Document:

Unassociated Document

 

Exhibit 10.19

American CareSource Holdings, Inc.

Confidential Materials Omitted and Filed Separately with the

Securities and Exchange Commission

Confidential Portions denoted by [***]

 

 

[Logo of HealthSmartsm Preferred Care, Inc.]

 

American CareSource Client Agreement

 

THIS AGREEMENT is made and entered into effective as of August 1, 2002, by and between American CareSource Corporation (hereinafter “ACS”) an Indiana corporation with its corporate office located at 8080 Tristar Drive, Suite 100, Irving, TX 75063, and HealthSmart Preferred Care, Inc. (hereinafter “HEALTHSMART”), a Texas corporation located at 2002 W. Loop 289, Suite 103, Lubbock, TX 79407.

 

WITNESSETH:

 

WHEREAS, ACS is engaged in the business of sourcing, managing, and administrating comprehensive Ancillary Services for health care, workers’ compensation, disability and auto liability benefit plans (“Covered Services”) and is engaged in the business of providing referral management of Ancillary Services and access to ACS Network Providers;

 

WHEREAS, ACS has agreements with various ACS Providers of Covered Services (“ACS Network Providers”) under which ACS Clients will be entitled to a reduction of ACS Network Provider’s charges for Covered Services provided to the Clients’ Covered Persons (“Negotiated Provider Rates”);

 

WHEREAS, HEALTHSMART desires to employ ACS to provide said services for the benefit of HEALTHSMART and Customers;

 

WHEREAS, ACS desires to be so employed by HEALTHSMART to provide said services;

 

NOW, THEREFORE, in consideration of the promises hereof, and the mutual promises and agreements made herein, the parties hereby agree as follows:

 

I.  DEFINITION OF TERMS

 

For purposes of this Agreement, the following terms shall have the meanings set forth as follows:

 

“Ancillary Services” means any health care services not provided in a medical doctor’s office or inpatient facility, such as hospital or outpatient surgical center. Ancillary Services by type of service are set forth in Exhibit A.

  

2002 West Loop 289 / Suite 109 / Lubbock, TX 79407

P.O. Box 53010 / Lubbock, TX 79453-3010

Phone:  806.473.2500 / Fax:  806.473.2525 / 800.687.0500

Internet:  www.healthsmart.net

 

  

 

  

 

“Clients” means those companies providing services for third party administrators, managed care networks, and/or insurance carriers contracting with ACS for ancillary management services. 

“Covered Persons” means individuals who are entitled to Covered Services (as set forth in Exhibit A) from HEALTHSMART’s Customers.

 

“Covered Services” means sourcing, managing and administering comprehensive Ancillary Services for health care, workers’ compensation, disability and auto liability benefit plans.

 

“Customers” means those parties or entities purchasing services from HEALTHSMART.

 

“Negotiated Client Rates” means the agreed upon rates between ACS and HEALTHSMART that is to be charged to Customers for Covered Services provided to Covered Persons.

 

“Negotiated Provider Rates” means the contractually agreed upon reduced rates between ACS and Provider that are to be paid by ACS to Provider for Covered Services provided to HEALTHSMART’s Covered Persons.

 

“ACS Network Provider” means Providers of Covered Services, which have contractual agreements with ACS to provide Covered Services for a Negotiated Rate

 

“Payer” means the purchaser who is the fiduciary of benefit plans and managed care programs on behalf of its employees and/or dependents.

 

“ACS Providers” means any ancillary provider specializing in the administration or delivery of Ancillary Services that has met the credentialing standards established by ACS and has entered into a contractual arrangement with ACS.

 

“Referral Call Center Program” means the arrangement, handling and supervision by ACS staff of the coordination, scheduling, management and billing of Ancillary Services on behalf of Customers.

 

  

2

  

 

II.  OBLIGATIONS OF ACS

 

2.1.           ACS agrees to provide HEALTHSMART with the ACS Referral Call Center Program of Ancillary Services for the term of this Agreement.

 

2.2.           ACS agrees to arrange and coordinate the provision of Covered Services by ACS Network Providers to particular Covered Persons as requested by HEALTHSMART physicians and/or case managers in the states listed on Exhibit C.

 

2.3.           ACS agrees to bill HEALTHSMART Customers for the Negotiated Client Rates applicable to Covered Services provided to Covered Persons under Referral Call Center Program.  ACS agrees to look solely to HEALTHSMART Customers, and not to HEALTHSMART, for payment for these services and fees.

 

2.4.           ACS shall furnish HEALTHSMART with Referral Call Center Program cost savings and management information.  ACS agrees to assist and cooperate with HEALTHSMART and will report resolution of any complaints or grievances and findings of patient satisfaction surveys applying to HEALTHSMART Customers.

  

2.5.           ACS shall pay ACS Network Providers timely at the applicable Negotiated Provider Rates for Covered Services provided under Referral Call Center Program.  Provided ACS has received payment for such Covered Services, then in such event ACS agrees to indemnify and hold the customers of HEALTHSMART harmless for any claim for Provider payments arising out of the referrals pursuant to Section II, Paragraphs 22 through 2.6 of this contractual Agreement.

 

2.6.           ACS agrees to indemnify and hold the customers of HEALTHSMART harmless for any claim in excess of the amounts charged to Customers by ACS for the particular Ancillary Services provided to such Customers for Provider payments arising out of the referrals pursuant to Section II, Paragraphs 2.1 through 2.6 of this contractual Agreement.

 

2.7           ACS agrees to pay to HEALTHSMART an administrative and marketing fee based on [***] of the difference between Negotiated Client Rates and Negotiated Provider Rates actually paid by Customers of HEALTHSMART and collected by ACS.  ACS will pay the administrative and marketing fee to HEALTHSMART within thirty (30) days

 

  

3

  

 

after the month during which actual payment from customers is received by ACS.

 

2.8           ACS agrees to pay HEALTHSMART [***] per month during this Agreement to reimburse HEALTHSMART’s cost for a full time employee dedicated to the fulfillment of this Agreement to separate, batch and scan claims for Ancillary Services to ACS.

 

2.9           ACS will not effectuate any agreement with Customers of HEALTHSMART that decreases the administrative fees due to HEALTHSMART by ACS during the term of this Agreement.

 

III.  OBLIGATIONS OF HEALTHSMART

 

3.1.           HEALTHSMART will allow ACS to train all referral sources on how to utilize ACS services upon installation.

 

3.2.           Customers of HEALTHSMART shall be responsible for determinations of medical necessity and appropriateness and pre-certification of designated procedures and conditions in compliance with state and federal requirements.

 

3.3.           HEALTHSMART agrees to exert commercially reasonable efforts to support marketing and educational initiatives with customers to make them aware of the value-added benefits of using ancillary services administered and managed by ACS.

 

3.4.           HEALTHSMART agrees that ACS provider agreements will supercede existing HEALTHSMART agreements with the same providers during the term of the contract except as defined in Exhibit D.

 

3.5.           HEALTHSMART agrees to exert its best efforts in good faith to help ACS implement, assist and install ACS Network Providers into the HEALTHSMART business operation, and to maximize the inclusion of all “out of ACS network” providers of HEALTHSMART into the ACS Network through a continuous and sustained contracting effort by ACS with any and all HEALTHSMART ancillary service providers not otherwise being an ACS Network Provider.  However, if ACS fails to obtain an executed provider contract within 120 days from the date of written notice from HEALTHSMART, HEALTHSMART may enter into a direct agreement with provider on its own behalf.

 

  

4

  

 

IV.  TERMS OF AGREEMENT

 

4.1.           This Agreement shall be effective as of August 1, 2002, (“Effective Date”) and shall continue in effect for a period of one (1) year thereafter until terminated as provided herein.

 

4.2.           Upon the expiration of the initial term, this Agreement shall be extended year to year beginning on the anniversary date of the initial term without additions or modifications of its terms unless either party shall provide the other with written notification of intent to terminate this Agreement.  Said notice must be received within 90 days prior to the expiration of the initial or any succeeding term of this Agreement.

 

4.3.           Either party may, except as otherwise set forth herein, terminate this Agreement only for good cause upon no less than 90 days prior written notice to the other party.

 

4.4.           Termination for good cause is defined as either party’s failure to perform pursuant to this Agreement after prior written notice from the performing party setting forth with specificity the details of non-performance and a thirty (30) day curing period has elapsed without such default having been cured.

 

V.  RECORDS AND INFORMATION

 

5.1.           Both parties recognize the confidential nature of medical records and other medical information each may handle in implementing this Agreement.  Both ACS and HEALTHSMART agree to maintain the confidentiality of any information relating to individual Covered Persons in accordance with all applicable laws.

 

5.2.           Each party agrees to hold in confidence any information obtained by it relating to the business of the other.  Each party agrees that it will not disclose, furnish to, or use for the benefit of itself, or any other person proprietary information, client lists, provider lists, business data, any trade secrets, data, information, or know-how belonging to the other party without the prior written consent of the other party.  This provision shall not apply to any information known to a party prior to acceptance of this Agreement or to any information lawfully obtained from third parties.

 

  

5

  

 

VI.  MISCELLANEOUS

 

6.1.           ACS and HEALTHSMART are independent contractors in relationship to one another and no joint venture, partnership, employment or other relationship is created by this Agreement except as otherwise specifically set forth herein.

 

6.2.           This Agreement, including all Exhibits hereto, may be amended only by a writing signed by both parties.

 

6.3.           This Agreement shall be construed in accordance with the laws of the State of Texas and venue for any disputes shall be in Dallas County, Texas.

 

6.4.           All notices required by this Agreement shall be given in writing signed by the party giving the notice and delivered by hand or first class mail to the other party at the address set forth below or such other address as has been given by proper notice.

 

	  	
If to HEALTHSMART:

	  	  

	  	
2002 W. Loop 289, Suite 103

	  	
Lubbock, TX  79407

	  	
If to ACS:

	
Mark Bodnar, President

	  	
8080 Tristar Drive, Suite 100

	  	
Irving, TX  75063

 

6.5.           This Agreement contains the entire contract between the parties, as to the subject matters hereto, and may not be amended, altered or modified except by written agreement of the parties.  This Agreement may be amended only by written amendment signed by both parties.

 

6.6.           Except as otherwise provided herein, this Agreement may not be assigned by any party except with the prior written consent of the other party.

 

IN WITNESS WHEREOF, the undersigned have executed this Agreement effective as of the date first written above.

 

 

  

6

  

 

American CareSource (“ACS”)

 

By:  _________Illegible  _________

 

HealthSmart Preferred Care, Inc.

(HEALTHSMART)

 

By:  _________Illegible  _________

 

 

 

  

7

  

 

EXHIBIT A

American CareSource

ANCILLARY SERVICES

 

	
·

	
Bone Growth Stimulators

	
·

	
Chiropractic Services

	
·

	
Dialysis Services

	
·

	
Durable Medical Equipment

	
·

	
Home Health Services

	
  

	
·

	
Aides

	
  

	
·

	
IV Infusion Therapy

	
  

	
·

	
Medical Social Worker Services

	
  

	
·

	
Therapies

	
  

	
·

	
Wound Care

	
·

	
Hospice Services

	
·

	
Laboratory Services

	
·

	
Orthotics and Prosthetics

	
·

	
Outpatient Therapies

	
  

	
·

	
Occupational Therapy

	
  

	
·

	
Physical Therapy

	
  

	
·

	
Speech Therapy

	
·

	
Perinatal Monitoring

	
·

	
Rehabilitation Services

	
  

	
·

	
Functional Capacity Evaluations

	
  

	
·

	
Work Hardening/Work Conditioning

	
·

	
Sub-Acute and Skilled Nursing Facilities

	
·

	
Surgery Centers

 

  

8

  

 

EXHIBIT B

NEGOTIATED CLIENT RATES

 

	
·

	
[***] of National Medicare Ceiling rates for Ancillary Services priced by Medicare

	
·

	
Extrapolation of [***] of National Medicare Ceiling rates when Ancillary Services are not priced by Medicare but there is adequate UCR to estimate what [***] of National Medicare Ceiling rates would be if it had priced.  “UCR” means the fees for Ancillary Services which are representative of the average and prevailing charge for the same service in the same or similar geographic communities where services are rendered.

	
·

	
[***] off billed charges for remaining Ancillary Services that are not priced by Medicare and no extrapolation of Medicare is possible.

 

  

9

  

 

EXHIBIT C

Service Area

 

The State of Texas.

 

  

 

  

 

EXHIBIT D

List of sites.

 

HEALTHSMART provider contracts to be excluded from the provisions of Section 3.4.

 

  

 

  

 

American CareSource Holdings, Inc.

Client Agreement

HealthSmart Preferred Care II, LP

Amendment

 

Agreement and Effect of This Amendment

 

This Amendment supplements the agreement between the parties dated August 1, 2002 “American CareSource Client Agreement with HealthSmart Preferred Care II, LP” (hereinafter referred to as “Client Agreement”).  It shall have no effect apart from the Client Agreement.  This Amendment’s use of terms, names, or labels that are different from those of the Client Agreement shall not by itself alter the effect of either document.  The terms of this Amendment preempt, supersede, and override all contrary terms of the Client Agreement.  For the purpose of this Amendment, “ACS” refers to American CareSource Holdings Inc., and “HealthSmart” refers to HealthSmart Preferred Care II, LP.

 

This Amendment may be modified or supplemented only by an express amendment dated and signed by authorized representatives of the parties.  Except for blanks on originally printed forms, no handwritten or separately printed additions or changes on this document will be effective, even if they are initialed or signed.

 

Amendment effective date:  September 1, 2005

 

It is mutually agreed upon that the following sections of the Client Agreement are amended as follows:

 

I.           Definition of Terms

 

Definition of “Referral Call Center Program” is deleted from the Client Agreement.

 

II.           Obligations of ACS

 

All previous language pursuant to Section II, Paragraphs 2.1, 2.2, 2.3, 2.4, 2.5, 2.7, 2.8 and 2.9 are replaced with the amended language as follows:

 

2.1           Network Providers.  During the term of this Agreement, ACS will maintain a fully-credentialed network of ancillary health care service providers and will provide HealthSmart Participants access to those Network Providers.  ACS will supply the names and provider demographics for each Network Provider to HealthSmart at least monthly in a mutually agreed-upon electronic format.  HSPC shall not exclude ACS Network Providers for any purpose or reason other than the exceptions of (1) the necessity to have the provider remain with the HSPC network, (2) participation in ACS network would prohibit the provider from representation by HSPC for contracting via the administrative fee business model, and (3) inclusion of the ACS provider would cause potential harm or discord to HSPC provider rates or relationships.  ACS will not notify its Network Providers that HealthSmart Participants will begin utilizing the Network Providers.  ACS will notify their network providers of any new payor to the ACS network that HSPC participants will begin utilizing.  The network contact letter must be approved by HSPC.

  

2.2           Claims Processing of Covered Services.  ACS shall ensure that Network Providers submit claims for Covered Services provided to HealthSmart Participants to the electronic or U.S. mail addresses designated by HealthSmart.

 

2.3           Claim Payment Responsibility.  ACS agrees to bill HealthSmart Customers for the Negotiated Client Rates applicable to covered Services provided to covered Persons.  ACS agrees to look solely to HealthSmart customers, and not to HealthSmart, for payment for these services and fees.

 

2.5           Payment of Network Providers and Network Providers Relations.  Following receipt of

 

  

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payment for Covered Services provided to HealthSmart Participants, ACS shall pay the Network Providers who provided the Covered Services in accordance with the Network Provider’s ACS Provider Agreement within 14 days.  ACS shall provide all Explanation of Payment/Benefit forms to such Network Providers when payment is made, which will allow the Network Provider to collect remaining allowable Participant Expenses for the Covered Services.  ACS will provide Network Provider Relations services for Network Providers for claims paid by ACS to the Network Provider, including toll-free telephone lines, to address any payment or claims review issues involving the payment of the claim under the Provider Agreement.

 

2.7           Administrative Services Fee.  ACS warrants that the payment of the Administrative Service Fee is not intended to induce referrals rather the payment of the Administrative Service Fee provided HealthSmart from ACS is paid to ACS by Provider in consideration of the substantial provider network services performed by ACS hereunder, including, but not limited to, provider relations services, claims repricing, creating and maintaining provider directories, credentialing and quality improvement services, is intended to assist in defraying the costs of administering the provider network, and that such fee is fair and reasonable.  ACS agrees to pay HealthSmart an ongoing Administrative Fee of [***] of the Negotiated Client rates paid to ACS by Customers of HealthSmart if the following conditions are met:

a.           Claims capture from HSPC payors is initiated no later than December 20th, 2005.

b.           Claims are received by ACS no later than December 30th, 2005

If both conditions are not met, the fee ACS agrees to pay HealthSmart shall be [***].

The Administrative Fee shall not exceed [***] dollars.  The capped amount shall be reviewed and adjusted no less than annually.  Further, should ACS contract directly with a payor client of HealthSmart or payor type entity, HealthSmart shall receive the current applicable fee for services provided via the HealthSmart Network.

 

III.           Obligations of HealthSmart and/or Payors

 

All previous language pursuant to Section III, Paragraphs 3.1, 3.4, and 3.5 are replaced with the amended language as set forth below.  Paragraph 3.6 and 3.7 are added to the Client Agreement.

 

3.1           Claims Processing of Covered Services.  As defined in Exhibit E, HealthSmart shall receive all claims from Network Providers for Covered Services provided to HealthSmart/Payor Participants in accordance with the claim routing instructions established by HealthSmart and the HealthSmart customers and forward ACS Network Provider claims to ACS.  ACS will reprice claims utilizing the Negotiated Client Rates.  Payers shall adjudicate claims as “In-Network” as they would if the ACS Network Providers were directly contracted by HealthSmart.  Payer shall send an applicable explanation of payment/benefit information to enable ACS to provide such information to the Network Provider, including the amount of Participant Expense for each claim.

 

3.6           Payment.  When Payor has finally adjudicated the repriced Network Provider claims for Participants, it will remit all Benefit Plan payments to ACS for each such Network Provider, Payor will pay ACS the repriced amount, less applicable Participant Expenses (copayments and deductibles).  Payor will utilize ACS’ tax identification number for all such payments, recognizing the assignment of the claim from the Network Provider to ACS.  Payments to ACS shall be made as soon as possible following adjudication of the claim to ensure satisfaction of timely claims payment guidelines.

 

3.7           Records Review.  ACS shall reasonably maintain and furnish such records, files and documents as may be required by HSPC for review by HSPC or its agents of the appropriateness and timeliness of the payment of benefits and fees.

 

  

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VI.           Miscellaneous.

 

Section VI, Paragraph 6.4 is replaced with the amended language as follows:

 

6.4           All notices required by this Agreement shall be given in writing signed by the party giving the notice and delivered by hand or first class mail to the other party at the address set forth below or such other address as has been given by proper notice.

 

	
If to ACS:

	
Wayne Schellhammer, President & CEO

8080 Tristar Drive, Suite 100

Irving, TX  75063

 

Section VI, Paragraph 2.6 is replaced with the amended language as follows:

 

6.5           ACS agrees to indemnify and hold HealthSmart harmless against any liability or damage of any nature (including reasonable attorney’s fees and expenses) resulting from ACS’s negligent breach of its obligations hereunder or other negligence of ACS in its performance of this HealthSmart Agreement.  HealthSmart agrees to indemnify and hold ACS harmless against any liability or damage of any nature (including reasonable attorney’s fees and expenses) resulting from HealthSmart’s negligent breach of its obligations hereunder or other negligence of HealthSmart in its performance of this HealthSmart Agreement.

 

6.6           Non-solicitation of Employees.  For the term of this Agreement and for a period of two (2) years following its termination for any reason, neither ACS nor its representatives will, without the prior written consent of HSPC, hire, solicit for employment, recruit, initiate contact with for employment, or refer to others for employment, any officer, director, or employee of HSPC; provided that the foregoing shall not prohibit hiring such employee if such employee has terminated employment with the Company prior to ACS’s commencement of solicitation of such employee.  In the event that ACS breaches its obligations contained in this paragraph, ACS shall pay HSPC, on demand, damages of up to two (2) times the base salary of each employee so hired, it being mutually agreed by ACS and HSPC that this provision for liquidated damages is reasonable and that the actual damage which would be sustained by HSPC as the result of the failure to comply with this provision would be impractical and extremely difficult to determine, and that the payment of said damages is in no manner punitive.

 

6.7           Non-solicitation of Employees.  For the term of this Agreement and for a period of two (2) years following its termination for any reason, neither HSPC nor its representatives will, without the prior written consent of ACS, hire, solicit for employment, recruit, initiate contact with for employment, or refer to others for employment, any officer, director, or employee of ACS; provided that the foregoing shall not prohibit hiring such employee if such employee has terminated employment with the Company prior to HSPC’s commencement of solicitation of such employee.  In the event that HSPC breaches its obligations contained in this paragraph, HSPC shall pay ACS, on demand, damages of up to two (2) times the base salary of each employee so hired, it being mutually agreed by ACS and HSPC that this provision for liquidated damages is reasonable and that the actual damage which would be sustained by ACS as the result of the failure to comply with this provision would be impractical and extremely difficult to determine, and that the payment of said damages is in no manner punitive.

  

IN WITNESS WHEREOF, ACS and HealthSmart, acting by its authorized representatives have signed as indicated below to signify acceptance and agreement to all of the terms and conditions contained herein.

 

  

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AMERICAN CARESOURCE

HOLDINGS, INC.

	  	  	
HEALTHSMART PREFERRED

CARE II, LP

	  
	  	  	  	  	  
	  	  	  	  	  
	
/s/ Wayne A. Schellhammer

	  	  	
/s/ David Adams

	  
	
Signature

	  	  	
Signature

	  
	  	  	  	  	  
	  	  	  	  	  
	
Wayne A. Schellhammer

	  	  	
David Adams

	  
	
Printed Name

	  	  	
Printed Name

	  
	  	  	  	  	  
	  	  	  	  	  
	
December 13, 2005

	  	  	
January 19, 2006

	  
	
Date

	  	  	
Date 

	  

 

  

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EXHIBIT B

CUSTOMER FEE SCHEDULE FOR COVERED SERVICES

 

ACS will reprice claims based on the ACS discounted fee schedule provided to HealthSmart and updated annually.

 

  

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EXHIBIT C

SERVICE AREA

 

The United States

 

  

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EXHIBIT E

 

HEALTHSMART ANCILLARY CLAIMS REPRICING WORKFLOW

 

 

  

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American CareSource Holdings, Inc.

Amendment to the Provider Service Agreement with

HealthSmart Preferred Care II, LP

 

Agreement and Effect of This Amendment

Effective Date January 1, 2007

 

This Amendment supplements the agreement between parties dated August 1, 2002 “American CareSource Client Agreement with HealthSmart Preferred Care II, LP” (hereinafter referred to as (“Provider Service Agreement”) as well as the amendment between parties dated December 13th 2005 with HealthSmart Preferred Care II, LP (hereinafter referred to as “Client Amendment”).

 

This Amendment shall have no effect apart from the Provider Service Agreement.  The terms of this Amendment preempt, supersede, and override all contrary terms of the Provider Service Agreement and the subsequent Client Amendment.  For the purpose of this Amendment, “ACS” refers to American CareSource Holdings Inc. and its affiliate companies, including but not limited to Ancillary Care Services, Inc. and “HealthSmart” refers to HealthSmart Preferred Care, II, L.P. and its Affiliated Entities, as defined herein and listed in Exhibit A, attached hereto.

 

This Amendment may be modified or supplemented only by an express written amendment dated and signed by authorized representatives of the parties.  No handwritten or separately printed additions or changes on this Amendment will be effective, even if they are initialed or signed.

 

Amendment effective date: January 1, 2007

 

	
1)

	
ACS agrees to allow HealthSmart to outsource the access to and electronic routing of ACS provider claims, through HealthSmart to ACS for the benefit of their respective client base.  Affiliated Entities will be identified on the attached Exhibit A as they are approved and implemented by both parties.

 

	
2)

	
ACS agrees to develop and maintain an ancillary provider service solution for HealthSmart and the Affiliated Entities identified in Exhibit A for the benefit of their clients.

 

	
  

	
a)

	
ACS has the obligation to maintain an ancillary service solution as required by HealthSmart and become the primary point of contact for ACS providers.

 

  

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b)

	
In addition, as ACS expands its ancillary service solution, ACS providers will be made available to HealthSmart.

 

	
3)

	
ACS will pay HealthSmart an Administrative Services Fee as compensation for the data processing, administration and management of the claims transfer and payment processes associated with administrating the electronic and manual claims transfer to ACS.

 

	
  

	
a)

	
ACS agrees to pay HealthSmart an Administrative Services Fee based on a total of [***] of the ACS provider payments received by ACS on the existing ACS/ HealthSmart provider payments and any future HealthSmart’s client claims, as set forth below.

 

	
  

	
i)

	
This incremental [***] increase in Administrative Services Fee is predicated on HealthSmart claims flow being fully implemented by the agreed upon terms, timetable and agreements as set forth in the Exhibit B attached to this Amendment.

 

	
  

	
ii)

	
This additional payment will be calculated, applied with current payments retroactively to December 1, 2006, continuing thereafter, subject to fulfillment of items in Exhibit B.

 

	
  

	
b)

	
The increase in the existing HealthSmart Administrative Services Fee does not apply if the terms and agreements included in Exhibit B are not fulfilled.

 

	
  

	
c)

	
Effective March 1, 2007, ACS agrees to pay HealthSmart an Administrative Services Fee based on [***] of the ACS provider payments received by ACS from HealthSmart clients’ claims.

 

	
  

	
d)

	
The Administrative Services Fee shall not exceed [***] per annum.  (the “Capped Amount”).

 

	
  

	
e)

	
The Capped Amount shall be reviewed annually and adjusted based on increased processing and data management requirements of HealthSmart and ACS.

 

	
  

	
f)

	
The total Administrative Service Fees paid for a specific book of business will not exceed [***] of collected revenue, in total.  This includes payments to HealthSmart, its Affiliated Entities, or any other third party.

 

  

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4)

	
Administrative Services Fees will be estimated by ACS monthly based on claims paid during the immediately preceding month.

 

	
  

	
a)

	
Monthly payments will be made within 30 days following the end of each calendar month of the year under this Agreement.  Within 60 days following the end of each quarter under this Agreement

 

	
  

	
(1)

	
ACS shall reconcile the monthly payments made during the previous quarter and calculate the final payment for that previous quarter based on actual receipts.

 

	
  

	
(2)

	
All adjustments will be made in conjunction with the next scheduled payment.

 

	
  

	
b)

	
ACS will provide the existing HealthSmart approved monthly Financial Report with monthly payments.

 

	
5)

	
ACS and HealthSmart agree to work together on a continuing basis to establish, enhance, and modify their respective electronic interfaces and claims processing/repricing requirements for the benefit of HealthSmart.  ACS and HealthSmart agree to create a process to identify, route, reprice and distribute ACS provider claims from HealthSmart, as outlined in Exhibit B.

 

	
6)

	
ACS Appeals Policy – ACS will require ACS providers to follow an established appeals process if they disagree with the payment of services and/or explanation of benefits received.  An appeal is warranted when there is a dispute between the ACS provider and Ancillary Care Services, Inc. for reason(s) including, but not limited to:  contractual issues, timely filing, authorization, and notification of payment issues.  Providers will not be penalized for filing an appeal.

 

The provider may file an appeal up to 180 days after the paid date of the Explanation of Benefits (EOB) by submitting a written request for review with a copy of the claim, the EOB, and any appropriate supporting documentation.

 

  

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7)

	
The Agreement and any amendments to the Agreement will automatically renew for three years unless either party provides one hundred and twenty (120) days notice of its intent to modify or terminate the Agreement prior to the contract term.  However, either party may, except as otherwise set forth in the Agreement or amendments to the Agreement, terminate the Agreement and any amendments to the Agreement for good cause upon no less than sixty (60) days prior written notice to the other party.  These amended provisions supersede the language of the underlying agreement regarding modification or termination.

 

  

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IN WITNESS WHEREOF, ACS and HealthSmart, acting by its authorized representatives, have signed as indicated below to signify acceptance and agreement to all of the terms and conditions contained herein.

 

	
AMERICAN CARESOURCE

	 	
HEALTHSMART PREFERRED

	
HOLDINGS, INC.

	 	
CARE II, LP

	  	 	  
	
/s/ David S. Boone

	 	
/s/ Reagan Bruce

	
Signature

	 	
Signature

	  	 	  
	
David S. Boone

	 	
Reagan Bruce

	
Printed Name

	 	
Printed Name

	  	 	  
	
May 1, 2007

	 	
July 1, 2007

	
Date

	 	
Date

 

  

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“EXHIBIT A”

 

List of approved Affiliated Entities

 

	
  

	
1.

	
American Administrative Group, Inc. (AAG)

 

	
  

	
2.

	
CareVu Corporation

 

  

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“EXHIBIT B”

 

Terms, Timetables and Agreements for enhanced Administrative Services

Fee Disbursements.

 

	
1.

	
HealthSmart/CareVu – an implementation of a two-way electronic exchange of UB92 claims to ACS for repricing, to be completed by February 28, 2007.

 

	
2.

	
AAG/CareVu – AAG to use ACS for non-HealthSmart clients wherever possible.  AAG may implement this on a staggered timetable for its clients.  This project includes the following sub-projects:

 

	
  

	
a.

	
AAG Network Setup

 

	
  

	
b.

	
AAG PMA Load

 

	
  

	
c.

	
AAG Provider Load

 

	
  

	
d.

	
AAG/CareVu – two-way electronic exchange of claims to ACS for repricing.

 

	
3.

	
AAG will develop a detailed project plan by February 2, 2007, which includes specific tasks to be completed by AAG, ACS and CareVu, as well as projected completion dates.

 

	
4.

	
AAG and ACS agree to hold regularly scheduled meetings during the entire implementation process.  AAG and ACS agree to diligently strive to follow and meet completion dates reflected in the project plan.

 

  

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American CareSource Holdings, Inc.

Third Amendment to the Provider Service Agreement with

HealthSmart Preferred Care II, LP

 

This Third Amendment, effective the 31st day of July, 2007, supplements the American CareSource Client Agreement, dated August 1, 2002, by and between American CareSource Holdings, Inc. and HealthSmart Preferred Care II, LP (hereinafter referred to as the “Provider Service Agreement”) and its subsequent amendments dated December 13th  2005 and January 1, 2007 (hereinafter referred to as “Client Amendments”).

 

This Amendment shall have no effect apart from the Provider Service Agreement.  The terms of this Amendment preempt, supersede, and override all contrary terms of the Provider Service Agreement and the subsequent Client Amendments.  All unaffected terms and conditions of the Provider Service Agreement and the Client Amendments shall remain in full force and effect.  For the purpose of this Third Amendment, “ACS” refers to American CareSource Holdings Inc. and its affiliate companies, including but not limited to Ancillary Care Services, Inc. and “HealthSmart” refers to HealthSmart Preferred Care, II, L.P. and its Affiliated Entities, as defined herein and listed in Exhibit A, attached hereto.

 

This Amendment may be modified or supplemented only by an express written amendment dated and signed by authorized representatives of the parties.  No handwritten or separately printed additions or changes on this Amendment will be effective, even if they are initialed or signed.

 

As of the Effective Date, the parties agree as follows:

 

	
1)

	
HSPC agrees to use ACS as the Primary ancillary benefits manager for HSPC Customers.  Primary Ancillary benefits manager means that ACS will have primary responsibility and priority in providing Ancillary Care Services, including network development, contracting and provider maintenance, to HSPC Customers, subject to Customer’s agreement.  ACS and HSPC will work together to communicate the benefits of ACS’ provider network to these customers.  ACS provider contracts will be placed in priority, first tier position for HSPC Covered Persons’ access.  ACS will be responsible for properly and accurately repricing all submitted claims that match an ACS provider TIN file.  Upon mutual development of targeted ancillary providers (as provided for in Section 15, below), HSPC contracting staff will use commercially reasonable efforts to assist ACS in obtaining contracts with identified ancillary providers.  Notwithstanding, HSPC may contract directly for ancillary care providers as part of HSPC’s routine hospital and physician contracting, and/or with specific ancillary providers.

 

	
2)

	
HSPC agrees to devote necessary internal contracting resources to the joint strategic contracting plan as described in Section 15, below.  The initial phase of joint strategic contracting plan will be defined and implemented by HSPC and ACS no later then August 1, 2007.

 

	
3)

	
HSPC agrees to maintain the confidential nature of the service fee paid under this arrangement and will not disclose it to outside parties

 

  

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4)

	
HSPC agrees that no HSPC contracted providers will be excluded from the primary claims sort process that identifies that provider as an ACS contracted provider unless a more beneficial rate adjustment may be obtained by accessing an existing HSPC ancillary provider agreement.

 

	
5)

	
HSPC agrees that no ACS providers will be excluded by HSPC, HSPC customers, or its Affiliated Entities unless ACS cannot provide at least equivalent specific provider average savings compared to savings currently being achieved through alternative cost reduction mechanisms.  Current average savings are calculated using a minimum (90) day time frame and a minimum of ten (10) claims.

 

	
6)

	
HSPC will maintain the confidentiality and proprietary nature of the ACS provider discounts.  During the term of this Agreement, except as otherwise provided herein, HSPC agrees not to contract with any third-party vendors to receive services substantially similar to those provided by ACS hereunder.

 

	
7)

	
HSPC and ACS agree to develop a joint communication plan that will communicate this relationship to providers and payors.  Both parties will work together to determine the written and oral communication used to describe and sell this arrangement to the various parties.

 

	
8)

	
HSPC will communicate, as a follow up to communications sent by ACS, as necessary, to the providers included under this agreement, that they have contracted with ACS to manage the agreed upon ancillary service categories.

 

	
9)

	
HSPC will communicate, as necessary to its Customers, that they have contracted ACS to manage the agreed upon ancillary service categories with the ACS Network Providers.

 

	
10)

	
HSPC will dedicate staff to support the communication and conversion of providers to the ACS network as well as support communication with Customers to ensure timely implementation.

 

	
11)

	
HSPC agrees to allow a press release by ACS announcing this expanded relationship.  HSPC and ACS will jointly develop the copy for the press release and such release must be preagreed upon, in writing, prior to release.  Approval will not be unreasonably withheld.

 

	
12)

	
HSPC agrees that if they engage in any merger, acquisition or partnership with an organization that processes, produces or has access to ancillary claims that match TINs in the ACS provider network, that commercially reasonable efforts will be made to assure that such claims be included with and subject to the same process and terms of this agreement, provided that both HSPC and ACS agree at the time that such action will be mutually beneficial to the parties.

 

	
13)

	
ACS will provide HealthSmart with a complete ACS provider network download no later than July 15, 2007.  Effective August 1, 2007 HSPC will have downloaded the ACS provider network directory into the HSPC claims system as HealthSmart’s primary ancillary network.

 

  

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14)

	
Effective August 1, 2007, HSPC will:  (1) receive claims from HSPC Customers and/or providers, as applicable, with ACS provider TIN’s and (2) submit all such claims that match the ACS provider TIN’s directly to ACS for repricing in accordance with the Client Fee Schedule without exclusion (except as otherwise provided herein).

 

	
15)

	
The parties will jointly develop a strategic contracting plan that will define targeted providers and timetables for ACS/HSPC contracting efforts.  This project plan will be mutually agreed upon and incorporated into the Provider Service Agreement by subsequent amendment.

 

	
16)

	
HSPC and ACS agree to work diligently to complete and execute a new contract updating all terms, conditions and language within one-hundred-eighty (180) days from August 1, 2007.

 

	
17)

	
Non-Solicitation; Non-Interference.  While this Agreement is in effect, and for a period of one (1) year following the termination of this Agreement, neither party shall, directly or indirectly, (i) solicit or attempt to induce any individual who then is, or at anytime during the preceding six (6) month period was, an employee of the other party to become employed by or otherwise render services to the other party or (ii) employ any such individual.

 

	
18)

	
ACS represents and warrants that the ASC established Client Fee Schedule for HSPC and their Affiliates will demonstrate superior overall savings for their Customers and equivalent or superior savings per specific provider.  The specific benchmarks to demonstrate and document those savings will be jointly developed and incorporated into the Provider Service Agreement by subsequent amendment.

 

	
19)

	
Section 3 of the January 1, 2007 Client Amendment is deleted in its entirety and replaced with the following:

 

3)          As compensation for services rendered pursuant to the Provider Service Agreement and Client Amendments, ACS agrees to pay HSPC [***] of the amount collected by ACS from HSPC and their affiliated Customers on each resolved claim that was repriced on or after August 1, 2007 and continue that payment level over the life of the agreement (the “Service Fee”).  This fee represents compensation to HSPC for all data processing, administration and management of claims routing, the exclusive nature of this agreement, the commitment to assist in the contracting of HSPC ancillary providers into the ACS network and other duties performed by HSPC as outlined in the Provider Service Agreement and Client Amendments.

 

The Service Fee shall not exceed [***] per annum (the “Capped Amount”).  The Capped Amount shall be reviewed annually and adjusted based on increased processing and data management requirements of HSPC and ACS. HSPC and ACS agree to work diligently to achieve a threshold benchmark of [***] per month in ACS billed charges claim volume from HSPC and HSPC affiliated Customers and Payers by December of 2007.  The benchmark will be 

 

  

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reviewed by the parties in January of 2008.  Once the benchmark is achieved, the administrative fee will not be subject to modifications related to the benchmarks.  The following range will govern any modification to the administrative fee paid herein if the benchmark of [***] per month in ACS billed charge claim volume is not obtained by December 31, 2007:

	
  

	
·

	
From [***] in ACS billed charge claim volume the Service Fee will be jointly reviewed and operational plans to deliver [***] will be jointly developed.  The time frame to achieve [***] in ACS monthly billed charges will be extended by 120 days, which could be extended upon mutual agreement thereafter.

	
  

	
·

	
From [***] in ACS billed charge claim volume the on-going Service Fee will be reduced to [***] until the threshold of [***] is achieved and then the Service Fee will revert to [***].

	
  

	
·

	
From [***] in ACS billed charge claim volume the on-going Service Fee will revert to [***].

	
  

	
·

	
Below [***] in ACS billed charge claim volume the Service Fee will revert to [***] and ACS has the right to recoup the incremental [***] paid from August to December over the next twelve months as an adjustment to the monthly Service Fee owed to the HSPC.

 

  

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IN WITNESS WHEREOF, ACS and HealthSmart, acting by its authorized representatives, have signed as indicated below to signify acceptance and agreement to all of the terms and conditions contained herein.

 

 

 

	
AMERICAN CARESOURCE

HOLDINGS, INC.

	  	  	
HEALTHSMART PREFERRED

CARE II, LP

	  
	  	  	  	  	  
	  	  	  	  	  
	
/s/ David S. Boone

	  	  	
/s/ David Adams

	  
	
Signature

	  	  	
Signature

	  
	  	  	  	  	  
	  	  	  	  	  
	
David S. Boone

	  	  	
David Adams

	  
	
Printed Name

	  	  	
Printed Name

	  
	  	  	  	  	  
	  	  	  	  	  
	
8/01/07

	  	  	
8-1-07

	  
	
Date

	  	  	
Date 

	  

 

  

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“EXHIBIT A”

 

List of approved Affiliated Entities

 

	
  

	
1.

	
American Administrative Group, Inc. (AAG)

 

	
  

	
2.

	
CareVu Corporation

 

  

Page 6 of 6

  

 

Fourth Amendment to the Provider Service Agreement

 

This Fourth Amendment, effective the 20th day of December, 2008 (the “Effective Date”), amends the American CareSource Client Agreement, dated August 1, 2002, by and between American CareSource Holdings, Inc. and HealthSmart Preferred Care II, LP (hereinafter referred to as the “Provider Service Agreement”) and its subsequent amendments effective September 1, 2005 (the “First Amendment”), January 1, 2007 (the “Second Amendment”),  and July 31, 2007 (the “Third Amendment” and, together with the First Amendment and the Second Amendment, the “Client Amendments”).  The Provider Service Agreement, as amended by the Client Amendments and this Amendment, is referred to as the “Provider Service Agreement, as amended.”  This Amendment is entered into by and among American CareSource Holdings, Inc., HealthSmart Preferred Care II, LP and HealthSmart Holdings, Inc.

 

The terms of this Amendment preempt, supersede, and override all contrary terms and conditions of the Provider Service Agreement, as amended.  All unaffected terms and conditions of the Provider Service Agreement and the Client Amendments shall remain in full force and effect.  For the purpose of this Fourth Amendment, “ACS” refers to American CareSource Holdings Inc. and its affiliate companies, including but not limited to Ancillary Care Services, Inc., “Parent” refers to HealthSmart Holdings, Inc. and “HSPC” refers to HealthSmart Preferred Care, II, L.P. (collectively with the entities listed in Exhibit A hereto, “HealthSmart” or the “HealthSmart Entities”).

 

On September 21, 2007, HSPC became affiliated with Interplan Health Group (“IHG”).  ACS and HSPC agree that adding members of the IHG network to the list of Covered Persons would be mutually beneficial as contemplated by Section 12 of the Third Amendment.

 

All terms used but not defined in this Amendment have the meaning ascribed to them in the Provider Service Agreement, as previously amended.

 

As of the Effective Date, and as provided for in Section 16 of the Third Amendment, the parties agree as follows:

 

	
1)

	
In order to assist HSPC in coordinating and integrating access to the ACS network by members of the IHG network, ACS agrees to pay to HSPC one million dollars ($1,000,000) to offset integration costs incurred in connection therewith including, but not limited to, costs associated with salaries, benefits, and third party contract costs.  The payment shall be made by ACS to HSPC within ninety (90) days of the execution of this Amendment.  Both ACS and the HealthSmart Entities will maintain the confidentiality and proprietary nature of the payment and other terms described herein, to the extent public disclosure is not required by applicable law.

 

	
2)

	
The term of the Provider Service Agreement is hereby extended through December 31, 2012.

 

	  	
a)

	
The Provider Service Agreement, as amended, may not be terminated or amended by either party without the prior written consent of the other party other than upon any default by the other party, which default remains uncured for a period of 60 days following notice in writing thereof.

 

  

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b)

	
The Provider Service Agreement, as amended, shall apply to and bind each and all of the HealthSmart Entities.  By executing this Amendment, Parent accepts and ratifies such agreement, as amended, on behalf of itself and all Affiliated Entities, as defined in Exhibit A.

 

	  	
c)

	
This agreement shall survive a change in control of Parent or HSPC or its operating divisions subject to the Provider Service Agreement, as amended, and shall be binding upon any successor in interest thereto and no such change in control shall be effective without the express assumption of the terms of all agreements between the parties by the acquiror.

 

	
3)

	
Section 3 of the First Amendment is deleted in its entirety and replaced with the following:

 

	  	
a)

	
A fee (the “Service Fee”) payable to HSPC is designed to reimburse and compensate HSPC for the work that it is required to perform to support the ACS program.  This includes, but is not limited to marketing support, electronic claims conversion for the benefit of this program, the transmission of those claims to ACS, the receipt of those claims from ACS, and the transmission and tracking of the claims to the HSPC client payors.

	  	
b)

	
“Paid Claim Volume” is defined as the aggregate claims paid each calendar quarter to ACS that were derived from HSPC or its clients.

	  	
c)

	
When calculating Paid Claim Volume for purposes of the Service Fee, ACS may exclude paid claims in those cases where the amount paid to ACS is less than the sum of (i) the corresponding provider cost and (ii) any administrative fee paid to HealthSmart.  However, such claims will also be excluded for purposes of calculating the targets established in the table provided in Subsection d below.

	  	
d)

	
The Service Fee, which is calculated based on paid claims, will be reset annually beginning with the twelve months beginning June 30, 2009 (hereinafter, the “Reset Date”, which date may change in accordance with Section 3h of this Agreement), according to the following schedule:

	
If the paid claim volume for the quarter ended June 30 is...

	
The Service Fee rate shall be...

	
At [***] or greater

	
[***]

	
From [***] to [***]

	
[***]

	
From [***] to [***]

	
[***]

	
Less than [***]

	
[***]

	  	
e)

	
If there is a significant reduction in HSPC covered or managed lives, the fees will be revisited by both parties.

 

  

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f)

	
If this arrangement is found in any way to violate any federal or state regulations, both parties agree that they will use their best efforts to negotiate a revision that is acceptable to each party.

	  	
g)

	
The Service Fee shall not exceed [***] per annum (the “Capped Amount”).

	  	
(h)

	
The Reset Date shall become March 31, 2009 immediately (and retroactively in arrears if appropriate) and the relevant Service Fee shall adjust downward as of March 31, 2009 in accordance with the above schedule as if June 30 were March 31 upon either of the following:

	  	
i)

	
Any failure to satisfy any covenant, condition or warranty in any agreement relating to Indebtedness of HSPC or any HSPC Entity, whether or not such failure results in an event of default; or

	  	
ii)

	
If the Paid Claim Volume is less than [***] for the quarter ending-March 31, 2009.

	  	
iii)

	
In documenting compliance with 3)(h)(i) above, HSPC shall provide to ACS within 45 days following the end of the stated quarter quarter a copy of the certified compliance certificate submitted to its lenders and accompanying financial statements for the quarters ended December 31, 2008, March 31, 2009, June 30, 2009, September 30, 2009 and December, 31, 2009.  In addition, HSPC shall provide a copy of its annual audit report for each year of the remainder of the contract term within 30 days of its issuance by HSPC’s independent auditors.

	
4)

	
ACS warrants that it will provide the same level of discounts to HealthSmart Entities that it provides other clients for similar products and levels of support.

 

	
5)

	
Each of HSPC and Parent represents and warrants to ACS that it does not control, is not controlled by and is not under common control with (in each case directly or indirectly through one or more intermediaries) any person other than the Affiliated Entities, as defined in Exhibit A.

 

	
6)

	
The parties will jointly develop a strategic contracting plan (the “Project Plan”) that will define a list of targeted providers and timetables for ACS/HSPC contracting efforts pursuant to the Provider Service Agreement, as amended.  The Project Plan will be mutually agreed upon no later than January 15, 2009.  HSPC agrees to devote necessary internal contracting resources to the development of the Project Plan.  In addition, each of ACS and HSPC will dedicate a named point person who will devote substantially all of their time to the ACS/HSPC contracting efforts and the ongoing management of the relationship between ACS and HSPC by January 15, 2009.

 

The Project Plan will also include the following provisions:

 

	  	
a)

	
ACS will be the outsourced ancillary contracting and network management provider for HealthSmart’s group health clients, any Third Party Administrators (“TPAs”) currently owned by or affiliated with HealthSmart (including American Administrative Group

 

  

Page 3 of 8

  

 

	  	  	
(AAG)) and any entities, including any primary PPO networks and any TPAs, that may be controlled by (in each case directly or indirectly whether or not through one or more intermediaries) HSPC at any time in the future and with respect to which the ACS model could be deployed; provided, however, that HealthSmart payors who are not accessing a HealthSmart network as their primary PPO shall not be covered by this provision.

 

	  	
i)

	
HealthSmart will give ACS the rights of first refusal to add ancillary providers to the network.

 

	  	
ii)

	
HealthSmart will not pursue ancillary contracts for its group health business and TPAs, except through the Provider Services Agreement, as amended, and the Project Plan.

 

	
  

	
iii)

	
ACS and HealthSmart will jointly develop network service standards, and hereby agree to be bound by such standards, that will define the coverage and response necessary to meet the demands of HealthSmart.

 

	  	
iv)

	
The provisions of this Amendment will have no binding effect on HealthSmart’s routine hospital and physician contracting.

 

	  	
b)

	
HSPC contracting staff will notify targeted contracted ancillary providers that HSPC has engaged ACS to be the contracted ancillary management vendor for HealthSmart Entities.  Access to the HealthSmart group health lines of business can only occur through a direct contract with ACS, provided that the ACS discounts are equal to or greater than HSPC network discounts currently in force.

 

	  	
i)

	
HSPC will support the ACS contracting efforts through both written and verbal confirmation that ACS is the outsourced group health ancillary network for HealthSmart Entities.

 

	  	
ii)

	
HSPC will stop using a non-participating provider for any HealthSmart Entity if the ACS network is able to provide substitute coverage for the same service with quality standards and economics that satisfy either the same standards applied to the current providers or substantially similar standards actually applied to the current providers within the same geographic area.

 

	  	
c)

	
HSPC and the HealthSmart Entities will support the ACS ancillary network with its payors through joint sales efforts and communication to these payors about the benefits of the ACS network.

 

	  	
i)

	
If a HealthSmart Payor is not participating with the ACS program, they can be excluded on a case by case basis from the ACS network requirement.

 

	  	
ii)

	
ACS and HSPC will work together to develop a consistent provider and payor notification plan to support the contracting efforts.

 

  

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Sections 6)a), 6)b) and 6)c) will take effect in accordance with the specific time parameters [noted above] and in no case later than 90 days following the date that the Project Plan is mutually agreed upon.

 

	
7)

	
HSPC agrees to include the ACS logo on all cards issued by it or any other HealthSmart Entity to members that are or could be eligible for the ACS network.  In addition, HSPC agrees to re-issue, by June 30, 2009 all cards previously issued to members that are eligible for the ACS network with replacement cards including the ACS logo.

 

	  	
a)

	
The ACS logo will be displayed in a mutually agreeable fashion, subordinated to the Health Smart and/or payor logos, as applicable.

 

	  	
b)

	
This will only apply where HealthSmart is responsible for producing the cards.

 

	
  

	
c)

	
The program will be initiated no later than March 31, 2009, with cards being issued by June 30, 2009.

 

	  	
d)

	
HSPC will be responsible for the reasonable incremental cost of issuing and reissuing cards as described above.  This includes the cost of adding the logo to the card and printing and mailing the card.

 

	
8)

	
The ACS logo will also be included in the member directories, with the providers identified as an ACS provider.  This will be done in a mutually agreeable fashion, subordinated to the Health Smart logos as appropriate.

 

	  	
a)

	
The directory will include any web based or internet accessed directories prepared for participating HSPC members or companies.

 

	  	
b)

	
HSPC will be responsible for the reasonable incremental cost of preparing the member directories as described above.  This includes the cost of adding the logo to the directories and printing and mailing the directories, if applicable.

 

	
9)

	
The parties further agree to use good faith efforts to cooperate on a number of projects the parties have identified to be mutually beneficial.  Such projects include but are not limited to the Anci-Select,  Anci-Concierge, and Anci-Card programs currently under development by ACS.

 

	
10)

	
In the case of any disputes or issues that may arise in connection with the respective rights and/or obligations of the parties under the Agreement, arbitration will be entered into in Dallas, Texas.  Each party will notify the other, in writing, of the name of its representative(s) who will have primary responsibility for communications with the other party.  If such representatives are unable to resolve the dispute within 60 days of a party’s written notice of a dispute, either party may demand submission of the issue to arbitration before a single arbitrator in accordance with the Alternative Dispute Resolution Service Rules of Procedure for Arbitration, as published by the American Health Lawyers Association.  The party requesting such arbitration shall pay the arbitrator’s fee.  The 

 

  

Page 5 of 8

  

 

	
 

 

11)

	
decision of the representatives or, if applicable, the arbitrator, shall be final and binding upon the parties.

 

Except as otherwise stated herein, all remaining terms of the Service Provider Agreement, as previously amended, shall remain unmodified and in full force and effect.

 

[SIGNATURE PAGE FOLLOWS]

 

  

Page 6 of 8

  

 

IN WITNESS WHEREOF, ACS, HealthSmart, and Parent acting through their authorized representatives, have signed as indicated below to signify acceptance and agreement to all of the terms and conditions contained herein.

 

	
AMERICAN CARESOURCE

HOLDINGS, INC.

	  	
HEALTHSMART PREFERRED

CARE II, L.P.

	
 

 

/s/ David S. Boone

	  	
 

 

Illegible

	
Signature

	  	
Signature

	
 

David S. Boone

	  	
 

Illegible

	
Printed Name

	  	
Printed Name

	
 

12/31/08

	  	
 

12/31/08

	
Date

	  	
Date

	  	  	  
	
HEALTHSMART HOLDINGS, INC.,

on behalf of itself and the Affiliated Entities

	  	  
	
 

 

Illegible

	  	  
	
Signature

	  	  
	
 

Illegible

	  	  
	
Printed Name

	  	  
	
 

12/31/08

	  	  
	
Date

	  	  

 

  

Page 7 of 8

  

 

Exhibit A - Affiliated Entities

 

1. HealthSmart Holdings, Inc.

 

2. American Administrative Group, Inc. (AAG)

 

3. CareVu Corporation

 

4. Interplan Health Group

 

5. HealthSmart Benefit Solutions (including all TPA’s presently or subsequently owned operated or controlled, directly or indirectly, whether or not through one or more intermediaries, by HealthSmart Holdings, Inc. or any of its subsidiaries)

 

6. HealthSmart Networks (including all primary PPO networks presently or subsequently owned, operated or controlled, directly or indirectly, whether or not through one or more intermediaries, by HealthSmart Holdings, Inc. or any of its subsidiaries)

 

All entities listed above collectively referred to as the “Affiliated Entities”.

 

 

Page 8 of 8Unassociated Document

 

Exhibit 10.21

 

American CareSource Holdings, Inc.

Confidential Materials Omitted and Filed Separately with the

Securities and Exchange Commission

Confidential Portions denoted by [***]

 Final

7/2/2007

 

ANCILLARY CARE SERVICES

NETWORK ACCESS AGREEMENT

 

This Ancillary Care Services Network Access Agreement (the “Agreement”), dated as of July 2, 2007, by and between American CareSource Holdings, Inc. d/b/a Ancillary Care Services, Inc. (“ ACS “), and Texas True Choice, Inc. and its subsidiaries set forth on Schedule A attached hereto, which may be updated from time to time (collectively, the “ Client “) shall be effective as of May 21, 2007, the “ Effective Date “.

 

WHEREAS, ACS is engaged in the business of developing, maintaining and providing access to networks of providers engaged in ancillary health care services and in administrating comprehensive ancillary health care services for various types of medical benefit plans; and

 

WHEREAS, Client desires to utilize ACS’ Network Providers and active referral management services in order to provide benefits for ancillary health care services to its Participants; and

 

WHEREAS, Client shall provide claim consolidation and routing service to ACS to facilitate the automated repricing of claims, generating reductions in various charges for ancillary health care services that are Covered Services provided to Client Participants;

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth in this Agreement and other good and valuable consideration, the parties agree as follows:

 

	
1.

	
DEFINITIONS

 

1.1.           ”Benefit Plans” means any type of health care benefit provided either directly by Client to its customers, including insured, health maintenance organization or self-insured plans, or through administrative services contracts between Client and other payors, including those with employers, third party administrators, affiliates and subsidiaries.

 

1.2.           ”Covered Services” is defined to include those ancillary care services included on Attachment A hereto.

 

1.3.           ”Revenue” means the amount of money ACS actually collects from the Payor.

 

1.4.           ”Network Provider” means any provider of Covered Services that has agreed to participate as an ACS network provider and is a party to an ACS Provider Agreement.

 

  

 

  

 

1.5.           ”Participant” means any covered person under a Benefit Plan and who is entitled to benefits for Covered Services.

 

1.6.           ”Participant Expenses” means any amounts that are the responsibility of the Participant or the appropriate responsible party, other than ACS, to pay in accordance with his or her Benefit Plan, including co-payments, coinsurance and deductibles.

 

1.7.           ”Payor” means a payor or entity providing or administering a Benefit Plan on behalf of the Client for the Participant.

 

1.8.           ”Provider Agreement” means a contract by and between ACS and a Network Provider pursuant to which a Network Provider shall provide certain ancillary services.

 

	
2.

	
REPRESENTATIONS AND OBLIGATIONS OF ACS

 

2.1.           Network Providers.

 

 (a)           Access to Network Providers and Credentialing.  During the term of this Agreement, ACS warrants that it shall maintain a fully credentialed network of ancillary care providers and shall provide Client Participants access to its Network Providers.

 

 (b)           Network Provider Information.  ACS shall deliver the names and demographics for each of its Network Provider to Client on a monthly basis in a mutually agreed-upon electronic format.  Network Providers that have also entered into agreements with the Client shall provide Covered Services to the Client pursuant to its respective ACS Provider Agreement.  Client shall take such action as is necessary to provide that the agreement between ACS and the relevant Network Provider shall prevail over such existing agreements.

 

 (c)           Requested Additions and Deletions of Network Providers.  ACS shall use its best efforts to recruit additional Network Providers to meet the needs of the Client when requested by Client in writing.  If Client requests the deletion or suspension of a Network Provider from the list of those Network Providers providing Covered Services to Client Participants, ACS shall immediately contact Client to determine the factual situation necessitating the change and shall work with Client to obtain a mutually satisfactory solution.

 

 (d)           Activation Date.  ACS shall notify each of its respective Network Providers within ten (10) business days of the Effective Date of this Agreement to inform the Network Providers that it shall begin to provide Covered Services to Client Participants.

 

2.2.           Claims Processing of Covered Services and Repricing.

 

  

2

  

 

 (a)           ACS shall require that Network Providers submit claims for Covered Services provided to Client Participants to the electronic or U.S. mail addresses established by Client or Payor.

 

 (b)           ACS shall provide repricing services for Client in accordance with this Agreement.  ACS shall reprice claims using the customer fee schedule calculations attached hereto as Attachment B.

 

2.3.           Payment of Network Providers.  Following receipt from Client of payment for Covered Services provided to Client Participants, ACS shall pay the Network Providers who provided the Covered Services in accordance with such Network Provider’s respective ACS Provider Agreement.  ACS shall provide all Explanation of Payment or Explanation of Benefits forms to such Network Providers when payment is made, which shall allow the Network Provider to collect remaining allowable Participant Expenses for the Covered Services.

 

2.4.           Network Provider Relations.  ACS shall provide Network Provider relation services for Network Providers for claims paid by ACS to the Network Provider, including toll-free telephone lines, to address any payment or claims review issues involving the payment of the claim under the ACS Provider Agreement.

 

2.5.           Assignment of Payment for Services.  ACS Provider Agreements shall allow for the assignment to Payors of the right to collect payments for services provided.

 

2.6.           Reports.  ACS shall provide Client with information and reports on a monthly basis regarding the amount of savings realized, payment activity, utilization data and such other information as shall be mutually agreed upon, in such format, electronic or hard copy, as agreed upon by the parties.

 

2.7.           Binding Effect.  ACS is a corporation duly existing and in good standing under the laws of the State of Delaware, and it has the corporate authority to enter into this Agreement.

 

	
3.

	
REPRESENTATIONS AND OBLIGATIONS OF CLIENT

 

3.1.           Claims Routing Services.  Client shall collect, consolidate and transmit claims from Network Providers to ACS on a timely basis for repricing.  Client shall accept change in “pay to” status of the claim and route each repriced claim to the appropriate Payor.

 

3.2.           Claims Processing of Covered Services. Payors shall collect, consolidate and adjudicate all claims from Network Providers in accordance with the eligibility and benefit parameters specified by Participant’s benefit plan and subsequently remit such claims to ACS for repricing in accordance with Section 2.2(b) above. Payment shall be made as provided in Section 4 of this Agreement. Payor shall ensure that each claim paid pursuant to this Agreement is accompanied by applicable 

 

  

3

  

 

Explanation of Payment form or Explanation of Benefits form to enable ACS to provide such information to the Network Provider, including the amount of Participant Expense for each such claim.  Payor shall prepare all Explanation of Benefits forms for Participants reflecting the benefit payment amounts paid to ACS for claims from Network Providers, as well as remaining amounts that may be Participant Expenses.

 

3.3.           Network Provider Information.  All Network Providers for Covered Services shall be listed in all provider directories and resource materials for Client Participants, regulatory authorities, and prospective participants and groups, including printed and on-line or electronically-accessed directories.  Client agrees to update these listings with information provided by ACS at the same time that it routinely updates such listings for Client contracted providers, but no less frequently than monthly.  Client shall provide ACS with applicable Benefit Plan coverage codes, eligibility verification contact information and related information to allow ACS to furnish this information to its Network Providers.

 

3.4.           Licenses and Compliance with Law; Binding Effect.  Client represents and warrants that it holds, and will throughout the term of this Agreement continue to hold, all licenses required by applicable law to conduct its current healthcare business.  Client further represents and warrants that it has the corporate authority and is duly authorized to enter into this Agreement and to bind its employees and agents pursuant to the terms of this Agreement.  Client shall provide written notice to ACS within ten (10) business days of (i) any formal proceeding, challenge or change concerning Client’s licensure; or (ii) receipt of any notice from any governmental authority of noncompliance with any applicable federal, state or local law and regulations that would affect the terms or services provided pursuant to this Agreement.

 

3.5.           Preauthorization and Referrals.  Payor shall continue to administer its preauthorization and referral policies for Participants under its Benefit Plans, including all requirements for preauthorization of Covered Services, for Network Providers.

 

3.6.           Use of Trademarks and Name.  Client shall allow ACS to include Client’s name on all Explanation of Payment or Explanation of Benefits forms sent to Network Providers from ACS.  Any correspondence sent by ACS to Client Participants concerning payments to Network Providers may also include such information and, upon separate agreement, use of the Client trademarks or service marks, or, alternatively, Client will provide paper forms including such information for use by ACS exclusively for such Participants.

 

3.7.           Applicability to Client Benefit Plans.  Client shall provide ACS with a complete listing of Payors (“Payors Listing”) that shall use the Network Providers for Covered Services provided to Participants, subject to the agreement of ACS.  The Payors Listing shall be submitted to ACS on a monthly basis in a mutually agreed-upon electronic format.  This Payors Listing shall include:  group name, group number, address, effective date of group, contact for benefits or eligibility and claim submission address.  Any change or addition to such programs shall be negotiated with ACS prior to 

   

  

4

  

 

implementation, and additions shall be provided at least twenty business days prior to the effective date of the change to allow ACS adequate time to provide such information to its Network Providers.

 

	
4.

	
PAYMENT FOR SERVICES AND COMPENSATION

 

4.1.           Client Payments.  When Payor has finally adjudicated the repriced Network Provider claims for Participants, it will remit all Benefit Plan payments to ACS for each such Network Provider.  Payor will pay ACS the repriced amount, less applicable Participant Expense.  Payor will utilize ACS’ tax identification number for all such payments, recognizing the assignment of the claim from the Network Provider to ACS.  Payments to ACS shall be made as soon as possible following adjudication of the claim to ensure satisfaction of timely claims payment guidelines.  Payments to ACS shall be accompanied by accurate benefit explanations and calculation of Participant Expenses that will allow ACS to make payment and provide appropriate claims reconciliation information to Network Providers.  The parties may agree to electronic transfers of payments and payment information.

 

4.2.          Compensation to Client.  

(a)           TTC Fee.  During the Term of this Agreement, ACS shall pay to the Client the following:

(i)           Administrative Fee Payment.  ACS shall pay the Client a monthly management fee equal to the percentage of the ACS Revenue of the Client Business set forth on Attachment C that is collected as Revenue as reflected in the financial records of ACS..  All payments to the Client of the Administrative Fee shall be based on cash received and cash paid out by ACS.  Monthly payments to the Client representing the Administrative Fee shall be paid on the 15th of each month for the month immediately preceding.

(ii)           Implementation Payments.  ACS shall make up to four payments to the Client as a fixed implementation fee for the Client’s achievement of certain implementation targets as specified in Attachment C attached hereto, not to exceed [***] in the aggregate.  These targets will be measured as (i) the Client presenting for processing by ACS a percentage of its payors set forth in Attachment C actually and actively submitting claims to ACS and (ii) the attainment of monthly Revenue for Covered Services set forth in Attachment C.

Notwithstanding the above, it is the intention of the parties that the Client is to receive an aggregate fee (meaning the total of the Administrative Fee Payment and Implementation Payment) of [***] of the total Revenue attributable to all Covered Services (the “Client Business”) provided to Client Participants during the Term of this Agreement (the “TTC Fee”).  Commencing upon the 33rd month of the Term of the Agreement, ACS and the Client shall calculate the total aggregate amount of the Administrative Fee Payments and Implementation Payments paid to the Client and reconcile such payments to equal [***] of the total Revenue attributable to the Client Business.  Upon such reconciliation, any differences in the reconciled TTC Fee shall be paid to the Client by ACS or reimbursed to 

 

  

5

  

 

ACS by the Client, as the case may be, over a period of 18 months in equal installments as an adjustment to future Administrative Fee Payments.

 

 (b)           Warrants.  ACS shall grant Corporate Health Plans of America, Inc., an affiliate of the Client, warrants to purchase a total of 225,000 shares of ACS common stock at an exercise price equal to the closing price of the Common Stock of ACS reported on the American Stock Exchange as of the Effective Date.  The warrants shall vest 25% on the Effective Date and 25% on the subsequent anniversaries of the Effective Date and shall otherwise be in the form attached hereto as Attachment D.

 

	
5.

	
RECORDS, CONFIDENTIALITY AND HIPAA

 

5.1.           Maintenance and Accuracy of Records.  Both parties agree to maintain appropriate financial and administrative records related to the services provided and claims processed and paid under this Agreement and in accordance with applicable federal and state laws and regulations in an accurate and timely manner.  All such records shall be maintained for a minimum of three (3) years from the date of the making of the record.

 

5.2.           Audit.  During the term of this Agreement and for at least three (3) years after any particular transaction or payment obligation, Client shall keep and maintain detailed and accurate books and records with regard to all claims for services provided by ACS Network Providers.  ACS or its representatives shall be entitled, at a mutually agreeable time and date but in any event upon no less than fifteen (15) days prior written notice, to review, copy and audit such books and records and/or compliance with the terms of this Agreement during Client’s normal business office hours, all at ACS’ own expense; provided that Client will bear any such reasonable expense if the review or audit shows an underpayment of more than five percent (5%) for the period audited.  Underpayments by Client shown by any such audit shall be immediately paid by Client to ACS along with reimbursement of reasonable expenses incurred by ACS in conducting the audit.  The audit rights granted pursuant to this Section 5.2 shall also inure to Client with respect to ACS books and records as such relate to the transactions contemplated by this Agreement, and ACS shall keep and maintain detailed and accurate books and records with regard to such transactions during the existence of this Agreement and for at least three (3) years after any particular transaction or payment obligation.

 

5.3.           Confidential Business Information.  Client and ACS may from time to time receive confidential and proprietary business information, claim information, legal information or other information from the other party.  Client and ACS agree that such information (including ACS lists of payments under Provider Agreements, electronic claims processing systems, financial models and the financial provisions of this Agreement and related information which shall all be deemed confidential whether or not so marked) shall all be maintained in confidence and shall not be disclosed to any person or entity, or used for any purpose other than performance hereunder, except as authorized in writing by the party providing the information or as otherwise required by law.

 

  

6

  

 

5.4.           Confidentiality of Records; HIPAA.  ACS and Client shall safeguard the privacy of any health information that identifies a particular Participant.  ACS and Client shall abide by all federal and state laws regarding confidentiality and disclosure of medical records and other health and Participant information.  ACS recognizes that it may be considered to be a Business Associate of Client under the federal Health Insurance Portability and Accountability Act of 1996 (“ HIPAA “), and agrees to execute a Business Associate Agreement which shall be separately attached to and made a part of this Agreement.

 

	
6.

	
TERM AND TERMINATION

 

6.1.           Term; Renewal.  This Agreement shall commence on the Effective Date and shall continue in effect for a period of four (4) years unless terminated as provided herein (the “ Term “).  This Agreement shall renew automatically for successive one-year terms unless either party shall have delivered written notice of non-renewal to the other party at least ninety (90) days prior to the expiration of the then current term.

 

6.2.           Termination Without Cause.  ACS may terminate this Agreement without cause at any time during the Term of this Agreement by giving the Client ninety (90) days prior written notice of termination.  Client may terminate this Agreement without cause at any time during the Term of this Agreement by giving the Client two years prior written notice of termination.  If Client terminates the agreement without cause all monies and fees above [***] paid to the Client as described in section 4.2(a) of this Agreement shall be returned to ACS and the unvested Warrant set forth in Paragraph 4.2(b) shall terminate immediately.

6.3.           Termination for Cause.  Either party may terminate this Agreement if the other party breaches this Agreement and such breach has not been cured prior to the expiration of thirty (30) days after the non-breaching party’s delivery of written notice specifying such breach to the breaching party (referred to hereinafter as “cause”).  Cause would include a significant reduction (20%)in monthly Revenue from the account that would obviated the justification for the implementation payments.  If the Agreement is terminated with cause by ACS, all monies and fees above [***] paid to the Client as described in section 4.2(a) of this Agreement shall be returned to ACS and the Warrant set forth in Paragraph 4.2(b) shall terminate immediately.

 

	
7.

	
MISCELLANEOUS

 

7.1.           Entire Agreement; Assignment.  This Agreement (including all Attachments hereto) sets forth the entire agreement and understanding of the parties as to the subject matter hereof and supersedes all prior or contemporaneous understandings of any kind, whether written or oral.  Neither party may assign this Agreement or its rights hereunder, or delegate its duties except as provided by this Agreement, without prior written notice given to the other party.

 

  

7

  

 

7.2.           Amendment.  This Agreement, including its Attachments, may be amended or modified at any time during its term by written agreement of the parties.

 

7.3.           Governing Law.  This Agreement shall be construed in accordance with the laws of the State of Delaware not including the choice of law rules thereof.

 

7.4.           Severability.  If any part of this Agreement is held to be invalid, unenforceable, or illegal, such determination shall not affect any other provision of this Agreement, and this Agreement shall be construed as if the impermissible provision had never been contained herein, unless this would substantially deprive a party of benefits hereunder, in which case, either party may terminate this Agreement by giving 90 days advance notice of such termination.

 

7.5.           Relationship of the Parties.  ACS and Client are at all times acting and performing as independent contractors under the terms of this Agreement.  Neither party shall be considered a joint venture with the other party.  Neither party shall have any liability for the general debts nor obligations of the other party and each party shall hold the other party harmless from and against such general debts and obligations.

 

7.6.           Benefit.  This Agreement shall be binding upon and inure to the benefit of each party and its respective successors and permitted assigns.

 

7.7.           Notice.  Any notice or other communication required to be given hereunder shall be in writing and shall be delivered personally, sent by recognized overnight courier service, or sent by registered or certified mail, to the address shown on the signature page or at such other address as either party may designate in writing delivered to the other party.  Notice shall be effective upon receipt if delivered personally or on the date indicated on the return receipt, if mailed, or at such time as delivery is refused upon presentation.

 

7.8.           Counterparts.  This Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement.

 

  

8

  

 

IN WITNESS WHEREOF, the parties have executed or caused this Ancillary Care Services Network Access Agreement to be executed by their duly authorized representatives to be effective as first stated above.

 

	
“ACS”

AMERICAN CARESOURCE HOLDINGS, INC.

d/b/a ANCILLARY CARE SERVICES, INC.

	  
	  	  	  
	
BY:

	
  /s/ David S. Boone

	  	
7/2/07

	
Name

	  	
Date

	  	  	  	  
	
TITLE:

	
COO/CFO

	  	  
	  	  	  	  
	
“CLIENT”

TEXAS TRUE CHOICE, INC.

	  
	
BY:

	
  /s/ Alan Scoggins

	  	
7/2/07

	
Name

	  	
Date

	  	  	  	  
	
TITLE:

	
COO

	  	  
	  	  	  	  

 

  

9

  

 

Schedule A

 

[list of Texas True Choice subsidiaries to be provided]

 

  

 

  

 

ATTACHMENT A

COVERED SERVICES FOR CLIENT PARTICIPANTS

 

Ancillary Service Services include the following:

 

	
  

	
·

	
Hospice Services

	
  

	
·

	
Rehabilitation Services

	
  

	
·

	
Chiropractic

	
  

	
·

	
Infusion services

	
  

	
·

	
Sleep diagnostics

	
  

	
·

	
Diagnostic imaging & testing, lab

	
  

	
·

	
Dialysis

	
  

	
·

	
LTAC/SNF

	
  

	
·

	
Outpatient surgery centers

	
  

	
·

	
DME

	
  

	
·

	
Orthotics & prosthetics

	
  

	
·

	
Physical therapy

	
  

	
·

	
Massage therapy

	
  

	
·

	
Lithotripsy

	
  

	
·

	
Hearing aids

	
  

	
·

	
Pain management

	
  

	
·

	
Home health services

	
  

	
·

	
Urgent Care Services

	
  

	
·

	
Acupuncture

 

Such list of ancillary services is dynamic and subject to change by either party upon 60 days written notice.

 

  

 

  

 

Attachment B

	
Texas True Choice NVA

	  	  	  	  	  	  	  	  
	
1st Quarter 2007 Analysis

	  	  	  	  	  	  	  	  
	  	  	  	  	  	  	  	  	  	  	  
	
Primary Service

	  	
 Service Amt

	  	
 Allowed Amt

	  	
 ACS Client Amt

	  	
 Additional Client savings

	
 Additional Client savings %

	  
	
Cardiac Monitoring

	
$

	
[***]

	
$

	
[***]

	
$

	
[***]

	
$

	
[***]

	
[***]

	
%

	
Chiropractic

	
$

	
[***]

	
$

	
[***]

	
$

	
[***]

	
$

	
[***]

	
[***]

	
%

	
Diagnostic Imaging

	
$

	
[***]

	
$

	
[***]

	
$

	
[***]

	
$

	
[***]

	
[***]

	
%

	
Dialysis

	
$

	
[***]

	
$

	
[***]

	
$

	
[***]

	
$

	
[***]

	
[***]

	
%

	
DME

	
$

	
[***]

	
$

	
[***]

	
$

	
[***]

	
$

	
[***]

	
[***]

	
%

	
Genetic Test

	
$

	
[***]

	
$

	
[***]

	
$

	
[***]

	
$

	
[***]

	
[***]

	
%

	
Home Health

	
$

	
[***]

	
$

	
[***]

	
$

	
[***]

	
$

	
[***]

	
[***]

	
%

	
Hospice

	
$

	
[***]

	
$

	
[***]

	
$

	
[***]

	
$

	
[***]

	
[***]

	
%

	
Infusion Services

	
$

	
[***]

	
$

	
[***]

	
$

	
[***]

	
$

	
[***]

	
[***]

	
%

	
Lab

	
$

	
[***]

	
$

	
[***]

	
$

	
[***]

	
$

	
[***]

	
[***]

	
%

	
O & P

	
$

	
[***]

	
$

	
[***]

	
$

	
[***]

	
$

	
[***]

	
[***]

	
%

	
Podiatry

	
$

	
[***]

	
$

	
[***]

	
$

	
[***]

	
$

	
[***]

	
[***]

	
%

	
Rehab

	
$

	
[***]

	
$

	
[***]

	
$

	
[***]

	
$

	
[***]

	
[***]

	
%

	
Sleep Diagnostics

	
$

	
[***]

	
$

	
[***]

	
$

	
[***]

	
$

	
[***]

	
[***]

	
%

	
Surgery Center

	
$

	
[***]

	
$

	
[***]

	
$

	
[***]

	
$

	
[***]

	
[***]

	
%

	
Urgent Care Center

	
$

	
[***]

	
$

	
[***]

	
$

	
[***]

	
$

	
[***]

	
[***]

	
%

	
Vision

	
$

	
[***]

	
$

	
[***]

	
$

	
[***]

	
$

	
[***]

	
[***]

	
%

	
Total Analysis Group

	
$

	
[***]

	
$

	
[***]

	
$

	
[***]

	
$

	
[***]

	
[***]

	
%

	  	  	  	  	  	  	  	  	  	  	  
	  	  	  	  	  	  	  	  	  	  	  
	
Total First Quarter Projections

	
$

	
[***]

	
$

	
[***]

	
$

	
[***]

	
$

	
[***]

	
[***]

	
%

	  	  	  	  	  	  	
  

	  	  	  	  
	
Total Annual Projections

	
$

	
[***]

	
$

	
[***]

	
$

	
[***]

	
$

	
[***]

	
[***]

	
%

	  	  	  	  	  	  	  	  	  	  	  

 

  

 

  

 

ATTACHMENT C

 

TTC FEE SCHEDULE

 

	
Administrative Fee

	
Months 1-12

	
[***]

	
Months 13-24

	
[***]

	
Months 25-32

	
[***]

	
Months 33-48

	
[***]

 

	
Implementation Payments

	  
	
% of Payors Converted

	
Monthly Revenue Obtained

	
Implementation Fee Paid

	
33%

	
$250,000

	
[***]

	
50%

	
$890,000

	
[***]

	
75%

	
$1,600,000

	
[***]

	
95%

	
$2,600,000

	
[***]

	  	  	
[***]

 

	

Note:  the first payment has already been made to Texas True Choice

 

  

 

  

 

ATTACHMENT D

 

WARRANT

 

  

 

  

 

Void after 5:00 p.m. New York Time on May 21, 2012

Warrant to Purchase up to 225,000 Shares of Common Stock

 

WARRANT TO PURCHASE COMMON STOCK

OF

AMERICAN CARESOURCE HOLDINGS, INC.

This is to Certify that, FOR VALUE RECEIVED, CORPORATE HEALTH PLANS OF AMERICA, INC. or assigns (“Holder”), is entitled to purchase, subject to the provisions of this Warrant, from AMERICAN CARESOURCE HOLDINGS, INC., a Delaware corporation (the “Company”), up to Two Hundred Twenty-Five Thousand (225,000) fully paid, validly issued and nonassessable shares of Common Stock, par value $.01 per share, of the Company (“Common Stock”) at a price of $1.84 per share during the period from May 21, 2007 to May 21, 2012 in accordance with the schedule set forth in Paragraph (a)(2) below, but not later than 5:00 p.m. New York City Time, on May 21, 2012.  The number of shares of Common Stock to be received upon the exercise of this Warrant and the price to be paid for each share of Common Stock may be adjusted from time-to-time as hereinafter set forth.  In addition, the number of shares that may be purchased upon the exercise of this Warrant is subject to reduction as set forth in Paragraph (a)(1) below.  The shares of Common Stock deliverable upon such exercise, and as adjusted from time-to-time, are hereinafter sometimes referred to as “Warrant Shares” and the exercise price of a share of Common Stock in effect at any time and as adjusted from time to time is hereinafter sometimes referred to as the “Exercise Price.”

(a)           SPECIAL TERMS, VESTING AND EXERCISE OF WARRANT

(1)           SPECIAL TERMS.  The Holder has entered into an Ancillary Care Services Network Access Agreement with the Company, dated May 21, 2007 (the “Network Access Agreement”), having a term of four (4) years.  The Network Access Agreement may be terminated under certain circumstances by either party prior to the end of the four (4) year term  (“Early Termination”).  Should an Early Termination of the Network Access Agreement occur, this Warrant shall promptly terminate and be of no force or effect with respect to all unvested shares as described below immediately upon the delivery by either party of a Notice of Early Termination in accordance with the terms of the Network Access Agreement.

(2)           VESTING SCHEDULE.  This Warrant may be exercised through 5:00 p.m. on May 21, 2012 to the extent of the number of vested shares of Common Stock set forth below if upon each such anniversary date, an Early termination has not occurred, as follows:

 

  

 

  

 

	
Date

	
Number of Shares Vesting

	
May 21, 2007

	
56,250

	
May 21, 2008

	
56,250

	
May 21, 2009

	
56,250

	
May 21, 2010

	
56,250

 

Upon an Early Termination, no additional shares shall vest and all such shares listed above opposite the column for any date following an Early Termination, shall be unvested shares.

(3)           EXERCISE OF WARRANT.  The vested portion of this Warrant may be exercised in whole or in part at any time or from time-to-time on or after the date indicated above to May 21, 2012 (the “Exercise Period”); provided, however, that (i) if either such day is a day on which banking institutions in the State of New York are authorized by law to close, then on the next succeeding day that shall not be such a day, and (ii) in the event of any merger, consolidation or sale of substantially all the assets of the Company as an entirety (“Change of Control”), the Warrant shall be deemed, on and after the date of such Change of Control to be fully vested and the Holder shall have the right to exercise this Warrant commencing at such time through May 21, 2012 into the kind and amount of shares of stock and other securities (including cash) receivable by a holder of the number of shares of Common Stock into which this warrant might have been exercisable as fully vested.  This Warrant may be exercised by presentation and surrender hereof to the Company at its principal office, or at the office of its stock transfer agent, if any, with the Purchase Form annexed hereto duly executed and accompanied by payment of the Exercise Price for the number of Warrant Shares specified in such form.  As soon as practicable after each such exercise of the warrants, but not later than seven (7) days from the date of such exercise, the Company shall issue and deliver to the Holder a certificate or certificate for the Warrant Shares issuable upon such exercise, registered in the name of the Holder or its designee.  If this Warrant should be exercised in part only, the Company shall, upon surrender of this Warrant for cancellation, execute and deliver a new Warrant evidencing the rights of the Holder thereof to purchase the balance of the Warrant Shares purchasable thereunder.  Upon receipt by the Company of this Warrant at its office, or by the stock transfer agent of the Company at its office, in proper form for exercise, the Holder shall be deemed to be the holder of record of the shares of Common Stock issuable upon such exercise, notwithstanding that the stock transfer books of the Company shall then be closed or that certificates representing such shares of Common Stock shall not then be physically delivered to the Holder.

(4)           TERMINATION FOR CAUSE.  Notwithstanding the provisions set forth herein, if the Agreement is terminated by the Company for cause under Section 6.3 of the Network Access Agreement, the Warrant terminates and vested options may not be exercised.

 

  

2

  

 

(b)           RESERVATION OF SHARES.  The Company shall at all times reserve for issuance and/or delivery upon exercise of this Warrant such number of shares of its Common Stock as shall be required for issuance and delivery upon exercise of the Warrants.

(c)           FRACTIONAL SHARES.  No fractional shares or script representing fractional shares shall be issued upon the exercise of this Warrant.  With respect to any fraction of a share called for upon any exercise hereof, the Company shall pay to the Holder an amount in cash equal to such fraction multiplied by the current market value of a share, determined as follows:

(1)           If the Common Stock is listed on a national securities exchange or admitted to unlisted trading privileges on such exchange or listed for trading on the NASDAQ Stock Market, the current market value shall be the last reported sale price of the Common Stock on such exchange or market on the last business day prior to the date of exercise of this Warrant or if no such sale is made on such day, the average closing price and asked prices for such day on such exchange or market; or

(2)           If the Common Stock is not so listed or admitted to unlisted trading privileges, but is traded on the NASDAQ Capital Market or the NASDAQ OTC Bulletin Board, the current market value shall be the average of the closing price and asked prices for such day on such market and if the Common Stock is not so traded, the current market value shall be the mean of the last reported price and asked prices reported by NASDAQ on the last business day prior to the date of the exercise of this Warrant; or

(3)           If the Common Stock is not so listed or admitted to unlisted trading privileges and bid and asked prices are not so reported, the current market value shall be an amount not less than book value thereof as at the end of the most recent fiscal year of the Company ending prior to the date of the exercise of the Warrant, determined in such reasonable manner as may be prescribed by the Board of Directors of the Company.

(d)           EXCHANGE, TRANSFER, ASSIGNMENT OR LOSS OF WARRANT.  This Warrant is exchangeable, without expense, at the option of the Holder, upon presentation and surrender hereof to the Company or at the office of its stock transfer agent, if any, for other warrants of different denominations entitling the holder thereof to purchase in the aggregate the same number of shares of Common Stock purchasable hereunder.  Upon surrender of this Warrant to the Company at its principal office or at the office of its stock transfer agent, if any, with the Assignment Form annexed hereto duly executed and funds sufficient to pay any transfer tax, the Company shall, without charge, execute and deliver a new Warrant in the name of the assignee or assignees named in such instrument of assignment and this Warrant shall promptly be canceled.  This Warrant may be divided or combined with other warrants that carry the same rights upon presentation hereof at the principal office of the Company or at the office of it stock transfer agent, if any, together with a written notice specifying the names and denominations in which new Warrants are to be issued and signed by the Holder hereof.  The term “Warrant” as 

 

  

3

  

 

used herein includes any Warrants into which this Warrant may be divided or exchanged.  Upon receipt by the Company of evidence satisfactory to it of the loss, theft, destruction or mutilation of this Warrant, and (in the case of loss, theft or destruction) of reasonably satisfactory indemnification, and upon surrender and cancellation of this Warrant, if mutilated, the Company will execute and deliver a new Warrant of like tenor and date.  Any such new Warrant executed and delivered shall constitute an additional contractual obligation on the part of the Company, whether or not this Warrant so lost, stolen, destroyed or mutilated shall be at any time enforceable by anyone.

 

(e)           RIGHTS OF THE HOLDER.  The Holder shall not, by virtue hereof, be entitled to any rights of a shareholder in the Company, either at law or equity, and the rights of the Holder are limited to those expressed in the Warrant and are not enforceable against the Company except to the extent set forth herein.

(f)           ANTI-DILUTION PROVISIONS.  The Exercise Price in effect at any time and the number and kind of securities purchasable upon the exercise of the Warrants shall be subject to adjustment from time-to-time in case the Company shall:  (i) declare a dividend or make a distribution on its outstanding shares of Common Stock in shares of Common Stock, (ii) subdivide or reclassify its outstanding shares of Common Stock into a greater number of shares, or (iii) combine or reclassify its outstanding shares of Common Stock into a smaller number of shares, the Exercise Price in effect at the time of the record date for such dividend or distribution or of the effective date of such subdivision, combination or reclassification shall be adjusted so that it shall equal the price determined by multiplying the Exercise Price by a fraction, the denominator of which shall be the number of shares of Common Stock outstanding after giving effect to such action, and the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to such action.  Such adjustment shall be made successively whenever any event listed above shall occur.

Whenever the Exercise Price payable upon exercise of each Warrant is adjusted as set forth in this Section (f), the number of Shares purchasable upon exercise of this Warrant shall simultaneously be adjusted by multiplying the number of Shares initially issuable upon exercise of this Warrant by the Exercise Price in effect on the date hereof and dividing the product so obtained by the Exercise Price, as adjusted.

(g)           RECLASSIFICATION AND REORGANIZATION.  Except for a Change of Control as described in Section 3 hereof, in case of any reclassification, capital reorganization or other change of the characteristics of outstanding shares of Common Stock of the Company, the Company shall, as a condition precedent to such transaction, cause effective provisions to be made so that the Holder shall have the right thereafter by exercising this Warrant at any time prior to the expiration of the Warrant, to purchase the kind and amount of shares of stock and other securities and property receivable upon such reclassification, capital reorganization and other change by a holder of the number of shares of Common Stock that might have been purchased upon exercise of this Warrant immediately prior to such reclassification, reorganization or change of the characteristics of outstanding shares of Common Stock of the 

  

  

4

  

 

Company.  Any such provision shall include provision for adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided for in this Warrant.  The foregoing provisions of this Section (g) shall similarly apply to successive reclassifications, capital reorganizations and changes of shares of Common Stock.  In the event that in connection with any such capital reorganization or reclassification, additional shares of Common Stock shall be issued in exchange, conversion, substitution or payment, in whole or in part, for security of the Company other than Common Stock, any such issue shall be treated as an issue of Common Stock covered by the provisions of Section (f) hereof.

 

(h)           COMPLIANCE WITH SECURITIES ACT.

 

(1)           Unregistered Securities.  The Holder acknowledges that neither this Warrant, nor the Warrant Shares, have been registered under the Securities Act and agrees not to sell, pledge, distribute, offer for sale, transfer or otherwise dispose of this Warrant or any Warrant Shares in the absence of (i) an effective registration statement under the Securities Act covering this Warrant or such Warrant Shares and registration or qualification of this Warrant or such Warrant Shares under any applicable “blue sky” or state securities law then in effect, or (ii) the availability of an exemption from any such registration and qualification.

 

(2)           Legend.  Any certificates delivered to the Holder representing Warrant Shares shall bear the following legend or a legend in substantially similar form:

 

“THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN TAKEN FOR INVESTMENT AND THEY MAY NOT BE SOLD OR OTHERWISE TRANSFERRED BY ANY PERSON, INCLUDING A PLEDGEE, IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SHARES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR IF AN EXEMPTION FROM REGISTRATION IS THEN AVAILABLE.”

(i)           GOVERNING LAW.  This Warrant will be governed by and construed in accordance with and governed by the laws of Delaware, without giving effect to the conflict of law principles thereof.

(j)           NOTICES.  All notices, requests and other communications hereunder shall be in writing, shall be either (i) delivered by hand, (ii) made by facsimile transmission, (iii) sent by overnight courier, or (iv) sent by registered mail, postage prepaid, return receipt requested.   In the case of notices from the Company to the Holder, they shall be sent to the address furnished to the Company in writing by the last Holder who shall have furnished an address to the Company in writing.  All notices from the Holder to the Company shall be delivered to the Company at its offices at 5429 Lyndon B. Johnson Freeway, Suite 700, Dallas, TX 75240 facsimile (972) 308-6830 or such other address or facsimile number as the Company shall so notify the Holder.  All notices, requests and other communications hereunder shall be deemed to have been given (i) by hand, at the time of the delivery thereof to the receiving party at the address of such party 

 

  

5

  

 

described above, (ii) if made by facsimile transmission, at the time that receipt thereof has been acknowledged by electronic confirmation or otherwise, (iii) if sent by overnight courier, on the next business day following the day such notices is delivered to the courier service, or (iv) if sent by registered mail, on the fifth (5th) business day following the day such mailing is made.

 

	 	
AMERICAN CARESOURCE HOLDINGS, INC.

	 	 	 	 
	
 

	
By: 

	 
	 	 	
David S. Boone

Chief Financial Officer, 

Chief Operating Officer and Secretary

	 
	 	 	 	 

 

Dated as of:  July 2, 2007

Attest:

 

	 

Controller

 

  

6

  

 

PURCHASE FORM

Dated __________, 20__

The undersigned hereby irrevocably elects to exercise the within Warrant to the extent of purchasing ____ shares of Common Stock and hereby makes payment of ______ in payment of the actual price thereof.

_________________________

 

INSTRUCTIONS FOR REGISTRATION OF STOCK

Name ___________________________

(Please typewrite or print in block letters)

Address: _________________________

Signature _________________________

 

  

 

  

 

ASSIGNMENT FORM

FOR VALUE RECEIVED, ______________ hereby sells, assigns and transfers unto

Name ________________________

(Please typewrite or print in block letters)

Address _______________________

the right to purchase Common Stock represented by this Warrant to the extent of _____ shares as to which such right is exercisable and does hereby irrevocably constitute and appoint ________ as attorney, to transfer the same on the books of the Company with full power of substitution in the premises.

Date __________, 20___

Signature                                                                                           

 

  

 

  

 

ATTACHMENT E

CLIENT BENEFIT PLANS

 

  

 

  

 

AMENDMENT TO NETWORK ACCESS AGREEMENT

 

This Amendment to Network Access Agreement (“Amendment”) is made and entered into as of December 31, 2009 by and between American CareSource Holdings, Inc. d/b/a Ancillary Care Services, Inc. (“ACS”), and Viant, Inc. (“Client”).

 

WHEREAS, ACS and Texas True Choice, Inc. (as predecessor-in-interest to Client) have entered into a Network Access Agreement dated as of July 2, 2007 (the “Original Agreement”); and

 

WHEREAS, ACS and Client desire to memorialize the understanding that the parties hereto have been operating under since October 1, 2007 and desire to amend the Original Agreement as set forth herein.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, each intending to be legally bound hereby, agree as follows:

 

1.           Effective October 1, 2007, Attachment C of the Original Agreement is hereby superseded and amended to read in its entirety as set forth on Annex 1 hereto.

 

2.           This Amendment may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument.

 

3.           Except as otherwise explicitly provided in this Amendment, the Original Agreement remains unchanged and in full force and effect.

 

[Signature Pages Follow]

 

  

 

  

 

The parties have executed this Amendment as of the date first set forth above.

 

ACS:

 

AMERICAN CARESOURCE

HOLDINGS, INC. d/b/a ANCILLARY CARE SERVICES, INC.

 

 

	 	
By:  

	
/s/ David S. Boone

	
  

	
Name:

	
  

	
Title:

 

 

 

SIGNATURE PAGE TO AMENDMENT TO NETWORK ACCESS AGREEMENT

 

  

 

  

 

The parties have executed this Amendment as of the date first set forth above.

 

CLIENT:

 

VIANT. INC.

 

 

	 	
By:

	
/s/ Alan Scoggins

	
  

	
Name:  Alan Scoggins

	
  

	
Title:  Vice President

 

 

 

SIGNATURE PAGE TO AMENDMENT TO NETWORK ACCESS AGREEMENT

 

  

 

  

 

Annex 1

 

ATTACHMENT C

 

TTC FEE SCHEDULE

 

	
Administrative Fee

	
Months 1-12

	
[***]

	
Months 13-24

	
[***]

	
Months 25-32

	
[***]

	
Months 33-48

	
[***]

 

	
Implementation Payments

	  
	
% of Payors Converted

	
Monthly Revenue Obtained

	
Implementation Fee Paid

	
33%

	
$250,000

	
[***]

	
50%

	
$890,000

	
[***]

	  	  	
[***]

 

	
Note:  both payments have already been made to Texas True Choice

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