Document:

Exhibit 10.143

 

 

EXPRESS
REFERRALS AMENDMENT

TO THE PACIFICARE OF CALIFORNIA

MEDICAL GROUP/IPA SERVICE AGREEMENT

(PROFESSIONAL CAPITATION)

 

This
Express Referrals Amendment to the Professional Capitation Medical Group/IPA
Services Agreement (the “Amendment”) is entered into effective as of
October 1, 2002 by and between PACIFICARE OF CALIFORNIA, a California
corporation (“PacifiCare”), and Sierra Medical Group (“Medical Group”), with
respect to the following facts:

 

RECITALS

 

A.     The parties have previously entered into that certain Professional
Capitation Medical Group/IPA Services Agreement dated July 1, 1999 (the
“Agreement”).

 

B.       The purpose of this Amendment is to add Express Referrals to the
Agreement.

 

NOW, THEREFORE, in consideration of the foregoing, the parties hereto
agree that the Agreement is hereby modified as specified below:

 

1.               ARTICLE 9, EXPRESS REFERRALS, shall be added as follows to the Agreement.

 

ARTICLE 9

EXPRESS REFERRALS

 

9.1           Additional Defined Terms.  The
capitalized terms used in this Article 9, which are not otherwise defined
herein, shall have the meanings ascribed to them in the Agreement.

 

9.1.1        Express
Referrals is the name of the
program established by PacifiCare for streamlined referrals of Medical Group
Members from Primary Care Physicians to specialists in Express Referrals
Specialties.

 

9.1.2        Express
Referrals Provider is any
PacifiCare Participating Provider that offers Express Referrals.

 

9.1.3        Express
Referrals Specialties
include, but are not limited to, the following specialties: Cardiology,
Dermatology, Endocrinology, Ear, Nose and Throat, Gastroenterology, General
Surgery, Hematology, Neurology, Obstetrics/Gynecology, Oncology, Ophthalmology,
Orthopedic Surgery, Podiatry, Routine Lab, Routine X-Ray, and Urology.  PacifiCare may modify the list of Express
Referrals Specialties at any time upon at least ninety (90) days’ prior written
notice to Medical Group.

 

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9.2           Duties of Medical Group

 

9.2.1        Establish
Streamlined Referral Process.  Medical Group shall establish a streamlined
referral process, through which any Primary Care Physician who deems that a
referral to a specialist in any Express Referrals Specialty for any Member is
necessary, may refer the Member to Medical Group’s Participating Providers
specializing in such Express Referrals Specialty without the prior
authorization of the Medical Group or the Medical Group’s utilization review
committee.  The Medical Group must, however,
continue to track all referrals.  If,
for any reason, Medical Group fails to maintain a streamlined referral process
which meets all of the requirements of Express Referrals, Medical Group shall
provide immediate written notice thereof to PacifiCare.  Medical Group’s failure to so notify PacifiCare
that it is no longer maintaining standards in compliance with Express Referrals
shall be a material breach of the Agreement, subjecting Medical Group to all of
the remedies contemplated thereby.

 

9.2.2        Access
to Records.  Medical Group will provide PacifiCare with
any and all necessary information including medical records, policies and
procedures, utilization review procedures and reports and other related
information necessary, in order for PacifiCare to verify that Medical Group has
a streamlined referral process which meets the requirements of Express
Referrals in a manner acceptable to PacifiCare.

 

9.2.3        Marketing
Activities.  Medical Group agrees to participate in
PacifiCare’s marketing activities to promote Express Referrals and to promote the
Medical Group as an Express Referrals Provider.

 

9.3           Duties of PacifiCare

 

9.3.1        Marketing
Activities.  PacifiCare shall engage in marketing
activities to promote Express Referrals, including identifying Medical Group as
an Express Referrals Provider in PacifiCare’s Provider Directory.

 

9.3.2        Determination
of Compliance by Medical Group.  PacifiCare reserves the right to determine
whether Medical Group is in compliance with the terms of this Article 9
and the requirements of Express Referrals. 
If PacifiCare determines that Medical Group is not properly maintaining
a streamlined referral process in compliance with the requirements of Express
Referrals, PacifiCare shall cease marketing Medical Group as an Express
Referrals Provider, and any future marketing of Medical Group as an Express
Referrals Provider will be at the sole discretion of PacifiCare.

 

9.4           Termination.  The
provisions of this Article 9 may be terminated

 

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by PacifiCare at any time upon ninety (90) days’ prior written notice
to Medical Group.

 

2.               AGREEMENT REMAINS IN FULL FORCE AND EFFECT. 
Except as specifically amended by this Amendment, the Agreement shall
continue in full force and effect.

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement in
Cypress, California.

 

	
   

  	
  PACIFICARE
  OF CALIFORNIA

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:  Brian Jeffrey

  
	
   

  	
   

  
	
   

  	
  Title:   Vice President, Network Management

  
	
   

  	
   

  
	
   

  	
  Date:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MEDICAL
  GROUP

  
	
   

  	
  SIERRA
  MEDICAL GROUP

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Peter G. Goll

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
  Peter G. Goll

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  Senior Vice President

  	
   

  
	
   

  	
   

  
	
   

  	
  Date:

  	
  9-18-02

  	
   

  
							

 

3Exhibit 10.144

 

 

THIRD AMENDMENT TO

PACIFICARE OF CALIFORNIA

MEDICAL GROUP/IPA SERVICES AGREEMENT

(PROFESSIONAL CAPITATION)

 

This Third Amendment to the PacifiCare Medical Group/IPA
Services Agreement (the “Amendment”) is entered into effective as of
January 1, 2003 by and between PacifiCare of California, a California
corporation (“PacifiCare”) and Prospect Sierra Medical Group Medical Group
(“Medical Group”), with respect to the following facts:

 

RECITALS

 

A.  The parties have previously entered into that certain Medical
Group/IPA Services Agreement dated July 1, 1999 (the “Agreement”).

 

B.  The parties desire to amend the terms of the Agreement in the
manner set forth herein.

 

NOW, THEREFORE, in
consideration of the foregoing, the parties hereto agree that the Agreement is
hereby modified as specified below:

 

1.  The following Sections of the Agreement are hereby deleted and
replaced in their entirety, to read as follows:

 

ARTICLE 1

DEFINITIONS

 

1.7                                 Cost of Care is the valuation of Covered Services and other
health care services provided or arranged by Medical Group, as described in
Section 5.7.

 

1.8                                 Covered Services are those medically necessary health care
services, supplies and benefits which are required by a Member as determined by
Medical Group, PacifiCare or pursuant to an independent third party review in
accordance with the Member’s Managed Care Plan and PacifiCare’s Quality
Improvement Program and Medical Management Program, which services may include
experimental services.  For purposes of
this Agreement, “medically necessary” shall have the meaning set forth in the
applicable Subscriber Agreement.

 

1.11                           Emergency Services are Covered Services provided in a hospital
emergency facility or comparable facility to evaluate, treat and stabilize a
medical condition of recent onset and severity, including, without limitation,
severe pain that would lead a prudent layperson, possessing an average
knowledge of medicine and health, to believe that his or her condition,
sickness, or injury is of such a nature that failure to get immediate medical
care could result in: (i) placing the Member’s health in serious jeopardy; (ii)
serious impairment to bodily functions; (iii) serious dysfunction of any bodily
organ or part; (iv) serious disfigurement; or (v) in the case of a pregnant
woman, serious jeopardy to the health of the fetus.

 

The final determination of
whether Emergency Services were required shall be made by

 

 

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

 

1

 

the PacifiCare medical
director or designee, subject to appeal under the applicable Member appeals
procedure or pursuant to the Dispute Resolution Procedure and Arbitration
proceedings of Section 7.5 of this Agreement.

 

1.19                           Medical Group Service Area is the geographic area where Medical Group
provides and arranges for Medical Group Services as defined in Exhibit 1
to this Agreement.

 

1.22                           Out-of-Area Medical Services are those Urgently Needed Services and
Emergency Services provided while a Member is outside the Medical Group Service
Area which would have been the financial responsibility of Medical Group had
the services been provided within the Medical Group Service Area.  Medical Services which are to be provided
outside of the Medical Group Service Area and are arranged by Medical Group for
Assigned Members are not considered Out-of-Area Medical Services.

 

1.24                           Premium is defined in Product Attachment A for the PacifiCare Commercial Health
Plan and POS Plan and Product Attachment C for the PacifiCare Secure Horizons
Health Plan.

 

1.34                           DMHC is the California Department of Managed
Health Care.

 

1.35                           National Preferred Transplant Networks
(“NPTN”) is the national
preferred referral network of hospitals, professionals, ancillary, and other
Participating Providers that have been selected by PacifiCare (based on various
criteria including quality, performance levels, and outcomes) to provide to
PacifiCare Members Covered Services consisting of specific transplant services
as set forth in the applicable NPTN Agreement by and between PacifiCare and the
NTPN Participating Providers.

 

1.36                           Referral Services shall be those Covered Services, which are
not Primary Care Services and are provided by a Participating Provider upon
referral from Medical Group, in accordance with the requirements of the
PacifiCare Medical Management Program.

 

1.37                           Standard Service Capitation Amount.  The
Standard Service Capitation amount is the monthly per Commercial Plan Member
per Month Capitation Payment based on the age/gender/benefit factors, prior to
adjustments.  The Standard Service
Capitation Amount is found on the monthly capitation reports that accompany the
monthly Capitation Payment.

 

1.38                           National Preferred Transplant Network (“NPTN”) is the national preferred referral
network of hospitals, professionals, ancillary, and other Participating
Providers that have been selected by PacifiCare (based on various criteria
including quality, performance levels, and outcomes) to provide to PacifiCare
Members Covered Services consisting of specific Transplant Services as set
forth in the applicable NPTN Agreement between PacifiCare and the NPTN
Participating Providers.

 

2.  The following Sections of the Agreement are hereby amended in their
entirety, to read as follows:

 

2

 

ARTICLE 2

DUTIES OF MEDICAL GROUP

 

2.1                                 Provide or Arrange Covered Services. 
Medical Group, through Participating Providers, shall provide or arrange
Covered Services in the Medical Group Service Area to Medical Group Members, in
coordination with PacifiCare and PacifiCare’s Participating Providers and in
accordance with the terms and conditions set forth in this Agreement and the
Managed Care Plans.  Medical Group shall
be financially responsible for Medical Group Services.

 

2.3.5                        Adverse Changes in Capacity. 
Medical Group and its Participating Providers will continue to accept
Members enrolled by PacifiCare for so long as Medical Group and its
Participating Providers have the capacity to provide and arrange Covered
Services under this Agreement and for so long as Medical Group continues to
accept new patients from any HMO or other prepaid health plan.  Medical Group shall provide at least ninety
(90) calendar days’ prior written notice to PacifiCare of any significant
changes in the capacity of Medical Group to provide or arrange Covered Services
that would prevent Medical Group from accepting additional Members.  Medical Group shall use reasonable efforts
to eliminate or remedy any condition which results in a significant adverse
change in capacity.  A significant
change in capacity includes, without limitation, the following: (i) inability
of Medical Group to properly serve additional Members due to a lack of Primary
Care Physicians or other Participating Providers; (ii) inability of any one of
Medical Group’s Primary Care Physicians or other Participating Providers to
serve additional Members; or (iii) closure of any Medical Group Facility.  PacifiCare may continue to enroll Members
with Medical Group until the expiration of the notice period required under
this Section, and in such event, Medical Group and its Primary Care Physicians
and other Participating Providers shall continue to accept such Members.  PacifiCare shall discontinue the enrollment
of Members with Medical Group upon expiration of the notice period required
under this Section until such time, if any, that Medical Group provides written
notification to PacifiCare that it has the capacity to accept additional
Members.

 

2.4                                 Medical Group’s Subcontracts with
Participating Providers.  Medical Group shall demonstrate and certify
to PacifiCare prior to the Commencement Date and upon PacifiCare’s written
request at any time during the term of this Agreement (in the format specified
by PacifiCare) that its subcontracts with Participating Providers comply with
requirements of this Agreement.  Medical
Group shall amend any and all of its existing subcontracts with Participating
Providers which do not comply with this Agreement within thirty (30) calendar
days following the execution of this Agreement and shall provide PacifiCare
with written certification thereof. 
Without limiting any other provision of this Agreement, all of Medical
Group’s subcontracts shall contain the requirements set forth in Sections 8.3.3
of this Agreement pertaining to the provision of Covered Services in Special
Circumstances and shall provide that Medical Group’s Participating Providers
shall look solely to Medical Group for payment for Covered Services provided to
Medical Group Members.

 

3

 

2.4.5                        Performance of Subcontract Rights. 
Medical Group’s subcontracts shall require its Participating Providers
who are independent contractors to agree to perform their obligations under
their subcontract for the benefit of PacifiCare in the event of dissolution or
Insolvency of Medical Group, in the event of termination of this Agreement by
PacifiCare for cause pursuant to Section 6.2.2 or in the event of termination
by PacifiCare pursuant to Section 6.3. 
Such obligation shall continue through the continuing care period
provided by this Agreement.  Medical
Group’s subcontracts shall provide that in the event PacifiCare exercises such
option, Medical Group’s subcontractors agree to accept payment from PacifiCare,
as payment in full, at rates which are the lesser of the Cost of Care or the
rate set forth in the applicable subcontract. 
To the extent Medical Group’s subcontracts do not comply with the requirements
of this Section 2.4.5 as of the date this Agreement is executed and delivered,
Medical Group shall cause its subcontracts to be amended to comply with the
forgoing by February 1, 2003. 
PacifiCare shall be obligated to pay Medical Group’s Participating
Providers only for such periods as PacifiCare specifically elects, in writing,
to access Medical Group’s subcontracts.

 

2.8.1                        Copies of Financial Statements. 
Medical Group shall provide to PacifiCare within forty-five (45)
calendar days of the end of each calendar quarter copies of its quarterly
financial statements, which shall include a balance sheet, statement of income
and statement of cash flow (the “Financial Statements”) prepared in accordance
with generally accepted accounting principles. 
Such quarterly Financial Statements shall be certified by the chief
financial officer of Medical Group as accurately reflecting the financial
condition of Medical Group, including without limitation, its operations in the
Medical Group Service Area for the period indicated.  In addition, Medical Group shall provide to PacifiCare, within
one hundred and twenty (120) calendar days from the end of each fiscal year,
copies of its audited annual Financial Statements together with copies of all
auditor’s letters to management in connection with such audited annual
financial statements.

 

2.8.2                        Security Reserves.

 

Security Reserves/Letter of
Credit.

 

(a)  Letter of Credit. 
As a material condition to PacifiCare’s obligations pursuant to this
Agreement, Medical Group shall, upon the occurrence of a Triggering Event as
defined below, obtain for the benefit of PacifiCare a Letter of Credit to
secure Medical Group’s performance under this Agreement (“Letter of Credit”).

 

(b)  Letter of Credit Required Amount.  In the event that Medical Group is required,
as defined below, to obtain a Letter of Credit, the initial amount shall be
***.  PacifiCare may later request that
Medical Group increase the Letter of Credit if Medical Group fails to achieve
for a period of four (4) consecutive months a current ratio (current assets
divided by current liabilities) of 1.0 to 1.0 as determined by GAAP.  The fixed amount of the increase in the
Letter of Credit that will be required shall equal fifty percent (50%) of
PacifiCare’s portion, which is the ratio of PacifiCare’s average capitation
payment to Medical Group for the previous twelve (12) months

 

4

 

divided by Medical Group’s
average capitation revenue from all active HMO’s for the previous twelve (12)
months, applied to the difference between the actual current liabilities and
current assets as reported on the most recent quarter’s Medical Group balance
sheet.  In the event that the Letter of
Credit is required to be increased, then the increase shall occur in equal
portions over a four (4) month period of time. 
PacifiCare shall provide Medical Group with thirty (30) calendar days
written notice of any requirement to adjust the Letter of Credit Funding
Amount.  Should Medical Group, after receiving
notice from PacifiCare that the initial amount of the Letter of Credit be
adjusted, as defined in this paragraph, achieve a current ratio of 1.0 to 1.0
as determined by GAAP and maintains that current ratio for twelve (12)
consecutive months, then the Letter of Credit shall be reduced to the original
*** level.  As used in the balance of
this Section, “Letter of Credit” shall refer to any initial Letter of Credit
and any subsequent Adjusted Letter of Credit.

 

(c)  Triggering Event Conditions.  Immediately upon the occurrence of a Triggering Event (as defined
in this subsection), Medical Group shall obtain the Letter of Credit in the
amount of the then applicable Letter of Credit Funding Amount.  A Triggering Event, for purposes of this
Section 2.8.2, shall mean any of the following: (i) Medical Group’s failure to
maintain a current ratio (current assets divided by current liabilities) of 1.0
to 1.0, as determined by PacifiCare upon review of Medical Group’s financial
statements; (ii) Medical Group’s failure to maintain positive Tangible Net
Equity, calculated in a manner consistent with GAAP; (iii) Medical Group’s
failure to provide financial statements as outlined in Section 2.8.1 of this
Agreement; and (iv) Medical Group’s failure to meet Commercial Health Plan
and/or Secure Horizons Health Plan claims payment timelines standards for a
period of six (6) consecutive months. 
In any event, PacifiCare shall provide Medical Group with thirty (30)
calendar days notice of a Triggering Event occurrence.  Medical Group shall have thirty (30)
calendar days from the date PacifiCare notifies Medical Group of the occurrence
of the Triggering Event to cure to the satisfaction of PacifiCare or both
parties mutually agree on a remedy prior to PacifiCare acting on Triggering
Event as outlined in this Section.  If
the cure is not to the satisfaction of PacifiCare or if the remedy is not
mutually agreed to within thirty (30) calendar days of PacifiCare notifying
Medical Group, PacifiCare shall act on the terms and conditions outlined in
this Section.

 

(d)           Letter of Credit Terms and Conditions.  Medical Group shall be responsible for any
cost, expense, or administrative fee in connection with the establishment and
maintenance of the Letter of Credit. 
Without limiting the foregoing, the Letter of Credit shall contain
language to include the identical terms and conditions as outlined in this
Section 2.8.2 and to be attached to this Agreement.  In the event that any of the terms and conditions in the Letter
of Credit are inconsistent with the terms and conditions outlined in this
Section 2.8.2, the terms and conditions of the Letter of Credit shall then be
subject to PacifiCare’s prior written approval.  Without limiting the foregoing, the Letter of Credit shall
provide that PacifiCare may draw on the Letter of Credit by certifying to the
issuer of the Letter of Credit (the “Issuer”) that (i) Medical Group is in
default under this Section 2.8.2, and has failed to cure such default following
thirty (30) calendar days written notice from PacifiCare; or (ii) Medical Group
is insolvent.

 

5

 

The proceeds of the Letter of
Credit (or the “Security Deposit”) shall be the property of PacifiCare.  PacifiCare shall use the Security Deposit solely
to pay Medical Group’s obligations under the Agreement.  PacifiCare shall pay Medical Group the
amount of any unused portion of the Security Deposit after all of Medical
Group’s financial obligations have been satisfied and this Agreement has been
terminated.

 

(e)           Letter of Credit Term.  The Letter of Credit, when required to be in place as provided
above, shall remain in full force and effect until Medical Group satisfies all
its financial obligations under this Agreement (“the Letter of Credit Term”).  The Letter of Credit shall be for a minimum
of a six (6) month term.  PacifiCare
acknowledges and agrees that the Letter of Credit may not be issued at any one
time that would be for the entire Letter of Credit Term on the condition that
Medical Group agree to the following. 
Should Medical Group otherwise fail to obtain Letter of Credit for the
Letter of Credit Term from an issuer acceptable to PacifiCare by a date
fourteen (14) calendar days prior to the expiration date of the Letter of
Credit, such failure shall constitute a material breach of this Agreement and
PacifiCare shall be entitled to immediately establish a Security Deposit, as
outlined in Paragraph (f) below.

 

(f)            Interim Security Deposit Establishment.  Upon the occurrence of a Triggering Event
and in the event that Medical Group has not established, a Letter of Credit
within thirty (30) days of PacifiCare’s notice and as required by this Section,
PacifiCare may begin deducting six (6%) of Medical Group’s monthly Standard
Service Capitation Payment, up to the amount, as defined in Paragraph (b)
above, for the purpose of establishing a security deposit (also a “Security
Deposit” hereunder).  PacifiCare shall
pay Medical Group the Security Deposit upon the earlier of (i) PacifiCare’s
receipt of the fully funded Letter of Credit, or (ii) all of Medical Group’s
financial obligations have been satisfied and this Agreement has been
terminated.

 

(g)           The financial statements for Prospect Medical Group,
Prospect Health Source Medical Group and Sierra Medical Group are all
consolidated and reported under Prospect Medical Group.  As such, any solvency reserve requirement
shall remain solely with the consolidated entity, namely Prospect Medical
Group.

 

2.11                           Reciprocity Arrangements.  If
any Member who is not a Medical Group Member or if any individual who is
enrolled in a benefit plan and program of any PacifiCare affiliated entity
(“PacifiCare Affiliate”) receives services or treatment from Medical Group or
its Participating Providers, Medical Group or the Participating Provider agrees
to bill PacifiCare or the PacifiCare Affiliate (or their respective designees),
as applicable, at billed charges and to accept the Cost of Care amount less any
applicable Copayments, coinsurance and/or deductibles as payment in full for
such services or treatment.  PacifiCare
or the PacifiCare Affiliate will process payment for such services or treatment
in accordance with the payment procedures for the applicable benefit plan or
program.

 

Medical Group shall cooperate
with PacifiCare’s Participating Providers and PacifiCare Affiliates and agrees
to provide Medical Group Services to Members enrolled in Managed Care Plans and
health benefit plans of Affiliates and to

 

6

 

assure reciprocity of health
care services.  Without limiting the
foregoing, if any Member receives services or treatment constituting Covered
Services from Medical Group or its Participating Providers and a capitated
Participating Provider is financially responsible for such services, such
Participating Provider shall be solely responsible for compensating Medical
Group for such services.  Payment by the
Participating Provider shall be at the rates agreed by the Participating
Provider and Medical Group or, if there is no applicable agreement, at the
rates provided by applicable State and Federal Law or, at the election of the
Participating Provider, at the rates set forth in this Agreement, less
applicable Copayments, coinsurance, and/or deductibles, as payment in full for
such services or treatment.  The
provisions of Section 8.2 [No Billing of Members (Member Hold Harmless
Provision)] shall be binding upon Medical Group regardless of whether
PacifiCare or another capitated Participating Provider is at financial risk for
services provided.

 

If any Medical Group Member
receives Covered Services from a PacifiCare Participating Provider or
PacifiCare Affiliate contracted provider, PacifiCare shall, where contractually
available, provide reciprocity to Medical Group at PacifiCare rates for such
Covered Services.  Medical Group shall
comply with the procedures established by PacifiCare or the PacifiCare
Affiliate for reimbursement of such Covered Services.

 

3.  The following Sections of the Agreement are hereby amended in
their entirety, to read as follows:

 

ARTICLE 3

ADMINISTRATIVE DUTIES OF PACIFICARE

 

3.2                                 Marketing.  PacifiCare shall make
reasonable efforts to market the Managed Care Plans.  Medical Group agrees that PacifiCare may, in its discretion, use
Medical Group’s name, address and telephone number as well as the names,
addresses and telephone numbers and specialties of its Participating Providers
in PacifiCare’s marketing and informational materials including, without
limitation, PacifiCare’s directory of Participating Providers.  Medical Group agrees that PacifiCare may, at
its discretion, exclude Medical Group and/or its Participating Providers from
certain Managed Care Plans or other new products or plans within Managed Care
Plans.  However, at Medical Group’s request,
PacifiCare agrees to meet and confer with Medical Group regarding the criteria
that Medical Group must meet in order to participate in such new Managed Care
Plans or other new products or plans within Managed Care Plans.  Nothing in this Agreement shall be deemed to
require PacifiCare to conduct any specific marketing activities on behalf of
Medical Group and its Participating Providers or to identify Medical Group or
its Participating Providers in any specific PacifiCare marketing or informational
materials.

 

3.3                                 Enrollment and Assignment of Members. 
PacifiCare shall be responsible for distributing the PacifiCare
Enrollment Packet to Members upon enrollment and at open enrollment
periods.  PacifiCare shall provide
benefit information to Members concerning the type, scope and duration of
benefits to which Members are entitled under the Managed Care Plans.  Nothing in this Agreement shall be construed
to require PacifiCare to assign any

 

7

 

minimum or maximum number of
Members to Medical Group or to utilize Medical Group for any Members in the
Medical Group Service Area.  At any time
during the term of this Agreement, without terminating this Agreement,
PacifiCare may cease assigning Members to Medical Group.

 

3.8    Transplant Services.

 

3.8.1        Transplant Services - Definitions.

 

(a)           “Transplant Services” are Covered Services for solid organ
transplants, autologous hemopoetic stem cell transplantation and allogeneic
hemopoetic stem cell transplantation as described in the applicable Subscriber
Agreement and Evidence of Coverage.

 

(b)           “NPTN” Transplant Services are Transplant Services
provided pursuant to and in accordance with PacifiCare’s NPTN program to NPTN
Members.

 

(c)           “NPTN Members” are:

 

(i)            Members who have been approved for Transplant Services on
or before December 31, 2002 who consent to receive services pursuant to
PacifiCare’s NPTN Program and whose anticipated transplant outcomes should not
be adversely affected by a transfer into the NPTN Program; and

 

(ii)           Members who have been approved for Transplant Services on
or after January 1, 2003.

 

(d)           “Non-NPTN” Transplant Services are all Transplant Services
which are not NPTN Transplant Services. 
Without limiting the foregoing, Non-NPTN Transplant Services include all
Transplant Services provided to Members who are not NPTN Members.

 

3.8.2        Financial Responsibility for
Transplant Services.  The parties’
respective financial responsibility for the various components of Transplant
Services are described in this Section 3.8, Section 5,14 [Compensation for
Transplant Services], and the Division of Financial Responsibility Matrix
including Attachment C to the DFR.

 

3.8.3        Medical Management of Transplant
Services.

 

(a)   All Transplant Services shall be provided in
accordance with the provisions of PacifiCare’s MM Program including without
limitation, the provisions of PacifiCare’s Provider Manual.  Specifically, but without limitation,
authorization of the evaluation of the recipient prior to listing for transplantation,
the actual transplant itself, and post transplant care up to 365 days post
discharge, must be obtained from PacifiCare’s NPTN Medical Director, or his or
her designee, prior to the provision of Transplant Services.

 

(b)   PacifiCare shall be responsible for
providing, coordinating and arranging for the Medical Management of NPTN
Transplant Services for which it is financially responsible.  Medical Group shall be responsible for
providing, coordinating and arranging Transplant Services for which it is
financially responsible, subject to coordination with PacifiCare pursuant to
the terms of PacifiCare’s MM Program.

 

8

 

(c)   Transplant Services provided by Medical Group
or pursuant to a Medical Group referral that are not authorized by PacifiCare
prior to the provision of the Transplant Services shall constitute Non-NPTN
Transplant Services and be the sole financial responsibility of the Medical
Group regardless of whether such Transplant Services would have otherwise
constituted NPTN Transplant Services.

 

3.9                                 PacifiCare-Sponsored Carve-Out Program
Management.  The Division of Financial Responsibility
(DFR) Matrix attached to this Agreement identifies the risk arrangements
between Medical Group and PacifiCare. 
In specific instances, PacifiCare has assumed financial responsibility
for specific Covered Services, drugs and agents (to include injectable drugs
and adjuncts) that were the previous responsibility of the Medical Group.

 

PacifiCare has established, at
its sole discretion, specified Carve-Out Programs.  Specific Carve-Out Program descriptions, policies and procedures
are provided in Attachments B and C of Exhibit 4.

 

3.9.1                        PacifiCare’s Right to Modify the
PacifiCare-Sponsored Carve-Out Programs.  On a semi-annual basis and or
as directed by applicable law or regulatory requirement(s), and at its sole
discretion, PacifiCare reserves the right to make additions or deletions to the
list of Carve-Out Program Covered Services, drugs and agents.  PacifiCare shall provide Medical Group with
30 days’ advanced notice of such changes. 
Upon any such change, PacifiCare shall notify Medical Group of any
adjustment to Medical Group’s compensation resulting from such changes, which
adjustment shall be determined using reasonable actuarial standards, taking
into account other changes in compensation made pursuant to Section 5.1, all as
determined by PacifiCare.

 

3.9.2                        PacifiCare’s Right to Terminate Medical
Group’s Participation in PacifiCare-Sponsored Carve-Out Programs. 
PacifiCare, at its sole discretion, reserves the right to terminate
Medical Group’s participation in PacifiCare-Sponsored Carve-Out Programs by
providing Medical Group 30 calendar days advance written notice.

 

ARTICLE 4

MANAGED CARE PROGRAM SERVICES

 

4.2.1        Delegation Audits and Determinations.

 

Medical Group’s authority to
perform medical management functions, as described but not limited to Article
4, may be modified, from time to time, at the sole discretion of
PacifiCare.  PacifiCare shall use best efforts
to provide Medical Group with thirty (30) days prior written notice before such
modification.

 

ARTICLE  5

COMPENSATION

 

5.1.4                        Adjustments For PacifiCare-Sponsored Carve-Out
Programs.  Based upon the assumption of financial
responsibility by PacifiCare, PacifiCare shall reduce the

 

9

 

Medical Group’s monthly
Standard Service Capitation Payment by the amounts specified in Attachments A,
B and C of Exhibit 4.

 

Medical Group shall be
responsible for assessing the financial impact that the PacifiCare Sponsored
Carve-Out Programs will have on the Medical Group.  Upon such assessment, Medical Group may choose not to participate
in certain of the PacifiCare-Sponsored Carve-Out Programs.  In the event Medical Group chooses not to
participate in any of the optional PacifiCare-Sponsored Carve-Out Programs,
Medical Group shall indicate such decision on the relevant Exhibit describing
the specific program attached to this Amendment.

 

(a)                                  Limitations to the PacifiCare-Sponsored
Carve-Out Programs.  The PacifiCare-Sponsored Carve-Out Programs
shall: (a) cover only the specific medications and Covered Services contained
the Carve-Out Program’s Descriptions and listed in Attachments A, B and C of
Exhibit 4, (b) be subject to modification as a result of mandates in applicable
law and or regulatory requirements and (c) apply only to those specific
medications authorized by PacifiCare and provided by PacifiCare’s contracted
vendor(s) for Self-Injectable Carve-Out Program (SICOP) medications.  SICOP medications will be prescribed by
Medical Group Participating Providers and such Participating Providers shall be
responsible for all patient education relating to the applicable prescription(s).

 

(b)                                 Medical Group’s Failure to Comply with
PacifiCare-Sponsored Carve-Out Programs.  If PacifiCare determines that
Medical Group is not complying with the stipulated Carve-Out Program Policies
and Procedures, PacifiCare may terminate the respective Carve-Out Program.  Upon any such termination, PacifiCare shall
notify Medical Group of any adjustment to Medical Group’s compensation, which
adjustment shall be determined using reasonable actuarial standards, taking
into account other changes in compensation made pursuant to this Amendment, all
as determined by PacifiCare.

 

In addition to the foregoing,
the PacifiCare-Sponsored Carve-Out Programs and Medical Group’s participation
in the Carve-Out Programs shall be subject to the provisions of PacifiCare’s
policies and procedures applicable to the Carve-Out Programs, copies of which
shall be provided to Medical Group.

 

5.1.5                        Capitation Payment Adjustment for NPTN
Transplant Services.  Medical Group and PacifiCare agree that the
compensation set forth in Product Attachments A, B and C of this Agreement does
not include amounts attributable to NPTN Transplant Services that are
PacifiCare’s financial responsibility as set forth in this Agreement.  Specifically, the Capitation Payment amounts
set forth at Product Attachments A, B and C have been adjusted to reflect that
as of the Effective Date, PacifiCare shall be responsible for Transplant
Services to the extent set forth on the DFR, including Exhibit 4 to the DFR.

 

10

 

5.4                                 Incentive Programs. 
Incentive programs are designed to ensure that PacifiCare and Medical
Group work collaboratively to deliver Covered Services in an effective and
efficient manner by ensuring appropriate utilization of Covered Services,
Incentive programs for each Managed Care Plan are set forth in the applicable
Product Attachment.

 

5.4.1                        Incentive Program Withhold. 
PacifiCare shall establish withholds from Medical Group’s monthly
Capitation Payment for purposes of offsetting potential deficits for the
combined incentive programs administered by PacifiCare, excluding the
Commercial Hospital Incentive Program and the Secure Horizons Hospital
Incentive Program for which separate withholds may be established.  The monthly incentive withhold shall be two
dollars and ninety-five cents ($2.95) per Member per month for the PacifiCare
Commercial Health Plan.  PacifiCare, in
its sole discretion, shall prospectively adjust the withhold based on Medical
Group’s experience under the combined incentive programs at the time of the
program settlements described below. 
The monthly incentive withhold shall not exceed the amount referenced
above in this paragraph.

 

5.4.2                        Incentive Program Settlements. 
PacifiCare shall conduct combined settlements, inclusive of a reserve
allowance for incurred but not reported claims expense, for all of the Managed
Care Plan incentive programs applicable to Medical Group and administered by
PacifiCare.  Surpluses and deficits
under each of the incentive programs shall be aggregated and offset against one
another.  PacifiCare will conduct a
final calculation annually (the “Final Calculation”) based on the contract
calendar year.  The incentive program
withhold described above shall be refunded to the Medical Group at the time of
the incentive program settlements, except that Medical Group’s share of any
incentive program deficits shall be deducted from such refund.  Payments under the combined incentive
programs will be due from the owing party within one hundred, and eighty (180) days
following the end of the contract calendar year for the Final Calculation.  To the extent a Medical Group deficit has
been carried forward from a prior settlement period, this deficit shall be
offset against amounts due to Medical Group hereunder.  In the event that claims for providers were
incurred during the contract calendar year in question but were not paid until
after the final calculation, such costs shall be carried forward and applied to
the subsequent contract calendar year’s incentive program as an expense for
that contract calendar year.  Unless
otherwise agreed by the parties in writing, the Final Calculation shall not bar
either party from providing information reflecting that the Final Calculation
should be adjusted, which adjustments may be requested by either party no later
than one year following the end of the applicable contract calendar year.

 

5.4.4                        Limitation on Medical Group’s Risk.  In
the event Medical Group incurs an obligation under the overall incentive
program settlement described above, Medical Group shall not be responsible for
reimbursing PacifiCare nor shall PacifiCare offset the Medical Group’s
Capitation Payments as a result of any incentive program obligation.  PacifiCare shall carry forward any Medical
Group obligations as the result of an incentive program obligation and the
amount carried forward shall be offset against amounts otherwise due to Medical
Group under future settlements for the combined incentive programs.  Notwithstanding the foregoing, and in
accordance with Medical Group’s pharmacy incentive program.  Medical Group shall be responsible for
reimbursing PacifiCare for

 

11

 

deficits in pharmacy
incentive programs to the extent there are insufficient surpluses due Medical
Group from other incentive programs to offset pharmacy deficits; such
reimbursement shall be made within thirty (30) days following completion of the
Final Calculation for all incentive program settlements described above.

 

5 5.1                        Individual Stop-Loss Program. 
PacifiCare shall provide Individual Stop-Loss (“ISL”) protection in
order to limit Medical Group’s financial risk for Medical Group Services (“ISL
Program”).  The ISL Program is designed
to limit Medical Group’s financial responsibility for Medical Group Services to
a specified dollar amount per Medical Group Member per calendar year (“ISL
Deductible”), while encouraging Medical Group’s continuing involvement with
Medical Group Member’s care by sharing a portion of the financial
responsibility for Medical Group Services which exceed the ISL Deductible (“ISL
Coinsurance”).  PacifiCare shall charge
a premium (“ISL Premium”) as consideration for the ISL Program.  The ISL Deductible, ISL Coinsurance and ISL
Premium for Medical Group are specified in each Product Attachment.  Notwithstanding any other provision of this
Agreement, PacifiCare may amend the ISL Deductible, ISL Coinsurance and ISL
Premium on an annual basis effective at the beginning of any calendar year by
providing sixty (60) calendar days prior written notice to Medical Group.  During each year of this Agreement, should
Medical Group fail to provide PacifiCare with timely evidence of ISL protection
consistent with regulatory requirements, PacifiCare shall assign such coverage
to Medical Group and deduct the then-current ISL Premium from the Medical
Group’s Capitation Payments as further described in each Product
Attachment.  For Medical Group Services
which exceed the ISL Deductible, PacifiCare will pay Cost of Care, less the
Medical Group’s ISL Coinsurance amount, subject to the Medical Group’s
compliance with the procedures set forth in the Provider Manual and the
provisions of this Section set forth below.

 

5.5.4                        Notification of ISL and Reinsurance Claims. 
Medical Group shall provide written notification to PacifiCare when
Medical Group becomes aware that claims for Medical Group Services or Hospital
Services provided to Medical Group Member(s) equal fifty percent (50%) of the
ISL Deductible or fifty percent (50%) of the Reinsurance Deductible,
respectively.  Such written notification
shall be provided to PacifiCare no later than the fifteenth (15th) day of the
month following the month in which such threshold is reached.  Medical Group acknowledges and agrees that
if Medical Group fails to provide the written notice required by this Section
within the time frame specified in this Section, Medical Group shall be
financially responsible for ten percent (10%) of all Medical Group Services or
ten percent (10%) of all Hospital Services provided to the Medical Group
Member(s) in excess of the ISL Deductible or Reinsurance Deductible, as
applicable, which amount shall be in addition to the ISL Coinsurance or
Reinsurance Coinsurance, as applicable.

 

5.7                                 Cost of Care.  Certain provisions of this
Agreement require that Medical Group provide or arrange health care services
which are not covered by Capitation Payments at Cost of Care and certain
provisions of this Agreement require that Covered Services be valued at Cost of
Care.  For purposes of this Agreement,
“Cost of Care” shall be calculated using the lesser of billed charges or in
accordance with the PacifiCare Fee Schedule. 
The PacifiCare Fee Schedule shall be based upon the following: (i) for
professional services that are included under the Medicare RBRVS Fee Schedule,
reimbursement shall be one hundred percent

 

12

 

(100%) of Medicare’s
geographically adjusted fee schedule according to the Medicare payment locality
the provider resides in; (ii) for all other health care services (other than in
patient and outpatient Hospital Services) that are not included in RBRVS, but
included in a Medicare Fee Schedule, reimbursement shall be one hundred percent
(100%) of the Medicare rate for the current period as released by CMS by December
of the preceding year; (iii) for inpatient and outpatient Hospital Services,
the Cost of Care shall be the lessor of the amount determined under
PacifiCare’s Fee Schedule and paid by PacifiCare or the prevailing Medicare
allowable; (iv) Anesthesia shall be reimbursed at $38.00 ASA, excluding
modifiers; (v) for outpatient Pharmaceuticals, to include injectable drugs and
adjuncts, shall be the lesser of billed charges, or the average wholesale price
(AWP) less fifteen percent (15%), or the amount determined under PacifiCare’s
prevailing Fee Schedule and paid by PacifiCare.

 

5.8                                 Collection of Copayments. 
Medical Group and its Participating Providers shall be responsible for
the collection of Copayments upon rendering Medical Group Services to Medical
Group Members in accordance with the applicable Subscriber Agreement.  Any Copayments which are stated as a
percentage shall be calculated using the Cost of Care for such Medical Group
Services.  Medical Group and its
Participating Providers shall not refuse to provide Medical Group Services in
the event a Member is unable to pay the Member’s Copayment except as may be
specifically permitted in the Provider Manual or as approved in advance by
PacifiCare.

 

5.12                           Recoupment Rights. 
PacifiCare shall have the right, but not the obligation, to pay claims
which Medical Group fails to pay for Covered Services provided to PacifiCare
Members if Medical Group fails to pay such claims following ten (10) days
written notice from PacifiCare.  Except
as may otherwise be specifically provided in this Agreement, PacifiCare shall
have the right to immediately recoup any and all amounts owed by Medical Group
to PacifiCare against amounts, including Capitation Payments, owed by
PacifiCare to Medical Group.  This right
shall include, without limitation, PacifiCare’s right to recoup the following
amounts owed to PacifiCare by Medical Group: (i) amounts owed by Medical Group
due to overpayments or payments made in error by PacifiCare; (ii) amounts owed
by Medical Group as a result of claims for Medical Group Services that
PacifiCare may pay on behalf of Medical Group; (iii) amounts owed by Medical
Group for Covered Services provided outside the Medical Group Service Area;
(iv) amounts owed by Medical Group as a result of the outcome of the Member
appeals and grievance procedure; (v) amounts owed by Medical Group in
connection with any other prior or existing agreement between Medical Group and
PacifiCare or any PacifiCare Affiliate and (vi) amounts owed by Medical Group
pursuant to Section 5.4.2 (Incentive Program Settlements) above.  As a material condition to PacifiCare’s
obligations under this Agreement, Medical Group agrees that all recoupment and
any offset rights pursuant to this Agreement shall be deemed to be and to
constitute rights of recoupment authorized in State or Federal law or in equity
to the maximum extent possible under law or in equity and that such rights
shall not be subject to any requirement of prior or other approval from any
court or other government authority that may now or hereafter have jurisdiction
over Medical Group.

 

5.13                           Adequacy of Compensation. 
Except for those instances specified in Sections 5.124 and 5.17 above,
Medical Group agrees to accept payment as provided herein as payment in full
for providing and arranging the Covered Services required under this Agreement,
whether that amount is paid in whole or in part by Member, PacifiCare or any
Subscriber,

 

13

 

including other health care
plans that pay before PacifiCare as required by applicable State or Federal
coordination of benefits provisions. 
This Section does not prohibit Medical Group from collecting applicable
Copayments, coinsurance or deductibles consistent with the Managed Care Plans.

 

5.14                           Character of Payments from PacifiCare. 
Capitation Payments to Medical Group pursuant to this Agreement are for
the primary purpose of compensating Medical Group for the value of Medical
Group Services provided pursuant to this Agreement.  Medical Group shall assure that claims and compensation for
Medical Group Services provided or arranged pursuant to this Agreement are paid
from the Capitation Payments from PacifiCare and from other funds available to
Medical Group as may be necessary for Medical Group to satisfy its financial
obligations under this Agreement. 
PacifiCare shall have the right, but not the obligation, to pay claims
which Medical Group fails to pay for Covered Services provided to PacifiCare
Members.  Medical Group specifically
agrees that PacifiCare may exercise its recoupment rights as set forth above in
the event Medical Group fails to comply with the foregoing.

 

5.16                           PacifiCare Quality Incentive Program. 
PacifiCare’s Quality Incentive Program (“QIP”) is a bonus program which
recognizes PacifiCare Participating Providers who have statistically
demonstrated sound clinical care practice, quality-focused provision or
arrangement of Covered Services on behalf of their assigned PacifiCare Members
and demonstrated superior customer satisfaction.  Exhibit 5 of this
Agreement describes the QIP.  The terms
of Exhibit 5 reflect PacifiCare’s participation in the “pay for performance”
initiative of the Integrated Healthcare Association.

 

5.17                           Payments which are the Responsibility of
Capitated Providers.  Medical Group acknowledges and agrees that
if Medical Group is, now or hereafter, a party to any subcontract or other
agreement with PacifiCare Participating Providers who receive capitation and
are responsible for arranging for Covered Services through their sub-contractual
arrangements (“Capitated Providers”), that Medical Group shall look solely to
the applicable Capitated Provider, and not PacifiCare, for payment for Covered
Services provided to PacifiCare Members that are covered by PacifiCare’s
agreements with such Capitated Providers.

 

5.18                           Non-Capitated Services Submission of
Claims/Claims Payment.  Medical Group shall submit all claims for
non-capitated services reimbursement under this Agreement (including claims for
interest) to PacifiCare no later than sixty (60) calendar days from the date of
service or, if a third party or Coordination of Benefits claim, upon receipt of
payment or notice of denial from a primary payor.  Medical Group shall submit such claims in accordance with the
procedures and standards established by PacifiCare.  If Medical Group elects to submit claims electronically to
PacifiCare, such electronic format shall be acceptable to PacifiCare or its
agent.

 

Medical Group acknowledges
and agrees that if Medical Group fails to submit claims as specified by this
Section, PacifiCare reserves the right to deny payment for such claims.  For each Clean Claim submitted by Medical
Group, PacifiCare or the applicable Payor shall pay the amount due to Medical
Group within sixty (60) business days following receipt of a Clean Claim by
PacifiCare and in accordance with applicable State and Federal Law for the
applicable Managed Care Plan.  For
purposes of this Section, a “Clean Claim” is a claim for Covered Services
submitted by Medical Group which is complete and includes all the information
reasonably required by PacifiCare, and as to

 

14

 

which request for payment
there is no material issue regarding PacifiCare’s obligation to pay under the
terms of a Managed Care Plan or PacifiCare’s Medical Management Program.  In the event it is determined that a claim
is not a Clean Claim, PacifiCare shall, within the time frames set forth above
for the payment of Clean Claims, use reasonable efforts to advise Medical Group
of the basis upon which a claim is not eligible for payment and specify any
additional information required for PacifiCare to pay the amount due with
respect to the applicable claim.

 

Medical Group acknowledges
and agrees that payors are solely responsible for payment to Medical Group for
non-capitated Covered Services provided to Members of payor plans whether
claims are submitted to and paid by Payor directly or by PacifiCare on behalf
of payor.  PacifiCare shall not be
responsible or liable for any claims decisions or for any payment of claims by
payors.

 

5.19                           Timely Submission of Medical Group Requests
for Claims Payment Reconsideration.  Pursuant to Section 7.5 of
this Agreement and in accordance with the provisions set forth in the Provider
Manual, Provider/Hospital may dispute any claims payment by PacifiCare
described in Section 5.12.  Medical
Group requests for reconsideration of a claims payment must be forwarded, in
writing, to PacifiCare within sixty (60) working days from receipt of applicable
claims payment from PacifiCare.  Medical
Group’s failure to submit written requests as specified in this Section 5.19
shall result in the request being denied by PacifiCare, and no further action
may be taken by Medical Group.

 

5.20                           Timely Submission of Medical Group Requests
for Recoupment Reconsideration for Recoupment Actions Initiated by PacifiCare. 
Pursuant to Section 7.5 of this Agreement and in accordance with the
provisions set forth in the Provider Manual, Medical Group may dispute any recoupment
action by PacifiCare described in Section 5.12 above.  Medical Group requests for reconsideration of recoupment actions
initiated by PacifiCare must be received in writing by PacifiCare within ninety
(90) working days from receipt of the Notice of Intent to Recoup from
PacifiCare.  Medical Group’s failure to
submit written requests as specified in this Section 5.20 shall result in the
request being denied by PacifiCare, and no further action may be taken by
Medical Group.

 

ARTICLE 6

TERM AND TERMINATION

 

6.1                                 Term.  The term of this Agreement
shall commence on January 1, 2003 (the “Commencement Date”), and end on
December 31, 2004.  Thereafter, the term
of this Agreement shall be automatically extended for a one year term every
January 1 (“Anniversary Date”), unless either party provides the other with
written notice of such party’s intention not to extend the term no later than
one hundred eighty (180) days prior to each Anniversary Date or until this
Agreement is appropriately terminated by either party as provided herein.

 

6.2.1                        Cause for Termination of Agreement by Medical
Group.  The following shall constitute cause for
termination of this Agreement by Medical Group:

 

(j)                                     Non-Payment.  Failure by PacifiCare to pay
Capitation Payments due Medical Group hereunder within thirty (30) days of the
Capitation

 

15

 

Payment due date or failure
by PacifiCare to make any other payments due Medical Group hereunder within
forty-five (45) days of any such payment’s due date and PacifiCare’s failure to
make such payment within the cure period provided at Section 6.3.2, below.

 

6.2.2                        Cause for Termination of Agreement by
PacifiCare.  The following shall constitute cause for
termination of this Agreement by PacifiCare:

 

(iv)                              Change in Hospital Agreement.  In
addition to other provisions of the Agreement, PacifiCare may terminate this
Agreement in the event of the termination of the Hospital Services Agreement
(“Hospital Agreement”) between Hospital and PacifiCare pursuant to which
Hospital provides Covered Services to Medical Group Members; or PacifiCare may
terminate this Agreement in the event that PacifiCare and Hospital fail to
execute a satisfactory Hospital Agreement. 
PacifiCare shall provide Medical Group with written notice of its intent
to terminate this Agreement pursuant to this Section at least ninety (90) days
prior to the effective date of the termination of this Agreement.  However, prior to or in conjunction with
issuing such termination notice, PacifiCare shall meet and confer with Medical
Group regarding alternative hospital arrangements and strategies.  The requirements set forth in Section 6.3.3
shall not apply to termination by PacifiCare pursuant to this Section.

 

6.2.3                        Notice of Termination and Effective Date of
Termination.  The party asserting cause for termination of
this Agreement (the “terminating party”) shall provide written notice of
termination to the other parry.  The
notice of termination shall specify the breach or deficiency underlying the
cause for termination.  The party
receiving the written notice of termination shall have thirty (30) calendar
days from the receipt of such notice to cure the breach or deficiency to the
satisfaction of the terminating party (the “Cure Period”).  If such party fails to cure the breach or
deficiency to the satisfaction of the terminating party within the Cure Period
or if the breach or deficiency is not curable, the terminating partly shall
provide written notice of failure to cure the breach or deficiency to the other
party following expiration of the Cure Period. 
This Agreement shall terminate upon receipt of the written notice of
failure to cure or at such later date as may be specified in such notice.  During the Cure Period, PacifiCare may, and
following the termination of this Agreement, PacifiCare shall cease marketing
efforts for Medical Group, discontinue enrollment of Members with Medical Group
and begin transferring Medical Group Members to other PacifiCare Participating
Providers.  The continuing care
obligations of Medical Group shall survive the termination of this Agreement.

 

6.6                                 Repayment Upon Termination. 
Within one hundred eighty (180) calendar days of the effective date of
termination of this Agreement, an accounting shall be made by PacifiCare of the
monies due and owing either party and payment shall be forthcoming by the
appropriate party to settle such balance within thirty (30) calendar days of
such accounting.  Either party may
request an independent audit of such PacifiCare accounting by a mutually
acceptable independent certified public accountant and such audit shall be
equally paid for by both parties.  The
parties agree to abide by the findings of such independent audit.  Appropriate payment, if any, by the
appropriate parry shall be made

 

16

 

within thirty (30) calendar
days of such independent audit.  Unless
otherwise agreed by the parties in writing, the Final Calculation shall not bar
either party from providing information reflecting that the Final Calculation
should be adjusted, which adjustments may be requested by either party no later
than one year following the end of the applicable contract calendar year.

 

6.7                                 Termination Not an Exclusive Remedy.  Any
termination by either party pursuant to this Article is not meant as an
exclusive remedy and such terminating party may seek whatever action in law or
equity as may be necessary to enforce its rights under this Agreement.  Notwithstanding the foregoing, no party
shall be entitled to punitive damages as a consequence of the other party’s
breach of this Agreement; the non-breaching party’s damages shall be limited to
compensatory damages.

 

6.8                                 Termination of Managed Care Plan.  Upon
ninety (90) days’ prior written notice, PacifiCare may terminate the Medical
Group’s participation in any of the Managed Care Plans described in the Product
Attachments to this Agreement.  At the
end of the ninety (90) day period, PacifiCare may begin transferring the
Members receiving Covered Services pursuant to such Managed Care Plan.  Until such Members are transferred,
following the termination date of the applicable Managed Care Plan, Medical
Group shall be obligated to continue to provide services pursuant to Section
8.3 (the continuing care provisions) of this Agreement.  Upon Medical Group’s request, PacifiCare
shall meet with Medical Group to discuss alternatives to the termination of a
Managed Care Plan.

 

ARTICLE 7

GENERAL PROVISIONS

 

7.6.2                        Arbitration.  Any controversy, dispute or
claim arising out of the interpretation, performance or breach of this
Agreement which is not resolved pursuant to the Provider Dispute Resolution
Procedure specified above shall be resolved by binding arbitration at the
request of either party, in accordance with the Commercial Rules of the
American Arbitration Association.  Such
rules provide that the parties shall share equally the cost of the arbitration
except that Medical Group shall not be responsible for costs (excluding
attorney fees and expert fees) in excess of the costs of a judicial
proceeding.  Such arbitration shall
occur in Los Angeles, California, unless the parties mutually agree to have
such proceeding in some other locale. 
The arbitrators shall apply California substantive law and Federal
substantive law where State law is preempted. 
Civil discovery for use in such arbitration may be conducted in
accordance with the provisions of California law, and the arbitrator(s)
selected shall have the power to enforce the rights, remedies, duties, liabilities
and obligations of discovery by the imposition of the same terms, conditions
and penalties as can be imposed in like circumstances in a civil action by a
court of competent jurisdiction of the State of California.  The provisions of California law concerning
the right to discovery and the use of depositions in arbitration are
incorporated herein by reference and made applicable to this Agreement.

 

The arbitrators shall have
the power to grant all legal and equitable remedies provided by California law.
 The arbitrators shall prepare in
writing and provide

 

17

 

to the parties an award
including factual findings and the legal reasons on which the award is
based.  The arbitrators shall not have
the power to commit errors of law or legal reasoning.

 

Notwithstanding the above, in
the event either Medical Group or PacifiCare wishes to obtain preliminary
injunctive relief or a temporary restraining order (together “injunctive
relief”), such party may initiate an action for such relief in a court of
general jurisdiction in the State of California.  The parties specifically agree that such injunctive relief shall
only be available with respect to matters directly relating to the continued
provision of Covered Services to Members or the acceptance, assignment or
transfer of Members.  The decision of
the court with respect to the requested preliminary injunctive relief or
temporary restraining order shall be subject to appeal only as allowed under
California law.  However, the courts
shall not have the authority to review or grant any request or demand for
damages.  Each party shall bear its own
attorneys’ fees.

 

Medical Group and PacifiCare
knowingly acknowledge and agree that the foregoing constitutes a waiver of
their constitutional right to a jury trial.

 

ARTICLE 8

GOVERNING LAW AND REGULATORY REQUIREMENTS

 

8.6                                 Equal Opportunity/Affirmative Action. 
PacifiCare is an equal employment opportunity employer.  As such, the provisions of Executive Order
11246, as amended (Equal Opportunity/Affirmative Action), 38 U.S.C. 4212, as
amended (Vietnam Era Veterans Readjustment Assistance Act), and Section 503 of
the Rehabilitation Act of 1973, as amended (Handicapped Regulations), and the
implementing regulations found at 41 C.F.R. 60-1&2, 41 C.F.R. 60-250, and
41 C.F.R. 60-741, respectively, are hereby incorporated by reference.

 

8.7                                 Confidentiality of Protected Health
Information.

 

8.7.1                        Use of Protected Health Information. 
Medical Group shall not use or disclose Protected Health Information (as
defined at 45 C.F.R. § 164.504) for any purpose other than (i) the purposes
contemplated by this Agreement; (ii) as required or allowed under the Health
Insurance Portability and Accountability Act and the regulations promulgated
thereunder at 45 C.F.R. Parts 160 through 164 (collectively, “HIPAA”); or (iii)
as otherwise required by law.  In no
event may Medical Group use or disclose Protected Health Information in a
manner that violates or would violate HIPAA if such activity were engaged in by
PacifiCare.  PacifiCare shall provide
copies of relevant portions of HIPAA to Medical Group upon request.

 

8.7.2                        Safeguards.  Medical Group shall use
reasonable efforts to implement and maintain such operational and technological
safeguards as are necessary to ensure that Protected Health Information
relating to Members is not used or disclosed by Medical Group or by any
subcontractors, affiliates, or business associates of Medical Group except as
is provided in this Agreement.

 

18

 

8.7.3                        Reporting of Unauthorized Use or Disclosure. 
Medical Group shall promptly report to PacifiCare any use or disclosure
of Protected Health Information received from PacifiCare relating to any Member
of which Medical Group becomes aware that is not provided for or permitted in
this Agreement or by HIPAA.  Medical
Group shall permit PacifiCare to investigate any such report in accordance with
the provisions of Section 8.7.6.

 

8.7.4                        Use of Subcontractors.  To
the extent that Medical Group uses one or more subcontractors or agents to
perform its obligations under this Agreement, and such subcontractors or agents
receive or have access to Protected Health Information of Members, Medical
Group shall cause each such subcontractor or agent to sign an agreement with
Medical Group containing substantially the same restrictions and conditions
related to the protection and confidentiality of Protected Health Information
as those that apply to Medical Group under this Agreement.  In addition, each such contract shall
identify PacifiCare as an intended third party beneficiary with rights of
enforcement and indemnification from such subcontractors or agents in the event
of any violations thereof.

 

8.7.5                        Access to and Correction of Information;
Disclosure Records.  Medical Group shall permit PacifiCare
Members timely access to, and to obtain a copy of, Protected Health Information
in accordance with the provisions of 45 C.F.R. § 164.524.  Medical Group shall permit Members to submit
proposed corrections to Protected Health Information, and Medical Group shall
accept or deny such proposed corrections in accordance with the provisions of
45 C.F.R. § 164.526.  Medical Group
shall keep records of all disclosures of Protected Health Information on an
ongoing basis and shall maintain such information for a period of at least six
(6) years, and Medical Group shall make available the information required to
provide an accounting of disclosures as required by 45 C.F.R. § 164.528.

 

8.7.6                        Right to Audit. 
Medical Group shall make its practices, books and records related to
Protected Health Information received from PacifiCare, or created or received
by Medical Group on behalf of PacifiCare or related to PacifiCare Members,
available to PacifiCare and to the Secretary of Health and Human Services to
determine [Medical Group’s/Hospital’s] compliance with HIPAA and with the
provisions of this Section 8.7.  In the
event it is determined that Medical Group is in violation of HIPAA or this
Section 8.7, Medical Group shall promptly remedy any such violation and shall
certify the same in writing to PacifiCare.

 

8.7.7                        Future Confidentiality of Records.  From
and after expiration or termination of this Agreement, Medical Group shall
continue to maintain the confidentiality of the Protected Health Information
and shall use or disclose the Protected Health Information only as permitted by
this Agreement or State and Federal law.

 

19

 

[Intentionally Left Blank]

 

 

20

 

 

 

PRODUCT
ATTACHMENT A

 

PACIFICARE
COMMERCIAL HEALTH PLAN

(See Attached)

 

PRODUCT
ATTACHMENT B

 

PACIFICARE
COMMERCIAL POINT-OF-SERVICE PLAN

(See Attached)

 

PRODUCT
ATTACHMENT C

 

SECURE
HORIZONS HEALTH PLAN

 

SECURE
HORIZONS

PRODUCT
NOT APPLICABLE; PRODUCT TERMINATED 12/31/01

 

PACIFICARE
OF CALIFORNIA

 

MEDICAL
GROUP/IPA SERVICES AGREEMENT

(PROFESSIONAL
CAPITATION)

 

EXHIBIT
1

MEDICAL
GROUP FACILITIES AND SERVICE AREA

(This
Exhibit 1 is an integral part of this Agreement)

(See Attached)

 

PACIFICARE
OF CALIFORNIA

 

MEDICAL
GROUP/IPA SERVICES AGREEMENT

(PROFESSIONAL
CAPITATION)

 

EXHIBIT
2

DELEGATED ACTIVITIES

(This
Exhibit 2 is an integral part of this Agreement)

(See Attached)

 

21

 

PACIFICARE
OF CALIFORNIA

 

MEDICAL
GROUP/IPA SERVICES AGREEMENT

(PROFESSIONAL
CAPITATION)

 

EXHIBIT
4

 

DIVISION
OF FINANCIAL RESPONSIBILITY

(This Exhibit 4 is an integral part of this Agreement)

(See Attached)

 

2.                              Use of Defined Terms. 
Terms utilized in this Amendment shall have the same meaning set forth
in the definitions to the Agreement.

 

3.                          Agreement Remains in Full Force and Effect. 
Except as specifically amended by this Amendment, the Agreement shall
continue in full force and effect.

 

IN WITNESS WHEREOF, the
undersigned parties hereby agree to this Amendment as of the date first set
forth above.

 

	
   

  	
  PACIFICARE OF CALIFORNIA

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Brian Jeffrey

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  Vice
  President

  	
   

  
	
   

  	
   

  
	
   

  	
  Date:

  	
  12/10/02

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MEDICAL GROUP

  
	
   

  	
  SIERRA MEDICAL GROUP

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Peter G.
  Goll

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  Senior Vice President

  	
   

  
	
   

  	
   

  
	
   

  	
  Date:

  	
  12-10-02

  	
   

  
									

 

22

 

PRODUCT
ATTACHMENT A

 

PACIFICARE
COMMERCIAL HEALTH PLAN

 

This Product Attachment A,
along with the Base Agreement, sets forth the specific terms and conditions
which are applicable to the PacifiCare Commercial Health Plan, as defined
below.

 

ARTICLE I

DEFINITIONS

 

The following terms shall have the meaning attributed below for purposes
of the PacifiCare Commercial Health Plan, as described in this Product
Attachment A.  Capitalized terms not
otherwise defined herein shall have the meaning assigned to them in the Base
Agreement, as amended.

 

1.1                                 Commercial Plan Premium is the premium received by PacifiCare each
month for PacifiCare Commercial Plan Members, excluding amounts to pay broker
and agent commissions/compensation, administrative fees paid to affiliates in
connection with joint marketing arrangements, Premium taxes and premiums for
Supplemental Benefits.

 

1.2                                 OPM Agreement is the agreement between PacifiCare and the
Federal Office of Personnel Management for the provision of Covered Services to
persons enrolled in the PacifiCare Commercial Plan through their participation
in the health benefits programs for federal employees and their dependents.

 

1.3                                 PacifiCare Commercial Plan is any and all of the various Managed Care
Plans sold by PacifiCare to individuals (excluding individuals eligible for the
PacifiCare Medicaid Plan and the Secure Horizons Health Plan) and employer
groups, associations with employer group participation and unions which
purchase benefits for their employees and their dependents.

 

1.4                                 Commercial Plan Members are Medical Group Members enrolled in the
PacifiCare Commercial Plan.

 

1.5                                 Supplemental Benefits are benefits offered under the PacifiCare
Commercial Plan which require separate premium, in addition to the Commercial
Plan Premium, as consideration for the additional benefits.

 

ARTICLE 2

DUTIES OF MEDICAL GROUP

 

2.1                                 Provision of Covered Services. 
Medical Group and its Participating Providers shall provide Covered
Services to Commercial Plan Members pursuant to the terms of the Base Agreement
and this Product Attachment A.

 

2.2                                 Compliance with OPM Agreement. 
Medical Group shall comply with all requirements in the OPM Agreement
which are applicable to Medical Group as a subcontractor of PacifiCare as a
result of this Agreement.  Without
limiting the foregoing, Medical Group shall ensure that all provisions of the
OPM Agreement which are applicable to Medical Group’s Participating

 

23

 

Providers are included in
Medical Group’s subcontracts with its Participating Providers.  A copy of the OPM Agreement shall be
provided to Medical Group concurrent with the execution of this Agreement.

 

2.3                                 Compliance with Subscriber Agreements for
PacifiCare Commercial Plan.  Medical Group and its Participating
Providers shall comply with all requirements in Subscriber Agreements for the
PacifiCare Commercial Plan which are applicable to Medical Group.  PacifiCare shall make good faith efforts to
notify Medical Group of any such requirements that are not otherwise reflected
in this Agreement.

 

ARTICLE 3

COMPENSATION

 

3.1                                 Age/Gender/Benefit Adjusted Commercial
Capitation.  Capitation Payments for Commercial Plan
Members shall be made based upon a per Member per month base capitation rate
(“Base Capitation Rate”) adjusted to reflect the Medical Group Members’ age,
gender, and benefit plan participation. 
Effective January 1, 2003, the Base Capitation Rate for Sierra Medical
Group (PacifiCare Dec # 2351) shall be *** per Commercial Plan Member per
month.  The Base Capitation Rate for
Antelope Valley IPA (PacifiCare Dec # 5185) shall be *** per Commercial Plan
Member per month.  Effective- January 1,
2004, the Base Capitation Rate for Sierra Medical Group (PacifiCare Dec # 2351)
shall be *** per Commercial Plan Member per month.  The Base Capitation Rate for Antelope Valley IPA (PacifiCare Dec
# 5185) shall *** per Commercial Plan Member per month.  Age/gender adjustment factors are
actuarially determined and are listed below. 
Benefit adjustment factors are actuarially determined by PacifiCare and
may take into consideration variations in benefit plan types, Copayment and coinsurance
levels.  PacifiCare may change its
benefit adjustment factors as needed to support the differing plan types that
it offers.  On an annual basis,
PacifiCare may modify the benefit adjustment factors based on actuarially
determined changes.  The Standard
Service Capitation Amount will vary during subsequent months as a result of
changes in the age, gender, and benefit plan participation of the Medical
Group’s Members for the applicable month. 
The total monthly Capitation Payment shall also be adjusted in the
manner set forth in Article 5 of the Base Agreement.

 

The following are
PacifiCare’s age/gender adjustment factors:

 

	
  Child 0

  	
   

  	
  1.9939

  
	
   

  	
   

  	
   

  
	
  Child 1

  	
   

  	
  1.2664

  
	
   

  	
   

  	
   

  
	
  Child 2 – 9

  	
   

  	
  0.4730

  
	
   

  	
   

  	
   

  
	
  Child 10 – 17

  	
   

  	
  0.4375

  
	
   

  	
   

  	
   

  
	
  Female 18 - 19

  	
   

  	
  0.7395

  
	
   

  	
   

  	
   

  
	
  Female 20 – 24

  	
   

  	
  1.4564

  

 

24

 

	
  Female 25 – 29

  	
   

  	
  1.6593

  
	
   

  	
   

  	
   

  
	
  Female 30 – 34

  	
   

  	
  1.4785

  
	
   

  	
   

  	
   

  
	
  Female 35 – 39

  	
   

  	
  1.2495

  
	
   

  	
   

  	
   

  
	
  Female 40 – 44

  	
   

  	
  1.3095

  
	
   

  	
   

  	
   

  
	
  Female 45 – 49

  	
   

  	
  1.2221

  
	
   

  	
   

  	
   

  
	
  Female 50 – 54

  	
   

  	
  1.5869

  
	
   

  	
   

  	
   

  
	
  Female 55 – 59

  	
   

  	
  1.7404

  
	
   

  	
   

  	
   

  
	
  Female 60 – 64

  	
   

  	
  2.0135

  
	
   

  	
   

  	
   

  
	
  Female 65 plus

  	
   

  	
  2.0630

  
	
   

  	
   

  	
   

  
	
  Male 18 – 19

  	
   

  	
  0.3554

  
	
   

  	
   

  	
   

  
	
  Male 20 – 24

  	
   

  	
  0.4774

  
	
   

  	
   

  	
   

  
	
  Male 25 – 29

  	
   

  	
  0.5702

  
	
   

  	
   

  	
   

  
	
  Male 30 – 34

  	
   

  	
  0.6033

  
	
   

  	
   

  	
   

  
	
  Male 35 – 39

  	
   

  	
  0.7038

  
	
   

  	
   

  	
   

  
	
  Male 40 – 44

  	
   

  	
  0.7700

  
	
   

  	
   

  	
   

  
	
  Male 45 – 49

  	
   

  	
  0.8742

  
	
   

  	
   

  	
   

  
	
  Male 50 – 54

  	
   

  	
  1.3235

  
	
   

  	
   

  	
   

  
	
  Male 55 – 59

  	
   

  	
  1.7024

  
	
   

  	
   

  	
   

  
	
  Male 60 – 64

  	
   

  	
  2.2284

  
	
   

  	
   

  	
   

  
	
  Male 64 plus

  	
   

  	
  2.3563

  

 

3.1.1                        Adjustment for ISL Premium.  In
calculating Capitation Payments due to Medical Group, PacifiCare shall deduct
the ISL Premium amount set forth herein from the amounts otherwise due to
Medical Group, unless PacifiCare has approved of Medical Group’s opting out of
PacifiCare’s ISL Program.

 

3.2                                 ISL Program.  The ISL Deductible, ISL
Premium and ISL Coinsurance for the Commercial Plan shall initially be:

 

(i)                                     ISL Deductible shall be zero dollars and zero
cents ($0.00) per Commercial Plan Member per calendar year.

 

25

 

(ii)                                  ISL Premium shall be zero dollars and zero
cents ($0.00) per Commercial Plan Member per month.

 

(iii)                               ISL Coinsurance shall be zero dollars and zero
cents ($0.00) of Cost of Care in excess of the ISL Deductible.

 

If PacifiCare has approved of
Medical Group’s opt out of the ISL Program, the above amounts and percentages
will reflect “zero.” In such event, Medical Group shall be required to obtain
ISL coverage from a third-party insurance carrier in accordance with Section
5.6.5 of the Base Agreement.

 

3.3                                 Commercial Hospital Incentive Program. 
PacifiCare shall establish and administer an annual Commercial Hospital
Incentive Program for the PacifiCare Commercial Plan (the “CHIP”).  The CHIP is designed to provide an incentive
for the efficient and effective use of Hospital Services, and shall be
calculated utilizing the terms defined below. 
All calculations for the CHIP shall be based upon Commercial Plan
Members, excluding Commercial POS Plan Members.

 

3.3.1                        Reinsurance Program. 
Claims under the Reinsurance Program shall be valued at the Cost of Care
as defined in this Agreement.  The
Reinsurance Deductible, Reinsurance Premium and Reinsurance Coinsurance for the
Commercial Plan shall initially be:

 

(i)                                     Reinsurance Deductible shall be
         percent
(        %) per Commercial Plan Member
per calendar year.

 

(ii)                                  Reinsurance Premium shall be
         percent
(        %) of Commercial Plan Premium.

 

(iii)                               Reinsurance Coinsurance shall be fifty percent
(50%) of the Cost of Care for amounts in excess of the Reinsurance Deductible
but less than two hundred fifty thousand dollars ($250,000) and twenty percent
(20%) of the Cost of Care for amounts in excess of two hundred fifty thousand
dollars ($250,000).

 

3.3.2                        CHIP Budget.  The CHIP Budget for Commercial
Plan Members and Commercial POS Plan Members, shall be established based upon a
per Member per month rate (“Base Rate”) adjusted to reflect the Assigned
Medical Group Members’ age, gender, and benefit plan participation.  Effective January 1, 2003, the Base Rate for
Sierra Medical Group (PacifiCare Dec # 2351) shall be *** per Commercial Plan
Member per month.  The Base Rate for
Antelope Valley IPA (PacifiCare Dec #5185) shall be *** per Commercial Plan
Member per month.  Effective January 1,
2004, the Base Rate for Sierra Medical Group (PacifiCare Dec # 2351) shall be
*** per Commercial Plan Member per month. 
The Base Rate for Antelope Valley IPA (PacifiCare Dec # 5185) shall be
*** per Commercial Plan Member per month. 
Age/gender adjustment factors are actuarially determined by PacifiCare
and are listed below.  Benefit
adjustment factors are actuarially determined by PacifiCare and take into
consideration variations in benefit plan types, Copayment and coinsurance
levels.  PacifiCare may change its
benefit adjustment factors as needed to support the differing plan types that
it offers.  On an annual basis,
PacifiCare may modify the benefit adjustment factors based on actuarially
determined changes.  The

 

26

 

average yield will vary
during subsequent months as a result of changes in the age, gender, and benefit
plan participation of the Assigned Medical Group Members for the applicable
month.

 

The following are
PacifiCare’s CHIP Budget age/gender adjustment factors:

 

	
  Gender

  	
   

  	
  Age Band

  	
   

  	
  Hospital

  
	
  C

  	
   

  	
  00-00

  	
   

  	
  4.0488

  
	
  C

  	
   

  	
  01-01

  	
   

  	
  0.7234

  
	
  C

  	
   

  	
  02-09

  	
   

  	
  0.3228

  
	
  C

  	
   

  	
  10-17

  	
   

  	
  0.3706

  
	
  F

  	
   

  	
  18-19

  	
   

  	
  0.5841

  
	
  F

  	
   

  	
  20-24

  	
   

  	
  0.9398

  
	
  F

  	
   

  	
  25-29

  	
   

  	
  1.4088

  
	
  F

  	
   

  	
  30-34

  	
   

  	
  1.3551

  
	
  F

  	
   

  	
  35-39

  	
   

  	
  1.1025

  
	
  F

  	
   

  	
  40-44

  	
   

  	
  1.0464

  
	
  F

  	
   

  	
  45-49

  	
   

  	
  1.1741

  
	
  F

  	
   

  	
  50-54

  	
   

  	
  1.4581

  
	
  F

  	
   

  	
  55-59

  	
   

  	
  2.0324

  
	
  F

  	
   

  	
  60-64

  	
   

  	
  2.4463

  
	
  F

  	
   

  	
  65 and over

  	
   

  	
  2.2225

  
	
  M

  	
   

  	
  18-19

  	
   

  	
  0.4431

  
	
  M

  	
   

  	
  20-24

  	
   

  	
  0.4520

  
	
  M

  	
   

  	
  25-29

  	
   

  	
  0.5000

  
	
  M

  	
   

  	
  30-34

  	
   

  	
  0.5081

  
	
  M

  	
   

  	
  35-39

  	
   

  	
  0.6558

  
	
  M

  	
   

  	
  40-44

  	
   

  	
  0.8823

  
	
  M

  	
   

  	
  45-49

  	
   

  	
  1.1058

  
	
  M

  	
   

  	
  50-54

  	
   

  	
  1.5844

  
	
  M

  	
   

  	
  55-59

  	
   

  	
  2.2785

  
	
  M

  	
   

  	
  60-64

  	
   

  	
  3.0045

  
	
  M

  	
   

  	
  65 and over

  	
   

  	
  2.9368

  

 

3.3.3                        CHIP Expense.  CHIP Expense shall be equal to
the sum of the following:

 

(i)                                     Inpatient costs for Hospital Services rendered
to Commercial Plan Members, excluding Commercial POS Plan Members, by
Participating Providers, valued at the actual costs incurred by PacifiCare; plus,

 

(ii)                                  Other Hospital Services rendered to Commercial
Plan Members, excluding Commercial POS Plan Members, by Participating Providers
other than inpatient services, valued at actual costs incurred by PacifiCare; plus,

 

(iii)                               The actual amount paid for Hospital Services
which are rendered by non-Participating Providers; minus,

 

(iv)                              Amounts paid by PacifiCare under the
Reinsurance Program, if any; minus,

 

27

 

(v)                                 Any and all amounts received from third
parties for Hospital Services provided to Commercial Plan Members, excluding Commercial
POS Plan Members, through coordination of benefits, work-related accidents or
injuries, stop-loss and reinsurance payments and Member Copayments.

 

3.3.4                        CHIP Surplus.  In the event the CHIP Expense
is less than the CHIP Budget, the surplus shall be allocated as follows:

 

*** to Medical Group

*** to PacifiCare

 

3.3.5                        CHIP Deficit.  In the event the CHIP Expense
is greater than the CHIP Budget, the deficit shall be allocated as follows:

 

*** to Medical Group

*** to PacifiCare

 

3.3.6                        Settlements and Reconciliation. 
Interim settlements and the final settlement and reconciliation of the
CHIP shall be performed by PacifiCare as provided in Article 5 of the Base
Agreement.

 

3.4                                 Commercial Plan Pharmacy Incentive Program. 
PacifiCare shall establish and administer an annual Pharmacy Incentive
Program for the PacifiCare Commercial Plan (the “PIP”).  The PIP is designed to provide an incentive
for the efficient and effective use of Outpatient Pharmacy Supplemental Benefits
for Commercial Plan Members.  The PIP
shall be calculated as follows:

 

3.4.1                        Outpatient Pharmacy Supplemental Benefits shall be the benefits made available by
PacifiCare under the PacifiCare Supplemental Pharmacy Benefit, as defined in
the applicable Subscriber Agreement.

 

3.4.2                        PIP Budget shall equal eighty percent (80%) of the premium received by PacifiCare
for Outpatient Pharmacy Supplemental Benefits for Commercial Plan Members plus
*** per Commercial Plan Member per month, which amount is established as a
credit for rebates received from pharmaceutical manufacturers.

 

This credit may or may not
reflect the total pharmaceutical manufacturer rebate revenues received by
PacifiCare.  The PIP Budget shall be
retained by PacifiCare for purposes of administering the PIP.

 

3.4.3                        PIP Expense shall equal the expense incurred for the provision of Outpatient
Pharmacy Supplemental Benefits during the applicable period.

 

3.4.4                        PIP Surplus.  In the event the PIP Expense
is less than the PIP Budget, zero percent (0%) of the surplus shall be
allocated to Medical Group.

 

3.4.5                        PIP Deficit.  In the event that the PIP
Expense is greater than the PIP Budget, zero percent (0%) of the deficit shall
be allocated to Medical Group.

 

28

 

IN WITNESS WHEREOF, the parties hereto have executed this Product
Attachment A.

 

 

	
   

  	
  PACIFICARE OF CALIFORNIA

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Brian Jeffrey

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  Vice President

  	
   

  
	
   

  	
   

  
	
   

  	
  Date:

  	
  12/10/02

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MEDICAL GROUP

  SIERRA MEDICAL GROUP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Peter G.
  Goll

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  Senior Vice President

  	
   

  
	
   

  	
   

  
	
   

  	
  Date:

  	
  12-10-02

  	
   

  
					

 

29

 

PRODUCT
ATTACHMENT B

 

PACIFICARE
COMMERCIAL POINT-OF-SERVICE PLAN

 

In addition to the terms and conditions set forth in the Base Agreement
and Product Attachment A, the following terms and conditions, as defined below,
are also applicable to the PacifiCare Commercial Point-of-Service Plan.

 

ARTICLE
I

DEFINITIONS

 

The following terms shall
have the meaning attributed below for purposes of the PacifiCare Commercial
Point-of-Service Plan, as described in this Product Attachment B.  Capitalized terms not otherwise defined
herein shall have the meaning assigned to them in the Base Agreement, as
amended.

 

1.1                                 In-Network Services are Covered Services received by Commercial
POS Plan Members which are (a) provided or arranged by Medical Group pursuant
to the PacifiCare Commercial Plan; (b) received from a non-contracting Provider
following an authorization from Medical Group; (c) Emergency Services; and (d)
Urgently Needed Services.

 

1.2                                 In-Network Hospital Services are Hospital Services received by Commercial
POS Plan Members which are (a) provided or arranged by Medical Group pursuant
to the PacifiCare Commercial Plan; (b) received from a non-contracting Provider
following an authorization from Medical Group; (c) Emergency Services; and (d)
Urgently Needed Services.

 

1.3                                 Out-of-Network Services are Covered Services, excluding Emergency
Services and Urgently Needed Services, which are received by Commercial POS
Plan Members without the prior authorization of Medical Group.

 

1.4                                 PacifiCare Commercial Point-of-Service (“POS”)
Plan is any PacifiCare
Commercial Plan, as defined in Product Attachment A, under which Members are
entitled to coverage for both In-Network Services and Out-of-Network Services.

 

1.5                                 Commercial POS Plan Members are Medical Group Members enrolled in the
PacifiCare Commercial POS Plan.

 

ARTICLE
2

DUTIES OF MEDICAL GROUP

 

2.1                                 Covered Services. 
Medical Group and its Participating Providers shall provide or arrange
Covered Services to Commercial POS Plan Members under same terms and conditions
as Commercial Plan Members.

 

2.2                                 Reciprocity; Reimbursement for Out-of-Network
Services.  If any of Medical Group’s Participating
Providers provides Out-of-Network Services to a Commercial POS Plan Member,
such Medical Group Participating Provider shall bill PacifiCare or the payor
responsible for payment for Out-of-Network Services for such services and
agrees to accept full payment at the Cost of Care.  Neither Medical Group nor its Participating Providers shall
encourage Members to

 

30

 

receive Covered Services from
non-Participating Providers.  Medical
Group shall include the requirements of this Section in all subcontracts with its
Participating Providers.

 

ARTICLE
3

COMPENSATION

 

3.1                                 Capitation Payments for Commercial POS Plan
Members.  For Commercial POS Plan Members, PacifiCare
will pay Medical Group *** of the monthly Standard Service Capitation Amount
for Commercial Plan Members, subject to the adjustments set forth in Article 5
of the Base Agreement and the adjustments set forth below in this Section.  The payment described in this Section is
payment in full for In-Network Services, except for Copayments, coordination of
benefits and third party recoveries.

 

3.1.1                        Premium Adjustments.  The
Commercial Plan Premium and benefits may be amended for each Subscriber
Agreement upon the annual renewal date of each Subscriber Agreement at the sole
discretion of PacifiCare.

 

3.2                                 Commercial POS Control Program. 
Effective January 1, 2003, the Commercial POS Control Program is
discontinued.  Therefore, this section
3.2 [Commercial POS Control Program] is hereby deleted and the numbering
reserved for future use.

 

IN WITNESS WHEREOF, the parties
hereto have executed this Product Attachment B.

 

 

	
   

  	
  PACIFICARE OF CALIFORNIA

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Brian Jeffrey

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  Vice President

  	
   

  
	
   

  	
   

  
	
   

  	
  Date:

  	
  12/10/02

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MEDICAL GROUP

  SIERRA MEDICAL GROUP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Peter G.
  Goll

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  Senior Vice President

  	
   

  
	
   

  	
   

  
	
   

  	
  Date:

  	
  12-10-02

  	
   

  
					

 

31

 

PACIFICARE
OF CALIFORNIA

 

MEDICAL
GROUP/IPA SERVICES AGREEMENT

(PROFESSIONAL CAPITATION)

 

EXHIBIT
1

MEDICAL GROUP FACILITIES AND SERVICE AREA

(This Exhibit 1 is an integral part of this Agreement)

 

Medical Group Facilities:

 

Prior to the Commencement
Date, Medical Group shall provide PacifiCare with a list of all Medical Group
Facilities.

 

Facilities shall also include
each facility at which a Medical Group Participating Provider routinely
provides services pursuant to this Agreement.

 

All Medical Group Facilities
shall, in accordance with PacifiCare’s policies and procedures, be subject to
PacifiCare’s prior written approval.

 

Medical Group networks are as
follows:

 

	
  Sierra Medical Group

  	
   

  	
  Dec # 2351

  	
   

  	
  (Commercial only)

  
	
  Antelope Valley IPA

  	
   

  	
  Dec # 5185

  	
   

  	
  (Commercial only)

  

 

Hospital(s):

Antelope Valley Medical
Center

Lancaster Community Hospital

 

Medical Group Service Area:

 

The Medical Group Service Area is the geographic area served by the
Medical Group’s Participating Providers, including referral providers.  The Medical Group Service Area is defined as
being within a thirty (30) mile radius of each of the Medical Group Facilities,
and includes the facilities and physician offices beyond the thirty mile radius
where Referral Services are arranged for by Medical Group.  The Medical Group Service Area shall be
determined by PacifiCare, based upon the shortest route using public streets
and highways.

 

32

 

PACIFICARE
OF CALIFORNIA

 

MEDICAL
GROUP/IPA SERVICES AGREEMENT

(PROFESSIONAL CAPITATION)

 

EXHIBIT
2

DELEGATED ACTIVITIES

(This Exhibit 2 is an integral part of this Agreement)

 

The purpose of the following
Grids is to specify the responsibilities of PacifiCare and Medical Group under
the Agreement with respect to: (i) claims processing and payment, (ii)
credentialing and recredentialing, (iii) medical records, (iv) quality
management and improvement and (v) medical management.

 

The Grids set forth the
specific activities with respect to (i) claims processing and payment, (ii)
credentialing and recredentialing, (iii) medical records, (iv) quality
management and improvement and (v) medical management, which PacifiCare has
delegated to Medical Group and which Medical Group shall perform on behalf of
PacifiCare.  The Grids also set forth
the specific activities with respect to: (i) claims processing and payment,
(ii) credentialing and recredentialing, (iii) medical records, (iv) quality
management and improvement and (v) medical management, which PacifiCare has not
delegated to Medical Group under the Agreement and which PacifiCare shall
perform directly utilizing its own personnel. 
Medical Group is responsible for cooperating, participating and
complying with PacifiCare’s performance of such activities.

 

PacifiCare does not formally
delegate to its contracting medical groups the responsibility for performing
quality management and improvement activities on behalf of PacifiCare.  However, PacifiCare does require contracting
medical groups to maintain a quality improvement and management program,
participate and cooperate in PacifiCare’s quality improvement program, collect
data for PacifiCare’s quality improvement activities, and carry out corrective
actions as required by PacifiCare. 
Accordingly, the Grids set forth certain quality improvement activities
which PacifiCare has not delegated to Medical Group to perform on behalf of
PacifiCare, but which PacifiCare and Medical Group shall perform concurrently
under the Agreement.  PacifiCare also
does not formally delegate to contracting medical groups the responsibility for
performing member services.  However,
PacifiCare does require contracting medical groups under the Agreement to participate,
cooperate and comply with PacifiCare’s activities relating to member services,
preventive health services, and medical record reviews as required by
PacifiCare.

 

The Grids also identify (i)
the elements and performance measures established by PacifiCare for the
Delegated Activities in accordance with the NCQA accreditation standards and
State and Federal law and regulatory requirements, (ii) the reports which shall
be provided to PacifiCare by Medical Group for each of the Delegated Activities
and the frequency of reporting, and (iii) the oversight activities which
PacifiCare shall perform with respect to each of the Delegated Activities.

 

Exhibit 2 may be amended from time to time during the term of this
Agreement by PacifiCare to reflect changes in delegation standards; delegation
status; performance measures; reporting requirements; and other provisions of
Exhibit 2.

 

33

 

MEDICAL MANAGEMENT DELEGATION GRID

 

	
  Function

  	
   

  	
  Delegation

  Status

  	
   

  	
  Provider Group Responsibility/

  Performance Measure

  	
   

  	
  Reporting

  Frequency

  	
   

  	
  PacifiCare Oversight

  
	
  UM Program
  Structure and Process

  	
   

  	
  ý Delegated

  o Not delegated

  	
   

  	
  Development
  and documentation of program structure and accountability, including;

   

  1.  Goals & Objectives,
  including behavioral health care aspects

   

  2.  Committee responsibilities:

  a)  Membership

  b)  Minutes

  c)  Dissemination of
  information

  d)  Education of staff &
  providers

  3.  UM Director & senior
  physician’s and designated behavioral health care practitioner roles

  4.  UM Dept interfaces with
  other depts.

  5.  Program is evaluated &
  approved annually

  For each UM function delegated there must be documentation of:

   

  1.  Staff & Physician
  responsibilities related to each UM function.

  2.  Adequate staffing mix

  3.  After-hours UM process
  defined

  4.  Interface with PacifiCare
  appropriately

  5.  Data elements as required

  6.  Reporting capability

   

  Implementation of corrective action plan for elements of
  non-compliance.

  	
   

  	
  • Annual
  submission of UM Program and Work Plan and Evalution.

  •
  Submission of corrective action plans as needed.

  	
   

  	
  •      Initial
  onsite assessment using approved oversight document

  •      Annual
  oversight assessment

  •      Annual
  PacifiCare committee approval of UM Program documents

  •      Identification
  of corrective action plans for elements of non-compliance.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Prior
  Authorization Professional:

   

   

   

   

  Institutional

  	
   

  	
  ý Delegated

  o Not delegated

  

  

  

  

  ý Delegated

  o Not delegated

  	
   

  	
  For prior
  authorization the Provider Group (PG) must;

  • Comply
  with PacifiCare’s Turn Around Times and notification requirements.

  • Follow
  nationally recognized medical necessity criteria

  • Develop
  and document program to perform prior authorization function of OP care
  meeting all regulatory and PacifiCare standards

  	
   

  	
  • Weekly
  submission of authorization/denial logs

  • Monthly
  submission of encounter data

  • Participation in census verification
  process

  	
   

  	
  • Pre-delegation
  onsite assessment to determine ability to perform function

  • Annual
  onsite assessment to determine ability to perform function

  

 

34

 

	
  Function

  	
   

  	
  Delegation

  Status

  	
   

  	
  Provider
  Group Responsibility/

  Performance Measure

  	
   

  	
  Reporting

  Frequency

  	
   

  	
  PacifiCare
  Oversight

  
	
  Concurrent
  Review

  	
   

  	
  ý Delegated

  o Not delegated

  	
   

  	
  For
  concurrent review PG must:

  • Comply
  with PacifiCare’s Turn Around Times and notification requirements.

  • Follow
  nationally recognized medical necessity criteria

  • Develop
  and document programs to perform concurrent review of acute and Skilled
  Nursing Facility inpatients meeting all regulatory and PacifiCare standards

  	
   

  	
  • Daily
  submission of patient census by admission and discharge and Level of Care

  • Monthly
  submission of Bed Days per thousand members per year

  	
   

  	
  •
  Pre-delegation onsite assessment to determine ability to perform function

  • Annual
  onsite assessment to determine ability to perform function

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Discharge
  Planning

  	
   

  	
  ý Delegated

  o Not delegated

  	
   

  	
  Develop and
  document program to perform discharge planning functions for Acute and
  Skilled Nursing Facility meeting all regulatory and PacifiCare standards

  Issue
  Skilled Nursing Facility Notice of Non-coverage timely and appropriately.

  	
   

  	
  Reviewed
  during annual assessment

  	
   

  	
  •
  Pre-delegation onsite assessment to determine ability to perform function

  • Annual
  onsite assessment to determine to perform function

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Out Of
  Area(OOA)

  	
   

  	
  oDelegated

  ý Not delegated

  	
   

  	
  If not
  delegated, report any OOA notifications received by group.

  If delegated, develop and document program
  to perform OOA concurrent review meeting all regulatory and PacifiCare
  standards.

  	
   

  	
  If Group
  delegated, OOA should be included in weekly authorization/denial log
  submission

  	
   

  	
  •
  Pre-delegation onsite assessment to determine ability to perform function

  • Annual
  onsite assessment to determine ability to perform function

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Case Management

  	
   

  	
  ýDelegated

  o Not delegated

  	
   

  	
  Develop and
  document program to perform Case Management function meeting all regulatory
  and PacifiCare standards

  If NOT
  delegated, responsible to coordinate care with PacifiCare Case Managers

  	
   

  	
  Monthly
  submission of Case Management Log

  •   ESRD

  •   Transplants

  •   Catastrophic

  	
   

  	
  •
  Pre-delegation onsite assessment to determine ability to perform function

  • Annual
  onsite assessment to determine ability to perform function

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Transplants

  	
   

  	
  ý Not delegated

  	
   

  	
  Develop and document Policies and Procedures to support notification
  to PacifiCare of potential transplant candidates.

  • Responsible to provide PacifiCare
  with all necessary information to make medical determination and manage the
  case.

  	
   

  	
  Report cases
  immediately.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  New
  Technology

  	
   

  	
  ý Not delegated

  	
   

  	
  Develop and
  document Policies and Procedures to support notification to PacifiCare of
  requests for new technology and coordination of making determinations.

  	
   

  	
  Ad Hoc

  	
   

  	
  N/A

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Retrospective
  Review

  Professional

  Retrospective
  Review Institutional

  	
   

  	
  ý Delegated

  o Not delegated

  

  

  o Delegated

  ý Not delegated

  	
   

  	
  For
  Retroactive-review of services PG must:

  • Comply
  with PacifiCare’s Turn Around Times and notification requirements

  • Follow
  PacifiCare’s approved medical necessity criteria

  • Develop
  and document program to perform retrospective review function.

  	
   

  	
  Weekly
  submission of authorization/ denial logs

  	
   

  	
  •
  Pre-delegation onsite assessment to determine ability to perform function.

  • Annual
  onsite assessment to determine ability to perform function

  

 

35

 

	
  Function

  	
   

  	
  Delegation

  Status

  	
   

  	
  Provider
  Group Responsibility/

  Performance measure

  	
   

  	
  Reporting

  Frequency

  	
   

  	
  PacifiCare
  Oversight

  
	
  Denials
  Professional Institutional (Administrative / Facility Denials)

  	
   

  	
  ý Delegated

  oNot delegated

  o Delegated

  ý Not delegated

  	
   

  	
  for Denials of ? services PG must:

  • Comply
  with PacifiCare’s Turn Around Times and notification requirements.

  • Follow
  nationally recognized medical necessity criteria

  • Develop
  and document of program to perform denial function meeting all regulatory and
  PacifiCare standards.

  	
   

  	
  Weekly
  submission of denial logs

  	
   

  	
  •
  Pre-delegation onsite assessment to determine ability to perform function.

  • Annual
  onsite assessment to determine ability to perform function.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Benefit
  Interpretations

  	
   

  	
  ý Not delegated

  	
   

  	
  For Benefit
  Interpretations PG must:

  •         Comply with
  PacifiCare’s Turn Around Times and notification requirements.

   

  •         Request PacifiCare
  interpretation when unable to make clear determination based on resources
  provided by PacifiCare (e.g., Benefits Manual)

  •         Request PacifiCare
  determination regarding medical necessity when requested service appears to
  be of an experimental or investigational nature for a member who has a “life-threatening”
  or “seriously debilitating” condition as defined in the California Health
  & Safety Code (see note below)*

  	
   

  	
  N/A

  	
   

  	
  •
  Pre-delegation onsite assessment to determine ability to perform function.

  • Annual
  onsite assessment to determine ability to perform function.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Appeals

  	
   

  	
  o Delegated

  ý Not delegated

  	
   

  	
  • Develop
  and document program to support cooperation with PacifiCare in handling
  appeals.

   

  • Notify
  PacifiCare of all member and provider appeals coming through PG.

  	
   

  	
  PacifiCare
  will provide the PGs quarterly report to show number of appeals and overturn
  rate for specific PG.

  	
   

  	
  •
  Pre-delegation onsite assessment to determine ability to perform function.

  • Annual
  onsite assessment to determine ability to perform function.

  

 

PacifiCare’s responsibilities
relating to Medical Management and those responsibilities, which PacifiCare has
delegated to the Provider Group, are outlined above.

 

The Provider Group agrees to be
accountable for all responsibilities delegated by PacifiCare and will not further
delegate any such responsibilities without the prior written approval by
PacifiCare.

 

Medical Group agrees to work
cooperatively with PacifiCare in all delegated functions.  As a Medical Group that shares risk with
PacifiCare through the Commercial Hospital Incentive Program (CHIP), Medical
Group acknowledges that PacifiCare’s Medical Management staff has a significant
role in certain functions including, but not limited to concurrent review,
discharge planning, and case management.

 

PacifiCare will perform audits
annually and as needed to evaluate the group’s delegated status.  In the event there are deficiencies
PacifiCare will perform audits annually and as needed to evaluate the group’s
delegated status.  In the event there
are deficiencies identified in the audit, PacifiCare will provide a specific
corrective action plan.  If the group is
not able to comply with the corrective action plan within the specified time
frame, PacifiCare may revoke the group’s delegated status.

 

36

 

California Health and Safety
Code Section 1370.4(a)(1)(B)(i) and (ii) and Section 1370.4(a)(1)(C) defines
the following items: “Life-threatening” means either or both of the following:
(i) Diseases or conditions where the likelihood of death is high unless the
course of the disease is interrupted. 
(ii) Diseases or conditions with potentially fatal outcomes, where the
end point of clinical intervention is survival.  “Seriously debilitating,” means diseases or conditions that cause
major irreversible morbidity.

 

37

 

CREDENTIALING DELEGATION GRID

 

	
  Function

  	
   

  	
  Delegation

  Status

  	
   

  	
  Provider Group Responsibility

  Performance Measure

  	
   

  	
  Reporting

  Frequency

  	
   

  	
  PacifiCare

  Oversight

  
	
  Credentialing
  Program description and/or Policies and Procedures (P&Ps)

  	
   

  	
  ý Delegated

  o Not delegated

  	
   

  	
  Full
  Compliance with NCQA Standards:

   

  • Define
  the scope of practitioner network to be cred./recred., i.e. MD, DO, DPM, DDS,
  DC, and behavioral health and other licensed independent practitioners.

   

  • Define
  criteria and verification of criteria

   

  • Describe
  decision making process, including how advice is received from participating
  practitioners

   

  • Describe
  the process to delegate credentialing/ recredentialing

   

  • Describe
  right of practitioner to review information.

   

  • Develop
  process to notify practitioner of discrepancies.

   

  • Include
  practitioner’s right to correct erroneous information.

   

  • Ensure
  confidentiality.

   

  • Define
  Medical Director responsibilities and participation.

  	
   

  	
  Submit
  Credentialing Program annually.

  Revised
  credentialing policies and procedures submitted at least annually.

  	
   

  	
  • Initial
  onsite assessment

   

  • Annual
  oversight assessment

   

  • Annual
  PacifiCare Committee approval

   

  • Evaluate
  and approve

   

  written

   

  Credentialing

   

  Program

   

  • Implementation
  of Corrective Action Plan(s) for elements of non-compliance

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Credentialing
  Committee

  	
   

  	
  ý Delegated

  o Not delegated

  	
   

  	
  Full
  Compliance with NCQA Standards:

  • The
  Provider Group (PG) designates a credentialing committee, including a range
  of participating practitioners of different specialties, that makes
  recommendations regarding credentialing decisions using a peer review
  process.

   

  • The PG
  documents committee advice in all credentialing/recredentialing decisions.

   

  • The PG
  documents meaningful process for consideration of performance at
  recredentialing.

  	
   

  	
  Annual
  credentialing program to include committee structure.

  	
   

  	
  • Initial
  onsite assessment

  • Annual
  oversight assessment

  • Annual
  PacifiCare Committee approval

  • Annual
  Review of Committee minutes

  • Annual
  review of membership

  • Frequency
  of meetings

  • Implementation
  of Corrective Action Plan(s) for elements of non-compliance

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Primary
  source verification of credentialing information

  	
   

  	
  ý Delegated

  o Not delegated

  	
   

  	
  Full
  compliance with NCQA Standards regarding verification of information within
  180 days of Committee approval date.

  Meet 90% of
  all NCQA credentialing standards on file review.

  Meet 100% of
  NCQA & regulatory body standards related to primary source verification
  of the following:

  •
  License

  • Hospital Admitting privileges, if applicable

  	
   

  	
  Submit
  current list of practitioners credentialed and date approved with quarterly
  report.

  	
   

  	
  • Initial onsite assessment

  • Annual
  oversight assessment

  • Annual
  PacifiCare Committee approval

  • Implementation
  of Corrective Action Plan(s) for elements of non-compliance.

  • Annual
  audit conducted of

  

 

38

 

	
  Function

  	
   

  	
  Delegation

  Status

  	
   

  	
  Provider Group Responsibility/

  Performance Measure

  	
   

  	
  Reporting

  Frequency

  	
   

  	
  PacifiCare

  Oversight

  
	
   

  	
   

  	
   

  	
   

  	
  •
  Education & Training

  • Board
  certification

  • Professional
  liability claims

   

  Meet 100% of
  NCQA & regulatory body standards related to data collection of the
  following.

  • DEA/CDS

  • Work
  History

  •
  Malpractice Insurance

  	
   

  	
   

  	
   

  	
  provider’s practitioners’ credentialing files according to NCQA
  methodology.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Application/
  Attestation

  	
   

  	
  ý Delegated

  

  o Not delegated

  	
   

  	
  Full
  compliance with NCQA Standards.

  The PG
  application must include a statement regarding:

   

  • Reasons
  for any inability to perform.

   

  • Lack of
  present illegal drug use.

   

  • History
  of loss of license or felony conviction.

   

  • History
  of loss or limitation of privileges or disciplinary activity.

   

  • Current
  malpractice insurance coverage, including dates & coverage amount

   

  • Attestation
  by applicant of the correctness and completeness of the application.

   

  • Signed
  within 180 days of Committee approval date.

  	
   

  	
  Immediate
  submission of any changes to application.

  	
   

  	
  • Initial
  onsite assessment.

   

  • Annual
  oversight assessment.

   

  • Annual
  PacifiCare Committee approval.

   

  • Annual
  audit conducted of provider’s practitioners’ credentialing files according to
  NCQA methodology.

   

  • Implementation
  of Corrective Action Plan(s) for elements of non-compliance.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  National
  Practitioner Data Base (NPDB) Information/Initial Sanction Information

  	
   

  	
  ý Delegated

  

  o Not delegated

  	
   

  	
  Full
  compliance with NCQA Standards regarding verification of information within
  180 days of Committee Approval date.

   

  • Information
  from NPDB

   

  • Sanction
  or Limitations information on licensure, as appropriate, must cover the most
  recent 5 year period available through the data source:

   

  • MD,
  DOs: NPDB, State Board of Medical Examiners, or Federation of State Medical
  Boards

   

  • DCs:
  State Board of Chiropractic Examiners or the Federation of Chiropractic
  Licensing Boards

   

  • DDSs:
  NPDB or State Board of Dental Examiners

   

  • DPMs:
  State Board of Podiatric Examiners or Federation of Podiatric Medical Boards

   

  •
  Non-physician behavioral health & other independently licensed
  practitioners: Appropriate state agency or State Board of Licensure or
  Certification

  	
   

  	
  None

  	
   

  	
  • Initial
  onsite assessment

   

  • Annual
  oversight assessment

   

  • Annual
  PacifiCare committee approval

   

  • Annual
  audit conducted of provider’s practitioners credentialing files according to
  NCQA methodology.

   

  •
  Implementation of Corrective Action Plan(s) for elements of non-compliance

  

 

39

 

	
  Function

  	
   

  	
  Delegation

  Status

  	
   

  	
  Provider Group Responsibility/

  Performance Measure

  	
   

  	
  Reporting

  Frequency

  	
   

  	
  PacifiCare

  Oversight

  
	
   

  	
   

  	
   

  	
   

  	
  • For all
  practitioners (except DDS): review of Medicare/ Medicaid sanctions, must
  cover the most recent 3 year period available through the data source, NPDB
  or Medicare/ Medicaid sanction report.

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Initial
  office site visit and medical record keeping practice review of all PCPs,
  OB/GYNs, and High Volume Behavioral Healthcare practitioners

  	
   

  	
  ý Delegated

   

  o Not delegated

  	
   

  	
  Full
  compliance with NCQA Standards regarding initial site visit/medical record
  keeping review prior to the Committee approval date.

  Structured
  review that evaluates the office site against standards in the following
  areas:

   

  • Physical accessibility

   

  • Physical appearance

   

  •
  Adequacy of waiting room and exam room space

   

  •
  Availability of appointments vs. expected performance standards

   

  • Documentation of an evaluation of medical record
  keeping practices for conformity with standards

  Specify methodology for identification of potential high volume
  behavioral health practitioners.

  Established thresholds for acceptable performance against identified
  standards.

  Institutes actions for improvement with sites not meeting thresholds.

  Evaluation of effectiveness of actions at least every 6 months until
  sites with deficiencies meet thresholds.

  Follows same procedure for an initial site visit when a PCP, OB/GYN,
  or high volume behavioral health practitioner relocates or opens a new site.

  Procedures for detecting deficiencies subsequent to the initial site
  visit, at least quarterly, Reevaluates site of new deficiencies and
  institutes actions for improvement.

  Incorporation of this information into the credentialing process.

  	
   

  	
  On an annual
  basis, include list of all site reviews subsequent to the initial site visit.

  	
   

  	
  • Initial onsite assessment

   

  • Annual oversight assessment

   

  • Annual review of audit tool

   

  • Annual audit conducted of provider’s practitioners’
  credentialing files according to NCQA methodology.

   

  • Annual PacifiCare Committee approval

   

  • Implementation of Corrective Action Plan(s) for
  elements of non-compliance

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Recredentialing
  Primary source verification (PSV)

  	
   

  	
  ý Delegated

   

  o Not delegated

  	
   

  	
  Full
  compliance with NCQA Recredentialing Standards regarding verification of
  information within 180 days of Committee approval date.

  Recredentialing
  conducted every three years by the PG.

  Recredentialing
  must be completed within 36 months of prior credentialing or recredentialing
  activity (as required by CMS & DMHC).

  Meet 90% of
  all NCQA Recredentialing standards on file review.

  Meet 100% of
  NCQA and regulatory body

  	
   

  	
  Include list
  of all practitioners re-credentialed, including approval dates, on a
  quarterly basis (with quarterly report)

  	
   

  	
  • Initial
  onsite assessment

   

  • Annual
  oversight assessment

   

  • Annual
  audit conducted of provider’s practitioners’ recredentialing files according
  to NCQA methodology.

   

  •
  Implementation of Corrective Action Plan(s) for elements of non-compliance.

   

  • Annual
  PacifiCare

  

 

40

 

	
  Function

  	
   

  	
  Delegation

  Status

  	
   

  	
  Provider Group Responsibility/

  Performance Measure

  	
   

  	
  Reporting

  Frequency

  	
   

  	
  PacifiCare

  Oversight

  
	
   

  	
   

  	
   

  	
   

  	
  standards
  related to primary source verification of the following:

  • License

  • Hospital
  Admitting privileges, if applicable

  • Board
  certification (if expired or new since initial credentialing)

  • Professional
  liability claims

  • Signed
  Attestation regarding

  • reasons
  for any inability to perform

  • lack of
  present illegal drug use,

  • History
  of loss or limitation of privileges or disciplinary activity, and

  • Current
  malpractice insurance coverage, including dates & amount, and

  • correctness and
  completeness of application

  Meet 100% of
  NCQA and regulatory body standards related to data collection of the
  following:

   

  • DEA/CDS

   

  • Malpractice
  Insurance

  	
   

  	
   

  	
   

  	
  Committee
  approval

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Recredentialing
  National Practitioner Data Base (NPDB) information/Recredentialing Sanction
  information

  	
   

  	
  ý Delegated

   

  o Not delegated

  	
   

  	
  Full
  compliance with NCQA Recredentialing Standards regarding verification of information
  within 180 days of Committee approval date.

  Recredentialing
  conducted every three years by the PG.

  Recredentialing
  must be completed within 36 months of prior credentialing or recredentialing
  activity (as required by CMS & DMHC).

  Recredentialing
  information found in credentialing files includes the following:

  • Information from NPDB

  •
  Sanction or Limitations information on licensure, as appropriate, must cover
  the last 2 year period available through the data source (data that may not
  have come to the attention of the provider previously):

  • MD,
  DOs: NPDB, State Board of Medical Examiners, or Federation of State Medical
  Boards

  • DCs:
  State Board of Chiropractic Examiners or the Federation of Chiropractic
  Licensing Boards

  • DDSs:
  NPDB or State Board of Dental Examiners

  	
   

  	
  None

  	
   

  	
  • Initial
  onsite assessment

  • Annual
  oversight assessment

  • Annual
  audit conducted of provider’s practitioners’ recredentialing files according
  to NCQA methodology.

  •
  Implementation of Corrective Action Plan(s) for elements of non-compliance.

  • Annual
  PacifiCare Committee approval

  

 

41

 

	
  Function

  	
   

  	
  Delegation

  Status

  	
   

  	
  Provider Group Responsibility/

  Performance Measure

  	
   

  	
  Reporting

  Frequency

  	
   

  	
  PacifiCare

  Oversight

  
	
   

  	
   

  	
   

  	
   

  	
  • DPMs: State
  Board of Podiatric Examiners or Federation of Podiatric Medical Boards

   

  • Non-physician
  behavioral health & other independently licensed practitioners:
  Appropriate state agency or State Board of Licensure or Certification

   

  • For all
  practitioners (except DDS): review of Medicare/ Medicaid sanctions, must
  cover the last 2 year period available through the data source (data that may
  not have come to the attention of the provider previously):

  • NPDB or
  Medicare/ Medicaid sanction report

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Incorporation
  of the following data in the Recredentialing decision-making process for PCPs
  and high volume behavioral health practitioners:

  • Member
  complaints

  • QI
  activities

  	
   

  	
  ý Delegated

   

  o Not delegated

  	
   

  	
  Full compliance with NCQA Recredentialing Standards.

  Recredentialing conducted every three years by the PG. (CMS, DMHC)

  Recredentialing must be completed within 36 months of prior
  credentialing or recredentialing activity. (as required by CMS & DMHC).

  Incorporate the following information into the recredentialing
  decision making process for PCPs and high volume behavioral health
  practitioners:

  • Member complaints (as received from plan)

  •  Information from
  quality improvement activities

  Specify criteria/methodology for identification of potential high volume
  behavioral health practitioners.

  	
   

  	
  List of all
  recredentialing decisions completed on an annual basis

  	
   

  	
  • Initial
  onsite assessment

   

  • Annual
  oversight assessment

   

  • Annual
  audit conducted of provider’s practitioners’ recredentialing files according
  to NCQA methodology.

   

  •
  Implementation of Corrective Action Plan(s) for elements of non-compliance.

   

  • Annual
  PacifiCare Committee approval

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Ongoing
  monitoring of Sanctions and Complaints

  	
   

  	
  ý Delegated

   

  o Not delegated

  	
   

  	
  Full
  compliance with NCQA standards.

  P&Ps for ongoing monitoring of sanctions and complaints include
  addressing the following sources:

  • Medicare
  and Medicaid Sanctions

  • State
  Sanctions or limitations on licensure

  • Complaints
  (as received from plan)

  Evidence the
  PG collects and reviews information from the above referenced sources.

  PG takes
  action on instances of poor quality.

  	
   

  	
  New P&Ps
  submitted at least annually

  Notification
  to PCC of any actions reported on a practitioner immediately.

  	
   

  	
  • Initial
  onsite assessment

   

  • Annual
  oversight assessment

   

  •
  Implementation of Corrective Action Plan(s) for elements of non-compliance

   

  • Annual
  PacifiCare Committee approval

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Process for
  Peer Review/Disciplinary Action

  	
   

  	
  ý Delegated

   

  o Not delegated

  	
   

  	
  Full compliance with NCQA Standards.

  P&Ps for altering the conditions of the practitioner’s
  participation with PacifiCare

  	
   

  	
  New P&Ps
  submitted at least annually

  	
   

  	
  • Initial
  onsite assessment

   

  • Annual
  oversight

  

 

42

 

	
  Function

  	
   

  	
  Delegation

  Status

  	
   

  	
  Provider Group Responsibility/

  Performance Measure

  	
   

  	
  Reporting

  Frequency

  	
   

  	
  PacifiCare

  Oversight

  
	
   

  	
   

  	
   

  	
   

  	
  based on
  quality of care of service:

  P&Ps for
  reporting of quality deficiencies to appropriate authorities.

  P&Ps for
  range of actions to be taken to improve performance prior to termination.

  P&Ps to
  describe appeals process & process of notifying practitioners of appeal
  rights.

  	
   

  	
  Notification
  to PCC of any actions reported on a practitioner immediately.

  	
   

  	
  assessment

  • Annual
  PacifiCare committee approval

  • Implementation
  of Corrective Action Plan(s) for elements of non-compliance

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Assessment
  of Organizational Providers (hospitals, home health agencies, SNFs,
  free-standing surgical centers, behavioral health facilities providing mental
  health or substance abuse services in an inpatient, residential or ambulatory
  setting.  If PMG maintain a contract
  for Medicare + Choice members then additional facilities are required:
  laboratories, outpatient rehabilitation, dialysis centers, and physical
  therapy/speech therapy facilities)

  	
   

  	
  ý Delegated

  o Not delegated

  	
   

  	
  For
  contracted acute care hospitals, home health agencies, SNFs, free-standing
  surgical centers, behavioral health facilities, laboratories, outpatient
  rehabilitation, dialysis centers, physical therapy/speech therapy provider
  facilities where the contract is held by the PG. (NCQA, CMS)

  1. Confirms good standing with State and Federal regulatory bodies
  (including if providing services to Medicare enrollees, PG must confirm
  provider’s participation in Medicare); and

  2. Confirms accreditation, or

  3. If not accredited, develops standards of participation and reviews
  for compliance; and

  4. Initially & at least every three years, confirms continued
  good standing of regulatory bodies, and if applicable, accreditation

  • At
  least 90% of all medical organizational providers meet all requirements

  • At
  least 50% of all behavioral health care delivery organizational providers
  meet all requirements.

   

  	
   

  	
  Submit list
  of contracted organizational providers on an annual basis

  	
   

  	
  • Initial
  onsite assessment

   

  • Annual
  assessment including P&Ps and random audit of files; two in each
  of the categories; one accredited, one non-accredited, as applicable

   

  • Annual
  PacifiCare committee approval

   

  •
  Implementation of Corrective Action Plan(s) for elements of non-compliance

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sub-Delegation
  of Credentialing

  	
   

  	
  ý Delegated

  o Not delegated

  	
   

  	
  If PG sub-delegates Credentialing to a CVO, Hospital, IPA, Behavioral
  Health, etc:

  •
  Detailed documentation of mutually agreed upon delegation agreement
  identifying:

  • Listing
  of responsibilities

  	
   

  	
  Submit
  copies of sub-delegation agreements to PacifiCare prior to sub-delegation and
  on an annual basis

  	
   

  	
  • Initial
  onsite assessment

  • Annual assessment of sub-delegation process,
  including agreements, polices and procedures, and ongoing evaluation of
  performance.

  

 

43

 

	
  Function

  	
   

  	
  Delegation

  Status

  	
   

  	
  Provider Group Responsibility/

  Performance Measure

  	
   

  	
  Reporting

  Frequency

  	
   

  	
  PacifiCare

  Oversight

  
	
   

  	
   

  	
   

  	
   

  	
  of delegate (PG) & sub-delegate;

  •
  Specific delegated activities;

  • Process
  for evaluating sub-delegate’s performance, and

  • Remedies
  if sub-delegate does not perform

  • PG
  retains right to approve/ disapprove new providers and to discipline
  providers

  •
  Pre-delegation evaluation

  • Annual
  evaluation, including file review, according to NCQA’s methodology

  • If
  deficiencies found, evidence of PG & sub-delegate follow up for
  opportunities for improvement

  	
   

  	
   

  	
   

  	
  according to NCQA standards & methodology

  • Annual
  PacifiCare committee approval

  •
  Implementation of Corrective Action Plan(s) for elements of non-compliance

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Accessibility
  to Credentialing Files

  	
   

  	
  ý Delegated

  o Not delegated

  	
   

  	
  Should any
  of the following provider events occur, PCC shall have access to Medical
  Group’s credentialing files to ensure practitioners are properly credentialed
  for continuity and coordination of care for members:

  •
  Bankruptcy

  •
  Termination of contract

  • De-delegation
  of credentialing activities

  Credentialing
  files be available, including making appropriate copies, for regulatory &
  accreditation audits.

  	
   

  	
  Immediately
  notify PCC of any such provider event.

  As needed,
  provide PCC access to PG credentialing/ recredentialing files should any of
  the referenced provider events occur.

  Comply with
  requests for selected credentialing files for regulatory &/or
  accreditation audits.

  	
   

  	
  • Access
  PG credentialing/recredentialing files should any of the referenced provider
  events occur.

  •
  Collection of copies of selected credentialing/recredentialing files from PG
  for regulatory and accreditation audits, as applicable.

  

 

The Provider Group agrees to be
accountable for all responsibilities delegated by PacifiCare and will not
further delegate any such responsibilities without the prior approval by PacifiCare.
PacifiCare’s responsibilities relating to Credentialing and those
responsibilities, which PacifiCare has delegated to the Provider Group, are
outlined above.

 

44

 

PacifiCare will perform audits
prior to delegation, annually, and as needed to evaluate the group’s delegated
status.  In the event there are
deficiencies identified in the audit, PacifiCare will provide a specific
corrective action plan.  If the group is
not able to comply with the corrective action plan within the specified time
frame, PacifiCare may revoke the group’s delegated status.

 

	
  MEDICAL RECORDS DELEGATION GRID

  
	
   

  
	
  Function

  	
   

  	
  Delegation

  Status

  	
   

  	
  Provider Group Responsibility/

  Performance Measure

  	
   

  	
  Reporting

  Frequency

  	
   

  	
  PacifiCare

  Oversight

  
	
  Systematic
  Review of Medical Records

  	
   

  	
  ý Delegated

  o Not delegated

  	
   

  	
  • Set
  documentation standards and distribute to practice sites.  Documentation audit tool to include all
  elements required by NCQA and PacifiCare.

  • At
  least annually, audit medical records from a sample of primary care
  practitioners with 50 or more members.

  • Conduct
  focused follow-up to improve documentation by PCPs who perform poorly against
  standards.

  	
   

  	
  Annual
  submission of medical records review work plan and audit tool.

  At least annually
  report at a minimum: the number of physicians whose medical records were
  reviewed; any practitioner-specific actions taken for improvement; and the
  results of those actions.

  	
   

  	
  Quality Improvement Committee or their designee reviews and approves
  Annual Work Plan and monitoring report.

  • Audit
  Provider Group’s policies and processes on an annual basis to ensure
  conformance to standards and note deficiencies identified.  Facilitate and monitor Provider Group’s
  compliance with work plan and corrective action plans.

  

 

PacifiCare’s responsibilities
relating to Medical Records and those responsibilities, which PacifiCare has
delegated to the Provider Group, are outlined above.

 

45

 

The Provider Group agrees to be
accountable for all responsibilities delegated by PacifiCare and will not
further delegate any such responsibilities without the prior approval by
PacifiCare.

 

PacifiCare will perform audits
annually and as needed to evaluate the group’s delegated status.  In the event there are deficiencies
identified in the audit, PacifiCare will provide a specific corrective action
plan.  If the group is not able to
comply with the corrective action plan within the specified time frame,
PacifiCare may revoke the group’s delegated status.

 

46

 

	
  CLAIMS DELEGATION GRID

  
	
   

  
	
  Function

  	
   

  	
  Delegation

  Status

  	
   

  	
  Medical
  Group Responsibility /

  Performance Measure

  	
   

  	
  Reporting

  Frequency

  	
   

  	
  PacifiCare

  Oversight

  
	
  CMS
  Regulations

  	
   

  	
  ý Delegated

   

  o Not delegated

  	
   

  	
  Compliance with all CMS regulations & guidelines for claims
  processing and payment including:

  Claims payment turnaround times Appropriate reimbursement for
  contracted and non-contracted providers

  Interest payments

  Denials/denial letters

  BBA regulations

  Provider reporting

  Y2K compliance

  	
   

  	
  Monthly

  	
   

  	
  Initial
  onsite assessment utilizing approved oversight tool.

  Annual
  oversight assessment utilizing approved oversight tool.

  Additional onsite reviews as warranted by the plan utilizing approved
  oversight tool.  Implementation of
  Corrective Action Plan(s) for elements of non-compliance.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  PacifiCare
  Standards for Commercial Products

  	
   

  	
  ý Delegated

   

  o Not delegated

  	
   

  	
  Compliance
  with PacifiCare’s standards for processing and payment of claims for
  Commercial Products including:

  Claims payment turnaround times

  Appropriate reimbursement for contracted and non-contracted providers

  Interest payments

  Denials/denial letters

  Provider reporting

  Appropriate IBNR reserves

  	
   

  	
  Monthly

  	
   

  	
  Initial
  onsite assessment utilizing approved oversight tool.

  Annual oversight assessment utilizing approved oversight tool.

  Additional onsite reviews as warranted by the plan utilizing approved
  oversight tool.  Implementation of
  Corrective Action Plan(s) for elements of non-compliance.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  State
  Regulations

  	
   

  	
  ý Delegated

   

  o Not delegated

  	
   

  	
  Compliance
  with State Regulations for claims processing:

  COB and TPL
  review

  Compliance with all Medicaid Regulations 

  	
   

  	
  N/A

  	
   

  	
  Initial
  onsite assessment utilizing approved oversight tool.

  Annual
  oversight assessment utilizing approved oversight tool.

  Additional
  onsite reviews as warranted by the plan utilizing approved oversight
  tool.  Implementation of Corrective
  Action Plan(s) for elements of non-compliance.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  OPM
  Requirements

  	
   

  	
  ý Delegated

   

  o Not delegated

  	
   

  	
  Compliance
  with Office of Personnel Management for Federal Employees requirements for
  claims processing and payment including:

  COB
  identification

  Debarred
  providers suspended

  	
   

  	
  N/A

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Standards
  for Employer Performance Guarantees

  	
   

  	
  ý Delegated

   

  o Not delegated

  	
   

  	
  Meet
  Employer performance guarantee measurements for claims processing and
  payment.

  	
   

  	
  As required by employer

  	
   

  	
  Initial
  onsite assessment utilizing approved oversight tool.

  Annual
  oversight assessment utilizing approved oversight tool.

  Additional
  onsite reviews as warranted by the plan utilizing approved oversight
  tool.  Implementation of Corrective
  Action Plan(s) for elements of non-compliance.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Eligibility
  and Benefits

  	
   

  	
  o Delegated

   

  ý Not delegated

  	
   

  	
  Medical Group
  must:

  Verify
  eligibility at time of claim review

  Update
  eligibility and benefit information in their system as often as communicated
  by the plan. 

  	
   

  	
  N/A

  	
   

  	
  Initial
  onsite assessment utilizing approved oversight tool.

  Annual
  oversight assessment utilizing approved oversight tool.

  Additional
  onsite reviews as warranted by the plan utilizing approved oversight tool.

  Implementation
  of Corrective Action Plan(s) for elements of non-compliance.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Financial
  Accounting

  	
   

  	
  ý Delegated

   

  o Not delegated

  	
   

  	
  Meets PacifiCare
  financial accounting requirements and solvency requirements including those
  for:

  Financial statements

  IBNR reserves

  Processes for expense reduction

  	
   

  	
  Annually

  	
   

  	
  Initial
  onsite assessment utilizing approved oversight tool.

  Annual
  oversight assessment utilizing approved oversight tool.

  Additional
  onsite reviews as warranted by the plan utilizing approved oversight tool.

  Implementation
  of Corrective Action Plan(s) for elements of non-compliance.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Check
  Production Processes

  	
   

  	
  ý Delegated

   

  o Not delegated

  	
   

  	
  Compliance
  with timely claims payments and IRS requirements including:

  Check
  production processes

  Performing
  Provider Satisfaction Survey

  	
   

  	
  N/A

  	
   

  	
  Initial
  onsite assessment utilizing approved oversight tool.

  Annual oversight assessment utilizing approved oversight tool.

  

 

47

 

	
  Function

  	
   

  	
  Delegation

  Status

  	
   

  	
  Medical Group

  Responsibility/

  Performance Measure

  	
   

  	
  Reporting

  Frequency

  	
   

  	
  PacifiCare Oversight

  
	
   

  	
   

  	
   

  	
   

  	
  Process to settle claims in collections 1099 production processes

  	
   

  	
   

  	
   

  	
  Additional onsite reviews as warranted by the plan utilizing approved
  oversight tool.  Implementation of
  Corrective Action Plan(s) for elements of non-compliance.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Staffing

  	
   

  	
  ý Delegated

   

  o Not delegated

  	
   

  	
  Staffing
  sufficient to support claims volume and processing timeliness requirements
  including:

  Staffing
  levels

  Customer
  Service capabilities

  Past experience for claims resolution

  Staff available to answer claims questions during normal hours of operation

  	
   

  	
  N/A

  	
   

  	
  Initial
  onsite assessment utilizing approved oversight tool.

  Annual
  oversight assessment utilizing approved oversight tool.

  Additional
  onsite reviews as warranted by the plan utilizing approved oversight tool.

  Implementation of Corrective Action Plan(s) for elements of non-compliance.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Audit
  Reporting

  	
   

  	
  ý Delegated

   

  o Not delegated

  	
   

  	
  Appropriate
  and adequate audit reporting available including:

  • Reports provided for audit

  	
   

  	
  As needed
  for audits

  	
   

  	
  Initial
  onsite assessment utilizing approved oversight tool.

  Annual oversight
  assessment utilizing approved oversight tool.

  Additional
  onsite reviews warranted by the plan utilizing approved oversight tool.

  Implementation of Corrective Action Plan(s) for elements of
  non-compliance.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Encounter
  Data

  	
   

  	
  ý Delegated

   

  o Not delegated

  	
   

  	
  The Medical
  Group must have an encounter data submission process with encounter data
  reported and submitted to PacifiCare monthly

  	
   

  	
  Monthly

  	
   

  	
  Initial
  onsite assessment utilizing approved oversight tool.

  Annual
  oversight assessment utilizing approved oversight tool.

  Additional onsite reviews as warranted by the plan utilizing approved
  oversight tool.  Implementation of
  Corrective Action Plan(s) for elements of non-compliance.

  

 

PacifiCare’s responsibilities
relating to Claims and those responsibilities which PacifiCare has delegated to
the Medical Group, are outlined above.

 

The Medical Group agrees to be
accountable for all responsibilities delegated by PacifiCare and will not
further delegate any such responsibilities without prior written approval by
PacifiCare.

 

PacifiCare will perform audits
annually and as needed to evaluate the group’s delegated status.  In the event there are deficiencies
identified in the audit, PacifiCare will provide a specific corrective action
plan.  If the group is not able to
comply with the corrective action plan within the specified time frame,
PacifiCare may revoke the group’s delegated status.

 

48

 

	
  QUALITY IMPROVEMENT DELEGATION GRID

  
	
   

  
	
  Function

  	
   

  	
  Delegation

  Status

  	
   

  	
  Medical Group Responsibility /

  Performance Measure

  	
   

  	
  Reporting

  Frequency

  	
   

  	
  PacifiCare

  Oversight

  
	
  Program
  Structure

  	
   

  	
  Not
  Delegated

  	
   

  	
  Medical
  Group is required to maintain the following:

  QM Program

  Structure to
  carry out Quality Mgmt. Program

  QM Program outlining structure and content

  Program description must be evaluated annually and updated as necessary

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Program
  Operations

  	
   

  	
  Not
  Delegated

  	
   

  	
  Participated
  and cooperate in PacifiCare’s Quality Improvement program 

  Collect data for PacifiCare’s Quality Improvement Activities

  Carry out corrective actions required by PacifiCare 

  Have a peer review process

  Participate in PacifiCare Quality

  Improvement Committee,(if requested)

  Provide
  PacifiCare access to Medical Records

  Identify
  barriers to improving key initiatives Implement Interventions

  Comply with
  PacifiCare’s confidentiality standards

  	
   

  	
   

  	
   

  	
   

  

 

PacifiCare does not formally delegate to its contracting Medical Groups
the responsibility for performing quality management and improvement activities
on behalf of PacifiCare.

 

 

	
   

  	
  PACIFICARE
  OF CALIFORNIA

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Brian
  Jeffrey

  	
   

  
	
   

  	
   

  
	
   

  	
  Title: 

  	
  Vice
  President

  	
   

  
	
   

  	
   

  
	
   

  	
  Date:

  	
  12/10/02

  	
   

  
	
   

  	
   

  
	
   

  	
  MEDICAL
  GROUP SIERRA MEDICAL GROUP

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Peter G. Goll

  	
   

  
	
   

  	
   

  
	
   

  	
  Title: 

  	
  Senior Vice
  President

  	
   

  
	
   

  	
   

  
	
   

  	
  Date: 

  	
  12-10-02

  	
   

  
					

 

49

 

PACIFICARE OF CALIFORNIA

 

MEDICAL GROUP/IPA SERVICES AGREEMENT

(PROFESSIONAL CAPITATION)

 

EXHIBIT 3

 

PRODUCT ATTACHMENTS

VERIFICATION OF RECEIPT OF PROVIDER MANUAL,

FORM SUBSCRIBER AGREEMENT AND EVIDENCE OF
COVERAGE

(This Exhibit 3 is an Integral part of
this Agreement)

 

MEDICAL GROUP NAME: SIERRA
MEDICAL GROUP

 

VERIFICATION OF RECEIPT OF
PROVIDER MANUAL AND SUBSCRIBER AGREEMENT AND EVIDENCE OF COVERAGE:

 

A copy of the PacifiCare
Provider Policies and Procedures Manual and standard form Subscriber Agreement
and Evidence of Coverage for each of the Managed Care Plans specified below has
been provided to Medical Group by Pacific Care prior to the execution of this
Agreement:

 

	
  By:

  	
  /s/ Peter
  G. Goll

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
  Senior Vice President

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
  12-10-02

  	
   

  

 

ATTACHMENTS:

 

The following attachments, when
initialed by PacifiCare and Medical Group, are an integral part of this
Agreement:

 

	
   

  	
   

  	
  PacifiCare

  	
   

  	
  Medical Group

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  PacifiCare
  Commercial Health Plan

  	
   

  	
  /s/ BJ

  	
   

  	
  /s/ PG

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  PacifiCare
  Commercial POS Health Plan

  	
   

  	
  /s/ BJ

  	
   

  	
  /s/ PG

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Division of
  Financial Responsibility

  	
   

  	
  /s/ BJ

  	
   

  	
  /s/ PG

  

 

50

 

PACIFICARE OF CALIFORNIA

 

MEDICAL GROUP/IPA SERVICES AGREEMENT

(PROFESSIONAL CAPITATION)

 

EXHIBIT 4

 

DIVISION OF FINANCIAL RESPONSIBILITY

(This Exhibit 4 is an integral part of this Agreement)

 

 

The
following matrix outlines the division of financial responsibility between
PacifiCare, Medical Group and the Hospital Incentive Program, the intent being
to clarify Covered Services categories in order to provide for accurate
administration.  The matrix serves as a
model under which broad Covered Service categories suggest the appropriate
financial responsibility for Covered Services not specifically listed.  The applicable Subscriber Agreement and
Evidence of Coverage should be consulted for an accurate and complete
description of Covered Services and the Provider Manual for administrative
clarification.  Member benefit
information should be verified prior to the provision of services.

 

Division of Financial Responsibility

 

KEY:
M - Opt-out to Medicare benefit for Hospice

 

	
  Service Description

  	
   

  	
  Medical

  Group

  	
   

  	
  Hospital

  Incentive

  Program

  	
   

  	
  PacifiCare

  	
   

  
	
  Allergy - Serum - OP

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Allergy - Testing & Tx - OP – Prof

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Ambulance (Air and Ground) – OP

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Amniocentesis - OP - Fac & Prof

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Anesthesiology - IP & OP – Prof

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Autologous Blood Services - OP - Fac & Prof

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Biofeedback (Medically Necessary) – OP

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Chemical Dependency (Detox) - IP & OP – Fac

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Chemical Dependency (Detox) - IP & OP – Prof

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Chemical Dependency (Rehab) - IP - Fac – CO

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Chemical Dependency (Rehab) - IP - Prof– CO

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Chemical Dependency (Rehab) - OP - Fac – CO

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Chemical Dependency (Rehab) - OP - Prof– CO

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Chemotherapy (Including Chemotherapy Drugs - Inject/Oral and including
  Lupron and Viadur J Codes when used in conjunction with Chemotherapy, as
  follows: J9217, J9218, J9219) - OP - Fac & Prof

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Chemotherapy - IP – Prof

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Chiropractic - Medical - OP - Fac & Prof

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Chiropractic - Supplemental - OP - Fac &  Prof

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Circumcision - OP - Fac & Prof

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Diagnostic Tests - OP - Fac & Prof

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  DME – IP

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  DME, Ostomy/Colostomy Supplies. Prosthetics/Orthotics - OP

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Emergency Room - OP – Fac

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Emergency Room - OP – Professional and E.R. Phys.

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Endoscopic Studies - IP– Prof

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Endoscopic Studies - OP – Fac

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  

 

 

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

 

51

 

	
  Service Description

  	
   

  	
  Medical

  Group

  	
   

  	
  Hospital

  Incentive

  Program

  	
   

  	
  PacifiCare

  	
   

  
	
  Endoscopic Studies - OP– Prof

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Family Planning - Abortions - OP - Fac

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Family Planning - Abortions - OP - Prof

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Family Planning - Contraceptive Devices -
  Insertion - OP - Prof

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Family Planning - Contraceptive Devices - Non-Rx (eg. Norplant/IUD) -
  OP

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Family Planning - Contraceptive Devices - Prescription - OP

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Family Planning - GIFT/ZIFT/IVF - OP - Fac
  & Prof

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Family Planning - Infertility Procedures -
  OP - Fac

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Family Planning - Infertility Procedures -
  OP - Prof

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Family Planning - Infertility Testing - OP - Prof

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Family Planning - Sterilization - IP &
  OP - Prof

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Family Planning - Sterilization - IP - Fac

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Family Planning - Sterilization - OP - Fac

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Fetal Monitoring - OP - Fac & Prof

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Health Education – OP

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Health Eval/Physical

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Hearing Aids/Molds – OP

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Hearing Screening (Audiologic Evaluation) - OP

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Hemodialysis/Dialysis - IP & OP - Prof

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Hemodialysis / Dialysis – OP – Fac
  (including all drugs)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Hemophilia Factors - Not Part of Outpatient
  Pharmacy Benefits – OP - CO

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Home Health Care / Homebound Infusion
  Therapy - OP – Prof

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Hosp Based Phys Interpretative Serv Incl
  Radiology & Pathology - IP & OP - Prof

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Hospice Services - IP - Prof– CO

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Hospitalization Services - IP –Fac

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Immunizations & Inoculations (Medically
  Necessary) - OP

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Injectables - Not Part of Outpatient
  Pharmacy Benefits - OP

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Laboratory/Pathology (Diagnostic Only) - OP
  - Fac

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Laboratory/Pathology (Diagnostic Only) - OP
  - Prof

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Laboratory/Pathology - IP – Fac

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Lithotripsy - OP - Fac

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Lithotripsy - OP - Prof

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Med/Surg Supplies (casts, splints,
  bandages) - Office - OP

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Medication - Prescription - OP

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Mental Health (Crisis Intervention) - OP -
  Prof- CO

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  MENTAL HEALTH:

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Mental Health – IP and OP – Fac – CO

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Mental Health - IP and OP – Prof- CO

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Observation Room - OP – Fac

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Oral Surgery / Dental Services - Accident
  & Injury Only - OP - Fac

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Oral Surgery / Dental Services - Accident
  & Injury Only - OP - Prof

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Out of Area - IP & OP – Fac

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Out of Area - IP & OP – Prof

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Outpatient Surgery - OP – Fac

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Outpatient Surgery - OP - Prof

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Physician Services (All Professional
  Services) - IP & OP - Prof

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Prosthetics - Surgical Implants - OP

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Radiation Therapy - IP & OP - Prof

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Radiation Therapy - OP – Fac and/ or
  freestanding facility

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Radiology (Diagnostic Only) - OP – Fac

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  

 

 

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

 

52

 

	
  Service Description

  	
   

  	
  Medical

  Group

  	
   

  	
  Hospital

  Incentive

  Program

  	
   

  	
  PacifiCare

  	
   

  
	
  Radiology (Diagnostic Only) - OP – Prof

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Radiology - IP – Fac

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Reconstructive Surgery - IP & OP – Prof

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Reconstructive Surgery - OP – Fac

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Rehabilitation - Cardiac/OT/PT/RT/ST - OP – Fac

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Rehabilitation - Cardiac/OT/PT/RT/ST - OP – Prof

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Skilled Nursing Facility - IP – Fac

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Sleep Studies – OP

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  TMJ - Evaluation (excludes dental exams/treatment) - OP - Prof

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Transfusions - OP - Fac

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Transplant Candidacy and Maintenance; OP and IP Professional

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Transplant Candidacy and Maintenance: OP and IP Facility

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Transplant Evaluation (excludes corneal); OP and IP Professional. See
  Note (3).

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Transplant Evaluation (excludes corneal); OP and IP Facility. See Note
  (3).

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Transplant Procedure and Procurement (excludes corneal); OP and IP
  Professional Services. See Note (3).

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Transplant Procedure and Procurement (excludes corneal); OP and IP Facility.
  See Note (3).

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Transplant Related Transportation and Housing - NPTN specific benefit.
  See Note (3).

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Transplant Follow-up (excludes corneal) OP and IP Professional; Year 1
  - See Note (3).

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Transplant Follow-up (excludes corneal); OP and IP Facility; Year 1.
  (See Note (3)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Transplant Years 2 - 5 Follow-Up (excludes corneal); OP and IP
  Professional

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Transplant Years 2 – 5 Follow-Up (excludes corneal); OP and IP
  Facility

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Urgent Care - OP - Fac & Prof

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Vision - Medical Treatment – OP - Prof

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Vision - Refraction for Contact Lenses/Frames - OP - Prof

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  Vision Care Materials - Contact Lenses/Frames (non-cataract) - OP - CO

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  

 

Notes:

 

(3)         PacifiCare’s responsibility
for Transplant Services is limited to those services provided in accordance
with its National Transplant Network Program as described in the Agreement,
including Attachment C to this Exhibit 4.

 

 

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

 

53

 

PACIFICARE OF CALIFORNIA

 

MEDICAL GROUP/IPA SERVICES AGREEMENT

 

EXHIBIT 4

ATTACHMENT A

 

2003
SELF-INJECTABLE CARVE OUT PROGRAM (SICOP)

(This Exhibit 4, Attachment A is an integral
part of this Agreement)

 

PacifiCare
offers to Medical Group the 2003 SICOP for Secure Horizons and Commercial
members.  If Medical Group elects to
participate, the 2003 SICOP places financial responsibility for the
self-injectable drugs listed on Attachment A-1 to this Exhibit 4, Attachment A
(the “Self-Injectables”) on PacifiCare. 
The 2003 SICOP is standard, and thus offered without potential for any
modification.  Any previous
self-injectable carve out programs that do not meet the standard requirements
of the 2003 SICOP are hereby discontinued.

 

The key provisions of the SICOP are as follows:

 

•              The carve out
covers only the Self-Injectables.  The
SICOP does not cover the Self- Injectables when provided in the physician
office setting or by clinical staff in the home or other setting.

 

•              PacifiCare and its
Affiliate Prescription Solutions may at their sole discretion during the term
of the agreement amend the list of Self-lnjectables on Attachment A –1 to add
new therapeutic drugs or therapeutic substitutes.  The SICOP does not cover all self-injectable drugs which might be
a covered benefit.

 

•              The attached
flowchart and procedure document outline the SICOP process in greater detail.

 

•              The valuations
associated with the SICOP have been provided to Medical Group.  In the event Medical Group chooses to
participate in the SICOP, PacifiCare will deduct the amounts set forth in
Product Attachment A related to the SICOP from Medical Group’s monthly
Capitation Payments.

 

•              In the event
Medical Group elects not to participate in the SICOP, Medical Group shall so
indicate by initialing here:

 

	
  /s/
  [ILLEGIBLE]

  	
   

  	
  Medical
  Group elects not to participate in the SICOP.

  

 

54

 

 

55

 

2003 Self-lnjectable
Carve-Out Program

Procedures for Ordering

 

I.                                         Requesting an
Injectable Medication

 

	
  The ordering physician is encouraged to phone in injectable
  prescription request to Prescription Solutions Prior Authorization Department
  (800) 711-4555 option 1

  

 

•                  The Injectable
Authorization Form  is to be completed, signed, and faxed to
Prescription Solutions (800) 853-3844 for authorization.

•                  This form serves
as a request for authorization and a legal prescription for the injectable
pharmacy vendor.

•                  Indicate where to
send the medication (patient’s home or physician office)

 

II.                                     Approved

 

•                  Prescription
Solutions (Rx Solutions) will fax a copy of the approved Injectable
Authorization Form to the physician’s office.

•                  A copy of the
authorized form is forwarded to the PCC’s injectable pharmacy vendor.

 

III.                                 Denied

 

•                  Rx Solutions will
fax a copy of the denied Injectable Authorization Form to the physician’s
office.

•                  Rx Solutions will mail a denial letter to
the patient’s home.

•                  The patient or
physician can request an Appeal as deemed necessary.

 

IV.                                 Education

 

•                  Patient Education will be
provided by the physician or physician staff member.

 

V.                                     Delivery of
product to patient

 

•                  The Injectable Pharmacy Vendor will contact
the patient and arrange the delivery of the injectable.

 

Fulfillment Time

 

	
  Day and Time when an authorized
  prescription is received by injectable Pharmacy Vendor **

  	
   

  	
  Expected turn around time for delivery.

  

 

56

 

	
  Monday
  through Thursday before 4:00pm

  	
   

  	
  Within
  24 hours

  
	
  Monday
  through Wednesday after 4:00pm

  	
   

  	
  Within
  48 hours

  
	
  Thursday
  after 4:00pm

  	
   

  	
  Delivery
  will be made Tuesday of the following week*

  
	
  Friday

  	
   

  	
  Delivery
  will be made Tuesday of the following week*

  

 

*              Unless special arrangements are
made with Injectable Pharmacy Vendor.

 

** Order is a complete and valid order.

 

57

 

EXHIBIT 4, ATTACHMENT A,

ATTACHMENT A-1

 

PacifiCare of California

2003 Self-lnjectable
Carve-out Program (SICOP)

 

 

The following product-specific list of drugs is
applicable to the 2003 SICOP Program:

 

Commercial:

Aranesp

Avonex

Betaserone

Copaxone

Enbrel

Epogen/Procrit

Fragmin

Growth Hormone

Innohep

Kineret

Leukine

Lovenox

Neulasta

Neumega

Neupogen

Peg Intron

Rebetron

Serostim

 

 

Note:
PacifiCare Retiree Members are covered under the Commercial Drug List
identified above.

 

58

 

PACIFICARE OF CALIFORNIA

 

MEDICAL GROUP/IPA SERVICES AGREEMENT

 

EXHIBIT 4

ATTACHMENT B

 

 

THIS EXHIBIT 4, ATTACHMENT B INTENTIONALLY LEFT BLANK

 

59

 

PACIFICARE OF CALIFORNIA

 

MEDICAL GROUP/IPA SERVICES AGREEMENT

 

EXHIBIT 4

ATTACHMENT C

 

NATIONAL PROVIDER TRANSPLANT NETWORK

(This Exhibit 4, Attachment C is an integral part of
this Agreement)

 

Division
of Financial Responsibility.  The Division of Financial
Responsibility (DFR), attached to this Agreement as Exhibit 4, shall serve as
the specific designation of financial risk for the Medical Group, Hospital
Incentive Program and PacifiCare for Transplant Services (other than skin or
ophthalmic transplants, which are addressed separately in the DFR):

 

I.     Designated NPTN Components
(Phases) of Care - General

 

Transplant
Services are generally described in the following components of care:

 

•                  Transplant Evaluation

•                  Transplant Candidacy and Maintenance

•                  Transplant Procedure and Procurement

•                  Post-Transplant Follow-up (Year 1)

•                  Post-Transplant Follow-up (Years 2-5)

 

II.     Transplant Services Phases
of Care Definitions and Service Components.

 

1.   SOLID ORGAN
TRANSPLANTATION.  The solid organ Transplant Services are
segregated into the following components:

 

a)  TRANSPLANT EVALUATION PHASE.  Pre-transplant medically necessary services
required to assess and evaluate the Member to determine acceptance to
transplant program.  This phase ends
upon acceptance or denial into the transplant program.  This Phase shall include:

 

•                  Consultation with surgeon(s),
psychiatrist(s), specialist(s), transplant coordinator(s), social services.

 

•                  Hematology, blood banking, serology,
chemistry, histocompatibility.

 

•                  X-rays, pulmonary function tests, skin tests,
leukopheresis consultation, CT scan, tissue typing, MRI.

 

60

 

•                  Inpatient or
outpatient, including professional, room and board, nursing, pharmacy and all
other ancillary services.

 

b)     TRANSPLANT
CANDIDACY AND MAINTENANCE PHASE: Services necessary to assess referral for
formal evaluation for Transplant Services and Medically Necessary in patient
and/or outpatient services, in order to maintain the Member’s health prior to a
transplant.

 

c)     TRANSPLANT
PROCEDURE AND PROCUREMENT PHASE. 
Transplant related services from the day before a transplant is
performed through discharge.  Includes
all hospital, physician, ancillary, transportation, acquisition costs and other
services necessary to acquire a cadaver or living transplantable human organ
for transplantation into designated Member. 
This Phase includes retransplantation. 
This Phase includes:

 

•                  Inpatient or
outpatient, including professional, room and board, nursing, pharmacy and all
other ancillary services for recipient and living donor

 

•                  Surgical
transplant and other surgical procedures during admission

 

•                  Organ and tissue
procurement and transportation costs related to procurement

 

•                  Donor testing
and identification and preparation of organ and tissue

 

d)     POST-TRANSPLANT
FOLLOW-UP (YEAR 1).  Transplant-related
Medically Necessary services rendered to recipient for follow-up for up to 365
days post discharge for recipient and 90 days post discharge for living donor.  This Phase includes:

 

•                  Inpatient or
outpatient, including professional, room and board, nursing, pharmacy and all
other ancillary services for recipient and donor.

 

•                  Readmissions
related to transplant complications

 

•                  Transplant
rejection diagnosis and treatment

 

•                  Transplant
related complications (medical care necessary related directly to transplant or
re-transplantation)

 

e)             POST-TRANSPLANT
FOLLOW-UP (YEARS 2-5). 
Transplant-related Medically Necessary services provided after the
post-transplant follow-up period described above.

 

61

 

2.  
AUTOLOGOUS HEMOPOETIC STEM CELL TRANSPLANTATION.  The autologous
hemopoetic stem cell Transplant Services are segregated into the following
components:

 

a) TRANSPLANT EVALUATION PHASE. 
Begins with initial consult with transplant physician through day prior
to myeoloblative or immunoablative therapy beginning.  This phase ends upon acceptance or denial into the transplant
program.  The Evaluation Phase shall
include:

 

•                  Consultation
with transplant physician(s), psychiatrist(s), specialist(s), transplant
coordinator(s), social services.

 

•                  Hematology,
blood banking, serology, chemistry, histocompatibility.

 

•                  X-rays,
pulmonary function tests, skin tests, leukopheresis consultation, CT scan,
tissue typing, MRI.

 

•                  Restaging of
disease

 

•                  Inpatient or
outpatient, including professional, room and board, nursing, pharmacy and all
other ancillary services.

 

•                  IV or oral
medications for mobilization

 

•                  Bone marrow
harvest/stem cell collection

 

•                  Stem cell
cryopreservation and storage

 

b)     TRANSPLANT
CANDIDACY AND MAINTENANCE PHASE. 
Services necessary to assess referral for formal evaluation for
Transplant Services and Medically Necessary inpatient and/or outpatient
services, in order to maintain the Member’s health prior to transplant.

 

c)     TRANSPLANT
PROCEDURE PHASE.  From day myeoloblative
or immunoablative therapy begins through discharge.

 

•                  Inpatient or
outpatient, including professional, room and board, nursing, pharmacy and all
other ancillary services for recipient.

 

•                  Marrow ablative
or immunoablative therapy (total body irradiation and/or chemotherapy)

 

•                  Marrow or cord
acquisition

 

•                  Transplant

 

62

 

d)  POST-TRANSPLANT FOLLOW-UP
(YEAR 1).  Transplant related Medically
Necessary services rendered to recipient for follow-up for up to 365 days post
discharge.

 

•                  Inpatient or outpatient, including
professional, room and board, nursing, pharmacy and all other ancillary
services for recipient.

 

•                  Transplant physician visits

 

•                  Laboratory
testing

 

•                  Radiology exams

 

•                  Retransplantation

 

•                  Readmissions
related to transplant complications

 

•                  Treatment for
delayed stem cell engraftment (GCSF)

 

•                  Transplant
related complications (medical care necessary related directly to transplant or
re-transplantation)

 

3.  
ALLOGENEIC HEMOPOETIC STEM CELL TRANSPLANTATION (Related or Unrelated).  The allogenic hemopoetic stem cell
Transplant Services are segregated into the following components:

 

a)  
TRANSPLANT EVALUATION PHASE. 
Pre-transplant Medically Necessary Services required to assess and
evaluate the Member to determine acceptance to the transplant program.  This phase ends upon acceptance or denial
into the transplant program.  This Phase
shall include:

 

•                                          Consultation with transplant physician(s),
psychiatrist(s), specialist(s), transplant coordinator(s), social services.

 

•                                          Hematology,
blood banking, serology, chemistry, histocompatibility.

 

•                                          X-rays,
pulmonary function tests, skin tests, leukopheresis consultation, CT scan,
tissue typing, MRI.

 

•                                          Restaging
of disease

 

•                                          HLA
typing

 

•                                          Inpatient
or outpatient, including professional, room and board, nursing, pharmacy and
all other ancillary services.

 

63

 

•                  IV or oral
medications for mobilization

 

•                  Bone marrow
harvest/stem cell collection

 

•                  Stem cell
cryopreservation and storage

 

•                  NMDP or cord
bank search

 

•                  NMDP or cord
bank testing of donors

 

b)     TRANSPLANT
CANDIDACY AND MAINTENANCE PHASE. 
Services necessary to assess referral for formal evaluation for
Transplant Services.  Medically
necessary inpatient and/or outpatient services, in order to maintain the
Member’s health prior to transplant.

 

c)     TRANSPLANT
PROCEDURE AND PROCUREMENT PHASE.  From
day myeoloblative or immunoablative therapy begins through discharge.

 

•                  Inpatient or
outpatient, including professional, room and board, nursing, pharmacy and all
other ancillary services for recipient.

 

•                  Marrow ablative
or immunoablative therapy (total body irradiation and/or chemotherapy)

 

•                  Transplant

 

d)     POST-TRANSPLANT
CARE.  Transplanted related medically
necessary services rendered to recipient for follow-up for up to 365 days post
discharge.

 

•                  Inpatient or
outpatient, including professional, room and board, nursing, pharmacy and all
other ancillary services for recipient.

 

•                  Transplant
physician visits

 

•                  Laboratory
testing

 

•                  Radiology exams

 

•                  Retransplantation

 

•                  Readmissions
related to transplant complications

 

•                  Transplant
related complications (medical care necessary related directly to transplant or
re-transplantation)

 

64

 

•                  Treatment for
GVHD (liver biopsy, hepatic panel, medications)

 

•                  CMV, PCP, VZV
prophylaxis

 

•                  Treatment for
delayed stem cell engraftment

 

4.  
TRANSPORTATION AND HOUSING. 
Transportation and local housing may be a Covered Service for NPTN
Members.  All such services must be
pre-authorized by PacifiCare’s Case Management Department.

 

65

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