Document:

exv10w24

Exhibit 10.24

MOLINA HEALTHCARE OF CALIFORNIA 

HOSPITAL SERVICES AGREEMENT

	 	 	 	This Hospital Services Agreement (“Agreement”) is entered by and between Molina
Healthcare of California, a California corporation (“Health Plan”), and Pacific Hospital
of Long Beach.

RECITALS

	 	A.	 	Health Plan arranges for the provision of certain health care services
to Members pursuant to contracts with various government sponsored health programs.
Health Plan intends to participate in additional government sponsored health
programs and offer other health products as the opportunities become available.
	 
	 	B.	 	Health Plan arranges for the provision of certain health care services
to Members by entering into provider service agreements with individual physicians,
groups of physicians, individual practice associations, hospitals, clinics,
ancillary health providers, and other health providers.
	 
	 	C.	 	Provider is licensed to render hospital inpatient and outpatient
services and desires to provide such services to Health Plan’s Members in
connection with Health Plan’s contractual obligations to provide and/or arrange for
Health Care Services for Health Plan’s Members.

	 	 	 	Now, therefore, in consideration of the promises, covenants and warranties stated
herein, Health Plan and Provider agree as follows:

ARTICLE ONE — DEFINITIONS

	1.1	 	Provider means the health care professional(s), or entity(ies) identified
in Attachment A to this Agreement.
	 
	1.2	 	Capitalized words or phrases in this Agreement shall have the meaning set forth in
Attachment B.

ARTICLE TWO — PROVIDER OBLIGATIONS

	2.1	 	Serving as a Panel Provider. Provider shall provide hospital inpatient and/or
outpatient services to Members for the products specified in Attachment C.
Provider agrees that its facility information may be used in Health Plan’s provider
directories, promotional materials, advertising and other informational material

HSA — Hospital Services Agreement

	 	 	 	 	 
	Molina ECMS ref# 729

	 	 	 	Provider or authorized
	MHC v122706 / MHI v091707

	 	 	 	representative’s initials:
	Pacific Hospital of Long Beach
	 	 	 	 

Page 1 of 40

 

	 	 	 	made available to the public and Members. Facility Information includes, but is
not limited to, name, address, telephone number, hours of operation, and services.
Provider shall promptly notify Health Plan of any changes in this practice
information.

	2.2	 	Standards for Provision of Care.

	 	a.	 	Provision of Covered Services. Provider shall provide Covered Services
to Members, within the scope of Provider’s license, in accordance with this
Agreement, Health Plan’s policies and procedures, the terms and conditions of the
Health Plan product which covers the Member, and the requirements of any
applicable government sponsored program.
	 
	 	b.	 	Standard of Care. Provider shall provide Covered Services to Members
at a level of care and competence that equals or exceeds the generally accepted
and professionally recognized standard of practice at the time of treatment, all
applicable rules and/or standards of professional conduct, and any controlling
governmental licensing requirements.
	 
	 	c.	 	Facilities, Equipment, and Personnel. Provider’s facilities, equipment,
personnel and administrative services shall be at a level and quality as
necessary to perform Provider’s duties and responsibilities under this Agreement
and to meet all applicable legal requirements, including the accessibility
requirements of the Americans with Disabilities Act.
	 
	 	d.	 	Prior Authorization. Provider shall verify eligibility of Members
prior to rendering services. Prior to admitting any Member as an inpatient or
outpatient, Provider shall obtain the prior authorization of Health Plan in
accordance with Health Plan’s Provider Manual unless the situation is one
involving the delivery of Emergency Services. For Emergency Services that result
in an admission, Provider shall notify Health Plan or its agent within
twenty-four (24) hours of admission and shall request authorization from Health
Plan prior to the provision of any post-stabilization care. For non-emergent
services, regardless of whether prior authorization was received, Provider shall
cooperate and participate in Health Plan’s notification procedures described in
the Provider Manual for all inpatient admissions (acute, rehabilitation, mental
health and SNF) including admissions resulting from an outpatient visit, and
Provider shall notify Health Plan of any admission within twenty-four (24) hours
of admission.
	 
	 	e.	 	Contracted Providers. Except in the case of Emergency Services or upon
prior authorization of Health Plan, Provider shall use only those health
professionals, hospitals, laboratories, skilled nursing and other facilities and
providers which have contracted with Health Plan (“Participating Providers”).

HSA — Hospital Services Agreement

	 	 	 	 	 
	Molina ECMS ref# 729

	 	 	 	Provider or authorized
	MHC v122706 / MHI v091707

	 	 	 	representative’s initials: 
	Pacific Hospital of Long Beach
	 	 	 	 

Page 2 of 40

 

	 	f.	 	Prescriptions. Except with respect to prescriptions and pharmaceuticals
ordered for in-patient hospital services, Provider shall abide by Health Plan’s drug
formularies and prescription policies, including those regarding the prescription of
generic or lowest cost alternative brand name pharmaceuticals. Provider shall obtain
prior authorization from Health Plan if Provider believes a generic equivalent or
formulary drug should not be dispensed. Provider acknowledges the authority of Health
Plan contracting pharmacists to substitute generics for brand name pharmaceuticals
unless counter indicated on the prescription by the Provider.
	 
	 	g.	 	Availability of Services. Provider shall make Covered Services available
twenty-four (24) hours a day, seven (7) days a week. Provider shall meet the
applicable standards for timely access to care and services, taking into account the
urgency of the need for the services.
	 
	 	h.	 	Hospital Services are those Plan benefits to include short term inpatient or
outpatient general hospital services including room with customary furnishings and
equipment, meals (including special diets as medically necessary), general nursing
care, use of operating room and related facilities, intensive care unit and services,
emergency services, drugs, including drugs to be dispensed at time of emergency room
visit in amount sufficient to last until such time Member can reasonably be expected
to fill a prescription, medications, biological, anesthesia and oxygen services,
ambulatory care services, diagnostic laboratory and x-ray services, special duty
nursing as medically necessary, physical therapy, respiratory therapy, administration
of blood and blood products, and diagnostic, therapeutic and rehabilitative services
as appropriate, and coordinated discharge planning including the planning of such
continuing care as may be necessary, both medically and as a means of preventing
possible early re-hospitalization.

	2.3	 	Standards for Hospital Providers.

	 	a.	 	Hospital Providers. Provider shall have a sufficient number of Hospital
Providers to provide Covered Services and meet the needs of Health Plan and its
Members as determined by Health Plan’s Quality Improvement Program and in accordance
with state and federal law. Provider shall be responsible for the Covered Services
provided by Hospital Providers.
	 
	 	b.	 	Contract with Hospital Providers. Provider’s contract with its Hospital
Providers shall be in writing and shall bind Hospital Providers to the terms and
conditions of this Agreement including, but not limited to, terms relating to
licensure, insurance and billing of Members for Covered Services.
	 
	 	c.	 	Hospital Provider Information. Upon request, Provider shall provide Health
Plan with a complete list of its Hospital Providers, together with the

HSA — Hospital Services Agreement

	 	 	 	 	 
	Molina ECMS ref# 729

	 	 	 	Provider or authorized
	MHC v122706 / MHI v091707

	 	 	 	representative’s initials: 
	Pacific Hospital of Long Beach
	 	 	 	 

Page 3 of 40

 

	 	 	 	provider specific information required by Health Plan for credentialing and
for administration of its health programs.

	 	d.	 	Restriction, Suspension or Termination of Hospital
Provider(s). Provider shall immediately restrict, suspend or terminate Hospital Providers(s)
from providing Covered Services to Members in the following circumstances: (i) the
Hospital Provider(s) ceases to meet the licensing/certification requirements or
other professional standards as specified in this Article; or (ii) Health Plan or
Provider reasonably determine that there are serious deficiencies in the quality
of care of the applicable Hospital Provider(s) which affects or could adversely
affect the health or safety of Members.
	 
	 	e.	 	Staffing Privileges. Provider agrees to use its best efforts to
arrange staff privileges or other appropriate access for Health Plan’s contracted
providers, Health Plan’s medical directors and hospitalist providers who are
qualified medical or osteopathic physicians, provided they meet the reasonable
standard of practice and credentialing standards established by Provider’s
medical staff and the bylaws, rules and regulations of Provider.
	 
	 	f.	 	Notification. Provider shall notify Health Plan within five (5)
business days of becoming aware of any of its Hospital Provider(s) who cease to
meet the licensing/certification requirements or other professional standards as
described in this Agreement. Provider will notify Health Plan within five (5)
business days should any disciplinary or other action of any kind be initiated
against any Health Plan contracted provider, medical director or hospitalist
provider which could result in any suspension, reduction or modification of
his/her hospital privileges. Provider’s notification to Health Plan shall state
Provider’s actions taken against the Hospital Provider or Health Plan provider.
If Provider fails to act as required by this Article with respect to any of its
Hospital Provider(s) or Health Plan reasonably determines and provides
documentation to Provider that there are serious deficiencies in the professional
competence, conduct, or quality of care of the Hospital Provider which could
adversely affect the health and safety of Members, Health Plan shall have the
right to prohibit such Hospital Provider(s) from continuing to provide Covered
Services to Members.

	2.4	 	Nondiscrimination.

	 	a.	 	Enrollment. Provider shall not differentiate or discriminate in
providing Covered Services to Members because of race, color, religion, national
origin, ancestry, age, sex, marital status, sexual orientation, physical, sensory
or mental handicap, socioeconomic status, or participation in publicly financed
programs of health care services. Provider shall render Covered Services to
Members in the same location, in the same manner, in accordance with the

HSA — Hospital Services Agreement

	 	 	 	 	 
	Molina ECMS ref# 729

	 	 	 	Provider or authorized
	MHC v122706 / MHI v091707

	 	 	 	representative’s initials: 
	Pacific Hospital of Long Beach
	 	 	 	 

Page 4 of 40

 

	 	 	 	same standards, and within the same time availability regardless of payor.

	 	b.	 	Employment. Provider shall not differentiate or discriminate against any
employee or applicant for employment, with respect to their hire, tenure, terms,
conditions or privileges of employment, or any matter directly or indirectly related
to employment, because of race, color, religion, national origin, ancestry, age, sex,
height, weight, marital status, physical, sensory or mental disability unrelated to
the individual’s ability to perform the duties of the particular job or position.

	2.5	 	Recordkeeping.

	 	a.	 	Maintaining Member Medical Record. Provider shall maintain a medical record for
each Member to whom Provider renders health care services. Provider shall open each
Member’s medical record upon the Member’s first encounter with Provider. The Member’s
medical record shall contain all information required by state and federal law,
generally accepted and prevailing professional practice, applicable government
sponsored health programs, and all Health Plan policies and procedures. Provider shall
retain all such records for at least ten (10) years.
	 
	 	b.	 	Confidentiality of Member Health Information. Provider shall comply with
all applicable state and federal laws, Health Plan’s policies and procedures,
government sponsored program requirements regarding privacy and confidentiality of
Members’ health information and medical records, including mental health records.
Provider shall not disclose or use Member names, addresses, social security numbers,
identities, other personal information, treatment modalities, or medical records
without obtaining appropriate authorization to do so. This provision shall not affect
or limit Provider’s obligation to make available medical records, encounter data and
information concerning Member care to Health Plan, any authorized state or federal
agency, or other Providers of health care upon authorized referral.
	 
	 	c.	 	HIPAA. To the extent Provider is considered a covered entity under the
Health Insurance Portability and Accountability Act (“HIPAA”), Provider shall comply
with all provisions of HIPAA including, but not limited to, provisions addressing
privacy, security, and confidentiality.
	 
	 	d.	 	National Provider Identification (“NPI”). In accordance with applicable
statutes and regulations of the Health Insurance Portability and Accountability Act
(HIPAA) of 1996, Provider shall comply with the Standard Unique Identifier for Health
Care Provider regulations promulgated under HIPAA (45 CFR Section 162.402, et seq.)
and use only the NPI to identify HIPAA covered health care providers in standard
transactions. Provider shall obtain an NPI from the National Plan and Provider
Enumeration System (“NPPES”)

HSA — Hospital Services Agreement

	 	 	 	 	 
	Molina ECMS ref# 729

	 	 	 	Provider or authorized
	MHC v122706 / MHI v091707

	 	 	 	representative’s initials: 
	Pacific Hospital of Long Beach
	 	 	 	 

Page 5 of 40

 

	 	 	 	for itself or for any subpart of the Provider. Provider shall make best efforts
to report its NPI and any subparts to Health Plan. Provider shall report any changes in
its NPI or subparts to Health Plan within thirty (30) days of the change. Provider
shall use its NPI to identify itself on all claims and encounters (both electronic and
paper formats) submitted to Health Plan.

	 	e.	 	Delivery of Patient Care Information. Provider shall promptly deliver to
Health Plan, upon request and/or as may be required by state or federal law, Health
Plan’s policies and procedures, applicable government sponsored health programs,
Health Plan’s contracts with the government agencies, or third party payers, any
information, statistical data, encounter data, or patient treatment information
pertaining to Members served by Provider, including but not limited to, any and all
information requested by Health Plan in conjunction with utilization review and
management, grievances, peer review, HEDIS Studies, Health Plan’s Quality Improvement
Program, or claims payment. Provider shall further provide direct access at reasonable
times to said patient care information as requested by Health Plan or as required by
any governmental agency or any appropriate state and federal authority having
jurisdiction over Health Plan. Health Plan shall have the right to withhold
compensation from Provider in the event that Provider fails or refuses to promptly
provide any such information to Health Plan.
	 
	 	f.	 	Member Access to Health Information. Provider shall give Health Plan and
Members access to Members’ health information including, but not limited to, medical
records and billing records, in accordance with the requirements of state and federal
law, applicable government sponsored health programs, and Health Plan’s policies and
procedures.

	2.6	 	Program Participation.

	 	a.	 	Participation in Grievance Program. Provider shall participate in Health
Plan’s Grievance Program and shall cooperate with Health Plan in identifying,
processing, and promptly resolving all Member complaints, grievances, or inquiries.
	 
	 	b.	 	Participation in Quality Improvement Program. Provider shall participate in
Health Plan’s Quality Improvement Program and shall cooperate with Health Plan in
conducting peer review and audits of care rendered by Provider.
	 
	 	c.	 	Participation in Utilization Review and Management Program. Provider shall
participate in and comply with Health Plan’s Utilization Review and Management
Program, including all policies and procedures regarding prior authorizations, and
shall cooperate with Health Plan in audits to identify,

HSA — Hospital Services Agreement

	 	 	 	 	 
	Molina ECMS ref# 729

	 	 	 	Provider or authorized
	MHC v122706 / MHI v091707

	 	 	 	representative’s initials: 
	Pacific Hospital of Long Beach
	 	 	 	 

Page 6 of 40

 

	 	 	 	confirm, and/or assess utilization levels of Covered Services.

	 	d.	 	Participation in Credentialing. Provider shall participate in Health Plan’s
credentialing and re-credentialing process and shall satisfy, throughout the term of
this Agreement, all credentialing and re-credentialing criteria established by the
Health Plan. Provider shall immediately notify Health Plan of any change in the
information submitted or relied upon by Provider to achieve credentialed status. If
Provider’s credentialed status is revoked, suspended or limited by Health Plan, Health
Plan may at its discretion terminate this Agreement and/or move Members to another
hospital.
	 
	 	e.	 	Provider Manual. Provider shall comply and render Covered Services in
accordance with the contents, instructions and procedures set forth in Health Plan’s
Provider Manual, which may be amended from time to time. Health Plan’s Provider Manual
is incorporated in this Agreement by this reference.
	 
	 	f.	 	Health Education/Training. Provider shall participate in and cooperate
with Health Plan’s Provider education and training efforts as well as Member education
and efforts. Provider shall also comply with all Health Plan health education,
cultural and linguistic standards, policies, and procedures, and such standards,
policies, and procedures as may be necessary for Health Plan to comply with its
contracts with employers, the state, or federal government. Provider shall promptly
deliver to medical staff, all informational, promotional, educational, or
instructional materials prepared by Health Plan regarding any aspect of providing
Covered Services to Members.

	2.7	 	Promotional Activities. At the request of Health Plan, Provider shall (a) display Health
Plan promotional materials in its offices and facilities as practical, and (b) shall cooperate
with and participate in all reasonable Health Plan’s marketing efforts. Provider shall not use
Health Plan’s name in any advertising or promotional materials without the prior written
permission of Health Plan.
	 
	2.8	 	Licensure and Standing.

	 	a.	 	Licensure. Provider warrants and represents that it is appropriately
licensed as a general acute care hospital to render health care services. Provider
shall provide evidence of licensure to Health Plan upon request. Provider shall
maintain its licensure in good standing, free of disciplinary action, and in
unrestricted status throughout the term of this Agreement. Provider shall immediately
notify Health Plan of any change in Provider’s licensure status, including any
disciplinary action taken or proposed by any licensing agency responsible for
oversight of Provider.
	 
	 	b.	 	Unrestricted Status. Provider warrants and represents that it has not been
convicted of crimes as specified in Section 1128 of the Social Security Act

HSA — Hospital Services Agreement

	 	 	 	 	 
	Molina ECMS ref# 729

	 	 	 	Provider or authorized
	MHC v122706 / MHI v091707

	 	 	 	representative’s initials: 
	Pacific Hospital of Long Beach
	 	 	 	 

Page 7 of 40

 

	 	 	 	(42 U.S.C. 1320a-7), excluded from participation in the Medicare or Medicaid
program, assessed a civil penalty under the provisions of Section 1128, entered into a
contractual relationship with an entity convicted of a crime specified in Section 1128,
or taken any other action that would prohibit it from participation in Medicaid and/or
state health care programs.

	 	c.	 	Malpractice and Other Actions. Provider shall give immediate notice to
Health Plan of: (a) any malpractice claim asserted against it by a Member, any payment
made by or on behalf of Provider in settlement or compromise of such a claim, or any
payment made by or on behalf of Provider pursuant to a judgment rendered upon such a
claim; (b) any criminal investigations or proceedings against Provider; (c) any
convictions of Provider for crimes involving moral turpitude or felonies; and (d) any
civil claim asserted against Provider that may jeopardize Provider’s financial
soundness.
	 
	 	d.	 	Liability Insurance. Provider shall maintain premises and professional
liability insurance in coverage amounts appropriate for the size and nature of
Provider’s facility and the nature of Provider’s health care activities. If the
coverage is claims made or reporting, Provider agrees to purchase similar “tail”
coverage upon termination of the Provider’s present or subsequent policy. Provider
shall deliver copies of such insurance policies to Health Plan within five business
days of a written request by Health Plan.

	2.9	 	Claims Payment

	 	a.	 	Submitting Claims. Provider shall promptly submit to Health Plan claims
for Covered Services rendered to Members. All claims shall be submitted in a form
acceptable to and approved by Health Plan, and shall include any and all medical
records pertaining to the claim if requested by Health Plan or otherwise required by
Health Plan’s policies and procedures. Except as otherwise provided by law or provided
by government sponsored program requirements, any claims that are not submitted by
Provider to Health Plan within ninety (90) days of providing the Covered Services that
are the subject of the claim shall not be eligible for payment, and Provider hereby
waives any right to payment therefor.
	 
	 	b.	 	Compensation. Health Plan shall pay Provider for Clean Claims for Covered
Services provided to Members, including Emergency Services, in accordance with
applicable law and regulations and in accordance with the compensation schedule set
forth in Attachment D. Provider shall accept such payment, applicable
co-payments, deductibles, and coordination of benefits collections as payment in full
for services provided under this Agreement. Provider shall not balance bill Members
for any Covered Services.

HSA — Hospital Services Agreement

	 	 	 	 	 
	Molina ECMS ref# 729

	 	 	 	Provider or authorized
	MHC v122706 / MHI v091707

	 	 	 	representative’s initials: 
	Pacific Hospital of Long Beach
	 	 	 	 

Page 8 of 40

 

	 	c.	 	Co-payments and Deductibles. Provider is responsible for collection of co-
payments and deductibles, if any.
	 
	 	d.	 	Coordination of Benefits. Health Plan is a secondary payer in any
situation where there is another payer as primary carrier. Provider shall make
reasonable inquiry of Members to learn whether Member has health insurance or health
benefits other than from Health Plan or is entitled to payment by a third party under
any other insurance or plan of any type, and Provider shall immediately notify Health
Plan of said entitlement. In the event that coordination of benefits occurs, Provider
shall be compensated in an amount equal to the allowable Clean Claim less the amount
paid by other health plans, insurance carriers and payers, not to exceed the amount
specified in Attachment D.
	 
	 	e.	 	Payments which are the Responsibility of a Capitated
Provider.
Provider agrees that if Provider is or becomes a party to a subcontract or other
agreement with a provider contracted with Health Plan, who receives a global capitation
from Health Plan for both professional and facility services and is responsible for
arranging for Covered Services through subcontract arrangements (“Capitated Provider”),
that Provider shall look solely to the Capitated Provider, and not Health Plan, for
payment of Covered Services provided to Members that are covered by Health Plan’s
agreements with such Capitated Providers.

	2.10	 	Claims Review.

	 	a.	 	Emergency Room. For admissions through the Emergency Room in which there
is: (a) a direct admission to Provider’s intensive care units for the provision of
Emergency Services, (b) a direct transfer to Provider’s operating room for the
provision of Emergency Services, or (c) an authorization by Health Plan or its agents
for the provision of post-stabilization care, Health Plan will not retrospectively
deny payment for the day of admission. For all other services, including those
admissions through the Emergency Room that resulted in a one (1) day admission, Health
Plan reserves the right to retrospectively review such claims to determine if such
services were Medically Necessary and may deny payment for any such services which do
not constitute Covered Services. Notwithstanding the foregoing, Provider is not
required to obtain authorization from Health Plan prior to the provision of Emergency
Services and care necessary to stabilize a Member’s emergency medical condition.
Health Plan will not retrospectively deny payment for any services rendered by
Provider in good faith pursuant to the prior authorization of Health Plan.
	 
	 	b.	 	Authorized Services. Health Plan is responsible for the authorization of
medical services provided to Members. If Provider has obtained concurrent or

HSA — Hospital Services Agreement

	 	 	 	 	 
	Molina ECMS ref# 729

	 	 	 	Provider or authorized
	MHC v122706 / MHI v091707

	 	 	 	representative’s initials: 
	Pacific Hospital of Long Beach
	 	 	 	 

Page 9 of 40

 

	 	 	 	prior authorization for a Covered Service provided to a Member, Health Plan
will not retrospectively deny payment for such authorized Covered Service, unless
Provider’s claim and/or medical record for such services do not support the
specific services and/or level of care authorized by Health Plan. Health Plan
shall conduct medical management throughout the course of treatment. Provider
acknowledges that initial and subsequent authorizations shall be obtained as
necessary.

	 	c.	 	Reporting Requirements. Provider’s failure to comply with Health
Plan’s requirements regarding Provider’s identification and reporting of
institutional and outpatient services, admissions, and/or related services to
Health Plan or to obtain authorization as required may result in non-payment to
Provider for all days and charges until the day that notification is received and
services are authorized.
	 
	 	d.	 	Offset. In the event that Health Plan determines that a claim has been
overpaid or paid in duplicate, or that funds were paid which were not provided
for under this Agreement, Provider shall make repayment to Health Plan within
thirty (30) working days of written notification by Health Plan of the
overpayment, duplicate payment, or other excess payment. In addition to any other
contractual or legal remedy, Health Plan may recover the amounts owed by way of
offset or recoupment from current or future amounts due Provider by giving
Provider not less than thirty (30) working days notice in which to exercise
Provider’s appeal rights under this Agreement. As a material condition to Health
Plan’s obligations under this Agreement, Provider agrees that the offset and
recoupment rights set forth herein shall be deemed to be and to constitute rights
of offset and recoupment authorized in state and federal law or in equity to the
maximum extent legally permissible, and that such rights shall not be subject to
any requirement of prior or other approval from any court or other governmental
authority that may now or hereafter have jurisdiction over Health Plan and/or
Provider.
	 
	 	e.	 	Claims Review and Audit. Provider acknowledges Health Plan’s right to
review Provider’s claims prior to payment for appropriateness in accordance with
industry standard billing rules, including, but not limited to, current UB manual
and editor, current CPT and HCPCS coding, CMS billing rules, CMS
bundling/unbundling rules, National Correct Coding Initiatives (NCCI) Edits, CMS
multiple procedure billing rules, and FDA definitions and determinations of
designated implantable devices and/or implantable orthopedic devices. Provider
acknowledges Health Plan’s right to conduct such review and audit on a
line-by-line basis or on such other basis as Health Plan deems appropriate, and
Health Plan’s right to exclude inappropriate line items to adjust payment and
reimburse Provider at the revised allowable level. Provider also acknowledges
Health Plan’s right to conduct utilization reviews to determine medical necessity
and to conduct post-payment billing audits.

HSA — Hospital Services Agreement

	 	 	 	 	 
	Molina ECMS ref# 729

	 	 	 	Provider or authorized
	MHC v122706 / MHI v091707

	 	 	 	representative’s initials: 
	Pacific Hospital of Long Beach
	 	 	 	 

Page 10 of 40

 

	 	 	 	Provider shall cooperate with Health Plan’s audits of claims and payments by
providing access at reasonable times to requested claims information, all supporting
medical records, Provider’s charging policies, and other related data. Health Plan
shall use established industry claims adjudication and/or clinical practices, state and
federal guidelines, and/or Health Plan’s policies and data to determine the
appropriateness of the billing, coding and payment.

	2.11	 	Compliance with Applicable Law. Provider shall comply with all applicable state and
federal laws governing the delivery of Covered Services to Members including, but not limited
to, title VI of the Civil Rights Act of 1964; title IX of the Education Amendments of 1972
(regarding education programs and activities); the Age Discrimination Act of 1975; the
Rehabilitation act of 1973; the Balanced Budget Act of 1997; and the Americans with
Disabilities Act:

	 	a.	 	Provider acknowledges that this Agreement and all Covered Services rendered
pursuant to this Agreement are subject to state licensing statutes and regulations set
forth in Attachment E.
	 
	 	b.	 	Provider acknowledges that all Covered Services rendered in conjunction with
the state Medicaid program are subject to the additional provisions set forth in
Attachment F, the effect of which provisions is limited solely to activities
and Covered Services related to the state Medicaid program.
	 
	 	c.	 	Provider acknowledges that all Covered Services rendered in conjunction with
the Medicare program are subject to the Medicare provisions set forth in
Attachment H, the effect of which provisions is limited solely to activities
and Covered Services related to the Medicare program.

	2.12	 	Provider Non-solicitation Obligations. Provider shall not unilaterally assign or transfer
patients served under this Agreement to another hospital without the prior written approval of
Health Plan. Nor shall Provider solicit or encourage Members to select another health plan for
the primary purpose of securing financial gain for Provider. Nothing in this provision is
intended to limit Provider’s ability to fully inform Members of all available health care
treatment options or modalities.
	 
	2.13	 	Fraud and Abuse Reporting. Provider shall report to Health Plan’s compliance officer all
cases of suspected fraud and/or abuse, as defined in Title 42, of the Code of Federal
Regulations, Section 455.2, where there is reason to believe that an incident of fraud and/or
abuse has occurred, by subcontractors, Members, providers, or employees within ten (10) state
working days of the date when Provider first becomes aware of, or is on notice of, such
activity. Provider shall establish policies and procedures for identifying, investigating, and
taking appropriate corrective action against fraud and/or abuse in the provision of health
care services under the Medicaid program. Upon the request of Health Plan and/or the state,
Provider shall consult with the appropriate state agency prior to

HSA — Hospital Services Agreement

	 	 	 	 	 
	Molina ECMS ref# 729

	 	 	 	Provider or authorized
	MHC v122706 / MHI v091707

	 	 	 	representative’s initials: 
	Pacific Hospital of Long Beach
	 	 	 	 

Page 11 of 40

 

	 	 	and during the course of any such investigations.

	2.14	 	Advance Directive. Provider shall document all patient records with respect to the
existence of an Advance Directive in compliance with the Patient Self- Determination Act
(Section 4751 of the Omnibus Reconciliation Act of 1990), as amended, and other
appropriate laws.
	 
	2.15	 	Reciprocity Agreements. Provider shall cooperate with Health Plan’s Participating
Providers and affiliates of Health Plan and agrees to provide Covered Services to
Members enrolled in various government sponsored health programs and other health
products, and various government sponsored health programs and other health products of
affiliates, and to assure reciprocity of health care services. Without limiting the
foregoing, if any Member receives services or treatment constituting Covered Services
from Provider and a capitated Participating Provider is financially responsible for such
services, such Participating Provider shall be solely responsible for compensating
Provider for any Covered Services provided by the Provider in accordance with the
applicable Payments which are the Responsibility of a Capitated Provider provisions of
this Agreement. Payment by the Participating Provider shall be at; (i) the rates agreed
by the Participating Provider and Provider, or (ii) if there is no applicable agreement,
at the lesser of Provider’s billed charges or an amount equivalent to one hundred
percent (100%) of the governing rates provided by applicable State and Federal Law
specific to the Member’s enrolled benefit plan (i.e. Medicaid, Medicare, etc) in place
at the time services are rendered, or (iii) at the election of the Participating
Provider, at the rates set forth in this Agreement. Provider agrees that the applicable
provisions of the Compensation section of this Agreement shall continue to be binding
upon Provider, especially in that Provider shall not balance bill Members for any
Covered Services. Provider shall comply with the procedures established by Health Plan
or its affiliates and this Agreement for reimbursement of such services or treatment.
Provider shall not encourage Members to receive Covered Services from non-Participating
Providers. Breach of this section shall constitute breach of a material term of the
Agreement and will give rise to cause for termination of this Agreement pursuant to the
applicable Termination with Cause provisions of this Agreement. Provider shall abide by
all provisions of this Agreement relating to non-billing of Members with respect to all
services and treatment subject to this reciprocity arrangement.

ARTICLE THREE — HEALTH PLAN’S OBLIGATIONS

	3.1	 	Compensation. Health Plan shall pay Provider in accordance with the terms and
conditions of this Agreement and the compensation schedule set forth in Attachment
D.
	 
	3.2	 	Member Eligibility Determination. Health Plan shall maintain data on Member
eligibility and enrollment. Health Plan shall promptly verify Member

HSA — Hospital Services Agreement

	 	 	 	 	 
	Molina ECMS ref# 729

	 	 	 	Provider or authorized
	MHC v122706 / MHI v091707

	 	 	 	representative’s initials: 
	Pacific Hospital of Long Beach
	 	 	 	 

Page 12 of 40

 

	 	 	eligibility at the request of Provider.

	3.3	 	Prior Authorization Review. Health Plan shall timely respond to requests for prior
authorization and/or determination of Covered Services.
	 
	3.4	 	Medical Necessity Determination. Health Plan’s determination with regard to Medically
Necessary services and scope of Covered Services, including determinations of level of care
and length of stay benefits available under the Member’s health program shall govern. The
primary concern with respect to all medical determination shall be in the interest of the
Member.
	 
	3.5	 	Provider Directory. Health Plan will provide Members with access to Health Plan’s Provider
Directory, updated from time to time, identifying the professional status, specialty, office
address, and telephone number of Health Plan contracted providers.
	 
	3.6	 	Provider Services. Health Plan will maintain a Provider Manual describing Health Plan’s
policies and procedures, Covered Services, limitations and exclusions, and coordination of
benefits information. Health Plan will maintain a Provider Services Department available to
educate Provider regarding Health Plan’s policies and procedures.
	 
	3.7	 	Medical Director. Health Plan will employ a physician as medical director who shall be
responsible for the management of both the; (i) medical, and (ii) medically-related scientific
and technical, aspects of Health Plan.

ARTICLE FOUR — TERM AND TERMINATION

	4.1	 	Term. This Agreement shall commence on the effective date indicated by Health Plan on
the signature page of this Agreement (“Effective Date”) and shall continue in effect for one
year; thereafter, it shall automatically renew for successive one year terms unless and until
terminated by either party in accordance with the provisions of this Agreement or in
accordance with applicable provisions set forth in the attachments.
	 
	4.2	 	Termination without Cause. This Agreement may be terminated without cause by either party
on at least one hundred and twenty (120) days written notice to the other party.
	 
	4.3	 	Termination with Cause. In the event of a breach of any material provision of this
Agreement, the party claiming the breach will give the other party written notice of
termination setting forth the facts underlying its claim(s) that the other party has breached
the Agreement. The party receiving the notice of termination shall have thirty (30) days from
the date of receipt of such notice to remedy or cure the claimed breach to the satisfaction of
the other party. During this thirty

HSA — Hospital Services Agreement

	 	 	 	 	 
	Molina ECMS ref# 729

	 	 	 	Provider or authorized
	MHC v122706 / MHI v091707

	 	 	 	representative’s initials: 
	Pacific Hospital of Long Beach
	 	 	 	 

Page 13 of 40

 

	 	 	(30) day period, the parties agree to meet as reasonably necessary and to
confer in good faith in an attempt to resolve the claimed breach. If the party
receiving the notice of termination has not remedied or cured the breach within such
thirty (30) day period, the party who provided the notice of termination shall have
the right to immediately terminate this Agreement.

	4.4	 	Immediate Termination. Notwithstanding any other provision of this
Agreement, Health Plan may immediately terminate this Agreement and transfer Member(s)
to another provider by giving notice to Provider in the event of any of the following:

	 	a.	 	Provider’s license or certificate to render health care services is
limited, suspended or revoked, or disciplinary proceedings are commenced against
Provider by the state licensing authority;
	 
	 	b.	 	Provider fails to maintain insurance required by this Agreement;
	 
	 	c.	 	Provider loses credentialed status;
	 
	 	d.	 	Provider becomes insolvent or files a petition to declare bankruptcy or
for reorganization under the bankruptcy laws of the United States, or a trustee
in bankruptcy or receiver for Provider is appointed by appropriate authority;
	 
	 	e.	 	Health Plan determines that Provider’s facility and/or
equipment is insufficient to render Covered Services to Members;
	 
	 	f.	 	Provider is excluded from participation in Medicare and state health care
programs pursuant to Section 1128 of the Social Security Act or otherwise is
terminated as a provider by any state or federal health care program;
	 
	 	g.	 	Provider engages in fraud or deception, or knowingly permits fraud or
deception by another in connection with Provider’s obligations under this
Agreement;
	 
	 	h.	 	Health Plan determines that health care services are not being properly
provided, or arranged for, and that such failure poses a threat to Members’
health and safety.

ARTICLE FIVE — GENERAL PROVISIONS

	5.1	 	Indemnification. Each party shall indemnify and hold harmless the other party
and its officers, directors, shareholders, employees, agents, and representatives from
any and all liabilities, losses, damages, claims, and expenses of any kind, including
costs and attorneys’ fees, which result from the duties and obligations of the
indemnifying party and/or its officers, directors, shareholders, employees,

HSA — Hospital Services Agreement

	 	 	 	 	 
	Molina ECMS ref# 729

	 	 	 	Provider or authorized
	MHC v122706 / MHI v091707

	 	 	 	representative’s initials: 
	Pacific Hospital of Long Beach
	 	 	 	 

Page 14 of 40

 

	 	 	agents, and representatives under this Agreement.

	5.2	 	Relationship of the Parties. Nothing contained in this Agreement is intended to create, nor
shall it be construed to create, any relationship between the parties other than that of
independent parties contracting with each other solely for the purpose of effectuating the
provisions of this Agreement. This Agreement is not intended to create a relationship of
agency, representation, joint venture, or employment between the parties. Nothing herein
contained shall prevent any of the parties from entering into similar arrangements with other
parties. Each of the parties shall maintain separate and independent management and shall be
responsible for its own operations. Nothing contained in this Agreement is intended to create,
nor shall be construed to create, any right in any third party, including but not limited to
Health Plan’s Members. Nor shall any third party have any right to enforce the terms of this
Agreement.
	 
	5.3	 	Entire Agreement. This Agreement, together with Attachments and incorporated documents or
materials, contains the entire agreement between Health Plan and Provider relating to the
rights granted and obligations imposed by this Agreement. The contract between the state and
the Health Plan is incorporated herein by reference and shall be the guiding and controlling
document when interpreting the terms of this Agreement. Any prior agreements, promises,
negotiations, or representations, either oral or written, relating to the subject matter of
this Agreement are of no force or effect.
	 
	5.4	 	Severability. If any term, provision, covenant, or condition of this Agreement is held by
a court of competent jurisdiction to be invalid, void, or unenforceable, the remaining
provisions shall remain in full force and effect and shall in no way be affected, impaired, or
invalidated as a result of such decision.
	 
	5.5	 	Non-exclusivity. This Agreement shall not be construed to be an exclusive Agreement between
Health Plan and Provider. Nor shall it be deemed to be an Agreement requiring Health Plan to
refer Members to Provider for health care services.
	 
	5.6	 	Amendment. Health Plan may, without Provider’s consent, amend this Agreement to maintain
consistency and/or compliance with any state or federal law, policy, directive, or government
sponsored program requirement upon forty-five (45) business days’ notice to Provider unless a
shorter timeframe is necessary for compliance. Health Plan may otherwise materially amend this
Agreement only after forty-five (45) business days prior written notice to Provider and only
if mutually agreed to by the parties as evidenced by the amendment being executed by each
party hereto.
	 
	5.7	 	Assignment. Provider may not assign, transfer, subcontract or delegate, in whole or in
part, any rights, duties, or obligations under this Agreement without

HSA — Hospital Services Agreement

	 	 	 	 	 
	Molina ECMS ref# 729

	 	 	 	Provider or authorized
	MHC v122706 / MHI v091707

	 	 	 	representative’s initials: 
	Pacific Hospital of Long Beach
	 	 	 	 

Page 15 of 40

 

	 	 	the prior written consent of Health Plan. Subject to the foregoing, this Agreement
is binding upon, and inures to the benefit of the Health Plan and Provider and their
respective successors in interest and assigns. Neither the acquisition of Health Plan nor a
change of its legal name shall be deemed an assignment.

	5.8	 	Arbitration. Any claim or controversy arising out of or in connection with this Agreement
shall be resolved, to the extent possible, within forty-five (45) days through informal
meetings and discussions held in good faith between appropriate representatives of the
parties. Any remaining claim or controversy shall be settled by binding arbitration
administered by the American Arbitration Association (“AAA”) in accordance with its Commercial
Arbitration Rules then in effect by a single arbitrator in Long Beach, CA; provided, however,
that binding arbitration shall not be utilized to adjudicate matters that primarily involve
review of Provider’s professional competence or professional conduct, and shall not be
available as a mechanism for appeal of any determinations made as to such matters. If
possible, the arbitrator shall be an attorney with at least fifteen (15) years of experience,
including at least five (5) years of experience in managed health care. The parties shall
conduct a mandatory settlement conference at the initiation of arbitration, to be administered
by AAA. The arbitrator shall have no authority to provide a remedy or award damages that would
not be available to such prevailing party in a court of law, nor shall the arbitrator have the
authority to award punitive damages. Each party shall bear its own costs and expenses,
including its own attorneys’ fees, and shall bear an equal share of the arbitrator’s and
administrative fees of arbitration. The parties agree to accept any decision by the arbitrator
as a final determination of the matter in dispute, and judgment on the award rendered by the
arbitrator may be entered in any court having jurisdiction. Arbitration must be initiated
within one year of the earlier of the date the claim or controversy arose, was discovered, or
should have been discovered with reasonable diligence; otherwise it shall be deemed waived.
The use of binding arbitration shall not preclude a request for equitable and injunctive
relief made to a court of appropriate jurisdiction.
	 
	5.9	 	Attachments. Each of the Attachments identified below is hereby made a part of this Agreement
	 
	 	 	Attachment A — Provider Identification Sheet

Attachment B — Definitions

Attachment C — Products/Programs

Attachment D — Compensation Schedule

Attachment E — Licensing Provisions

Attachment F — Medicaid Program Provisions

Attachment G — Acknowledgment of Receipt of Provider Manual

Attachment H — Medicare Program Provisions

Attachment I — Disclosure Form

Attachment J — Certificate of Ownership

HSA — Hospital Services Agreement

	 	 	 	 	 
	Molina ECMS ref# 729

	 	 	 	Provider or authorized
	MHC v122706 / MHI v091707

	 	 	 	representative’s initials: 
	Pacific Hospital of Long Beach
	 	 	 	 

Page 16 of 40

 

	5.10	 	Notice. All notices required or permitted by this Agreement shall be in writing and may be
delivered in person or may be sent by registered or certified mail or U.S. Postal Service
Express Mail, with postage prepaid, or by Federal Express or other overnight courier that
guarantees next day delivery, or by facsimile transmission, and shall be deemed sufficiently
given if served in the manner specified in this Section. The addresses below shall be the
particular party’s address for delivery or mailing of notice purposes:

If to Health Plan:

Molina Healthcare of California

200 Oceangate, Suite 100, Long Beach, California, 90802

Attention: President/CEO

If to Provider:

Pacific Hospital of Long Beach

                    

Attention: Michael D Drobot, CEO

	 	 	The parties may change the names and addresses noted above through written notice in
compliance with this Section. Any notice sent by registered or certified mail, return
receipt requested, shall be deemed given on the date of delivery shown on the receipt card,
or if no delivery date is shown, the postmark date. Notices delivered by U.S. Postal
Service Express mail, Federal Express or overnight courier that guarantees next day
delivery shall be deemed given twenty-four (24) hours after delivery of the notice to the
United States Postal Service, Federal Express or overnight courier. If any notice is
transmitted by facsimile transmission or similar means, the notice shall be deemed served
or delivered upon telephone confirmation of receipt of the transmission, provided a copy is
also delivered via delivery or mail.

*** THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK ***

HSA — Hospital Services Agreement

	 	 	 	 	 
	Molina ECMS ref# 729

	 	 	 	Provider or authorized
	MHC v122706 / MHI v091707

	 	 	 	representative’s initials: 
	Pacific Hospital of Long Beach
	 	 	 	 

Page 17 of 40

 

SIGNATURE AUTHORIZATION

     IN WITNESS WHEREOF, the parties hereto have agreed to and executed this Agreement by
their officers thereunto duly authorized as of the Effective Date set forth by Health Plan
below. The individual signing below on behalf of Provider acknowledges, warrants, and
represents that said individual has the authority and proper authorization to execute this
Agreement on behalf of Provider and its constituent providers, if any, and does so freely
with the intent to fully bind Provider, and its constituent providers, if any, to the
provisions of this Agreement.

	 	 	 
	Pacific Hospital of Long Beach

	 	Molina Healthcare of California

	 	 	 	 	 	 	 
	Provider

	 	 	 	Molina	 	 
	Signature:

	 	/s/ M. Drobot
	 	Signature:
	 	/s/ Lisa Rubino
	 
	 	 	 	 	 	 
	Signatory Name

	 	M. Drobot
	 	Signatory Name
	 	Lisa Rubino
	(Printed):

	 	 	 	(Printed):	 	 
	 
	 	 	 	 	 	 
	Signatory Title

	 	 	 	Signatory Title
	 	President
	(Printed):

	 	CEO
	 	(Printed):	 	 
	 
	 	 	 	 	 	 
	Signature Date:

	 	4/16/09
	 	Signature Date:
	 	4/30/09
	 
	 

	 	 	 	Effective Date:
	 	(To be completed by Health Plan)

	 

	 	 	 	 	 	 

	 	 	 
	HSA — Hospital Services Agreement

	 
	 	 
	Molina ECMS ref# 729

	 	Provider or authorized
	MHC v122706 / MHI v091707

	 	representative’s initials: 
	Pacific Hospital of Long Beach
	 	 

Page 18 of 40

 

 

ATTACHMENT A 

Provider Identification Sheet

Mark applicable category(ies) below. For those Providers representing multiple
health care professional(s) or entity(ies), please check all the categories that
apply.

	 	 	 	 	 	 	 
	 
 

	 	Primary Care Physician
	 	 
 

	 	 
	 
	 	 	 	 	 	 
	 
 

	 	Specialist: type
	 	 
 

	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
 

	 	 

	 	 	 
	  

	 	Group/IPA (a list of constituent members with their License and DEA numbers is attached and incorporated herein)

	 	 	 	 	 	 	 
	 X 

	 	Hospital
	 	 
 

	 	 

	 	 	 	 	 	 	 
	  

	 	Ancillary Provider: type
	 	 
 

	 	 
	 
	 	 	 	 	 	 
	  

	 	Pharmacy
	 	 
 

	 	 
	 
	 	 	 	 	 	 
	  

	 	Other: type
	 	 
 

	 	 

Please enter “N/A” for the following if not applicable or not available:

	 	 	 	 	 
	Provider Name

	 	Pacific Hospital of Long Beach
	 	Billing Address:
	Telephone No.

	 	562-997-2500
	 	P O Box 77417, Los Angeles, CA, 90084
	Facsimile No.
	 	 	 	 
	Email Address
	 	 	 	 
	Tax I.D. No.

	 	
	 	Physical Address (if different than above):
	License No.
	 	 	 	 
	NPI (or UPIN if NPI

	 	NPI: 1861407637	 	 
	not yet designated)

	 	UPIN:	 	 
	DEA No.
	 	 	 	 

(Use continuation pages if multiple providers under common ownership will submit bills under
this Agreement)

I, the undersigned, am authorized to and do hereby verify the accuracy of the
foregoing Provider information.

	 	 	 	 	 
	 

	 	Provider	 	 
	 

	 	Signature:
	 	/s/ M. Drobot
	 
	 	 	 	 
	 

	 	Signatory Name
	 	M. Drobot
	 

	 	(Printed):	 	 
	 
	 	 	 	 
	 

	 	Signatory Title
	 	CEO
	 

	 	(Printed):	 	 
	 
	 	 	 	 
	 

	 	Signature Date:
	 	4/16/09

	 	 	 
	HSA — Hospital Services Agreement

	 
	 	 
	Molina ECMS ref# 729

	 	Provider or authorized
	MHC v122706 / MHI v091707

	 	representative’s initials: 
	Pacific Hospital of Long Beach
	 	 

Page 19 of 40

 

 

ATTACHMENT A

Provider Identification Sheet (Continuation Page)

Use one or more continuation pages as necessary when multiple providers under
common ownership (the Provider is signing on behalf of all of them) are expected to
bill Health Plan under more than one TIN and/or billing address. Please enter “N/A” for
the following if not applicable or not available:

	 	 	 	 	 
	Provider Name

	 	 	 	Billing Address:
	Telephone No.

	 	 	 	Street
	Facsimile No.

	 	 	 	City
	Email Address

	 	 	 	State, Zip          ,
	Tax I.D. No.

	 	 	 	Physical Address:
	License No.

	 	 	 	Street
	NPI (or UPIN if NPI 

not yet designated)

	 	NPI:

UPIN:
	 	City
	DEA No.

	 	 	 	State, Zip          ,
	 
	 	 	 	 
	Provider Name

	 	 	 	Billing Address:
	Telephone No.

	 	 	 	Street
	Facsimile No.

	 	 	 	City
	Email Address

	 	 	 	State, Zip          ,
	Tax I.D. No.

	 	 	 	Physical Address:
	License No.

	 	 	 	Street
	NPI (or UPIN if NPI 

not yet designated)

	 	NPI:

UPIN:
	 	City
	DEA No.

	 	 	 	State, Zip          ,
	 
	 	 	 	 
	Provider Name

	 	 	 	Billing Address:
	Telephone No.

	 	 	 	Street
	Facsimile No.

	 	 	 	City
	Email Address

	 	 	 	State, Zip          ,
	Tax I.D. No.

	 	 	 	Physical Address:
	License No.

	 	 	 	Street
	NPI (or UPIN if NPI 

not yet designated)

	 	NPI:

UPIN:
	 	City
	DEA No.

	 	 	 	State, Zip          ,
	 
	Provider Name

	 	 	 	Billing Address:
	Telephone No.

	 	 	 	Street
	Facsimile No.

	 	 	 	City
	Email Address

	 	 	 	State, Zip          ,
	Tax I.D. No.

	 	 	 	Physical Address:
	License No.

	 	 	 	Street
	NPI (or UPIN if NPI 

not yet designated)

	 	NPI:

UPIN:
	 	City
	DEA No.

	 	 	 	State, Zip          ,

	 	 	 
	HSA — Hospital Services Agreement

	 
	 	 
	Molina ECMS ref# 729

	 	Provider or authorized
	MHC v122706 / MHI v091707

	 	representative’s initials: 
	Pacific Hospital of Long Beach
	 	 

Page 20 of 40

 

 

ATTACHMENT
B

Definitions

	1.	 	Advance Directive is a Member’s written instructions, recognized under state law,
relating to the provision of health care when the Member is not competent to make a
health care decision as determined under state law. Examples of Advance Directives are
living wills and durable powers of attorney for health care.
	 
	2.	 	Agreement means this Provider Services Agreement, all Attachments, and
incorporated documents or materials.
	 
	3.	 	Claim means an invoice for services rendered to a Member by Provider,
submitted in a format approved by Health Plan, and with all service and encounter
information required by Health Plan.
	 
	4.	 	Clean Claim means a claim for Covered Services that has no defect,
impropriety, lack of any required substantiating documentation, or particular
circumstance requiring special treatment that prevents timely payment from being made
on the claim.
	 
	5.	 	CMS means the Centers for Medicare and Medicaid Services, an administrative
agency of the United States Government, responsible for administering the Medicare
program.
	 
	6.	 	CMS Agreement means the Medicare Advantage contract between Health Plan and
CMS.
	 
	7.	 	Covered Services means those health care services that are Medically
Necessary, are within the normal scope of practice and licensure of Provider, and are
benefits of the Health Plan product or a Health Plan affiliate’s product which covers
the Member.
	 
	8.	 	Emergency Services are Covered Services necessary to evaluate or stabilize a
medical or psychiatric condition manifesting itself by acute symptoms of sufficient
severity (including severe pain) so as to cause a prudent layperson, who possesses an
average knowledge of health and medicine, to reasonably expect the absence of
immediate medical attention to result in: (a) placement of the Member’s health (or
the health of the Member’s unborn child) in serious jeopardy; (b) serious impairment to
bodily functions; or (c) serious dysfunction of any bodily organ or part. For Health
Plan’s Medicaid / Medi-Cal members, Emergency Services also includes any services
defined as emergency services under 42 C.F.R. §438.114.
	 
	9.	 	Grievance Program means the procedures established by Health Plan to timely
address Enrollee and Provider complaints or grievances.

	 	 	 
	HSA — Hospital Services Agreement

	 
	 	 
	Molina ECMS ref# 729

	 	Provider or authorized
	MHC v122706 / MHI v091707

	 	representative’s initials: 
	Pacific Hospital of Long Beach
	 	 

Page 21 of 40

 

 

	10.	 	Health Plan means Molina Healthcare of California
	 
	11.	 	HEDIS Studies means Health Employer Data and Information Set.
	 
	12.	 	IPA means Independent Practice Association.
	 
	13.	 	Medically Necessary means those medical services and supplies which are
provided in accordance with professionally recognized standards of practice which
are determined to be: (a) appropriate and necessary for the symptoms, diagnosis or
treatment of the Member’s medical condition; (b) provided for the diagnosis and
direct care and treatment of such condition; (c) not furnished primarily for the
convenience of the Member, the Member’s family, the treating provider, or other
provider; (d) furnished at the most appropriate level which can be provided
consistent with generally accepted medical standards of care; and (e) consistent
with Health Plan policy.
	 
	14.	 	Medicare means the Hospital Insurance Plan (Part A) and the Supplementary
Medical Insurance Plan (Part B) provided under Title XVIII of the Social Security
Act, as amended.
	 
	15.	 	Medicare Advantage means the managed care program established by the
Medicare Modernization Act of 2003 to serve 

Medicare-eligible beneficiaries.
Medicare Advantage plans generally cover Part A and Part B services and may also
include Part D services.
	 
	16.	 	Medicare Advantage Special Needs Plan (MA-SNP) means the managed care
program established by the Medicare Modernization Act of 2003 which allows health
plans to create specialized plans for beneficiaries who are eligible for Medicare
and Medicaid.
	 
	17.	 	Member(s) means a person(s) enrolled in one of Health Plan’s benefit
products or a Health Plan affiliate’s benefit product and who is eligible to
received Covered Services.
	 
	18.	 	Provider means the person(s) and/or entity identified in Attachment
A to this Agreement. Where Provider is a Group/IPA or Hospital, Provider means
and includes all constituent physicians, allied health professionals and staff
persons who provide health care services to Members by and/or through the Group/IPA
or Hospital. All of
said persons are bound by the terms of this Agreement.
	 
	19.	 	Provider Manual means the compilation of Health Plan policies, procedures,
standards and specimen documents, as may be unilaterally amended or modified from
time to time by Health Plan or mutually amended or modified from time to time by
the parties, that have been compiled by Health Plan for the use and instruction of
Provider, and to which Provider must adhere.

	 	 	 
	HSA — Hospital Services Agreement

	 
	 	 
	Molina ECMS ref# 729

	 	Provider or authorized
	MHC v122706 / MHI v091707

	 	representative’s initials: 
	Pacific Hospital of Long Beach
	 	 

Page 22 of 40

 

 

	20.	 	Quality Improvement Program means the policies, procedures and systems developed by
Health Plan for monitoring, assessing and improving the accessibility, quality and continuity
of care provided to Members.
	 
	21.	 	Utilization Review and Management Program means the policies, procedures and systems
developed by Health Plan for monitoring the utilization of Covered Services by Members,
including but not limited to under-utilization and over-utilization.
	 
	22.	 	Utilization Management Reduction Amount means that amount by which payments otherwise owing
to Provider are reduced in the event that Provider is de-delegated responsibility for
utilization management.

	 	 	 
	HSA — Hospital Services Agreement

	 
	 	 
	Molina ECMS ref# 729

	 	Provider or authorized
	MHC v122706 / MHI v091707

	 	representative’s initials: 
	Pacific Hospital of Long Beach
	 	 

Page 23 of 40

 

 

ATTACHMENT C

Products/Programs

	 	 	Provider hereby elects to participate as a panel provider for each of the
following Health Plan products as offered and applicable.

	 	 	 	 	 	 	 
	  

	 	 	1.	 	 	Medi-Cal Primary Care Case Manager
	 
	 	 	 	 	 	 
	  

	 	 	2.	 	 	Medi-Cal Prepaid Health Plan
	 
	 	 	 	 	 	 
	  

	 	 	3.	 	 	Medi-Cal Geographic Managed Care
	 
	 	 	 	 	 	 
	 X 

	 	 	4.	 	 	Medi-Cal Two-Plan Model
	 
	 	 	 	 	 	 
	 X 

	 	 	5.	 	 	 Healthy Families
	 
	 	 	 	 	 	 
	 X 

	 	 	6.	 	 	Medicare Advantage (Molina Medicare Options)
	 
	 	 	 	 	 	 
	 X 

	 	 	7.	 	 	MA-SNP (Molina Medicare Options Plus)
	 
	 	 	 	 	 	 
	  

	 	 	8.	 	 	Other Products — Provider agrees that Health Plan
may from time to time add additional products for which
provider agrees to participate as a contracted
provider

     Health Plan shall maintain any applicable benefit and Covered Services
descriptions in its Provider Manual.

	 	 	 
	HSA — Hospital Services Agreement

	 
	 	 
	Molina ECMS ref# 729

	 	Provider or authorized
	MHC v122706 / MHI v091707

	 	representative’s initials: 
	Pacific Hospital of Long Beach
	 	 

Page 24 of 40

 

 

ATTACHMENT D

Compensation Schedule

Pacific Hospital of Long Beach

Medi-Cal & Healthy Families

Molina shall pay Provider on a fee for service basis at the lesser of: (i) Provider’s billed
charges; or (ii) in accordance with the fee schedule set forth below for all Covered Services
provided to a Member, which are authorized, by Molina or its designee for Molina Healthcare’s
Managed Medi-Cal & Healthy Family Members, less any applicable Member co-payments, deductibles,
co-insurance, or amounts paid or to be paid by other liable third parties, if any.

	 	 	 	 	 
	SERVICE	 	APPLICABLE CODES	 	 
	DESCRIPTION	 	(if designated)	 	PAYMENT RATES
	Medical/Surgical

	 	UB: 100, 101, 110, 111, 112, 117,
119,
120, 121, 127, 129, 130, 131, 132, 137, 139,
140, 141, 142, 147, 149, 150, 151, 152,
157, 159, 160, 164, 169,
	 	$1,200 Per Diem
	 
	 	 	 	 
	DOU

	 	UB: 206, 214
	 	$1,200 Per Diem
	 
	 	 	 	 
	ICU/CCU

	 	UB: 200,
 201, 202, 207, 208, 209, 210, 211, 213, 219
	 	$1,300 Per Diem
	 
	 	 	 	 
	
OB Vaginal Delivery 
2 days

	 	DRG’s 767, 768, 774, 775 includes One well
baby defined by UB codes 170 or 171
Additional baby is Reimbursed at Boarder
Baby Rate
	 	$2,400 Case Rate
	 
	 	 	 	 
	OB C-Section 3 days

	 	DRG-765, 766 includes one well baby defined by

UB codes 170-or 171
	 	$3,600 Case Rate
	 
	 	 	 	 
	Outpatient
Diagnostic
Services/Emergency
Room Procedures

	 	UB: 300-319, UB: 320-359, UB: 610-619; UB:
 730-749, UB: 450-459, UB: 351, 352, 359
	 	105% of Medi-Cal
	 
	 	 	 	 
	Outpatient Surgery

	 	UB: 360, 361, 369, 490, 499, 500
	 	100% of applicable APC.
Multiple procedures
shall be reimbursed
according to the
Medicare guidelines.
	 
	 	 	 	 
	Partial Psych Care

	 	UB: 114, 124, 134, 154, 513
	 	$600.00 Case Rate
	 
	 	 	 	 
	Exclusions

	 	UB: 274, 275, 276, 278
	 	The following items
with a cost greater
than $500.00 are
excluded from the
rates above and shall
be reimbursed at a
rate of Hospital Cost
plus 5%: Implantable
devices (including
non-reusable
orthopedic
instrumentations,
spinal cages,
alugraphs, putty,
pacemakers, leads,
orthotics and
prosthetics.

HSA — Hospital Services Agreement

	 	 	 
	Molina ECMS ref# 729

	 	Provider or authorized
	MHC v122706 / MHI v091707

	 	representative’s initials:

	Pacific Hospital of Long Beach
	 	 

Page 25 of 40

 

ATTACHMENT
D-1

Compensation Schedule

Pacific Hospital of Long Beach

Molina Medicare Options (MMO) &

Molina Medicare Options Plus (MMOP)

Molina shall pay Provider on a fee for service basis at the lesser of: (i) Provider’s billed
charges; or (ii) in accordance with the fee schedule set forth below for all Covered
Services provided to a Member, which are authorized, by Molina or its designee for Molina
Healthcare’s Managed Molina Medicare Options & Molina Medicare Options Plus Members, less
any applicable Member co-payments, deductibles, co-insurance, or amounts paid or to be paid
by other liable third parties, if any.

INPATIENT SERVICES:

Inpatient Services with Codable Medicare DRGs:

	•	 	Health Plan agrees to reimburse Provider one hundred percent (100%) of the
prevailing Medicare Inpatient Prospective Payment System (DRG) in effect at the time
of service. Such Medicare DRG reimbursement will include DME, IME, DSH, Capital, and
all other Medicare payments, including outliers.
	 
	•	 	This reimbursement methodology is not intended to imply any governance
or regulations set forth by Centers of Medicare and Medicaid Services (CMS), but
is used to describe the type of mathematical reimbursement formula agreed upon
by Provider and Health Plan.
	 
	•	 	Provider uses its Fiscal Intermediary to administer their Medicare
program. The Fiscal Intermediary calculates and updates factors used in the
calculation of the Medicare reimbursement formulas, which will be adopted for use
in this Agreement. Any change in the reimbursement formula factors, including, but
not limited to, changes in DRG definitions to comply with industry mandated
standards, will be applicable to the reimbursement set forth in this Agreement,
effective concurrently with the effective date of updates to the Inpatient PPS PC
Pricer.

OUTPATIENT SERVICES

	•	 	Health Plan agrees to reimburse Provider at one hundred percent (100%) of
the prevailing Medicare Ambulatory Payment Classification (APC) in effect at
the time services are rendered.

HSA — Hospital Services Agreement

	 	 	 
	Molina ECMS ref# 729

	 	Provider or authorized
	MHC v122706 / MHI v091707

	 	representative’s initials: 
	Pacific Hospital of Long Beach
	 	 

Page 26 of 40

 

ARTICLE
FIVE — NOTATIONS

	6.1	 	Capitalized terms utilized in this Attachment, which are not otherwise defined in this
Attachment, if any, shall have the same meaning set forth in the definitions to this
Agreement.

	6.2	 	Unless otherwise set forth above, the stipulated Hospital Provider payment rates shall apply
to all Professional Clean Claims submitted by Hospital Providers.

4/16/09

HSA — Hospital Services Agreement

	 	 	 
	Molina ECMS ref# 729

	 	Provider or authorized
	MHC v122706 / MHI v091707

	 	representative’s initials: 
	Pacific Hospital of Long Beach
	 	 

Page 27 of 40

 

ATTACHMENT E

REQUIRED
PROVISIONS

(Health Care Service Plans)

The following provisions are required by (i) federal statutes and regulations applicable to
Health Plan, or (ii) state statutes and regulations applicable to health care service plans. Any
purported modifications to these provisions inconsistent with such statutes, regulations, and
agreements shall be null and void.

DMHC Provisions

	1.	 	In the event that Health Plan fails to pay Provider for Covered Services, the Member or
subscriber shall not be liable to Provider for any sums owed by Health Plan. Provider shall
not collect or attempt to collect from a Member or subscriber any sums owed to Provider by
the Health Plan. Provider may not and will not maintain any action at law against a Member
or subscriber to collect sums owed to the Provider by Health Plan. (Health and Safety Code
section 1379)

	2.	 	To the extent that any of Health Plan’s quality of care review functions or systems are
administered by Provider, Provider shall deliver to Health Plan any information requested in
order to monitor or require compliance with Health Plan’s quality of care review system.
(Rule 1300.51, J-5)

	3.	 	Provider is responsible for coordinating the provision of health care services to
Members who select Provider if Provider is a primary care physician. (Rule 1300.67.1(a))

	4.	 	Provider shall maintain Member medical records in a readily available manner that permits
sharing within Health Plan of all pertinent information relating to the health care of
Members. (Rule 1300.67.1(c))

	5.	 	Provider shall maintain reasonable hours of operation and make reasonable provisions for
after-hour services. (Rule 1300.67.2(b))

	6.	 	To the extent Provider has any role in rendering emergency health care services, Provider
shall make such emergency health care services available and accessible twenty-four (24)
hours a day, seven days a week. (Rule 1300.67.2(c))

	7.	 	Provider shall participate in Plan’s system for monitoring and evaluating accessibility
of care including but not limited to waiting times and appointment availability, and
addressing problems that may develop. Provider shall timely notify Health Plan of any
changes to address or inability to maintain Health Plan’s access standards. (Rule
1300.67(f))

HSA — Hospital Services Agreement

	 	 	 
	Molina ECMS ref# 729

	 	Provider or authorized
	MHC v122706 / MHI v091707

	 	representative’s initials: 
	Pacific Hospital of Long Beach
	 	 

Page 28 of 40

 

	8.	 	Health Plan is subject to the requirements of the Knox-Keene Health Care Service
Plan Act of 1975, as amended (Chapter 2.2 of Division 2 of the Health and Safety Code),
and the Regulations promulgated hereunder (subchapter 5.5 of Chapter 3 of Title 28 of
the California Code of Regulations). Any provision of the aforementioned statutes or
regulation that is required to be in this Agreement shall bind the Health Plan whether
or not expressly set forth in this Agreement. (Rule 1300.67.4(a)(9))

	9.	 	Upon the termination of this Agreement, Health Plan shall be liable for Covered
Services rendered by Provider (other than for copayments as defined in subdivision (g)
of Section 1345 of the Health and Safety Code) to a subscriber or Member who retains
eligibility under the applicable plan contract or by operation of law under the care of
Provider at the time of termination of the Agreement until the services being rendered
to the subscriber or Member by Provider are completed, unless the Health Plan makes
reasonable and medically appropriate provision for the assumption of services by a
contracting provider. (Health and Safety Code section 1373.96) (Rule 1300.67.4(a)(10))

	10.	 	Any written communications to Members that concern a termination of this
agreement shall comply with the notification requirements set forth in Health and
Safety Code section 1373.65(f)

	11.	 	Provider shall maintain all records and provide all information to the Health
Plan or the DMHC as may be necessary for compliance by the Health Plan with the
provisions of the Knox-Keene Health Care Service Plan Act of 1975, as amended and any
regulations promulgated thereunder. To the extent feasible, all such records shall be
located in this state. Provider shall retain such records for at least two years: this
obligation shall not terminate upon termination of the Agreement, whether by rescission
or otherwise. (Health and Safety Code section 1381) (Rule 1300.67.8(b))

	12.	 	Provider shall afford Health Plan and the DMHC access at reasonable times upon
demand to the books, records and papers of Provider relating to health services
provided to Members and subscribers, to the cost thereof, to payments received by
Provider from Members and subscribers of the Health Plan (or from others on their
behalf), and, unless Provider is compensated on a fee-for-services basis, to the
financial condition of Provider. Provider shall promptly deliver to Health Plan, any
financial information requested by Health Plan for the purpose of determining
Provider’s ability to bear capitation or other applicable forms of risk sharing
compensation. (Rule 1300.67.8(c))

	13.	 	Provider shall not and is hereby prohibited from demanding surcharges from
Members for Covered Services. Should Health Plan receive notice of any such surcharges
by Provider, Health Plan may take any action it deems appropriate including but not
limited to demanding repayment by Provider to Members of any
surcharges, terminating this Agreement, repaying surcharges to Members and

HSA — Hospital Services Agreement

	 	 	 
	Molina ECMS ref# 729

	 	Provider or authorized
	MHC v122706 / MHI v091707

	 	representative’s initials: 
	Pacific Hospital of Long Beach
	 	 

Page 29 of 40

 

		 	offsetting the cost of the same against any amounts otherwise owing to Provider.
(Rule 1300.67.8(d))
	 
	14.	 	Upon Health Plan’s request, provider shall report all co-payments paid by Members to
provider. (Health and Safety Code section 1385)

	15.	 	To the extent that any of Health Plan’s quality assurance functions are delegated to
Provider, Provider shall promptly deliver to Health Plan all information requested for the
purpose of monitoring and evaluating Provider’s performance of those quality assurance
functions. (Rule 1300.70)

	16.	 	Provider may utilize Health Plan’s Provider Dispute Resolution Process by phoning or writing
the Provider Services Department, Molina Medical Centers, Third Floor, One Golden Shore Drive,
Long Beach, CA 90802 (800) 526-8196, ext. 1249. The Provider Dispute Resolution Process,
however, does not and cannot serve as an appeal process from any fair hearing proceeding held
pursuant to Health and Safety Code Section 809, et. seq. Please see the Provider Manual for
more information regarding the dispute resolution process. (Health and Safety Code Section
1367(h).) (Rule 1300.71.38)

	17.	 	Provider shall display in each reception and waiting area a notice informing Members how to
contact their health plan, file a complaint with their plan, obtain assistance from the DMHC,
and seek an independent medical review. (Rule 1300.67.8(f))

	18.	 	Provider shall provide grievance forms and assist Members in filing grievances. Provider
shall cooperate with Health Plan in responding to Member grievances and requests for
independent medical reviews. (Rule 1300.68(b))

	19.	 	In the event a Member seeks and obtains a recovery from a third party or a third party’s
insurer for injuries caused to that Member, and only to the extent permitted by the Member’s
evidence of coverage and by California law, Provider may have the right to assert a third
party lien for and to recover from the Member the reasonable value of Covered Services
provided to the Member by Provider for the injuries caused by the third party. Health Plan
shall similarly have the right to assert a lien for and recover for payments made by Health
Plan for such injuries. Provider shall cooperate with Health Plan in identifying such third
party liability claims and in providing such information. Pursuit and recovery of under third
party liens shall be conducted in accordance with California Civil Code section 3040.

	20.	 	The Provider Manual may be unilaterally amended or modified by Health Plan to maintain
consistency and/or compliance with any state or federal law, policy, directive, or government
sponsored program requirement upon forty-five (45) business days’ notice to Provider unless a
shorter timeframe is necessary for compliance. Health Plan may otherwise materially amend the
Provider Manual only after 

forty-five (45) business days prior written notice to Provider and
only if

HSA — Hospital Services Agreement

	 	 	 
	Molina ECMS ref# 729

	 	Provider or authorized
	MHC v122706 / MHI v091707

	 	representative’s initials: 
	Pacific Hospital of Long Beach
	 	 

Page 30 of 40

 

	 	 	mutually agreed to by the parties as evidenced by the amendment being executed by each
party.
	 
	21.	 	Notwithstanding any other provision in this Agreement, if Health Plan or Health Plan’s
capitated provider is not the primary payer under coordination of benefits, Provider may
submit claims to Health Plan or Health Plan’s capitated provider within ninety (90) days from
the date of payment or date of contest, denial or notice from the primary payer. Except as
otherwise provided by law or provided by government sponsored program requirements, any claims
that are not submitted by Provider to Health Plan within ninety (90) days from the date of
payment or date of contest, denial or notice from the primary payer shall not be eligible for
payment, and Provider hereby waives any right to payment therefore.

	22.	 	Notwithstanding any other provision in this Agreement, if Health Plan or Health Plan’s
capitated provider denies a claim because it was filed beyond the claim filing deadline,
Health Plan will, upon Provider’s submission of a provider dispute pursuant to Title 28,
California Code of Regulations, section 1300.71.38 and the demonstration of good cause for the
delay, accept, and adjudicate the claim according to California Health & Safety Code section
1371 or 1371.35, which ever is applicable, and the California Code of Regulations.

HSA — Hospital Services Agreement

	 	 	 
	Molina ECMS ref# 729

	 	Provider or authorized
	MHC v122706 / MHI v091707

	 	representative’s initials: 
	Pacific Hospital of Long Beach
	 	 

Page 31 of 40

 

ATTACHMENT F

DHCS Provisions

     The following provisions apply exclusively to Covered Services provided and
activities engaged in pursuant to Medicaid Program:

	1.	 	All Medicaid covered services are set forth in Attachment C and the Provider Manual as
set forth in this Agreement. (Rule 53250(c)(1))
	 
	2.	 	This Agreement shall be governed by and construed in accordance with all laws,
regulations and contractual obligations incumbent upon the Health Plan. (Rule
53250(c)(2))
	 
	3.	 	This Agreement shall become effective upon approval by the Department of Health Care
Services (“DHCS”) in writing, or by operation of law where the DHCS has acknowledged
receipt of this Agreement and has failed to approve or disapprove the Agreement within
60 days of receipt. (Rule 53250(c)(3))
	 
	4.	 	Amendments to this Agreement shall be submitted to the DHCS, for prior approval, at
least thirty (30) days before the effective date of any proposed changes governing
compensation, services or term. Proposed changes which are neither approved nor
disapproved by the DHCS, shall become effective by operation of law thirty (30) days
after the DHCS has acknowledged receipt, or upon the date specified in the Amendment,
whichever is later. (Rule 53250(c)(3))
	 
	5.	 	Provider agrees to submit all reports required and requested by Health Plan, in a form
acceptable to Health Plan. (Rule 53250(c)(5))
	 
	6.	 	Provider shall make all of its books and records, pertaining to the goods and services
furnished under the terms of this Agreement, available for inspection, examination or
copying:

	 	a.	 	By the DHCS, the United States Department of Health and Human Services, the
DMHC, and the Department of Justice;
	 
	 	b.	 	At all reasonable times, at Provider’s place of business or at such other
mutually agreeable location in California;
	 
	 	c.	 	In a form maintained in accordance with the general standards applicable to
such book or record keeping;
	 
	 	d.	 	For a term of at least five years from the close of the fiscal year in which
the date of service occurred, in which the record or data was created or applied,
and for which the financial record was created;

HSA
— Hospital Services Agreement

	 	 	 
	Molina ECMS ref# 729

	 	Provider or authorized
	MHC v122706 / MHI v091707

	 	representative’s initials: 
	Pacific Hospital of Long Beach
	 	 

Page 32 of 40

 

	 	e.	 	Including all encounter data for a period of at least five years. (Rule
53250(e)(1))

	7.	 	Provider agrees to notify the DHCS in the event that this Agreement is amended or terminated.
Notice to the DHCS shall be considered given when properly addressed and deposited in the
United States Postal Service as First Class Registered Mail, postage attached. 

(Rule
53250(e)(4))
	 
	8.	 	Provider shall maintain and make available to the DHCS, upon request, copies of all
subcontracts and shall ensure that all subcontracts are in writing and require that
subcontractors:

	 	a.	 	Make all applicable books and records available at all reasonable times for
inspection, examining or copying by the DHCS, the U.S. Department of Health and Human
Services, the DMHC, and the Department of Justice;
	 
	 	b.	 	Retain such books and records for a term of at least five years from the fiscal year
in which the date of service occurred, in which the record or data was created or applied,
and for which the financial record was created. (Rule 53250(e)(3))

	9.	 	Provider agrees that any assignment or delegation of this Agreement shall be void unless
prior written approval is obtained from the DHCS in those instances where prior approval by
the DHCS is required. (Rule 53250(e)(5))
	 
	10.	 	Provider agrees to hold harmless both the State of California and Health Plan members in the
event that Health Plan cannot or will not pay for services performed by Provider pursuant to
this Agreement. (Rule 53250(e)(6))
	 
	11.	 	Provider shall assist Health Plan in the transfer of care in the event Health Plan’s
Two-Plan Model Contract with the DHCS expires or terminates. Providers shall assist
Health Plan in the transfer and care in the event this Agreement expires or terminates
for any reason.
	 
	12.	 	Provider shall not attempt recovery in circumstances involving casualty insurance, tort
liability or workers’ compensation. Provider shall report to the DHCS within ten (10) days
after discovery any circumstances which may result in casualty insurance payments, tort
liability payments, or workers’ compensation award. (Rule 53222(b))
	 
	13.	 	Provider shall disclose the names of the officers and owners of Provider, stockholders owning
more than ten percent (10%) of the stock issued by Provider, if any, and major creditors
holding more than five percent (5%) of the dept of Provider. For that purpose, Provider shall
use the Disclosure Form made available by Health Plan. (W&I Code section 14452(a))

HSA
— Hospital Services Agreement

	 	 	 
	Molina ECMS ref# 729

	 	Provider or authorized
	MHC v122706 / MHI v091707

	 	representative’s initials: 
	Pacific Hospital of Long Beach
	 	 

Page 33 of 40

 

	14.	 	Provider acknowledges that Health Plan bears significant risk by assuming financial
responsibility for all in-patient hospitalization expenditures, including expenditures for
services connected with the period of hospitalization. (Rule 53251(c) & (e))
	 
	15.	 	Non-Discrimination Clause. During the performance of this Agreement, Provider and Provider’s
subcontractors will not unlawfully discriminate, harass, or allow harassment, against any
employee or applicant for employment because of sex, race, color, ancestry, religious creed,
national origin, physical disability (including HIV and AIDS), mental disability, medical
condition (including cancer), age (over 40), marital status, and denial of family care leave.
Provider and Provider’s subcontractors will ensure the evaluation and treatment of their
employees and applicants for employment are free from discrimination and harassment. Provider
and Provider’s subcontractors will comply with the provisions of the Fair Employment and
Housing Act (Government Code, Section 12900, et. seq.) and the applicable regulations
promulgated thereunder (California Code of Regulations, Title 2, Section 7285.0, et seq.). The
applicable regulations of the Fair Employment and Housing Commission implementing Government
Code Section 12990(a-f), set forth in Chapter 5 of Division 4 of Title 2 of the California
Code of Regulations are incorporated into this Agreement by reference and made a part hereof
as if set forth in full. Provider and Provider’s subcontractors as the case may require will
give notice of their obligations under this clause to labor organizations with which they have
a collective bargaining or other agreement.
	 
	16.	 	Provider agrees to arrange for the provision of interpreter services for Members at all
provider sites.
	 
	17.	 	Nothing in this Agreement shall be interpreted in any manner to terminate or diminish Health
Plan’s independent obligations to the State of California under one or more of its contracts
with the Department of Health Services.

Upon request by DHCS, Provider shall timely gather, preserve and provide to DSHS, in the form and
manner specified by DHCS, any information specified by DHCS, subject to lawful privileges, in
Provider’s possession, related to threatened or pending litigation by or against DHCS. If Provider
asserts that any requested documents are covered by a privilege, Provider shall: (1) identify such
privileged documents with sufficient particularity to reasonably identify the document while
retaining the privilege; and (2) state the privilege being claimed that supports withholding
production of the document. Such request shall include, but is not limited to, a response to a
request for documents submitted by any party in any litigation by or against DHCS. Provider
acknowledges that time may be of the essence in responding to such request. Provider shall use all
reasonable efforts to immediately notify DHCS and Health Plan of any subpoenas, document production
requests, or requests for records, received by Provider related to Health Plan’s contract with
DHCS. Provider shall be reimbursed by DHCS for the services necessary to comply with this
requirement under the reimbursement terms

HSA
— Hospital Services Agreement

	 	 	 
	Molina ECMS ref# 729

	 	Provider or authorized
	MHC v122706 / MHI v091707

	 	representative’s initials: 
	Pacific Hospital of Long Beach
	 	 

Page 34 of 40

 

specified
in Health Plan’s contract with DHCS.

HSA
— Hospital Services Agreement

	 	 	 
	Molina ECMS ref# 729

	 	Provider or authorized
	MHC v122706 / MHI v091707

	 	representative’s initials: 
	Pacific Hospital of Long Beach
	 	 

Page 35 of 40

 

ATTACHMENT G

Acknowledgement of Receipt of Provider Manual

Provider
hereby acknowledges receipt of Health Plan’s Provider Manual.

Date
of receipt: 4|16|09

Initials of authorized

representative of Provider: /s/ Michael D. Drobot

HSA
— Hospital Services Agreement

	 	 	 
	Molina ECMS ref# 729

	 	Provider or authorized
	MHC v122706 / MHI v091707

	 	representative’s initials:
_______
	Pacific Hospital of Long Beach
	 	 

Page 36 of 40

 

ATTACHMENT H

Medicare Program Provisions

The following provisions apply to all services rendered in conjunction with Health Plan’s
Medicare Programs as set forth in Attachment C to this Agreement. The Agreement shall be
automatically modified to conform to subsequent amendments to Medicare standards. Any purported
modification to the Agreement inconsistent with Medicare standards is not effective. In the event
of any inconsistency between the terms of this Attachment and the terms of the Agreement, the terms
of this Attachment shall control.

	1.	 	Right to Audit. Provider shall make all of its “Relevant Records” available for
inspection, examination and copying by all federal and state agencies with regulatory
authority over the subject matter of this Agreement. Provider shall permit such inspection at
Provider’s place of business and at all reasonable times. “Relevant Records” shall mean all
books and records of Provider related directly or indirectly to the goods and services
furnished under the terms of this Agreement. Provider shall maintain such Relevant Records for
the period of time required by applicable federal and state statutes, but in no event less
than ten (10) years. This provision shall survive termination of the Agreement. (42 CFR
422.504(e)(2), 422.504(e)(3), 422.504(e)(4), and 422.504(i)(2)(ii)).
	 
	2.	 	Confidentiality. Provider shall comply with the confidentiality and enrollee
record accuracy requirements set forth in 42 CFR 422.118. (42 CFR 422.504(a)(13)).
	 
	3.	 	Hold Harmless. Provider agrees that under no circumstance shall a subscriber or
enrollee be liable to the Provider for any sums owed by Health Plan to the Provider. (42 CFR
422.504(g)(1)(i).
	 
	4.	 	Delegation. If Provider is delegated any of the activities or functions of Health
Plan as required in the CMS Agreement, Provider agrees to comply with all applicable
contractual provisions in the same manner as if Provider had executed such contract with CMS
directly. The activities or functions delegated to Provider are set forth in the Agreement. In
the event CMS or Health Plan determines, in its sole discretion, that Provider has not
performed the delegated activities or functions satisfactorily, the delegated activities shall
be revoked upon not less than five (5) days prior written notice. Health Plan shall monitor
the performance of such delegated activities on an ongoing basis, and Provider shall cooperate
with all reasonable requests made by Health Plan in order to accomplish such monitoring. If
Provider is delegated credentialing activities, Provider’s credentialing process will be
reviewed and approved by Health Plan, and such credentialing process will be audited by Health
Plan on an ongoing basis; further, Provider agrees that its credentialing process will comply
with all applicable NCQA standards. Health Plan retains the right to approve, suspend, or

HSA
— Hospital Services Agreement

	 	 	 
	Molina ECMS ref# 729

	 	Provider or authorized
	MHC v122706 / MHI v091707

	 	representative’s initials: 
	Pacific Hospital of Long Beach
	 	 

Page 37 of 40

 

	 	 	terminate any credentialing delegation arrangement. (42 CFR 422.504(i)(3)(iii),
422.504(i)(4)) and 422.504(i)(5).
	 
	5.	 	Medicare Claims Payment. Health Plan and Provider agree that Health Plan shall pay
all Clean Claims within sixty (60) days of the date such claim is delivered by Provider to
Health Plan and Health Plan determines such claim is complete/clean. Any claims that are not
submitted to Health Plan within six (6) months of providing the Covered Services that are the
subject of the claim shall not be eligible for payment, and Provider hereby waives any right
to payment therefore. Health Plan reserves the right to deny any claims that are not in
accordance with the Medicare Claims Processing Manual and Medicare rules for billing. Health
Plan shall pay interest on Clean Claims that are not paid within sixty (60) days for the
period beginning on the day after the required payment date and ending on the date on which
payment is made. Interest shall be computed at the rate of interest provided under 41 U.S.C.
§611. (42 CFR 422.520(b)).
	 
	6.	 	Reporting. Provider shall comply with the reporting requirements set forth in 42
CFR 422.516 and 42 CFR 422.257. (42 CFR 504(a)(8)).
	 
	7.	 	Accountability. Provider acknowledges and agrees that Health Plan is accountable to
CMS for overseeing any functions or responsibilities delegated to Provider. (42 CFR
422.504(i)(3)(ii)(A)).
	 
	8.	 	Medicare Compliance. Provider shall comply with all applicable Medicare laws,
regulations, and CMS instructions. 

(42 CFR 422.504(i)(4)(v)).
	 
	9.	 	Benefit Continuation. Notwithstanding the termination of the Provider Agreement,
Provider shall not abandon any Medicare patients, and shall continue to see and treat those
patients requiring ongoing medical care (including, but not limited to, patients that are
hospitalized on the termination date of the Provider Agreement) on the same terms and
conditions as prior to termination, and shall continue to see and treat such ongoing patients
until such time as such patients may be transitioned to another appropriate medical provider
(or, if applicable, such patients are discharged from the hospital). (42 CFR 422.504(g)(2)(I),
422.504(g)(2)(ii), and 422.504(g)(3)).

HSA
— Hospital Services Agreement

	 	 	 
	Molina ECMS ref# 729

	 	Provider or authorized
	MHC v122706 / MHI v091707

	 	representative’s initials: 
	Pacific Hospital of Long Beach
	 	 

Page 38 of 40

 

ATTACHMENT I

DISCLOSURE FORM

(Welfare
and Institutions Code Section 14452 (a))

HealthSmart Pacific, Inc., dba

Name of Subcontractor Pacific Hospital of Long Beach

The undersigned hereby certifies that the following information regarding Pacific Hospital of Long
Beach (the “Organization”) is true and correct as of the date set forth below.

	1.	 	Officers/Directors General Partners: Please see attachment
	 
	2.	 	Co-Owner(s):
	 
	3.	 	Stockholders owning more than ten percent (10%) of the stock of the Organization:
	 
	 	 	Abraws Healthcare, Inc.
	 
	4.	 	Major creditors holding more than five percent (5%) of Organization’s debt:
	 
	 	 	East West Bank, Future Opportunities, LLC
	 
	5.	 	Form of Organization (Corporation, Partnership, Sole Proprietorship, Individual):
	 
	 	 	Corporation
	 
	6.	 	If not already disclosed above, is Organization, either directly or indirectly, related to or
affiliated with the Contracting Health Plan? Explain:
	 
	 	 	Yes. Faustino Bernadette

	 	 	 	 	 	 	 
	Date: 4/11/09

	 	By:
	 	/s/ M. Drobot
	 	 
	 

	 	 	 	 	 	 
	 

	 	Print Name:
	 	M. Drobot	 	 
	 

	 	Title:
	 	CEO	 	 

HSA — Hospital Services Agreement

	 	 	 
	Molina ECMS ref# 729

	 	Provider or authorized
	MHC v122706 / MHI v091707

	 	representative’s initials:                     
	Pacific Hospital of Long Beach
	 	 

Page 39 of 40

 

 

HealthSmart Pacific, Inc. dba

Pacific Hospital of Long Beach

Officers/Directors/General Partners:

	 	 	 
	Chairman of the Board

	 	Faustino Bernadett, M.D.
	Chief Executive Officer

	 	Michael D. Drobot
	President

	 	Clark Todd
	Treasurer

	 	G. William Hammer
	Secretary

	 	Michael J. Tichon

1

 

ATTACHMENT J

CERTIFICATE OF OWNERSHIP

I, Mr. Drobot, an authorized representative of Pacific Hospital of Long Beach, do certify that, to
the best of my knowledge, the individuals or entities listed below have a five percent or more
ownership, direct or indirect, or control interest in the aforementioned entity as defined under 42
U.S. C. Section 1320 a 3 (2). This form is to be submitted annually to the organization contracting
with the Managed Risk Medical Insurance Board for the Healthy Families Program and/or Access to
Infants and Mothers Program.

	 	 	 	 	 	 	 	 	 
	 	 	Employer	 	 	Social Security	 
	Name of Individual/Entity	 	Identification Number	 	 	Number	 
	/s/ Tino Bernadett
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 

	o	 	No one is listed because there are no individuals or entities with a five (5%) percent
or more interest
	 
	o	 	No one is listed because the plan is under government ownership.
	 
	o	 	No one is listed because the provider of services is a non-profit, public benefit
corporation for which there are no outside controlling interests.

	 	 	 
	/s/ Michael D. Drobot               CEO

	 	4/16/09
	 

	 	 
	Signature of Authorized Representative and Title

	 	Date

HSA — Hospital Services Agreement

	 	 	 
	Molina ECMS ref# 729

	 	Provider or authorized
	MCH v122706 / MHI v091707

	 	representative’s initials:
	Pacific Hospital of Long Beach
	 	 

Page 40 of 40exv10w25

Exhibit 10.25

HOSPITAL SERVICES AGREEMENT

	 	 	 	This Hospital Services Agreement (“Agreement”) is entered by and between
Molina Healthcare of California, a California corporation (“Health Plan”), and
HealthSmart Pacific, Inc., dba Pacific Hospital of Long Beach (“Provider”).

RECITALS

	 	A.	 	Health Plan arranges for the provision of certain health care
services to
Members pursuant to contracts with various government sponsored health
programs. Health Plan intends to participate in additional government
sponsored health programs and offer other health products as the opportunities
become available.
	 
	 	B.	 	Health Plan arranges for the provision of certain health care
services to
Members by entering into provider service agreements with individual
physicians, groups of physicians, individual practice associations, hospitals,
clinics, ancillary health providers, and other health providers.
	 
	 	C.	 	Provider is licensed to render hospital inpatient and outpatient
services and
desires to provide such services to Health Plan’s Members in connection with
Health Plan’s contractual obligations to provide and/or arrange for Health
Care Services for Health Plan’s Members.

	 	 	 	Now, therefore, in consideration of the promises, covenants and warranties stated
herein, Health Plan and Provider agree as follows:

ARTICLE ONE — DEFINITIONS

	1.1	 	Provider means the health care professional(s), or entity(ies) identified
in Attachment A to this Agreement.
	 
	1.2	 	Capitalized words or phrases in this Agreement shall have the meaning set forth
in Attachment B.

Pending DMHC approval

Page 1

 

ARTICLE TWO — PROVIDER OBLIGATIONS

	2.1	 	Serving as a Panel Provider. Provider shall provide hospital inpatient and/or
outpatient services to Members, as are specifically set forth in Attachment C.
Provider agrees that its practice information may be used in Health Plan’s
provider directories, promotional materials, advertising and other informational
material made available to the public and Members. Facility Information
includes, but is not limited to, name, address, telephone number, hours of
operation, and services. Provider shall promptly notify Health Plan of any
changes in this practice information.
	 
	2.2	 	Standards for Provision of Care

	 	a.	 	Provision of Covered Services. Provider shall provide Covered Services to
Members, within the scope of Provider’s license, in accordance with this
Agreement, Health Plan’s policies and procedures, the terms and conditions of
the Health Plan product which covers the Member, and the requirements of
any applicable government sponsored program.
	 
	 	b.	 	Standard of Care. Provider shall provide Covered Services to Members at a
level of care and competence that equals or exceeds the generally accepted
and professionally recognized standard of practice at the time of treatment, all
applicable rules and/or standards of professional conduct, and any controlling
governmental licensing requirements.
	 
	 	c.	 	Facilities, Equipment, and Personnel. Provider’s facilities, equipment,
personnel and administrative services shall be at a level and quality as
necessary to perform Provider’s duties and responsibilities under this
Agreement and to meet all applicable legal requirements, including the
accessibility requirements of the Americans with Disabilities Act.
	 
	 	d.	 	Prior Authorization. Provider shall verify eligibility of Members prior to
rendering services. Prior to admitting any Member as an inpatient or
outpatient, Provider shall obtain the prior authorization of Health Plan in
accordance with Health Plan’s Provider Manual unless the situation is one
involving the delivery of Emergency Services. For Emergency Services that
result in an admission, Provider shall notify Health Plan or its agent within
twenty-four (24) hours of admission and shall request authorization from
Health Plan prior to the provision of any post-stabilization care. For
non-emergent services, regardless of whether prior authorization was received,
Provider shall cooperate and participate in Health Plan’s notification
procedures described in Provider Manual for all inpatient (acute,
rehabilitation, mental health and SNF) and outpatient admission on the same
day of admission or at a maximum within twenty-four (24) hours of
admission.

Page 2

 

	 	e.	 	Contracted Providers. Except in the case of Emergency Services or upon
prior authorization of Health Plan, Provider shall use only those health
professionals, hospitals, laboratories, skilled nursing and other facilities and
providers which have contracted with Health Plan (“participating providers”).
	 
	 	f.	 	Prescriptions. Except with respect to prescriptions and pharmaceuticals
ordered for in-patient hospital services, Provider shall abide by Health Plan’s
drug formularies and prescription policies, including those regarding the
prescription of generic or lowest cost alternative brand name pharmaceuticals.
Provider shall obtain prior authorization from Health Plan if Provider believes
a generic equivalent or formulary drug should not be dispensed. Provider
acknowledges the authority of Health Plan contracting pharmacists to
substitute generics for brand name pharmaceuticals unless counter indicated
on the prescription by the Provider.
	 
	 	g.	 	Availability of Services. Provider shall make Covered Services available 24
hours a day, 7 days a week. Provider shall meet the applicable standards for
timely access to care and services, taking into account the urgency of the need
for the services.

	2.3	 	Standards for Hospital Providers

	 	a.	 	Hospital Providers. Provider shall have a sufficient number of Hospital
Providers to provide Covered Services and meet the needs of Health Plan and
its Members as determined by Health Plan’s Quality Improvement Program
and in accordance with state and federal law. Provider shall be responsible for
the Covered Services provided by Hospital Providers.
	 
	 	b.	 	Contract with Hospital Providers. Provider’s contract with its Hospital
Providers shall be in writing and shall bind Hospital Providers to the terms
and conditions of this Agreement including, but not limited to, terms relating
to licensure, insurance and billing of Members for Covered Services.
	 
	 	c.	 	Hospital Provider Information. Upon request, Provider shall provide
Health Plan with a complete list of its Hospital Providers, together with the
provider specific information required by Health Plan for credentialing and for
administration of its health programs.
	 
	 	d.	 	Restriction, Suspension or Termination of Hospital Provider(s). Provider
shall immediately restrict, suspend or terminate Hospital Providers(s) from
providing Covered Services to Members in the following circumstances: (i)
the Hospital Provider(c) ceases to meet the licensing/certification
requirements or other professional standards as specified in this Article; or (ii)
Health Plan or Provider reasonably determine that there are serious

Page 3

 

	 	 	 	deficiencies in the quality of care of the applicable Hospital Provider(s)
which
affects or could adversely affect the health or safety of Members.
	 
	 	e.	 	Staffing Privileges. Provider agrees to use its best efforts to arrange
staff
privileges or other appropriate access for Health Plan’s contracted providers,
Health Plan’s medical directors and hospitalist providers who are qualified
medical or osteopathic physicians, provided they meet the reasonable standard
of practice and credentialing standards established by Provider’s medical staff
and the bylaws, rules and regulations of Provider.
	 
	 	f.	 	Notification. Provider shall notify Health Plan within five (5) business
days
of becoming aware of any of its Hospital Provider(s) who cease to meet the
licensing/certification requirements or other professional standards as
described in this Agreement. Provider will notify Health Plan within five (5)
business days should any disciplinary or other action of any kind be initiated
against any Health Plan contracted provider, medical director or hospitalist
provider which could result in any suspension, reduction or modification of
his/her hospital privileges. Provider’s notification to Health Plan shall state
Provider’s actions taken against the Hospital Provider or Health Plan provider.
If Provider fails to act as required by this Article with respect to any of its
Hospital Provider(s) or Health Plan reasonably determines and provides
documentation to Provider that there are serious deficiencies in the
professional competence, conduct, or quality of care of the Hospital Provider
which could adversely affect the health and safety of Members, Health Plan
shall have the right to prohibit such Hospital Provider(s) from continuing to
provide Covered Services to Members.

	2.4	 	Nondiscrimination.

	 	a.	 	Enrollment. Provider shall not differentiate or discriminate in providing
Covered Services to Members because of race, color, religion, national origin,
ancestry, age, sex, marital status, sexual orientation, physical, sensory or
mental handicap, socioeconomic status, or participation in publicly financed
programs of health care services. Provider shall render Covered Services to
Members in the same location, in the same manner, in accordance with the
same standards, and within the same time availability regardless of payor.
	 
	 	b.	 	Employment. Provider shall not differentiate or discriminate against any
employee or applicant for employment, with respect to their hire, tenure,
terms, conditions or privileges of employment, or any matter directly or
indirectly related to employment, because of race, color, religion, national
origin, ancestry, age, sex, height, weight, marital status, physical, sensory or
mental disability unrelated to the individual’s ability to perform the duties of
the particular job or position.

Page 4

 

	2.5	 	Recordkeeping

	 	a.	 	Maintaining Member Medical Record. Provider shall maintain a medical
record for each Member to whom Provider renders health care services.
Provider shall open each Member’s medical record upon the Member’s first encounter
with Provider. The Member’s medical record shall contain all information required by
state and federal law, generally accepted and prevailing professional practice,
applicable government sponsored health programs, and all Health Plan policies and
procedures. Provider shall retain all such records for at least ten (10) years.
	 
	 	b.	 	Confidentiality of Member Health Information. Provider shall comply
with all applicable state and federal laws, Health Plan’s policies and
procedures, government sponsored program requirements regarding privacy
and confidentiality of Members’ health information and medical records,
including mental health records. Provider shall not disclose or use Member
names, addresses, social security numbers, identities, other personal
information, treatment modalities, or medical records without obtaining
appropriate authorization to do so. This provision shall not affect or limit
Provider’s obligation to make available medical records, encounter data and
information concerning Member care to Health Plan, any authorized state or
federal agency, or other Providers of health care upon authorized referral.
	 
	 	c.	 	HIPAA. To the extent Provider is considered a covered entity under the
Health Insurance Portability and Accountability Act (“HIPAA”), Provider
shall comply with all provisions of HIPAA including, but not limited to,
provisions addressing privacy, security, and confidentiality.
	 
	 	d.	 	Delivery of Patient Care Information. Provider shall promptly deliver to
Health Plan, upon request and/or as may be required by state or federal law,
Health Plan’s policies and procedures, applicable government sponsored
health programs, Health Plan’s contracts with the government agencies, or
third party payers, any information, statistical data, encounter data, or patient
treatment information pertaining to Members served by Provider, including
but not limited to, any and all information requested by Health Plan in
conjunction with utilization review and management, grievances, peer review,
HEDIS Studies, Health Plan’s Quality Improvement Program, or claims
payment. Provider shall further provide direct access at reasonable times to
said patient care information as requested by Health Plan or as required by
any governmental agency or any appropriate state and federal authority having
jurisdiction over Health Plan. Health Plan shall have the right to withhold
compensation from Provider in the event that Provider fails or refuses to
promptly provide any such information to Health Plan.
	 
	 	e.	 	Member Access to Health Information. Provider shall give Health Plan and
Members access to Members’ health information including, but not limited to,
medical records and billing records, in accordance with the requirements of

Page 5

 

	 	 	 	state and federal law, applicable government sponsored health programs, and
Health Plan’s policies and procedures.

	2.6	 	Program Participation

	 	a.	 	Participation in Grievance Program. Provider shall participate in Health
Plan’s Grievance Program and shall cooperate with Health Plan in identifying,
processing, and promptly resolving all Member complaints, grievances, or
inquiries.
	 
	 	b.	 	Participation in Quality Improvement Program. Provider shall participate
in Health Plan’s Quality Improvement Program and shall cooperate with
Health Plan in conducting peer review and audits of care rendered by
Provider.
	 
	 	c.	 	Participation in Utilization Review and Management Program. Provider
shall participate in and comply with Health Plan’s Utilization Review and
Management Program, including all policies and procedures regarding prior
authorizations, and shall cooperate with Health Plan in audits to identify,
confirm, and/or assess utilization levels of Covered Services.
	 
	 	d.	 	Participation in Credentialing. Provider shall participate in Health Plan’s
credentialing and re-credentialing process and shall satisfy, throughout the
term of this Agreement, all credentialing and re-credentialing criteria
established by the Health Plan. Provider shall immediately notify Health Plan
of any change in the information submitted or relied upon by Provider to
achieve credentialed status. If Provider’s credentialed status is revoked,
suspended or limited by Health Plan, Health Plan may at its discretion
terminate this Agreement and/or move Members to another hospital.
	 
	 	e.	 	Provider Manual. Provider shall comply and render Covered Services in
accordance with the contents, instructions and procedures set forth in Health
Plan’s Provider Manual, which may be amended from time to time. Health
Plan’s Provider Manual is incorporated in this Agreement by this reference.
	 
	 	f.	 	Health Education/Training. Provider shall participate in and cooperate with
Health Plan’s Provider education and training efforts as well as Member
education and efforts. Provider shall also comply with all Health Plan health
education, cultural and linguistic standards, policies, and procedures, and such
standards, policies, and procedures as may be necessary for Health Plan to
comply with its contracts with employers, the state, or federal government.
Provider shall promptly deliver to medical staff, all informational,
promotional, educational, or instructional materials prepared by Health Plan
regarding any aspect of providing Covered Services to Members.

Page 6

 

	2.7	 	Promotional Activities. At the request of Health Plan, Provider shall (1)
display Health Plan promotional materials in its offices and facilities as practical, and
(2) shall cooperate with and participate in all reasonable Health Plan’s marketing efforts.
Provider shall not use Health Plan’s name in any advertising or promotional materials
without the prior written permission of Health Plan.

	2.8	 	Licensure and Standing

	 	a.	 	Licensure. Provider warrants and represents that it is appropriately licensed
as a general acute care hospital to render health care services. Provider shall
provide evidence of licensure to Health Plan upon request. Provider shall
maintain its licensure in good standing, free of disciplinary action, and in
unrestricted status throughout the term of this Agreement. Provider shall
immediately notify Health Plan of any change in Provider’s licensure status,
including any disciplinary action taken or proposed by any licensing agency
responsible for oversight of Provider.
	 
	 	b.	 	Unrestricted Status. Provider warrants and represents that it has not been
convicted of crimes as specified in Section 1128 of the Social Security Act
(42 U.S.C. 1320a-7), excluded from participation in the Medicare or Medicaid
program, assessed a civil penalty under the provisions of Section 1128,
entered into a contractual relationship with an entity convicted of a crime
specified in Section 1128, or taken any other action that would prohibit it from
participation in Medicaid and/or state health care programs.
	 
	 	c.	 	Malpractice and Other Actions. Provider shall give immediate notice to
Health Plan of: (a) any malpractice claim asserted against it by a Member, any
payment made by or on behalf of Provider in settlement or compromise of
such a claim, or any payment made by or on behalf of Provider pursuant to a
judgment rendered upon such a claim; (b) any criminal investigations or
proceedings against Provider; (c) any convictions of Provider for crimes
involving moral turpitude or felonies; and (d) any civil claim asserted against
Provider that may jeopardize Provider’s financial soundness.
	 
	 	d.	 	Liability Insurance. Provider shall maintain premises and professional
liability insurance in coverage amounts appropriate for the size and nature of
Provider’s facility and the nature of Provider’s health care activities. Provider
shall deliver copies of such insurance policies to Health Plan within five
business days of a written request by Health Plan.

Page 7

 

	2.9	 	Claims Payment

	 	a.	 	Submitting Claims. Provider shall promptly submit to Health Plan claims for
Covered Services rendered to Members. All claims shall be submitted in a
form acceptable to and approved by Health Plan, and shall include any and all
medical records pertaining to the claim if requested by Health Plan or
otherwise required by Health Plan’s policies and procedures. Except as
otherwise provided by law or provided by government sponsored program
requirements, any claims that are not submitted by Provider to Health Plan
within 180 days of providing the Covered Services that are the subject of the
claim shall not be eligible for payment, and Provider does not waive any
AB-1455 right to payment.
	 
	 	b.	 	Compensation. Health Plan shall pay Provider for Clean Claims for Covered
Services provided to Members, including Emergency Services, in accordance
with applicable law and regulations and in accordance with the compensation
schedule set forth in Attachment D. Provider shall accept such payment,
applicable co-payments, deductibles, and coordination of benefits collections
as payment in full for services provided under this Agreement. Provider shall
not balance bill Members for any Covered Services.
	 
	 	c.	 	Co-payments and Deductibles. Provider is responsible for collection of
co-payments and deductibles, if any.
	 
	 	d.	 	Coordination of Benefits. Health Plan is a secondary payer in any situation
where there is another payer as primary carrier. Provider shall make reasonable
inquiry of Members to learn whether Member has health insurance or health benefits
other than from Health Plan or is entitled to payment by a third party under any
other insurance or plan of any type, and Provider shall immediately notify Health
Plan of said entitlement. In the event that coordination of benefits occurs,
Provider shall be compensated in an amount equal to the allowable Clean Claim less
the amount paid by other health plans, insurance carriers and payers, not to
exceed the amount specified in Attachment D.
	 
	 	e.	 	Payments which are the Responsibility of a Capitated Provider. Provider
agrees that if Provider is or becomes a party to a subcontract or other
agreement with a provider contracted with Health Plan, who receives a global
capitation from Health Plan for both professional and facility services and is
responsible for arranging for Covered Services through subcontractual
arrangements (“Capitated Provider”), that Provider shall look solely to the
Capitated Provider, and not Health Plan, for payment of Covered Services
provided to Members that are covered by Health Plan’s agreements with such
Capitated Providers.

Page 8

 

	 	 	2.10 Claims Review

	 	a.	 	Emergency Room. For admissions through the Emergency Room in which
there is: (a) a direct admission to Provider’s intensive care units for the
provision of Emergency Services, (b) a direct transfer to Provider’s operating
room for the provision of Emergency Services, or (c) an authorization by
Health Plan or its agents for the provision of post-stabilization care, Health
Plan will not retrospectively deny payment for the day of admission. For all
other services, including those admissions through the Emergency Room that
resulted in more than a one (1) day admission, Health Plan reserves the right
to retrospectively review such claims to determine if such services were
Medically Necessary and may deny payment for any such services which do
not constitute Covered Services. Notwithstanding the foregoing, Provider is
not required to obtain authorization from Health Plan prior to the provision of
Emergency Services and care necessary to stabilize a Member’s emergency
medical condition. Health Plan will not retrospectively deny payment for any
services rendered by Provider in good faith pursuant to the prior authorization
of Health Plan.
	 
	 	b.	 	Authorized Services. Health Plan is responsible for the authorization of
medical services provided to Members. If Provider has obtained concurrent or
prior authorization for a Covered Service provided to a Member, Health Plan
will not retrospectively deny payment for such authorized Covered Service,
unless Provider’s claim and/or medical record for such services do not support
the specific services and/or level of care authorized by Health Plan. Health
Plan shall conduct medical management throughout the course of treatment.
Provider acknowledges that initial and subsequent authorizations shall be
obtained as necessary.
	 
	 	c.	 	Reporting Requirements. Provider’s failure to comply with Health Plan’s
requirements regarding Provider’s identification and reporting of institutional
and outpatient services, admissions, and/or related services to Health Plan or
to obtain authorization as required may result in non-payment to Provider for
all days and charges until the day that notification is received and services are
authorized.
	 
	 	d.	 	Offset. In the event that Health Plan determines that a claim has been
overpaid or paid in duplicate, or that funds were paid which were not provided
for under this Agreement, Provider shall make repayment to Health Plan
within thirty (30) working days of written notification by Health Plan of the
overpayment, duplicate payment, or other excess payment. In addition to any
other contractual or legal remedy, Health Plan may recover the amounts owed
by way of offset or recoupment from current or future amounts due Provider
by giving Provider not less than thirty (30) working days notice in which to
exercise Provider’s appeal rights under this Agreement. As a material
condition to Health Plan’s obligations under this Agreement, Provider agrees

Page 9

 

	 	 	 	that the offset and recoupment rights set forth herein shall be deemed to
be and to constitute rights of offset and recoupment authorized in state and federal
law or in equity to the maximum extent legally permissible, and that such rights shall
not be subject to any requirement of prior or other approval from any court or other
governmental authority that may now or hereafter have jurisdiction over Health Plan
and/or Provider. Health Plan may not offset any claim that date-of-services is older
than 360 days, unless Health Plan can show just cause for delay of submission from
provider, according to AB-1455 regulations.
	 
	 	e.	 	Claims Review and Audit. Provider acknowledges Health Plan’s right to
review Provider’s claims prior to payment for appropriateness in accordance with
industry standard billing rules, including, but not limited to, current UB manual and
editor, current CPT and HCPCS coding, CMS billing rules, CMS bundling/unbundling
rules, National Correct Coding Initiatives (NCCI) Edits, CMS multiple procedure
billing rules, and FDA definitions and determinations of designated implantable
devices and/or implantable orthopedic devices. Provider acknowledges Health Plan’s
right to conduct such review and audit on a line-by-line basis or on such other basis
as Health Plan deems appropriate, and Health Plan’s right to exclude inappropriate
line items to adjust payment and reimburse Provider at the revised allowable level.
Provider also acknowledges Health Plan’s right to conduct utilization reviews to
determine medical necessity and to conduct post-payment billing audits. Provider shall
cooperate with Health Plan’s audits of claims and payments by providing access at
reasonable times to requested claims information, all supporting medical records,
Provider’s charging policies, and other related data. Health Plan shall use
established industry claims adjudication and/or clinical practices, state and federal
guidelines, and/or Health Plan’s policies and data to determine the appropriateness of
the billing, coding and payment.

	2.11	 	Compliance with Applicable Law. Provider shall comply with all applicable state and
federal laws governing the delivery of Covered Services to Members including, but not limited
to, title VI of the Civil Rights Act of 1964; title IX of the Education Amendments of 1972
(regarding education programs and activities); the Age Discrimination Act of 1975; the
Rehabilitation act of 1973; the Balanced Budget Act of 1997; and the Americans with
Disabilities Act:

	 	a.	 	Provider acknowledges that this Agreement and all Covered Services rendered
pursuant to this Agreement are subject to applicable state licensing statutes
and regulations. Accordingly, Provider shall abide by those provisions set
forth in Attachment E.
	 
	 	b.	 	Provider acknowledges that all Covered Services rendered in conjunction with
the state Medicaid program are subject to the additional provisions set forth in
Attachment F, the effect of which provisions is limited solely to activities
and
Covered Services related to the state Medicaid program.

Page 10

 

	2.12	 	Provider Non-solicitation Obligations. Provider shall not unilaterally assign or
transfer patients served under this Provider Services Agreement to another
hospital without the prior written approval of Health Plan. Nor shall Provider
solicit or encourage Members to select another health plan for the primary
purpose of securing financial gain for Provider. Nothing in this provision is
intended to limit Provider’s ability to fully inform Members of all available health
care treatment options or modalities.
	 
	2.13	 	Fraud and Abuse Reporting. Provider shall report to Health Plan’s compliance
officer all cases of suspected fraud and/or abuse, as defined in Title 42, of the
Code of Federal Regulations, Section 455.2, where there is reason to believe that
an incident of fraud and/or abuse has occurred, by subcontractors, Members,
providers, or employees within ten (10) state working days of the date when
Provider first becomes aware of, or is on notice of, such activity. Provider shall
establish policies and procedures for identifying, investigating, and taking
appropriate corrective action against fraud and/or abuse in the provision of health
care services under the Medicaid program. Upon the request of Health Plan
and/or the state, Provider shall consult with the appropriate state agency prior to
and during the course of any such investigations.
	 
	2.14	 	Advance Directive. Provider shall document all patient records with respect to
the existence of an Advance Directive in compliance with the Patient
Self-Determination Act (Section 4751 of the Omnibus Reconciliation Act of 1990), as
amended, and other appropriate laws.

ARTICLE THREE — HEALTH PLAN’S OBLIGATIONS

	3.1	 	Compensation. Health Plan shall pay Provider in accordance with the terms and
conditions of this Agreement and the compensation schedule set forth in
Attachment D.

	3.2	 	Member Eligibility Determination. Health Plan shall maintain data on Member
eligibility and enrollment. Health Plan shall promptly verify Member eligibility
at the request of Provider.
	 
	3.3	 	Prior Authorization Review. Health Plan shall timely respond to requests for
prior authorization and/or determination of Covered Services.
	 
	3.4	 	Medical Necessity Determination. Health Plan’s determination with regard to
Medically Necessary services and scope of Covered Services, including
determinations of level of care and length of stay benefits available under the
Member’s health program shall govern. The primary concern with respect to all
medical determination shall be in the interest of the Member.

Page 11

 

	3.5	 	Provider Directory. Health Plan will provide Members with access to Health
Plan’s Provider Directory, updated from time to time, identifying the professional
status, specialty, office address, and telephone number of Health Plan contracted
providers.
	 
	3.6	 	Provider Services. Health Plan will maintain a Provider Manual describing
Health Plan’s policies and procedures, Covered Services, limitations and
exclusions, and coordination of benefits information. Health Plan will maintain a
Provider Services Department available to educate Provider regarding Health
Plan’s policies and procedures.
	 
	3.7	 	Medical Director. Health Plan will employ a physician as medical director who
shall be responsible for the management of the scientific, technical, and medical
aspects of Health Plan.

ARTICLE FOUR — TERM AND TERMINATION

	4.1	 	Term. This Agreement shall commence on the first day of the month immediately
following the date this Agreement is signed by Health Plan (Effective Date) and shall continue
in effect for one year; it shall automatically renew for successive one year terms unless and
until terminated by either party in accordance with the provisions of this Agreement or in
accordance with applicable state licensing statutes and regulations set forth in
Attachment E and Attachment F.

	4.2	 	Termination without Cause. This Agreement may be terminated without cause
by either party on at least 120 days written notice to the other party.
	 
	4.3	 	Termination with Cause. In the event of a breach of any material provision of
this Agreement, the party claiming the breach will give the other party written
notice of termination setting forth the facts underlying its claim(s) that the other
party has breached the Agreement. The party receiving the notice of termination
shall have 30 days from the date of receipt of such notice to remedy or cure the
claimed breach to the satisfaction of the other party. During this 30-day period,
the parties agree to meet as reasonably necessary and to confer in good faith in an
attempt to resolve the claimed breach. If the party receiving the notice of
termination has not remedied or cured the breach within such 30-day period, the
party who provided the notice of termination shall have the right to immediately
terminate this Agreement.
	 
	4.4	 	Immediate Termination. Notwithstanding any other provision of this
Agreement, Health Plan may immediately terminate this Agreement and transfer
Member(s) to another provider by giving notice to Provider in the event of any of
the following:

Page 12

 

	 	a.	 	Provider’s license or certificate to render health care services is limited,
suspended or revoked, or disciplinary proceedings are commenced against Provider by
the state licensing authority:
	 
	 	b.	 	Provider fails to maintain insurance required by this Agreement;
	 
	 	c.	 	Provider loses credentialed status;
	 
	 	d.	 	Provider becomes insolvent or files a petition to declare bankruptcy or for
reorganization under the bankruptcy laws of the United States, or a trustee in
bankruptcy or receiver for Provider is appointed by appropriate authority;
	 
	 	e.	 	Health Plan determines that Provider’s facility and/or equipment
is insufficient to render Covered Services to Members;
	 
	 	f.	 	Provider is excluded from participation in Medicare and state health care
programs pursuant to Section 1128 of the Social Security Act or otherwise is
terminated as a provider by any state or federal health care program;
	 
	 	g.	 	Provider engages in fraud or deception, or knowingly permits fraud or
deception by another in connection with Provider’s obligations under this
Agreement.
	 
	 	h.	 	Health Plan determines that health care services are not being properly
provided, or arranged for, and that such failure poses a threat to Members’ health and
safety

ARTICLE FIVE — GENERAL PROVISIONS

	5.1	 	Indemnification. Each party shall indemnify and hold harmless the other party and its
officers, directors, shareholders, employees, agents, and representatives from any and all
liabilities, losses, damages, claims, and expenses of any kind, including costs and attorneys’
fees, which result from the duties and obligations of the indemnifying party and/or its
officers, directors, shareholders, employees, agents, and representatives under this
Agreement.
	 
	5.2	 	Relationship of the Parties. Nothing contained in this Agreement is intended to create, nor
shall it be construed to create, any relationship between the parties other than that of
independent parties contracting with each other solely for the purpose of effectuating the
provisions of this Agreement. This Agreement is not intended to create a relationship of
agency, representation, joint venture, or employment between the parties. Nothing herein
contained shall prevent any of the parties from entering into similar arrangements with other
parties. Each of the parties shall maintain separate and independent management and shall be
responsible for its own operations. Nothing contained in this Agreement is

Page 13

 

intended to create, nor shall be construed to create, any right in
any third party, including but
not limited to Health Plan’s Members. Nor shall any third party have any right to enforce the terms
of this Agreement.

	5.3	 	Entire Agreement. This Agreement, together with Attachments and incorporated documents or
materials, contains the entire agreement between Health Plan and Provider relating to the
rights granted and obligations imposed by this Agreement. The contract between the state and
the Health Plan is incorporated herein by reference and shall be the guiding and controlling
document when interpreting the terms of this Agreement. Any prior agreements, promises,
negotiations, or representations, either oral or written, relating to the subject matter of
this Agreement are of no force or effect.
	 
	5.4	 	Severability. If any term, provision, covenant, or condition of this Agreement is held by a
court of competent jurisdiction to be invalid, void, or unenforceable, the remaining
provisions shall remain in full force and effect and shall in no way be affected, impaired, or
invalidated as a result of such decision.
	 
	5.5	 	Non-exclusivity. This Agreement shall not be construed to be an exclusive Agreement between
Health Plan and Provider. Nor shall it be deemed to be an Agreement requiring Health Plan to
refer Members to Provider for health care services.
	 
	5.6	 	Amendment. Health Plan may, without Provider’s consent, immediately amend this Agreement to
maintain consistency and/or compliance with any state or federal law, policy, directive, or
government sponsored program requirement. Health Plan may otherwise materially amend this
Agreement only after 45 business days prior written notice to Provider and only if mutually
agreed to by the parties as evidenced by the amendment being executed by each party hereto.
	 
	5.7	 	Assignment. Provider may not assign, transfer, subcontract or delegate, in whole or in part,
any rights, duties, or obligations under this Agreement without the prior written consent of
Health Plan. Subject to the foregoing, this Agreement is binding upon, and inures to the
benefit of the Health Plan and Provider and their respective successors in interest and
assigns. Neither the acquisition of Health Plan nor a change of its legal name shall be deemed
an assignment.
	 
	5.8	 	Arbitration. Any controversy between Health Plan and Provider shall be resolved, to the
extent possible, within forty-five (45) days by informal meetings and discussions held in good
faith between appropriate representatives of the parties. Any remaining controversies or
claims which, when determined on a cumulative basis, exceed $10,000 or more, arising from or
related to this Agreement and the rendition of services to Members pursuant to this Agreement,
shall be settled by binding arbitration; provided, however, that binding arbitration shall not
be utilized to adjudicate matters that primarily involve review of Provider’s professional
competence or professional conduct, and shall not be

Page 14

 

available as a mechanism for appeal of any determinations made as
to such matters. The arbitration
shall be administered by the American Arbitration Association (“AAA”) in accordance with its
Commercial Arbitration Rules then in effect, and shall be conducted by a single arbitrator in Long
Beach, California. The arbitrator shall be an attorney with at least fifteen years of experience,
including at least five in managed health care. The parties shall conduct a mandatory settlement
conference at the initiation of arbitration, to be administered by AAA. The arbitrator shall have
no authority to provide a remedy or award damages that would not be available to such prevailing
party in a court of law. Nor shall the arbitrator have the authority to award punitive damages.
Each party shall bear its own costs and expenses, including its own attorneys’ fees, and shall bear
an equal share of the arbitrator’s and administrative fees of arbitration. The parties agree to
accept the arbitrator’s decision as a final determination of the matter in dispute, and judgment on
the award rendered by the arbitrator may be entered in any court having jurisdiction hereof. Any
arbitration must be initiated within one year after the controversy or claim arises, is discovered
or should have been discovered with reasonable diligence; if not so initiated, any such claim shall
be deemed waived. The use of binding arbitration shall not preclude a request for equitable and
injunctive relief made to a court of appropriate jurisdiction.

	5.9	 	Attachments. Each of the Attachments identified below is hereby made a part of this
Agreement:

Attachment A — Provider Identification
Sheet

Attachment B — Definitions

Attachment C — Products/Programs

Attachment D — Compensation Schedule

Attachment E — Licensing Provisions

Attachment F — Medicaid Program Provisions

Attachment G — Acknowledgment of Receipt of Provider Manual

Attachment H — Division of Financial Responsibility — Medicare Advantage

	 	 	 	 	 	 	 
	 	 	/s/ David C. Zembik	 	 
	 	 	 	 	 
	 	 	Molina Healthcare of California	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	David C. Zembik	 	 
	 	 	 	 	 
	 	 	Name (printed)	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Executive Director	 	 
	 	 	 	 	 
	 	 	Title	 	 
	 
	 	 	 	 	 	 
	 

	 	Date
	 	6/19/06	 	 
	 

	 	 	 	 	 	 

Page 15

 

SIGNATURE AUTHORIZATION

     The individual signing below on
behalf of Provider-acknowledges, warrants, and represents that
said individual has the authority and proper authorization to execute this Agreement on behalf of
Provider and its constituent providers, if any, and does so freely with the intent to fully bind
Provider, and its constituent providers, if any, to the provisions of this Agreement.

	 	 	 	 	 	 	 
	 	 	HealthSmart Pacific Inc.	 	 
	 	 	dba Pacific Hospital of Long Beach	 	 
	 
	 	 	 	 	 	 
	 	 	“Provider”	 	 
	 
	 	 	 	 	 	 
	 	 	/s/ Faustino Bernadett	 	 
	 	 	 	 	 
	 

	 	By	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	CEO	 	 
	 	 	 	 	 
	 

	 	Title	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	Faustino Bernadett	 	 
	 	 	 	 	 
	 	 	Name (printed)	 	 
	 
	 	 	 	 	 	 
	 

	 	Date
	 	6/1/06	 	 
	 

	 	 	 	 	 	 

Page 16

 

ATTACHMENT A

Provider Identification Sheet

(Initial applicable category)

	 	 	 
	 
 

	 	Primary Care Physician 
	 
	 	 
	 
 

	 	Specialist:
type 

	 
	 	 
	 
 

	 	Group/IPA (a list of constituent members with their License and DEA
numbers is attached and incorporated herein) 
	 
	 	 
	X
 

	 	Hospital 
	 
	 	 
	 
 

	 	Ancillary Provider:
type 

	 
	 	 
	 
 

	 	Pharmacy 
	 
	 	 
	 
 

	 	Other:
type 

	 	 	 	 	 	 	 	 	 
	 	 	HealthSmart Pacific, Inc. dba	 	 	 	 	 	 
	 	 	Pacific Hospital of Long	 	 	 	 	 	2776 Pacific Avenue, Long Beach,
	Provider Name	 	Beach	 	 	 	Address 	 	CA 90806
	Telephone No.

	 	(562) 595-1911	 	 	 	 	 	 
	Facsimile No.

	 	(562) 492-1363	 	 	 	 	 	 
	Tax I.D. No.

	 	 	 	 	 	 	 	 
	License No.
	 	 	 	 	 	 	 	 
	UPIN
	 	 	 	 	 	 	 	 
	DEA No.
	 	 	 	 	 	 	 	 

	 	 	 
	All capitated managed care activities are
administered by:
	 	 
	HealthSmart Management Services Organization, Inc.

	 	Tel: (949) 999-3700
	P.O. Box 7110

	 	Fax: (949) 999-3806
	Newport Beach, CA 92658-7110
	 	 
	Attn: President
	 	 

	 	 	 	 	 	 	 	 	 
	 	 	I, the undersigned, am authorized to and do hereby verify the
	 	 	accuracy of the foregoing Provider information.
	 
	 	 	 	 	 	 	 	 
	 	 	/s/ Faustino Bernadett	 	Date:	 	6/1/06
	 	 	 	 	 	 	 
	 	 	Provider Signature	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	Faustino Bernadett	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	(Name)	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	CEO	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	(Title)	 	 	 	 

Page 17

 

ATTACHMENT B

Definitions

Agreement means this Provider Services Agreement, all
Attachments, and incorporated
documents or materials.

	1.	 	Claim means an invoice for services rendered to a Member by Provider, submitted in a format
approved by Health Plan, and with all service and encounter information required by Health
Plan.
	 
	2.	 	Clean Claim means a claim for Covered Services that has no defect, impropriety, lack of any
required substantiating documentation, or particular circumstance requiring special treatment
that prevents timely payment from being made on the claim.
	 
	3.	 	Covered Services means those health care services that are Medically Necessary, are within
the normal scope of practice and licensure of Provider, and are benefits of the Health Plan
product or a Health Plan affiliate’s product which covers the Member.
	 
	4.	 	Credentialing Payment Reduction Amount means that amount by which payments otherwise
owing to Provider are reduced in the event Provider is dedelegated responsibility for
credentialing.
	 
	5.	 	Emergency Services are Covered Services necessary to evaluate or stabilize a medical or
psychiatric condition manifesting itself by acute symptoms of sufficient severity (including
severe pain) so as to cause a prudent layperson, who possesses an average knowledge of health
and medicine, to reasonably expect the absence of immediate medical attention to result in:
(a) placement of the Member’s health (or the health of the Member’s unborn child) in serious
jeopardy; (b) serious impairment to bodily functions; or (c) serious dysfunction of any bodily
organ or part. For Health Plan’s Medicaid/Medi-Cal members, Emergency Services also includes
any services defined as emergency services under 42 C.F.R. §438.114.
	 
	6.	 	Grievance Program means the procedures established by Health Plan to timely address Enrollee
and Provider complaints or grievances.
	 
	7.	 	Health Plan means Molina Healthcare of California
	 
	8.	 	HEDIS Studies means Health Employer Data and Information Set.
	 
	9.	 	IPA means Independent Practice Association.

Page 18

 

	10.	 	Member(s) means a person(s) enrolled in one of Health Plan’s benefit products or a Health
Plan affiliate’s benefit product and who is eligible to received Covered Services.
	 
	11.	 	Medically Necessary means those medical services and supplies which are provided in
accordance with professionally recognized standards of practice which are determined to be:
(a) appropriate and necessary for the symptoms, diagnosis or treatment of the Member’s medical
condition; (b) provided for the diagnosis and direct care and treatment of such condition; (c)
not furnished primarily for the convenience of the Member, the Member’s family, the treating
provider, or other provider; (d) furnished at the most appropriate level which can be provided
consistent with generally accepted medical standards of care; and (e) consistent with Health
Plan policy.
	 
	12.	 	Provider means the person(s) and/or entity identified in Attachment A to this
Agreement. Where Provider is a Group/IPA or Hospital, Provider means and includes all
constituent physicians, allied health professionals and staff persons who provide health care
services to Members by and/or through the Group/IPA or Hospital. All of said persons are bound
by the terms of this Agreement.
	 
	13.	 	Provider Manual means the compilation of Health Plan policies, procedures, standards and
specimen documents, as may be unilaterally amended or modified from time to time by Health
Plan or mutually amended or modified from time to time by the parties, that have been compiled
by Health Plan for the use and instruction of Provider, and to which Provider must adhere.
	 
	14.	 	Quality Improvement Program means the policies, procedures and systems developed by Health
Plan for monitoring, assessing and improving the accessibility, quality and continuity of care
provided to Members.
	 
	15.	 	Utilization Review and Management Program means the policies, procedures and systems
developed by Health Plan for monitoring the utilization of Covered Services by Members,
including but not limited to under-utilization and over-utilization.
	 
	16.	 	Utilization Management Reduction Amount means that amount by which payments otherwise owing
to Provider are reduced in the event that Provider is de-delegated responsibility for
utilization management.

Page 19

 

ATTACHMENT C

Products/Benefits Inventory

     Provider hereby elects to
participate as a panel provider for each of the Health Plan products
initialed below.

	 	 	 	 	 	 	 
	 
 

	 	 	1.	 	 	Medi-Cal Primary Care Case Manager 
	 

	 	 	 	 	 	(Description of benefits appended as Attachment C-1)
	 
	 	 	 	 	 	 
	 
 

	 	 	2.	 	 	Medi-Cal Prepaid Health Plan 
(Description
of benefits appended as Attachment C-2)
	 
	 	 	 	 	 	 
	 
 

	 	 	3.	 	 	Medi-Cal Geographic Managed Care 
(Description
of benefits appended as Attachment C-3)
	 
	 	 	 	 	 	 
	 
 

	 	 	4.	 	 	Medi-Cal Two-Plan Model 
(Description
of benefits appended as Attachment C-4)
	 
	 	 	 	 	 	 
	 
 

	 	 	 5.	 	 	Healthy Families 
(Description
of benefits appended as Attachment C-5)
	 
	 	 	 	 	 	 
	 
 

	 	 	6.	 	 	Commercial 
(Description
of benefits appended as Attachment C-6)
	 
	 	 	 	 	 	 
	X
 

	 	 	 7.	 	 	Medicare 
(Description
of benefits appended as Attachment C-7)
	 
	 	 	 	 	 	 
	 
 

	 	 	 8.	 	 	Other Products 
Provider
agrees that Health Plan may from time to time add additional products for which provider agrees to participate as a
contracted provider

     Provider hereby acknowledges receipt
of a description of the benefits for each of the Health
Plan products initialed above.

	 	 	 
	 

	 	Initials of authorized
	 

	 	representative of Provider:

Page 20

 

ATTACHMENT D

Compensation Schedule

Pacific Hospital of Long Beach (Capitated Hospital) full risk with
Pacific
Healthcare IPA Medical Associates, Inc.

Medicare Advantage (Special Needs Program)
Capitation Payment Amount:

43% of the CMS Premium*

Capitation Payments to Provider shall be made to
the Provider by the 10th day of each month.

 

*  The gross revenue Molina receives each month from CMS, as
determined by CMS
for Parts A, B and Medi-Cal portion only, as determined by CMS, for the
medical coverage of each member, including the Medicare rebates and
retro-active payments. The revenue shall not be deducted to pay for any or
all broker fees nor deducted from the gross revenue prior to the capitation
split.

	 	 	 
	 

	 	Initials of authorized
	 

	 	representative of Provider:

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ATTACHMENT E

REQUIRED PROVISIONS

(HEALTH CARE SERVICE PLANS)

The following provisions are required by (i) federal statutes and regulations applicable to
Health Plan, or (ii) state statutes and regulations applicable to health care service plans. Any
purported modifications to these provisions inconsistent with such statutes, regulations, and
agreements shall be null and void.

	1.	 	In the event that Health Plan fails to pay Provider for Covered Services, the Member or
subscriber shall not be liable to Provider for any sums owed by Health Plan. Provider shall
not collect or attempt to collect from an Member or subscriber any sums owed to Provider by
the Health Plan. Provider may not and will not maintain any action at law against an Member or
subscriber to collect sums owed to the Provider by Health Plan (Health and Safety Code section
1379)

	2.	 	To the extent that any of Health Plan’s quality of care review functions or systems are
administered by Provider, Provider shall deliver to Health Plan any information requested in
order to monitor or require compliance with Health Plan’s quality of care review system. 

(Rule
1300.51, J-5)

	3.	 	Provider is responsible for coordinating the provision of health care services to
Members who select Provider if Provider is a primary care physician. (Rule 1300.67.1(a))

	4.	 	Provider shall maintain Member medical records in a readily available manner that permits
sharing within Health Plan of all pertinent information relating to the health care of
Members. (Rule 1300.67.1(c))

	5.	 	Provider shall maintain reasonable hours of operation and make reasonable provisions
for after-hour services. (Rule 1300.67.2(b))

	6.	 	To the extent Provider has any role in rendering emergency health care services,
Provider shall make such emergency health care services available and accessible 24 hours a
day, seven days a week. (Rule 1300.67.2(c))

	 	 	 
	 

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	 	representative of Provider:

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	7.	 	Provider shall participate in Plan’s system for monitoring and evaluating accessibility of
care including but not limited to waiting times and appointment availability, and addressing
problems that may develop. Provider shall timely notify Health Plan of any changes to address
or inability to maintain Health Plan’s access standards. (Rule 1300.67(f))

	8.	 	Health Plan is subject to the requirements of the Knox-Keene Health Care Service Plan Act of
1975, as amended (Chapter 2.2 of Division 2 of the Health and Safety Code), and the
Regulations promulgated hereunder (subchapter 5.5 of Chapter 3 of Title 28 of the California
Code of Regulations). Any provision of the aforementioned statutes or regulation that is
required to be in this Agreement shall bind the Health Plan whether or not expressly set forth
in this Agreement. (Rule 1300.67.4(a)(9))

	9.	 	Upon the termination of this Agreement, Health Plan shall be liable for Covered
Services rendered by Provider (other than for copayments as defined in subdivision (g) of
Section 1345 of the Health and Safety Code) to a subscriber or Member who retains eligibility
under the applicable plan contract or by operation of law under the care of Provider at the
time of termination of the Agreement until the services being rendered to the subscriber or
Member by Provider are completed, unless the Health Plan makes reasonable and medically
appropriate provision for the assumption of services by a contracting provider. (Health and
Safety Code section 1373.96) (Rule 1300.67.4(a)(10))

	10.	 	Any written communications to Members that concern a termination of this agreement shall
comply with the notification requirements set forth in Health and Safety Code section
1373.65(f)

	11.	 	Provider shall maintain all records and provide all information to the Health Plan or the
DMHC as may be necessary for compliance by the Health Plan with the provisions of the
Knox-Keene Health Care Service Plan Act of 1975, as amended and any regulations promulgated
thereunder. To the extent feasible, all such records shall be located in this state. Provider
shall retain such records for at least two years: this obligation shall not terminate upon
termination of the Agreement, whether by rescission or otherwise. (Health and Safety Code
section 1381) (Rule 1300.67.8(b))

	 	 	 
	 

	 	Initials of authorized
	 

	 	representative of Provider:

Page 23

 

 

	12.	 	Provider shall afford Health Plan and the DMHC access at reasonable times upon demand to
the books, records and papers of Provider relating to health services provided to Members and
subscribers, to the cost thereof, to payments received by Provider from Members and subscribers
of the Health Plan (or from others on their behalf), and, unless Provider is compensated on a
fee-for-services basis, to the financial condition of Provider. Provider shall promptly deliver
to Health Plan, any financial information requested by Health Plan for the purpose of
determining Provider’s ability to bear capitation or other applicable forms of risk sharing
compensation. (Rule 1300.67.8(c))

	13.	 	Provider shall not and is hereby prohibited from demanding surcharges from Members for
Covered Services, Should Health Plan receive notice of any such surcharges by Provider, Health
Plan may take any action it deems appropriate including but not limited to demanding repayment
by Provider to Members of any surcharges, terminating this Agreement, repaying surcharges to
Members and offsetting the cost of the same against any amounts otherwise owing to Provider.
(Rule 1300.67.8(d))

	14.	 	Upon Health Plan’s request, provider shall report all co-payments paid by Members to
provider. (Health and Safety Code section 1385)

	15.	 	To the extent that any of Health Plan’s quality assurance functions are delegated to
Provider, Provider shall promptly deliver to Health Plan all information requested for the
purpose of monitoring and evaluating Provider’s performance of those quality assurance
functions. (Rule 1300.70)

	16.	 	Provider may utilize Health Plan’s Provider Dispute Resolution Process by phoning or writing
the Provider Services Department, Molina Medical Centers, Third Floor, One Golden Shore Drive,
Long Beach, CA 90802 (800) 526-8196, ext. 1249. The Provider Dispute Resolution Process,
however, does not and cannot serve as an appeal process from any fair hearing proceeding held
pursuant to Health and Safety Code Section 809, et. seq. Please see the Provider Manual for
more information regarding the dispute resolution process. (Health and Safety Code Section
1367(h).) (Rule 1300.71.38)

	17.	 	Provider shall display in each reception and waiting area a notice informing Members how to
contact their health plan, file a complaint with their plan, obtain assistance from the DMHC,
and seek an independent medical review. (Rule 1300.67.8(f))

	 	 	 
	 

	 	Initials of authorized
	 

	 	representative of Provider:

Page 24

 

 

	18.	 	Provider shall provide grievance forms and assist Members in filing grievances. Provider
shall cooperate with Health Plan in responding to Member grievances and requests for independent
medical reviews. (Rule 1300.68(b))

	19.	 	In the event a Member seeks and obtains a recovery from a third party or a third party’s
insurer for injuries caused to that Member, and only to the extent permitted by the Member’s
evidence of coverage and by California law, Provider may have the right to assert a third
party lien for and to recover from the Member the reasonable value of Covered Services
provided to the Member by Provider for the injuries caused by the third party. Health Plan
shall similarly have the right to assert a lien for and recover for payments made by Health
Plan for such injuries. Provider shall cooperate with Health Plan in identifying such third
party liability claims and in providing such information. Pursuit and recovery of under third
party liens shall be conducted in accordance with California Civil Code section 3040.

	20.	 	The Provider Manual may be unilaterally amended or modified by Health Plan to maintain
consistency and/or compliance with any state or federal law, policy, directive, or government
sponsored program requirement upon 45 business days’ notice to Provider unless a shorter
timeframe is necessary for compliance. Health Plan may otherwise materially amend the Provider
Manual only after 45 business days prior written notice to Provider and only if mutually
agreed to by the parties as evidenced by the amendment being executed by each party.

	21.	 	Notwithstanding any other provision in this Agreement, if Health Plan or Health Plan’s
capitated provider is not the primary payer under coordination of benefits, Provider may
submit claims to Health Plan or Health Plan’s capitated provider within 90 days from the date
of payment or date of contest, denial or notice from the primary payer. Except as otherwise
provided by law or provided by government sponsored program requirements, any claims that are
not submitted by Provider to Health Plan within 90 days from the date of payment or date of
contest, denial or notice from the primary payer shall not be eligible for payment, and
Provider hereby waives any right to payment therefore.

	 	 	 
	 

	 	Initials of authorized
	 

	 	representative of Provider:

Page 25

 

 

	22.	 	Notwithstanding any other provision in this Agreement, if Health Plan or Health Plan’s
capitated provider denies a claim because it was filed beyond the claim filing deadline, Health
Plan will, upon Provider’s submission of a provider dispute pursuant to Title 28, California
Code of Regulations, section 1300.71.38 and the demonstration of good cause for the delay,
accept, and adjudicate the claim according to California
Health & Safety Code section 1371 or 1371.35, which ever is applicable, and the California
Code of Regulations.

	23.	 	In the event Provider participates in Molina Advantage, the following provisions shall apply:

	 	a.	 	Provider shall make all of its “Relevant Records” available for inspection,
examination and copying by all federal and state agencies with regulatory authority
over the subject matter of this Agreement. Provider shall permit such inspection at
Provider’s place of business and at all reasonable times. “Relevant Records” shall
mean all books and records of Provider related directly or indirectly to the goods and
services furnished under the terms of this Agreement. Provider shall maintain such
Relevant Records for the period of time required by applicable federal and state
statutes, but in no event less than ten (10) years. This provision shall survive
termination of the Agreement. (42 CFR 422.504(e)(2), 422.504(e)(3), 422.504(e)(4), and
422.504(i)(2)(ii)).
	 
	 	b.	 	Provider shall comply with the confidentiality and enrollee record accuracy
requirements set forth in 42 CFR 422.118. (42 CFR 422.504(a)(13)).
	 
	 	c.	 	Provider agrees that under no circumstance shall a subscriber or enrollee in
Molina Advantage be liable to the Provider for any sums owed by Health Plan to
Provider. (42 CFR 422.504(g)(1)(i).

	 	 	 
	 

	 	Initials of authorized
	 

	 	representative of Provider:

Page 26

 

 

	 	d.	 	If Provider is delegated any of the activities or functions of Health Plan as required in
its contract with CMS, Provider agrees to comply with all applicable contractual provisions in
the same manner as if Provider had executed such contract with CMS directly. The activities or
functions delegated to Provider are set forth in the Agreement. In the event CMS or Health Plan
determines, in its sole discretion, that Provider has not performed the delegated activities or
functions satisfactorily, the delegated activities shall be revoked upon not less than five (5)
days prior written notice. The performance of such delegated activities shall be monitored by
Health Plan on an ongoing basis, and Provider shall cooperate with all reasonable requests made
by Health Plan in order to accomplish such monitoring. If Provider is delegated credentialing
activities, Provider’s credentialing process will be reviewed and approved by Health Plan, and
such credentialing process will be audited by Health Plan on an ongoing basis; further,
Provider agrees that its credentialing process will comply with all applicable NCQA standards.
(42 CFR 422.504(i)(3)(iii) and 422.504(i)(4)).

	 	 	 
	 

	 	Initials of authorized
	 

	 	representative of Provider:

Page 27

 

 

ATTACHMENT
E-1

DMHC Financial Solvency Provisions

This Attachment is required to comply with the financial standards and reporting requirements Rules
1300.75.4 through 1300.75.4.8. References to the term “Rule” identity regulatory citations in Title
28 of the California Code of Regulations.

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

I. DEFINITIONS

	1.1	 	“Cash-to-Claims Ratio” is Provider’s cash, readily available marketable securities and
receivables, excluding all risk pool, risk-sharing, incentive payment program and
pay-for-performance receivables, reasonably anticipated to be collected within sixty (60) days
divided by Provider’s unpaid claims liability. Unpaid claims liability is claims payable plus
incurred but not reported claims (“IBNR”).

	1.2	 	“Contracted Plans” means all full-service health care service plans as defined in Section
1345(f) of the California Health & Safety Code with which Provider has contracts involving a
Risk Arrangement.

	1.3	 	“Corrective Action Plan” (“CAP”) means a plan reflected in a document containing requirements
for correcting and monitoring Provider’s efforts to correct any financial solvency
deficiencies in the Grading Criteria, financial deficiencies or other claims payment
deficiencies, determined through the DMHC’s review or audit process, indicating that Provider
may lack the capacity to meets its contractual obligations consistent with the requirements of
Rule 1300.70(b)(2)(H)(1).

	1.4	 	“DMHC” means the California Department of Managed Health Care. Whenever the Solvency
Regulations reference the Department, that reference includes the DMHC or its External Party.

	 	 	 
	 

	 	Initials of authorized
	 

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Page 28

 

 

	1.5	 	“External Party” means the DMHC or its designated agent, which may be contracted or
appointed to fulfill the functions stated in these Solvency
Regulations.

	1.6	 	“Grading Criteria” means the four grading/reviewing criteria specified in Health and Safety
Code sections 1375.4(b)(1)(A)(i), (ii), (iii), and (iv) and the Cash-to-Claims Ratio as
defined above.

	1.7	 	“Risk Arrangement” is defined to include both “risk-sharing arrangement” and “risk-shifting
arrangement,” which are defined as follows:

	 	(a)	 	Risk-Sharing Arrangement means any compensation arrangement between Provider
and Health Plan under which Provider shares the risk of financial gain or loss with
Health Plan.
	 
	 	 	 	(b) Risk-Shifting Arrangement means a contractual arrangement between Provider and
Health Plan under which Health Plan pays Provider on a fixed, periodic or capitated
basis, and the financial risk for the cost of services provided pursuant to the
contractual arrangement is assumed by Provider.

	1.8	 	“Solvency Regulations” means Rules 1300.75.4 through 1300.75.4.8.

II. OBLIGATIONS OF HEALTH PLAN

	2.1	 	Monthly Membership Reports. Notwithstanding any different provisions of the
Agreement, Health Plan will provide the following information to Provider on a monthly basis
for members assigned to Provider, within ten (10) calendar days following the start of each
month:

	 	(a)	 	Membership information containing at least the following elements for each
member: i) identification number; ii) name; iii) birth date; iv) gender; v) address
(including zip code); vi) benefit plan selected; vii) employer group identification
(name and number); viii) identity of other third party coverage (if known); ix) dates
of enrollment/disenrollment from Provider; x) Provider number; xi) primary care
physician selected; xii) primary care physician effective date; xiii) type of change
to coverage; xiv) co-payment amounts; xv) deductible (if applicable); xvi) amount of
monthly capitation payment.

	 	 	 
	 

	 	Initials of authorized
	 

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	 	(b)	 	The following additional information: i) member additions and terminations  for
the month (including at least: member name, member identification
number); ii) number of additional members under each managed care plan; iii) number
of terminated members under each managed care plan.
	 
	 	(c)	 	Health Plan shall submit the information from
Section 2.1(a) and 2.1(b) to
Provider electronically, unless both Health Plan and Provider agree in writing that
hard copy reports will be submitted instead.
	 
	 	(d)	 	If the information from Section 2.1(a) and 2.1(b) above is provided to
Provider in more than one report, all reports shall be processed by Health Plan on the
same date.
	 
	 	(e)	 	Within forty-five (45) calendar days of the close of each calendar quarter,
Health Plan shall disclose to Provider a reconciliation of any variances between the
reports for information listed in sections 2.1(a) and 2.1(b) above through electronic
transmission, or in hard copy if mutually agreed upon by Provider and Health Plan.

	2.2	 	Intentionally Left Blank.
	 
	2.3	 	Intentionally Left Blank.

	2.4	 	Annual Financial Risk Disclosure. On the Agreement anniversary date each year, Health
Plan shall disclose to Provider the financial risk assumed under the Agreement by providing to
Provider the following information for each and every type of Risk Arrangement (including, but
not limited to, Medicare Advantage, Medi-Cal, commercial, point of service, small group, and
individual plans) covered under the Agreement:

	 	(a)	 	A matrix of responsibility for medical expenses (physician, institutional,
ancillary, and pharmacy) which will be allocated to Provider, a hospital(s) or Health
Plan under the Risk Arrangement.
	 
	 	(b)	 	Expected/projected utilization rates and unit costs for each major expense
service group (inpatient, outpatient, primary care physician, specialist, pharmacy,
injectables, home health, durable medical equipment, ambulance and other), as well as
the source of the data and the actuarial methods employed in determining the
utilization rates and unit costs by each and every type of Risk Arrangement.

	 	 	 
	 

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	2.5	 	Annual Disclosure of Capitation Payments. On the Agreement anniversary date
each year, Health Plan shall disclose to Provider the amount of capitation payments to be
paid per member per month.

	2.6	 	Capitation Deduction Detail. Health Plan shall provide to Provider sufficient details
to allow Provider to verify the accuracy and appropriateness of any deductions from capitation
payments made by Health Plan including, but not limited to, member name, member number, member
date-of-birth, billing provider name, date-of-service, procedure/service codes billed, and
amount paid.

III. OBLIGATIONS OF MEDICAL GROUP

	3.1	 	Cash-to-Claims Ratio. Provider shall maintain at least the following Cash-to-Claims
Ratio:

(a) 0.60
— January 1, 2006 through June 30, 2006

(b) 0.65 — July 1, 2006 through December 31, 2006

(c) 0.75 — January 1, 2007 and thereafter

	3.2	 	Quarterly Financial Survey. No later than forty-five (45) calendar days following the
close of each quarter of its fiscal year beginning on or after July 1, 2005, Provider agrees
to submit a quarterly financial survey report in an electronic format to the DMHC as required
by Rule 1300.41.8 of Title 28 of the California Code of Regulations as set forth below:

	 	(a)	 	The quarterly financial survey report shall include the following if
Provider has at least 10,000 covered lives under all Risk Arrangements as of December
31 of the preceding calendar year:

	 	 	 
	 

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	 	(i)	 	A Financial survey report, (including a balance sheet, an income statement and a statement
of cash flows), or comparable financial statements if Provider is a nonprofit entity, and
supporting schedule information (including, but not limited to, aging of receivable
information), reflecting the results of operations for the immediately preceding quarter,
prepared in accordance with Generally Accepted Accounting Principles (“GAAP”). Financial
survey reports must be on a combining basis with an affiliate, if Provider or such Provider
affiliate is legally or financially responsible for payment of Provider’s claims. Any
affiliated entity included in this financial survey report must be separately identified in a
combining schedule format. For the purposes of this section, Provider’s use: (1) of a
“sponsoring organization” arrangement to reduce its liabilities for the purposes of
calculating tangible net equity and working capital or (2) an affiliated entity to provide
claims processing services shall not be construed to automatically
create a legal or financial - obligation to pay Provider’s claims liability.
	 
	 	(ii)	 	A claims report, which includes the percentage of claim’s that have been timely reimbursed,
contested or denied during the quarter by Provider in accordance with the requirements of
sections 1371 and 1371.35 of the California Health & Safety Code, Rule 1300.71, and any other
applicable state and federal laws and regulations. If less than ninety-five percent (95%) of
all complete claims have been reimbursed, contested or denied on a timely basis, the claims
report must also describe the reasons why Provider’s claims adjudication process is not
meeting the requirements of applicable law, any actions taken to correct the deficiency, and
any results of the actions. This claims report is for the purpose of monitoring the financial
solvency of Provider and is not intended to change or alter existing state and federal laws
and regulations relating to claims payment settlement practices and timeliness.

	 	 	 
	 

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	 	(iii)	 	A statement as to whether or not Provider has estimated and documented, on a monthly
basis, its liability for (“IBNR”) claims in accordance with Rule 1300.77.2 (“IBNR Statement”)
and that these estimates are the basis for the quarterly financial survey report submitted to
the DMHC. If the estimated and documented liability is not in compliance with Rule 1300.77.2
in any way, the IBNR Statement shall describe in detail for each deficiency the nature of the
deficiency, the reasons for the deficiency, any actions taken to correct the deficiency, and
any results of those actions. Provider’s failure to: (1) estimate and document, on a monthly
basis, its liability for IBNR claims or (2) maintain its books and records on an accrual
accounting basis shall result in Provider’s failure to maintain, at all times, positive
tangible net equity (“TNE”) and positive working capital as set forth in section 3.2(a)(iv)
below.
	 
	 	(iv)	 	A statement as to whether or not Provider has maintained at all times throughout the quarter
(1) a positive TNE as defined in Rule 1300.76(e) and (2) a positive level of working capital,
calculated according to GAAP (“TNE/Working Capital Statement”). If either the required TNE or
the required working capital has not been maintained at all times, a statement must be
included in the quarterly financial survey report that describes in detail the nature of the
deficiency, the reasons for the deficiency, any actions taken to correct the deficiency, and
any results of those actions. Provider may reduce its liabilities or increase its cash for
purposes of calculating its TNE, working capital and Cash-to-Claim Ratio in a manner allowed
by Health and Safety Code Section 1375.4(b)(1)(B) so long as the sponsoring organization has
filed with the DMHC: (1) its audited annual financial statements within one hundred twenty
(120) calendar days of the end of the sponsoring organization’s fiscal year and (2) a copy of
the written guarantee meeting the requirements of Health and Safety Code Rule
1375.4(b)(1)(B). For purposes of the Health and Safety Code Rule 1375.4(b)(1)(B), a
sponsoring organization shall have a TNE of at least twice the total of all amounts that it
has guaranteed to all persons and entities, or TNE in a lesser amount approved by the DMHC,
in situations where Provider can demonstrate to the DMHC’s satisfaction that a lesser amount
of TNE is sufficient. If Provider has a sponsoring organization, Provider shall provide a
statement demonstrating the capacity of the sponsoring organization to guarantee Provider’s
debts as well as the nature and scope of the guarantee provided consistent with Health and
Safety Code Section 1375.4(b)(1)(B).

	 	 	 
	 

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	 	(v)	 	For the quarter beginning on or after January 1, 2006, a statement as to
whether or not Provider has, at all times during the quarter, maintained a
Cash-to-Claims Ratio as required in section 3.1 above, calculated in a manner
consistent with GAAP. If the required Cash-to-Claims Ratio has not been maintained
at all times, a statement shall be included in the quarterly financial survey
report that describes in detail the nature of the deficiency, the reasons for the
deficiency, any action taken to correct the deficiency, and any results of that
action.

	 	(b)	 	The quarterly financial survey report shall include the following if
Provider has fewer than 10,000 covered lives under all Risk Arrangements as of
December 31 of the preceding calendar year:

	 	(i)	 	The disclosure statements set forth in sections 3.2(a)(ii),(iii),
(iv) and (v) above.
	 
	 	(ii)	 	In the event Provider serves fewer than 10,000 covered lives under
all Risk Arrangements and it: (i) fails to satisfactorily demonstrate its
compliance with the Grading Criteria; (ii) experiences an event that materially
alters its ability to remain compliant with the Grading Criteria; (iii) is found,
by the DMHC’s (or the DMHC’s designee’s) review or audit activities, to
potentially lack sufficient financial capacity to continue to accept financial
risk for the delivery of health care services consistent with the requirements of
Rule 1300.70(b)(2)(H)(1); or (iv) is found, through the DMHC’s HMO Help Center,
medical audits and surveys, or any other source, to be delaying referrals,
authorizations, or access to basic health care services based on financial
considerations, Provider shall, within thirty (30) calendar days of the DMHC’s
written request, begin submitting all quarterly financial survey reports set
forth in sections 3.2(a) above.

	3.3	 	Annual Financial Survey. Provider agrees to submit to the DMHC on a yearly basis,
not more than one hundred fifty (150) calendar days after the close of Provider’s fiscal year
beginning on or after January 1, 2005, annual financial survey reports, in an electronic
format determined by the DMHC as required by Rule 1300.41.8, based upon Provider’s annual
audited financial statement prepared in accordance with generally accepted auditing standards
and containing all of the following:

	 	 	 
	 

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	 	(a)	 	An annual financial survey report, based upon Provider’s annual audited financial
statements, (including at least a balance sheet, an income statement, a statement of cash
flows, and footnote disclosures) or comparable financial statements if Provider is a nonprofit
entity, and supporting schedule information, (including, but not limited to, aging of
receivable information and debt maturity information) for the immediately preceding fiscal
year, prepared by an independent certified public accountant in accordance with GAAP. For the
purposes of determining the independence of the certified public accountant, the regulations of
the California State Board of Accountancy (Division 1, Sections 1 through 99.2, Title 16 of the
California Code of Regulations) shall apply.
	 
	 	(b)	 	The financial survey reports of Provider shall be on a combining basis with an affiliate if
Provider or such affiliate is legally or financially responsible for the payment of Provider’s
claims. Any affiliated entity included in the report shall be separately identified.
Provider’s use of: (1) a “sponsoring organization” arrangement to reduce its liabilities for
the purposes of calculating TNE and working capital or (2) an affiliated entity to provide
claims processing services shall not be construed to automatically create a legal or financial
obligation to pay Provider’s claims liability. When combined financial statements are
required, the independent accountant’s report or opinion must address all the entities
included in the combined financial statements. If the accountant’s report or opinion makes
reference to the fact that another auditor performed a part of the examination, Provider shall
also file the report or opinion issued by the other auditor.
	 
	 	(c)	 	Opinion of an independent certified public accountant indicating whether Provider’s annual
audited statements present fairly, in all material respects, the financial position of
Provider and whether the financial statements were prepared in accordance with GAAP. If the
opinion is qualified in any way, the survey report shall include an explanation regarding the
nature of the qualification.

	 	 	 
	 

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	 	(d)	 	An IBNR Statement consistent with the requirements outlined in section 3.2(a)(iii) of this
Amendment. If the estimated and documented liability is not in compliance with Rule 1300.77.2
in any way, the IBNR Statement shall describe in detail for each deficiency the nature of the
deficiency, the reasons for the deficiency, any actions taken to correct the deficiency, and
any results of those actions. Provider’s failure to: (1) estimate and document, on a monthly
basis, its liability for IBNR claims or (2) maintain its books and records on an accrual
accounting basis shall result in Provider’s failure to maintain, at all times, positive
tangible net equity (“TNE”) and positive working capital as set forth in section 3.3(e) below.
	 
	 	(e)	 	A TNE/Working Capital Statement consistent with the TNE reporting requirements as outlined in
Section 3.2(a)(iv) of this Amendment. If either the required TNE or the required working
capital has not been maintained at all times, the TNE/Working Capital Statement shall describe
in detail the nature of the deficiency, the reasons for the deficiency, any actions taken to
correct the deficiency, and any results of those actions. Provider may reduce its liabilities
for purposes of calculating its TNE and working capital in a manner as required by Rule
1300.41.8 and as outlined in section 3.2(a)(iv) of this Amendment.
	 
	 	(f)	 	For fiscal years beginning on or after January 1, 2006, a statement as to whether or not
Provider has at all times during the year maintained a Cash-to Claims Ratio as required in
section 3.1 above, calculated in a manner consistent with GAAP. If the required Cash-to-Claims
Ratio has not been maintained at all times, a statement shall be included in the quarterly
financial survey report that describes in detail the nature of the deficiency, the reasons for
the deficiency, any action taken to correct the deficiency, and any results of that action.
	 
	 	(g)	 	A statement as to whether Provider maintains reinsurance and/or professional stop-loss
coverage.
	 
	 	(h)	 	A copy of Provider’s complete annual audited financial statement, including footnotes and
the certificate or opinion of the independent certified public accountant.

	 	 	 
	 

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	3.4	 	Annual Statement of Organization Survey. Provider shall submit to the DMHC a “Statement
of Organization,” in an electronic format determined by the DMHC to be filed with Provider’s annual
financial survey report, Such Statement of Organization shall include the following information as
of December 31 of each calendar year prior to the filing:

	 	(a)	 	Name and address of Provider;
	 
	 	(b)	 	Financial and public contact person, with title, address, telephone, fax and
e-mail address;
	 
	 	(c)	 	A list of all health plans with which Provider has Risk Arrangements;
	 
	 	(d)	 	Type of Provider: Independent Practice Association (IPA), Medical Group, Foundation
or other entity, or some combination. If Provider is a foundation, identify each and every
medical group within the foundation and whether any of those medical groups independently
qualifies as a risk-bearing organization as defined in Health and Safety Code Section
1375.4(g).
	 
	 	(e)	 	Corporate status: professional corporation, partnership, not-for-profit corporation,
sole proprietor or other form of business;
	 
	 	(f)	 	The name, address and principal officer of each of Provider’s affiliates as defined
in Rule 1300.45(c)(1) and (2);
	 
	 	(g)	 	Whether Provider is partially or wholly owned by a hospital or hospital
system;
	 
	 	(h)	 	A matrix listing all major categories of medical care offered by Provider,
including but not limited to anesthesiology, cardiology, orthopedics, ophthalmology,
oncology, obstetrics/gynecology, and radiology, and next to each listed category in the
matrix a disclosure of the compensation model (salary, fee-for-service, capitation,
other) used by Provider to compensate the majority of providers of that category of
care;

	 	 	 
	 

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	 	(i)	 	An approximation of the number of enrollees served by Provider through Risk
Arrangements, pursuant to a list of ranges developed by the DMHC;
	 
	 	(j)	 	The name of any Management Services Organization (“MSO”) that Provider
contracts with for administrative services;
	 
	 	(k)	 	Total number of contracted physicians in employment and/or contractual
arrangements with Provider;
	 
	 	(l)	 	Disclosure by California county or counties of Provider’s primary service
area (excluding out-of-area tertiary facilities and providers);
	 
	 	(m)	 	Provider’s address, telephone number and website link, if available, where
providers may access written information and instructions for filing of provider
disputes with Provider’s dispute resolution mechanism consistent with requirements of
Rule 1300.71.38;
	 
	 	(n)	 	Any other information which the DMHC deems reasonable and necessary, as
permitted by law, to understand the operational structure and finances of Provider.

	3.5	 	Attestation. Provider shall submit a written verification for each report made under
Sections 3.2, 3.3, and 3.4 of this Amendment stating that the report is true and correct to
the best knowledge and belief of a principal officer of Provider, and signed by a principal
officer, as defined by Rule 1300.45(o).

	3.6	 	Notification to DMHC & Health Plan. Provider agrees to notify the DMHC and Health
Plan no later than five (5) business days from discovering that Provider has experienced any
event that materially alters its financial situation or threatens its solvency.

	3.7	 	DMHC Evaluation of Provider. Provider shall:

	 	(a)	 	Permit the DMHC to make any examination that it deems reasonable and
necessary to implement section 1375.4 of the Health and Safety Code, and provide to
the DMHC for inspection and copying, upon request, any books or records that the DMHC
deems relevant or useful in such examination, as permitted by law.

	 	 	 
	 

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	 	(b)	 	Comply with the DMHC’s review and audit process that is used to determine
Provider’s compliance with the Grading Criteria.
	 
	 	(c)	 	Permit the DMHC to obtain and evaluate supplemental financial information
pertaining to Provider when:

	 	(i)	 	Provider fails to satisfactorily demonstrate its compliance
with the Grading Criteria;
	 
	 	(ii)	 	Provider experiences an event that materially alters its
ability to remain compliant with the Grading Criteria;
	 
	 	(iii)	 	The External Party’s review or audit process indicates that
Provider may have insufficient financial capacity to continue to accept
financial risk for the delivery of health care services consistent with the
requirements of Rules 1300.70(b)(2)(H)(1);
	 
	 	(iv)	 	The DMHC receives information from complaints submitted to
the HMO Help Center, Health Plan reporting, medical audits and surveys or any
other source that indicates Provider may be delaying referrals or
authorizations or failing to meet access standards for basic health care
services based on financial considerations.

IV. OBLIGATIONS OF MEDICAL GROUP & HEALTH PLAN

	4.1	 	Corrective Action Plans. Provider and Health Plan shall comply with the DMHC’s
Corrective Action Plan (“CAP”) process as set forth below.

	 	(a)	 	Beginning with the financial survey submission filed for the third quarter
of calendar year 2005, in the event Provider has deficiencies in any of the Grading
Criteria, it shall simultaneously submit a self-initiated CAP proposal, in an
electronic format developed by the DMHC, to the DMHC and Health Plan that meets the
following requirements:

	 	(i)	 	Identifies the Grading Criteria that Provider has failed to meet;
	 
	 	(ii)	 	Identifies the amount by which Provider has failed to meet
the Grading Criteria;
	 
	 	(iii)	 	Identifies Health Plan and other Contracted Plans,
including the identification of the name, title, telephone and facsimile
numbers, and postal and e-mail addresses for the person responsible at Health
Plan and each Contracted Plan for monitoring compliance with the CAP;

	 	 	 
	 

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