.


 


	
  Individual HMO Shared

  Risk Budget-

  Entire Calendar Year 2000

  
	
  $

  	
  *** PMPM

  



 


7.               Addendum B to the Agreement, Section G. COMMERCIAL  POS.  Subsection
4. Professional Capitation Rate shall be deleted in its entirety and
replaced with the following:


 


2

















 


4.                                       Professional Capitation Rate.  PPG
shall be compensated for rendering professional In-Network Services to
Commercial POS Members at the PMPM amounts set forth for Commercial HMO
Members, less a forty percent (40%) withhold (Professional Capitation).  This Withhold shall partially fund the
Professional Out-of-Network Budget.


 


8.               Addendum B to the Agreement. Section G. COMMERCIAL POS. Subsection 6.1 POS
Shared Risk Budgets shall be deleted in its entirety and replaced with the
following:


 


6.1                               POS Shared Risk Budgets.  The
budgets shall be determined for each Commercial POS population: Standard POS,
Small Group POS and at a later date. 
Individual POS Members.  Each
Budget shall cover In-Network, Out-of-Network and Out-of-Area Shared Risk
Services. Each of the normalized Shared Risk Budgets shall be equal to the
normalized HMO Shared Risk Budget, or institutional capitation PMPM, if
applicable, and multiplied by one hundred and five percent (105%).  Actual Shared Risk Budget shall fluctuate
from month to month to the extent that PPG’s age, sex and benefit plan mix
fluctuates.


 


	
  Entire
  Calendar Year 2000

  
	
  Standard HMO

  Shared Risk – 5%

  	
   

  	
  Small
  Group HMO

  Shared Risk – 5%

  	
   

  	
  Individual HMO

  Snared Risk – 5%

  
	
  $

  	
  *** – 5%

  	
   

  	
  $

  	
  *** – 5%

  	
   

  	
  $

  	
  *** – 5%

  
								



 


9.               Addendum B to the Agreement. Section J.  Pharmacy
Shared Risk Program and Section K. Pharmacy Rcbate Program shall be deleted in their entirety
and replaced with the following:


 


J.                Pharmacy Shared Risk Program.  The
Pharmacy Shared Risk Program shall be applicable to the following Members’
Standard HMO, Flex Funded HMO, Small Group HMO, and Individual HMO.


 


1.                                      Pharmacy Budget.  Each
month HMO shall fund the Pharmacy Budget at $12.00 per eligible Member per
month (“PEMPM”) subject to the age, sex and benefit plan factors set forth in
Addendum B   Such Pharmacy Budget shall
be effective for the entire calendar year For year 2000 the Pharmacy Budget
shall be adjusted according to the aggregate PEMPM dollar change experienced by
those participating physician groups comprising the top third of lowest PEMPM
normalized pharmacy costs, based on current calendar year experience.  Such adjustment shall occur prior to
calculating the final settlement for the Pharmacy Reconciliation, as set forth
in this Addendum.  Any calculation of
the normalized pharmacy costs shall be based upon actual claims.  The top third calculation shall be weighed
by eligible Member months.


 


2.                                      Pharmacy Reconciliation for
Commercial HMO Members.  For each Reconciliation Period, HMO shall
calculate pharmacy claims subject to this Program as outlined in the Operations
Manual.  HMO shall compare such claims
to the corresponding Pharmacy Budget. 
In the event pharmacy claims are less than the Pharmacy Budget, PPG’s
share of the Pharmacy Budget surplus shall be fifty percent (50%).  In the event pharmacy claims exceed the
Pharmacy Budget.  PPG’s share of the Pharmacy
Budget deficit shall be fifty percent (50%).


 


HMO shall perform an interim
and final settlement for the Pharmacy Risk Sharing Program.  The naming of these settlements shall
correspond to the interim and final settlements of other risk sharing
program.  Subject to Section 4.3 of this
Agreement, any Pharmacy Budget deficit shall be offset against any amounts
payable by HMO, or any amounts remaining in the Withhold Fund, or shall be
offset against Capitation.


 


3

















 


Except as so amended, all
other provisions of the Agreement shall remain unchanged and in effect.


 


IN WITNESS
WHEREOF, the parties
hereto have executed this Amendment by their officers duly authorized to be
effective on the date and year first written above.


 


	
  SIERRA
  MEDICAL-GROUP 

  	
  FOUNDATION
  HEALTH SYSTEMS AFFILIATES HEALTH NET

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Peter G. Goll

  	
   

  	
  /s/ Christopher Ciano

  	
   

  
	
  Signature

  	
  Christopher
  Ciano

  
	
   

  	
   

  
	
  Senior Vice President

  	
   

  	
  Senior Vice President and
  General Manager

  
	
  Title

  	
  Southern California

  
	
   

  	
   

  
	
  12-10-00

  	
   

  	
  12-18-00

  	
   

  
	
  Date

  	
  Date

  
	
   

  	
   

  
	
  95-3929309

  	
   

  	
   

  
	
  Federal Tax
  Identification Number

  	
   

  



 


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