Document:

Exhibit 10.122

 

ORIGINAL

 

AMENDMENT

to the

PROVIDER SERVICES AGREEMENT

between

HEALTH NET, INC. AFFILIATES

And

PROSPECT MEDICAL GROUP

 

The
Provider Services Agreement (“Agreement”), dated January 1, 1998, between
Prospect Medical Group (“PPG”) and Health Net, Inc. Affiliates (“HNI”)
subsequently amended July 1, 2000, February 19, 2001, and
October 1, 2001 is hereby amended effective April, 1 2003.

 

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

 

1.                                       Article VI Term and Termination
Section 6.1 Term of the Agreement is deleted in its entirety and replaced
as follows:

 

6.1                               Term.  The
term of this Amendment shall commence April 1, 2003, and shall continue in
effect for a period of twenty one (21) months (“Initial Term”).  Thereafter, this Agreement shall
automatically renew for successive one-year (1) periods on the annual renewal
date, unless terminated as set forth herein. 
The term of this Agreement shall remain the same for all Benefit
Programs covered hereunder.

 

2.                                       Article VI Term and Termination,
Section 6.2 Without Cause Termination is deleted in its entirety and
replaced as follows:

 

6.2                               Without Cause Termination  After
the Initial Term either party may terminate this Agreement at the scheduled
renewal date upon one hundred twenty (120) days prior written notice to the
other party.  In the event HNI provides
PPG with such notice, FHS may, at its option, begin to transition Members
immediately under this Agreement to another Participating Provider after such
notice.

 

3.                                       Addendum A Benefit Programs and Affiliates to
the Agreement is deleted in its entirety and replaced with the new Addendum A
attached hereto.

 

4.                                       Addendum B, Commercial Health Maintenance
Organization (HMO) And Commercial Point Of Service (POS) Benefit Programs to
the Agreement is deleted in its entirety and replaced with the new Addendum
attached B hereto.

 

5.                                       Addendum B.2 Division of Responsibility Matrix
Of HMO, PPG And Shared Risk/Hospital Capitated Services Commercial HMO And
Point Of Service Benefit Programs of the Agreement is deleted in its entirety
and replaced with the new Addendum B.2 attached hereto.

 

6.                                       Addendum I Healthy Families Program is added
to the Agreement and attached hereto.

 

7.                                       Addendum J Financial Solvency Reporting
Requirement Applicable To Health Net Of California, Inc. is added to the
Agreement and attached hereto.

 

8.                                       Addendum K, Health Insurance Portability and
Accountability Act of 1996 (“HIPAA”) is added to the Agreement and is attached
herein.

 

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

 

 

Except
as provided in this Amendment, all other provisions of the Agreement between
HNI and Provider not inconsistent herewith shall remain in full  force and effect.

 

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

 

 

	
  Prospect Medical Group

  	
  Health Net, Inc. Affiliates

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/
  Peter Goll

  	
   

  	
  /s/
  Jenni Vargas

  	
   

  
	
  Signature

  	
  Signature

  
	
   

  	
   

  
	
  Peter
  Goll

  	
  Jenni
  Vargas

  
	
  Senior
  Vice President

  	
  Network
  Management &  Development
  Officer

  
	
   

  	
   

  
	
  3/17/03

  	
   

  	
  3-27-03

  	
   

  
	
  Date

  	
  Date

  

 

2

 

ADDENDUM A

 

BENEFIT PROGRAMS AND AFFILIATES

I.                                         BENEFIT PROGRAMS

 

Benefit
Program participation included under this Agreement is as follows:

 

	
  BENEFIT PROGRAM

  	
   

  	
  ADDENDUM

  	
   

  	
  PPG

  PARTICIPATION

  Yes/No

  	
   

  
	
  Standard HMO

  	
   

  	
  B

  	
   

  	
  Yes

  	
   

  
	
  Flex Funded HMO

  	
   

  	
  B

  	
   

  	
  Yes

  	
   

  
	
  Small Group HMO

  	
   

  	
  B

  	
   

  	
  Yes

  	
   

  
	
  Individual HMO

  	
   

  	
  B

  	
   

  	
  Yes

  	
   

  
	
  AIM

  	
   

  	
  B

  	
   

  	
  Yes

  	
   

  
	
  Medicare COB

  	
   

  	
  B

  	
   

  	
  Yes

  	
   

  
	
  Commercial POS

  	
   

  	
  B

  	
   

  	
  Yes

  	
   

  
	
  Medicare HMO

  	
   

  	
  C

  	
   

  	
  Yes

  	
   

  
	
  PPO/EPO/POS (out-of-network)

  	
   

  	
  D

  	
   

  	
  Yes

  	
   

  
	
  Medi-Cal

  	
   

  	
  F

  	
   

  	
  No

  	
   

  
	
  TRICARE

  	
   

  	
  G

  	
   

  	
  Yes

  	
   

  
	
  Occupational Medicine

  	
   

  	
  H

  	
   

  	
  Yes

  	
   

  
	
  Healthy Families

  	
   

  	
  I

  	
   

  	
  Yes

  	
   

  

 

II.                                     AFFILIATES

 

Upon
execution of this Agreement, the Affiliates primarily using this Agreement
include, but are not limited to the following: Health Net of California Inc;
Health Net Life Insurance Company; Health Net Federal Services Inc. Employer
and Occupational Services Group (EOS); Foundation Integrated Risk Management
Solution, Inc.; and Foundation Health Systems Life and Health Insurance
Company.  The Affiliates are defined in
Section 1.1 of this Agreement.

 

Notwithstanding
the foregoing, PPG agrees that any other Affiliate of HNI not listed above may
access the rates set forth in this Agreement and Addenda.  This would include Members of non-California
based Affiliates who may receive Contracted Services from PPG.

 

III.                                 MAIN/SATELLITE OFFICES

 

	
  PPG tt

  	
   

  	
  Main
  and Satellite Offices

  
	
  505?1470

  	
   

  	
  Prospect
  Medical Group

  
	
  2979?1853

  	
   

  	
  Prospect
  - Nuestra Familia

  
	
  3067?1952

  	
   

  	
  Prospect
  -HealthSource

  
	
  3097?1978

  	
   

  	
  Prospect
  - Huntington Beach

  
	
  3064?1947

  	
   

  	
  Prospect
  Corona

  
	
  2980?1854

  	
   

  	
  Prospect
  Sherman Oaks

  

 

3

 

ADDENDUM B

 

COMMERCIAL HEALTH MAINTENANCE ORGANIZATION (HMO) AND

COMMERCIAL POINT OF SERVICE (POS) BENEFIT PROGRAMS

 

A.                                    GENERAL REIMBURSEMENT
PROVISIONS.

 

1.                                      PPG understands and agrees that the
obligations of HNI set forth in this Addendum are only the obligations of
Health Net of California.  A California
Health Plan (hereafter “HMO”) and not the obligations of HNI or any other
Affiliate of HNI.  PPG shall be
compensated according to this Addendum B and this Addendum shall be applicable
to only those Commercial HMO and Commercial POS Members listed on the
applicable Capitation remittance summaries.

 

2.                                      Benefit Programs.  This
Addendum B is applicable to the following Benefit Programs:

•                  Commercial
HMO

•                  Standard HMO

•                  Flex Funded HMO

•                  Small Group HMO

•                  Individual HMO

•                  AIM

•                  Medicare COB

•                  Commercial
POS

 

3.                                      Compensation for PPG
Capitated Services.  As compensation for rendering PPG Capitated
Services.  HMO shall pay PPG Capitation
as set forth in this Addendum B for each Commercial HMO and Commercial POS
Member eligible to receive services from PPG during any particular month.  Capitation shall be payable on a per Member
per month (PMPM) basis. Capitation shall be computed on the basis of the most
current information available and shall be paid by HMO by wire transfer on or
before the fifteenth (15th) day of each month or the first business day
following the fifteenth, if the fifteenth is a holiday or on a weekend.  Each Capitation payment shall be accompanied
by a remittance summary.  The remittance
summary identifies the total Capitation payable and those Commercial HMO and
Commercial POS Members for whom Capitation is being paid.  In the event of a Capitation error,
resulting in an overpayment or underpayment to PPG, HMO shall adjust subsequent
Capitation to offset such error.

 

4.                                      Compensation to Other
Providers of PPG Capitated Services.  PPG shall compensate all
providers who render PPG Capitated Services to Commercial HMO and Commercial
POS Members assigned to PPG.  In the
event that PPG does not process and pay eligible claims submitted to PPG for
Capitated Services within applicable time limits, HMO may pay such claims at
the lesser of HMO’s contract rate with such provider, if any, PPG’s subcontract
terms, or provider’s billed charges. 
HMO shall deduct any such claim amounts paid from PPG’s Capitation, as
set forth in the Operations Manual.

 

5.                                      Contracted Services.  PPG
and Member Physicians shall render Contracted Services which are not PPG
Capitated Services to Members covered under this Addendum B and shall be
compensated on a fee-for-service basis at the rates set forth in Addendum
E.  PPG shall submit clams in accordance
with the terms of this Agreement and State and federal law.

 

6.                                      Withhold Fund and
Determination of Maximum Downside of Shared Risk Deficits.  Notwithstanding
any provision in this Agreement or in any Addendum hereto to the contrary,
PPG’s total downside liability for all Shared Risk Budget deficits shall not
exceed  *** of PPG’s gross annual
Capitation.  Any and all Withhold Fund
amounts as set forth herein shall be applied to offset such total downside
liability.

 

4

 

B.                                    STANDARD HMO.

 

1.                                      Professional Capitation
Rates.

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

 

	
  Standard
  HMO Capitation

  
	
  April 1, 2003 *** PMPM through December 31, 2003

  
	
  January 1, 2004 ***  PMPM

  

 

2.                                      Professional Stop Loss
Program.  PPG elects not to participate in the
Professional Stop Loss Program.  PPG
shall provide HMO with proof of Professional Stop Loss coverage.

 

3.                                      Shared Risk Program.  PPG
shall participate in an incentive program for Shared Risk Services, which shall
reward PPG for effectively coordinating such care.  Under this Program, a budget shall be established for Shared Risk
Services, and the actual cost of such services shall be compared to the budget.

 

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

 

	
  Standard
  HMO Shared Risk Budget

  
	
  April 1, 2003 through December 31, 2003. ***PMPM

  
	
  January 1, 2004 *** PMPM

  

 

3.2                               Shared Risk Administration.  As a
contingency for any PPG liability under this Shared Risk Program, HMO shall
deduct zero percent (0%) of PPG’s Capitation for Standard HMO Members and place
such amount in the Withhold Fund as described in the Agreement.

 

In
the event the shared risk claims exceed the shared risk budget at the interior
settlement date, HMO may, at its sole discretion, withhold from PPG’s gross
monthly capitation up to *** of PPG’s monthly capitation and may continue such
withhold until the final shared risk settlement.  The withheld amount shall be placed in the Withhold Fund as
described in the Agreement.  If there is
a deficit at the time of final settlement, HMO may at it’s sole discretion,
continue to withhold up to ***  of PPG’s
capitation for Standard HMO Members and place such amount in the Withhold Fund
as described in this agreement.

 

Each
Reconciliation Period, HMO shall calculate Shared Risk Claims in accordance
with the Operations Manual and compare such claim cost to the corresponding
Shared Risk Budget. HMO shall perform both an interim and final settlement. In
the event that such claims are less than the Shared Risk Budget for the Interim
Period. PPG’s share of the settlement shall be *** subject to Section 4.3
of this Agreement.

 

Shared
Risk Claims with dates of service within the Reconciliation Period, and paid by
March 31 of the following year, shall be used in the calculation.  Shared Risk Services incurred within the
Reconciliation Period, but paid after March 31 of the following year, will
be included in the next Reconciliation Period calculation. In the event any
amounts remain in the Withhold Fund following the reconciliation of any shared
risk program, those excess funds shall be paid to PPG by April 30 of the
following year.

 

3.3                               Shared Risk Budget Surplus.  In
the event of a Shared Risk Budget surplus, PPG’s share of the surplus shall be
limited to the lesser of (a) *** of the Shared Risk Budget surplus,

 

5

 

or
(b) an amount not to exceed *** of the annual gross PPG Capitation. Subject to
Section 4.3 of the Agreement, the Shared Risk Budget surplus shall be
offset against any amounts payable by PPG. 
Any surplus remaining shall be paid to PPG by April 30 of the
following year.

 

3.4                               Shared Risk Budget Deficit.  In
the event of a Shared Risk Budget deficit, PPG’s share of the deficit shall be
limited to the lesser of (a) *** of the Shared Risk Budget deficit, or (b) an
amount not to exceed *** of the annual gross PPG Capitation. Subject to
Section 4.3, of the Agreement, any amounts payable by PPG shall be offset
against the Withhold Fund and any other amounts payable by HMO.

 

In
the event a deficit remains in the Shared Risk Program after such offset, such
deficit shall be carried forward to be applied against future years Shared Risk
Program surpluses and withhold funds.

 

3.5                               Shared Risk Reinsurance.  PPG
shall participate in the Shared Risk Reinsurance Program. The cost to PPG for
such participation shall be calculated as follows:

 

(a)                                  Out-of-Area Emergency and Urgently Needed
Services: *** of Shared Risk Budget.

 

Out-of-Area
Emergency and Urgently Needed Services are reimbursed at eighty percent (80%)
of allowed amount, and the remaining *** shall be charged against the Shared
Risk Budget.

 

(b)                                  In-Area Shared Risk Services: *** % of Shared
Risk Budget.

 

The
cost of In-Area Shared Risk Services utilized by a Member in a Reconciliation
Period shall be charged against the Shared Risk Budget as follows: *** amount
over ***

 

4.                                      AIDS Reinsurance Programs.  On a
network wide basis, reinsurance programs shall be established by HMO to cover
the payment of expenses incurred in the treatment of Members who have been
diagnosed with Acquired Immune Deficiency Syndrome (“AIDS Members”).

 

4.1                               AIDS Reinsurance. 
Professional, institutional, and pharmacy costs for AIDS Members shall
be the financial responsibility of HMO, as set forth in the Operations
Manual.  Additionally, the pharmacy cost
for HIV drugs shall be the financial responsibility of HMO under this Program.  PPG shall receive prior authorization from
HMO for an elective inpatient admission of an AIDS Member.  In addition, PPG shall provide HMO with
timely notification of any urgent/emergent admission of any AIDS Member who is
receiving anti-viral home treatments, or of any AIDS Member who is receiving
total parenteral nutrition. For purposes of this paragraph, timely notification
is within twenty-four (24) hours of an admission or the initial treatment.  In the event PPG fails to notify HMO as set
forth in this paragraph, AIDS related claims for such Members shall not be
eligible for payment under this Program.

 

4.2                               AIDS Reinsurance Premium.  The
Reinsurance Program rates, as set forth below, shall be deducted from PPG’s
Capitation:

 

•                  AIDS Reinsurance  *** PMPM

 

5.                                      Flex Funded HMO.  Flex
Funded HMO Members, (those enrolled in a benefit program which is fully or
partially self-funded) shall not be subject to a Dual Risk Program, nor to a
Shared Risk Program PPG Capitation. 
Professional Stop Loss and Reinsurance Programs shall be as set forth
above.

 

6

 

C.                                    SMALL GROUP HMO.

 

1.                                      Professional
Capitation Rates.

 

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

 

	
  Small Group HMO Capitation

  
	
  April 1. 2003 *** PMPM through
  December 31, 2003

  
	
  January 1, 2004 ***  PMPM

  

 

2.                                      Professional
Stop Loss Program. PPG elects not to participate in the Professional
Stop Loss Program. PPG shall provide HMO with proof of Professional Stop Loss
coverage.

 

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

 

	
  Small Group

  HMO Shared Risk Budget

  
	
  April 1, 2003 through
  December 31, 2003, *** PMPM

  
	
  January 1, 2004 *** PMPM

  

 

3.2                               Shared
Risk Administration.  As a
contingency for any PPG liability under this Shared Risk Program, HMO shall deduct  *** PPG’s Capitation for Small Group HMO Members
and place such amount in the Withhold Fund as described in the Agreement.

 

In the event the shared risk claims exceed
the shared risk budget at the interim settlement date.  HMO may, at its sole discretion, withhold
from PPG’s gross monthly capitation up to five percent (5%) of PPG’s monthly
capitation and may continue such withhold until the final shared risk
settlement.  The withheld amount shall
be placed in the Withhold Fund as described in the Agreement.  If there is a deficit at the time of final
settlement, HMO may at it’s sole discretion, continue to withhold up to *** of
PPG’s capitation for Small Group HMO Members and place such amount in the
Withhold Fund as described in this agreement.

 

Each Reconciliation Period, HMO shall
calculate Shared Risk Claims in accordance with the Operations Manual and
compare such claim cost to the corresponding Shared Risk Budget.  HMO shall perform both an interim and final
settlement.  In the event that such
claims are less than the Shared Risk Budget for the Interim Period, PPG’s share
of the settlement shall be ***, subject to Section 4.3 of this Agreement.

 

Shared Risk Claims with dates of service
within the Reconciliation Period, and paid by March 31 of the following
year, shall be used in the calculation. 
Shared Risk Services incurred within the Reconciliation Period, but paid
after March 31 of the following year, will be included in the next
Reconciliation Period calculation.  In
the event any amounts remain in the Withhold Fund following the reconciliation
of any shared risk program, those excess funds shall be paid to PPG by
April 30 of the following year.

 

3.3                               Shared
Risk Budget Surplus.  In the
event of a Shared Risk Budget surplus, PPG’s share of the surplus shall be
limited to the lesser of (a) *** of the Shared Risk Budget surplus, or (b) an
amount not to exceed *** of the annual gross PPG Capitation.  Subject to Section 4.3 of

 

7

 

the
Agreement, the Shared Risk Budget surplus shall be offset against any amounts
payable by PPG.  Any surplus remaining
shall be paid to PPG by April 30 of the following year.

 

3.4                               Shared Risk Budget Deficit.  In
the event of a Shared Risk Budget deficit, PPG’s share of the deficit shall be
limited to the lesser of (a) *** of the Shared Risk Budget deficit, or (b) an
amount not to exceed *** of the annual gross PPG Capitation.  Subject to Section 4.3 of the
Agreement, any amounts payable by PPG shall be offset against the Withhold Fund
and any other amounts payable by HMO.

 

In the event a deficit remains in the Shared Risk Program after such
offset, such deficit shall be carried forward to be applied against future
years Shared Risk Program surpluses and withhold funds.

 

3.5                               Shared Risk Reinsurance.  PPG
shall participate in the Shared Risk Reinsurance Program. The cost to PPG for
such participation shall be calculated as follows:

 

(a)                                  Out-of-Area Emergency and Urgently Needed
Services: *** of Shared Risk Budget.

 

Out-of-Area Emergency and Urgently Needed Services are reimbursed at ***
of allowed amount, and the remaining *** shall be charged against the Shared
Risk Budget.

 

(b)                                  In-Area Shared Risk Services: ***% of Shared
Risk Budget.

 

The cost of In-Area Shared Risk Services utilized by a Member in a
Reconciliation Period shall be charged against the Shared Risk Budget as  follows: ***% of  any amount over $ ***.

 

3.6                               AIDS Reinsurance Premium.  As
further defined in Section B.4 of this Addendum B, the Reinsurance Program
rates, as set forth below, shall be deducted from PPG’s Capitation:

 

•                  AIDS Reinsurance  *** PMPM

 

D.            INDIVIDUAL HMO.

 

1.                                      Professional
Capitation Rates.

 

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

 

	
  Individual

  HMO Capitation

  
	
  April 1, 2003 *** PMPM through December 31, 2003

  
	
  January 1, 2004 *** PMPM

  

 

2.                                      Professional Stop Loss
Program.  PPG elects not to participate in the
Professional Stop Loss Program.  PPG
shall provide HMO with proof of Professional Stop Loss coverage.

 

8

 

3.                                      Shared Risk Program.  PPG
shall participate in an incentive program for Shared Risk Services, which shall
reward PPG for effectively coordinating such care.  Under this Program, a budget shall be established for Shared Risk
Services, and the actual cost of such services shall be compared to the budget.

 

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

 

	
  Individual HMO Shared Risk Budget

  
	
  April 1, 2003, through December 31, 2003, *** PMPM

  
	
  January 1, 2004 $*** PMPM

  

 

3.2                               Shared
Risk Administration.  As a
contingency for any PPG liability under this
Shared Risk Program, HMO shall deduct ***% of PPG’s Capitation for Individual
HMO Members and place such amount in the Withhold Fund as described in the
Agreement.

 

In the event the shared risk claims exceed
the shared risk budget at the interim settlement date, HMO may, at its sole
discretion, withhold from PPG’s gross monthly capitation up to *** PPG’s
monthly capitation and may continue such withhold until the final shared risk
settlement.  The withheld amount shall
be placed in the Withhold Fund as described in the Agreement.  If there is a deficit at the time of final
settlement, HMO may at it’s sole discretion, continue to withhold up to *** of
PPG’s capitation for Individual HMO Members and place such amount in the
Withhold Fund as described in this agreement.

 

Each Reconciliation Period, HMO shall
calculate Shared Risk Claims in accordance with the Operations Manual and
compare such claim cost to the corresponding Shared Risk Budget.  HMO shall perform both an interim and final
settlement.  In the event that such
claims are less than the Shared Risk Budget for the Interim Period.  PPG’s share of the settlement shall be ***
subject to Section 4.3 of this Agreement.

 

Shared Risk Claims with dates of service within the Reconciliation
Period, and paid by March 31 of the following year shall be used in the
calculation.  Shared Risk Services
incurred within the Reconciliation Period but paid after March 31 of the
following year will be included in the next Reconciliation Period
calculation.  In the event any amounts
remain in the Withhold Fund following the reconciliation of any shared risk
program, those excess funds shall be paid to PPG by April 30 of the
following year.

 

3.3                               Shared Risk Budget Surplus.  In
the event of a Shared Risk Budget surplus, PPG’s share of the surplus shall be
limited to the lesser of (a) *** of the Shared Risk Budget surplus, or (b) an
amount not to exceed twenty percent (20%) of the annual gross PPG
Capitation.  Subject to Section 4.3
of the Agreement, the Shared Risk Budget surplus shall be offset against any
amounts payable by PPG.  Any surplus
remaining shall be paid to PPG by April 30 of the following year.

 

3.4                               Shared Risk Budget Deficit.  In
the event of a Shared Risk Budget deficit, PPG’s share of the deficit shall be
limited to the lesser of (a) *** of the Shared Risk Budget deficit, or (b) an
amount not to exceed *** of the annual gross PPG Capitation.  Subject to Section 4.3, of the
Agreement, any amounts payable by PPG, shall be offset against the Withhold
Fund and any other amounts payable by HMO.

 

In the event a deficit remains in the Shared Risk Program after such
offset, such deficit shall be carried forward to be applied against future
years Shared Risk Program surpluses and withhold funds.

 

9

 

3.5                               Shared Risk Reinsurance.  PPG
shall participate in the Shared Risk Reinsurance Program.  The cost to PPG for such participation shall
be calculated as follows:

 

(a)                                  Out-of-Area Emergency and Urgently Needed
Services: *** of Shared Risk Budget.

 

Out-of-Area Emergency and Urgently Needed Services are reimbursed at
eighty percent (80%) of allowed amount, and the remaining *** shall be charged
against the Shared Risk Budget.

 

(b)                                  In-Area Shared Risk Services: *** of Shared Risk Budget.

 

The cost of In-Area Shared Risk Services utilized by a Member in a
Reconciliation Period shall be charged against the Shared Risk Budget as
follows: *** of any amount over ***.

 

4.                                      AIDS Reinsurance Premium.  As
further defined in Section B.4 of this Addendum B, the Reinsurance Program
rates, as set forth below, shall be deducted from PPG’s Capitation:

 

•                  AIDS
Reinsurance  *** PMPM

 

E.                                      ACCESS
FOR INFANTS AND MOTHERS.  The
Access for Infants and Mothers (“AIM”) Program
provides health care coverage to low-income women, pursuant to state law, who
are pregnant but without insurance for such pregnancy.  The AIM Program is funded by the State
through Proposition 99 Cigarette and Tobacco Tax Revenue.  At such time PPG is certified by the State
for participation in the AIM Program, PPG shall provide Covered Services for
AIM Members as set forth in the Operations Manual.

 

1.                                      Compensation.  HMO
shall pay PPG a flat fee of one thousand eight hundred fifty dollars ($1,850)
for each adult AIM Member to cover the professional services related to the
birth of an infant.  In addition to this
flat fee, HMO shall pay PPG *** PMPM for each adult AIM Member enrolled in the
AIM Program.  HMO shall pay PPG *** PMPM
during the first year of life for each infant AIM Member and *** PMPM during
the second year of life.

 

2.                                      Reinsurance Programs.  PPG’s
professional stop loss level shall be six thousand dollars ($6,000.00) per AIM
Member.  The professional stop loss
level shall be provided to the PPG for AIM Members at no cost.  All other terms and conditions of the
Agreement regarding Professional Stop Loss shall apply to AIM Members.  AIM Members shall not be included in the
AIDS Reinsurance Program.

 

3.                                      Shared Risk Programs.  HMO shall be solely responsible for all Shared
Risk services and for pharmacy benefit costs of AIM Members.

 

F.                                      MEDICARE
COB.  The Medicare Supplement
Benefit Programs are provided to Members who have primary coverage through Medicare. 
Capitation for Members enrolled in such Benefit Programs compensates PPG
for Co-payments that would be normally a Member’s responsibility under
Medicare.

 

1.                                      Capitation Rates.  PPG
Capitation rates for Medicare COB Members shall be at the following PMPM
levels, subject to age, sex and benefit plan factors set forth in Addendum B:

 

 

	
  Medicare COB HMO

  	
   

  	
  Medicare COB POS

  
	
  April 1, 2003, through
  December 31, 2003 *** PMPM

  	
   

  	
  April 1, 2003, through
  December 31, 2003 *** PMPM

  
	
  January 1, 2004 *** PMPM

  	
   

  	
  January 1, 2004 *** PMPM

  

 

2.                                      Reinsurance Programs. 
Medicare COB Members shall not be included in the Professional Stop Loss
Program, the AIDS Reinsurance Program or the Transfer Reinsurance Program.

 

10

 

3.                                      Shared Risk Program.  HMO
shall be solely responsible for all Shared Risk Services and for pharmacy
benefit costs of Medicare COB Members.

 

G.                                    COMMERCIAL POS.

 

1.                                      Commercial POS Benefit
Program.  Under a POS Benefit Program, Members may
elect, at the time of obtaining each Covered Service, to utilize: (i) HMO
coverage through PPG; (ii) coverage by self-referring to any PPO provider; or
(iii) indemnity coverage for self-referring to non-Participating Providers in
accordance with Benefit Program requirements. 
Standard HMO Members, Small Group HMO Members, Individual HMO Members,
Medicare COB HMO Members and Flex Funded HMO Members may be eligible for
Commercial POS Benefit Programs.

 

2.                                      Definitions.

 

2.1                               In-Network Services.  PPG
Capitated Services and Shared Risk Services provided or arranged through PPG.

 

2.2                               Out-of-Network Services.  In
accordance with Benefit Program requirements, Covered Services provided as a
result of a Member’s self-referral to a PPO or HMO Provider or to a
non-Participating Provider. 
Out-of-Network Services may be provided in area or out of area.

 

3.                                      Compensation. 
Compensation to PPG for Commercial POS Members shall include: a) PPG
professional Capitation for In-Network professional services, b) any surplus
resulting from the Professional Out-of-Network Shared Risk Program, and c) any
surplus resulting from the Institutional In-Network and Out-of-Network Shared
Risk Program.

 

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

 

5.                                      Professional Out-of-Network
Risk Sharing Program.  The budget for this Program shall be equal
to the sum of the following two components: 1) The Professional Out-of-Network
Withhold, as described in Section 4 above, and 2) an amount equal to 10%
of the Commercial POS Professional Capitation prior to withhold.

 

Each year, HMO shall settle the risk-sharing
program by calculating the difference between the budget and the actual
claims.  If a surplus remains, PPG’s
share shall be fifty percent (50%), not to exceed *** of PPG’s annual gross
capitation, subject to Section 4.3. 
PPG shall not be subject to any downside.

 

6.                                      Institutional
Shared Risk Program.

 

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

 

11

 

	
  Standard POS

  Shared Risk Budget

  	
   

  	
  Small
  Group

  POS Shared Risk

  Budget

  	
   

  	
  Individual POS

  Shared Risk

  Budget

  
	
  April 1, 2003, through
  December 31, 2003 *** PMPM

  	
   

  	
  $*** PMPM

  	
   

  	
  *** PMPM

  
	
  January 1, 2004, *** PMPM

  	
   

  	
  $*** PMPM

  	
   

  	
  *** PMPM

  

 

6.2                               POS Shared Risk
Administration.  Each Reconciliation Period, HMO shall
calculate Shared Risk Claims in accordance with the Operations Manual and
compare such claim cost to the corresponding Shared Risk Budget.  HMO shall perform both an interim and final
settlement.  In the event any amounts
remain in the Withhold Fund following the reconciliation of any shared risk
program, those excess funds shall be paid to PPG by April 30 of the
following year.  In the event that such
claims are less than the Shared Risk Budget for the Interim Period, PPG’s share
of the settlement shall be  ***, subject
to Section 4.3 of this Agreement.

 

Shared Risk Claims with dates of service within the Reconciliation
Period, and paid by March 31 of the following year shall be used in the
calculation.  Shared Risk Services
incurred within the Reconciliation Period but paid after March 31 of the
following year will be included in the next Reconciliation Period calculation.

 

6.3                               POS Shared Risk Budget
Surplus.  In the event of a POS Shared Risk Budget
surplus, PPG’s share of the surplus shall be limited to the lesser of (a) ***
or (b) an amount not to exceed *** of the annual gross PPG Capitation.

 

6.4                               POS Shared Risk Budget
Deficit.  In the event of a POS Shared Risk Budget
deficit, PPG shall not be liable for the deficit.

 

6.5                               POS Shared Risk Reinsurance.  PPG
shall participate in the POS Shared Risk Reinsurance Program which provides
reinsurance for In-Network and Out-of-Network services.  The cost to PPG for the POS Shared Risk
Reinsurance Program shall be calculated as follows:

 

(a)                                  Out-of-Area Emergency and Urgently Needed
Services: 6.44% of POS Shared Risk Budget.

 

Out-of-Area Emergency and Urgently Needed Services shall be reimbursed
at *** of cost, and the remaining
***  of the cost shall be charged
against the POS Shared Risk Budget.

 

(b)                                  In-Network and Out-of-Network POS Shared Risk
Services: *** of POS Shared Risk Budget.

 

The cost of In-Network and Out-of-Network POS Shared Risk Services
during the Reconciliation Period shall be charged against the POS Shared Risk
Budget as follows: *** of any amount over $***.

 

7.                                      Professional Stop Loss
Program.  The Professional Stop Loss Program includes
coverage for In-Network Services, an optional program, as well as for
Out-of-Network Services, a program in which PPG’s participation is required.

 

(a)                                  In-Network Professional Stop Loss.  PPG
elects not to participate in the Professional Stop Loss Program.  PPG shall provide HMO with proof of
Professional Stop Loss coverage.

 

(b)                                  Out-of-Network Professional Stop Loss. 
PPG’s Out-of-Network Professional Stop Loss threshold shall be *** per
Commercial POS Member during the calendar year.  The cost to PPG for

 

12

 

the
Out-of-Network Professional Stop Loss program shall be $*** PMPM, which, shall
be deducted from PPG’s Out-of-Network Risk Sharing Budget.

 

8.                                      AIDS Reinsurance.  As
further defined in Section B.4 of this Addendum, the AIDS Reinsurance rate
shall be $0.56 PMPM, which shall be deducted from PPG’s Capitation and $0.38
PMPM shall be deducted from PPG’s Professional Out-of-Network Risk Sharing
Budget.  For the subsequent years, these
deductions shall fluctuate to correspond with the Professional Out-of-Network
Withhold percentage change.

 

I.                                         Pharmacy Shared Risk Program.  Not
applicable.  PPG does not participate in
Pharmacy Shared Risk Program.

 

J.                                      Immunizations: PPG assumes financial responsibility for
immunization under the capitation rate set forth in this Addendum New
immunizations approved by American Academy of Pediatrics and the Advisory
Committee on Immunization Practices (ACIP) of the US Public Health Service,
after the effective date of the Agreement, shall be reimbursed at rates that
are negotiated based on experiential data, which shall be mutually agreed upon
by HMO and PPG.  In the event HMO and
PPG cannot agree upon such rates, PPG shall be reimbursed in accordance with
Addendum E.

 

13

 

ADDENDUM B.2

DIVISION OF RESPONSIBILITY

MATRIX OF HMO, PPG AND SHARED RISK/HOSPITAL CAPITATED SERVICES

 

COMMERCIAL HMO AND POINT OF SERVICE BENEFIT PROGRAMS

 

The following matrix outlines the division of
financial responsibility between HMO, PPG and Hospital.  The matrix is intended only as a summary
guide.  The applicable Subscriber’s
Certificate should be consulted for an accurate and complete description of
Covered Services and the Provider Operations Manual for clarification.

 

	
   

  	
   

  	
  PPG

  CAPITATED

  SERVICES

  	
   

  	
  HMO RISK

  SERVICES

  	
   

  	
  SHARED RISK/

  HOSPITAL

  CAPITATED

  SERVICES

  
	
  AIDS – Drugs

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  AIDS – Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  AIDS – Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  ALLERGY
  IMMUNOTHERAPY

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  ALLERGY
  TESTING

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  ALPHA –
  FETOPROTEIN

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  AMBULANCE

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      In
  Area (30 Mile Radius)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Out
  of Area

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  ANESTHESIOLOGY

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  BIOFEEDBACK

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  BLOOD/BLOOD
  PRODUCTS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Autologous/Homologous

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Blood
  Bank

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Storage
  and Collection of Blood

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  CHEMICAL
  DEPENDENCY

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Inpatient
  Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Inpatient
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Outpatient
  Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Outpatient
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Inpatient
  Detox Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Inpatient
  Detox Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  CHEMOTHERAPY

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •     Drugs, including Epogen, Neupogen and
  adjunctive therapies

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Facility
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •     Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  CHIROPRACTIC
  (Medicare Approved)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  COLOSTOMY
  SUPPLIES

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  CONSULTATIONS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  COSMETIC
  SURGERY (Medically
  Necessary)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •     Facility
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  CRITICAL
  CARE VISITS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  

 

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

 

14

 

	
   

  	
   

  	
  PPG

  CAPITATED

  SERVICES

  	
   

  	
  HMO RISK

  SERVICES

  	
   

  	
  SHARED RISK/

  HOSPITAL

  CAPITATED

  SERVICES

  
	
  DENTAL
  SERVICES

  (When a covered
  benefit)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Facility
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  DIAGNOSTIC
  TESTING - Outpatient
  Facility & Professional

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  DURABLE
  MEDICAL EQUIPMENT

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Outpatient

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Surgically
  Implanted

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  EMERGENCY
  ADMISSIONS – In-Area

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Facility
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  EMERGENCY
  ADMISSIONS –  Out of Area

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Facility
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  EMERGENCY
  ROOM VISITS – In Area

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Facility
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  EMERGENCY
  ROOM VISITS –
  Out-of-Area

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Facility
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  EXTENDED
  CARE/SKILLED NURSING FACILITY

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Facility
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  GROWTH
  HORMONES

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  HEARING
  AIDS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  HEMODIALYSIS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Epogen,
  Neupogen

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Facility
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  HOME
  HEALTH

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  HOME
  VISITS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  HOSPICE

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Facility
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  HOSPITAL
  BASED PHYSICIANS -

  Inpatient, Ambulatory Surgery or Emergency Room Admissions

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Technical
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  IMMUNIZATIONS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  INFANT
  APNEA MONITOR

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  INJECTABLES,
  SELF ADMINISTERED

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  INPATIENT
  VISITS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  IVF &
  GIFT

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Facility
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  

 

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

 

15

 

	
   

  	
   

  	
  PPG

  CAPITATED

  SERVICES

  	
   

  	
  HMO RISK

  SERVICES

  	
   

  	
  SHARED RISK/

  HOSPITAL

  CAPITATED

  SERVICES

  
	
  LITHOTRIPSY

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Facility
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  MATERNITY - Deliveries and Non-Deliveries

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Facility
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  MEDICAL
  ADMISSIONS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Facility
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  MENTAL
  HEALTH – Inpatient

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •     
  Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  MENTAL
  HEALTH – Outpatient

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Facility
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  OFFICE
  VISITS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  PATIENT
  EDUCATION

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  PATHOLOGY - Inpatient, Ambulatory Surgery or Emergency
  Room

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Technical
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  PATHOLOGY – office

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  PATHOLOGY – Outpatient

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Technical
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  PERIODIC
  EXAMS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  PRE
  ADMISSION -
  Outpatient Laboratory, X-ray
(within 72 hrs, or related
  admission)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  PROSTHETIC/ORTHOTIC
  DEVICES

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Outpatient

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Surgically
  Implanted

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  RADIOLOGY - Inpatient, Ambulatory Surgery or Emergency
  Room

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Technical
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  RADIOLOGY - Office

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  RADIOLOGY - Outpatient

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Technical
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  SPEECH AND
  HEARING EXAMS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  SUPPLIES- Medical, Surgical, Office

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Related
  to a Hospital Stay:

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Surgical Supplies, Equipment, etc.

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •     Related
  to an Outpatient Office Visit:

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Splints, Casts, Bandages, etc.

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  

 

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

 

16

 

	
   

  	
   

  	
  PPG

  CAPITATED

  SERVICES

  	
   

  	
  HMO RISK

  SERVICES

  	
   

  	
  SHARED RISK/

  HOSPITAL

  CAPITATED

  SERVICES

  
	
  SUPPLIES,
  DIABETIC

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Chem,
  Strips, Lancet, Needles, Syringes

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Glucometer

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  SURGERY –  Inpatient

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Facility
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  SURGERY –  Office

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  SURGERY –  Outpatient

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Facility
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  THERAPEUTIC
  INJECTIONS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  THERAPY: Physical, Occupational, Speech

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Inpatient

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Outpatient/Office

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  TRANSPLANTS
  (Non-experimental)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Covered
  Immunosupressives

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Facility
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Organ
  Procurement

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  TRANSPLANT
  EVALUATIONS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Facility
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Professional

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  URGENT
  CARE VISITS –
  In-Area

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  URGENT
  CARE VISITS –  Out-of-Area

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  VISION
  CARE

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Exams
  and Medically Necessary Care

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Implanted
  Lenses (Cataract Surgery)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Lenses
  and Frames (Non-Cataract)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  

 

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

 

17

 

ADDENDUM 1

 

HEALTHY FAMILIES PROGRAM

 

PPG
understands and agrees that the obligations of HNI set forth in this Addendum
shall be the obligations of HEALTH NET of California, (HEALTH NET), an
Affiliate of HNI, and not the obligations of HNI or any other Affiliate of HNI.

 

HEALTH
NET entered into an agreement with the California Managed Risk Medical
Insurance Board (“MRMIB”) to arrange for the provision of Covered Services to
persons who are eligible under the California Children’s Health Insurance
Program (aka, and hereinafter “Healthy Families Program”) and enrolled in, or
otherwise assigned to HEALTH NET, on a prepaid basis.  The Healthy Families Program is a government sponsored health
care program administered by the State of California, funded in part by federal
funds, and arranged by HMOs and their participating providers.

 

Notwithstanding
any provision in the Agreement to the contrary, PPG understands and agrees that
PPG shall arrange and provide health care services to Healthy Families Members
in accordance with the benefits and program requirements of the Healthy
Families Agreement.  PPG understands
that Evidence of Coverage documents are subject to change and approval by MRMIB
and PPG hereby agrees to arrange and provide health care services in accordance
with such changes.

 

A.            GENERAL PROVISIONS

 

1.             Provision of Covered
Services.  PPG shall arrange
Covered Services for assigned Members. 
For the purposes of this Addendum. 
“Covered Services” means those health care services, supplies and items
set that are specified as being covered under the Healthy Families
Agreement.  PPG shall ensure that it and
its Participating Providers arrange Covered Services for Members, in accordance
with the following, each of which is hereby incorporated by reference as if set
out in full herein:

 

1.1           The terms and conditions of this Addendum and the
Agreement.

 

1.2           The terms and conditions of HEALTH
NET’s Healthy Families Agreement with MRMIB, and the applicable Evidence of
Coverage.

 

1.3           HEALTH NET’s Healthy Families
policies and procedures and provider bulletins.

 

1.4           Healthy Families Program regulations
and statutes.

 

1.5           All laws applicable to PPG or HEALTH
NET.

 

1.6           HEALTH NET’s Utilization Management
Program and Quality Management Program.

 

1.7           Standards requiring services to be
provided in the same manner, and with the same availability, as services are
rendered to other patients.

 

1.8           No less than the minimum clinical
quality of care and performance standards that are professionally recognized
and/or adopted, accepted or established by HEALTH NET.

 

1.9           The most recent recommendations of
the American Academy of Pediatrics (AAP) with regard to Recommendations for
Preventative Pediatric Health Care, or other preventative care standards
mandated by MRMIB

 

18

 

2.             Reports
and Information.  PPG and its Participating Providers shall
provide HEALTH NET, within the time requested by HEALTH NET, with all such
reports and information as  HEALTH
NET may require to allow it to meet the reporting requirements under the
Healthy Families Agreement or any applicable law.  Such reporting obligations include, but are not limited to,
monthly reporting to HEALTH NET of referrals of Members to the following
programs: California Children’s Services, referrals of Members with possible
Serious Emotional Disturbance to the County Mental Health Department, and
alcohol and drug treatment referrals to Managed Health Network.

 

3.             Carve-out
of California Children’s Services (CCS) Program services. 
Health care services to treat CCS-eligible conditions are “carved out”
of HEALTH NET’s coverage obligations under the Healthy Families Agreement.  However, PPG and its Participating Providers
are required to identify and timely refer Members with possible CCS-eligible
conditions to the County CCS Program. 
Upon referral, the Participating Provider shall inform the Member’s
parent or guardian.  The CCS Program
requires eligible children to be treated at CCS-certified facilities by
CCS-paneled providers.  The CCS Program
may require transfer to CCS-certified facilities with CCS-paneled
providers.  The CCS Program is
financially responsible for payment of health care costs to treat a
CCS-eligible condition.  The parties
understand and agree that HEALTH NET is not financially responsible for payment
of services related to CCS-eligible conditions.

 

4.             Referral
of Members having possible mental health conditions to Managed Health Network.  PPG
and its Participating Providers are required to identify and timely refer
Members with possible mental health conditions (other than Serious Emotional
Disturbance as set out in the following section) to HEALTH NET’s affiliate and
subcontractor, Managed Health Network. 
Managed Health Network is financially responsible for payment of
treatment of covered mental health services

 

5.             Services
for Members with Serious Emotional Disturbance (SED). 
Health care services to treat SED are the responsibility of the County
Mental Health Department.  However, PPG
and its Participating Providers are required to identify and timely refer
Members with possible SED to the County Mental Health Department. Upon
referral, the Participating Provider shall inform the Member’s parent or
guardian. The County Mental Health Department is responsible for the provision
and payment of health care costs to treat SED.

 

6.             Cultural
and Linguistic Services.  PPG and its Participating Providers shall:
(1) not require or encourage Members to utilize family members or friends as
interpreters; (2) record the language needs of Members in the medical record;
and (3) document Member request or refusal of interpreter services in the
Member’s medical record.  PPG and its
Participating Providers shall arrange interpreter services for Members either
through telephone language services or face-to-face interpreters PPG and its
Participating Providers are encouraged to directly make these interpretive
services available, however, HEALTH NET’s Member Services Department is
available to provide certain interpretive assistance to facilitate
Member-provider communications upon request.

 

7.             Initial
Health Assessments.  PPG and its Participating Providers shall
offer an initial health assessment to their assigned members within 120 days of
their enrollment in HEALTH NET's Healthy Families Plan.

 

8.             Eligibility. 
Eligibility and commencement of enrollment under Healthy Families is
determined by MRMIB.  Commencement of
coverage can occur at any day of a month

 

9.             Copayments. Copayments are subject to a *** limitation
and PPG and its Participating Providers are encouraged to make extended payment
arrangements available to Members experiencing an inability to pay a required
co-payment.

 

19

 

B.            REIMBURSEMENT PROVISIONS

 

1.             PPG shall be compensated according
to this Addendum I and this Addendum shall be applicable to only those Healthy
Families listed on the Commercial HMO remittance summaries. HNI will modify
this Addendum I to reflect a new rate structure for adults, pending federal
approval of expanding this program to parents”.

 

2.             Compensation
for PPG Capitated Services. 
As compensation for rendering PPG Capitated Services, HEALTH NET shall
pay PPG Capitation as set forth in this Addendum I for each Healthy Families
Member to receive services from PPG during any particular month. Capitation
shall be payable on a per Member per month (PMPM) basis. Capitation shall be
computed on the basis of the most current information available and shall be
paid by HEALTH NET by wire transfer on or before the fifteenth (15th) day of
each month or the first business day following the fifteenth if the fifteenth
is a holiday or on a weekend.  Each
Capitation payment shall be accompanied by a remittance summary.  The remittance summary identifies the total
Capitation payable and those Healthy Families Members for whom Capitation is
being paid.  In the event of a
Capitation error, resulting in an overpayment or underpayment to PPG, HEALTH
NET shall adjust subsequent Capitation to offset such error.

 

3.             Compensation
to Other Providers of PPG Capitated Services.  PPG shall compensate all providers who
render PPG Capitated Services to Healthy Families Members assigned to PPG. In
the event that PPG does not process and pay eligible claims submitted to PPG
for Capitated Services within applicable time limits, HEALTH NET may pay such
claims at the lesser of HEALTH NET’s contract rate with such provider, if any.
PPG’s subcontract terms, or provider’s billed charges, HEALTH NET shall deduct
any such claim amounts paid from PPG’s Capitation, as set forth in the
Operations Manual.

 

4.             Contracted
Services.  PPG and Member
Physicians shall render Contracted Services which are not PPG Capitated Services
to Members covered under this Addendum I and shall be compensated on a
fee-for-service basis at one hundred percent of the Medi-Cal Fee Schedule.  PPG shall submit claims in accordance with
the terms of this Agreement and State and federal law.

 

5.             Withhold
Fund and Determination of Maximum Downside of Shared Risk Deficits.  Notwithstanding any provision in
this Agreement or in any Addendum hereto to the contrary, PPG’s total downside
liability for all Shared Risk Budget deficits shall not exceed *** %) of PPG’s
gross annual Capitation. Any and all Withhold Fund amounts, if applicable, as
set forth herein shall be applied to offset such total downside liability.

 

6.             Professional
Capitation Rates.

 

6.1           Capitation
Rates.  PPG Capitation for
Healthy Families Members shall be determined on a monthly basis by multiplying the number of members by the
flat capitation amount set forth in Addendum I.

 

	
  Healthy
  Families

  Capitation

  
	
  *** PMPM

  

 

7.             Professional
Stop Loss. PPG elects not to participate in the Professional Stop
Loss Program PPG shall provide HEALTH NET with proof of Professional Stop Loss
coverage.

 

8.             Shared
Risk Program. PPG shall participate in an incentive program for
Shared Risk Services, which shall reward PPG for effectively coordinating such
care.  Under this Program, a budget
shall be established for Shared Risk Services, and the actual cost of such
services shall be compared to the budget

 

20

 

8.1          Shared Risk
Budget. HEALTH NET
shall fund the Shared Risk Budget for Members, with normalized rates. These
normalized rates shall be adjusted for PPG’s assigned Members by the age, sex
and benefit plan factors as set forth
in Addendum 1.1. Actual Shared Risk Budget shall fluctuate from month month to
the extent that PPG’s age, sex and benefit plan mix fluctuates.

 

	
  Healthy
  Families Shared Risk Budget

  
	
  April
  1, 2003 through December 31, 2003, ***7 PMPM

  
	
  January
  1, 2004 *** PMPM

  

 

8.2          Shared Risk
Administration.  Each Reconciliation Period, HEALTH NET shall
calculate Shared Risk Claims in accordance with the Operations Manual and
compare such claim cost to the corresponding Shared Risk Budget.  HEALTH NET shall perform both an interim and
final settlement. In the event that such claims are less than the Shared Risk
Budget for the Interim Period, PPG’s share of the settlement shall be ***
subject to Section 4.3 of this Agreement.

 

Shared
Risk Claims with dates of service within the Reconciliation Period and paid by
March 31 of the following year shall be used in the calculation. Shared Risk
Services incurred within the Reconciliation Period but paid after March 31 of
the following year will be included in the next Reconciliation Period
calculation. In the event any amounts remain in the Withhold Fund following the
reconciliation of any shared risk program, those excess funds shall be paid to
PPG by April 30 of the following year.

 

8.3          Shared Risk
Budget Surplus.  In the event of a Shared Risk Budget
surplus, PPG’s share of the surplus shall be limited to the lesser of (a)
***  of the Shared Risk Budget surplus,
or (b) an amount not to exceed *** of the annual gross PPG Capitation.  Subject to Section 4.3 of the Agreement, the
Shared Risk Budget surplus shall be offset against any amounts payable by PPG.
Any surplus remaining shall be paid to PPG by April 30 of the following year.

 

8.4          Shared Risk
Budget Deficit.  In the event of a Shared Risk Budget deficit,
PPG’s share of the deficit shall be limited to the lesser of (a) *** of the
Shared Risk Budget deficit, or (b) an amount not to exceed *** of the annual
gross PPG Capitation. Subject to Section 4.3, of the Agreement, any amounts
payable by PPG shall be offset against the Withhold Fund and any other amounts
payable by HEALTH NET.

 

In
the event a deficit remains in the Shared Risk Program after such offset, such
deficit shall be carried forward to be applied against future years Shared Risk
Program surpluses and withhold funds.

 

8.5          Shared Risk
Reinsurance.  PPG shall participate in the Shared Risk
Reinsurance Program. The cost to PPG for such participation shall be calculated
as follows:

 

(a)           Out-of-Area Emergency and Urgently
Needed Services: *** of Shared Risk Budget.

 

Out-of-Area
Emergency and Urgently Needed Services are reimbursed at eighty percent (80%)
of allowed Amount, and the remaining *** shall be charged against the Shared
Risk Budget.

 

(b)           In-Area Shared Risk Services *** of Shared Risk

 

21

 

ADDENDUM I.1

 

AGE, SEX AND BENEFIT FACTORS

 

The age, sex and
benefit plan factors shall be developed by HEALTH NET based upon actuarial
assumptions consistent with existing actuarial assumptions and HEALTH NET’s
utilization experience. Such factors, as updated approximately every three
years to reflect changing demographic and utilization patterns, shall be
forwarded to PPG and are incorporated into this Agreement by reference.

 

A.            Age,
Sex and Benefit Plan Factors for PPG  Capitation
and Shared Risk Budgets:

 

A.
1         Age, Sex Factors for PPG
Capitation and Hospital Capitation/Shared Risk Budgets.

 

	
  Sex

  	
   

  	
  Age

  	
   

  	
  Inst

  Factor

  
	
  Child

  	
   

  	
  0

  	
   

  	
  5.228

  
	
   

  	
   

  	
  1

  	
   

  	
  0.644

  
	
   

  	
   

  	
  2 - 4

  	
   

  	
  0.406

  
	
   

  	
   

  	
  5 - 9

  	
   

  	
  0.296

  
	
   

  	
   

  	
  10 - 14

  	
   

  	
  0.338

  
	
   

  	
   

  	
  15 - 19

  	
   

  	
  0.607

  

 

A.2          Benefit Plan Factors for PPG
Capitation and Hospital Capitation/Shared Risk Budgets

 

Healthy Families

 

	
  Plan

  	
   

  	
  Inst

  Factor

  
	
  9Y

  	
   

  	
  0.9334

  
	
  9YA

  	
   

  	
  0.9079

  
	
  MW

  	
   

  	
  0.9076

  
	
  MWA

  	
   

  	
  0.9076

  

 

23

 

ADDENDUM I.2

 

DIVISION OF RESPONSIBILITY

MATRIX OF HMO, PPG AND SHARED RISK/HOSPITAL CAPITATED SERVICES

 

HEALTHY FAMILIES PROGRAM

 

The
following matrix outlines the division of financial responsibility between
HEALTH NET, PPG and Hospital. The matrix is  intended
only as a summary guide. The applicable Subscriber’s Certificate should be
consulted for an accurate and complete description of Covered Services and the
Provider Operations Manual for clarification. CCS-eligible services are
excluded from HEALTH NET Risk Services.

 

	
   

  	
   

  	
  PPG

  CAPITATED

  SERVICES

  	
   

  	
  HEALTH NET

  RISK

  SERVICES

  	
   

  	
  SHARED RISK/

  HOSPITAL

  CAPITATED

  SERVICES

  
	
  AIDS – Drugs-Children 0-21 years

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  AIDS – Drugs-Adults 21 and older

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  AIDS – Facility Component-Children 0-21

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  AIDS – Facility Component-Adults 21 and older

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  AIDS – Professional Component-Children 0-21

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  AIDS – Professional Component-Adults 21 and older

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  ALLERGY
  IMMUNOTHERAPHY

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  ALLERGY
  TESTING

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  ALPHA-FETOPROTEIN

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  AMBULANCE

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •     In Area (30 Mile Radius)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •     Out of Area

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  ANESTHESIOLOGY

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  BIOFEEDBACK

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  BLOOD/BLOOD
  PRODUCTS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •       Autologous/Homologous

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Blood
  Bank

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Storage
  and Collection of Blood

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  CHEMICAL DEPENDENCY

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •     Inpatient Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Inpatient
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Outpatient
  Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Outpatient
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  CHEMOTHERAPY
  - Children 0-21
  years

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Drugs, including Epogen,
  Neupogen and adjunctive therapies

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •     Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •     Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  CHEMOTHERAPY
  - Adults 21 years
  and older

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Drugs,
  including Epogen, Neupogen and adjunctive therapies

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •       Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  CHIROPRACTIC
  (Medicare Approved)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  

 

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

 

24

 

	
   

  	
   

  	
  PPG

  CAPITATED

  SERVICES

  	
   

  	
  HEALTH NET

  RISK

  SERVICES

  	
   

  	
  SHARED RISK/

  HOSPITAL

  CAPITATED

  SERVICES

  
	
  COLOSTOMY
  SUPPLIES

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  CONSULTATIONS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  COSMETIC SURGERY

  (Medically
  Necessary)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Facility
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  CRITICAL
  CARE VISITS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  DENTAL SERVICES

  (When a covered
  benefit)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Facility
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  DIAGNOSTIC
  TESTING - Outpatient
  Facility & Professional

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  DURABLE MEDICAL EQUIPMENT

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Outpatient

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Surgically
  Implanted

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  EMERGENCY ADMISSIONS - In-Area

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Facility
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  EMERGENCY ADMISSIONS - Out of Area

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Facility
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  EMERGENCY ROOM VISITS-In Area

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Facility
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  EMERGENCY ROOM VISITS - Out-of-Area

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Facility
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  EXTENDED CARE/SKILLED NURSING FACILITY

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Facility
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  GROWTH
  HORMONES

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  HEARING
  AIDS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  HEMODIALYSIS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Epogen,
  Neupogen

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •     Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  HEPATITIS-B

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  HOME
  HEALTH

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  HOME
  VISITS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  HOSPICE

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Facility
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  

 

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

 

25

 

	
   

  	
   

  	
  PPG

  CAPITATED

  SERVICES

  	
   

  	
  HEALTH NET

  RISK

  SERVICES

  	
   

  	
  SHARED RISK/

  HOSPITAL

  CAPITATED

  SERVICES

  
	
  HOSPITAL BASED PHYSICIANS – Inpatient, Ambulatory Surgery or Emergency
  Room Admissions

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •       Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •       Technical Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  IMMUNIZATIONS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  INFANT
  APNEA MONITOR

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  INJECTABLES,
  SELF ADMINISTERED

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  INPATIENT
  VISITS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      IVF & GIFT
  –Facility and Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  LITHOTRIPSY

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Facility
  Component 

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  MATERNITY - Deliveries and Non-Deliveries

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Facility
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  MEDICAL
  ADMISSIONS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Facility
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  MENTAL
  HEALTH – Inpatient

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Facility
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  MENTAL
  HEALTH –
  Inpatient-Serious Emotional Disturbances(SED)-Children 0-21

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Facility
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  MENTAL
  HEALTH - Outpatient

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Facility
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  MENTAL
  HEALTH –
  Outpatient-Serious Emotional Disturbances (SED)-Children 0-21

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Facility
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  OFFICE
  VISITS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  PATIENT
  EDUCATION

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  

 

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

 

26

 

	
   

  	
   

  	
  PPG

  CAPITATED

  SERVICES

  	
   

  	
  HEALTH NET

  RISK

  SERVICES

  	
   

  	
  SHARED RISK/

  HOSPITAL

  CAPITATED

  SERVICES

  
	
  PATHOLOGY - Inpatient, Ambulatory Surgery or Emergency
  Room

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Technical
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  PATHOLOGY
  – Office

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  PATHOLOGY
  – Outpatient

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Technical
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  PERIODIC
  EXAMS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  PRE
  ADMISSION –
  Outpatient

  Laboratory, X-ray

  (within 72 hrs. or related admission)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  PROSTHETIC/ORTHOTIC
  DEVICES

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Outpatient

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Surgically
  Implanted

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  RADIOLOGY
  – Inpatient,
  Ambulatory Surgery or Emergency Room

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Technical
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  RADIOLOGY
  – Office

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  RADIOLOGY – Outpatient

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Technical
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  SPEECH AND
  HEARING EXAMS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  SUPPLIES- Medical, Surgical, Office

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Related
  to a Hospital Stay:

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Surgical Supplies, Equipment, etc.

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Related
  to an Outpatient Office Visit:

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Splints, Casts, Bandages, etc.

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  SUPPLIES,
  DIABETIC

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Chern,
  Strips, Lancet, Needles, Syringes

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Glucometer

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  SURGERY – Inpatient

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Facility
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  SURGERY – Office

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  SURGERY – Outpatient

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Facility
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  THERAPEUT1C
  INJECTIONS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  

 

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

 

27

 

	
   

  	
   

  	
  PPG

  CAPITATED

  SERVICES

  	
   

  	
  HEALTH NET

  RISK

  SERVICES

  	
   

  	
  SHARED RISK/

  HOSPITAL

  CAPITATED

  SERVICES

  
	
  THERAPY: Physical, Occupational, Speech

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Inpatient

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Outpatient/Office

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  TRANSPLANTS
  (Non-experimental)-Children
  0-21

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Covered
  Immunosupressives

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Facility
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Organ
  Procurement

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  TRANSPLANTS
  (Non-experimental)-Adults
  21 and older

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Covered
  Immunosupressives

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Organ
  Procurement

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  TRANSPLANT
  EVALUATIONS-Children 0-21

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Facility
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Professional

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  TRANSPLANT
  EVALUATIONS-Adults 21 and older

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Facility
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Professional

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  URGENT
  CARE VISITS -
  In-Area

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  URGENT
  CARE VISITS -
  Out-of-Area

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  VISION
  CARE

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Exams

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Medically
  Necessary Care

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Implanted
  Lenses (Cataract Surgery)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Lenses
  and Frames (Non-Cataract)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  

 

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

 

28

 

This is a DRAFT document that may contain
typographical errors that are subject to correction.

 

ADDENDUM 1.3

 

DISCLOSURE FORM

(Required
by California Welfare and Institutions Code Section 14452)

 

Prospect Medical Group

 

The undersigned hereby
certifies that the following information regarding:

 

Prospect Medical Group is
true and correct as of the date set forth below:

 

Officers/Directors/General
Partners:

 

Co-Owner(s):

 

Stockholders owning more than
ten percent of the stock of the Organization:

 

Major creditors holding more
than five percent of Organization’s debt:

 

Form
of Organization (Corporation, Partnership, Sole Proprietorship, Individual,
etc.):

 

If not already disclosed
above, is Organization, either directly or indirectly related to or affiliated
with the Contracting Health Plan? 
Please explain:

 

	
   

  	
  Dated

  	
   

  	
   

  	
  Signature:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (Please type or print)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (Please type or print)

  	
   

  
								

 

 

Medicare Amendment

January 1, 2003

 

29

 

ADDENDUM J

 

FINANCIAL SOLVENCY REPORTING REQUIREMENT

APPLICABLE TO HEALTH NET OF CALIFORNIA, INC.

 

PPG understands and agrees
that the obligations of HNI set forth in this Addendum are only the obligations
of Health Net of California, Inc., (“HMO”), and not the obligations of HNI or
any other Affiliate of HNI.  This
Addendum J shall be applicable to the Benefit Programs set forth in Addenda B,
C, F and I.

 

PPG has agreed to a risk arrangement under
this Agreement as set forth in Addenda B, C, F and I, whereby PPG provides or
arranges for the provision of all medically necessary capitated services, for
the capitation payments described in this Agreement.

 

The California Legislature has enacted
legislation regarding financial standards and requirements for groups that
enter into risk arrangements with health care service plans, such as HMO, the
requirements of which are set forth in Health and Safety Code Section 1375.4.

 

The DMHC has promulgated
regulations regarding the financial reporting requirements for HMO and PPG,
which regulations are set forth in California Administrative Code Title 10 Rule
1300.75.

 

HMO and PPG agree to comply
with the regulations issued by the DMHC as set forth in this Addendum J.

 

I.             DEFINITIONS:

 

1.1       Risk
Arrangement.  Risk arrangement
shall include both “risk-sharing arrangement” and “risk- shifting arrangement,”
which are defined as follows:

 

a)      “Risk Sharing Arrangement” means any compensation arrangement
between PPG and HMO under which both PPG and HMO share a risk of financial
loss.

 

b)      “Risk-Shifting Arrangement” means a contractual arrangement
between a PPG and HMO under which HMO pays PPG on a fixed, periodic or
capitated basis, and the financial risk for the cost of services provided
pursuant to the arrangement is assumed by PPG.

 

II.            OBLIGATIONS
OF HMO:

 

2.1       Monthly
Reports. Notwithstanding any different provisions of the Agreement,
HMO will provide the following to PPG on a monthly basis, within ten (10) days
of the start of each month:

 

(a)     A single Member eligibility report,
including the following elements:

 

Member Identification Number

Name

Birth Date

Sex

Address

HMO contract selected

Employer Group Identification

Other Third Party coverage,
(if known)

Enrollment Date, (Original
Effective Date)/Dis-enrollment Date

PPG Number

 

30

 

PPG Effective Date

Changes to Coverage

Co-Payment

Deductible (if applicable)

Amount of Capitation for Each
Member

Primary Care Physician
selected

 

(b)     A report of additions and terminations for
the month, including:

 

Member Name

Member Identification Number

Number of additional Members
under each Benefit Program

Number of deleted Members
under each Benefit Program

 

(c)     To inform PPG of the financial risk assumed under the Agreement
for each separate product type under the Agreement, (i.e., Medicare + Choice,
Commercial HMO, POS, etc.).

 

1.   The expected/projected utilization rates and
unit costs for each major expense category:

 

Inpatient

Outpatient

Primary Care Physician

Specialist

Pharmacy

Home Health

Durable Medical Equipment

Ambulance

 

2.         The source of the data and the
actuarial methods used in determining the utilization rates and unit costs by
Benefit Plan and product type.

 

3.         All factors, (such as age, sex,
geographic area, family size, experience rated, Benefit Plan design, including
co-payment and deductible levels), used to adjust payments or risk share
targets.

 

(d)     HMO shall submit such reports to PPG electronically, unless both
HMO and PPG agree that such may be submitted in writing.

 

2.2    Quarterly
Risk-Sharing Reports.  HMO shall provide to PPG on a quarterly
basis, within forty-five (45) days of the close of each calendar year quarter,
a quarterly risk-sharing report, containing a detailed description of each
amount, including expenses and income, allocated to PPG and HMO under each
Risk-Sharing Arrangement.  HMO shall
submit the quarterly risk-sharing report to PPG electronically, unless HMO and
PPG agree that such may be submitted in writing.

 

2.3    Annual Statement
of  Risk-Sharing Accounts.  No
later than one hundred eighty (180) days after the close of each calendar year
or the Agreement’s termination date, whichever occurs first. HMO shall complete
the reconciliation of and payment under all Risk-Sharing Arrangements in the
Agreement.

 

31

 

III.
OBLIGATIONS OF PPG:

 

The
DMHC is drafting certain regulations regarding the Obligations of PPG’s
pursuant to the Financial Solvency Reporting Requirements of Senate Bill
260.  The expected release date of the
regulation is the first quarter of 2003. PPG agrees to be bound by such
regulations as promulgated by the DMHC.

 

32

 

ADDENDUM K

HEALTH
INSURANCE PORTABILITY AND

ACCOUNTABILITY ACT (HIPAA)

 

A.         HNI and PPG are parties to the Agreement
pursuant to which PPG provides a service to, or performs a function on behalf
of, HNI and, in connection therewith, uses or discloses Protected Health
Information (“PHI”) that is subject to protection under the Health Insurance
Portability and Accountability Act of 1996 (“HIPAA”);

 

B.         Any entity which creates or receives PHI from
or on behalf of HNI is a business associate, as defined in the HIPAA
implementing privacy regulations, 45 C.F.R. Parts 160 and 164 (“HIPAA Regulations”);

 

C.         Pursuant to the HIPAA Regulations, all PPG’s
contracted with HNI must agree in writing to certain mandatory provisions
regarding the use and disclosure of PHI; and

 

D.         The purpose of this Addendum is to satisfy the
requirements of the HIPAA Regulations, including, but not limited to, business
associate contract requirements set forth at 45 C.F.R. § 164.504(e), as it may
be amended from time to time.

 

NOW, THEREFORE, in consideration of the mutual
promises and covenants contained herein, the parties agree as follows:

 

1.                              Definitions.  Unless otherwise provided in
this Addendum, capitalized terms have the same meaning as set forth in the
HIPAA Regulations, 45 C.F.R. Parts 160 and 164.

 

2.                              Scope of Use and Disclosure of Protected
Health Information.  Except as otherwise limited in this
Addendum, PPG shall use and disclose PHI solely to provide the services, or
perform the functions, described in the Agreement, provided that such use or
disclosure would not violate the HIPAA Regulations if so used or disclosed by
HNI.  PPG, to the full extent
applicable, shall ensure that its directors, officers, employees, contractors
and agents shall:

 

(A)                    Not use or further disclose PHI other than as
permitted or required by this Addendum or as Required By Law;

 

(B)                      Implement all appropriate and reasonable
administrative, physical and technical safeguards to prevent use or disclosure
of PHI other than as provided by this Addendum;

 

(C)                      Mitigate, to the extent practicable, any
harmful effect that is known to PPG of a use or disclosure of PHI by PPG in
violation of the requirements of this Addendum;

 

(D)                      Report promptly to HNI’s designated Privacy
Officer any use or disclosure of PHI not provided for by this Addendum of which
PPG becomes aware;

 

(E)                        Require contractors or agents to whom PPG
provides PHI received from, or created or received by PPG on behalf of,  HNI, to agree to the same restrictions
and conditions that apply to PPG with respect to such PHI under this Addendum;

 

(F)                        Provide to HNI or, as directed by HNI, to an
Individual, in the time and manner designated by HNI, any information necessary
to allow HNI to respond timely to a

 

33

 

request
by an Individual for a copy of the Individual’s PHI pursuant to 45 C.F.R. §
164.524; (1)

 

(G)                      Maintain for a period of six (6) years all
Designated Record Sets relating to PHI received from, or created or received by
PPG on behalf of, HNI;

 

(H)                     Maintain for a period of six (6) years records
of all disclosures of PHI, other than for the purpose(s) set forth in this
Addendum, including the date, name of recipient, description of PHI disclosed
and purpose of disclosure;

 

(I)                          Provide to HNI or, as directed by HNI, to an Individual, in the time and manner
designated by HNI, any necessary information collected in accordance with
Section 2(H) of this Addendum in order to allow HNI to respond timely to a
request by an Individual for an accounting of the disclosures of the
Individual’s PHI pursuant to 45 C.F.R. § 164.528; (2)

 

(J)                         Make any amendments to PHI that HNI directs or
agrees to pursuant to 45 C.F.R. § 164.526 at the request of HNI or an
Individual in the time and manner designated by HNI; (3)

 

(K)                     Make PPG’s internal practices, books, and
records relating to the use and disclosure of PHI received from, or created or
received by PPG on behalf of, HNI available to HNI or, at the request of HNI,
to the Department of Health and Human Services (“DHHS”), in a time and manner
designated by HNI or DHHS, for purposes of determining HNI’s compliance with
the HIPAA Regulations; provided that, in all events. PPG shall immediately
notify HNI upon receipt by PPG of any request received from DHHS relating to
HNI’s compliance with the HIPAA Regulations and shall provide HNI with copies
of any materials provided to DHHS;

 

(L)                       Upon termination of the Agreement, return or
destroy all PHI received from, or created or received by PPG on behalf of, HNI
that PPG still maintains, or which is maintained by any contractor or agents of
PPG, in any form and shall retain no copies of such PHI; provided that if such
return or destruction is not feasible, PPG shall extend the protections of this
Addendum to the PHI and limit further uses and disclosures to those purposes
that make the return or destruction of the information infeasible.  A senior officer of PPG shall certify in
writing to HNI, within five (5) days after termination, that all PHI has been
returned or destroyed as provided above and that PPG retains no copies of PHI
in any form; and

 

(M)                  Allow HNI, upon reasonable notice, to inspect
PPG’s procedures and practices with respect to compliance with the terms of
this Addendum; provided, however, that HNI has no duty to inspect and its
decision not to inspect does not relieve PPG of its compliance responsibility.

 

3.                              Obligations of HNI.  To
assist PPG in the proper use and disclosure of PHI, HNI shall:

 

(1)       May be omitted if PPG does not have PHI in a designated record
set.  Designated record sets are records
concerning enrollment, payment, claims, adjudication, and medical or case
management as well as any other records used to make a decision about an
Individual.

(2)       May be omitted if PPG does not have PHI in a designated record
set.

(3)       May be omitted if PPG does not have PHI in a designated record
set.

 

34

 

(A)                    Provide PPG with the notice of privacy
practices that HNI produces in accordance with 45 C.F.R. § 164.520, as well as
any changes to such notice;

 

(B)                      Provide PPG with any changes in, or revocation
of, permission by an Individual to use or disclose PHI, if such changes affect
PPG’s permitted or required uses and disclosures;

 

(C)                      Notify PPG of any restriction on the use or
disclosure of PHI that HNI has agreed to in accordance with 45 C.F.R. § 164.522;
and

 

(D)                     Not request PPG to use or disclose PHI in any
manner that would not be permissible under the HIPAA Regulations if the PHI
were to be so used or disclosed by HNI. (4)

 

4.                             Standard Transactions. To the extent PPG conducts Standard
Transaction(s) on behalf of HNI, PPG shall, without limitation, comply with the
HIPAA Regulations, “Administrative Requirements for Transactions,” 45 C.F.R. §
162.100 et seq., by the compliance date of October 16, 2003, and shall not: (a)
Change the definition, data condition or use of a data element or segment in a
standard; (b) Add any data elements or segments to the maximum defined data
set; (c) Use any code or data elements that are either marked “not used” in the
standard’s implementation specification or are not in the standard’s
implementation specification(s); or (d) Change the meaning or intent of the
standard’s implementation specifications.(5)

 

5.                             Termination for Breach.  HNI
shall have the right to terminate the Agreement upon written notice if HNI
determines that PPG has breached a material term of the provisions of this
Addendum; provided that HNI’s remedies under this Addendum and the section(s)
of the Agreement related to termination, if any, shall be cumulative.

 

6.                             Survival of Terms. The obligations of PPG under Sections 2(F),
2(G), 2(H), 2(I) and 2(L) of this Addendum shall survive the termination of the
Agreement.

 

7.                             Injunctive Relief.  PPG
agrees that the remedies at law for any breach by it of the terms of this
Addendum shall be inadequate and that monetary damages resulting from such
breach are not readily measured. 
Accordingly, in the event of a breach or threatened breach by PPG of the
terms of this Addendum. HNI shall be entitled to immediate injunctive relief.

 

Nothing
herein shall prohibit HNI from pursuing any other remedies available to it for
such breach, and HNl’s rights under this Addendum and the sections of the
Agreement related to injunctive relief, if any, shall be cumulative.

 

8.                             Amendment of Agreement.  In
the event of a material change in the HIPAA Regulations or state law affecting
the use or disclosure of PHI, HNI may amend this Addendum and the Agreement as
necessary to comply with the change in the law or regulation and such amendment
shall become effective sixty (60) days after receipt by PPG.  HNI’s rights under this Addendum and the
section(s) of the Agreement related to amendments, if any, shall be cumulative.

 

9.                             Notice of Investigation or Lawsuit and
Indemnification.  PPG shall notify HNI immediately upon
receipt of notice of an investigation or of a lawsuit filed against PPG related
to or arising

 

(4)       If the Agreement provides for the use of PHI for purposes of
data aggregation or management and administrative activities of PPG, add the
following language to the end of this provision: “unless such use or disclosure
is necessary for the purposes of data aggregation or management and
administrative activities of PPG under the Agreement.”

(5)       May be omitted if there is no electronic
data transaction by PPG

 

35

 

from
the use or disclosure of PHI by PPG pursuant to this Addendum.  Any indemnification provision in the
Agreement shall apply to PPG’s and HNI’s use and disclosure of PHI under this
Addendum.

 

10.                     Confidentiality.  Notwithstanding
the foregoing, PHI shall not be included within the definition of “confidential
information” in the section(s) of the Agreement related to protection of,
confidential information, if any, as PPG’s obligations with respect to PHI are
set forth in this Addendum.

 

11.                     State Law Requirements.  To
the extent that state law is more stringent than the HIPAA Regulations, any use
or disclosure of PHI by PPG shall be made in accordance with state law.

 

12.                     Interpretation. Any ambiguity in this Addendum shall be
resolved in favor of a meaning that permits HNI to comply with the HIPAA
Regulations.

 

36Exhibit
10.123

 

CALIFORNIACARE

 

MEDICAL SERVICES AGREEMENT

 

This AGREEMENT is effective on January 1, 1997 between BLUE CROSS OF
CALIFORNIA and Affiliates (jointly and severally “BLUE CROSS”) and Prospect Medical Group (“PARTICIPATING
MEDICAL GROUP”).

 

I.                                         RECITALS

 

1.01                 BLUE CROSS is a
California Corporation licensed by the California Commissioner of Corporations
to operate a health care service plan pursuant to the Knox-Keene Health Care
Service Plan Act of 1975 and the Rules of the California Commissioner of
Corporations promulgated thereunder (California Health & Safety Code,
Sections 1340 to 1399.64 and California Code of Regulations, Sections 1300.43
to 1300.99, collectively, the “Knox-Keene Act”), including without limitation
to issue Benefit Agreements covering the provision of health care services and
to enter into agreements with PARTICIPATING MEDICAL GROUP.

 

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

 

II.                                     DEFINITIONS

 

2.01                 “Adjusted Per
Member Per Month Non-Capitated Expense” means the PARTICIPATING MEDICAL GROUP’s Per
Member Per Month Non-Capitated Expense after adjustments for the PARTICIPATING
MEDICAL GROUP’s mix of Member age/sex and plan, and the PARTICIPATING MEDICAL
GROUP’s stop-loss and regional relativities for use in identifying the
PARTICIPATING MEDICAL GROUP’s Non-Capitated Performance Settlement.

 

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

 

2.03                 “Age/Sex Factors” means the factors
used to adjust PARTICIPATING MEDICAL GROUP’s Per Member Per Month Non-Capitated
Expenses to account for cost variations attributable to the mix of Member age
and sex.

 

2.04                 “Alternative
Birthing Center Services” means services rendered by an Alternative Birthing
Center.  Alternative Birthing Center
Services include related services such as equipment, surgical and anesthetic
supplies, oxygen and drugs, blood and blood processing, laboratory procedures
and diagnostic imaging.

 

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

 

1

 

2.05                 “Ambulance
Services” means transportation services provided by a licensed ambulance company.

 

2.06                 “Attachment Point” is the point at
which no settlement shall be made if the PARTICIPATING MEDICAL GROUP’s Adjusted
Per Member Per Month Non-Capitated Expense equals or exceeds that amount.  The Attachment Point is shown in the Non-Capitated
Performance Settlement Schedule as set forth in Exhibit F.

 

2.07                 “Away From Home
Care” means urgent care, Away from Home Emergency Care, routine care, and
follow-up care as defined in the HMO-USA member’s plan certificate or benefit
agreement.

 

2.08                 “Benefit Agreement(s)” means the written
agreement(s) entered into between BLUE CROSS and groups or individuals, under
which BLUE CROSS provides, indemnifies, or administers health benefits to
persons enrolled in BLUE CROSS programs including, but not limited to, the
CALIFORNIACARE programs or the BLUE CROSS PLUS program.  “Benefit Agreement(s)” also mean
arrangements established by BLUE CROSS and/or one or more of its Affiliates, or
by persons or entities utilizing the BLUE CROSS Managed Care Network pursuant
to a contract with BLUE CROSS and/or one or more of its Affiliates.  Subject to the terms hereof, BLUE CROSS
and/or one or more of its Affiliates may contract, on PARTICIPATING MEDICAL
GROUP’s behalf, with Other Payors wishing to utilize the services of the BLUE
CROSS Managed Care Network, incorporating the terms and conditions of this
Agreement.

 

2.09                 “BLUE CROSS Managed
Care Network” means the network of health care providers that have entered into
contracts with BLUE CROSS and/or one or more of its Affiliates pursuant to
which those providers have agreed to participate in the CALIFORNIACARE, BLUE
CROSS PLUS and other programs that are to be conducted pursuant to Benefit
Agreements.

 

2.10                 “BLUE CROSS PLUS” means a point of
service option benefit plan offered by BLUE CROSS under which enrolled Members
may, at the time benefits are selected, elect to receive benefits from either a
CALIFORNIACARE provider or another licensed provider.

 

2.11                 “CALIFORNIACARE” means direct care
prepayment plan(s) offered by BLUE CROSS.

 

2.12                 “CALIFORNIACARE
Case Manager” means a CALIFORNIACARE employee charged with assisting PARTICIPATING
MEDICAL GROUPs in case management.

 

2.13                 “CALIFORNIACARE
Coordinator” means an employee of PARTICIPATING MEDICAL GROUP as set forth in
Section 4.08B.

 

2.14                 “CALIFORNIACARE
Hospital” means a hospital which has entered into an agreement with BLUE CROSS to
provide Hospital Services to Members.

 

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

 

2.16                 “Capitation” means a uniform
prepayment fee per Member per month, adjusted by age-sex, based on the Benefit
Agreement issued to each Subscriber and the services due thereunder.

 

2.17                 “Capitation
Services” means all CALIFORNIACARE Covered Medical Services which are not
otherwise defined in this Agreement or in the Division of Financial
Responsibilities (Exhibit A-1 hereto) as Non-Capitated Services.

 

2

 

2.18                 “Case Management Program” means a program
that assesses the Member’s medical needs and includes working with
PARTICIPATING MEDICAL GROUP and other Participating Providers to explore and
coordinate treatment alternatives that may (1) be more cost effective; (2)
result in better medical outcomes; (3) achieve benefit savings; and (4)
increase Member satisfaction.

 

2.19                 “Case Management
Stop-Loss Threshold” means the level at which stop-loss under
Section 9.03 herein shall apply to PARTICIPATING MEDICAL GROUP’s
Non-Capitated Performance Settlement.

 

2.20                 “Covered Medical
Services” means the services and benefits covered under the Benefit
Agreements.  A matrix of those services
and benefits is set forth in Exhibit A (incorporated by reference herein).

 

2.21                 “Covered Persons” means Members,
enrollees, dependents and other beneficiaries who are covered by an Affiliate’s
Benefit Agreement or by an Other Payor.

 

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

 

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

 

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

 

C&R charges are determined by BLUE CROSS.

 

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

 

A.           Placing the
patient’s health in serious jeopardy,

 

B.             Serious impairment
to bodily functions,

 

C.             Other serious
medical consequences, or

 

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

 

2.24                 “Enrollment
Protection” is a program to limit PARTICIPATING MEDICAL GROUP’s risk with respect
to any individual Member who requires Capitation Services in excess of the
limit of liability per individual Member per calendar year, as set forth in
Article VIII, ENROLLMENT PROTECTION, below.

 

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

 

3

 

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

 

2.27                 “Hemodialysis
Services” means services rendered by a Medicare certified hemodialysis
provider.  Hemodialysis Services include
facility charges, use of facility equipment and supplies, laboratory tests and
drugs administered in conjunction with on-site treatment.

 

2.28                 “HMO-USA” means a nationwide
network of Blue Cross and Blue Shield Plan HMOs (Participating Plans) sponsored
by Blue Cross and Blue Shield Association (BCBSA).  BCBSA Participating Plan HMOs have entered into Agreements to
provide each other’s members with guest memberships, urgent care and Emergency
care, routine care, and follow-up care as pre-approved and authorized by BLUE
CROSS when the member is traveling away from his or her Home HMO-USA
participating plan.

 

2.29                 “Home HMO” means the
participating plan in which a HMO-USA participating plan member is enrolled.

 

2.30                 “Hospice Services” means services
rendered to terminally ill patients, by a Medicare certified hospice provider
that are (a) covered by a Benefit Agreement and (b) ordered or authorized by
PARTICIPATING MEDICAL GROUP.

 

2.31                 “Hospital Services” means Medically
Necessary acute and sub-acute care inpatient and hospital outpatient services
and supplies which are both (a) covered by aBenefit Agreement, and (b) ordered or authorized by a PARTICIPATING
MEDICAL GROUP Physician.  Hospital
Services do not include long-term non-acute care.

 

2.32                 “Host HMO” means any participating
plan in whose Service Area a HMO-USA participating plan member temporarily
stays except the member’s Home HMO.

 

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

 

2.34                 “Inpatient Hospital
Services” means services which include inpatient hospital days for semi-private
accommodations, or special treatment units, or private room accommodations if
specifically authorized as Medically Necessary by PARTICIPATING MEDICAL GROUP
Physician.

 

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

 

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

 

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

 

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

 

4

 

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

 

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

 

2.36                 “Member” means a Subscriber
or enrolled dependent covered by a Benefit Agreement.

 

2.37                 “Member Months” means a count that
records one Member month for each month the Member is enrolled in the
CALIFORNIACARE program or the BLUE CROSS PLUS program.

 

2.38                 “Non-Capitated Expenses” means the actual
expenses incurred by BLUE CROSS to provide Non-Capitated Services to Members,
as ordered, authorized or referred by PARTICIPATING MEDICAL GROUP Physicians.

 

2.39                 “Non-Capitated
Performance Settlement” means amount paid to PARTICIPATING MEDICAL GROUP
for managing Non-Capitated Services.

 

2.40                 “Non-Capitated
Performance Settlement Schedule” means a schedule of PMPM Non-Capitated
Performance Settlement amounts associated with varying PMPM Non-Capitated
Expenses.  The Non-Capitated Performance
Settlement Schedule is set forth in Exhibit F.

 

2.41                 “Non-Capitated
Services” means the designated services set forth in Article IX and Exhibit
A-1.

 

2.42                 “Operations Manual” means the
CaliforniaCare PMG Operations Manual.

 

2.43                 “Other Payor” means persons or
entities utilizing the BLUE CROSS Managed Care Network pursuant to an agreement
with BLUE CROSS, including without limitation, other Blue Cross and/or Blue
Shield Plans, self-administered or self-insured programs providing health care
benefits, or employers or insurers.

 

2.44                 “Out-of-Area
Emergency Services” means Emergency services which are rendered to a Member at a distance
of more than twenty (20) mile radius from the medical offices of PARTICIPATING
MEDICAL GROUP or the Satellite Facility to which the Member is assigned.  When PARTICIPATING MEDICAL GROUP is
organized as an Independent Practice Association, Out-of-Area Emergency
Services are those Emergency services which are rendered to a Member at a
distance of more than twenty (20) mile radius from a hospital designated in
Exhibit B as a Service Area hospital. 
Out-of-Area Emergency Services shall also include Out of Area urgently
needed services to prevent serious deterioration of a Member’s health resulting
from unforeseen illness or injury for which treatment cannot be delayed until
the Member returns to the Service Area.

 

2.45                 “Outpatient
Hospital Services” means services which include the facility component of outpatient
surgery, pre-admission testing, laboratory and radiology services.

 

2.46                 “Outpatient
Prescription Drug Expense” means the benefit amount paid by BLUE CROSS for a
Member’s covered outpatient prescription drugs.

 

2.47                 “Outpatient
Prescription Drug Settlement” means an amount paid to PARTICIPATING MEDICAL
GROUP for managing Outpatient Prescription Drug Expenses.

 

5

 

2.48                 “Outpatient
Prescription Drug Settlement Schedule” means a schedule of outpatient
prescription drug settlement amounts associated with varying Per Member per
Month Outpatient Prescription Drug Expenses. 
The Schedule is set forth in Exhibit H.

 

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

 

2.50                 “Per Member Per
Month (PMPM) Non-Capitated Expense” means the average monthly medical
Non-Capitated Expense per Member attributable to the PARTICIPATING MEDICAL
GROUP.

 

2.51                 “Per Member Per
Month (PMPM) Outpatient Prescription Drug Expense” means the average
monthly Outpatient Prescription Drug Expenses per Member for PARTICIPATING
MEDICAL GROUP’s Members with outpatient prescription drug benefits.

 

2.52                 “Plan Factors” means factors used
to adjust the PARTICIPATING MEDICAL GROUP’s PMPM Non-Capitated Expense to
account for cost variations attributable to the mix of Member Benefit
Agreements.  The Non-Capitated Expense
Plan Factors include a durational factor for the durational plans.

 

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

 

2.54                 “Quality Management
Committee” means a committee of physicians and other licensed health care
providers, at least fifty percent (50%) of whom participate in CALIFORNIACARE,
which meets regularly to review the Quality Management Program.

 

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

 

2.56                 “Related Hospital
Services” means services rendered to Members as part of, and concurrent with
Inpatient Hospital Services, Outpatient Hospital Services, Hemodialysis
Services, Skilled Nursing Facility Services, Alternative Birthing Center
Services and Hospice Services, including the use of facility equipment,
surgical and anesthetic supplies, oxygen and drugs except (or take-home drugs,
blood and blood processing, laboratory procedures and diagnostic imaging.

 

2.57                 “Referral Services” means Capitation
Services which are rendered to Members through a process established by
PARTICIPATING MEDICAL GROUP.

 

2.58                 “Region Factor” means the factors
used to adjust PARTICIPATING MEDICAL GROUP’s PMPM Non-Capitated Expense to
account for cost variations across BLUE CROSS’ corporate regions.

 

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

 

6

 

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

 

2.61                 “Skilled Nursing
Facility Services” means inpatient and related services provided by a licensed skilled
nursing facility.  Skilled Nursing
Facility Services excludes custodial care.

 

2.62                 “Stop-Loss Factor” means the factor
used to adjust the PARTICIPATING MEDICAL GROUP’s PMPM Non-Capitated Expense to
account for cost variations due to different Case Management Stop-Loss
thresholds.

 

2.63                 “Subscriber” means an
individual who has qualified for and is covered under a Benefit Agreement.

 

2.64                 “Urgent Care
Center” is a facility that meets CALIFORNIACARE’s Urgent Care Center criteria
as set forth in the Operations Manual, and is approved by BLUE CROSS prior to
being designated as a CALIFORNIACARE Urgent Care Center.

 

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

 

III.                                 RELATIONSHIP
BETWEEN BLUE CROSS AND PARTICIPATING MEDICAL GROUP

 

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

 

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

 

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

 

3.04                 PARTICIPATING
MEDICAL GROUP consents to the memorializing of its legal obligations with BLUE
CROSS and each particular Affiliate in one or more separate written agreements
that shall not alter the substance of those obligations.

 

3.05                 PARTICIPATING
MEDICAL GROUP agrees that each arrangement by which PARTICIPATING MEDICAL GROUP
performs services for Covered Persons that utilize the BLUE CROSS Managed Care
Network shall constitute an independent legal relationship between
PARTICIPATING MEDICAL GROUP and that Affiliate or Other Payor.

 

7

 

3.06                 PARTICIPATING
MEDICAL GROUP hereby expressly acknowledges its understanding that this
Agreement constitutes a contract between PARTICIPATING MEDICAL GROUP and BLUE
CROSS as an independent corporation, operating under a license with the Blue
Cross and Blue Shield Association, an association of independent Blue Cross and
Blue Shield Plans (the “Association”), permitting BLUE CROSS to use the Blue
Cross service mark in the State of California and that BLUE CROSS is not
contracting as the agent of the Association. 
PARTICIPATING MEDICAL GROUP further acknowledges and agrees that it has
not entered into this Agreement based upon representations by any person other
than BLUE CROSS and that no person, entity, or organization other than BLUE
CROSS, or the applicable Affiliate, shall be held accountable or liable to
PARTICIPATING MEDICAL GROUP for any of BLUE CROSS’, or the applicable
Affiliate’s, obligations to PARTICIPATING MEDICAL GROUP created under this
Agreement.  This section shall not
create any additional obligations whatsoever on the part of BLUE CROSS, other
than those obligations created under other provisions of this Agreement.

 

IV.                                 PARTICIPATING
MEDICAL GROUP SERVICES AND RESPONSIBILITIES

 

PARTICIPATING MEDICAL GROUP and PARTICIPATING
MEDICAL GROUP Physicians agree as follows:

 

4.01                 Provision of
Services.

 

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

 

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

 

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

 

D.            To assure that
privileges of PARTICIPATING MEDICAL GROUP Physicians at CALIFORNIACARE
Hospitals shall be adequate to meet the requirements for the CALIFORNIACARE
Hospital Services to which Members are entitled under the terms of the Benefit
Agreement(s).

 

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

 

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

 

8

 

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

 

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

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

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

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

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

 

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

 

4.02                 Accessibility and
Continuity of Care.

 

A.           To promptly provide
or arrange for available and accessible Covered Medical Services for each
Member assigned to PARTICIPATING MEDICAL GROUP, in accordance with that
Member’s Benefit Agreement and this Agreement, and to provide those services in
and through facilities designated in Exhibit J (incorporated by reference
herein).

 

B.             That all Covered
Medical Services, (including consultation and Referral Services), ambulatory
care services, diagnostic laboratory, diagnostic imaging and therapeutic
radiology services, home health services and preventive health services, shall
be available to Members a minimum of forty (40) hours per week, except for
weeks including holidays.  The foregoing
services shall be available beyond normal business hours during additional
hours to be scheduled by PARTICIPATING MEDICAL GROUP.

 

C.             To promptly
provide, arrange or authorize all Emergency services for each Member assigned
to PARTICIPATING MEDICAL GROUP. 
Authorization of any Emergency services, as set forth in
Section 2.23 herein, shall not be withheld by PARTICIPATING MEDICAL GROUP
regardless of whether PARTICIPATING MEDICAL GROUP is notified within
forty-eight (48) hours from the time such Emergency services were
rendered.  PARTICIPATING MEDICAL GROUP
shall comply with all requirements set forth in California Health and Safety
Code Section 1371.4(a) - (d).

 

D.            That PARTICIPATING
MEDICAL GROUP shall manage and facilitate access to Emergency services within a
twenty (20) mile radius of each Satellite Facility and PARTICIPATING MEDICAL
GROUP’s main facility at all times, twenty-four (24) hours a day, seven (7)
days a week.  In the event that
PARTICIPATING MEDICAL GROUP is an Independent Practice Association,
PARTICIPATING MEDICAL GROUP shall manage and facilitate access to Emergency
services within a twenty (20) mile radius of the Hospital(s) designated in
Exhibit B (incorporated by reference herein) as the CALIFORNIACARE Hospital(s)
within PARTICIPATING MEDICAL GROUP’s Service Area.

 

9

 

E.              To admit, or
authorize admission of, Members solely to the CALIFORNIACARE Hospitals listed
in Exhibit B, except (a) when Medically Necessary in an Emergency situation or
(b) when Covered Medical Services are not available in a CALIFORNIACARE
Hospital or (c) as otherwise required under Section 4.02F or (d) when
requested to do so in writing by the Member, with the written understanding
that admission to a hospital, other than those listed in Exhibit B, is not a
Covered Medical Service, except as stated above in this Section 4.02E.

 

F.              Notwithstanding
Section 4.02E, for those Members that require transplant services (solid
organ and bone marrow/stem cell) that are Covered Medical Services.  PARTICIPATING MEDICAL GROUP agrees to admit,
or authorize the inpatient admission or outpatient treatment of Members, solely
at those CALIFORNIACARE Hospitals whose transplant programs have been approved
by BLUE CROSS and identified as such in the Operations Manual.

 

PARTICIPATING MEDICAL GROUP will provide
notification to BLUE CROSS of all potential transplant cases, including
deferred or denied cases, when such cases are considered by PARTICIPATING
MEDICAL GROUP’s Utilization Management Program Committee or other similar
PARTICIPATING MEDICAL GROUP functional committee, except for Emergencies, in
which case PARTICIPATING MEDICAL GROUP shall provide notification within two
(2) business days of the admission.  The
format of such notification is provided in the Operations Manual.

 

G.             That in
circumstances where a Member requires specialized tertiary care or because of
bed unavailability in a CALIFORNIACARE Hospital, the Member must be admitted to
a non-CaliforniaCare in-area or out-of-area facility for Hospital Services,
then until the Member is transferred to a CALIFORNIACARE Hospital, the PARTICIPATING
MEDICAL GROUP will be financially responsible for care the same as if care had
been provided in a CALIFORNIACARE Hospital, and the Non-Capitated Services
arrangement as set forth in Article IX of this Agreement will apply.

 

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

 

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

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

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

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

 

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

 

10

 

J.                To assure that
Members shall not be subject to discrimination in access to Covered Medical
Services.

 

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

 

L.              To provide health
education and wellness programs for Members within the guidelines indicated in
the “CaliforniaCare Health Education and Wellness Manual.” Programs are to be
delivered in accordance with these guidelines which provide for disease
prevention and management and the promotion of healthier life-styles.

 

4.03                 Utilization/Quality
Management and Grievance Procedures.

 

To cooperate with BLUE CROSS’ administration of its
internal quality of care review and grievance procedures.  The parties acknowledge and agree that
authority to perform Utilization Management Program activities and Quality
Management Program activities under this Agreement is a delegation of BLUE
CROSS authority pursuant to Sections 1370 and 1370.1 of the Health and Safety
Code, and all or part of this authority may be revoked at any time.  The scope of delegated authority shall be as
set forth in the Utilization Management Program guidelines and the Quality
Management Program guidelines issued by BLUE CROSS and provided to
PARTICIPATING MEDICAL GROUP.  The
proceedings of the Utilization Management and Quality Management Committees
shall be strictly confidential between BLUE CROSS and PARTICIPATING MEDICAL GROUP
and are subject to the protections set forth in Sections 1370 and 1370.1

 

4.04                 Quality Management
Program.

 

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

 

A.           The Quality
Management Program shall:

 

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

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

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

 

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

 

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

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

(3)          Incident
identification and risk management.

(4)          Member grievance
resolution.

(5)          General and focused
health care audits.

(6)          Development and implementation
of appropriate recommendations.

 

11

 

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

 

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

 

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

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

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

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

 

D.            PARTICIPATING
MEDICAL GROUP shall:

 

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

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

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

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

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

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

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

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

 

4.05                 Utilization
Management Program.

 

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

 

12

 

A.           The Utilization Management
Program shall:

 

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

(2)          Include
documentation of remedial procedures for instances of inappropriate or
substandard services(s) and or failure to provide Medically Necessary Covered
Medical Services.

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

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

(5)          Work closely with
CALIFORNIACARE Hospitals.

(6)          Encompass
inpatient, outpatient, and ancillary care.

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

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

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

 

B.             BLUE CROSS shall
validate PARTICIPATING MEDICAL GROUP’s development and implementation of the
Utilization Management Program through regular audit activities as follows:

 

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

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

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

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

 

C.             PARTICIPATING
MEDICAL GROUP shall:

 

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

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

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

 

4.06                 Records and
Reserves.

 

A.           BLUE CROSS shall
have access at reasonable times upon demand to the books, records and papers of
PARTICIPATING MEDICAL GROUP relating to the services PARTICIPATING MEDICAL
GROUP provides to Members, to the cost thereof, and to payments PARTICIPATING
MEDICAL GROUP receives from Members or others on their behalf.  PARTICIPATING MEDICAL GROUP shall maintain
such records and provide such information to BLUE CROSS and the Commissioner of
Corporations as may be necessary

 

13

 

for BLUE CROSS’ compliance with the requirements of
the Knox-Keene Act.  PARTICIPATING
MEDICAL GROUP shall maintain such records for at least five (5) years, and such
obligations shall not be terminated upon a termination of this Agreement,
whether by rescission or otherwise.

 

B.             PARTICIPATING
MEDICAL GROUP agrees to provide BLUE CROSS with audited financial statements of
PARTICIPATING MEDICAL GROUP no later than three (3) months after the end of its
fiscal year, and BLUE CROSS shall maintain strict confidentiality of said
records.  Audited financial statements
shall illustrate net operating surplus or profit (after taxes).  Documents shall include the following.

 

(1)          Balance sheets

(2)          Statements of
revenues and expenses

(3)          Statements of cash
flow

 

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

 

C.             To maintain
financial reserves adequate to cover all risks assumed by PARTICIPATING MEDICAL
GROUP hereunder, including, but not limited to, unanticipated claims for
Referral Services that are the potential responsibility of PARTICIPATING
MEDICAL GROUP.

 

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

 

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

 

4.07                 Insurance Programs
or Policies.

 

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

 

A.           Professional
Liability Insurance

 

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

 

14

 

officers liability in minimum amounts of ONE
MILLION DOLLARS ($1,000,000.00) for any one incident, ONE MILLION DOLLARS
($1,000,000.00) annual aggregate.

 

B.             Other Insurance

 

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

 

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

 

4.08                 Administrative
Responsibilities.

 

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

 

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

 

C.             To notify BLUE
CROSS within Fifteen (15) days concerning:

 

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

 

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

 

(3)          Any other situation
that may interfere with PARTICIPATING MEDICAL GROUP’s or PARTICIPATING MEDICAL
GROUP Physician’s duties and obligations under this Agreement.

 

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

 

E.              To continually meet
all criteria for PARTICIPATING MEDICAL GROUPs, set forth in the Operations
Manual, and to continually meet all criteria for Satellite Facilities (if
applicable) set forth in the Operations Manual.

 

15

 

F.              To provide BLUE
CROSS, on a monthly basis, all ambulatory encounter data either directly or
through PARTICIPATING MEDICAL GROUP’s billing agent in the file formal as shown
in the Operations Manual.

 

G.             To comply with BLUE
CROSS programs related to the management of pharmaceutical expenses.

 

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

 

4.09                 Payments and Member
Billing.

 

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

 

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

 

B.             To never charge any
Member for any health service which has been deemed not Medically Necessary or
not appropriate after utilization review by PARTICIPATING MEDICAL GROUP, unless
the Member specifically requests the service and acknowledges in writing that
the service is not a Covered Medical Service under the Member’s Benefit
Agreement.

 

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

 

D.            That PARTICIPATING
MEDICAL GROUP shall promptly notify, in writing, the CALIFORNIACARE Case
Management Department of all cases that reach the Enrollment Protection or Case
Management Stop-Loss levels specified herein.

 

E.              To pay all Health
Professionals and hospitals who have rendered authorized Referral Services or
Out-of-Area Emergency Services to Members, within forty-five (45) working days
following receipt of a clean, undisputed claim, consistent with the regulations
of the Commissioner of Corporations governing BLUE CROSS.

 

4.10                 Membership.

 

A.           To accept any and
all Members who select PARTICIPATING MEDICAL GROUP until such time as PARTICIPATING
MEDICAL GROUP shall have provided ninety (90) days prior written notice to BLUE
CROSS that it has reached its maximum capacity as set forth in
Section 16.08 herein, or that it anticipates reaching such maximum within
ninety (90) days from the date of the notice to BLUE CROSS.  The maximum capacity of PARTICIPATING

 

16

 

MEDICAL GROUP designated in Section 16.08
shall be reduced only upon ninety (90) days written notice to BLUE CROSS.  The parties acknowledge their understanding
that enrollment from individual accounts, or changes in selection of
PARTICIPATING MEDICAL GROUP by Members, are not entirely within the control of
BLUE CROSS.

 

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

 

C.             PARTICIPATING
MEDICAL GROUP agrees that, in the event a Member who is covered for workers’
compensation benefits by a workers’ compensation carrier affiliated with BLUE
CROSS, seeks services for a work-related illness or injury.  PARTICIPATING MEDICAL GROUP shall have the
option to (a) provide such Medically Necessary medical services or (b) refer
such Member to a provider that participates in the Prudent Buyer Comp provider
network or the CalCare Comp provider network, whichever is applicable.  In the event that PARTICIPATING MEDICAL
GROUP elects to treat such Member.  PARTICIPATING
MEDICAL GROUP shall complete a Doctor’s First Report of Injury as defined in
the California Labor Code.  As payment
for such medical services rendered, PARTICIPATING MEDICAL GROUP agrees to
accept, as payment in full, compensation in accordance with the fee
schedule set forth in Exhibit E of the Agreement (incorporated by
reference herein).  PARTICIPATING
MEDICAL GROUP further agrees that, in the event such Member requires medical
services in connection with such work-related illness or injury beyond the
treatment provided at the initial visit, PARTICIPATING MEDICAL GROUP shall
refer such Member only to a provider that participates in the Prudent Buyer
Comp provider network or the CalCare Comp provider network, whichever is
applicable.

 

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

 

E.              When the BLUE CROSS
Managed Care Network is utilized by an Affiliate or Other Payor, PARTICIPATING
MEDICAL GROUP agrees to provide services to Covered Persons of that Affiliate
or Other Payor in accordance with the terms of this Agreement.  BLUE CROSS shall compensate PARTICIPATING
MEDICAL GROUP in accordance with the terms of this Agreement for services
provided to Covered Persons of any such Other Payor.  When an Other Payor utilizes the Managed Care Network, such Other
Payor shall comply with the terms of this Agreement.

 

In the event the BLUE CROSS Managed Care Network is
to be utilized by an Other Payor that has operational requirements that are
materially different from those required under this Agreement, BLUE CROSS
agrees to notify PARTICIPATING MEDICAL GROUP in writing thirty (30) days prior
to the commencement of such utilization. 
PARTICIPATING MEDICAL GROUP may decline to provide services to such
Other Payor by providing written notice of such decision to BLUE CROSS within
ten (10) days of receipt of notice by BLUE CROSS referenced above.

 

17

 

V.                                     BLUE CROSS SERVICES
AND RESPONSIBILITIES

 

BLUE CROSS agrees:

 

5.01                 To perform, or
arrange for the performance of, all necessary accounting and enrollment
functions with respect to marketing and administering the CALIFORNIACARE
program, and to issue an identification card to each Subscriber or to each
Subscriber and one additional eligible Member covered under a two-party or
family contract as described in the Operations Manual.

 

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

 

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

 

5.04                 To provide
PARTICIPATING MEDICAL GROUP with claims paid and Non-Capitated Services data as
described in the Operations Manual.

 

5.05                 To make trained
personnel available to PARTICIPATING MEDICAL GROUP to assist in Quality
Management activities, the establishment of procedures for pre-admission
medical review and concurrent medical review of Members who require, or may
require, hospitalization.

 

5.06                 To notify
PARTICIPATING MEDICAL GROUP of any CALIFORNIACARE Group Benefit Agreements
between BLUE CROSS and employers, government agencies, or any other groups,
which may substantially affect enrollment at PARTICIPATING MEDICAL GROUP.

 

5.07                 To undertake
reasonable efforts, in accordance with a standard of good faith, to assure that
Members assigned to PARTICIPATING MEDICAL GROUP will live or work within the
Service Area defined in this Agreement. 
However, BLUE CROSS reserves the right to assign any Members to
PARTICIPATING MEDICAL GROUP at the Member’s open enrollment period, or when the
Member changes residence, or when BLUE CROSS determines such transfer to be in
the Member’s best interest due to special circumstances under the terms of the
Member’s Benefit Agreement.

 

5.08                 To exercise
reasonable efforts to negotiate special rates with hospitals and other
providers who contract with BLUE CROSS to render Non-Capitated Services to
Members and to pay hospitals in accord with those agreements.

 

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

 

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

 

18

 

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

 

5.12                 To collect, or
arrange to have collected, all premiums, Member payments and other items of
income to which BLUE CROSS is entitled under its group and individual contracts
or otherwise, except for (a) co-payments, (b) payments for non-Covered Medical
Services, (c) coordination of benefits payments for professional services which
may be collected by PARTICIPATING MEDICAL GROUP under the conditions set forth
in the Member’s Benefit Agreement, and (d) third party liability payments for
professional services.  Pursuant to the
Benefit Agreement(s) BLUE CROSS may hold a lien on third party liability
payments in the amount of benefits paid by BLUE CROSS and the value of medical
care provided under CALIFORNIACARE for the treatment of the illness, injury or
condition for which a third party is liable. 
BLUE CROSS shall assign to PARTICIPATING MEDICAL GROUP that portion of
any such lien related to professional services rendered under this Agreement by
PARTICIPATING MEDICAL GROUP. 
PARTICIPATING MEDICAL GROUP’s methods of collection of such payments
shall be conducted in a reasonable and nonegregious manner and only proper
legal procedures may be used to enforce such payment.

 

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

 

VI.                                 ELIGIBILITY
LISTINGS

 

6 01                 Eligibility
listings of Members of employer groups who have personally selected, or been
assigned to, PARTICIPATING MEDICAL GROUP shall be provided in the following
manner:

 

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

 

B.             PARTICIPATING
MEDICAL GROUP shall receive a copy of the Eligibility Reports at PARTICIPATING
MEDICAL GROUP’s main site.  Should
PARTICIPATING MEDICAL GROUP request reports in an electronic format, paper
reports will continue to be provided for an additional ninety (90) days
only.  As described in the Operations
Manual, BLUE CROSS will charge a fee of between Fifty Dollars ($50.00) and Five
Hundred Dollars ($500.00) per report, for each of the following:

 

(1)          duplicate copies of
paper reports,

(2)          copies of paper
reports delivered in addition to reports in electronic format after the ninety
(90) day parallel reporting period (tape, diskette, NDM or other electronic
medium),

(3)          duplicate reports
for prior months.

 

C.             BLUE CROSS will
discourage retroactive cancellation by an employer group of more than ninety
(90) days from BLUE CROSS’ applicable monthly billing process date.  However, when no services have been
rendered, BLUE CROSS may make occasional exceptions due to legitimate administrative
processing requirements.  Notwithstanding
any retroactive cancellation of a Member by an employer group of more than
ninety (90) days, BLUE

 

19

 

CROSS shall not be entitled to any refund of
Capitation payments made for such Member beyond the ninety (90) day
period.  BLUE CROSS will attempt to
discourage retroactively adding any Member after the applicable billing is
reconciled.  In the event BLUE CROSS
finds it necessary to assign, up to ninety (90) days retroactively, a new
Member to PARTICIPATING MEDICAL GROUP. 
Capitation payment for that Member shall be made, and PARTICIPATING
MEDICAL GROUP agrees to be responsible for all Covered Medical Services due
that Member under the terms of the Members Benefit Agreement which were
provided or arranged by PARTICIPATING MEDICAL GROUP, from the date the Member
was assigned.

 

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

 

VII.                             COMPENSATION TO
PARTICIPATING MEDICAL GROUP

 

7 01                 Exhibits D, G and
G-1 (all incorporated by reference herein), set forth Capitation payments for
new and renewing business.  The
applicable Capitation payment for each Member assigned to PARTICIPATING MEDICAL
GROUP, shall be paid monthly, prorated in accordance with Member eligibility.

 

Such Capitation payment shall be adjusted for
Member age, sex and Benefit Agreement in accordance with age, sex and plan
relativities that have been developed by BLUE CROSS based upon actuarial
assumptions and BLUE CROSS’ utilization experience.  BLUE CROSS reserves the right to adjust such relativity factors,
upon contract renewal, based upon BLUE CROSS’ experience.

 

7.02                 Capitation shall be
paid in consideration for providing Capitation Services and arranging Non-Capitated’
Services for each Member assigned to PARTICIPATING MEDICAL GROUP, and in
consideration for all Capitation Services arranged through referral for Members
by PARTICIPATING MEDICAL GROUP.  The
Capitation payment shall be made by the tenth of each month and shall be
computed on the basis of the most current group and individual information
available.  In the event that an error
is made in the computation of the Capitation payment, resulting in an
overpayment or underpayment to PARTICIPATING MEDICAL GROUP, BLUE CROSS reserves
the right to adjust subsequent Capitation payments to PARTICIPATING MEDICAL
GROUP to offset such overpayment or underpayment.

 

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

 

20

 

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

 

7.04                 PARTICIPATING
MEDICAL GROUP agrees to continue to provide or arrange for all Covered Medical
Services and benefits to any Member, or former Member, who is eligible for
coverage under the Extension of Benefits provision of the Benefit Agreements,
in exchange for the then current Capitation amount per Member per month of the
Benefit Agreement type under which the Member is, or was, enrolled.  Under the circumstances described in this
Section 7.04 BLUE CROSS shall be financially responsible for Non-Capitated
Services.

 

7.05                 PARTICIPATING
MEDICAL GROUP agrees to be responsible for professional and technical charges,
as described in Exhibit A-1 (incorporated by reference herein), for laboratory,
radiology and diagnostic testing procedures and diagnostic imaging examinations
rendered to Members, as a part of, and concurrent with benefits set forth in
this Agreement, whether billed by the hospital or by a qualified health
professional

 

7.06                 In the event a
referral provider has not been reimbursed for authorized Referral Services or
that any other provider has not been reimbursed by PARTICIPATING MEDICAL GROUP
as required under their agreement for services provided to Members within
forty-five (45) working days following receipt of a clean, undisputed claim,
then after notice BLUE CROSS shall have the option to pay a clean and
uncontested claim and deduct such payment (including any interest payable under
Health & Safety Code Section 1371), plus an administrative charge
equal to ten percent (10%) of the claim amount, from any money due from BLUE
CROSS to PARTICIPATING MEDICAL GROUP. 
If a total of five (5) or more instances occur where any provider
associated with PARTICIPATING MEDICAL GROUP bills a Member in violation of this
Agreement during any calendar year, BLUE CROSS may, in its sole discretion,
suspend the assignment of new Members to PARTICIPATING MEDICAL GROUP until such
time as PARTICIPATING MEDICAL GROUP has rectified the problem to BLUE CROSS’
satisfaction.

 

VIII.                         ENROLLMENT
PROTECTION

 

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

 

8.02                 For PARTICIPATING
MEDICAL GROUPs with less than *** Members, on the effective date of this
Agreement, the liability of PARTICIPATING MEDICAL GROUP for expenses for
Capitation Services rendered to any single Member during the calendar year
shall be limited to the first *** of such expenses.

 

8.03                 If PARTICIPATING
MEDICAL GROUP’s assigned CALIFORNIACARE and BLUE CROSS PLUS enrollment is ***
or more Members, on the effective date of this Agreement, PARTICIPATING MEDICAL
GROUP agrees to accept risk under either Subsection A or
Subsection B, as indicated below.

 

A.           The liability of
PARTICIPATING MEDICAL GROUP for expenses for Capitation Services rendered to
any single Member during the calendar year, shall be limited to the first ***
of Capitation Services expenses, which have been incurred by PARTICIPATING
MEDICAL GROUP for that Member, or

 

21

 

B.             The liability of
PARTICIPATING MEDICAL GROUP for expenses for Capitation Services rendered to
any single Member during the calendar year, shall be limited to the first ***
of Capitation Services expenses which have been incurred by PARTICIPATING
MEDICAL GROUP for that Member.

 

PARTICIPATING MEDICAL GROUP hereby elects to accept
risk pursuant to Section 8.03.

o A.  o B. (Check one).

 

8.04                 Notwithstanding
Section 8.02 or 8.03 above, the liability of PARTICIPATING MEDICAL GROUP
for expenses for Capitation Services for Members who have been diagnosed as
having Acquired Immune Deficiency Syndrome (AIDS) shall be limited to FIFTEEN
HUNDRED DOLLARS ($1,500.00) for any Member who has been diagnosed as having
AIDS according to the most current criteria established by the Center for
Disease Control (CDC) at the time of the diagnosis.

 

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

 

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

 

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

 

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

 

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

 

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

 

8.07                 PARTICIPATING
MEDICAL GROUP shall maintain records necessary to evidence having reached the
Enrollment Protection level.  After
reaching the Enrollment Protection level with regard to any Member, during the
remainder of the calendar year PARTICIPATING MEDICAL GROUP shall bill BLUE
CROSS for one hundred percent (100%) of services rendered, or provided, to that
Member by PARTICIPATING MEDICAL GROUP, calculated in accordance with Sections
8.02, 8.03, 8.04, 8.05 and 8.06. 
Reimbursement to PARTICIPATING MEDICAL GROUP for Enrollment Protection
shall be made by BLUE CROSS in accordance with the lesser of actual billed
charges or the fee schedule set forth in Exhibit E, on a monthly basis,
within forty-five (45) working days of submission of complete and accurate
documentation by PARTICIPATING MEDICAL GROUP. 
Services which are not set forth in Exhibit E shall be reimbursed by
BLUE CROSS at the actual charges paid by PARTICIPATING MEDICAL GROUP.

 

22

 

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

 

IX.                                NON-CAPITATED
SERVICES

 

9.01                 Non-Capitated
Services, as defined in this Article, shall include Covered Medical Services,
as set forth in the applicable Benefit Agreement and as authorized or referred
by PARTICIPATING MEDICAL GROUP.

 

The Covered Medical Services encompassed in
Non-Capitated Services are delineated in Exhibit A(1) and include, but are not
limited to:

 

A.           Inpatient Hospital
Services (exclusive of professional charges).

 

B.             Outpatient Hospital
Services (exclusive of professional charges).

 

C.             Hemodialysis
Services (exclusive of professional charges).

 

D.            In-Area Emergency
Room Facility Services (exclusive of professional charges).

 

E.              Related Hospital
Services.

 

F.              Skilled Nursing
Facility Services.

 

G.             Ambulance Services.

 

H.            Home Health
Services.

 

I.                 Alternative
Birthing Center Services (exclusive of professional charges).

 

J.                Ten percent (10%)
of expenses related to Out-of-Area Emergency Services (Facility and
Professional Expenses).

 

K.            Durable Medical
Equipment and prosthetic devices.

 

L.              Hospice Services.

 

M.         Fifty percent (50%)
of the average wholesale price (AWP) related to chemotherapy drugs
(intravenously administered) and injectable medications administered during a
visit to the physician’s office (excluding take-home insulin).

 

N.            Mammography
Services.

 

23

 

9.02                 Billing for
Non-Capitated Services shall be as follows:

 

A.           The provider of
Non-Capitated Services may bill BLUE CROSS directly, in which case, BLUE CROSS
shall reimburse said provider within forty-five (45) working days following
receipt of a clean, undisputed claim accompanied by an authorization from
PARTICIPATING MEDICAL GROUP; or,

 

B.             The provider of
Non-Capitated Services may bill PARTICIPATING MEDICAL GROUP, in which case,
PARTICIPATING MEDICAL GROUP shall bill BLUE CROSS for reimbursement.  BLUE CROSS shall reimburse PARTICIPATING
MEDICAL GROUP within forty-five (45) working days following BLUE CROSS’S
receipt of a clean undisputed claim from PARTICIPATING MEDICAL GROUP, on the
condition that such claim shall be submitted to BLUE CROSS no later than twelve
(12) months after the date of service. 
This section shall only apply for the following Non-Capitated
Services: mammography services, DME, prosthetics and injectable medications
(including chemotherapy drugs and infused substances).

 

In either case described above, BLUE CROSS shall
pay contracting providers at the rate negotiated between BLUE CROSS and said
provider.  In the case of
non-contracting providers, BLUE CROSS shall pay the lesser of: the actual
billed charges, or the maximum allowable rate according to the BLUE CROSS
Customary and Reasonable charges, or the rate arranged for by a CALIFORNIACARE
Case Manager.

 

9.03                 Case Management
Stop-Loss.

 

A.           The Case Management
Program is a program in which a Member’s medical needs are assessed by
PARTICIPATING MEDICAL GROUP in conjunction with a CALIFORNIACARE Case Manager
to explore and coordinate treatment alternatives.  PARTICIPATING MEDICAL GROUP should notify the CALIFORNIACARE Case
Manager prior to the Member achieving the applicable Case Management Stop-Loss
Threshold, as described below.

 

B.             For PARTICIPATING
MEDICAL GROUPs with enrollment of *** or more Member Months for the calendar
year, the Case Management Stop-Loss Threshold for an individual Member shall be
*** of Non-Capitated Expenses.

 

For PARTICIPATING MEDICAL GROUPs with enrollment of
less than *** Member Months, the Case Management Stop-Loss Threshold shall be
*** of Non-Capitated Expenses.

 

C.             Authorized expenses
for Member’s Non-Capitated Services, up to the Case Management Stop-Loss
Threshold specified above will be accrued toward PARTICIPATING MEDICAL GROUP’s
PMPM Non-Capitated Expenses. 
Additionally, *** of expenses between the applicable Case Management
Stop-loss Threshold and *** incurred by an individual Member will be accrued
toward PARTICIPATING MEDICAL GROUP’s PMPM Non-Capitated Expenses.  Non-Capitated expenses greater than *** a
for any individual Member will not be included in PARTICIPATING MEDICAL GROUP’s
PMPM Non-Capitated Expenses.

 

24

 

D.            The Case Management
Stop-loss Thresholds described above will apply to Members whose treatment
includes transplants (solid organ and bone marrow/stem cell), except in those
cases where PARTICIPATING MEDICAL GROUP fails to notify BLUE CROSS, as
described in Section 4.02F.  When
PARTICIPATING MEDICAL GROUP fails to provide such notice, all of that Member’s
Non-Capitated Expenses will be included in PARTICIPATING MEDICAL GROUP’s PMPM Non-Capitated
Expenses.

 

9.04                 Calculating PARTICIPATING
MEDICAL GROUP PMPM Non-Capitated Expenses.

 

The Non-Capitated Expenses shall include actual
expenses incurred by BLUE CROSS to provide Non-Capitated Services to Members,
as authorized or referred by the PARTICIPATING MEDICAL GROUP.  Expenses above the Case Management Stop-Loss
Threshold, as set forth in Section 9.03, and expenses incurred by Members
or former Members covered under the Extension of Benefits provision of the
Benefit Agreements are excluded from PARTICIPATING MEDICAL GROUP’s Non-Capitated
Expenses for purposes of determining the Non-Capitated Performance Settlement.

 

BLUE CROSS shall accrue Non-Capitated Expenses by
each PARTICIPATING MEDICAL GROUP by the calendar year the services were
incurred and paid through one hundred and twenty (120) days (April 30)
after year-end.  Beginning in year two
(2) of this Agreement, any claims received after calculation of the final
Non-Capitated Performance Settlement will be charged to the following year’s
Non-Capitated Expenses.  Any
Non-Capitated Services treatments that begin in one calendar year and extend
into the next year shall accrue to the year the treatment began.  Notwithstanding the aforementioned, any
claims for Non-Capitated Services or Shared Risk Services (as defined in the
CALIFORNIACARE Medical Services Agreement in effect for years prior to 1997)
paid after April 30, 1997 will be charged to the 1997 Non-Capitated
Expense.

 

PARTICIPATING MEDICAL GROUP’s PMPM Non-Capitated
Expense is the quotient of PARTICIPATING MEDICAL GROUP’s Non-Capitated Expenses
divided by PARTICIPATING MEDICAL GROUP’s calendar year Member Months.

 

BLUE CROSS shall provide PARTICIPATING MEDICAL
GROUP with quarterly reports advising them of their Non-Capitated
Expenses.  The Operations Manual
describes the PARTICIPATING MEDICAL GROUP reports.

 

9.05                    Non-Capitated
Performance Settlement Schedule.

 

Non-Capitated Performance Settlement
Schedule shall mean a schedule that will be the basis for determining
the Non-Capitated Performance Settlement. 
This schedule presents BLUE CROSS’s prior year aggregate PMPM
Non-Capitated Expenses adjusted by factors to account for medical
inflation.  Exhibit F (incorporated by
reference herein) sets forth the Non-Capitated Performance Settlement Schedule.

 

9.06                 Calculating the
Non-Capitated Performance Settlement.

 

A.           PARTICIPATING
MEDICAL GROUP’s Adjusted PMPM Non-Capitated Expense.

 

PARTICIPATING MEDICAL GROUP’s Adjusted PMPM
Non-Capitated Expenses is the quotient of PARTICIPATING MEDICAL GROUP’s PMPM
Non-Capitated Expenses divided by the composite of PARTICIPATING MEDICAL
GROUP’s Age/Sex, Plan, Stop-Loss and Region Factors.

 

25

 

The PARTICIPATING MEDICAL GROUP’s PMPM
Non-Capitated Expense is adjusted to account for the PARTICIPATING MEDICAL
GROUP’s mix of Members and make the PARTICIPATING MEDICAL GROUP’s PMPM
Non-Capitated Expenses comparable to the Non-Capitated Performance Settlement
Schedule, as set forth in Exhibit F.

 

B.             Non-Capitated
Performance Settlement.

 

If the PARTICIPATING MEDICAL GROUP’s Adjusted PMPM
Non-Capitated Expense is equal to of greater than the Attachment Point, the
PARTICIPATING MEDICAL GROUP will not receive a Non-Capitated Performance
Settlement.  If the PARTICIPATING MEDICAL
GROUP’s Adjusted PMPM Non-Capitated Expense is less than the Attachment Point,
the PARTICIPATING MEDICAL GROUP will receive a Non-Capitated Performance
Settlement.

 

The PMPM Non-Capitated Performance Settlement is
determined by allocating a portion of the difference between the Attachment
Point and the  PARTICIPATING
MEDICAL GROUP’s Adjusted PMPM Non-Capitated Expense.  The proportion of the difference allocated to the PMPM
Non-Capitated Performance Settlement is according to the Non-Capitated
Performance Settlement Schedule, set forth in Exhibit F.  The PMPM Non-Capitated Performance
Settlement amount multiplied by the PARTICIPATING MEDICAL GROUP’s calendar year
Member Months determines the total Non-Capitated Performance Settlement.

 

Within forty-five (45) working days after
April 30, BLUE CROSS shall pay the Non-Capitated Performance Settlement if
a Non-Capitated Performance Settlement amount is due to the PARTICIPATING
MEDICAL GROUP.

 

Notwithstanding the above, in the event this
Agreement is terminated, BLUE CROSS shall calculate the Non-Capitated
Performance Settlement in accordance with this Article IX and Shall pay
PARTICIPATING MEDICAL GROUP a preliminary Non-Capitated Performance Settlement
equal to eighty percent (80%) of any amount due PARTICIPATING MEDICAL GROUP
based upon this calculation.  Twelve
(12) months following the calculation and payment of the preliminary
Non-Capitated Performance Settlement, BLUE CROSS shall calculate a final
Non-Capitated Performance Settlement in accordance with this Article IX
and shall pay any amount due PARTICIPATING MEDICAL GROUP, less any amounts paid
at the time of preliminary Non-Capitated Performance Settlement.  In the event monies paid PARTICIPATING
MEDICAL GROUP at the time of the preliminary Non-Capitated Performance
Settlement exceed the final Non-Capitated Performance Settlement, PARTICIPATING
MEDICAL GROUP shall reimburse BLUE CROSS any amounts owed within forty-five
(45) working days of notification from BLUE CROSS.

 

X.                                    OUTPATIENT
PRESCRIPTION DRUG EXPENSE

 

10.01           Calculating
PARTICIPATING MEDICAL GROUP PMPM Outpatient Prescription Drug Expenses (“PMPM
OPDE”).

 

The Outpatient Prescription Drug Expense (“OPDE”)
shall include expenses incurred by BLUE CROSS to provide covered outpatient
prescription drugs to Members assigned to PARTICIPATING MEDICAL GROUP.

 

BLUE CROSS shall accrue OPDE for each PARTICIPATING
MEDICAL GROUP by the calendar year the services were incurred and paid through
one hundred and twenty (120) days after year-end Beginning in year two (2) of
this Agreement, any claims received after calculation of the final Outpatient
Prescription Drug Settlement will be charged to the following year’s OPDE.  Notwithstanding the aforementioned, any
claims for outpatient prescription drug services

 

26

 

incurred prior to 1997 but paid after the final
Non-Capitated Performance Settlement calculation for 1996 and if applicable,
for subsequent years, will be charged to the following year’s OPDE.

 

PARTICIPATING MEDICAL GROUP’s PMPM OPDE is the
quotient of PARTICIPATING MEDICAL GROUP’s OPDE divided by the PARTICIPATING
MEDICAL GROUP’s calendar year Member Months for Members with outpatient
prescription drug benefits.

 

BLUE CROSS shall provide PARTICIPATING MEDICAL
GROUP with quarterly reports advising them of their OPDE.  Report formats are described in the
Operations Manual.

 

10.02           Outpatient
Prescription Drug Settlement Schedule.

 

The Outpatient Prescription Drug Settlement
Schedule set forth at Exhibit H (incorporated by reference herein) will be
the basis for determining PARTICIPATING MEDICAL GROUP’s Outpatient Prescription
Drug Settlement.

 

10.03           Calculating the
Outpatient Prescription Drug Settlement.

 

If PARTICIPATING MEDICAL GROUP’s PMPM OPDE is less
than the Outpatient Prescription Drug Expense Target, the PARTICIPATING MEDICAL
GROUP will receive an Outpatient Prescription Drug Settlement.  If the PARTICIPATING MEDICAL GROUP’s PMPM
Outpatient Prescription Drug Expense is equal to or greater than the Outpatient
Prescription Drug Expense Target, the PARTICIPATING MEDICAL GROUP will not
receive an Outpatient Prescription Drug Settlement.

 

A.           Outpatient
Prescription Drug Settlement.

 

The PMPM Outpatient Prescription Drug Settlement is
determined by allocating a portion of the difference between the OPDE Target,
and the PARTICIPATING MEDICAL GROUP’s PMPM Outpatient Prescription Drug
Expense.  The proportion of the
difference allocated to the PMPM Outpatient Prescription Drug Settlement is
determined in accordance with the Outpatient Prescription Drug Schedule, set
forth in Exhibit H.

 

B.             Formulary
Utilization Incentive.

 

If PARTICIPATING MEDICAL GROUP’s use of the BLUE
CROSS Outpatient Prescription Drug Formulary (the “Formulary”) is equal to or
greater than ninety-five percent (95%), as described in Exhibit H, and
PARTICIPATING MEDICAL GROUP’s PMPM OPDE is less than the OPDE Target, an
additional *** PMPM will be added to PARTICIPATING MEDICAL GROUP’s PMPM Outpatient
Prescription Drug Settlement.

 

The amount of the Outpatient Prescription Drug
Settlement and Formulary utilization incentive will be based on the applicable
PMPM Settlement calculation under Exhibit H multiplied by PARTICIPATING MEDICAL
GROUP’s Member Months for Members, with outpatient prescription drug benefits.  Within forty-five (45) working days after
April 30, BLUE CROSS will pay any Outpatient Prescription Drug Settlement
that is due PARTICIPATING MEDICAL GROUP for the previous year.

 

Notwithstanding the above, in the event this
Agreement is terminated, BLUE CROSS shall calculate the Outpatient Prescription
Drug Settlement in accordance with this Article X and shall pay
PARTICIPATING MEDICAL GROUP a preliminary Outpatient Prescription Drug
Settlement equal to eighty percent (80%) of any amount due PARTICIPATING
MEDICAL GROUP based upon this calculation. 
Twelve (12) months following the calculation and payment of the
preliminary Outpatient Prescription Drug Settlement, BLUE CROSS Shall calculate
a final

 

27

 

Outpatient Prescription Drug Settlement in
accordance with this Article X and shall pay any amount due PARTICIPATING
MEDICAL GROUP, less any amounts paid at the time of preliminary Outpatient
Prescription Drug Settlement.  In the
event monies paid PARTICIPATING MEDICAL GROUP at the time of the preliminary
Outpatient Prescription Drug Settlement exceed the final Outpatient
Prescription Drug Settlement, PARTICIPATING MEDICAL GROUP shall reimburse BLUE
CROSS any amounts owed within forty-five (45) working days of notification from
BLUE CROSS.

 

XI.                                QUALITY MANAGEMENT
BONUS

 

Blue Cross will evaluate PARTICIPATING MEDICAL
GROUP’s Quality Management Program and Member quality of care using a
scorecard.  PARTICIPATING MEDICAL GROUP
will be notified of the scorecard parameters and scoring methodology prior to
the start of each year, as described in the Operations Manual.

 

PARTICIPATING MEDICAL GROUP must meet minimum
eligibility criteria to receive a scorecard score and therefore to be eligible
for a Quality Management Bonus.  These
criteria include a minimum of 12,000 Member months for a calendar year and
submission to BLUE CROSS of all necessary encounter data.

 

A Quality Management Bonus will be paid if
PARTICIPATING MEDICAL GROUP’s performance on the scorecard is average or above
average.  No Quality Management Bonus
will be paid if PARTICIPATING MEDICAL GROUP’s scorecard performance is below
average.  BLUE CROSS will notify
PARTICIPATING MEDICAL GROUP of the scorecard results sixty (60) days following
the end of the calendar year.

 

The Quality Management Bonus paid to PARTICIPATING
MEDICAL GROUP, should a payment be due in accordance with the PMPM Quality
Management Bonus Schedule shown in Exhibit I (incorporated by reference
herein), will be made by the fifteenth of June following the end of the
calendar year for which it is based.

 

XII.                            BILLING FOR HMO-USA
AWAY FROM HOME CARE SERVICES

 

12.01           PARTICIPATING
MEDICAL GROUP agrees to render or refer urgent care, Emergency services,
follow-up care and routine services, as Host HMO to out-of-state members of
HMO-USA participating plans, when such care is prearranged by BLUE CROSS.  Urgent care as it relates to the HMO-USA
Away From Home Care Program means outpatient medical care which the Host HMO
determines is required for an unexpected illness or injury that is not life
threatening, but which cannot reasonably be postponed until the HMO-USA
participating plan member returns to the service area of the member’s Home HMO.

 

All medical services rendered at PARTICIPATING
MEDICAL GROUP or Satellite Facilities and all Referral Services rendered to
members of HMO-USA participating plans, due to unavailability of the required
services at PARTICIPATING MEDICAL GROUP, shall be paid by BLUE CROSS.  For services PARTICIPATING MEDICAL GROUP
provides directly to members of HMO-USA participating plans, BLUE CROSS shall
reimburse PARTICIPATING MEDICAL GROUP at PARTICIPATING MEDICAL GROUP’s invoiced
amount, not to exceed reimbursement in accordance with Exhibit E of this
Agreement.  For Referral Services,
PARTICIPATING MEDICAL GROUP may instruct providers of Referral Services to bill
BLUE CROSS directly or, such providers may bill PARTICIPATING MEDICAL GROUP, in
which case, PARTICIPATING MEDICAL GROUP shall be reimbursed by BLUE CROSS.  In all cases, PARTICIPATING MEDICAL GROUP or
provider of Referral Services shall note on the claim that services were

 

28

 

rendered to a member of an HMO-USA participating
plan.  Neither PARTICIPATING MEDICAL
GROUP nor provider of Referral Services shall bill members of HMO-USA
participating plans.

 

12.02           BLUE CROSS agrees
to pay PARTICIPATING MEDICAL GROUP within forty-five (45) working days of
receipt of a completed professional services claim form for authorized services
rendered to members of HMO-USA participating plans.

 

XIII.                        TERM OF AGREEMENT,
TERMINATION

 

13.01           This Agreement
shall be in effect for a three (3) year period (the “Initial Term”) from the
date noted on page 1.  Unless written
notice of intent not to renew or of intent to modify this Agreement is provided
at least one hundred twenty (120) days prior to completion of the Initial Term
or any subsequent renewal period, this Agreement shall renew upon the same
terms and conditions for consecutive one year periods each year thereafter

 

13.02           Should this
Agreement be terminated pursuant to Section 13.01 above, PARTICIPATING
MEDICAL GROUP agrees to continue to provide Capitation Services and to arrange
Non-Capitated Services for all Members assigned to PARTICIPATING MEDICAL GROUP,
including any Members who become eligible during the notice period set forth in
Section 13.01 above; and to provide these services consistent with the
terms and conditions of the applicable Benefit Agreements.  In such case, Capitation Services rendered
to Members shall be compensated, at the applicable rates set forth in Exhibit
E, until the annual anniversary dates of the Benefit Agreements of Members
assigned to PARTICIPATING MEDICAL GROUP

 

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

 

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

 

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

 

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

 

29

 

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

 

XIV.                        ARBITRATION
DISPUTES BETWEEN BLUE CROSS AND PARTICIPATING MEDICAL GROUP

 

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

 

14.02           Any problem or
dispute arising under this Agreement and/or concerning the terms of this
Agreement that is not satisfactorily resolved under Section 14.01 shall be
arbitrated.  The arbitration shall be
initiated by either party making a written demand for arbitration on the other
party.  Arbitration shall be conducted
by the American Arbitration Association (AAA) under the Commercial Rules of the
AAA.  The arbitration shall also be
subject to California Code of Civil Procedure, Title Nine, Section 1280, et. seq., unless otherwise mutually
agreed.  The parties agree that the
decision of the arbitrator shall be final and binding as to each of them,
except to the extent that California or Federal law provide for the review of
arbitration proceedings.  Issues as to
whether malpractice was committed by a physician shall not be subject to
Arbitration by the AAA unless otherwise agreed in writing by the parties and
the AAA.

 

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

 

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

 

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

 

14.06           Limitation.  Nothing contained herein is intended to
create, nor shall it be construed to create, any right of any Member to
independently initiate the arbitration procedure established in this
Article.  This limitation shall not
prevent BLUE CROSS from initiating such procedures as the representative of its
Members, or PARTICIPATING MEDICAL GROUP from initiating such procedures on
behalf of Members for whom they have assumed responsibility for the provision
of Capitation Services, and for arranging Non-Capitated Services provided that
in any such case BLUE CROSS or PARTICIPATING MEDICAL GROUP, respectively, shall
be considered the initiating party for the purposes of Section 14.03
hereof.

 

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

 

30

 

XV.                            CALIFORNIACARE
MEMBER GRIEVANCE SYSTEM

 

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

 

15.02           PARTICIPATING
MEDICAL GROUP shall maintain a log of all grievances heard by PARTICIPATING
MEDICAL GROUP’s Quality Management Committee filed by Members who are assigned
to PARTICIPATING MEDICAL GROUP and shall, on a quarterly basis, forward a copy
of each grievance to the CALIFORNIACARE Quality Management Representative.

 

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

 

15.04           The Member shall be
notified of the disposition of the complaint by BLUE CROSS within fifteen (15)
working days of making the appeal.

 

XVI.                        MISCELLANEOUS
PROVISIONS

 

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

 

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

 

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

 

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

 

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

 

31

 

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

 

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

 

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

 

16.08           Maximum Capacity.  The Maximum Capacity of PARTICIPATING
MEDICAL GROUP during the term of this Agreement shall be unlimited Members.

 

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

 

16.10           Solicitation of
Members.  The business relationship
between BLUE CROSS and its Members, and BLUE CROSS and the employer groups with
which it contracts, shall be deemed the property of BLUE CROSS.  Similarly, all lists of Members accepted by
PARTICIPATING MEDICAL GROUP under the provisions of this Agreement and of the
employer groups to which they belong, shall be deemed the property of BLUE
CROSS.  During the term of this
Agreement or any renewal thereof, and for a period of one (1) year from the
date of termination, PARTICIPATING MEDICAL GROUP agrees and will require its
PARTICIPATING MEDICAL GROUP Physicians and all other contracted Health
Professionals to agree, that they will not, within the service area of BLUE
CROSS; (1) interfere with BLUE CROSS’ contract and/or properly rights, (2)
advise or counsel any Member or employer groups to disenroll from BLUE CROSS,
(3) solicit such Member or employer group to become enrolled with any other health
maintenance organization, preferred provider organization or any other similar
hospitalization or medical payment plan or insurance company; or (4) disclose
proprietary BLUE CROSS information. 
This section shall not apply to general mailings unless the
mailings specifically target BLUE CROSS Members and as long as the mailings do
not violate the intent of this section.

 

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

 

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

 

32

 

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

 

	
  BLUE CROSS OF CALIFORNIA

  	
  PARTICIPATING MEDICAL GROUP

  
	
   

  	
   

  
	
   

  	
   

  
	
  Signature:

  	
  /s/ Ferial Bahremand

  	
   

  	
  Signature.

  	
  /s/ Gregg DeNicola

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
  Ferial Bahremand

  	
   

  	
  Name:

  	
  Gregg DeNicola

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  Vice President

  	
   

  	
  Title:

  	
  President

  	
   

  
	
   

  	
  Network Development & Management

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
  2/13/97

  	
   

  	
  Date:

  	
  11/26/96

  	
   

  

 

33

 

SENIOR CALIFORNIACARE

 

MEDICAL SERVICES AGREEMENT

 

TABLE OF CONTENTS

 

	
  I.

  	
   

  	
  Recitals

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  II.

  	
   

  	
  Definitions

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  III.

  	
   

  	
  Relationship Between CCHP and PARTICIPATING
  MEDICAL GROUP

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  IV.

  	
   

  	
  PARTICIPATING MEDICAL GROUP Services and
  Responsibilities

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  V.

  	
   

  	
  CCHP Services and Responsibilities

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  VI.

  	
   

  	
  Eligibility Listing(s)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  VII.

  	
   

  	
  Compensation To PARTICIPATING MEDICAL GROUP

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  VIII.

  	
   

  	
  Enrollment Protection

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  IX.

  	
   

  	
  Non-Capitated Services

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  X.

  	
   

  	
  Billing for HMO-USA Away from Home Care Services

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  XI.

  	
   

  	
  Term of Agreement, Termination

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  XII.

  	
   

  	
  Mutual Agreement - Amendment Procedure

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  XIII.

  	
   

  	
  Arbitration of Disputes

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  XIV.

  	
   

  	
  SENIOR CALIFORNIACARE Member Grievance System

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  XV.

  	
   

  	
  Miscellaneous Provisions

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  EXHIBITS

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit A

  	
  Covered Medical Services

  	
   

  
	
  Exhibit A(1)

  	
  Division of Financial Responsibilities

  	
   

  
	
  Exhibit B

  	
  Criteria for Satellites

  	
   

  
	
  Exhibit B(1)

  	
  Criteria for Urgent Care Centers

  	
   

  
	
  Exhibit C

  	
  Facilities

  	
   

  
	
  Exhibit D

  	
  SENIOR CALIFORNIACARE Hospitals

  	
   

  
	
  Exhibit E

  	
  Administrative Responsibilities of PARTICIPATING
  MEDICAL GROUP

  	
   

  
	
  Exhibit F

  	
  Criteria for PARTICIPATING MEDICAL GROUPs

  	
   

  
	
  Exhibit G

  	
  Ambulatory Services Encounters

  	
   

  
	
  Exhibit H

  	
  Capitation

  	
   

  
	
  Exhibit H(1)

  	
  Enrollment Protection

  	
   

  
	
  Exhibit I

  	
  Physician Fee Schedule

  	
   

  
	
  Exhibit J

  	
  Non-Capitated Performance Schedule

  	
   

  
	
  Exhibit K

  	
  Adjusted Factors for Non-Capitated Performance
  Settlement

  	
   

  
	
  Exhibit L

  	
  Quarterly Non-Capitated Expense Reports

  	
   

  
					

 

 

EXHIBIT A

 

COVERED MEDICAL SERVICES

 

I.                                         Medical and
Surgical Services

 

A.           Physician’s
services at the:

 

(1)          Physician’s office;
the Member shall pay any copayment directly to the physician for each such
visit

 

(2)          Hospital or Skilled
Nursing Facility

 

B.             Professional
services of an anesthetist or anesthesiologist

 

C.             Diagnostic X-ray
examinations

 

D.            Laboratory tests

 

E.              Radiation therapy
in Physician’s office, including use of X-ray, radium, cobalt and other
radioactive substances

 

F.              Professional
services of other participating Health Professionals

 

G.             Professional
services of a physician at the Member’s home when the Member is too ill or
disabled to be seen during regular office hours.  The Member shall pay the amounts set forth in the Member’s
Benefit Agreement to the physician for each such visit.

 

II.                                     Psychiatric Care
Benefits

 

A.           Inpatient Visits

 

Physician’s hospital visits shall be limited as set
forth in the Member’s Benefit Agreement during each calendar year and the
Member shall pay the amounts set forth in the Members Benefit Agreement to the
physician for each such visit.

 

B.             Outpatient Visits
or Sessions

 

Outpatient care shall be provided for short-term
evaluation of the Member’s condition when such care is ordered by the attending
PARTICIPATING MEDICAL GROUP Physician. 
Charges and limitations as set forth in the Members Benefit Agreement.  This care shall not include visits for
psychoanalysis.

 

III.                                 Covered Preventive
Care Benefits

 

The following services shall be provided when
performed by, authorized by, or deemed appropriate by the Members Primary Care
Physician.  The Member shall pay any
copayment listed in the Member’s Benefit Agreement directly to the physician
for each service performed.

 

A.           Well baby care
through age 2 years, including immunizations.

 

B.             Scheduled physical
examinations as set forth in the Member’s Benefit Agreement.

 

C.             Pediatric and adult
immunizations.

 

D.            Eye examinations

 

E.              Infertility studies
for Members aged 18 or over.

 

A-1

 

F.              Ear examinations.

 

G.             Health education
services as follows:

 

(1)          Health education
services and education in the appropriate use of health services and in the
contribution each Member can make to the maintenance of his/or her own health.

 

(2)          Instruction in
personal health care measures.

 

(3)          Information about
services provided, including recommendations on generally accepted medical standards
for use and frequency of such services.

 

H.            Services such as
pre- and post-hospitalization planning; referral to services provided through
community health and social welfare agencies and related family counseling for
the physical, emotional and economic impact of illness and disability.

 

I.                 Allergy testing and
administration of injections.

 

A-2

 

EXHIBIT A(1)

 

CALIFORNIACARE

 

DIVISION OF FINANCIAL
RESPONSIBILITIES

 

	
  List of
  Benefits / Services

  	
   

  	
  Capitation

  	
   

  	
  Non-

  Capitated

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  ACUPUNCTURE

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  AIDS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Inpatient Facility
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  ALLERGY TESTING A
  TREATMENT 

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Serums

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  AMBULANCE: Air or Ground

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  In-Area

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Out-of-Area

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  AMNIOCENTESIS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Outpatient Facility
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  ANESTHETICS,
  Administration of ARTIFICIAL EYE

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  *

  	
  ARTIFICIAL INSEMINATION

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  ARTIFICIAL LIMBS
  (Prosthetic Device)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  BIOFEEDBACK

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  BLOOD AND BLOOD PRODUCTS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  From Blood Bank

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Autologous Blood
  Donation

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  *

  	
  CHEMICAL DEPENDENCY
  REHABILITATION

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Inpatient Facility
  component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Inpatient Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Outpatient Facility
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Outpatient Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  

 

*      As set forth in the applicable Benefit
Agreement.

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

 

A(1)-1

 

	
  List of
  Benefits / Services

  	
   

  	
  Capitation

  	
   

  	
  Non-

  Capitated

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  CHEMOTHERAPY
  DRUGS (intravenously administered)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Chemotherapy
  Drugs

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  CHIROPRACTIC
  (Referred Service only)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  CIRCUMCISION

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  COLOSTOMY
  SUPPLIES

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Inpatient
  Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Outpatient
  Dispensing

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  In
  Conjunction with Home Health

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  DENTAL SERVICES

  (accidental injury to sound natural teeth
  and dental work necessary for the construction of non-dental structures)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Inpatient
  Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  DETOXIFICATION

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Inpatient
  Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  *

  	
  DURABLE
  MEDICAL EQUIPMENT (DME)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  EMERGENCY
  ADMISSIONS: In-Area

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Facility
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  EMERGENCY
  ADMISSIONS: Out-of-Area

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Facility
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  EMERGENCY
  ROOM: In-Area

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Facility
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  

 

*      As set forth in the applicable Benefit
Agreement.

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

 

A(1)-2

 

	
  List of
  Benefits / Services

  	
   

  	
  Capitation

  	
   

  	
  Non-

  Capitated

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  EMERGENCY
  ROOM: Out-of-Area

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Facility
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  EMPLOYMENT
  PHYSICAL EXAMS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  ENDOSCOPIC
  STUDIES

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Inpatient
  / Outpatient Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  EXPERIMENTAL
  PROCEDURES

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  FAMILY
  PLANNING SERVICES

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Inpatient
  Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Outpatient
  Clinic or Non-Hospital Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  FETAL
  MONITORING

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Inpatient
  Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  GENETIC
  TESTING

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  HEALTH
  EDUCATION

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  **

  	
  HEALTH EVALUATIONS /
  PHYSICALS

  (required by third party or outside
  agency)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  *

  	
  HEARING AIDS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  HEARING
  SCREENING

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  HEMODIALYSIS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Inpatient
  / Outpatient Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  

 

*                 As set forth in the
applicable Benefit Agreement

**          Routine physical
examinations or tests which do not directly treat an actual illness, injury or
condition unless authorized by a Primary Care Physician, except in no event
will any physical examination or test required by employment or government
authority, or at the request of a third party such as a school, camp or sport
affiliated organization be covered.

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

 

A(1)-3

 

	
  List of
  Benefits / Services

  	
   

  	
  Capitation

  	
   

  	
  Non-

  Capitated

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  HEPATITIS
  B VACCINE / GAMMA GLOBULIN

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  HOME
  HEALTH (Including medications)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  HOSPICE
  (in lieu of acute inpatient or SNF care)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Inpatient
  Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  HOSPITAL
  BASED PHYSICIANS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Anesthesiology

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Audiology

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Cardiology

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Emergency
  Medicine

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  General
  Surgery

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Neonatology

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Nephrology

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Neurology

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Neurosurgery

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Obstetrics
  / Gynecology

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Orthopedic
  Surgery

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Pathology

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Pediatrics

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Physical
  Medicine

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Pulmonary
  Medicine

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Radiology

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Radiation
  Oncology

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Urology

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  *

  	
  HOSPITALIZATION /
  INPATIENT SERVICES, SUPPLIES & TESTING

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  In-Area

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Out-of-Area
  (Emergency)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  

 

*  As set
forth in the applicable Benefit Agreement

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

 

A(1)-4

 

	
  List of
  Benefits / Services

  	
   

  	
  Capitation

  	
   

  	
  Non-

  Capitated

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  IMMEDIATE
  CARE

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Facility
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  IMMUNIZATION
  SERUMS (pediatric)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  IMMUNIZATION
  SERUMS (Adult)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  INFANT APNEA MONITOR
  (DME)

  (in conjunction with or concurrent with
  authorized inpatient admission)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  OUTPATIENT
  INFANT APNEA MONITOR

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  *

  	
  INFERTILITY(Diagnosis /
  Treatment)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  *Inpatient
  Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  *Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  INFUSION
  THERAPY

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Inpatient
  / Outpatient Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Infused
  Substances

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  INJECTABLE MEDICATIONS:
  Outpatient

  (excluding take-home insulin)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  LABORATORY SERVICES

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Inpatient
  Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Outpatient
  Hospital Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Outpatient
  Clinic or Non-Hospital Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  *

  	
  LITHOTRIPSY

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Inpatient
  / Outpatient Hospital Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  MAMMOGRAPHY

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Technical
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  

 

*                 As set forth in the applicable Benefit
Agreement

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

 

A(1)-5

 

	
  List of
  Benefits / Services

  	
   

  	
  Capitation

  	
   

  	
  Non-

  Capitated

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  MENTAL
  HEALTH

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  *Inpatient
  Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  *Inpatient
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  *Outpatient
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  NUTRITIONIST
  / DIETITIAN

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  OBSTETRICAL
  SERVICES

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Inpatient
  Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Inpatient
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Outpatient
  Diagnostic Services

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

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

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  ORGAN
  TRANSPLANTS (non-experimental)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Inpatient
  Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  *

  	
  OUTPATIENT DIAGNOSTIC
  SERVICES & TREATMENTS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Primary
  Care Physicians

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Specialty
  Physicians

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  OUTPATIENT CLINIC OR
  NON-HOSPITAL FACILITY COMPONENT

  FOR DIAGNOSTIC SERVICES & TREATMENTS

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

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Angiograms

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  CAT
  Scan

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2-D
  Echo

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  EEG

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  EKG
  (aka: ECG)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  EMG

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Holter
  Monitor

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  MRI

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Treadmill

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Ultrasound

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  

 

*                 As set forth in the
applicable Benefit Agreement

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

 

A(1)-6

 

	
  List of
  Benefits / Services

  	
   

  	
  Capitation

  	
   

  	
  Non-

  Capitated

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  OUTPATIENT
  DIAGNOSTIC SERVICES & TREATMENTS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Professional
  Component for:

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Anesthesiology

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Audiology

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Cardiology

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Emergency
  Medicine

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  General
  Surgery

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Neonatology

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Nephrology

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Neurology

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Obstetrics
  / Gynecology

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Orthopedics

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Pathology

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Pediatrics

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Physical
  Medicine

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Pulmonary
  Medicine

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Radiation
  Oncology

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Radiology

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Urology

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  OUTPATIENT
  SURGERY

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Facility
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Professional
  Component for:

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Anesthesiology

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Audiology

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Cardiology

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Emergency
  Medicine

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Neonatology

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Neurology

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Nephrology

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Orthopedics

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Pathology

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  

 

*                 As set forth in the
applicable Benefit Agreement

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

 

A(1)-7

 

	
  List of
  Benefits / Services

  	
   

  	
  Capitation

  	
   

  	
  Non-

  Capitated

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Pediatrics

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Physical
  Medicine

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Pulmonary
  Medicine

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Radiation
  Oncology

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Radiology

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Urology

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  PEDIATRIC
  SERVICES (newborn)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  PHYSICAL
  THERAPY

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Inpatient
  Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Outpatient
  Clinic or Non-Hospital Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Inpatient
  / Outpatient Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  PHYSICIAN
  VISITS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  To
  Hospital

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  To
  Skilled Nursing Facility

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  To
  Patient Home

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  PHYSICIAN
  OFFICE VISITS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Consultations

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Specialty
  Visits

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  PODIATRY
  SERVICES

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  PREADMISSION
  TESTING

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Inpatient
  Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Outpatient
  Hospital Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Outpatient
  Clinic or Non-Hospital Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Inpatient
  / Outpatient Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  PRE-EXISTING
  PREGNANCY

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Inpatient
  Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  

 

*                 As set forth in the applicable Benefit
Agreement

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

 

A(1)-8

 

	
  List of
  Benefits / Services

  	
   

  	
  Capitation

  	
   

  	
  Non-

  Capitated

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  PREGNANCY
  SERVICES

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Inpatient
  Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  PROSTHETIC
  DEVICES

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  RADIATION
  THERAPY

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Inpatient
  Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Outpatient
  Hospital Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Outpatient
  Clinic Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  RADIOLOGY
  SERVICES

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Inpatient
  Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Outpatient
  Hospital Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Outpatient
  Clinic or Non-Hospital Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  RECONSTRUCTIVE
  SURGERY

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Inpatient
  Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  REFRACTIONS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  REHABILITATION SERVICES

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

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Inpatient
  Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Inpatient
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Outpatient
  Clinic or Non-Hospital Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Outpatient
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  ROUTINE
  PHYSICAL EXAMINATIONS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SKILLED
  NURSING FACILITY (SNF)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SPECIALIST
  CONSULTATIONS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  

 

*                 As set forth in the applicable Benefit
Agreement

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

 

A(1)-9

 

	
  List of
  Benefits / Services

  	
   

  	
  Capitation

  	
   

  	
  Non-

  Capitated

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SURGICAL
  SUPPLIES

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Inpatient
  Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Outpatient
  Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  TEMPORO-MANDIBULAR
  JOINT SYNDROME (TMJ)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Dental
  Treatment

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Professional
  Component

  (for the diagnosis and medically necessary
  correction)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Inpatient
  Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  TRANSFUSIONS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  From
  Blood Bank

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Autologous
  Blood Donations

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  URGENT
  CARE: In-Area

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Facility
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  URGENT
  CARE: Out-of-Area

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Facility
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  VISION
  SCREENING

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  VISION
  CARE

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Medically
  Necessary Care

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Refraction

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Lenses
  / Frames (covered by optional rider)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Contact
  lenses (fitting only)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  

 

*                 As set forth in the
applicable Benefit Agreement

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

 

A(1)-10

 

EXHIBIT H

 

OUTPATIENT PRESCRIPTION DRUG
SETTLEMENT SCHEDULE

 

PMPM Outpatient Prescription Drug Expense
Target:  $10.45 PMPM

 

	
  PMPM
  Expense Range

  	
   

  	
  Settlement Calculation

  
	
   

  	
   

  	
   

  
	
  Greater than ***

  	
   

  	
  $0.00

  
	
   

  	
   

  	
   

  
	
  *** to ***

  	
   

  	
  (*** PMPM OPDE) x 45%

  
	
   

  	
   

  	
   

  
	
  *** to ***

  	
   

  	
  (*** PMPM OPDE) x 50%

  
	
   

  	
   

  	
   

  
	
  Less than ***

  	
   

  	
  *** PMPM

  

 

If PARTICIPATING MEDICAL
GROUP’s PMPM OPDE is less than the OPDE Target, an additional *** PMPM will be
due to PARTICIPATING MEDICAL GROUP if PARTICIPATING MEDICAL GROUP’s Formulary
utilization is equal to or greater than ***

 

	
  Formulary Utilization:

  	
   

  	
  Is the quotient of the number of prescriptions
  for Members with outpatient prescription drug benefits assigned to
  PARTICIPATING MEDICAL GROUP using drugs listed in the Blue Cross of
  California Outpatient Prescription Drug Formulary divided by the total number
  of prescriptions for Members with outpatient prescription drug benefits
  assigned to PARTICIPATING MEDICAL GROUP.

  

 

H-1

 

EXHIBIT I

 

QUALITY MANAGEMENT BONUS
SCHEDULE

 

	
  Quality Management Scorecard
  Rating

  	
   

  	
  PMPM Quality Bonus Settlement

  
	
   

  	
   

  	
   

  
	
  Below Average

  	
   

  	
  ***

  
	
  Average

  	
   

  	
  ***

  
	
  Above Average

  	
   

  	
  ***

  

 

Where:

 

“Average” is the numeric average of all
PARTICIPATING MEDICAL GROUP scorecard scores plus or minus one standard
deviation.

 

“Above Average” is a score that is greater than one
standard deviation above the numeric average of all PARTICIPATING MEDICAL GROUP
scorecard scores.

 

“Below Average” is a score that is less than one
standard deviation below the numeric average of all PARTICIPATING MEDICAL GROUP
scorecard scores.

 

I-1

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00067-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00067-of-00352.parquet"}]]