Document:

Exhibit 10.157

 

SERVICE
AGREEMENT

 

BETWEEN

 

CAREAMERICA SOUTHERN CALIFORNIA

 

AND

 

Northwest
Orange County Medical Group

 

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

 

 

TABLE OF
CONTENTS

 

	
   

  	
   

  	
  RECITALS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  I.

  	
   

  	
  DEFINITIONS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  II.

  	
   

  	
  PHYSICIAN
  GROUP OBLIGATIONS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  III.

  	
   

  	
  HEALTH PLAN OBLIGATIONS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  IV.

  	
   

  	
  UTILIZATION REVIEW
  PROGRAM

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  V.

  	
   

  	
  PROVIDER MANUAL

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  VI.

  	
   

  	
  COMPENSATION

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  VII.

  	
   

  	
  REPORTING PROCEDURES

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  VIII.

  	
   

  	
  COORDINATION OF BENEFITS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  IX.

  	
   

  	
  STOP LOSS PROGRAM

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  X.

  	
   

  	
  MEDICAL AND
  ADMINISTRATIVE RECORDS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  XI.

  	
   

  	
  ACCESSIBILITY
  AND CONTINUITY OF CARE

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  XII.

  	
   

  	
  INSURANCE

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  XIII.

  	
   

  	
  COOPERATION

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  XIV.

  	
   

  	
  TERM AND TERMINATION

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  XV.

  	
   

  	
  DISPUTE RESOLUTION

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  XVI.

  	
   

  	
  GENERAL PROVISIONS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ATTACHMENT A - FINANCIAL RESPONSIBILITY

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ATTACHMENT B - FUND ALLOCATION AND RISK
  SHARING

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ATTACHMENT C - CONVERSION FACTORS

  	
   

  

 

 

 

HEALTH PLAN and PHYSICIAN GROUP

SERVICE AGREEMENT

 

THIS AGREEMENT
is made and entered into as of the 1st day of September, 1990 , by and between
CareAmerica Southern California, Inc. (“Health Plan”), a California corporation
organized under the laws of the State of California and Northwest Orange County
Medical Group (“Physician Group”), a California professional corporation
organized under the laws of the State of California.

 

RECITALS

 

A.            Health
Plan is  a Health Care Service
Plan licensed under the Knox-Keene Health Care Service Plan Act of 1975 as amended
(“Knox-Keene Act”).  

 

B.            Health
Plan intends .c operate a Competitive Medical Plan (“CMP”) pursuant to Section
114 of the U.S. Tax Equity and Fiscal Responsibility Act of 198? (“TEFRA”) and
to offer a prepaid health benefits plan to individuals covered under the
Federal
Medicare program.

 

C.            Physician
Group employs or has entered into contracts with physicians and other providers
of medical services and Physician Group desires to provide Capitated Services
to Enrollees in CMP Program.  

 

D.      Health
Plan and Physician Group desire to enter into an Agreement whereby Physician
Group will provide services to Medicare beneficiaries enrolled in CMP Program
operated by Health Plan.  

 

NOW, THEREFORE, in consideration of the
promises and the mutual covenants herein stated, it is agreed by and between
the parties hereto as follows:  

 

I.  DEFINITIONS

 

1.1           “Capitated
Service” will mean those Physician, other professional and related health care
services which are the financial responsibility of Physician Group and which
Physician Group will provide to Enrollees pursuant to Attachment A of this
Agreement.  

 

The
determination of whether a service or item is a Capitated Service rests with
Health Plan. 

 

1

 

1.2           “Capitation
Fee” will mean the predetermined monthly payment to be made to Physician Group
for Capitated Services to be provided to Enrollees assigned to Physician
Group.  The Capitation Fees are
specified in Attachment B of this Agreement.  

 

The determination of whether a service or
supply is a Capitated Service rests with the Health Plan.  

 

1.3           “CMP
Program” will mean the health care service plan program established by Health
Plan to comply with all applicable requirements of the Knox-Keene Act and TEFRA
and which is available to individuals eligible for Medicare.  

 

1.4           “Copayment”
will mean those charges for Covered Services payable by Enrollee to providers
of service, in accordance with the Evidence of Coverage  

 

1.5           “Covered
Services” will mean those services which are benefits under Health Plan’s CMP
Program in accordance with the Evidence of Coverage.  

 

The determination of whether a service or
supply is a Covered Service rests with the Health Plan, subject to the
regulations and appeals procedure established by HCFA.  

 

1.6           “Emergency
Services” will mean services that are provided for the evaluation or treatment
of injury or illness requiring immediate medical attention and which in the
opinion of the treating physician, threaten life or limb or which cannot be delayed
without possible serious effects on the health of  Enrollee.

 

1.7           “Enrollee”
will mean a Medicare beneficiary who is enrolled in the Health Plan’s CMP
Program who is assigned to a Group Physician and Hospital.  

 

1.8           “Evidence
of Coverage” will mean the document approved by HCFA and the California
Department of Corporations and issued by Health Plan to Enrollees that
describes Enrollee’s benefits under the CMP. Program.  

 

1.9           “Group
Physician” will mean a Physician who is employed by or under contract to
provide services to Physician Group.  

 

1.10         “Group
Provider” will mean a Group Physician or any other provider of medical services
who is employed by or under contract with Physician Group to provide medical
services.  

 

1.11         “HCFA”
will mean the Health Care Financing Administration which is the agency of the
Federal government responsible for administration of the Medicare program
including Health Plan’s CMP Program.  

 

2

 

1.12         “Hospital”
will mean that Hospital selected by Physician Group and Health Plan which has
entered into an Agreement to provide services to Enrollees in Health Plan’s CMP
Program and where Group Physicians customarily admit patients.  

 

1.13         “Hospital
Reinsurance Program” will mean the arrangements through which Hospital may be
provided with additional compensation for Capitated Services rendered to an
Enrollee, when the value of such services exceeds a specified limit per year
per Enrollee.  

 

1.14         “Medically
Necessary” will mean medical or surgical treatment which an Enrollee requires,
as determined by a Group Physician, in accordance with accepted medical and
surgical practices and standards prevailing at the time of treatment.  The final decision of whether a treatment is
Medically Necessary rests with the Health Plan and is subject to the procedures
for post-treatment utilization review. Enrollee grievance and dispute
resolution.  

 

1.15         “Non-Covered
Services” will mean those services which are not benefits under the CMP Program
in accordance with the Evidence of Coverage and applicable State and Federal
laws and regulations.  

 

1.16         “Non-Participating
Provider” will mean an institutional, professional or other provider of health
care services who has not entered into an agreement with Health Plan, either
directly or through another organization, to provide Covered Services to
Enrollees.  

 

1.17         “Out-of-Area”
will mean that area that is further than thirty (30) air miles from Hospital

 

1.18         “Participating
Provider” will mean an institutional, professional or other provider of health
care services who has entered into an agreement, either with Health Plan,
Physician Group or through an agreement with another organization, to provide
medical services to Enrollees.  

 

1.19         “Physician”
will mean a person licensed to practice medicine by the State of California.

 

1.20         “Plan
Physician” will mean a Physician who is under contract with Health Plan, either
directly or through a contract with a medical group, IPA or other organization,
to provide professional medical services to Enrollees.  

 

3

 

1.21         “Primary
Care Physician” will mean the Group Physician selected by an Enrollee to render
first contact medical care and to authorize and coordinate the provision of
Covered Services. Primary Care Physicians will either be general practitioners,
Family Practitioners or Internists.  

 

1.22         “Service
Area” will mean the geographic area that is within a thirty (30) air mile
radius of Hospital.  

 

1.23         “Shared
Risk Services” will mean those Covered Services described in Attachment B which
are subject to the formula for determining the amount and distribution of risk
sharing incentives between Physician Group, Hospital and Health Plan.  

 

1.24         “Stop
Loss Program” will mean the program through which Physician Group is provided
with additional compensation for Capitated Services rendered to an Enrollee,
when the value of such services exceeds a specified limit per year per
Enrollee.  

 

1.25         “Urgently
Needed Services” will mean medical services which are required without delay,
in order to prevent serious deterioration of Enrollee’s health as a result of
an illness or injury while Enrollee is absent from Service Area.  

 

1.26         “Utilization
Review Program” will mean the programs and processes established and carried
out by Health Plan. Hospital and Plan Physicians, and approved by Health Plan,
to evaluate, authorize and monitor the utilization of Covered Services provided
to Enrollees.  

 

II.  PHYSICIAN
GROUP OBLIGATIONS

 

2.1           Capitated
Services.  Physician Group agrees to
provide Capitated Services to Enrollees selecting and assigned to Physician
Group.  The Capitated Services which are
to be provided and which are the financial responsibility of Physician Group
are described in Attachment A. 
Physician Group agrees to pay all claims for Capitated Services in
accordance with State and Federal regulations governing claims payment by
Health Plan and CMP Program. Physician Group agrees that, should Health Plan be
required to compensate any provider for Capitated Services. Health Plan shall
be reimbursed for such expenditures by Physician Group either through an offset
against Capitation Fees, direct payment by Physician Group or combination
thereof.  

 

Attachment A
shall not be amended during the current contract period without mutual consent,
except as may be required for continued compliance with Federal and State laws
and regulations.  

 

4

 

2.2           Provider
Network Maintenance.  Physician Group
agrees to select, enter into and maintain contracts with Group Providers.
Physician Group agrees to employ or contract with a sufficient number of
Physicians and other providers representing the range of medical specialties
necessary, in the opinion of Health Plan. HCFA and the California Department of
Corporations, to assure Enrollees of reasonable access to the full range of
Capitated Services.  However, Physician
Group shall not be required to contract with providers for services which are
not available within the Service Area or which are rarely utilized by Medicare
beneficiaries.  Such network of
contracting providers should recognize the need for Primary Care Physicians to
be located so as to assure reasonable geographic and physical access of Enrollees
to such Physicians.

 

Physician Group will maintain accurate records regarding Group
Providers and will, whenever possible, notify Health Plan thirty (30) days in
advance of any change in this information or of the addition or termination of
a Group Physician. 

 

Physician Group agrees to
comply with written request by Health Plan that Physician Group not utilize
specific Physicians or other providers named by Health Plan to provide Covered
Services to Enrollees.  If Plan makes
such request, Physician Group will immediately make arrangements for care to be
provided by other providers. 

 

2.3           Physician
License Requirement.  Physician
Group warrants and represents as a material term of this Agreement that Group
Physicians are now, and will remain as long as this Agreement remains in
effect, the holders of currently valid unrestricted licenses to practice
medicine in the State of California. 
Physician Group shall notify Health Plan within 10 (ten) working days in
the event Physician Group becomes aware that action has been taken to revoke or
restrict a Group Physician’s license.  

 

2.4           Medical
Staff Requirements.  Physician Group
warrants that all Group Physicians are on the medical staff of Hospital and
will notify Health Plan within ten (10) working days if Physician Group becomes
aware that the staff privileges of any Group Physician are revoked or
significantly restricted.  

 

2.5           Verification
of Group Provider Credentials. 
Physician Group shall establish and maintain a program to verify, at the
time Physician Group enters into a contract with a provider and at least every
year thereafter, that, at a minimum:  

 

a.             Group Physicians hold an
unrestricted license to practice medicine in the State of California and that
other Group Providers hold licenses or other certifications required by the
State of California.  

 

5

 

b.             Group Physicians, except for
Physicians who, because of their specialty, do not customarily maintain
hospital staff privileges, are on the medical staff of Hospital.  

 

c.             Group Providers maintain
professional liability insurance as required by this Agreement.  

 

2.6           Primary
Care Physician.  Physician Group
agrees that each Enrollee will select or be assigned a Primary Care
Physician.  Group will determine that
Primary Care Physicians are trained and have experience in dealing with the
medical problems frequently encountered in elderly individuals.  Primary Care Physician shall be responsible
for the provision, coordination, referral and authorization of Covered Services
in accordance with the Utilization Review Program and prevailing standards of
medical practice.  

 

2.7           Non-Discrimination.  Physician Group agrees:  (1) not to differentiate or discriminate in
its provision of Covered Services to Enrollees because of race, color, national
origin, ancestry, religion, sex, marital status, sexual orientation, or age;
and (2) to render Covered Services to Enrollees in the same manner, in
accordance with the same standards, and within the same time availability as
offered to non-Health Plan patients.  

 

2.8           Identification
of Physician Group and Physicians. 
Physician Group agrees that Health Plan may list its name, address,
telephone number and that of its Group Physicians in Health Plan’s roster of
Participating Providers that is given to Enrollees and prospective Enrollees,
and may use such names for advertising/marketing purposes. However, Health Plan
is not obligated to list the name of any particular Group Physician in roster
of participating providers. The use of Physician Group’s trademarks or logos by
Health Plan is prohibited without Physician Group’s prior written approval.

 

2.9           Hours
of Service.  Physician Group agrees
to provide or arrange for Capitated Services to Enrollees on a twenty-four (24)
hour seven (7) day a week basis, including access to a Group Physician by
telephone on a twenty-four (24) hour, seven (7) day a week basis.  

 

2.10         Standards
of Care.  Physician Group will
provide all Covered Services in accordance with generally accepted medical,
surgical and scientific practices and standards prevailing at the time of
treatment.  

 

2.11         Physician
Group-Group Provider Agreement. 
Physician Group agrees that each Group Provider with whom Physician
Group contracts to provide Capitated Service will be required to execute a
contract with Physician Group, which shall require Group Physician to comply
with those aspects of this Agreement related to the activities of Group
Physicians and be in  

 

6

 

compliance with applicable
State and Federal laws and regulations governing Health Plan’s CMP
Program.  Such Agreements shall be
approved by Health Plan as to form and shall be made available to Health Plan
for inspection and copying upon request.

 

2.12         Quality
Assurance/Utilization Review Committee. Physician Group agrees to establish
one or more committees which will review on a prospective, concurrent, and
retrospective basis the quality, appropriateness, level of care and utilization
of professional, ancillary and institutional services provided to
Enrollees.  The functions of the
Committee shall include the following:  

 

a)             The Committee or its designee shall
observe the procedures identified in the Utilization Review Program in Article
IV.  

 

b)            The Committee shall establish an
appropriate mechanism for enforcing all peer review decisions of Physician
Group in a manner acceptable to health Plan and in accordance with applicable
requirements of State and Federal law.  

 

c)             The Committee shall document and
follow a authorization system for all Covered Services including a discharge
planning system for hospitalized Enrollees.  

 

d)            The Committee or its designee shall
conduct non-urgent utilization review on a periodic basis but no less than one
time per week.  Mechanisms shall be
established to assure that review and authorization of urgently needed services
can be conducted by a designated physician within eight hours of such
request.  Any service requested by a
Physician for which authorization is not provided due to the determination that
such services are not Medically Necessary must be reviewed by a Physician and
such physician’s review must be documented.  

 

e)             The Committee shall, no less than
quarterly, review the quality of professional, ancillary and institutional care
provided to Enrollees in accordance with criteria and methods approved by
Health Plan.  

 

f)             Committee shall cooperate with
Health Plan staff and the Health Plan medical director may attend Committee
meetings.  

 

g)            The rules, regulations, authorities
and responsibilities of the Committee shall be enumerated by Physician Group,
in writing, subject to the reasonable approval thereof by Health Plan.  

 

7

 

2.13         Health
Plan Liaison.  Physician Group shall
designate an individual(s) who will assume the day to day responsibilities with
regard to Physician Group’s obligations hereunder and to serve as liaison with
Health Plan.  Physician Group will also
designate an individual(s) will also be responsible for answering Enrollee
inquiries and responding promptly to a grievance by following the Health Plan’s
grievance procedures.  

 

2.14         Physician
Group Medical Director.  Physician
Group agrees to designate a Group Physician as Medical Director for purposes of
this Agreement.  The Physician Group
Medical Director will be a member of the Physician Group Quality
Assurance/Utilization Review Committee and will be the individual to whom the
Health Plan communicates regarding provision of professional medical care, and
regarding quality and/or appropriate utilization of medical services.  The Medical Director will be the individual
responsible for representing Physician Group in the resolution of any
grievances related to the provision of medical care presented to the Health
Plan by Enrollees.  

 

2.15         Enrollee
Medical Record.  Physician Group
agrees to ensure that a medical record will be established and maintained for
each Enrollee as set forth in Article X. 
The record shall include, at a minimum, all information about Enrollee
as dictated by generally accepted medical practice standards.  

 

2.16         Prescriptions.  Physician Group agrees to cooperate with
drug formularies and treatment protocols proposed by Health Plan subject to
generally accepted medical standards, and approved by the Physician Group.

 

2.17         Use
of Plan Providers and Non-Participating Providers. Physician Group agrees
to use its best efforts, where consistent with sound medical practice, to
assure that Covered Services are provided only by Group Physicians and other
Plan Providers except in cases of Emergency Services or if no such provider, is
available to perform the appropriate service. 
If Covered Services are not available from Participating Providers.  Group shall promptly arrange for appropriate
treatment from Non-Participating Providers.  

 

If Physician Group arranges
with Non-Participating Providers to provide Covered Services to Enrollees, it
will be Physician Group’s responsibility to ensure that such provider:  (1) looks solely to Physician Group for compensation
for Capitated Services; (2) will not bill Enrollees for Covered Services
directly under any circumstances; and (3) will, prior to all elective services
obtain authorization in accordance with Utilization Review Program. 

 

8

 

2.18         Patient
Transfers.  Physician Group agrees
to assist in facilitating the transfer of Enrollees to Group Providers and/or
Hospital if determined medically acceptable by attending physicians and the
Health Plan Medical Director.  Physician
Group will be responsible for the cost of Covered Services provided if
Physician Group refuses to accept such transfer.  

 

2.19         Collection
of Copayments. Physician Group shall collect Copayments from Enrollees upon
the rendition of service. Such amounts shall be retained by provider or
Physician Group in addition to Capitation Fees.  

 

2.20         Collection
of Payment from Third Parties. 
Whenever an Enrollee is entitled to benefits under a Workers’
Compensation law, an automobile medical or ???fault insurance policy or an
employer sponsored group health plan, including a self-insured plan, or other
third party pay ??  program. Physician
Group shall bill, collect and retain amounts payable by such source for
services rendered by Physician Group in accordance with Article VIII.  Physician Group may bill Enrollee if
Enrollee receives reimbursement from a third party that is primarily
responsible for payment under Medicare regulations.

 

2.21         Enrollee
Grievances.  Physician Group agrees
to cooperate with Health Plan in resolving Enrollee grievances related to
Physician Group or Group Providers. 
Health Plan will bring to the Physician Group’s attention all Enrollee
grievances involving Group Providers, and Physician Group will investigate such
grievances and use its best efforts to resolve them in a fair and equitable
manner.  Physician Group agrees to
notify Health Plan promptly of any action taken or proposed with respect to the
resolution of such grievances and the avoidance of similar grievances in the
future.  Physician Group’s failure to
resolve a grievance through its established procedures could result in the
application of Health Plan’s grievance procedures or procedures required by
HCFA.  

 

2.22         State
and Federal Site Visits.  Physician
Group agrees to permit the State Department of Health, the Department of
Corporations of California and the U.S. Department of Health and Human Services
to conduct a site evaluation of Physician Group and Group Providers’ facilities
in accordance with the current State and Federal laws and regulations and to
comply with the agencies recommendations, if any.  

 

III.  HEALTH PLAN OBLIGATIONS  

 

3.1           Health
Plan Services.  Health Plan agrees
to provide certain consumer and administrative services, including but not
limited to processing Enrollee applications, maintaining eligibility records
and a system of verifying eligibility and processing enrollments and
disenrollments through communication with HCFA, responding to Enrollee
complaints and grievances.  

 

9

 

informing Enrollees of Health
Plan policies, providing Enrollees with membership cards and informational
material and informing Enrollees of Participating Providers.

 

3.2           Orientation.
Health Plan agrees to provide orientation and training for Group Physicians and
their office staff in the use of the administrative services described herein
and the policies and procedures of Health Plan and Physician Group.  

 

3.3           Marketing.  Health Plan will market CMP Program to
Medicare beneficiaries.  

 

3.5           Applications.  Health Plan agrees to process all enrollment
applications and assign Enrollees to Primary Care Physicians and Hospital.  Health Plan reserves the right to assign
Enrollees to a Plan Physician other than that selected by  Enrollee.

 

3.6           Administration
of Funds.  Health Plan will
administer the funds and payments called for in this Agreement in accordance
with provisions outlined in Attachment B.  

 

3.7           Claims
Payment.  Health Plan and Physician
Group shall review, adjudicate and pay all claims in accordance with the
benefits set forth in the Evidence of Coverae, the requirements established by
HCFA. State regulations and the terms of this Agreement.  Health Plan shall review, adjudicate and pay
all claims for Covered Services which are not the financial responsibility of
Physician Group or Hospital as set forth in Attachment A.  In the event Health Plan receives a claim
for Capitated Services which are the financial responsibility of Physician
Group, Health Plan shall forward such claim to the Physician Group for
payment.  Health Plan shall not pay for
services that are Physician Group’s financial responsibility unless Physician
Group fails to make payment within the time allowed by HCFA and State
regulations.  In such cases. Health Plan
will make payment, and Physician Group shall reimburse Health Plan for such
payments.  This may include deducting
such paid amounts from the monthly capitation.  

 

3.8           Listing
of Health Plan.  Health Plan agrees
that Physician Group may list its name, address, telephone number, and a
description of the CMP Program along with other Health Plans in Physician
Group’s promotional materials and advertisements.  The use of Health Plan’s trademarks and logos by Physician Group
is prohibited without Health Plan’s prior written approval.  

 

10

 

IV.           UTILIZATION REVIEW PROGRAM

 

4.1           Program
Responsibility. Enrollees assigned to Hospital have also selected and been
assigned to a Group Physician on Hospital’s medical staff.  Health Plan in cooperation with Physician
Group and Hospital will operate a Utilization Review Program which delegates
certain responsibility for utilization review to Hospital and Plan Physicians.

 

4.2           Use of
Hospital.  Physician Group agrees to
require Group Physicians to utilize Hospital facilities, or such providers as
designated by Hospital, for the provision of all Covered Services which are the
financial responsibility of Hospital as set forth in Attachment A, except for
Emergency Services, services which cannot be safely and effectively provided by
Hospital or such other designated provider, or when authorization to use an
alternative provider has been received in accordance with the Utilization
Review Program.  

 

4.3           Quality
Assurance/Utilization Review. 
Physician Group shall establish mechanisms acceptable to Health Plan,
the Department of Corporations and HCFA whereby they will review on a
prospective, concurrent and retrospective basis the quality, appropriateness
and level of care and utilization of services provided to Enrollees.  

 

4.4           Authorization
Procedures.  Physician Group agrees
to require Group Physicians to complete an Admission Authorization Form for all
non-emergency admissions to acute hospitals or skilled nursing facilities and
use of outpatient surgery facilities other than in physicians’ offices.  Such form will be reviewed and approved by a
committee of Group Physicians, or its designee, prior to submission to
Hospital. The Admission Authorization Form will contain all necessary
pre-admission information as requested by Hospital and must be submitted to
Hospital at least twenty-four (24) hours prior to admission or seventy-two (72)
hours in advance if the admission is scheduled for a Monday.  

 

For Covered Services not provided by
Enrollee’s Primary Care Physician, other than those named above. Group
Physicians shall complete an authorization form for
all such services.  Such form shall be
reviewed by a committee of Group Physicians, or its designee. prior to the
provision of services, except in an emergency or urgent situation when such
review could result in a potentially harmful delay in the provision of
services.  The form shall contain all
information necessary to justify the need for the requested service and to
facilitate appropriate billing by the provider.  The requirement for review by a committee of Group Physicians
shall be waived for specific diagnoses or categories of service if Physician
Group determines that such review would not facilitate the control of costs,
the enhancement of quality or the continuity of care provided to Enrollees.

 

11

 

The requirements for prior authorization
and documentation thereof shall not delay the provision of medical care in an
emergency or urgent situation, or when such delay could, in the judgement of
the treating physician, jeopardize the health of an Enrol lee.  

 

4.5           Hospital
Review of Admission Authorization. 
Hospital will review Admission Authorization Form and authorize length
of stay and admission to Hospital, facilities under contract with Hospital to
provide services to Health Plan Enrollees or non- contracted facilities based
on the medical services required by Enrollee. 
Should Hospital recommend denial of admission or not reach agreement
with Plan Physicians on facilities or length of stay, Hospital will refer case
to Health Plan for review.  

 

4.6           Periodic
Review of Patient Records. 
Physician Group Medical Director in cooperation with Hospital and Health
Plan will conduct periodic reviews of the status and charts of hospitalized
Enrollees.  

 

4.7           Resolving
Admission Disputes.  Any disputes
between Plan Physicians and Hospital regarding admissions, length of stay,
medical necessity, or selection of facilities will be resolved by the Health
Plan Medical Director.  

 

V.           provider
manual  

 

5.1           Policies
and Procedures.  Health Plan will
develop a Provider Manual that contains those Health Plan policies and
procedures necessary for the proper operation of the Physician Group as it
relates to Health Plan and Enrollees.  

 

5.2           Precedence.  The Provider Manual and all updates shall be
consistent with the laws and regulations governing the Federal Medicare
program, the regulations established by HCFA governing CMP Program, the
Knox-Keene Act and the provisions of this Agreement.  If inconsistencies are identified, the provisions of the Medicare
program. HCFA regulations, the Knox-Keene Act or this Agreement shall take
precedence in that order.  All
determinations made by Health Plan under the provisions of the Provider Manual
shall be reasonable and shall be subject to review under the dispute resolution
provisions, hereof.  

 

VI.           COMPENSATION

 

6.1           Physician
Group Compensation.  Compensation to
Physician Group for Capitated Services will be the Capitation Fees set forth in
Attachment B.  Such Capitation Fees
shall be payment in full for Capitated Services, except for allowable
Copayments, amounts recovered through Coordination of Benefits and amounts
payable under the Stop Loss Program.  Payment
of  

 

12

 

Capitation Fees shall be made
on a monthly basis by  the
fifteenth (15th) calendar day of the month, or if such day falls on a weekend
or national holiday, on the fist business day thereafter, for all Enrollees
eligible from the first (1st) of the month, and on whose behalf payment has
been received by Health Plan from HCFA prior to the tenth (10th) calendar day
of the month.  In the event Health plan
receives payment from HCFA after the 10th calendar day of the month. Capitation
Payment to Physician Group will be made within 5 (five) working days of receipt
of the monthly payment by Health Plan from HCFA. 

 

6.2           Enrollee
Non-Liability. Physician Group agrees that Enrollee shall not be liable to
the Physician Group or Group Providers for any sums owed to Physician Group by
Health Plan or owed to Group Providers by Physician Group.  At no time will Physician Group, Physician
Group Providers or any party with a claim against Health Plan or Physician Group
for Covered Services bill or otherwise seek compensation from Enrollees for
such services, except in the case [ILLEGIBLE] payments permitted or in cases
when a third party payor is primarily responsible and has paid Enrollee for a
Capitated Service  

 

6.3           Retroactive
Cancellation.  Health Plan will
discourage retroactive cancellation of any Enrollee.  However, Health Plan may make exceptions as required by HCFA or
due to legitimate administrative processing requirements,  

 

6.4           Payment
for Non-Covered Services.  Physician
Group and Group Providers may seek payment from Enrollees for Non-covered
Services at usual and customary charges.  

 

VII.          REPORTING PROCEDURES

 

7.1           Eligibility
Reports.  Health Plan will maintain,
update. and distribute monthly Enrollee eligibility reports for each month in
which the persons included on such list are eligible for CMP Program.  This report will identify the Primary Care
Physician selected by the Enrollee and the Enrollee’s coverage type.  The report will be sent to Physician Group
and Primary Care Physicians by the tenth (10th) of each month identifying
eligible Enrollees from the first (1st) of the month.  

 

7.2           Utilization
Data.  Physician Group shall, upon
request, provide Health Plan with information on the utilization and cost of
Capitated Services provided to Enrollees in such detail as to allow Health Plan
to conduct analysis of costs as required by HCFA, as dictated by sound business
practices and for the conduct of quality assurance and utilization review
activities by Plan. Such information to be provided by Physician Group will not
include information beyond that customarily provided on a claim form such as
Form HCFA-1500 and shall be provided in the form of  

 

13

 

a paper report,
computer disc or computer tape as agreed by the parties.  Required data will be delivered by Physician
Group to Health Plan not later than forty-five (45) days following written
request by Health Plan.  

 

VIII.        COORDINATION OF BENEFITS

 

8.1           Definition.  Coordination of Benefits (“COB”) refers to
the determination of order of financial responsibility which applies when two
or more health benefit plans provide coverage of services for an individual.
Such coordination is intended to preclude payment of more than one hundred
percent (100%) of usual and customary charges from all coverage.  When the primary and secondary benefits are
coordinated, determination of liability will be in accordance with Medicare regulations,
applicable State regulations and recommendations of the National Association of
Insurance Commissioners (NAIC).  

 

3.2           COB
Obligations of Physician Group. Hospital agrees to coordinate with Health
Plan for proper determination of COB and to bill and collect from other payers
and third party liens such charges for which the other payor is
responsible.  Physician Group agrees to
establish procedures to effectively identify, at the time of service and as
part of their claims payment procedures, individuals and services for which
there may be a financially responsible party other than CMP Program.  

 

Physician Group will bill and
collect from other payors such amounts for Capitated Services as the other
payor is responsible for, Health Plan hereby assigns to Physician Group for
collection any claims or demands against third parties for amounts due for
services provided by Physician Group pursuant to this Agreement provided that
Physician Group shall not commence any legal action against a third party to
obtain such amounts payable without obtaining the prior written consent of
Health Plan.  Physician Group shall
defend, indemnify and hold Health Plan harmless for all actions by Physician
Group which relate to collections of an account pursuant to this Section.  Except as noted herein, such collections may
be retained by the Physician Group as compensation in addition to the
Capitation Fees paid by Health Plan. 
Health Plan may immediately rescind such assignment on a claim-by-claim
basis by providing written notice of recision to Physician Group.  

 

In the event that, at least 120 days
following the date of service.  Health
Plan identifies, either through its own efforts or those of third parties
specializing in collection of COB, amounts payable by other
entities that had not been previously identified by Physician Group. Physician
Group agrees to cooperate with Health Plan and such third parties to collect
such payment.  Physician Group agrees
that Health Plan may retain 50%  

 

14

 

of amounts collected after
deducting the actual costs of Health Plan in obtaining such collection plus
amounts payable to the third party which identifies and facilitates payment of
such amounts.  However such amounts
payable to Health Plan and third parties from the proceeds of such collection
will not exceed the amount recovered. 
The balance of any recovery after payment to Health Plan and any third
parties shall be paid to Physician Group. 

 

8.3           COB
Obligations of Health Plan.  Health
Plan will cooperate in providing COB information to Physician Group by
collecting appropriate data from the Enrollee at the point of enrollment and
supplying such data to Physician Group.  

 

IX.           STOP LOSS PROGRAM

 

9.1           Stop
Loss.  Stop Loss Program is designed
to limit Physician Group’s liability for providing Capitated Services to a
specific Enrollee.  

 

9.2           Physician
Group Stop Less Deductible.  The liability of
Physician Group for Capitated Services rendered to any Enrollee, during each
calendar year or floating year as described in 9.3, shall be limited to ten
thousand ($10.000) dollars of Capitated Services rendered by Physician Group to
that Enrollee.  

 

9.3           Stop
Loss Period.  For purposes of
calculating the total value of services rendered in a year to any Enrollee.
Physician Group may choose a calendar year or any twelve (12) consecutive month
period beginning during the last quarter of the prior year, or ending during
the first quarter of the following calendar year, but not
both. Provided, however, that the period selected by Physician Group for
purposes of calculation of the total value of services to an Enrollee shall not
exceed a twelve month period.  

 

9.4           Value
of Capitated Services for Calculating Stop
Loss. The basis for calculation of the value of Capitated Services
rendered by Physician Group shall be the methodology described in Attachment C
or billed charges, whichever is less.  

 

9.5           Exclusions
From Stop Loss.  Services rendered
in connection with Workers’ Compensation cases shall not be included in
determining the value of Capitated Services rendered for purposes of Stop Loss
Program.  Copayments and amounts payable
through Coordination of Benefits, or through third party liability payments
shall be deducted from the value of Capitated Services provided for purposes of
determining amounts payable to Physician Group under Stop Loss Program.  

 

15

 

9.6           Substantiation of Stop
Loss.  Physician Group shall
be responsible for the determination of whether an Enrollee has met the Stop
Loss deductible and shall maintain records necessary to substantiate the
determination.  Claims by Physician
Group for payment under the Stop Loss Program must be submitted to Health Plan
within twelve (12) months of the end of the stop loss period.  

 

9.7           Payments.  After reaching the Stop Loss Deductible,
Physician Group shall be reimbursed for one hundred per cent (100%) of the
value of Capitated Services provided to that Enrollee by Physician Group,
calculated in accordance with this Section, for the remainder of the Stop Loss
Period.  Payments under this provision
shall be made by Health Plan within thirty (30) days of submission of
documentation by Physician Group.  

 

X.            MEDICAL AND
ADMINISTRATIVE RECORDS

 

10.1         Medical
Records.  Physician Group will
require that all Group Physicians establish and maintain for each Enrollee who
has obtained care from such physician a medical record which is organized in
such a fashion and which contains such demographic and clinical information as
is necessary, in the opinion of the Health Plan Medical Director and the
Physician Group Medical Director, to provide documentation as to the medical
problems and medical services provided to Enrollee.  Such record shall include a historical record of
diagnostic and therapeutic services recommended or provided by, or under the
direction of, the provider.  Such
records shall be in such a form as to allow trained health professionals, other
than the provider, to readily determine the nature and extent of the Enrollee’s
medical problem and the services provided and permit peer review of the care
provided.  

 

10.2         Right
to Inspection.  It is understood
that the medical records referred to in Section 10.1 above will be and remain
the property of Physician Group or Group Providers and will not be removed or
transferred from the their offices except in accordance with applicable
laws.  Health Plan or its designated
representatives will have the right, in accordance with Section 10.3 below, to
inspect, review, and make copies of such records at Health Plan’s expense upon
request to facilitate Health Plan’s obligation to conduct quality assurance,
utilization monitoring, and peer review activities.  The amount paid by Health Plan for the copying of such records
shall not be more than ten cents ($0.10) per page.

 

10.3         Confidentiality.  Physician Group and Health Plan agree to
maintain the confidentiality of information contained in the medical records of
Enrollee in accordance with the “Confidentiality of Medical Information Act”,
Cal. Civ. Code 56. et seq. 
Medical records may be disseminated to authorized Plan  

 

16

 

Physicians or
Health Plan representatives, to Hospital’s morbidity, mortality, tissue,
utilization review, judicial review, other quality of care and administrative
review committees, to Health Plan itself, or to an appropriate Health Plan peer
review, quality assurance or utilization review committee or subcommittee
identified by Health Plan.  

 

10.4         Release
of Records.  Notwithstanding the provisions
of Section 10.3 above, Physician Group or Group Providers will be authorized to
release Enrollee’s medical records to official governmental agencies or for
purposes of civil discovery, subject to applicable law.  

 

10.5         Health
Plan and Governmental Agency Access to Records. Physician Group will
cooperate with Health Plan and agencies of the State and Federal Government in
maintaining and providing medical, financial, administrative and other records
of Enrollees as shall be requested by Health Plan or such agencies.  Health Plan and such agencies will have
access at reasonable times upon demand to the books, records [ILLEGIBLE] papers
of Physician Group and Group Providers relating to services provided to Enrollees,
the quality, appropriateness, timeliness, cost thereof, and any payments
received by Physician Group or Group Providers for Covered Services provided to
Enrollees.  

 

10.6         Availability
of Records Upon Termination.  The
obligations contained in this Section X will continue despite the termination
of this Agreement, whether by rescission or otherwise.  In the event of termination of this
Agreement, Physician Group will provide Health Plan, any Enrollee.  Plan Physicians. State and Federal agencies
and any duly designated third party with reasonable access to medical records
of Enrollees maintained by Physician Group or Group Providers, for a period of
three (3) years after the termination of this Agreement, and at any time
thereafter that such access is required in connection with an Enrollee’s
medical care.  Health Plan will be
entitled to obtain copies of Enrollee’s medical records if it either makes
arrangements to have such copies prepared or agrees to reimburse the holder of
such records for the reasonable cost of preparing such copies, not to exceed
$0.10 per page.  The provisions of this
paragraph will not operate to waive or limit any restriction on release or
disclosure of patient records required by law.  

 

XI.           ACCESSIBILITY AND
CONTINUITY OF CARE

 

11.1         Accessibility
of Care.  Physician Group agrees
that, to the extent feasible, the Capitated Services provided by it will be
made available and accessible to Enrollees promptly and in a manner which
ensures continuity of care.  

 

17

 

XII.         INSURANCE

 

12.1         Physician
Group Liability Insurance. 
Physician Group agrees to procure and maintain, at its own expense,
policies of professional and general liability insurance covering Physician
Group.  A copy of such policies will be
provided to Health Plan upon request.  

 

12.2         Group
Provider Liability Insurance. 
Physician Group agrees to require each Group Provider to procure and
maintain, at Group Provider’s or Physician Group expense, appropriate programs
of general and professional liability coverage.  Professional liability coverage for Group Physicians shall not be
less than $1.0 million per occurrence and $3.0 million aggregate or such
greater amount as required to comply with the professional liability coverage
requirements of Hospital.  Professional
liability limits for other Group Providers shall have limits and terms similar
to those of policies held by similar providers in same geographic area.  Physician Group agrees to conduct a program
to periodically verify that Group Providers maintain such coverage and to
provide documentation to Health Plan on request that all Group Providers have
such coverage as required by this Agreement.  

 

12.3         Liability
Issues.  The coverage programs in
12.1 and 12.2 above shall insure the Physician Group or Group Providers and
their employees against any claim for damages arising by reason of personal
injuries or death occasioned directly or indirectly in connection with the
performance of, or the failure to perform any service provided by Group
Providers, their employees or agents.  

 

12.4         Health
Plan Liability Insurance.  Health
Plan, at its sole cost and expense, will procure and maintain policies of
general liability and other insurance necessary, or programs of self-insurance,
to insure Health Plan and its employees against any claim or claims for damages
arising by reason of personal injuries or death occasioned directly or
indirectly in connection with, the use of any property and facilities or
equipment provided by Health Plan, and the activities performed by Health Plan
in connection with this Agreement.  A
copy of the above insurance policies will be provided to Physician Group upon
request.  

 

12.5         Notification
of Claims.  Health Plan and
Physician Group agree to promptly notify the other party hereto of any claims
or demands which arise and for which indemnification hereunder is sought.

 

18

 

XIII.        COOPERATION

 

13.1         Non-Interference
- Health Plan.  Health Plan agrees
that it will not intervene in any manner with the rendition of services by
Physician Group, it being understood and agreed that the traditional relationships
between Physician and Patient, Hospital and Patient, and Physician and Hospital
will be maintained.  

 

13.2         Non-interference
- Physician Group.  Physician Group
and Group Physicians agree that they will not, during the term of this
Agreement, advise or counsel any Enrollee to disenroll from Health Plan and
will not solicit such Enrollee to become enrolled with any other health
maintenance organization, preferred provider organization or any other similar
hospitalization, medical payment plan or insurance program.  

 

13.3         Cooperation.  Health Plan and Physician Group agree that,
to the extent compatible with the separate and independent management of each,
they will at all times maintain an effective liaison and close cooperation with
each other to provide maximum benefits to Enrollees at the most reasonable
cost, consistent with quality standards of hospital and physician care.  

 

13.4         Signs.  Physician Group agrees that Health Plan may
post notices, mutually acceptable as to size, content and form in a prominent
place instructing Enrollees as to proper procedures and limitations on
coverage.  

 

13.5         Reciprocity with Other CareAmerica Physician Groups. Physician
Group agrees that should services be provided to a Health Plan Enrollee who is
not affiliated with Hospital or Physician Group, that Physician Group will provide such
services and accept compensation from Health Plan or other hospital at the
rates reflected in Attachment B or the reimbursement payable under Medicare,
whichever is less. 

 

XIV.    TERM AND TERMINATION  

 

14.1         Term
of Agreement.  This Agreement will
commence on September 1, 1990 will remain in effect until December 31,
1991.  Thereafter,
this Agreement will continue in effect from year to year,
unless terminated pursuant to the terms of this Section.

 

14.2         Termination.  This Agreement may be terminated without
cause by either party by written notice given at least ninety (90) days in
advance of such termination.  The
obligation of Physician Group to provide Capitated Services following the
effective date of termination will be as set forth in Section 14.5.  

 

19

 

14.3         Health
Plan’s Right To Terminate Agreement. 
Nothing herein will be construed as
limiting the right of Health Plan to terminate this Agreement immediately
upon delivery of written notice if:

 

a)           Physician Group or Group Physicians
are unable to secure the necessary governmental licenses required for the
performance of their duties.  

 

b)           Health Plan determines that the
health, safety, or welfare of Enrollees is jeopardized by continuation of this
Agreement.  

 

c)           Physician
Group commits fraud.  

 

14.4         Physician
Group’s Right to Terminate Agreement. 
Nothing herein will be construed as limiting the right of
Physician Group to terminate this Agreement immediately upon delivery of
written notice
if:  

 

a)           Health Plan commits fraud.  

 

b)           The State of California or the United
States Government revokes any certification or license of Health Plan necessary
for the performance of this Agreement.  

 

14.5         Physician
Group Obligations Following Termination. 
In the event of termination of this Agreement, Physician Group will
continue to provide Covered Services, under the same financial terms as prior
to said termination, to Enrollees, in accordance with the terms of this
Agreement until December 31 of the calendar year following the date which
termination becomes effective or until the Health Plan has made arrangements
with alternative providers to render care to Enrollees.  

 

14.6         Bankruptcy.  Health Plan or Physician Group may terminate
this Agreement with thirty (30) day written notice to the other party in the
event a petition is filed in a court of record jurisdiction to declare either
party bankrupt or for reorganization under the bankruptcy laws of the United
States or any similar statute of a state of the United States, or if a trustee
in bankruptcy or a receiver is appointed for such party, and such petition,
trustee, or receiver, as the case may be, is not dismissed within one hundred
and twenty (120) days thereof.

 

14.7         Breach
of Contract.  Either party will have
the right to terminate this Agreement on thirty (30) days written notice to the
other party if the party to whom such notice is given is in breach of any
material provision of this Agreement. 
The remedy of such breach within twenty (20) days of the receipt of such
notice will revive the Agreement in effect for the remaining term, subject to
any other rights of termination contained in this, or any other provision of
this Agreement.  

 

20

 

The
party claiming the right to terminate hereunder will set forth in the required
notice of intended termination the facts underlying its claim that the other
party is in breach of this Agreement. 
The party claiming the breach, if so requested by the breaching party,
will undertake reasonable efforts to assist the  breaching
party to remedy such breach within twenty (20) days. The breaching party will
be responsible for reimbursing the non-breaching party for reasonable expenses
associated with rectifying the breach.  

 

Each party will retain the  right to seek redress through dispute
resolution in accordance with Article XV.  

 

XV.         DISPUTE REsolution

 

15.1         Dispute
Resolution.  Controversies between
Physician Group and Health Plan shall be resolved, to the extent possible, by
informal meetings or discussions between appropriate representatives of the
parties.  

 

15.2         Arbitration.  In the event the parties are unable to
resolve the controversy in accord with paragraph 15.1, the parties agree to
submit the matter to binding arbitration under the rules and regulations of the
American Arbitration Association.  The
parties expressly covenant and agree to be bound by the decisions of the
arbitrator(s) and accept any decision by a majority of the arbitrators as a
final determination of the matter in dispute.  

 

15.3         Allocation
of Arbitration Costs.  Each party
shall be responsible for its own legal fees and other expenses incident to the
preparation of its case.  The losing
party shall be responsible for the costs of the arbitration proceedings.  In the event of a decision by the arbitrator
that recognizes equities on behalf of both parties, the costs of the
arbitration proceedings shall be assessed by the arbitrator.  

 

15.4         Rules
of Civil Discovery.  The California
rules of civil discovery will apply to all arbitration proceedings.  

 

XVI.        GENERAL PROVISIONS

 

16.1         Amendment.  This Agreement is intended to be in
compliance with all State and Federal laws. 
Should this Agreement be out of compliance with any existing or newly
enacted or adopted laws or regulations, the parties shall meet immediately to
develop alternative provisions to comply with the  

 

21

 

laws.  Such alternative provisions shall be incorporated into this
agreement by addendum.  

 

16.2         Waiver.  The waiver by either party of a breach or
violation of any provision of this Agreement will not operate as or be
construed to be a waiver of any subsequent breach thereof.  

 

16.3         Governing
Law.  This Agreement will be
governed in all respects by the laws of the State of California.  

 

16.4         Assignment.  This Agreement, being intended to secure the
services of Physician Group, will not be assigned, delegated or transferred
without the written consent of Health Plan.  

 

16.5         Notices.  Any notice required to be given pursuant to
the terms and provisions hereof will be in writing and will be sent by
certified mail, return receipt requested, postage prepaid, to Health Plan or
Physician Group at their respective places of business as designated from time
to time by the  parties.

 

16.6         Independent
Parties.  None of the provisions of
this Agreement are intended to create nor will be deemed or construed to create
any relationship between the parties hereto other than that of independent
contractors, solely for the purposes of effecting the provisions of the
Agreement.  Neither of the parties
hereto, nor any of their respective officers, directors, or employees shall act
as nor be construed to be the agent, the employee or the representative of the
other.  

 

16.7         Integration
of Entire Agreement.  This Agreement
contains all of the terms and conditions agreed upon by the parties regarding the
subject matter of this Agreement.  Any
prior agreements, promises, negotiations or representations of or between the
parties, either oral or written, relating to the subject matter of this
Agreement, which are not expressly set forth in this Agreement are null and
void and of no further force or effect.  

 

16.8         Invalidity
or Unenforceability.  The invalidity
or unenforceabi1ity of any terms or provisions hereof will in no way affect the
validity or enforceabi1ity of any other term or provision.  

 

16.9         Captions.  The Captions contained herein are for
convenience of reference purposes only and shall have no force or  effect.

 

22

 

IN WITNESS WHEREOF, the
parties have executed this Agreement the day and year set forth above.

 

	
  CAREAMERICA-SOUTHERN CALIFORNIA

  	
  NORTHTWEST ORANGE COUNTY MEDICAL GROUP

  
	
   

  	
   

  
	
   

  	
   

  
	
  By

  	
  /s/
  Arthur M. Southam

  	
   

  	
  By

  	
  /s/
  

  	
   

  
	
   

  	
   

  
	
  Name

  	
  Arthur M. Southam, M.D.

  	
   

  	
  Name

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Chief Operating Officer

  	
   

  
	
  Title

  	
  Executive vice president

  	
   

  	
  Title

  	
   

  	
   

  
	
   

  	
   

  
	
  Date 

  	
   

  	
   

  	
  Date 

  	
   

  	
   

  
											

 

 

CareAmerica Health Plan - Senior Plan

Attachment A

 

MATRIX OF FINANCIAL RESPONSIBILITY

 

This matrix of financial
responsibility outlines the distribution financial responsibility between the
Hospital, Physician Group, Health Plan and the various funds described in
Attachment B.  It is not exhaustive, but
serves as a guide by which broad categories of media services are used to
identify the distribution of financial responsibility for particular services. 

 

A.            Inpatient Services, Ambulatory Surgery and Major
Diagnostic Procedures 

 

This heading includes facility
and all anci1lary/non-professional charges for Covered Services provided to
inpatient and day surgery patients in a licensed facility, including inpatient
hospital acute, sub-acute or skilled nursing facility services, including room
and board and ancillary services. It includes facility and
ancillary/non-professional charges related to ambulatory surgery or ambulatory
diagnostic/therapeutic procedures (e.g. endoscopy, broncoscopy, laparoscopy,
angiography etc.) requiring a surgical or other specialized suite or general
anesthesia.  It includes pre-operative
and pre-admission testing.  It includes
Covered Services provided by facilities other than Hospital and services
provided by out of area providers upon referral. 

 

	
   

  	
   

  	
   

  	
   

  	
  HOSP

  	
   

  	
  PHYS

  	
   

  
	
  1.

  	
   

  	
  Acute
  hospital care

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  2.

  	
   

  	
  Intensive
  care units

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  3.

  	
   

  	
  Hospital
  surgical unit

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  4.

  	
   

  	
  Sub-acute
  hospital care

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  5.

  	
   

  	
  Skilled
  nursing facility

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  6.

  	
   

  	
  Inpatient
  hospice

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  7.

  	
   

  	
  Inpatient
  Medications

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  8.

  	
   

  	
  Surgically
  Implanted Devices

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  9.

  	
   

  	
  Nursing
  Services (inc. special duty)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  10.

  	
   

  	
  Lithotripsy

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  11.

  	
   

  	
  Discharge
  Medications (5 days)

  	
   

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
									

 

	
   

  	
  Initials

  	
   

  	
   

  	
   

  	
   

  

 

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

 

1

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  HOSP

  	
   

  	
  PHYS

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  B. 

  	
   

  	
  In Area
  Emergency Room Services

  	
   

  	
   

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
   

  	
  Emergency
  Room - Treat and Release

  	
   

  	
   

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
  Facility/Ancillary

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
  ER Physician

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
  HBP
  professional (lab, rad, card etc.)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  2.  

  	
   

  	
  Emergency Room - Within 24
  hours of admission

  	
   

  	
   

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Facility/Ancillary

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
  ER Physician

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
  HBP professional (lab,
  rad, card etc.)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  C.          Professional Services Including
  Interpretation by Hospital Base Physicians and Other Specialty Physicians

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
   

  	
  Anesthesiologist

  	
   

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
  Surgical/Other
  Procedure Anesthesia

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
  Inpatient
  and Outpatient

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
  Pain
  Management

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
  Inpatient
  and Outpatient

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  2.

  	
   

  	
  Radiologist

  	
   

  	
   

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
  Diagnostic Interpretation,
  Interventional Procedures and

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
  Radiation Therapy,
  including implants

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
  Inpatient

  	
   

  	
   

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
  Outpatient
  Hospital

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
  Physician Office

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  3.

  	
   

  	
  Pathologist

  	
   

  	
   

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
  Anatomical Pathology
  Services

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Inpatient

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Outpatient (inc Pap
  Smears)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
  Clinical Laboratory
  Services

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Pre-Admission

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Inpatient

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Outpatient Hospital

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Physician Office

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  4.

  	
   

  	
  Neurologist

  	
   

  	
   

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
  Inpatient EEG, EMG and NCS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
  Outpatient EEG, EMG and
  NCS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  5.

  	
   

  	
  Nephrologist

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
  Dialysis Prof Services

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
  Other Prof Services

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
																		

 

	
   

  	
  Initials

  	
   

  	
   

  	
   

  	
   

  

 

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

 

2

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  HOSP

  	
   

  	
  PHYS

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6 .

  	
  Cardiologist

  	
   

  	
   

  	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  Inpatient and Hospital Outpatient
  Diagnostic

  	
   

  	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  Procedures (e.g. ECG, treadmill, Holter,

  	
   

  	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  echocardiogram, wall motion, thallium
  scan etc.)

  	
   

  	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  Phys
  Office Diagnostic Procedures

  	
   

  	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  (e.g.
  ECG, treadmill, holter monitor, echocardiogram, etc.)

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  7

  	
  Pulmonology/Respiratory
  Therapy

  	
   

  	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  Inpatient
  diagnostic services 

  	
   

  	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  (e.g
  PFT, Blood Gas, Apnea eval etc.)

  	
   

  	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  Outpatient
  Hosp Diagnostic Services

  	
   

  	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  Phys
  Office Diag Proc

  	
   

  	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  8.

  	
  Interventional
  Professional Services

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  Interventional Cardiology (e.g. PTCA,
  angiography, percutaneous valvuloplasty etc.)

  	
   

  	
   

  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  Interventional Gastroenterology (e.g. ERCP, endoscopy,
  percutaneous biopsy/drainage etc.)

  	
   

  	
   

  ***

  	
   

  	
   

  ***

  
	
   

  	
   

  	
  Interventional Radiology (angioplasty,
  embolization, etc.) Bronchoscopy

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  D. 
  

  	
  LABORATORY, X-RAY AND DIAGNOSTIC
  PROCEDURES

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  (technical components)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
  Pre-admission, and inpatient laboratory,
  x-ray, ECG and other diagnostic services

  	
  ***

  	
   

  	
  ***

  
	
  2.

  	
  ER laboratory, x-ray, ECG and other
  diagnostic services - treat & release

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  3.

  	
  ER Laboratory, x-ray, ECG &  other
  diagnostic services - within 24 hrs admission

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  4.

  	
  Outpatient Laboratory

  	
   

  	
   

  	
   

  	
   

  	
  ***

  	
   

  	
  ***

  

 

	
   

  	
  Initials

  	
   

  	
   

  	
   

  	
   

  

 

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

 

3

 

	
   

  	
   

  	
   

  	
  HOSP

  	
   

  	
  PHYS

  	
   

  
	
  5.

  	
  Outpatient
  chest and skeletal x-ray

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  6.

  	
  Outpatient
  x-ray and diagnostic imaging (CPT 70000-79999) other than routine chest and
  skeletal x-rays (e.g. IVP, MRI, CT, Angiography, nuclear medicine studies,
  ultrasound, mammography)

  	
   

  	
   

   

  ***

  	
   

  	
   

   

  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  E.

  	
  PHYSICIAN SERVICES
  (not including those services described under Section B. above)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
  Primary care
  office visits

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  2.

  	
  Outpatient
  specialty Consultations and interpretations

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  3.

  	
  Inpatient
  primary care and consultations

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  4.

  	
  Office
  surgical procedures

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  5.

  	
  Physician
  Office Outpatient ECG services,

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  6.

  	
  Office
  laboratory

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  7.

  	
  Outpatient
  chest and skeletal x-rays

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  8.

  	
  Office
  visual examinations

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  9.

  	
  Office
  hearing evaluation

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  10.

  	
  Emergency
  Room Physician Fees

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  11.

  	
  Routine
  physical exams and evaluations

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  F.      Other
  Professional and Ancillary Services

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
  Home health
  care (professional, medication and supplies)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  2.

  	
  Durable
  Medical Equipment

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  3.

  	
  Prosthetic
  Devices

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  4.

  	
  Supplies
  (except as used in phys office)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  5.

  	
  Health
  Education  (including literature and
  course offerings)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  6.

  	
  Dietary
  counseling and education

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  7.

  	
  Psychiatric
  services and mental health counseling services including alcoholism and CD
  rehabilitation

  	
   

  	
   

  ***

  	
   

  	
   

  ***

  	
   

  

 

	
   

  	
  Initials

  	
   

  	
   

  	
   

  	
   

  

 

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

 

4

 

	
   

  	
   

  	
   

  	
  HOSP

  	
   

  	
  PHYS

  	
   

  
	
  8.

  	
  Social services and discharge planning

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  9.

  	
  Physical rehabilitation services.
  including physical, occupational, speech therapy and rehabilitation

  	
   

  	
   

  ***

  	
   

  	
   

  ***

  	
   

  
	
   

  	
   

  	
  Inpatient 

  	
   

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
  Outpatient

  	
   

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  10.

  	
  Dialysis (Inpt and Outpt. Tech, Prof,
  Fac, Supp and Meds)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  11.

  	
  Medical Transportation

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  12.

  	
  Cardiac Rehabilitation

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  13.

  	
  Facility component for fluorescein
  angiography and all treatments with lasers

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  14.

  	
  Chemotherapy treatment including
  medications and administration, inpatient or outpatient, not including
  oncologist professional fees.

  	
   

  	
   

  ***

  	
   

  	
   

  ***

  	
   

  
	
  15.

  	
  Other services considered to be
  customarily a hospital inpatient service

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  16.

  	
  Radiation Therapy

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
  Inpatient Professional & Technical

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
  Outpatient Professional & Technical

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  17.

  	
  Outpatient Hosp Resp Therapy

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  G.

  	
  Out-of-Area Services

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  H.

  	
  Other Services

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
  Outpatient Prescription Drugs

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  2.

  	
  Refractions and Eyeglasses

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  I.

  	
  Excluded Situations and Procedures

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
											

 

Any service not covered
pursuant to the Evidence of Coverage. 

 

In the event financial
responsibility for a service is not established by the above, services
generally paid for under Medicare Part B will be considered to be a Physician
Group capitated service, services generally paid under Medicare Part A will be
considered as a Hospital capitated service and services not covered under
Medicare Part A or Part B will be considered a Physician Group Capitated
Service. 

 

	
   

  	
  Initials

  	
   

  	
   

  	
   

  	
   

  

 

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

 

5

 

CareAmerica Southern California - Senior Plan

ATTACHMENT
B

FUND ALLOCATION AND RISK SHARING

 

Hospital:   La Palma Intercommunity Hospital

 

Physician Group: Northwest
Orange County Medical Group

 

A.          Allocation of HCFA Capitation.  Each month, Health Plan shall allocate the
gross capitation that it receives from HCFA, on behalf of Enrollees affiliated
with Hospital and Physician Group, as follows:  

 

	
  Hospital Capitation

  	
   

  	
  ***

  	
   

  
	
  Physician Group Capitation

  	
   

  	
  ***

  	
   

  
	
  Pharmacy capitation

  	
   

  	
  ***

  	
   

  

 

•                                          Hospital
Capitation shall be paid to Hospital. ***

 

•                                          Physician
Group Capitation shall be paid to Physician Group after Health Plan has
deducted the amount designated as Physician Group Withhold described below.

 

•                                          Pharmacy
Capitation shall be retained by Health Plan to pay expenses of providing the
outpatient prescription drug program.  

 

B.            Shared Risk Program Between Hospital and Physician
Group. As an incentive to control hospital service utilization a Shared
Risk Program shall be administered by Health Plan whereby both Hospital and
Physician Group shall be at risk for the utilization of Shared Risk Services,
as defined below. 

 

1.             Shared Risk Services - Definition. The following
are Shared Risk Services: 

 

All Covered Services which are
the financial responsibility of the Hospital as set forth in Attachment A. 

 

2.            Shared Risk Budget.  A budgeted amount (“Shared Risk
Budget”)  shall be established.  The Shared Risk Budget shall be 38.4 % of
the total capitation paid to Health Plan on behalf of Enrollees assigned to Physician
Group and Hospital.  

 

	
   

  	
  Initials

  	
   

  	
   

  	
   

  	
   

  

 

1

 

3.           Hospital Withhold.  *** Hospital
agrees to establish reserves, in lieu of Withhold, which reflect Hospital’s
potential liability to Physician Group under Shared Risk Program.  

 

4.             Physician Group Withhold.  Each month 5% of the capitation payable to
Physician Group shall be deducted by Health Plan from Physician Group
Capitation (“Physician Group Withhold”) and retained by Health Plan to
facilitate administration of the Shared Risk program.  Amounts withheld shall earn interest at the rate of 7% simple
interest per year. 

 

5.             Shared
Risk Cost.  Only those services
designated as Shared Risk Services shall be considered in determining Shared
Risk Costs for purposes of the Shared Risk Program.  Shared Risk Costs shall be calculated as follows: 

 

a.            For Inpatient Services at Hospital:

 

	
   

  	
  Acute Medical
  Care

  (including Med/Surg, and all other inpatient classifications not set forth
  below)

  	
   

  	
  ***

  	
  per diem

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  ICU/CCU

  	
   

  	
  ***

  	
  per diem

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Physical Rehab.

  	
   

  	
  ***

  	
  per diem

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Mental Health/Chem Dep 

  	
   

  	
  ***

  	
  per diem

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Subacute Care Services  

  	
   

  	
  ***

  	
  per diem

  

 

Emergency Room services
including facility and ancillary charges provided within 24 hours of an
inpatient admission are included in the above per diem rates. 

 

b.          Ambulatory
Surgery and Diagnostic Procedures at Hospital:  

 

***
Percent
of Charges not to exceed *** per case  

 

	
   

  	
  Initials

  	
   

  	
   

  	
   

  	
   

  

 

2

 

 

c.                                 Other
Capitated Services Provided by Hospital (including Home Health care, DME and
other services):  

 

*** Percent
of Charges not to exceed the Medicare allowed amount.  

 

d.                                For Shared
Risk Services rendered by providers other than Hospital:  

 

The actual amount paid to provider.

 

The above rates include all
room, board, ancillary services, supplies, physician and other professional
services which are the financial responsibility of Hospita1 as set forth in
Attachment A.  

 

6.             Reinsurance Program Costs and Recoveries.  Premiums paid by Hospital or Health Plan for
Hospital Reinsurance Program shall be paid from Hospital Capitation and shall
be considered a Shared Risk Cost. 
Recoveries from the Hospital Reinsurance Program shall be retained by
Hospital and will reduce the Shared Risk Cost for the period in which such
recovery is received. 

 

7.             Copayments and COB.  Copayments payable for covered services shall be deducted from
Shared Risk Costs.  Amounts payable, for
Shared Risk Services, to Hospital or other providers through Coordination of
Benefits or Worker’s Compensation shall be deducted from Shared Risk Costs, up
to the amount of Shared Risk Costs for the particular service.  Amounts actually received by Hospital
through third party liability recoveries for Shared Risk Services shall be
deducted from Shared Risk Costs in the period in which such payment is actually
received, up to the amount of Shared Risk Costs for the particular service. 

 

8.             Shared Risk Program Settlement.  Within one hundred twenty (120) days
following the end of each calendar year of this Agreement Health Plan shall
prepare a final report of the status of Shared Risk Program for such year
(Shared Risk Period).  Such report shall
include calculation of the Shared Risk Budget and Shared Risk Costs incurred
during the Shared Risk Period, Such calculation shall include an estimate of
incurred but not reported (IBNR) claims liability for Shared Risk Services in
accordance with generally accepted accounting and actuarial principles.  Shared Risk Budget and Shared Risk Costs
shall be the basis for the Shared Risk Program Settlement between the Hospital,
Health Plan and Physician Group. 

 

3

 

a.                                 Deficit.  If Shared Risk Costs exceed Shared Risk
Budget, 5% of such deficit shall be paid to Hospital by Health Plan.  

 

In
addition, 50% of the deficit shall be paid to Hospital by Physician Group.  However, the amount payable by Physician
Group shall not exceed 10% of the total Physician Group capitation for the
Shared Risk Period.  

 

Payment to
Hospital by Physician Group will be made from funds withheld (plus interest
earned) during the Shared Risk Period by Health Plan from Physician Group
capitation.  

 

If amounts
withheld from Physician Capitation by Health Plan are sufficient to pay amounts
due Hospital by Physician Group, all remaining funds withheld by Health Plan
from Physician Group capitation during the Shared Risk Period plus interest
shall be distributed to Physician Group. 

 

In the
event such withheld funds, plus accrued interest, are not sufficient to pay
amounts due Hospital, additional payments will be made by Physician Group
through deductions from capitation by Health Plan in amounts not to exceed ten
percent (10%) of the Physician Group’s monthly capitation. Such payments shall
be deducted from Physician Group’s capitation payments. 

 

b.           Surplus.  If Shared Risk Costs are less than the
Shared Risk Budget, 5% of such surplus shall be paid to Health Plan either from
funds set aside for this purpose by *** Hospital ***, by direct payment
from Hospital or through deduction from capitation, as determined by Health
Plan. 

 

In
addition, 50% of such surplus shall be paid to Physician Group.  Such payment shall be made from amounts Hospital
has set aside for this purpose *** during Shared Risk Period *** from
Hospital Capitation. 

 

***

 

	
   

  	
  Initials

  	
   

  	
   

  	
   

  	
   

  

 

4

 

If such *** funds set
aside by Hospital are not sufficient to pay amounts due by Hospital,
additional payments will be made by Hospital to Physician Group either through
direct payment or through an offset *** by Health Plan from Hospital
capitation payments. ***  

 

C.           Pharmacy Risk Sharing Program.  Health Plan shall establish a Pharmacy
Budget.  Health Plan shall pay all
covered pharmacy claims and pharmacy benefit administrative costs payable to
third parties (Pharmacy Costs).  

 

1.           Pharmacy Fund Settlement.  Within 120 days following the end of each
calendar year, there shall be an accounting of the Pharmacy Budget and Pharmacy
Costs.  Such accounting shall include an
estimate of incurred but not reported (IBNR) claims.  

 

a.                Pharmacy Deficit.  In the event that Pharmacy Costs exceed the
Pharmacy Budget, 50% of such deficit not to exceed 25% of the Pharmacy
Budget shall be paid by Physician Group through direct payment to Health
Plan, through funds payable to Physician Group pursuant to the Shared Risk
Program outlined above, and/or through a reduction in Physician capitation
sufficient to fund 50% of such deficit in six months.  

 

b.                Pharmacy surplus.  If Pharmacy Costs are less than the Pharmacy
Budget, 50% of such surplus not to exceed 25% of the Pharmacy Budget
shall be paid by Health Plan to Physician Group.  

 

D.          Reports and Timely Settlement

 

Health
Plan shall be responsible for maintenance of records and development of reports
required for administration of the risk sharing programs outlined
herein.  Detail Provider Utilization
Reports and Pharmacy Risk Share Reports shall be made available to Physician
Group within sixty (60) days following the end of each quarter.  Hospital and Physician Group shall have 30
days following the receipt to review such reports produced by Health Plan.  Absent objections and/or the presentation of
additional information in such 30 day period, the reports shall be considered
acceptable and complete.  Any
encounter data submitted after the thirty (30) day period has elapsed shall be
excluded from Hospital/Physician Group Shared Risk Program. All payments
due pursuant to final settlements *** shall be made or, in the case of
deductions from capitation, shall commence within 15 days following the
acceptance of such reports or the expiration of the 30 day review period.

 

	
   

  	
  Initials

  	
   

  	
   

  	
   

  	
   

  

 

5

 

ATTACHMENT C

 

Allowed Cost Calculations

 

In determining the fees to be
paid by Health Plan to the Primary Care Physician for Non Capitated Services,
for authorized calculation of eligibility for and reimbursement under the Stop
Loss provisions of the Agreement, the following methodology shall be used:  The allowed amount will be the lesser of
billed charges or the amount calculated by applying the following dollar values
to the relative value units for each procedure listed in the 1974 California
Relative Value Studies developed by the California Medical Association. 

 

	
  Medicine

  	
   

  	
  $

  	
  6.50

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Surgery

  	
   

  	
  $

  	
  155.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Anesthesiology

  	
   

  	
  $

  	
  33.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Radiology:

  	
   

  	
  $

  	
  13.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (Professional Component 40%)

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Pathology

  	
   

  	
  $

  	
  1.45

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Clinical

  	
  (Professional Component 20%)

  	
   

  	
   

  	
   

  
	
  Anatomical 
  

  	
  (Professional Component 80%)

  	
   

  	
   

  	
   

  

 

In the event a service is
provided which is not listed in the 1974 CRVS or for which no unit value is
stated, the allowed amount will be 80% of the prevailing fee in the community
(50th percentile) based on information provided by a vendor specializing in the
provision of such information (e.g. Health Insurance Association of
America).  The cost of physician
administered medication shall not exceed 125% of the Average Wholesale Price.Exhibit
10.158

 

DELEGATION AMENDMENT

TO MEDICARE+ CHOICE PHYSICIAN GROUP SERVICE AGREEMENT

 

The
Blue Shield of California Medicare+ Choice Physician Group Service Agreement
(Agreement), with an original effective date of September 1, 1990, between
California Physicians’ Service, dba Blue
Shield of California (“Health Plan”) and North West Orange County Medical Group (“Physician Group”), is
hereby amended, effective September 1,
1999,  as
follows:

 

RECITALS

 

A.    Health Plan and Physician Group currently
have an Agreement under which Physician Group arranges for certain Benefits in
accordance with the Agreement and the Health Plan’s Medicare+ Choice Plan.

 

B.    Physician Group agreed under the Agreement to
conduct a quality and utilization management program and to cooperate with
Health Plan in the monitoring of associated program activities delegated to
Physician Group. These activities include certain aspects of Utilization
Management, Medical Records Audits, Members’ Rights and Responsibilities, and
Credentialing.

 

C.    Health Plan and Physician Group now wish to
acknowledge the criteria used to determine eligibility for delegation of
activities and mutually agree to the precise activities delegated to Physician
Group and Health Plan’s monitoring thereof.

 

 

I.  DELEGATION
CRITERIA AND ACTIVITIES

 

Any
services or other delegated activities performed by Physician Group and any
Downstream Entity pursuant to this Agreement must be consistent and comply with
Health Plan’s contractual obligation to HCFA.

 

1.1           Health
Plan has developed and adopted Delegation Criteria for the delegation of
activities in the areas of Utilization Management (UM), Medical Records Audits
(MRA), Office Site Review (OSR), Members’ Rights and Responsibilities (MRR),
and Credentialing (CR).  Those Criteria
are published in the Provider Manual and incorporated herein by reference.
These Criteria and Standards as set forth in the Provider Manual may be
modified from time to time by Plan

 

1.2           Those
activities for which Physician Group meets the Delegation Criteria and agrees
to accept delegated responsibility and those activities whose performance is
retained by Health Plan are listed on Attachment G-l.  Attachment G-l may be amended by Health Plan from time-to-time to
reflect changes in those activities delegated to Physician Group.

 

1

 

1.3           Physician
Group warrants that it currently meets those Delegation Criteria applicable to
the activities for which Physician Group has been delegated and agrees to notify
Health Plan of any change in its eligibility under the Delegation Criteria
within no less than seven (7) business days, in the event it ceases, in whole
or in part, to meet such Criteria.

 

1.4           Health
Plan retains final authority and responsibility for activities
delegated under this Amendment.

 

1.5           Activities
not expressly delegated herein by Health Plan or for which
delegation is terminated are the responsibility of Health Plan.  By way of example and without limitation,
activities not delegated to Physician Group include final appeal decisions and
benefit interpretations.

 

II.  PERFORMANCE
AND MONITORING

 

2.1           Standards
for the Performance of Delegated Activities developed and adopted by Health Plan are published in the Provider Manual and incorporated herein by
reference. Physician Group agrees to perform the activities delegated to it in
a manner consistent with those Standards applicable to activities for which
Physician Group has been delegated.

 

2.2           Physician
Group acknowledges Health Plan’s responsibility to monitor Physician Group’s
eligibility for delegation according to the Delegation Criteria and performance
of the delegated activities according to the Standards of Performance.  Physician Group agrees to cooperate with
Health Plan’s monitoring of Physician Group’s eligibility and performance of
delegated activities.

 

2.3           Health
Plan shall conduct regularly scheduled audits to determine Physician Group’s
continued compliance with the Standards. 
Physician Group shall cooperate with Health Plan and its designated
agents in the performance of those audits, including but not limited to, the
provision of reasonable access during regular business hours to the Enrollee
inquiry files, credentialing files, clinical and medical records of Health Plan
Enrollees and non-Enrollees as applicable and reasonably necessary to evaluate
Physician Group’s performance of activities delegated to it.  Cooperation shall include, but not be
limited to, an annual evaluation and quarterly meetings between Health Plan and
Physician Group staff

 

2.4           Physician
Group agrees to provide Health Plan with periodic reports on delegated
activities performed by Physician Group. The report shall be in a form and contain such information as shall be agreed upon
between the parties.

 

2

 

2.5           Physician
Group agrees to use its best efforts to take whatever corrective actions are
identified by Health Plan through the audit review process as reasonably necessary.

 

III.  TERMINATION
OF DELEGATION

 

3.1           In
the event Health Plan is dissatisfied for any reason with Physician Group’s
performance of delegated activities, Health Plan may, in its sole discretion,
modify Physician Group’s status (in respect to all or a particular delegated
activity) from fully delegated to delegated with corrective action. Such notice
of delegation with corrective action shall set forth the deficiencies perceived
by Health Plan in Physician Group’s performance of delegated activities, and
Physician Group shall have ninety (90) days to correct such deficiencies to the
reasonable satisfaction of Health Plan. In the event such deficiencies are not
corrected to the reasonable satisfaction of Health Plan, Health Plan may, in
its sole discretion, terminate the delegation or extend the period given
Physician Group to correct such deficiencies.

 

3.2           In
lieu of the notice of delegation with corrective action and opportunity to
correct deficiencies, as set for in paragraph 3.1 above, Health Plan may at
anytime, *** and within its sole discretion terminate all or portions of the
delegation granted to Physician Group hereunder by providing no less than sixty
(60) days prior written notice.  Plan
may also terminate all or portions of the delegation granted to the Physician
Group hereunder in Health Plan determines, after consultation with Physician
Group, that Physician Group either no longer meets all Criteria or is not
performing (or is reasonably not likely to perform) the delegated activities in
full compliance with the Standards. In such event, Health Plan shall give to
Physician Group not less than thirty (30) days prior notice of such termination
of delegation, and if Physician Group during such notice period, cures such
deficiencies to Health Plan’s reasonable satisfaction, Health Plan may in its
sole discretion, withdraw such termination.

 

All
other provisions of the Agreement and its Amendments not specifically revised
by this Amendment remain in full force and effect.

 

IN
WITNESS WHEREOF, the undersigned have executed this Amendment as of the date(s)
written below.

 

	
  BLUE SHIELD OF CALIFORNIA

  	
  NORTHWEST ORANGE COUNTY

  
	
   

  	
  MEDICAL GROUP

  
	
  By:

  	
    /s/  Lisa Rubino

  	
   

  	
  By:

  	
    /s/  Pratihba Patel

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
    Lisa
  Rubino

  	
   

  	
  Name:

  	
    PRATIHBA
  PATEL, MD

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
    Chief
  Executive – Medicare Region

  	
   

  	
  Title:

  	
    PRESIDENT

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
    12/02/99

  	
   

  	
  Date:

  	
    11/11/99

  

 

	
   

  	
   

  	
   

  	
  By:

  	
  /s/
  James P. Agronick

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
    JAMES P. AGRONICK

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
    CEO
  HJMSO

  

 

3

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