Document:

Exhibit 10.173

 

TABLE OF CONTENTS:

 

	
  RECITALS

  	
   

  
	
   

  	
   

  
	
  DEFINITIONS

  	
   

  
	
   

  	
   

  
	
  REPRESENTATIONS AND
  DUTIES OF PPG

  	
   

  
	
   

  	
   

  
	
  DUTIES OF FHS

  	
   

  
	
   

  	
   

  
	
  COMPENSATION

  	
   

  
	
   

  	
   

  
	
  DELEGATION

  	
   

  
	
   

  	
   

  
	
  TERM
  AND TERMINATION

  	
   

  
	
   

  	
   

  
	
  RECORDS,
  AUDITS AND REGULATORY REQUIREMENTS

  	
   

  
	
   

  	
   

  
	
  GENERAL
  PROVISIONS

  	
   

  
	
   

  	
   

  
	
  ADDENDUM A

  	
   

  
	
   

  	
  Benefit
  Programs

  	
   

  
	
   

  	
  Affiliates

  	
   

  
	
   

  	
  Main/Satellite
  Offices

  	
   

  
	
   

  	
   

  	
   

  
	
  ADDENDUM B

  	
  COMMERCIAL HMO AND POS

  	
   

  
	
   

  	
  A.

  	
  General Reimbursement
  Provisions

  	
   

  
	
   

  	
  B.

  	
  Standard HMO

  	
   

  
	
   

  	
  C.

  	
  Small Group HMO

  	
   

  
	
   

  	
  D.

  	
  Individual HMO

  	
   

  
	
   

  	
  E.

  	
  Access for Infants and
  Mothers

  	
   

  
	
   

  	
  F.

  	
  Medicare
  Supplement

  	
   

  
	
   

  	
  G.

  	
  Commercial POS

  	
   

  
	
   

  	
  H.

  	
  QCIP

  	
   

  
	
   

  	
  I.

  	
  Pharmacy Shared Risk
  Program

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ADDENDUM B.1

  	
  AGE, SEX AND BENEFIT
  PLAN FACTORS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  ADDENDUM B.2

  	
  COMMERCIAL HMO and POS
  DIVISION OF FINANCIAL FINANCIAL RESPONSIBILITY MATRIX

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ADDENDUM C

  	
  MEDICARE HMO AND POS

  	
   

  
	
   

  	
  A.

  	
  Definitions

  	
   

  
	
   

  	
  B.

  	
  Medicare HMO Benefit
  Program

  	
   

  
	
   

  	
  C.

  	
  Medicare POS Benefit
  Program

  	
   

  
	
   

  	
  D.

  	
  Administration
  Of Shared Risk Budgets For HMO and POS

  	
   

  
							

 

DRAFT
AGREEMENT PENDING DOC APPROVAL

 

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

 

II

 

	
   

  	
  E.

  	
  Medicare Select
  Benefit Programs

  	
   

  
	
   

  	
  F.

  	
  Other Services

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  ADDENDUM C.1

  	
  SUPPLEMENTAL BENEFITS
  COSTS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  ADDENDUM C.2

  	
  PHARMACY SHARED RISK
  BUDGETS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  ADDENDUM C.3

  	
  MEDICARE DIVISION OF
  FINANCIAL RESPONSIBILITY MATRIX

  	
   

  
	
   

  	
   

  	
   

  
	
  ADDENDUM D

  	
  PPO, EPO AND POS

  	
   

  
	
   

  	
  A.

  	
  Benefit Program
  Requirements

  	
   

  
	
   

  	
  B.

  	
  PPO And EPO Benefit
  Programs

  	
   

  
	
   

  	
  C.

  	
  POS Benefit Programs

  	
   

  
	
   

  	
   

  	
   

  
	
  ADDENDUM E

  	
  FEE FOR SERVICE
  COMPENSATION SCHEDULE

  	
   

  
	
   

  	
   

  	
   

  
	
  ADDENDUM F

  	
  MEDI-CAL BENEFIT PROGRAM

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ADDENDUM G

  	
  CHAMPUS/TRICARE

  	
   

  
	
   

  	
  A.

  	
  Definitions

  	
   

  
	
   

  	
  B.

  	
  Programs and
  Regulations

  	
   

  
	
   

  	
  C.

  	
  Other Governmental Programs

  	
   

  
	
   

  	
  D.

  	
  Provider
  Obligations

  	
   

  
	
   

  	
  E.

  	
  CHAMPUS PRIME and
  EXTRA Benefit Programs and Compensation

  	
   

  
	
   

  	
   

  	
   

  
	
  ADDENDUM H

  	
  WORKERS COMPENSATION
  BENEFIT PROGRAM

  	
   

  
	
   

  	
  A.

  	
  Compensation

  	
   

  
	
   

  	
  B.

  	
  Other Duties

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  ADDENDUM H.1

  	
  WORKERS’ COMPENSATION
  RATE SCHEDULE

  	
   

  
							

 

III

 

PARTICIPATING PHYSICIAN GROUP

PROVIDER SERVICES AGREEMENT

 

This Participating Physician
Group Provider Services Agreement (“Agreement”) is made and entered into by and
between the Foundation Health Systems Affiliate(s) (“FHS”) identified in
Addendum A to this Agreement and StarCare Medical Group dba Gateway Medical
Group, a Participating Physician Group (“PPG”), to be effective March 1, 1999.

 

RECITALS

 

A.            PPG
is a medical group or individual practice association that provides or arranges
for the provision of professional health care services, supplies, products or
related services.

 

B.            FHS
is one or more corporations that have the legal authority to enter into this
Agreement, and to perform the obligations of FHS hereunder with respect to the
Benefit Programs identified on Addendum A.

 

C.            FHS
desires to enter into this Agreement to arrange for PPG to render Contracted
Services to Members of the various Benefit Programs identified on Addendum A.

 

D.            PPG
desires to enter into this Agreement to render Contracted Services to Members
of the various Benefit Programs identified on Addendum A.

 

AGREEMENT

 

NOW, THEREFORE, in
consideration of the above recitals and the covenants contained herein, the
parties hereby agree as follows:

 

I.              DEFINITIONS

 

Many words and terms are capitalized
throughout this Agreement to indicate that they are defined as set forth in
this Article I.

 

1.1          Affiliate.  An
entity in which Foundation Health Systems, Inc., a Delaware corporation, owns
51% or more of the voting stock, or which is managed by FHS or a FHS
subsidiary.  The Affiliates provide,
arrange for, or administer one or more Benefit Programs covered under this
Agreement.

 

1.2          Benefit Program.  FHS’
obligation to pay for, provide, arrange or administer Covered Services,
provider networks, administrative or other related services pursuant to a
written agreement between an employer or other entity or an individual and
FHS.  The Benefit Programs covered under
this Agreement are listed on Addendum A.

 

1.3          Capitation.  The
compensation paid per Member per month (“PMPM”) for each HMO Member who has
selected or been assigned to PPG.

 

1.4          Commercial HMO Member.  A HMO Member
whose premium is fully paid and enrolled in a commercial Benefit Program,
including 1) a Benefit Program offered to an employer other than a small group
employer (“Standard HMO Member”), 2) a Benefit Program offered to a small group
employer as defined in Section 1357(I) of the California Health and Safety Code
(“Small Group HMO Member”), 3) a Benefit Program offered to

 

1

 

individuals
(“Individual HMO Member”), 4) a Benefit Program offered to an individual
participating in the Access for Infants and Mothers Program (“AIM Member”), 5)
a Benefit Program which is fully or partially self-funded (“Flexible Funded HMO
Member”), or 6) a Benefit Program offered to Members with primary coverage
through Medicare and health care coverage under an HMO or POS Plan (“Medicare
Supplement Member”).

 

1.5          Contracted Services.  Those
Medically Necessary Covered Services to be rendered by PPG to a Member in
accordance with this Agreement.

 

1.6          Coordination of Benefits.  The
allocation of financial responsibility between two or more payors of health
care services, each with a legal duty to pay for or provide Covered Services to
a Member at the same time.

 

1.7          Copayment.  That
portion of the cost of Covered Services that a Member is obligated to pay under
a particular Benefit Program, including deductibles and coinsurance.

 

1.8          Coverage Certificate or
Certificate.  The document which describes the benefits
available to a Member in connection with a Benefit Program.

 

1.9          Covered Services.  The
health care services, products, supplies or related services that are covered
under an applicable Benefit Program.

 

1.10        Emergency.  A
medical condition manifesting itself by acute symptoms of sufficient severity
such that a prudent layperson who possesses average knowledge of health and
medicine, could reasonably expect the absence of immediate medical attention to
result in: (i) placing the individual in serious jeopardy (and in the case of a
pregnant woman, her health or that of her unborn child); (ii) serious
impairment to bodily functions; or (iii) serious dysfunction of any bodily
organ or part.  FHS shall have the final
authority in decisions regarding emergencies and emergency services.

 

1.11        HMO Member.  A person
who is eligible to receive Covered Services under those Benefit Programs
offered by an Affiliate which is a health care service plan licensed under the
Knox Keene Act, and whose premium has been fully paid.  An HMO Member shall be a person enrolled in
a Medicare Benefit Program as set forth in Addendum C (“Medicare HMO Member”),
a person enrolled in a Medicaid Benefit Program as set forth in Addendum F
(“Medi-Cal HMO Member”) or a person enrolled in a commercial Benefit Program as
set forth in Addendum B (“Commercial HMO Member”).

 

1.12        Insured Services. 
Contracted Services that are arranged or provided and paid for by PPG
but which are reimbursable by FHS in addition to the Capitation paid.  Such Insured Services are set forth in the
applicable Addendum.

 

1.13        Interim Period.  The
six-month period, January 1st through June 30th, used for
the purpose of calculating an interim settlement.

 

l.14         Medically Necessary.  Those
Covered Services which, under the provision of this Agreement, are determined
to be:

 

(a)           Appropriate and necessary for the symptoms, diagnosis or treatment of a
condition, illness or injury; and

 

(b)           Provided for the diagnosis or the direct care and treatment of a medical
condition, illness or injury; and

 

2

 

(c)           Within the standards of good medical practice within the organized
medical community; and

 

(d)           Not primarily for the convenience of the Member, or the Member’s
physician or other Provider; and

 

(e)           The most appropriate supply or level of service, including levels of
acute care such as intensive care unit services or regular acute medical and
surgical services as determined by the clinical status of the Member, which can
safely be provided to the Member.  For
hospitalization, this means that the Member requires acute care as an inpatient
due to the nature of the services the Member is receiving, or the severity of
the Member’s condition, and that safe and adequate care cannot be received as
an outpatient or at a less intensified medical setting such as a sub-acute unit
or skilled nursing facility.

 

Notwithstanding the above, Medically Necessary services for HMO Members
shall not differ from that defined in the Evidence of Coverage document
approved by the Department of Corporation.

 

1.15        Member. 
(Beneficiary) A person who is eligible to receive Covered Services under
a Benefit Program included in this Agreement by virtue of completing the
required enrollment process and whose premium has been fully paid.  Member shall include HMO Member.

 

1.16        Member Physician.  A
physician who practices medicine in the capacity of a shareholder, partner,
employee, subcontractor, locum tenens or associate of PPG.

 

1.17        Operations Manual.  All
Operations Manuals, including medical policy manuals, issued by FHS, as updated
from time to time, which are incorporated in this Agreement by this
reference.  PPG agrees to be
contractually bound to comply with the Operations Manual, including the medical
policy manuals, and any updates or revisions to such, to be issued to PPG.  In the event that any provision in an
Operations Manual or any updates thereto are clearly inconsistent with the
terms of this Agreement as amended, the terms of this Agreement shall prevail.

 

1.18        Participating Provider.  A
hospital, physician, physician organization. 
Participating Physician Group, Member Physician, other health care
practitioner or other organization which has a direct or indirect contractual
relationship with FHS or another Participating Provider to provide Covered Services
to Members.  In the event PPG contracts
with a health care provider to render Covered Services under this Agreement,
such provider is a Participating Provider.

 

1.19        Payor.  A
public or private entity contracted with FHS which funds, insures or is responsible
for paying Participating Providers for Covered Services rendered to Members
pursuant to the terms of this Agreement and as stipulated on the Member’s
identification card.

 

1.20        Pharmacy Budget.  The
amount allocated per eligible Member per month (“PEMPM”) for the cost of
contracted pharmaceutical benefits established by FHS as set forth in the
applicable Addendum.

 

1.21        PPG Capitated Services. 
Contracted Services as described in an Addendum to this Agreement for
which PPG has accepted Capitation under the applicable Benefit Programs to
which the Addendum applies.

 

1.22        Preventive Care. 
Preventive Care is care which attempts to remove or reduce disease risk
factors and promotes early detection of disease or precursor states.

 

1.23        Primary Care Physician
(PCP).  A Member Physician who is responsible for
providing and/or

 

3

 

coordinating
the delivery of Covered Services to an HMO Member pursuant to the applicable
Benefit Program Primary Care Physicians include general practitioners, family
practitioners, internists, pediatricians, obstetrician/gynecologists and other
specialists, if approved by FHS.

 

1.24        Prior Authorization.  The
written approval by FHS, Payor, PPG, or other permitted entity, prior to admitting
a Member to a hospital or a skilled nursing facility, or to providing certain
other Covered Services to a Member, which approval is required under the
Utilization Management Program of the applicable Benefit Program as described
in the Operations Manual.

 

1.25        Quality Improvement Program.  A
program to meet FHS standards, approved by FHS, and designed to assure the
provision of quality medical services, as described more fully in the
Operations Manual.

 

1.26        Reconciliation Period.  The
12-month period, January 1st through December 31st, used
for the purpose of calculating Shared Risk and Pharmacy Budget surpluses or
deficits.  The first Reconciliation
Period shall be the period beginning on the date that HMO Members are first
assigned to PPG under this Agreement through December 31st of that
calendar year.

 

1.27        Service Area.  The
geographic area in the continental United States within a 30-air mile radius of
an HMO Member’s PCP’s office location for the purpose of determining in-area
versus out-of-area services for such Member as set forth in the Operations
Manual.

 

1.28        Shared Risk Budget.  The
amount allocated per Member per month (“PMPM”) for the cost of Shared Risk
Services established by FHS as set forth in the applicable Addendum.

 

1.29        Shared Risk Claims. 
Shared Risk Claims shall include all claims for Shared Risk Services
including amounts for out of area services as set forth in the applicable
Addendum minus those amounts in excess of the Shared Risk Reinsurance threshold
which are payable under such program as set forth in the applicable Addendum
and minus any amounts received from third parties, including but not limited
to, Coordination of Benefits, workers’ compensation and Copayments.

 

1.30        Shared Risk Reinsurance.  The
program through which the PPG’s risk for Shared Risk Claims shall be limited
per assigned HMO Member in a Reconciliation Period.

 

1.31        Shared Risk Services.  The
Covered Services set forth in the attached matrix under the heading “Shared
Risk Services”.

 

1.32        State.  The
State of California.

 

1.33        Surcharge.  An
additional fee which is charged to a Member for a Covered Service, but which is
not approved by the applicable State and federal regulatory authority, and is
neither disclosed nor provided for in a Coverage Certificate.

 

1.34        Urgently Needed Services. 
Covered Services required in order to prevent a serious deterioration of
an HMO Member’s health that results from an unforeseen illness or injury if (i)
such Member is temporarily absent from the Service Area and (ii) receipt of the
health care service cannot be delayed until the Member’s return to the Service
Area.

 

1.35        Utilization/Care Management
Program.  A program that meets FHS’ standards and is
approved by FHS and designed to review and manage the utilization of Covered
Services, as described more fully in the Operations Manual.

 

4

 

II.            REPRESENTATIONS AND DUTIES OF PPG

 

2.1          Representations of PPG.

 

(a)           PPG warrants that it has the authority to contract on behalf of its
Member Physicians and to bind them to all of the terms and provisions of this
Agreement.  PPG will notify Member
Physicians of their rights and duties under this Agreement, and of all
amendments and modifications thereto.

 

(b)           PPG shall provide FHS, upon request, with its written applicable
policies and procedures and its bylaws and articles of incorporation and any
modifications thereto.

 

(c)           PPG represents that the terms of this Agreement do not conflict with the
terms of its agreements with Participating Providers.  PPG further represents that the terms of this Agreement shall
apply in any situation where there is an inconsistency or conflict with the
terms of any agreement between the Participating Provider and PPG or with
respect to any matter which is not addressed in any such agreement between the
Participating Provider and PPG.  PPG
shall be responsible to FHS for any such inconsistency or conflict in
terms.  This provision shall supersede
any similar provision in any agreement between PPG and a Participating
Provider.

 

2.2          PPG Network.  PPG
shall provide FHS with a list of the names, practice locations, federal tax
identification numbers, professional practice name, the business hours and any
additional information as required in the Operations Manual for all Member
Physicians and Participating Providers that contract with PPG in a format
acceptable to FHS.  If more than one
such provider uses the same federal tax identification number, PPG shall
include the professional practice name registered with such number.  FHS shall notify PPG of all such Member
Physicians and Participating Providers approved by FHS.  PPG shall provide FHS with at least a
monthly list of additions, deletions and address changes to such list and a
complete listing annually.

 

PPG
shall take all reasonable and prudent steps to ensure that all Participating
Providers provide adequate personnel and facilities in order to perform the
duties and responsibilities associated with the proper administration of this
Agreement, including but not limited to, ensuring that all facilities utilized
by Participating Providers shall satisfy the standards for licensure and
certification, if applicable, by the appropriate governmental licensing agency
as well as applicable State and federal law.  The Participating Provider assumes the responsibility for
supervision of all personnel associated with the Participating Provider.

 

2.3          PPG Contracts.  PPG
shall not contract for the performance of services under this Agreement without
the consent of FHS.  Upon entering into
any arrangements with a Participating Provider as may be necessary to fulfill
PPG’s obligations to provide or arrange for the provision of Contracted
Services and Covered Services under this Agreement, PPG shall obtain written
contracts with such providers which include the following requirements:

 

(a)           Secure adherence by Participating Providers to all the obligations of
this Agreement which affect Participating Providers, including but not limited
to:

 

(1)           Accepting Members upon referral from Member Physicians.

 

(2)           Collecting any Copayments due from Member and accepting payment from
PPG as payment-in-full for Contracted Services rendered to Members referred to
them, except for authorized Copayments, and agree not to bill FHS or Members
and shall hold them harmless for such services regardless of whether or not
payment is received from PPG or FHS.

 

(3)           Hospitalizing Members in accordance with the applicable Benefit Program
and

 

5

 

the Operations Manual.

 

(4)           Conforming to the drug dispensing guidelines set forth in the Operations
Manual or FHS’ drug formulary.

 

(5)           Maintaining in force adequate professional liability insurance as set
forth in this Agreement and in the Operations Manual.

 

(6)           Conforming to all State, federal and other government requirements
regarding retention of and access to records, and submission of reports.

 

(7)           Maintaining offices in a condition which conforms to FHS’ standards for
safety, appearance and accessibility of services.

 

(8)           Accepting all HMO Members when selected, assigned or transferred to PPG,
provided PPG and its Participating Providers have capacity to provide
Contracted Services under this Agreement and PPG and Member Physicians continue
to accept new patients from any other health care service plan.

 

(9)           Conforming to FHS’ processing of retroactive eligibility changes as set
forth in this Agreement.

 

(10)         Conforming with FHS’ guidelines for rapid medical records review,
response and resolution of Member complaints.

 

(b)           No agreement between PPG and a Participating Provider shall contain any
incentive plan that includes a specific payment made, in any type or form, as
an inducement to deny, reduce, or limit Covered Services to a Member.  PPG shall comply and shall cause its
Participating Providers to comply with State and federal law regarding
physician incentives and stop loss insurance requirements, where
applicable.  PPG shall furnish FHS with
all PPG’s contracting templates for FHS’ review and approval upon request and
at such time templates are changed. 
Every PPG contract shall provide that it is terminable with respect to
Members by PPG upon FHS’ request.  PPG
shall furnish FHS with copies of any amendments to a contract with a
Participating Provider within ten (10) days of execution.  In addition, any agreement or amendment
between PPG and a Member Physician shall not restrict the rights and
obligations of Member Physician to communicate freely with Members regarding
their medical condition and treatment alternatives.  In the event PPG enters into a contract with a Participating
Provider, PPG will provide FHS with documentation thereof as set forth in the
Operations Manual.

 

(c)           PPG shall assure through written communication that all Member
Physicians are aware of the appeals process regarding any decision, policy, or
practice of FHS or PPG which Member Physician believes is not consistent with
the provision of quality medical care to Members.

 

(d)           As requested or required by FHS, PPG shall maintain and make available
to FHS, the California Department of Health Services (“DHS”), the California
Department of Corporations (“DOC”), the U.S. Department of Justice (“DOJ”), the
U.S. Department of Defense (“DOD”), the U.S. Department of Health and Human
Services (“DHHS”) and any other regulatory agency having jurisdiction over FHS,
copies of PPG’s politics and procedures and all Participating Provider
subcontracts and any amendments thereto.

 

2.4          Member Physician Selection.  PPG
shall be responsible for the selection of Member Physicians, or other providers
who provide Covered Services to Members. 
Selection of Member physicians shall be made by PPG with reference to
reasonable requirements and PPG procedures. 
PPG shall assist each HMO Member in selecting a PCP when necessary.

 

6

 

PPG agrees to select Member
Physician(s) to function in a liaison capacity with FHS and serve, if
requested, on Quality Committees or any specified committee established by FHS.

 

In the event PPG adds new or
satellite facilities, except by acquisition or merger, or a new
Member Physician(s), PPG shall notify FHS in writing as soon as possible
but at least ninety (90) days before such addition is effective with FHS.  PPG acknowledges and agrees that FHS shall
have the right to determine whether the new or satellite facilities or the new
Member Physician(s) are acceptable to FHS. 
PPG agrees that no new satellite facility shall be added, or new Member
Physician shall be allowed to render Covered Services under this Agreement,
until FHS has approved such facility or Member Physician.  PPG understands and agrees that FHS shall be
free to deny participation under this Agreement to any new or satellite facilities
without any obligation to:

 

(a)           state a cause or provide an explanation for denying such addition, or

 

(b)           provide the PPG with any right to appeal or any other due process.  PPG agrees that FHS’ decision regarding the
foregoing shall be final and binding.

 

PPG
further understands and agrees that FHS may deny participation under this
Agreement to any new Member Physician(s). 
FHS shall afford Member Physician such rights to appeal and due process,
if any, as required by State and federal law. 
In the event PPG acquires or merges with another participating physician
group, PPG shall offer and FHS has the right to accept any rates which are the
most favorable to FHS.  Such rates shall
be retroactive to the date of any merger or acquisition.

 

2.5          Member Physician
Termination.  Whenever possible, PPG shall notify FHS in
writing at least ninety (90) days prior to any action by PPG to terminate a
Member Physician’s agreement with PPG, or if Member Physician decides to close
his or her medical practice or refuse to accept any additional Members.  When ninety (90) days prior written notice
is not possible.  PPG shall provide as
much advance notice as possible. PPG shall immediately notify FHS whenever a
Member Physician fails to renew his or her agreement with PPG, whenever PPG has
reason to believe a Member Physician will fail to renew his or her agreement
with PPG, and whenever PPG knows of an occurrence giving rise to an immediate
termination of a Member Physician by PPG. 
In the event of a Member Physician termination, PPG shall ensure that
there is sufficient capacity in the network to meet the access standards as set
forth in the Operations Manual.

 

FHS
may request and PPG shall terminate any Member Physician from participation
under this Agreement, at any time, upon at least thirty (30) days prior written
notice from FHS to PPG; provided, however, that no such termination shall be
because a Member Physician is advocating on behalf of a Member for health care
services.  Notwithstanding the
foregoing, if a Member Physician is found guilty of a criminal offense, is
barred or sanctioned from participation under the Medicare program, or if FHS
makes a determination, at its sole discretion, that treatment by a Member
Physician may jeopardize the health and safety of any Member.  PPG, upon FHS’ request, shall immediately
terminate such Member Physician from participation under this Agreement.

 

2.6          Eligibility. 
Except in an Emergency, PPG shall verify the eligibility of Members
before providing Contracted Services. 
FHS shall make a good faith effort to confirm the eligibility of any
Member.  When PPG has not made
reasonable efforts to verify eligibility, PPG shall not hold FHS financially
responsible for Covered Services rendered to any person who was not eligible for
FHS benefits as determined by FHS.

 

2.7          Performance Standards.  PPG
shall comply with the performance standards and indicators set forth in the
Operations Manual.  These standards and
indicators shall be monitored by PPG on an ongoing basis using mutually
agreeable measurements, and shall be reported to FHS on a regular basis as set
forth in the Operations Manual.  FHS
shall have the right, upon advance written notice to audit PPG’s reported
performance.

 

2.8          Provision of Services.  PPG
agrees to render, and to ensure that Participating Providers render.

 

7

 

Covered
Services to Members in accordance with:

 

(a)           The terms and conditions of this Agreement, and all laws, rules and
regulations applicable to PPG, FHS, and Payors;

 

(b)           The Utilization/Care Management Program, the Quality Improvement
Program, the applicable Benefit Programs, the Member’s Coverage Certificate and
the Operations Manual;

 

(c)           The performance standards and indicators that are established by FHS
including, but not limited to, waiting periods for appointments, waiting
periods in a Member Physician’s office and processing of prior authorizations;

 

(d)           The drug dispensing guidelines set forth in FHS’ drug formulary and the
Operations Manual;

 

(e)           The termination procedures outlined in the Operations Manual when
requesting termination of a Member.  PPG
shall not request, demand, or require or otherwise seek, directly or
indirectly, the removal of any Member based on that Member’s need for, or
utilization of Covered Services;

 

(f)            The Member selection or assignment provisions
of this Agreement.  PPG agrees to accept
any and all Members who select or are assigned to PPG.  PPG and Member Physicians shall maintain a
professional relationship with each Member to whom PPG or Member Physician
renders Contracted Services, and shall be solely responsible to such Member for
such services; and

 

(g)           The eligibility verification and notification procedures as set forth
in the Operations Manual.

 

2.9          Offices and Hours. 
Member Physician shall maintain offices, equipment, and personnel as may
be necessary to provide Contracted Services under this Agreement, in accordance
with State law and as reasonably requested by FHS.  Member Physician shall provide Contracted Services under this
Agreement during normal business hours, and shall be available to Members by
telephone twenty-four (24) hours a day, seven (7) days a week on an Emergency
basis and for consultation.

 

2.10        Coverage.  In
the event of a Member Physician’s illness, vacation or other absence from his
or her practice, PPG shall arrange for coverage and shall ensure that such
coverage shall be by a Participating Provider.

 

2.11        Non-Discrimination.  PPG
and Member Physicians shall not discriminate against any Member in the
provision of Covered Services hereunder, on any basis including age, sex,
marital status, sexual orientation, race, color, religion, ancestry, national
origin, disability, handicap, health status, source of payment, utilization of
medical or mental health services or supplies, or other unlawful basis
including without limitation, the filing by such Member of any complaint,
grievance, appeal, or legal action against PPG.  PPG and Member Physicians shall provide Covered Services in the
same manner, and with the same availability, as services are rendered to its
other patients.

 

During the term of this Agreement, PPG and
its subcontractors shall not unlawfully discriminate against any employee or
applicant for employment because of race, religious creed, color, national
origin, ancestry, physical disability, mental disability, medical condition,
marital status, age (over 40) or sex. 
PPG and its subcontractors also shall ensure that the evaluation and
treatment of their employees and applicants for employment are free of such
discrimination.  PPG and its
subcontractors shall comply with the provisions of the Fair Employment &
Housing Act (California Government Code, Section 12990 et seq.) and the
applicable regulations promulgated thereunder (California Code of Regulations,
Title 2, Section 7285.0 et seq.). 
The applicable

 

8

 

regulations
of the Fair Employment & Housing Commission implementing Government Code,
Section 12990, set forth in Chapter 5 of Division 4 of Title 2 of the California
Code of Regulations are incorporated into this Agreement by reference and made
a part hereof as if set forth in full. 
PPG and its subcontractors shall give written notice of their
obligations under this clause to labor organizations with which they have a
collective bargaining or other agreements.

 

2.12        Utilization/Care Management
Program.  PPG and Member Physicians agree to
participate in and cooperate fully with the provisions and all decisions
rendered in connection with FHS’ Utilization/Care Management Program.  PPG and Member Physician agrees to render
Covered Services at the most appropriate level of service (including levels of
acute care such as intensive care unit services or regular acute medical and
surgical services as determined by the clinical status of the Member) which can
safely be provided to the Member.  For
hospitalization, this means that the Member requires acute care as an inpatient
due to the nature of the services the Member is receiving, or the severity of
the Member’s condition, and that safe and adequate care cannot be received as
an outpatient or at a less intensified medical setting.  PPG and Member Physicians also agree to
provide such records and other information as may be required or requested
under such Utilization/Care Management Program as set forth in the Operations
Manual.  FHS may, at its sole
discretion, delegate certain Utilization/Care Management Program
activities.  If so determined qualified
and delegated by FHS, the obligations of PPG for delegation shall be as set
forth herein.

 

2.13        Prior Authorization and
Referrals.  PPG and Member Physicians agree to comply
with prior authorization and referral processes as required by the particular
Benefit Program or Utilization/Care Management Program as set forth in the Operations
Manual.  In the event PPG agrees to
participate in a program offered by another health plan, preferred provider
organization, managed care organization, or insurer which includes an expedited
process for referrals or authorizations, PPG agrees to participate in and offer
the same access for FHS Members for any such program offered by FHS.

 

Prior authorizations or referrals may be
issued by FHS, PPG, a Participating Provider, or Member Physician in accordance
with the applicable Benefit Program.  For
non-emergent services, PPG or Participating Provider agrees to obtain prior
authorization or a referral before providing or ordering Covered Services if
required by the applicable Benefit Program. 
In an Emergency, PPG agrees to attempt to obtain prior authorization or
a referral, by telephone if necessary, before providing or ordering Covered
Services.  If prior authorization or a
referral cannot be obtained in an Emergency, PPG agrees to notify FHS and the
appropriate Participating Provider, as soon as possible, but no later than
twenty-four (24) hours after admission. 
In the event PPG fails to obtain an authorization or a referral, PPG
agrees not to seek payment from FHS or a Payor for Contracted Services rendered
to a Member unless prior authorization or a referral was obtained.  FHS shall retain the right to authorize
Emergency services in accordance with the Operations Manual.

 

2.14        Notification of Institutional
Services.  PPG shall notify FHS prior to or at the time
of each admission of a Member to a hospital or skilled nursing facility whose
admission is the financial responsibility of FHS.  In the event of an Emergency admission, PPG shall notify FHS
regarding such Member within twenty-four (24) hours.

 

2.15        Participating Providers. 
Except in an Emergency or as otherwise required by law, PPG shall refer
Members only to Participating Providers for Covered Services unless such
services are not reasonably available from Participating Provider.  In the event PPG or a Member Physician
refers a Member to a non-Participating Provider, PPG agrees to be responsible
for payment of claims incurred for the Covered Services rendered by such
non-Participating Provider, and PPG agrees to hold harmless the Member for such
claims.

 

If FHS is obligated to pay for services which
FHS determines are the financial responsibility of PPG or which it would not
otherwise be obligated to pay, FHS shall have the right to deduct the cost of
such services from

 

9

 

any amounts due to PPG.  FHS agrees not to deduct any amount as set
forth in this Section without first giving PPG ten (10) days prior written
notice during which time PPG shall have the opportunity to show cause why such
amount should not be deducted by FHS.

 

2.16        Catastrophic Cases.  PPG
shall actively participate with FHS in managing Members with potentially
catastrophic medical conditions including, but not limited to, Acquired Immune
Deficiency Syndrome (AIDS) cases, organ transplantation, infants requiring
intensive care, and burn cases.  Such
participation includes, but is not limited to, prompt notification to FHS of
all known or suspected catastrophic cases, obtaining prior authorization from
FHS for organ transplantation evaluations and organ transplantations, and utilizing
regional centers designated by FHS for the purpose of delivering specialized
care.  PPG shall abide by the policies
and procedures for catastrophic case management as set forth in the Operations
Manual.

 

2.17        Quality Improvement Program.  PPG
agrees to participate in and cooperate fully with the applicable Quality
Improvement Program and to comply with decisions rendered by FHS in connection
with a Quality Improvement Program.  The
quality of Contracted Services rendered to Members shall be monitored under the
Quality Improvement Program applicable to the particular Benefit Program.  PPG also agrees to provide medical and other
records within five (5) calendar days of receipt of written notice, and review
data and other information as may be required or requested under a Quality
Improvement Program, including reporting in accordance with, but not limited
to, the current Health Plan Employer Data and Information Set (HEDIS), or its
successor.  In the event that PPG’s
performance, including but not limited to, its structures, processes or
outcomes, is found to be unacceptable under any Quality Improvement Program,
FHS shall give written notice to PPG to correct the specified deficiencies
within the time period specified in the notice.  PPG shall correct such deficiencies within that time period.

 

2.18        Preventive Care and Health
Education.  PPG shall provide quality health promotion
and disease prevention programs to Members in a manner which meets specified
criteria outlined in the Operations Manual. 
Such program shall (a) stress healthy lifestyles to minimize health risk
factors and maximize health potential; (b) focus on patient education as a part
of the medical treatment plan directed by physicians; (c) utilize an integrated
and systematic approach to planning, implementing, and evaluating programs
including a physician advisory committee and data collection of program usage
and results; and, (d) delegate responsibility for the program to an interested
and qualified health care professional who will coordinate the program for the
PPG and act as liaison to FHS.

 

2.19        Member Grievance and Appeal
Procedure.  PPG shall participate in and be bound by the
applicable Benefit Program, Member’s Certificate and the applicable Member
grievance and appeal procedure, as set forth in the Operations Manual.

 

2.20        Credentialing of PPG and/or
Participating Providers.  PPG shall submit to FHS the Credentials
Application, as set forth in the Operations Manual.  Such application shall be completed on behalf of PPG, and/or on
behalf of each Participating Provider rendering Covered Services under this
Agreement.  The submitted Credentials
Application is construed to be a part of this Agreement.  If so permitted by State law, and required
and delegated by FHS, the obligations of PPG in Article V also shall
apply.  PPG represents and warrants that
each Member Physician meets the credentialing and recredentialing standards
adopted by FHS set forth in the Operations Manual and that PPG shall perform
credentialing and recredentialing functions in accordance with the Operations
Manual.

 

2.21        Notice of Adverse Action.  PPG
shall notify FHS in writing, within five (5) days of receiving any notice of
any complaint, grievance, appeal, or adverse action, including, without
limitation, (i) any action against any license, certification under Title XVIII
or Title XIX or other applicable statute of the Social Security Act or other
State law, or DEA narcotic registration certificate; (ii) any action which
results in the filing of a report on a Member Physician under California
Business & Professions Code Section 805; (iii) any action by an insurance
carrier indicating that such carrier will cancel or not renew the insurance
coverage required to be carried by a Member Physician as specified in this
Agreement; (iv) any malpractice litigation or settlement involving a Member
Physician;

 

10

 

and
(v) any other event, occurrence or situation which might materially interfere
with, modify or alter performance of any of PPG’s duties or obligations under
this Agreement.  PPG shall maintain a
written record of any Member complaint and provide such record to FHS promptly
upon request.

 

2.22        Insurance.  PPG
shall maintain appropriate insurance programs or policies as follows and in
accordance with the Operations Manual:

 

(a)           PPG agrees to maintain professional liability insurance and managed
care errors and omissions insurance, or other risk protection program, in the
amounts required by law but no less than One Million Dollars ($1,000,000.00)
per claim and Three Million Dollars ($3,000,000.00) annual aggregate and, where
possible, shall name FHS as an additional insured.  Notification to FHS by PPG of cancellation or material
modification of the risk protection program shall be made to FHS at least
thirty (30) days prior to any cancellation. 
Certificates of Coverage or documents evidencing professional liability
insurance or other risk protection required under this subsection shall be
provided to FHS upon request.

 

(b)           PPG shall maintain a policy or program of comprehensive general
liability insurance (or other risk protection) with minimum coverage including
a Combined Single Limit Body Injury and Property Damage Insurance of not less
than One Million Dollars ($1,000,000.00) per claim.

 

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

 

2.23        Conflict of Interest.  PPG
shall not, during the term of this Agreement, acquire, or make any commitment
to acquire a proprietary interest in any organization which is licensed as a
health care service plan or which has submitted an application for such
licensure except as to a health care service plan with waivers.  This restriction shall include any
affiliated, subsidiary or parent organizations to which PPG may belong in which
thirty percent (30%) or more is under common ownership.  “Proprietary Interest”, as used herein,
shall not be deemed to include:

 

(a)           participation as a provider of services for any other health care
service plan or system of prepaid health care delivery; or

 

(b)           ownership of shares having a current value of less than two hundred
fifty thousand dollars ($250,000.00) in a corporation whose shares are
regularly traded in a public market.

 

2.24        Non-Solicitation.  PPG
and Member Physicians shall not, either during or after the term of this
Agreement, solicit any Member to enroll in any other health care service plan
or insurance program for the primary purpose of securing financial gain.  Liquidated damages for such solicitation
resulting in disenrollment of Members from FHS shall be one thousand dollars
($1,000) per Member.  PPG and FHS agree
that the amount stated as liquidated damages are reasonable under the
circumstances existing at the time that this Agreement is executed.  FHS shall have the right to review all
correspondence or communications to Members prior to dissemination or mailing.

 

2.25        Encounter Reporting.  For
HMO Members for which PPG receives Capitation under this Agreement, PPG shall
provide FHS encounter data in accordance with the Operations Manual, via
magnetic media for all Contracted Services provided to HMO Members during a
calendar month within thirty (30) days of the end of the month in which such
services are rendered.  PPG shall also
promptly provide FHS with all corrections to and revisions of such encounter
data.  FHS and PPG shall work in good
faith to eliminate hard copy reports and transition to Electronic Data
Interface (EDI) exchange of information.

 

2.26        Regulatory and Accreditation
Surveys.  PPG shall participate in and assist FHS with
any review conducted by a regulatory agency or any accreditation survey or
study.

 

11

 

2.27        New or Additional Benefit
Plan Designs.  PPG agrees to accept any new or additional
benefit plan designs developed by FHS and shall provide Covered Services
pursuant hereto.  FHS shall determine
appropriate actuarial values, consistent with existing actuarial assumptions,
in order to compensate PPG.

 

III.           DUTIES OF FHS

 

3.1          Enrollment List.  FHS
shall periodically provide PPG with a list of HMO Members assigned to PPG via
electronic transmission or magnetic media. 
FHS shall maintain a system to allow PPG and Member Physicians to make
telephonic or electronic inquiries regarding Member eligibility.

 

3.2          Administration.  FHS
shall perform, or have performed, all necessary administrative, accounting,
enrollment, and other functions appropriate for marketing and administration of
the Benefit Programs contained in this Agreement.

 

3.3          Member-Physician
Relationship.  FHS shall not interfere with the
professional relationship between any Member and his or her Member
Physician(s).  In no event shall FHS
interfere with the responsibilities or legal right of Member Physicians or
other licensed health care providers to discuss with Members information
relevant to such Members’ health care. 
Member Physicians shall have the right to act as an advocate for and to
communicate freely with Members regarding their health care, including, but not
limited to, communications regarding diagnostic and treatment options.

 

3.4          Insurance.  FHS
shall maintain appropriate insurance programs or policies including a policy of
bodily injury and personal injury coverage which includes persons serving on
FHS committees as insured by definition. 
In the event that a policy or program is terminated or the coverage of
committee persons is materially changed, FHS shall so notify PPG.

 

3.5          Timely Assignment of
Members.  FHS shall require Members to select a PCP
and or a participating physician group at the time of enrollment when required
under a Benefit Program.  FHS may assist
Members in such selection by providing information, as determined by FHS,
regarding PCPs and physician groups. 
Nothing in this Agreement shall be construed to require FHS to assign a
minimum or maximum number of Members to PPG or to utilize PPG for any Members in
the Service Area.

 

3.6          Reporting to Regulators.  FHS
shall accept sole responsibility for filing reports, obtaining approvals, and
complying with the applicable laws and regulations of State, federal, and other
regulatory agencies having jurisdiction over FHS; provided, however, that PPG
agrees to cooperate in providing FHS with any information and assistance
reasonably required in connection therewith.

 

3.7          Premiums.  FHS
shall collect all premiums, dues, Member payments, and other items of revenue
to which FHS is entitled, except for Copayments and payments for non-Covered
Services.

 

3.8          Out-of-Area Services.  FHS
shall manage and coordinate out-of-area services.  PPG shall cooperate fully with FHS and shall provide any
information necessary to transfer Members back into the Service Area, including
but not limited to, notification to FHS of known or suspected out-of-area
services.  PPG shall accept the prompt
transfer of Member to the care of PPG and its Participating Providers following
the receipt of out-of-area services when medically appropriate.

 

3.9          Operations Manual.  FHS
shall provide PPG with various Operations Manuals which identify the methods of
administration of this Agreement, including grievance and appeal
procedures.  Utilization/Care Management
Programs, Quality Improvement Programs, encounter reporting procedures, and
billing and accounting

 

12

 

of
Covered Services rendered hereunder. 
Updates to the Operations Manual will be made by FHS and, whenever
possible, shall be sent to PPG for review thirty (30) days prior to
implementation.  Such updates shall not
materially affect the compensation rates or financial responsibility of PPG
under this Agreement.

 

3.10        Marketing Activities.  FHS
shall make reasonable efforts to market the Benefit Programs.  Nothing in this Agreement shall require FHS
to conduct any specific marketing activities on behalf of PPG or to identify
PPG in any specific FHS marketing or informational materials.

 

IV.           COMPENSATION

 

4.1          Compensation Rates.  PPG
and Member Physician shall accept as payment in full for Contracted Services
and all other services rendered to Members under this Agreement the amounts
payable by FHS or a Payor as set forth in the applicable Addendum to this
Agreement.  Except when PPG is paid Capitation,
PPG may require Member Physicians to bill and accept compensation as payment in
full.  PPG shall bill and accept payment
for Contracted Services rendered by Member Physicians, and be responsible for
administering such funds, and compensating Member Physicians therefrom.  When PPG is paid Capitation, FHS reserves
the right to create new benefit plans and to establish capitation rates for new
benefit plans based on actuarial assumptions that are consistent with existing
actuarial assumptions.  FHS shall adjust
the actuarial assumptions which support the rates in the applicable Addenda on
a periodic basis, and shall advise PPG of any such adjustments in
methodology.  Capitation may also be
adjusted in the event benefits are added or deleted from PPG Capitated
Services.

 

PPG shall certify annually in
writing that compensation rates contained herein are comparable to the best
rates offered by PPG to any licensed health care service plan, health
maintenance organization, or any insurer, so that FHS shall not be
competitively disadvantaged in the marketplace.  FHS shall be entitled to reimburse PPG based upon the best rates
as of the effective date of such best rates. 
PPG shall permit, at FHS’ written request, an annual audit conducted by
an independent third party to verify the bestrates certification.  Audit costs shall be borne by FHS.

 

4.2          Performance Incentives.  In
consideration of PPG offering an approved wellness program and their
participation in the Quality of Care Improvement Program, or its successor, as
defined in the Operations Manual, FHS shall reimburse PPG pursuant to the
program set forth in the Operations Manual.

 

4.3          Billing and Payment.

 

(a)           Billing.  PPG
shall submit to FHS via FHS electronic claims submission program or by hard
copy, clean, complete and accurate claims for Contracted Services in accordance
with the Operations Manual and the applicable Benefit Program, unless PPG is
paid Capitation for such services.  PPG
shall submit claims within sixty (60) days of rendering Contracted
Services.  Where FHS is the secondary
payor under Coordination of Benefits, such sixty (60) day period shall commence
immediately after the primary payor has paid or denied the claim.  In the event PPG is capitated and elects to
purchase reinsurance from FHS, PPG shall submit reinsurance claims within sixty
(60) calendar days of the end of the annual reinsurance period.

 

FHS shall not be under any
obligation to pay PPG for any claim not timely submitted as set forth
above.  PPG shall not seek payment from
any Member in the event FHS does not pay PPG for a claim not timely submitted.

 

(b)           Payment.  Unless a claim
is disputed, FHS or a Payor shall pay PPG’s clean, complete, accurate and
timely submitted claims for Contracted Services rendered to a Member, in
accordance with applicable State and federal law.

 

13

 

(c)           Adjustments and Appeals.  PPG
or Member Physicians shall submit requests for adjustments and/or appeals
regarding claim payments to FHS within sixty (60) calendar days after the date
of the payment of such claim to PPG or Member Physician.  In the event PPG or Member Physician fails
to appeal a claim within such time period, PPG or Member Physician shall not have
the right to appeal such claim.

 

(d)           Offsetting.  FHS
shall have the right to offset any amounts owed to FHS by PPG, including but
not limited to, amounts owed by PPG under loans guaranteed by FHS, errors, or
FHS interim payment for Contracted Services, including Capitation
payments.  Effective July 1, 1998 and
notwithstanding any other provision of this Agreement or any other contract to
the contrary, only deficits in the shared risk programs which provide financial
incentives for the control or management of Shared Risk Services’ expenses or
utilization will neither be collected from PPG by FHS nor offset against PPG
Capitation; provided however, that FHS shall not be restricted from (i)
offsetting such deficits against payments to PPG including, but not limited to,
surpluses from other shared risk programs, stop loss payments, bonus or other
incentive program payments; (ii) establishing reasonable withholds from
Capitation approved by DOC as set forth in the applicable Addendum to offset
PPG liability when the cost of Shared Risk Services exceed the Shared Risk
Budget (Withhold Fund); or (iii) carrying forward such shared risk program
deficits to be applied against future year’s program surpluses and Withhold
Fund.  Each PPG numbered site shall be
calculated as a separate entity and any payments to or from PPG with multiple
sites shall be net amount due/owed from all sites.  In no event shall PPG be required to make any cash payment to FHS
for any deficit in a shared risk program for institutional services.

 

(e)           Reciprocity.  PPG
shall cooperate and develop arrangements with FHS and Participating Providers
to assure reciprocity of the rates for Covered Services for Members who are not
assigned to PPG.  FHS shall, where,
contractually available, provide reciprocity to FHS rates for Covered Services
provided to PPG’s assigned Members.  FHS
shall adjudicate and pay such referred claims on behalf of PPG (at available
reciprocity rates or, if reciprocity rates are unavailable, at rates negotiated
in consultation with PPG), shall deduct the costs of such claims from PPG’s
monthly Capitation, and shall provide PPG an accounting thereof.

 

PPG
agrees that FHS may allow the compensation rates set forth in this Agreement to
be used by other Participating Providers who may from time to time be
responsible for compensating PPG for Covered Services rendered by PPG to a
Member.

 

4.4          Reconciliation of
Eligibility.  In the event of a retroactive cancellation
or addition of an HMO Member, FHS shall adjust Capitation accordingly but no
later than 180 days from the date of the change in eligibility, unless
otherwise required by HCFA in regard to Medicare Members.  In the event Contracted Services are
provided to an individual who is not a Member, based on an erroneous or delayed
enrollment list or confirmation of enrollment of said individual by FHS, FHS
shall be financially responsible for all such services provided by PPG prior to
the time PPG received notice of that person’s ineligibility, except when the
individual is enrolled in another health care service plan or insurance program
from whom PPG or Participating Provider has or may receive capitation or other
payment for the individual.  In the
event FHS is financially responsible, FHS shall pay PPG at the fee-for-service
rates in Addendum E when PPG supplies FHS with evidence that it has
unsuccessfully sought payment through two billing cycles for all or a portion
of such charges from the patient, or the person having legal responsibility for
the patient or the entity having financial responsibility for such payment.  In the event FHS pays PPG pursuant to this
Section, PPG shall have no further right and shall not attempt to collect any
additional payment from the patient for said services and PPG shall be deemed
to have transferred all legal rights of collection and Coordination of Benefits
for services to FHS.

 

4.5          Extension of Benefit Members.  When
PPG is capitated, PPG’s Capitation for a Member who is or becomes eligible for
coverage under the extension of benefits provisions of the Member’s Coverage

 

14

 

Certificate
shall be equal to the current amount for the plan type under which the Member
is or was enrolled PPG shall provide services to any Member who is totally
disabled on the original date of the Member’s FHS coverage.  In the event payment for such Contracted
Services is obtained by FHS from a prior carrier as an extension of benefits,
FHS shall reimburse PPG to the extent payment is received from the prior
carrier.

 

4.6          Collection from Member.  PPG
shall collect all Copayments due from Members, and shall not waive or fail to
pursue collection of Copayments from Members. 
PPG shall not charge a Member any fees or Surcharges for Covered
Services rendered pursuant to this Agreement, except for authorized Copayments.  In addition, PPG shall not collect a sales,
use or other applicable tax from Members for the sale or delivery of Covered
Services.  If FHS receives notice of any
additional charge, FHS shall take appropriate action.  PPG may bill a Member for non-Covered Services rendered by PPG to
such Member only if the Member is notified in advance that the services to be
provided are not covered under the Member’s Benefit Program, and the Member
requests in writing that PPG render the non-Covered Services, prior to PPG’s
rendition of such services.

 

4.7          Member Held Harmless.  PPG
agrees that in no event, including, but not limited to, non-payment by FHS,
insolvency of FHS, or breach of this Agreement, shall PPG bill, charge, collect
a deposit from, seek compensation, remuneration, of reimbursement from, or have
any recourse against Members, the State, or persons other than FHS for Covered
Services provided pursuant to this Agreement. 
This provision shall not prohibit collection of Copayments or any
amounts due for services which are determined not to be Covered Services in
accordance with the terms of the applicable Benefit Program.

 

PPG further agrees that: (a)
this provision shall survive the termination of this Agreement regardless of
the cause giving rise to termination and shall be construed to be for the
benefit of Members; and (b) this provision supersedes any oral or written
contrary agreement existing or hereafter entered into between PPG and Members
or persons acting on their behalf.  Any
modification, addition, or deletion of or to the provisions of this clause
shall be effective on a date no earlier than fifteen (15) days after the State
regulatory agency has received written notice of such proposed change and has
approved such change.

 

4.8          Coordination of Benefits.  PPG
agrees to conduct Coordination of Benefits in accordance with the policies and
procedures in the Operations Manual, including but not limited to, the prompt
notification to FHS of any third party entity who may be responsible for
payment and collection of Copayments. 
PPG shall not bill Members for any portion of Contracted Services not
paid by the primary carrier when FHS is the secondary carrier, but shall seek
payment from FHS.  When FHS is secondary
under the Coordination of Benefit rules, FHS shall pay PPG only those amounts
which, when added to the amount paid to PPG from other sources, equals the
amount due to PPG under this Agreement in the absence of other sources of
payment.  Any legal right to collection
of overpayments from FHS which may occur under this Section shall be deemed to
be transferred from PPG to FHS if PPG has been paid in full according to the
primary carrier’s contracted rate.  PPG
shall report on a monthly basis, the nature and extent of all Coordination of
Benefits recoveries for services rendered by PPG under this Agreement.  Such recoveries shall be performed in
accordance with the applicable Evidence of Coverage and FHS’ policies set forth
in the Operations Manual.

 

4.9          Third Party Recoveries,
Worker’s Compensation.  In the event PPG provides services to FHS
Members for injuries resulting from the acts of third parties, or resulting
from work related injuries, PPG shall have the right to recover from any
settlement, award, or recovery from any responsible third-party the full value
of Covered Services rendered pursuant to the applicable provisions of the
Coverage Certificate and as set forth in the Operations Manual.  PPG shall notify FHS of any third party
payor and shall, upon request from FHS, provide FHS with an accounting of all
such sums recovered.

 

4.10        Audit of Claims.  FHS
shall have the right to review and audit any claims and to reconcile any
amounts accordingly.

 

15

 

4.11        Reinsurance.  For
selected Benefit Programs, FHS shall provide certain stop loss and reinsurance
programs designed to protect the PPG from excessive financial risk.  Such programs are specified in the
applicable Addendum.  FHS shall charge
PPG a premium in consideration for these programs.  Notwithstanding any other provision in this Agreement, FHS may
adjust the premium and thresholds for such programs by providing sixty (60)
days prior written notice to PPG.

 

PPG may elect not to
participate in certain stop loss and reinsurance programs effective the first
day of any calendar year provided that PPG provides written notice to FHS at
least sixty (60) calendar days prior to the beginning of the calendar year that
PPG shall not participate in the stop loss program and specifies the name of the
third party insurance carrier and proposed effective date, coverage levels and
charges.  In such event, PPG shall be
required to obtain stop loss coverage in the amounts required by FHS and State
and federal law from a third party insurance carrier acceptable to FHS.  If FHS does not object to such coverage in
writing within fifteen (15) days of the date of the notice, PPG shall be
required to purchase such coverage as of the effective date specified in the
notice.  If such notice is not received
when due or if coverage levels are not acceptable, FHS shall automatically
enroll PPG in its programs to afford protection effective on the first day of
the calendar year.

 

PPG shall submit claims under
the applicable stop loss and reinsurance programs in accordance with the
procedures set forth in the Operations Manual but no later than sixty (60)
calendar days following the end of the calendar year.  For purposes of calculating stop loss and reinsurance thresholds,
the following shall apply: (i) for PPG and Member Physicians, the compensation
schedule set forth in Addendum E shall be utilized, (ii) for any other Provider
who is subcontracted to PPG, such subcontract rates shall be utilized; (iii)
for a Participating Provider who is not subcontracted with PPG but is contracted
with FHS, FHS’ contract rate shall be utilized; or (iv) the actual charges paid
by PPG when none of the above applies. 
FHS shall compensate PPG for claims in excess of the stop loss threshold
at seventy-five percent (75%) of the fee-for-service rates in Addendum E unless
otherwise provided for in an applicable Addendum, less applicable Copayments,
coinsurance, deductibles and payments from third parties or Coordination of
Benefits.

 

V.            DELEGATION

 

5.1          Delegation of Certain
Functions.  If qualified, as determined by FHS, PPG
shall accept delegation of and perform such utilization management,
credentialing and recredentialing, Member grievance and appeal, medical record
review, and capitation and claims adjudication functions, in accordance with the
performance standards and criteria of FHS as set forth in the Operations
Manual.  PPG shall ensure the timely
payment of Covered Services rendered by referral health professionals and shall
perform such claims processing in accordance with applicable Benefit Program
and Operations Manual.

 

5.2          Termination of Delegation.  FHS
shall have the right to audit PPG’s performance of utilization management,
credentialing and recredentialing, Member grievance and appeal, medical record
review, and capitation and claims adjudication functions from time to
time.  If FHS determines that
deficiencies exist in PPG’s performance, PPG shall accept consulting assistance
from FHS.  Failure to cure any
identified deficiencies within a reasonable period of time as defined by FHS
policies, or if FHS determines PPG does not have the ability to perform
delegated functions, or is not effectively performing delegated functions, FHS
may revoke delegation of all or any of these functions in accordance with
procedures set forth in the Operations Manual and re-assume the performance of
such functions itself.  Should it become
necessary for FHS to reassume delegated functions, FHS shall charge the
following administrative fees: utilization management 4% of PPG Capitation:
claims processing 3.5% of PPG Capitation.

 

VI.           TERM AND TERMINATION

 

6.1          Term.  The
term of this Agreement shall commence on the date set forth on the first page
of this

 

16

 

Agreement
and shall continue for a period of twelve (12) months.  This Agreement shall automatically renew for
successive one year periods on the annual renewal date, unless terminated as
set forth herein.  The term of this Agreement
shall remain the same for all Benefit Programs covered hereunder.

 

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

 

6.3          Immediate Termination.  FHS
may terminate this Agreement immediately upon notice to PPG, in the event
of:  (a) PPG’s violation of any
applicable law, rule or regulation; (b) PPG’s failure to maintain the
professional liability insurance coverage specified hereunder; (c) PPG’s
failure to comply with the terms, conditions or determinations of any
Utilization/Care Improvement Program or Quality Improvement Program, or Benefit
Program; or, (d) FHS’ determination that the health, safety or welfare of any
Member may be in jeopardy if this Agreement is not terminated.

 

6.4          Termination for Failure to
Pay.  In the event FHS fails to make payments to
PPG under the terms and conditions of this Agreement within the times set forth
herein, PPG may terminate this Agreement, but only if FHS has failed to make
such payments following ten (10) business days prior written notice from PPG.  PPG may not terminate this Agreement after
giving such notice unless PPG has first made itself available to meet with FHS
to attempt in good faith to resolve the matter.

 

6.5          Termination Due to Material
Breach Other Than Non-Payment.  Except as set forth in above;
in the event that either PPG or FHS fails to cure a material breach of this
Agreement within thirty (30) days of receipt of written notice of such breach
from the other party, the non-defaulting party may terminate this
Agreement.  If the breach is cured
within such thirty (30) day period, or if the breach is one which cannot
reasonably be corrected within thirty (30) days, and the non-defaulting party
determines that the defaulting party is making substantial and diligent
progress toward correction during such thirty (30) day period, this Agreement
shall remain in full force and effect.

 

6.6          Termination of an Affiliate.  In
the event FHS ceases to own fifty-one percent (51%) or more of the voting
stock, or to manage or have a FHS subsidiary manage, an entity, such entity shall
cease being a FHS Affiliate hereunder. 
Effective on the date FHS ceases to own fifty-one percent (51%) or
manage, or an FHS subsidiary ceases to manage, the entity, such entity shall no
longer be a party to this Agreement and the terms and conditions hereunder
shall not apply to such entity.

 

In the event the terminated Affiliate under
this Section 6.6 is a licensed health care service plan, such Affiliate and PPG
understand and agree that Sections 6.7, 6.8 and 6.9 of the Agreement shall
apply to such Affiliate and the Members of such Affiliate.

 

6.7          Effect of Termination.  In
the event that a Member is receiving Contracted Services at the time this
Agreement terminates, PPG shall continue to provide Contracted Services to the
Member until the later of:   (a)
treatment is completed; (b) the Member is discharged from an inpatient
facility; (c) the Member is assigned to another Participating Provider; or (d)
the anniversary date of the Member’s Coverage Certificate, if requested by
FHS.  Compensation for such Contracted
Services shall be at the rates contained in the applicable Addendum Termination
of this Agreement shall not affect any right or obligations hereunder which
shall have previously accrued, or shall thereafter arise with respect to any
occurrence prior to termination, and such rights and obligations shall continue
to be governed by the terms of this Agreement.

 

6.8          Termination Withhold from
Capitation.  In the event either party gives the other
party notice

 

17

 

of
termination as set forth in this Article, FHS may, at its sole discretion,
withhold up to one-third of each of the final three months of Capitation due
PPG.  If FHS exercises its option to
transition HMO Members prior to the end of the termination notice period, FHS
may withhold the entire last month’s Capitation.  FHS may use such funds to offset any PPG liability to FHS or for
payment of PPG Capitated Services on behalf of PPG.  FHS shall pay PPG simple interest on all funds withheld as set
forth in this Section at the interest rate per annum which shall be the lower
of five percent (5%) or the prime interest rate, e.g. the base rate on
corporate loans posted by at least seventy five percent (75%) of the nation’s
thirty largest banks, as of the last business day in December of the prior
contract year.  PPG understands and
agrees that a decision by FHS to withhold any Capitation shall not relieve PPG
of its obligations to perform under this Agreement.  All amounts withheld by FHS and all interest accrued on such
amounts as set forth in this Section shall be included in any calculations
regarding a final settlement between the parties.

 

Notwithstanding any other
provision of this Agreement, in the event FHS decides to withhold Capitation
from PPG as set forth in this Section, FHS may, upon three days prior written
notice to PPG, administer or oversee all or part of PPG Capitated Services on
behalf of PPG.  PPG agrees to fully
cooperate with FHS in the administration of such claims, including providing
all necessary information, and to take no action which may jeopardize the
payment of such claims.

 

6.9          Financial Settlement Upon
Termination.  Within one hundred eighty (180) calendar
days of the effective date of termination of this Agreement, an accounting
shall be made by FHS of the monies due and owing either party and payment shall
be forthcoming by the appropriate party to settle such balance within thirty
(30) calendar days of such accounting. 
PPG may request an independent audit of such FHS accounting.  Such audit may be performed by a mutually
acceptable independent certified public accountant and shall be paid for solely
by PPG.  In the event such independent
audit results in findings different from FHS’s findings, the parties shall meet
and confer to resolve such differences.

 

VII.         RECORDS, AUDITS AND REGULATORY REQUIREMENTS

 

7.1          Medical and Other Records.  PPG
shall prepare and maintain all medical and other books and records required by
law in accordance with the general standards applicable.  PPG shall maintain such records for at least
seven (7) years after the rendering of Contracted Services and records of a
minor child shall be kept for at least one (1) year after the minor has reached
the age of eighteen (18), but in no event less than seven (7) years.  Additionally, PPG shall maintain such
financial, administrative and other records as may be necessary for compliance
by FHS with all applicable local, State, and federal laws, rules and regulations.  PPG agrees to submit upon request such
reports and financial information as is necessary for FHS to comply with
regulatory requirements to monitor the financial viability of PPG.

 

7.2           Access to Records; Audits.  The
records referred to above shall not be removed or transferred from PPG except
in accordance with applicable local, State, and federal laws, rules and
regulations.  Subject to applicable
State and federal confidentiality or privacy laws, FHS or its designated
representatives, and designated representatives of local, State, and federal
regulatory agencies having jurisdiction over FHS shall have access to PPG’s
records, at PPG’s place of business on request during normal business hours, to
inspect and review and make copies of such records.  Such governmental agencies shall include, but not be limited to,
when applicable to the Benefit Programs identified on Addendum A, the DHS, the
DHHS, the DOC, the DOD and the DOJ. 
When requested by FHS, PPG shall produce copies of any such records at
no cost.  Additionally, PPG agrees to
permit FHS, and its designated representatives, accreditation organizations,
and designated representatives of local, State, and federal regulatory agencies
having jurisdiction over FHS or any Payor, to conduct site evaluations and
inspections of PPG’s offices and service locations.

 

7.3          Continuing Obligation.  The
obligations of PPG under this Article shall not be terminated upon

 

18

 

termination
of this Agreement, whether by rescission or otherwise.  After termination of this Agreement, FHS and
Payors shall continue to have access to the other party’s records as necessary
to fulfill the requirements of this Agreement and to comply with all applicable
laws, rules and regulations.

 

VIII.        GENERAL PROVISIONS

 

8.1          Amendments. 
Except as provided herein, FHS and PPG may only amend this Agreement by
written mutual consent.  Amendments
required because of legislative, regulatory or legal requirements do not
require the consent of PPG or FHS and will be effective immediately on the
effective date thereof.  Any amendment
to this Agreement requiring prior approval of or notice to any federal or State
regulatory agency shall not become effective until all necessary approvals have
been granted or all required notice periods have expired.

 

8.2          Separate Obligations.  The
rights and obligations of under this Agreement shall apply to each Affiliate
listed on Addendum A to this Agreement only with respect to the Benefit
Programs of such Affiliate.  No such
Affiliate shall be responsible for the obligations of any other Affiliate under
this Agreement with respect to the other Affiliate’s Benefit Programs.  The person executing this Agreement has been
duly authorized by each Affiliate to execute this Agreement on such Affiliates
behalf.  In no event shall FHS or any
FHS Affiliate be responsible for any payment which is the financial
responsibility of a Payor and PPG shall seek compensation for such services
only from Payor.

 

8.3          Assignment. 
Neither party shall assign its rights nor delegate its duties and
obligations hereunder without the prior written consent of the other party;
provided, however FHS shall have the right to automatically assign this
Agreement to any entity which controls, is controlled by, or is under common
control with FHS.  PPG agrees to provide
prior written notice to FHS of its intent to either sell, transfer or convey its business assets to another
entity or enter into a management contract with a physician practice management
entity which does not manage PPG as of the effective date of this Agreement.

 

In the event PPG (1) files a petition in
bankruptcy, makes a general assignment for the benefit of creditors or has a
petition in bankruptcy filed against it, a receiver or trustee appointed over
its assets, or an attachment, seizure, lien or levy made against a substantial
portion of its assets; or (2) becomes otherwise incapable, as determined by FHS
of performing basic functions associated with operating a medical group or
performing its duties and responsibilities under this Agreement, including but
not limited to, claims payment, medical management, and quality assurance then,
PPG agrees to make full assignment (not including any delegation of prior
obligations) of its provider contracts to FHS. 
Nothing in this paragraph shall be construed to mean that PPG cannot or
shall not contract or re-contract with the same physicians, medical groups and
ancillary providers for other lines of business and or for the same lines of
business with other health plans-which rights are hereby expressly retained by
PPG.

 

8.4          Confidentiality.  FHS
and PPG agree to hold all confidential or proprietary information or trade
secrets of each other in trust and confidence and agree that such information
shall be used only for the purposes contemplated herein, and not for any other
purpose.  Specifically, PPG acknowledges
that the names, addresses and other identifying information concerning Members
and employers and other groups contracting with FHS constitute confidential
information which derives independent economic value from not being generally
known or readily accessible to others who can obtain economic value from its
disclosure or use.  FHS acknowledges
that the names contracts, addresses, and other information concerning Member
Physicians, employees and other providers and other groups contracting with PPG
constitute proprietary information of PPG. 
FHS shall use such information only as necessary and appropriate for the
performance of its obligations under this Agreement.  In the event FHS could obtain such information from a source
other than PPG such information shall not be proprietary to PPG.  Neither PPG, a Member Physician, nor FHS
shall disclose the terms of this Agreement except as may be required by law;
provided, however, nothing herein shall prohibit PPG or a Member Physician from
disclosing to a Member any information the PPG or Member Physician determines
is relevant to the Member’s care including the basic method of

 

19

 

reimbursement
and whether financial bonuses or incentives are used.

 

8.5          Provider Dispute Resolution
Procedure.  FHS has established a Provider Dispute
Resolution Procedure under which PPG may submit disputes to FHS.  The Provider Dispute Resolution Procedure
which contains the procedures for processing and resolving such disputes
including the location and telephone number where information regarding
disputes may be submitted, is set forth in the Operations Manual.  Any provider dispute which is not resolved
informally through the Provider Dispute Resolution Procedure may be submitted
for arbitration as provided in Section 8.6 below.

 

8.6          Binding Arbitration.  PPG
and FHS agree to meet and confer in good faith to resolve any problems or
disputes that may arise under this Agreement. 
Such good faith meet and confer shall be a condition precedent to the
filing of any arbitration demand by either party.  In addition, should the parties, prior to submitting a dispute to
arbitration, desire to utilize other impartial dispute settlement techniques
such as mediation or fact-finding, a joint request for such services may be
made to the American Arbitration Association (“AAA”), Judicial Arbitration and
Mediation Services (“JAMS”), or the parties may initiate such other procedures
as they may mutually agree upon at such time. 
Notwithstanding the foregoing, nothing contained herein is intended to
require arbitration of disputes for medical malpractice between a Member and
the PPG.

 

The parties further agree
that any controversy or claim arising out of or relating to this Agreement, or
the breach thereof, whether involving a claim in tort, contract, or otherwise,
shall be settled by final and binding arbitration, upon the motion of either
parry, to arbitration under the appropriate rules of the AAA or JAMS, as agreed
by the parties.  The arbitration shall
be conducted in Sacramento, Los Angeles, or San Francisco, California by a
single, neutral arbitrator who is licensed to practice law.  The written demand shall contain a detailed
statement of the matter and facts and include copies of all related documents
supporting the demand.  Arbitration must
be initiated within six (6) months after the alleged controversy or claim
occurred by submitting a written demand to the other parry.  The failure to initiate arbitration within
that period shall mean the complaining party shall be barred forever from
initiating such proceedings.

 

All such arbitration
proceedings shall be administered by the AAA or JAMS, as agreed by the parties;
however, the arbitrator shall be bound by applicable state and federal law, and
shall issue a written opinion setting forth findings of fact and conclusions of
law.  The parties agree that the
decision of the arbitrator shall be final and binding as to each of them.  Judgment upon the award rendered by the
arbitrator may be entered in any court having jurisdiction.  The arbitrator shall have no authority to
make material errors of law or to award punitive damages or to add to, modify,
or refuse to enforce any agreements between the parties.  The arbitrator shall make findings of fact
and conclusions of law and shall have no authority to make any award which
could not have been made by a court of law. 
The party against whom the award is rendered shall pay any monetary
award and/or comply with any other order of the arbitrator within sixty (60)
days of the entry of judgment on the award, or take an appeal pursuant to the
provisions of the California Civil Code. 
The parties waive their right to a jury or court trial.

 

In all cases submitted to
arbitration, the parties agree to share equally the administrative fee as well
as the arbitrator’s fee, if any, unless otherwise assessed by the
arbitrator.  The administrative fees
shall be advanced by the initiating party subject to final apportionment by the
arbitrator in this award.

 

8.7          Indemnification of Parties.

 

(a)           PPG agrees to indemnify, defend, and hold harmless FHS, its agents,
officers, and employees from and against any and all liability expense
including defense costs and legal fees incurred in connection with claims for
damages of any nature whatsoever, including but not limited to, bodily injury,
death, personal injury, or property damage arising from PPG’s performance or
failure to perform its obligations hereunder.

 

(b)           FHS agrees to indemnify, defend, and hold harmless PPG, its agents,
officers, and

 

20

 

employees from and against any and all
liability expense, including defense costs and legal fees incurred in
connection with claims for damages of any nature whatsoever, including but not
limited to, bodily injury, death, personal injury, or property damage arising
from FHS’ performance or failure to perform its obligations hereunder

 

8.8          Status as Independent
Entities.  None of the provisions of this Agreement is
intended to create or shall be deemed or construed to create any relationship
between PPG and FHS other than that of independent entities contracting with
each other solely for the purpose of effecting the provisions of this
Agreement.  Neither PPG nor FHS, nor any
of their respective agents, employees, or representatives shall be construed to
be the agent, employee or representative of the other.

 

8.9          Cooperation of Parties.  The
parties shall cooperate in administering and determining Member benefits under
the applicable Coverage Certificate in accordance with the Operations Manual
and as agreed to by the parties.  PPG
understands and agrees that PPG is not authorized to make nor shall it make any
variances, alterations, or exceptions to the provisions, terms, and conditions
of a Member’s Coverage Certificate.  FHS
shall have the final decision-making authority between the parties for payment
of claims for Covered Services rendered to Members, determination of Covered
Services, including Medically Necessary Services, determination of eligibility
and determination of Members’ benefits under the applicable Benefit
Program.  Notwithstanding the foregoing.  PPG and Member Physicians shall be solely
responsible for providing Contracted Services to Members.  The parties shall refrain from unduly
criticizing each other, especially in the presence of third parties and shall
attempt to resolve all issues in a cooperative and professional manner.

 

8.10        Use of Name.  Each
party agrees that the other party may not list the name, address, telephone
number and other factual information of the other party in its marketing and
informational materials without such party’s prior written consent, provided
FHS shall be entitled to list PPG’s information in any FHS provider directory.

 

8.11        Non-Exclusive Contract.  This
Agreement is non-exclusive and shall not prohibit PPG or FHS from entering into
agreements with other health care providers or purchasers of health care services.

 

8.12        No Third Party Beneficiary. 
Nothing in this Agreement is intended to, nor shall be deemed or
construed to create, any rights or remedies in any third party, including a
Member.  Nothing contained herein shall
operate (or be construed to operate) in any manner whatsoever to increase the
rights of any such Member or the duties or responsibilities of PPG or FHS with
respect to such Members.

 

8.13        Notice.  Any
notice required or desired to be given under this Agreement shall be in writing
and shall be sent by certified mail, return receipt requested, postage prepaid,
or overnight courier, or facsimile, addressed as follows:

 

FHS

C/O Health Net

21600 Oxnard Street

Woodland Hills, California
91367

Attention: Vice President,
Provider Network Management

 

PPG:        Gateway Medical Group, Chief Executive Officer

710 N Euclid Street, 4th Floor

Anaheim, California 92801

 

The addresses to which notices are to be sent
may be changed by written notice given in accordance with this Section.

 

21

 

8.14        Severability.  If
any provision of this Agreement is rendered invalid or unenforceable by any
local.  State, or federal law, rule or
regulation, or declared null and void by any court of competent jurisdiction,
the remainder of this Agreement shall remain in full force and effect.

 

8.15        Addenda.  Each
Addendum to this Agreement is made a part of this Agreement as though set forth
fully herein.  Any provision of an
Addendum that is in conflict with any provision of this Agreement shall take
precedence and supersede the conflicting provision of this Agreement.

 

8.16        Regulatory Approval.  If
FHS has not been licensed to provide, or provides services in connection with,
a particular Benefit Program in a particular State, or has not received all
required regulatory approvals for use of this Agreement with respect to the
Benefit Program in the State prior to the execution of this Agreement, this
Agreement shall be deemed to be a binding letter of intent with respect to such
Benefit Program in the State.  In such
event, this Agreement shall become effective with respect to any such Benefit
Program in the State on the date that the required licensure and regulatory
approvals are obtained.  If FHS is
unable to obtain such licensure or regulatory approvals after due diligence,
FHS shall notify PPG and both parties shall be released from any liability
under this Agreement with respect to the Benefit Program in question in the
applicable State; provided however, that if such licensure or regulatory
approval is conditioned upon amendment of this Agreement, then this Agreement
shall be amended automatically pursuant to this Article.

 

8.17        Headings.  The
headings of articles and paragraphs contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.

 

8.18        Entire Agreement. 
Except as expressly provided in the applicable Addendum, this Agreement
including its Addendum supersedes any and all other agreements, either oral or
written, between the parties with respect to the subject matter hereof, and no
other agreement, statement or promise relating to the subject matter of this
Agreement shall be valid or binding.

 

8.19        Governing Law.  This
Agreement shall be governed by and construed and enforced in accordance with
the laws of the State, except to the extent such laws conflict with or are
preempted by any federal law in which case such federal law shall govern.  Federal law shall also govern with respect
to federal Benefit Programs.  In
addition, FHS is subject to the requirements of Chapter 2.2 of Division 2 of
the California Health and Safety Code and of Subchapter 5.5 of Chapter 3 of
Title 10 of the California code of Regulations.  Any provision required to be in this Agreement by either of the
above shall bind the parties whether or not provided in this Agreement.

 

22

 

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

 

 

	
  Participating
  Physician Group

  	
   

  	
  Foundation
  Health Systems Affiliates

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  /s/ Marlean Free

  	
   

  	
  /s/ Christopher Ciano

  	
   

  
	
  Signature

  	
   

  	
  Signature

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  MARLEAN FREE

  	
   

  	
   

  	
   

  
	
  Print Name

  	
   

  	
  Christopher Ciano

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  DIRECTOR

  	
   

  	
   

  	
   

  
	
  Title

  	
   

  	
  Senior Vice President
  & General Manager - South

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  7/15/99

  	
   

  	
  8-24-99

  	
   

  
	
  Date

  	
   

  	
  Date

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  33-0843838

  	
   

  	
   

  	
   

  
	
  Federal Tax Identification
  Number

  	
   

  	
   

  	
   

  

 

23

 

ADDENDUM A

 

BENEFIT PROGRAMS AND AFFILIATES

 

I.              BENEFIT PROGRAMS

 

Benefit Program participation included under this Agreement is as
follows:

 

	
  BENEFIT PROGRAM

  	
   

  	
  ADDENDUM

  	
   

  	
  PPG

  PARTICIPATION

  Yes/No

  	
   

  
	
  Standard HMO

  	
   

  	
  B

  	
   

  	
  Yes

  	
   

  
	
  Flex Funded HMO

  	
   

  	
  B

  	
   

  	
  Yes

  	
   

  
	
  Small Group HMO

  	
   

  	
  B

  	
   

  	
  Yes

  	
   

  
	
  Individual HMO

  	
   

  	
  B

  	
   

  	
  Yes

  	
   

  
	
  AIM

  	
   

  	
  B

  	
   

  	
  Yes

  	
   

  
	
  Medicare
  Supplement

  	
   

  	
  B

  	
   

  	
  Yes

  	
   

  
	
  Commercial POS

  	
   

  	
  B

  	
   

  	
  Yes

  	
   

  
	
  Medicare HMO

  	
   

  	
  C

  	
   

  	
  Yes

  	
   

  
	
  Medicare POS

  	
   

  	
  C

  	
   

  	
  Yes

  	
   

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

  	
   

  	
  D

  	
   

  	
  Yes

  	
   

  
	
  Medi-Cal

  	
   

  	
  F

  	
   

  	
  No

  	
   

  
	
  CHAMPUS

  	
   

  	
  G

  	
   

  	
  Yes

  	
   

  
	
  Occupational
  Medicine

  	
   

  	
  H

  	
   

  	
  Yes

  	
   

  

 

II.            AFFILIATES

 

Upon execution of this
Agreement, the Affiliates primarily using this Agreement include, but are not
limited to the following: Health Net; Foundation Health, a California Health
Plan; Health Net Life Insurance Company; Qualmed Life and Health Insurance
Company; Foundation Health National Life Insurance Company; Business Insurance
Group, Inc.; Business Insurance Company; California Compensation Insurance
Company; Combined Benefits Insurance Company; Commercial Compensation Insurance
Company; Foundation Health Federal Services Inc.; Foundation Health Medical
Resource Management; Preferred Health Network Inc.; and Foundation Health
Systems Life and Health Insurance Company. 
The Affiliates are defined in Section 1.1 of this Agreement.

 

Notwithstanding the
foregoing, PPG agrees that any other Affiliate of FHS not listed above may
access the rates set forth in this Agreement and Addenda.  This would include Members of non-California
based affiliates who may be treated by PPG.

 

24

 

III.           MAIN/SATELLITE OFFICES

 

	
  PPG #

  	
   

  	
  Main and Satellite Offices

  	
   

  	
  Addresses

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

25

 

ADDENDUM B

 

COMMERCIAL HEALTH MAINTENANCE ORGANIZATION (HMO) AND
COMMERCIAL POINT

OF SERVICE (POS) BENEFIT PROGRAMS

 

A.            GENERAL REIMBURSEMENT
PROVISIONS.

 

1.             PPG
understands and agrees that the obligations of FHS set forth in this Addendum
are only the obligations of Health Net (hereafter “HMO”) and not the obligations
of FHS or any other Affiliate of FHS. 
PPG shall be compensated according to this Addendum B and this Addendum
shall be applicable to only those Commercial HMO and Commercial POS Members
listed on the applicable Capitation remittance summaries. Pursuant to Section
8.18, Entire Agreement, PPG understands and agrees that the compensation
and provisions under the agreement between PPG and the entity formerly known as
Foundation Health, a California Health Plan, are applicable to those Commercial
HMO and Commercial POS Members listed on the Foundation Health capitation
remittance summary, and that the Foundation Health agreement shall remain in
full force and effect for those Members until such time those Members are no
longer enrolled in Foundation Health Benefit Programs.

 

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

•      Commercial HMO

•      Standard HMO

•      Flex Funded HMO

•      Small Group HMO

•      Individual HMO

•      AIM

•      Medicare Supplement

•      Commercial POS

 

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

 

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

 

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

 

26

 

B.            STANDARD HMO.

 

1.             Professional Capitation
Rates.

 

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

 

	
  Period

  	
   

  	
  Standard

  HMO Capitation

  
	
  March
  1, 1999

  	
   

  	
  ***PMPM

  

 

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

 

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

 

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

 

 

	
  Period

  	
   

  	
  Standard

  HMO Shared Risk Budget 

  
	
  March
  1, 1999

  	
   

  	
  ***PMPM

  

 

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

 

Each Reconciliation Period,
HMO shall calculate Shared Risk Claims in accordance with the Operations Manual
and compare such claim cost to the corresponding Shared Risk Budget.  HMO shall perform both an interim and final
settlement.  In the event that such
claims are less than the Shared Risk Budget for the Interim Period, PPG’s share
of the settlement shall be seventy-five percent (75%),  subject to Section 4.3 of this Agreement.

 

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

 

3.3          Shared Risk Budget Surplus.  In
the event of a Shared Risk Budget surplus PPG’s share of the surplus shall be
limited to the lesser of (a) *** of the Shared Risk Budget surplus, or (b) an
amount not to exceed *** of the annual gross PPG Capitation.  Subject to Section 43 of the

 

27

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

4.             AIDS and Transplant
Reinsurance Programs.  On a network wide basis, reinsurance
programs shall be established by HMO to cover the cost of organ transplants for
Members, the payment of expenses incurred in the treatment of Members who have
been diagnosed with Acquired Immune Deficiency Syndrome (“AIDS Members”), and
to cover the costs for Members who transfer from one participating physician
group to another while undergoing acute treatment.

 

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

 

4.2          Transplant Reinsurance. 
Professional and institutional costs related to organ transplantation
shall be the financial responsibility of HMO, as set forth in the Operations
Manual.  PPG shall refer Members to
HMO’s designated regional transplant centers to qualify for payment of the
organ transplant costs under this Program. 
In the event PPG refers a transplant case to a facility that is not an
HMO-designated regional transplant center, those claims shall not be eligible
for payment under this Program.

 

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

 

28

 

	
  •

  	
   

  	
  AIDS Reinsurance

  	
   

  	
  *** PMPM

  
	
  •

  	
   

  	
  Transplant Reinsurance

  	
   

  	
  *** PMPM

  

 

5.             Insured Service(s).  In
the event that a Member new to HMO is assigned to PPG and gives birth within
six (6) months of such assignment, HMO shall pay PPG a flat fee of *** for such
Member’s delivery.  This fee shall be in
addition to the Capitation for such Member, provided that the delivery services
were rendered by a contracted physician of PPG.

 

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

 

C.            SMALL GROUP HMO.

 

1.             Professional Capitation
Rates.

 

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

 

 

	
  Period

  	
   

  	
  Small
  Group

  HMO Capitation

  	
   

  
	
  March 1,
  1999

  	
   

  	
  *** PMPM

  	
   

  

 

2.             Professional Stop Loss
Program.

 

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

 

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

 

	
  Period

  	
   

  	
  Small Group

  HMO S/R Budget 

  	
   

  
	
  March 1,
  1999

  	
   

  	
  *** PMPM

  	
   

  

 

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

 

Each Reconciliation Period,
HMO shall calculate Shared Risk Claims in accordance with the Operations Manual
and compare such claim cost to the corresponding Shared Risk Budget.  HMO shall perform both an interim and final
settlement.  In the event that such
claims are less than the Shared Risk Budget for the Interim Period, PPG’s share
of the settlement shall be seventy-five percent (75%), subject to Section 4.3
of this

 

29

 

Agreement.

 

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

 

3.3          Shared Risk Budget Surplus.  In
the event of a Shared Risk Budget surplus, PPG’s share of the surplus shall be
limited to the lesser of (a) fifty percent (50%) of the Shared Risk Budget
surplus, or (b) an amount not to exceed *** of the annual gross PPG Capitation.  Subject to Section 4.3 of the Agreement, the
Shared Risk Budget surplus shall be offset against any amounts payable by
PPG.  Any surplus remaining shall be
paid to PPG by April 30 of the following year.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

	
  •

  	
   

  	
  AIDS Reinsurance

  	
   

  	
  *** PMPM

  
	
  •

  	
   

  	
  Transplant Reinsurance

  	
   

  	
  *** PMPM

  

 

5.             Insured Service(s).  In
the event that a Member new to HMO is assigned to PPG and gives birth within
six (6) months of such assignment, HMO shall pay PPG a flat fee of *** for such
Member’s delivery.  This fee shall be in
addition to the Capitation for such Member, provided that the delivery services
were rendered by a contracted physician of the PPG.

 

30

 

D.            INDIVIDUAL HMO.

 

1.             Professional
Capitation Rates.

 

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

 

	
  Period

  	
   

  	
  Individual

  HMO Capitation

  	
   

  
	
  March
  1, 1999

  	
   

  	
  ***
  PMPM

  	
   

  

 

2.             Professional Stop Loss
Program.

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

 

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

 

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

 

	
  Period

  	
   

  	
  Individual

  HMO S/R Budget 

  	
   

  
	
  March 1, 1999

  	
   

  	
  *** PMPM

  	
   

  

 

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

 

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

 

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

 

31

 

3.3          Shared Risk Budget Surplus.  In
the event of a Shared Risk Budget surplus, PPG’s share of the surplus shall be
limited to the lesser of (a) fifty percent (50%) of the Shared Risk Budget
surplus, or (b) an amount not to exceed *** of the annual gross PPG
Capitation.  Subject to Section 4.3 of
the Agreement, the Shared Risk Budget surplus shall be offset against any
amounts payable by PPG.  Any surplus
remaining shall be paid to PPG by April 30 of the following year.

 

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

 

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

 

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

 

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

 

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

 

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

 

The cost of in-area Shared
Risk services utilized by a Member in a Reconciliation Period shall be charged
against the Shared Risk Budget as follows: *** of any amount over *** up to ***
and *** of any amount over ***.

 

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

 

	
  •

  	
   

  	
  AIDS Reinsurance

  	
   

  	
  *** PMPM

  
	
  •

  	
   

  	
  Transplant Reinsurance

  	
   

  	
  *** PMPM

  

 

5.             Insured Service(s).  In
the event that a Member new to HMO is assigned to PPG and gives birth within
six (6) months of assignment, HMO shall pay PPG a flat fee of *** for such
Member’s delivery.  This fee shall be
payable in addition to the Capitation for such Member provided the delivery
services were rendered by a contracted physician of the PPG.

 

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

 

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

 

32

 

2.             Reinsurance Programs.  PPG’s
professional stop loss level shall be (***00) per AIM Member.  The professional stop loss level shall be
provided to the PPG for AIM Members at no cost.  All other terms and conditions of the Agreement regarding
Professional Stop Loss shall apply to AIM Members.

 

AIM Members shall not be included in the AIDS Reinsurance Program or
the Transplant Reinsurance Program.

 

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

 

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

 

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

 

	
  Period

  	
   

  	
  Medicare
  Supplement

  HMO

  	
   

  	
  Medicare
  Supplement

  POS

  
	
  March
  1, 1999

  	
   

  	
  $***
  PMPM

  	
   

  	
  $***
  PMPM

  

 

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

 

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

 

G.            COMMERCIAL POS.

 

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

 

2.             Definitions.

 

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

 

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

 

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

 

33

 

Network
Shared Risk Program, and c) any surplus resulting from the Institutional
In-Network and Out-of-Network Shared Risk Program.

 

4.             Professional Capitation Rate.  PPG
shall be compensated for rendering professional In-Network Services to
Commercial POS Members at the PMPM amounts set forth for Commercial HMO
Members, less a fifty  percent
(50%) withhold (Professional Capitation). 
This Withhold shall partially fund the Professional Out-of-Network
Budget.

 

4.1          Professional Out-of-Network
Withhold.  The Professional Out-of-Network Withhold
percentage for subsequent years shall be determined using PPG’s actual cost for
professional Out-of-Network services in the prior year.  The following formula shall apply:

 

	
  a.

  	
   

  	
  Actual
  Out-of-Network Professional PMPM Cost

  
	
   

  	
   

  	
  Commercial
  POS PMPM Capitation (before withhold)

  
	
   

  	
   

  	
   

  
	
  b.

  	
   

  	
  Above
  result shall be rounded to the nearest multiple of five, and

  
	
   

  	
   

  	
   

  
	
  c.

  	
   

  	
  10%
  shall be added to produce the Professional Out-of-Network Withhold for the
  subsequent year.

  

 

On or before December 15th of each year, HMO shall notify PPG
of its Out-of-Network cost experience incurred during the twelve month period
ending June 30.  HMO shall perform above
calculation and shall notify PPG of the Professional Out-of-Network Withhold
percentage for the following year.

 

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

 

Each year, HMO shall settle the risk sharing program by calculating the
difference between the budget and the actual claims.  If a surplus remains, PPG’s share shall be fifty percent subject
to Section 4.3 PPG shall not be subject to any downside.

 

6.             Institutional Shared Risk
Program.

 

6.1          POS Shared Risk Budgets.  The
budgets shall be determined for each Commercial POS population: Standard POS,
Small Group POS and, at a later date, Individual POS Members.  Each Budget shall cover In-Network,
Out-of-Network and Out-of-Area Shared Risk Services.  Each of the normalized Shared Risk Budgets shall be equal to the normalized
HMO Shared Risk Budget, or institutional capitation PMPM, if applicable, and
multiplied by 110%.  Actual Shared Risk
Budget shall fluctuate from month to month to the extent that PPG’s age, sex
and benefit plan mix fluctuates.

 

34

 

	
  Period

  	
   

  	
  Standard HMO

  Shared Risk

  + 10%

  	
   

  	
  Small Group HMO

  Shared Risk

  + 10%

  	
   

  	
  Individual HMO

  Shared Risk

  +10%

  
	
  March 1, 1999

  	
   

  	
  $*** - 10%

  	
   

  	
  $*** - 10%

  	
   

  	
  *** - 10%

  

 

[ILLEGIBLE]

 

6.2          POS Shared Risk Administration.  Each
Reconciliation Period, HMO shall calculate Shared Risk Claims in accordance
with the Operations Manual and compare such claim cost to the corresponding
Shared Risk Budget.  HMO shall perform
both an interim and final settlement. 
In the event any amounts remain in the Withhold Fund following the
reconciliation of any shared risk program, those excess funds shall be paid to
PPG by April 30 of the following year. 
In the event that such claims are less than the Shared Risk Budget for
the Interim Period, PPG’s share of the settlement shall be seventy-five percent
(75%), subject to Section 4.3 of this Agreement.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(a)           In-Network Professional Stop Loss.

 

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

 

35

 

(b)           Out-of-Network Professional Stop Loss.  PPG’s Out-of-Network Professional Stop Loss
threshold shall be $*** Commercial POS Member during the calendar year.  The cost to PPG for the Out-of-Network
Professional Stop Loss program shall be *** PMPM, which, shall be deducted from
PPG’s Out-of-Network Risk Sharing Budget.

 

8.             AIDS and Transplant
Reinsurance.  As further defined in Section B.4 of this
Addendum, the AIDS Reinsurance rate shall be $*** PMPM, which shall be deducted
from PPG’s Capitation and *** PMPM shall be deducted from PPG’s Professional
Out-of-Network Risk Sharing Budget.  For
the subsequent years, these deductions shall fluctuate to correspond with the
Professional Out-of-Network Withhold percentage change.  The Transplant Reinsurance Program rate
shall be $*** PMPM, which, shall be deducted from PPG’s Capitation and $0.65
PMPM shall be deducted from PPG’s Professional Out-of-Network Risk Sharing
Budget.  The Transplant Reinsurance
Program’s deductions for subsequent years shall also fluctuate to correspond
with the Professional Out-of-Network Withhold percentage change.

 

H.            Quality of Care Improvement Program (QCIP).  QCIP,
as further described in the Operations Manual, rewards PPG for meeting and
exceeding quality standards and Member satisfaction levels. PPG shall be
eligible for a lump sum award, if performance is achieved in all
categories.  The PMPM award set forth
below shall be multiplied by PPG’s Member months for Standard HMO, Small Group
HMO, Individual HMO and Flex Funded HMO Benefit Programs.  The lump sum award shall be payable in
September following the calendar year in which the measurements were taken
provided that PPG is under contract with HMO for the duration of the calendar
year and at the time of the disbursement. 
HMO reserves the right to alter components and measurements of the QCIP
Program annually.

 

	
   

  	
   

  	
  QCIP Award

  	
   

  	
   

  
	
   

  	
   

  	
  Up
  to $*** PMPM

  	
   

  	
   

  

 

I.              Pharmacy Shared Risk Program.  The
Pharmacy Shared Risk Program shall be applicable to the following Members:
Standard HMO, Flex Funded HMO, Small Group HMO, and Individual HMO.

 

1.             Pharmacy Budget.  Each
month HMO shall fund the Pharmacy Budget at $*** per eligible Member per month
(“PEMPM”) subject to the age, sex and benefit plan factors set forth in
Addendum B.

 

2.             Pharmacy Reconciliation For
Commercial HMO Members.  For each Reconciliation Period, HMO shall
calculate pharmacy claims subject to this Program as outlined in the Operations
Manual.  HMO shall compare such claims
to the corresponding Pharmacy Budget. 
In the event pharmacy claims are less than the Pharmacy Budget, PPG’s
share of the Pharmacy Budget surplus shall be ***.  In the event pharmacy claims exceed the Pharmacy Budget, PPG’s
share of the Pharmacy Budget deficit shall be fifty percent (50%)

 

HMO shall perform an interim and final settlement for the Pharmacy Risk
Sharing Program.  The timing of these
settlements shall correspond to the interim and final settlements of other risk
sharing programs.  Subject to Section
4.3 of this Agreement, any Pharmacy Budget deficit shall be offset against any
amounts payable by HMO, or any amounts remaining in the Withhold Fund, or shall
be offset against Capitation.

 

36

 

ADDENDUM B.1

 

AGE, SEX AND BENEFIT PLAN FACTORS

 

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

 

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

 

A. 1 Age, Sex Factors for PPG Capitation and
Hospital Capitation/Shared Risk Budgets Effective March 1, 1999

 

	
  Sex

  	
   

  	
  Age

  	
   

  	
  Prof

  Factor

  	
   

  	
  Inst

  Factor

  	
   

  
	
  Child

  	
   

  	
  0

  	
   

  	
  2.008

  	
   

  	
  5.228

  	
   

  
	
   

  	
   

  	
  1

  	
   

  	
  1.075

  	
   

  	
  0.644

  	
   

  
	
   

  	
   

  	
  2 - 4

  	
   

  	
  0.598

  	
   

  	
  0.406

  	
   

  
	
   

  	
   

  	
  5 - 9

  	
   

  	
  0.439

  	
   

  	
  0.296

  	
   

  
	
   

  	
   

  	
  10 - 14

  	
   

  	
  0.418

  	
   

  	
  0.338

  	
   

  
	
   

  	
   

  	
  15 - 19

  	
   

  	
  0.590

  	
   

  	
  0.607

  	
   

  
	
  Female

  	
   

  	
  20 - 24

  	
   

  	
  1.195

  	
   

  	
  1.066

  	
   

  
	
   

  	
   

  	
  25 - 29

  	
   

  	
  1.653

  	
   

  	
  1.431

  	
   

  
	
   

  	
   

  	
  30 - 34

  	
   

  	
  1.509

  	
   

  	
  1.315

  	
   

  
	
   

  	
   

  	
  35 - 39

  	
   

  	
  1.378

  	
   

  	
  1.143

  	
   

  
	
   

  	
   

  	
  40 - 44

  	
   

  	
  1.322

  	
   

  	
  1.031

  	
   

  
	
   

  	
   

  	
  45 - 49

  	
   

  	
  1.386

  	
   

  	
  1.102

  	
   

  
	
   

  	
   

  	
  50 - 54

  	
   

  	
  1.551

  	
   

  	
  1.338

  	
   

  
	
   

  	
   

  	
  55 - 59

  	
   

  	
  1.794

  	
   

  	
  1.741

  	
   

  
	
   

  	
   

  	
  60 - 64

  	
   

  	
  2.090

  	
   

  	
  2.313

  	
   

  
	
   

  	
   

  	
  65 +

  	
   

  	
  2.414

  	
   

  	
  2.907

  	
   

  
	
   

  	
   

  	
  Medicare Eligible

  	
   

  	
  1.000

  	
   

  	
  1.000

  	
   

  
	
  Male

  	
   

  	
  20 - 24

  	
   

  	
  0.398

  	
   

  	
  0.477

  	
   

  
	
   

  	
   

  	
  25 - 29

  	
   

  	
  0.477

  	
   

  	
  0.486

  	
   

  
	
   

  	
   

  	
  30 - 34

  	
   

  	
  0.546

  	
   

  	
  0.506

  	
   

  
	
   

  	
   

  	
  35 - 39

  	
   

  	
  0.626

  	
   

  	
  0.589

  	
   

  
	
   

  	
   

  	
  40 - 44

  	
   

  	
  0.734

  	
   

  	
  0.768

  	
   

  
	
   

  	
   

  	
  45 - 49

  	
   

  	
  0.890

  	
   

  	
  1.087

  	
   

  
	
   

  	
   

  	
  50 - 54

  	
   

  	
  1.139

  	
   

  	
  1.580

  	
   

  
	
   

  	
   

  	
  55 - 59

  	
   

  	
  1.516

  	
   

  	
  2.203

  	
   

  
	
   

  	
   

  	
  60 - 64

  	
   

  	
  2.009

  	
   

  	
  2.880

  	
   

  
	
   

  	
   

  	
  65 +

  	
   

  	
  2.561

  	
   

  	
  3.586

  	
   

  
	
   

  	
   

  	
  Medicare Eligible

  	
   

  	
  1.000

  	
   

  	
  1.000

  	
   

  

 

37

 

A. 2 Benefit Plan Factors for PPG Capitation and Hospital
Capitation/Shared Risk Budgets Effective March 1, 1999

 

Standard
HMO

 

	
  Plan

  	
   

  	
  Prof

  Factor

  	
   

  	
  Inst

  Factor

  	
   

  
	
  1A

  	
   

  	
  0.9803

  	
   

  	
  0.9966

  	
   

  
	
  1B

  	
   

  	
  1.0012

  	
   

  	
  1.0012

  	
   

  
	
  1C

  	
   

  	
  1.0311

  	
   

  	
  1.0012

  	
   

  
	
  1D

  	
   

  	
  0.9805

  	
   

  	
  1.0064

  	
   

  
	
  1E

  	
   

  	
  1.0186

  	
   

  	
  1.0056

  	
   

  
	
  1F

  	
   

  	
  1.0152

  	
   

  	
  1.0012

  	
   

  
	
  1G

  	
   

  	
  1.0149

  	
   

  	
  1.0004

  	
   

  
	
  1H

  	
   

  	
  1.0152

  	
   

  	
  0.9228

  	
   

  
	
  1I

  	
   

  	
  1.0059

  	
   

  	
  0.9903

  	
   

  
	
  1J

  	
   

  	
  1.0295

  	
   

  	
  1.0064

  	
   

  
	
  1K

  	
   

  	
  1.0138

  	
   

  	
  1.0056

  	
   

  
	
  1L

  	
   

  	
  1.0292

  	
   

  	
  1.0021

  	
   

  
	
  1M

  	
   

  	
  1.0152

  	
   

  	
  0.9854

  	
   

  
	
  1N

  	
   

  	
  1.0295

  	
   

  	
  1.0064

  	
   

  
	
  1O

  	
   

  	
  1.0524

  	
   

  	
  1.0156

  	
   

  
	
  1P

  	
   

  	
  1.0152

  	
   

  	
  1.0012

  	
   

  
	
  1Q

  	
   

  	
  1.0152

  	
   

  	
  0.9228

  	
   

  
	
  1R

  	
   

  	
  1.0863

  	
   

  	
  1.0064

  	
   

  
	
  1S

  	
   

  	
  0.9661

  	
   

  	
  0.9820

  	
   

  
	
  1T

  	
   

  	
  0.9629

  	
   

  	
  0.9820

  	
   

  
	
  1U

  	
   

  	
  0.9208

  	
   

  	
  0.9617

  	
   

  
	
  1V

  	
   

  	
  1.0337

  	
   

  	
  0.9678

  	
   

  
	
  1W

  	
   

  	
  0.9661

  	
   

  	
  1.0012

  	
   

  
	
  1X

  	
   

  	
  1.0187

  	
   

  	
  1.0012

  	
   

  
	
  1Y

  	
   

  	
  1.0710

  	
   

  	
  1.0012

  	
   

  
	
  1Z

  	
   

  	
  1.0119

  	
   

  	
  0.9582

  	
   

  
	
  2A

  	
   

  	
  0.9661

  	
   

  	
  0.9228

  	
   

  
	
  2B

  	
   

  	
  1.0963

  	
   

  	
  1.0053

  	
   

  
	
  2C

  	
   

  	
  1.0963

  	
   

  	
  1.0053

  	
   

  
	
  2D

  	
   

  	
  0.9181

  	
   

  	
  0.9228

  	
   

  
	
  2E

  	
   

  	
  1.0710

  	
   

  	
  1.0012

  	
   

  
	
  2F

  	
   

  	
  1.0091

  	
   

  	
  1.0000

  	
   

  
	
  6A

  	
   

  	
  1.0514

  	
   

  	
  0.9725

  	
   

  
	
  6G

  	
   

  	
  0.9452

  	
   

  	
  0.9673

  	
   

  
	
  6H

  	
   

  	
  1.0047

  	
   

  	
  0.9776

  	
   

  
	
  6R

  	
   

  	
  0.9485

  	
   

  	
  0.9776

  	
   

  
	
  6S

  	
   

  	
  0.9452

  	
   

  	
  0.9398

  	
   

  
	
  6T

  	
   

  	
  0.9452

  	
   

  	
  0.9776

  	
   

  
	
  6V

  	
   

  	
  0.9452

  	
   

  	
  0.9625

  	
   

  
	
  6W

  	
   

  	
  0.9851

  	
   

  	
  0.9819

  	
   

  
	
  6Z

  	
   

  	
  0.9524

  	
   

  	
  0.8651

  	
   

  
	
  7C

  	
   

  	
  0.9934

  	
   

  	
  0.9776

  	
   

  
	
  7E

  	
   

  	
  0.9987

  	
   

  	
  0.9776

  	
   

  
	
  7F

  	
   

  	
  0.8921

  	
   

  	
  0.9025

  	
   

  
	
  7H

  	
   

  	
  0.9452

  	
   

  	
  0.9319

  	
   

  
	
  7I

  	
   

  	
  0.9988

  	
   

  	
  0.9776

  	
   

  
	
  7J

  	
   

  	
  0.8921

  	
   

  	
  0.9025

  	
   

  
	
  7K

  	
   

  	
  0.9934

  	
   

  	
  0.9777

  	
   

  
	
  7U

  	
   

  	
  1.0334

  	
   

  	
  0.9903

  	
   

  
	
  7M

  	
   

  	
  0.9934

  	
   

  	
  0.9777

  	
   

  
	
  7N

  	
   

  	
  0.9836

  	
   

  	
  0.9779

  	
   

  
	
  7O

  	
   

  	
  0.8981

  	
   

  	
  0.9774

  	
   

  
	
  7Q

  	
   

  	
  0.9452

  	
   

  	
  0.9776

  	
   

  
	
  7R

  	
   

  	
  0.9934

  	
   

  	
  0.9777

  	
   

  
	
  7S

  	
   

  	
  0.8884

  	
   

  	
  0.9396

  	
   

  
	
  7T

  	
   

  	
  0.9452

  	
   

  	
  0.9474

  	
   

  
	
  7L

  	
   

  	
  0.9934

  	
   

  	
  0.9776

  	
   

  
	
  7V

  	
   

  	
  0.9934

  	
   

  	
  0.9399

  	
   

  
	
  7W

  	
   

  	
  0.9452

  	
   

  	
  0.9399

  	
   

  
	
  7X

  	
   

  	
  1.0942

  	
   

  	
  0.9903

  	
   

  
	
  7Y

  	
   

  	
  1.0334

  	
   

  	
  0.9903

  	
   

  
	
  7Z

  	
   

  	
  0.9452

  	
   

  	
  0.9776

  	
   

  
	
  9A

  	
   

  	
  0.9934

  	
   

  	
  0.9776

  	
   

  
	
  9B

  	
   

  	
  0.9967

  	
   

  	
  0.9776

  	
   

  
	
  9C

  	
   

  	
  0.9967

  	
   

  	
  0.9776

  	
   

  
	
  9E

  	
   

  	
  0.9908

  	
   

  	
  0.9780

  	
   

  
	
  9F

  	
   

  	
  1.0514

  	
   

  	
  0.9776

  	
   

  
	
  9G

  	
   

  	
  1.0012

  	
   

  	
  0.9776

  	
   

  
	
  9H

  	
   

  	
  0.9967

  	
   

  	
  0.9805

  	
   

  
	
  9I

  	
   

  	
  0.9934

  	
   

  	
  0.9777

  	
   

  
	
  9J

  	
   

  	
  0.9084

  	
   

  	
  0.8363

  	
   

  
	
  9M

  	
   

  	
  0.9967

  	
   

  	
  0.9777

  	
   

  
	
  9N

  	
   

  	
  0.9485

  	
   

  	
  0.9398

  	
   

  
	
  9O

  	
   

  	
  0.9560

  	
   

  	
  0.9776

  	
   

  
	
  9P

  	
   

  	
  0.9876

  	
   

  	
  0.9795

  	
   

  
	
  9Q

  	
   

  	
  0.9967

  	
   

  	
  0.9776

  	
   

  
	
  9R

  	
   

  	
  0.9970

  	
   

  	
  0.9849

  	
   

  
	
  9S

  	
   

  	
  0.9967

  	
   

  	
  0.9776

  	
   

  
	
  9T

  	
   

  	
  0.9934

  	
   

  	
  0.9778

  	
   

  
	
  9U

  	
   

  	
  0.9866

  	
   

  	
  0.9811

  	
   

  
	
  9W

  	
   

  	
  0.9460

  	
   

  	
  0.9592

  	
   

  
	
  9X

  	
   

  	
  0.9014

  	
   

  	
  0.9776

  	
   

  
	
  9Y

  	
   

  	
  1.0327

  	
   

  	
  0.9334

  	
   

  
	
  A1

  	
   

  	
  1.0628

  	
   

  	
  0.9725

  	
   

  
	
  A2

  	
   

  	
  1.0595

  	
   

  	
  0.9776

  	
   

  
	
  A3

  	
   

  	
  1.0619

  	
   

  	
  0.9810

  	
   

  
	
  A4

  	
   

  	
  1.0595

  	
   

  	
  0.9776

  	
   

  
	
  A5

  	
   

  	
  1.0628

  	
   

  	
  0.9752

  	
   

  
	
  A7

  	
   

  	
  0.9500

  	
   

  	
  0.9295

  	
   

  
	
  A8

  	
   

  	
  1.0776

  	
   

  	
  1.0076

  	
   

  
	
  A9

  	
   

  	
  1.0257

  	
   

  	
  1.0076

  	
   

  
	
  B1

  	
   

  	
  0.9198

  	
   

  	
  0.8254

  	
   

  
	
  B2

  	
   

  	
  0.9198

  	
   

  	
  0.8252

  	
   

  
	
  B3

  	
   

  	
  0.9198

  	
   

  	
  0.8254

  	
   

  
	
  B4

  	
   

  	
  0.9198

  	
   

  	
  0.8460

  	
   

  
	
  B5

  	
   

  	
  0.9198

  	
   

  	
  0.8357

  	
   

  
	
  B6

  	
   

  	
  1.0047

  	
   

  	
  0.8758

  	
   

  
	
  B7

  	
   

  	
  0.9743

  	
   

  	
  1.0085

  	
   

  
	
  B8

  	
   

  	
  0.9644

  	
   

  	
  0.9941

  	
   

  
	
  B9

  	
   

  	
  0.9690

  	
   

  	
  1.0076

  	
   

  
	
  BB

  	
   

  	
  1.0047

  	
   

  	
  0.8655

  	
   

  
	
  C1

  	
   

  	
  1.0613

  	
   

  	
  0.9919

  	
   

  
	
  C2

  	
   

  	
  1.0663

  	
   

  	
  1.0032

  	
   

  
	
  C3

  	
   

  	
  1.0066

  	
   

  	
  0.9919

  	
   

  
	
  C6

  	
   

  	
  1.0162

  	
   

  	
  1.0076

  	
   

  
	
  C7

  	
   

  	
  1.0639

  	
   

  	
  1.0022

  	
   

  
	
  C8

  	
   

  	
  0.9463

  	
   

  	
  0.9695

  	
   

  
	
  C9

  	
   

  	
  0.9243

  	
   

  	
  1.0076

  	
   

  
	
  D1

  	
   

  	
  1.0613

  	
   

  	
  1.0022

  	
   

  
	
  D2

  	
   

  	
  1.0182

  	
   

  	
  1.0041

  	
   

  
	
  D3

  	
   

  	
  0.9327

  	
   

  	
  0.8259

  	
   

  
	
  D4

  	
   

  	
  0.9638

  	
   

  	
  0.8651

  	
   

  
	
  D5

  	
   

  	
  0.9599

  	
   

  	
  0.9776

  	
   

  
	
  D6

  	
   

  	
  0.9566

  	
   

  	
  0.9521

  	
   

  
	
  D7

  	
   

  	
  0.9897

  	
   

  	
  1.0074

  	
   

  
	
  D8

  	
   

  	
  1.0189

  	
   

  	
  1.0056

  	
   

  
	
  D9

  	
   

  	
  1.0319

  	
   

  	
  1.0076

  	
   

  
	
  E1

  	
   

  	
  1.0137

  	
   

  	
  0.9737

  	
   

  
	
  E2

  	
   

  	
  0.9836

  	
   

  	
  1.0050

  	
   

  
	
  E3

  	
   

  	
  1.0064

  	
   

  	
  0.9776

  	
   

  
	
  E4

  	
   

  	
  0.9584

  	
   

  	
  0.9706

  	
   

  
	
  E5

  	
   

  	
  1.0403

  	
   

  	
  1.0037

  	
   

  
	
  E6

  	
   

  	
  0.9656

  	
   

  	
  0.9737

  	
   

  
	
  E7

  	
   

  	
  0.9905

  	
   

  	
  1.0037

  	
   

  
	
  E8

  	
   

  	
  1.0180

  	
   

  	
  0.9985

  	
   

  
	
  E9

  	
   

  	
  0.9690

  	
   

  	
  0.9801

  	
   

  
	
  EA

  	
   

  	
  0.9755

  	
   

  	
  1.0033

  	
   

  
	
  EB

  	
   

  	
  0.9023

  	
   

  	
  0.8278

  	
   

  
	
  EC

  	
   

  	
  0.9604

  	
   

  	
  1.0076

  	
   

  
	
  ED

  	
   

  	
  1.0061

  	
   

  	
  0.9805

  	
   

  
	
  EE

  	
   

  	
  0.9951

  	
   

  	
  0.9793

  	
   

  
	
  EF

  	
   

  	
  1.0307

  	
   

  	
  1.0063

  	
   

  
	
  EH

  	
   

  	
  0.9585

  	
   

  	
  1.0018

  	
   

  
	
  EI

  	
   

  	
  0.9966

  	
   

  	
  0.9805

  	
   

  
	
  EJ

  	
   

  	
  1.0329

  	
   

  	
  1.0118

  	
   

  
	
  EK

  	
   

  	
  0.9310

  	
   

  	
  1.0050

  	
   

  
	
  EL

  	
   

  	
  1.0481

  	
   

  	
  0.9786

  	
   

  
	
  EM

  	
   

  	
  0.9714

  	
   

  	
  1.0135

  	
   

  
	
  EN

  	
   

  	
  0.9934

  	
   

  	
  0.9778

  	
   

  
	
  EO

  	
   

  	
  0.9727

  	
   

  	
  0.9633

  	
   

  
	
  EP

  	
   

  	
  0.9486

  	
   

  	
  0.9777

  	
   

  
	
  EQ

  	
   

  	
  0.9740

  	
   

  	
  1.0035

  	
   

  
	
  ER

  	
   

  	
  1.0858

  	
   

  	
  1.0032

  	
   

  
	
  ES

  	
   

  	
  0.9796

  	
   

  	
  1.0076

  	
   

  
	
  ET

  	
   

  	
  0.9163

  	
   

  	
  0.9774

  	
   

  
	
  EU

  	
   

  	
  0.9617

  	
   

  	
  0.9863

  	
   

  
	
  EV

  	
   

  	
  1.0046

  	
   

  	
  0.9628

  	
   

  
	
  EW

  	
   

  	
  1.0104

  	
   

  	
  1.0108

  	
   

  
	
  EX

  	
   

  	
  0.9277

  	
   

  	
  0.8955

  	
   

  
	
  EY

  	
   

  	
  0.9746

  	
   

  	
  0.9281

  	
   

  
	
  EZ

  	
   

  	
  0.9230

  	
   

  	
  0.8441

  	
   

  
	
  F1

  	
   

  	
  1.0230

  	
   

  	
  0.9893

  	
   

  
	
  F2

  	
   

  	
  1.0084

  	
   

  	
  0.9737

  	
   

  
	
  F3

  	
   

  	
  1.0071

  	
   

  	
  0.9776

  	
   

  
	
  F4

  	
   

  	
  0.9731

  	
   

  	
  1.0074

  	
   

  
	
  F5

  	
   

  	
  1.0087

  	
   

  	
  0.9780

  	
   

  
	
  F6

  	
   

  	
  1.0195

  	
   

  	
  1.0076

  	
   

  
	
  F7

  	
   

  	
  1.0804

  	
   

  	
  0.9903

  	
   

  
	
  F8

  	
   

  	
  0.8346

  	
   

  	
  0.8083

  	
   

  
	
  F9

  	
   

  	
  1.0350

  	
   

  	
  1.0037

  	
   

  
	
  FA

  	
   

  	
  1.0203

  	
   

  	
  1.0008

  	
   

  
	
  FB

  	
   

  	
  1.0213

  	
   

  	
  1.0145

  	
   

  
	
  FC

  	
   

  	
  1.0234

  	
   

  	
  1.0039

  	
   

  
	
  FD

  	
   

  	
  1.0241

  	
   

  	
  1.0023

  	
   

  
	
  FE

  	
   

  	
  0.9727

  	
   

  	
  1.0008

  	
   

  
	
  FF

  	
   

  	
  0.9709

  	
   

  	
  1.0062

  	
   

  
	
  FG

  	
   

  	
  0.9694

  	
   

  	
  0.9858

  	
   

  
	
  FH

  	
   

  	
  0.9708

  	
   

  	
  1.0008

  	
   

  
	
  FI

  	
   

  	
  0.9727

  	
   

  	
  1.0008

  	
   

  
	
  FJ

  	
   

  	
  0.9260

  	
   

  	
  1.0008

  	
   

  
	
  FK

  	
   

  	
  0.9727

  	
   

  	
  0.9581

  	
   

  
	
  FL

  	
   

  	
  0.9260

  	
   

  	
  0.9633

  	
   

  
	
  FM

  	
   

  	
  0.9755

  	
   

  	
  1.0058

  	
   

  
	
  G1

  	
   

  	
  0.9566

  	
   

  	
  0.9673

  	
   

  
	
  G2

  	
   

  	
  1.0047

  	
   

  	
  0.9776

  	
   

  
	
  G3

  	
   

  	
  1.0080

  	
   

  	
  0.9776

  	
   

  
	
  G5

  	
   

  	
  0.9095

  	
   

  	
  0.9671

  	
   

  
	
  G6

  	
   

  	
  1.0231

  	
   

  	
  0.9967

  	
   

  
	
  G9

  	
   

  	
  1.0047

  	
   

  	
  0.9776

  	
   

  
	
  HA

  	
   

  	
  1.0595

  	
   

  	
  0.9673

  	
   

  
	
  HB

  	
   

  	
  1.0047

  	
   

  	
  0.8655

  	
   

  
	
  HC

  	
   

  	
  1.0639

  	
   

  	
  0.9919

  	
   

  
	
  HD

  	
   

  	
  1.0807

  	
   

  	
  1.0031

  	
   

  
	
  HE

  	
   

  	
  1.0286

  	
   

  	
  1.0105

  	
   

  
	
  HF

  	
   

  	
  0.9682

  	
   

  	
  0.9875

  	
   

  
	
  HG

  	
   

  	
  1.0047

  	
   

  	
  0.9673

  	
   

  
	
  HK

  	
   

  	
  1.0784

  	
   

  	
  1.0076

  	
   

  
	
  HM

  	
   

  	
  1.1360

  	
   

  	
  1.0225

  	
   

  
	
  HN

  	
   

  	
  1.0195

  	
   

  	
  1.0076

  	
   

  
	
  HO

  	
   

  	
  0.9714

  	
   

  	
  1.0076

  	
   

  
	
  HP

  	
   

  	
  1.0049

  	
   

  	
  0.9919

  	
   

  
	
  HR

  	
   

  	
  1.1304

  	
   

  	
  1.0233

  	
   

  
	
  HS

  	
   

  	
  1.0817

  	
   

  	
  1.0022

  	
   

  
	
  HT

  	
   

  	
  1.0743

  	
   

  	
  1.0076

  	
   

  
	
  HU

  	
   

  	
  1.0443

  	
   

  	
  1.0165

  	
   

  
	
  HV

  	
   

  	
  1.0907

  	
   

  	
  1.0107

  	
   

  
	
  HW

  	
   

  	
  1.0524

  	
   

  	
  0.9681

  	
   

  
	
  HX

  	
   

  	
  0.9500

  	
   

  	
  0.9295

  	
   

  
	
  HY

  	
   

  	
  0.8997

  	
   

  	
  0.8921

  	
   

  
	
  I3

  	
   

  	
  0.9909

  	
   

  	
  1.0106

  	
   

  
	
  I4

  	
   

  	
  0.9198

  	
   

  	
  0.8442

  	
   

  
	
  I5

  	
   

  	
  0.9677

  	
   

  	
  1.0044

  	
   

  
	
  I6

  	
   

  	
  1.0338

  	
   

  	
  0.9745

  	
   

  
	
  I7

  	
   

  	
  1.0022

  	
   

  	
  1.0076

  	
   

  
	
  I8

  	
   

  	
  0.9746

  	
   

  	
  0.9916

  	
   

  
	
  I9

  	
   

  	
  0.9851

  	
   

  	
  1.0037

  	
   

  
	
  J3

  	
   

  	
  1.0165

  	
   

  	
  0.9849

  	
   

  
	
  J4

  	
   

  	
  1.0108

  	
   

  	
  0.9849

  	
   

  
	
  J5

  	
   

  	
  1.0071

  	
   

  	
  0.9778

  	
   

  
	
  J6

  	
   

  	
  0.9714

  	
   

  	
  0.9783

  	
   

  
	
  J7

  	
   

  	
  0.9756

  	
   

  	
  1.0085

  	
   

  
	
  J8

  	
   

  	
  0.9666

  	
   

  	
  0.9839

  	
   

  
	
  J9

  	
   

  	
  1.1169

  	
   

  	
  1.0283

  	
   

  
	
  K1

  	
   

  	
  1.0236

  	
   

  	
  1.0076

  	
   

  
	
  K2

  	
   

  	
  0.9663

  	
   

  	
  0.9801

  	
   

  
	
  K3

  	
   

  	
  1.0255

  	
   

  	
  1.0080

  	
   

  
	
  K4

  	
   

  	
  1.0817

  	
   

  	
  1.0076

  	
   

  
	
  K6

  	
   

  	
  0.9782

  	
   

  	
  1.0054

  	
   

  
	
  K7

  	
   

  	
  0.9845

  	
   

  	
  0.9966

  	
   

  
	
  K8

  	
   

  	
  0.9749

  	
   

  	
  0.9844

  	
   

  

 

38

 

Standard
HMO

 

	
  Plan

  	
   

  	
  Prof

  Factor

  	
   

  	
  Inst

  Factor

  	
   

  
	
  7G

  	
   

  	
  1.0481

  	
   

  	
  0.9776

  	
   

  
	
  KF

  	
   

  	
  1.0209

  	
   

  	
  0.9776

  	
   

  
	
  KI

  	
   

  	
  0.9727

  	
   

  	
  1.0010

  	
   

  
	
  KJ

  	
   

  	
  1.0203

  	
   

  	
  1.0010

  	
   

  
	
  KK

  	
   

  	
  0.9727

  	
   

  	
  0.9583

  	
   

  
	
  KL

  	
   

  	
  0.9763

  	
   

  	
  0.9864

  	
   

  
	
  KM

  	
   

  	
  0.9260

  	
   

  	
  1.0010

  	
   

  
	
  KN

  	
   

  	
  1.0961

  	
   

  	
  1.0239

  	
   

  
	
  KO

  	
   

  	
  1.0349

  	
   

  	
  1.0079

  	
   

  
	
  KP

  	
   

  	
  0.9039

  	
   

  	
  0.9383

  	
   

  
	
  KQ

  	
   

  	
  0.9695

  	
   

  	
  0.9978

  	
   

  
	
  KR

  	
   

  	
  1.0227

  	
   

  	
  1.0075

  	
   

  
	
  KS

  	
   

  	
  0.8981

  	
   

  	
  0.9317

  	
   

  
	
  KT

  	
   

  	
  1.0099

  	
   

  	
  1.0021

  	
   

  
	
  KU

  	
   

  	
  1.0336

  	
   

  	
  1.0170

  	
   

  
	
  KV

  	
   

  	
  1.0367

  	
   

  	
  1.0101

  	
   

  
	
  KZ

  	
   

  	
  1.0231

  	
   

  	
  1.0092

  	
   

  
	
  L1

  	
   

  	
  0.9825

  	
   

  	
  1.0061

  	
   

  
	
  L2

  	
   

  	
  0.9599

  	
   

  	
  0.9777

  	
   

  
	
  L3

  	
   

  	
  0.9566

  	
   

  	
  0.9777

  	
   

  
	
  L4

  	
   

  	
  0.9128

  	
   

  	
  0.9774

  	
   

  
	
  L5

  	
   

  	
  0.9695

  	
   

  	
  0.9776

  	
   

  
	
  L6

  	
   

  	
  1.0177

  	
   

  	
  0.9776

  	
   

  
	
  L7

  	
   

  	
  1.0424

  	
   

  	
  0.9756

  	
   

  
	
  L8

  	
   

  	
  1.0243

  	
   

  	
  0.9673

  	
   

  
	
  L9

  	
   

  	
  0.9755

  	
   

  	
  1.0076

  	
   

  
	
  M1

  	
   

  	
  0.9825

  	
   

  	
  1.0061

  	
   

  
	
  M2

  	
   

  	
  1.1361

  	
   

  	
  1.0225

  	
   

  
	
  M3

  	
   

  	
  1.0195

  	
   

  	
  1.0108

  	
   

  
	
  M4

  	
   

  	
  1.0195

  	
   

  	
  1.0076

  	
   

  
	
  M5

  	
   

  	
  1.0124

  	
   

  	
  1.0054

  	
   

  
	
  M6

  	
   

  	
  0.9749

  	
   

  	
  0.9175

  	
   

  
	
  M7

  	
   

  	
  0.9671

  	
   

  	
  0.8754

  	
   

  
	
  M8

  	
   

  	
  1.0231

  	
   

  	
  1.0074

  	
   

  
	
  M9

  	
   

  	
  1.0743

  	
   

  	
  1.0078

  	
   

  
	
  N1

  	
   

  	
  1.0246

  	
   

  	
  1.0076

  	
   

  
	
  N2

  	
   

  	
  1.0211

  	
   

  	
  1.0076

  	
   

  
	
  N3

  	
   

  	
  1.0230

  	
   

  	
  1.0076

  	
   

  
	
  N4

  	
   

  	
  1.0066

  	
   

  	
  1.0022

  	
   

  
	
  N5

  	
   

  	
  1.0082

  	
   

  	
  1.0022

  	
   

  
	
  N6

  	
   

  	
  1.0099

  	
   

  	
  1.0022

  	
   

  
	
  N7

  	
   

  	
  1.0228

  	
   

  	
  1.0076

  	
   

  
	
  N8

  	
   

  	
  1.0294

  	
   

  	
  1.0033

  	
   

  
	
  N9

  	
   

  	
  1.0207

  	
   

  	
  0.9916

  	
   

  
	
  O1

  	
   

  	
  0.9747

  	
   

  	
  1.0076

  	
   

  
	
  O2

  	
   

  	
  0.9714

  	
   

  	
  0.9676

  	
   

  
	
  A6

  	
   

  	
  1.0047

  	
   

  	
  0.9673

  	
   

  
	
  O5

  	
   

  	
  0.9584

  	
   

  	
  0.9864

  	
   

  
	
  O6

  	
   

  	
  1.0327

  	
   

  	
  1.0149

  	
   

  
	
  O7

  	
   

  	
  1.0317

  	
   

  	
  1.0033

  	
   

  
	
  O8

  	
   

  	
  1.0050

  	
   

  	
  0.9733

  	
   

  
	
  O9

  	
   

  	
  0.9822

  	
   

  	
  1.0076

  	
   

  
	
  P1

  	
   

  	
  1.0121

  	
   

  	
  0.9949

  	
   

  
	
  P2

  	
   

  	
  0.9030

  	
   

  	
  0.9396

  	
   

  
	
  P3

  	
   

  	
  0.9649

  	
   

  	
  0.9776

  	
   

  
	
  P4

  	
   

  	
  1.0195

  	
   

  	
  1.0186

  	
   

  
	
  P5

  	
   

  	
  0.9095

  	
   

  	
  0.9731

  	
   

  
	
  P6

  	
   

  	
  1.0823

  	
   

  	
  0.9838

  	
   

  
	
  P7

  	
   

  	
  1.0273

  	
   

  	
  1.0076

  	
   

  
	
  P8

  	
   

  	
  0.9614

  	
   

  	
  0.9828

  	
   

  
	
  P9

  	
   

  	
  1.0165

  	
   

  	
  0.9833

  	
   

  
	
  R1

  	
   

  	
  1.0121

  	
   

  	
  1.0052

  	
   

  
	
  R2

  	
   

  	
  0.9749

  	
   

  	
  1.0076

  	
   

  
	
  R3

  	
   

  	
  0.9909

  	
   

  	
  1.0076

  	
   

  
	
  R4

  	
   

  	
  0.9003

  	
   

  	
  0.9029

  	
   

  
	
  R5

  	
   

  	
  1.0047

  	
   

  	
  0.9777

  	
   

  
	
  R6

  	
   

  	
  1.0047

  	
   

  	
  0.9399

  	
   

  
	
  R7

  	
   

  	
  0.8997

  	
   

  	
  0.9025

  	
   

  
	
  R8

  	
   

  	
  0.9640

  	
   

  	
  1.0052

  	
   

  
	
  R9

  	
   

  	
  0.9198

  	
   

  	
  0.8412

  	
   

  
	
  S1

  	
   

  	
  1.0973

  	
   

  	
  1.0283

  	
   

  
	
  S2

  	
   

  	
  1.0259

  	
   

  	
  1.0091

  	
   

  
	
  S3

  	
   

  	
  1.0485

  	
   

  	
  1.0156

  	
   

  
	
  S4

  	
   

  	
  0.9629

  	
   

  	
  0.9295

  	
   

  
	
  S5

  	
   

  	
  0.9198

  	
   

  	
  0.8442

  	
   

  
	
  S6

  	
   

  	
  1.0658

  	
   

  	
  1.0022

  	
   

  
	
  S7

  	
   

  	
  1.0085

  	
   

  	
  1.0000

  	
   

  
	
  S8

  	
   

  	
  1.0080

  	
   

  	
  0.9777

  	
   

  
	
  S9

  	
   

  	
  1.0080

  	
   

  	
  0.9399

  	
   

  
	
  T1

  	
   

  	
  1.0759

  	
   

  	
  1.0076

  	
   

  
	
  T2

  	
   

  	
  1.0776

  	
   

  	
  1.0076

  	
   

  
	
  T3

  	
   

  	
  1.0187

  	
   

  	
  0.9985

  	
   

  
	
  T4

  	
   

  	
  1.0156

  	
   

  	
  0.9985

  	
   

  
	
  T5

  	
   

  	
  1.0212

  	
   

  	
  1.0078

  	
   

  
	
  T7

  	
   

  	
  0.9229

  	
   

  	
  0.9673

  	
   

  
	
  T8

  	
   

  	
  1.0086

  	
   

  	
  0.9833

  	
   

  
	
  T9

  	
   

  	
  1.0245

  	
   

  	
  1.0079

  	
   

  
	
  TA

  	
   

  	
  0.9966

  	
   

  	
  0.9894

  	
   

  
	
  TB

  	
   

  	
  0.9929

  	
   

  	
  0.9778

  	
   

  
	
  TC

  	
   

  	
  1.0104

  	
   

  	
  0.9780

  	
   

  
	
  TD

  	
   

  	
  1.0164

  	
   

  	
  1.0000

  	
   

  
	
  TE

  	
   

  	
  1.1100

  	
   

  	
  1.0239

  	
   

  
	
  EG

  	
   

  	
  1.0307

  	
   

  	
  1.0063

  	
   

  
	
  TR

  	
   

  	
  1.0823

  	
   

  	
  0.9888

  	
   

  
	
  TT

  	
   

  	
  0.8910

  	
   

  	
  0.8277

  	
   

  
	
  TU

  	
   

  	
  0.9676

  	
   

  	
  1.0000

  	
   

  
	
  TV

  	
   

  	
  1.0211

  	
   

  	
  1.0075

  	
   

  
	
  TW

  	
   

  	
  0.9707

  	
   

  	
  0.9742

  	
   

  
	
  TX

  	
   

  	
  1.0811

  	
   

  	
  1.0156

  	
   

  
	
  TY

  	
   

  	
  0.9328

  	
   

  	
  1.0067

  	
   

  
	
  TZ

  	
   

  	
  0.9777

  	
   

  	
  1.0084

  	
   

  
	
  U1

  	
   

  	
  1.0260

  	
   

  	
  0.9805

  	
   

  
	
  U2

  	
   

  	
  0.9599

  	
   

  	
  0.9399

  	
   

  
	
  U3

  	
   

  	
  0.9599

  	
   

  	
  0.9673

  	
   

  
	
  U4

  	
   

  	
  1.0778

  	
   

  	
  1.0022

  	
   

  
	
  U5

  	
   

  	
  0.9714

  	
   

  	
  1.0106

  	
   

  
	
  U6

  	
   

  	
  0.9750

  	
   

  	
  1.0074

  	
   

  
	
  U7

  	
   

  	
  0.9731

  	
   

  	
  1.0085

  	
   

  
	
  U8

  	
   

  	
  1.0263

  	
   

  	
  1.0080

  	
   

  
	
  U9

  	
   

  	
  1.0210

  	
   

  	
  1.0141

  	
   

  
	
  UA

  	
   

  	
  1.0790

  	
   

  	
  0.9776

  	
   

  
	
  UB

  	
   

  	
  0.9459

  	
   

  	
  0.9733

  	
   

  
	
  UD

  	
   

  	
  0.9707

  	
   

  	
  1.0064

  	
   

  
	
  UF

  	
   

  	
  0.9540

  	
   

  	
  0.9805

  	
   

  
	
  UH

  	
   

  	
  1.0262

  	
   

  	
  1.0110

  	
   

  
	
  UI

  	
   

  	
  1.0080

  	
   

  	
  0.8467

  	
   

  
	
  UJ

  	
   

  	
  1.0080

  	
   

  	
  0.7479

  	
   

  
	
  UK

  	
   

  	
  0.9598

  	
   

  	
  0.8467

  	
   

  
	
  UL

  	
   

  	
  0.9598

  	
   

  	
  0.7479

  	
   

  
	
  UN

  	
   

  	
  1.0228

  	
   

  	
  0.7688

  	
   

  
	
  UO

  	
   

  	
  1.0228

  	
   

  	
  0.8722

  	
   

  
	
  UQ

  	
   

  	
  0.9746

  	
   

  	
  0.8722

  	
   

  
	
  UR

  	
   

  	
  0.9746

  	
   

  	
  0.7688

  	
   

  
	
  US

  	
   

  	
  1.0080

  	
   

  	
  0.9122

  	
   

  
	
  UT

  	
   

  	
  1.0080

  	
   

  	
  0.7838

  	
   

  
	
  UU

  	
   

  	
  0.9598

  	
   

  	
  0.9122

  	
   

  
	
  UV

  	
   

  	
  0.9598

  	
   

  	
  0.7838

  	
   

  
	
  UW

  	
   

  	
  1.0209

  	
   

  	
  0.9400

  	
   

  
	
  UX

  	
   

  	
  1.0209

  	
   

  	
  0.8070

  	
   

  
	
  UY

  	
   

  	
  0.9729

  	
   

  	
  0.9400

  	
   

  
	
  UZ

  	
   

  	
  0.9729

  	
   

  	
  0.8070

  	
   

  
	
  W1

  	
   

  	
  1.0542

  	
   

  	
  0.9681

  	
   

  
	
  W2

  	
   

  	
  1.0067

  	
   

  	
  1.0000

  	
   

  
	
  W3

  	
   

  	
  0.9715

  	
   

  	
  1.0128

  	
   

  
	
  W4

  	
   

  	
  0.9287

  	
   

  	
  0.9680

  	
   

  
	
  W5

  	
   

  	
  1.0266

  	
   

  	
  1.0095

  	
   

  
	
  W6

  	
   

  	
  0.9649

  	
   

  	
  0.9806

  	
   

  
	
  W7

  	
   

  	
  0.9839

  	
   

  	
  0.9941

  	
   

  
	
  G4

  	
   

  	
  0.9566

  	
   

  	
  0.9776

  	
   

  
	
  X1

  	
   

  	
  0.9638

  	
   

  	
  0.8651

  	
   

  
	
  X2

  	
   

  	
  0.9533

  	
   

  	
  0.9295

  	
   

  
	
  X3

  	
   

  	
  0.9500

  	
   

  	
  0.9398

  	
   

  
	
  X4

  	
   

  	
  0.9821

  	
   

  	
  0.9058

  	
   

  
	
  X5

  	
   

  	
  1.0231

  	
   

  	
  1.0074

  	
   

  
	
  X6

  	
   

  	
  1.0240

  	
   

  	
  1.0076

  	
   

  
	
  X7

  	
   

  	
  0.9095

  	
   

  	
  0.9774

  	
   

  
	
  X8

  	
   

  	
  1.0043

  	
   

  	
  0.9779

  	
   

  
	
  X9

  	
   

  	
  0.9095

  	
   

  	
  0.9627

  	
   

  
	
  Y1

  	
   

  	
  0.9145

  	
   

  	
  0.9280

  	
   

  
	
  Y2

  	
   

  	
  0.8997

  	
   

  	
  0.9293

  	
   

  
	
  Y3

  	
   

  	
  0.9145

  	
   

  	
  0.9674

  	
   

  
	
  Y4

  	
   

  	
  0.9178

  	
   

  	
  0.9674

  	
   

  
	
  Y5

  	
   

  	
  0.9714

  	
   

  	
  0.9282

  	
   

  
	
  Y6

  	
   

  	
  0.8997

  	
   

  	
  0.9396

  	
   

  
	
  Y7

  	
   

  	
  1.0047

  	
   

  	
  0.9776

  	
   

  
	
  Y8

  	
   

  	
  1.0228

  	
   

  	
  1.0076

  	
   

  
	
  Y9

  	
   

  	
  0.9985

  	
   

  	
  1.0000

  	
   

  
	
  ZA

  	
   

  	
  1.0481

  	
   

  	
  0.9673

  	
   

  
	
  ZB

  	
   

  	
  0.9934

  	
   

  	
  0.8655

  	
   

  
	
  ZC

  	
   

  	
  1.0481

  	
   

  	
  0.9673

  	
   

  
	
  ZG

  	
   

  	
  0.9934

  	
   

  	
  0.9673

  	
   

  
	
  ZK

  	
   

  	
  1.0481

  	
   

  	
  0.9776

  	
   

  
	
  ZM

  	
   

  	
  1.0941

  	
   

  	
  0.9903

  	
   

  
	
  ZN

  	
   

  	
  0.9934

  	
   

  	
  0.9776

  	
   

  
	
  ZO

  	
   

  	
  0.9452

  	
   

  	
  0.9776

  	
   

  
	
  ZS

  	
   

  	
  1.0514

  	
   

  	
  0.9776

  	
   

  
	
  ZZ

  	
   

  	
  0.9870

  	
   

  	
  0.9780

  	
   

  
	
  K9

  	
   

  	
  0.9566

  	
   

  	
  0.9521

  	
   

  

 

39

 

Standard
HMO

 

	
  Plan

  	
   

  	
  Prof

  Factor

  	
   

  	
  Inst

  Factor

  	
   

  
	
  O3

  	
   

  	
  0.9749

  	
   

  	
  1.0076

  	
   

  
	
  04

  	
   

  	
  1.0195

  	
   

  	
  0.9676

  	
   

  
	
  TF

  	
   

  	
  0.9965

  	
   

  	
  0.9805

  	
   

  
	
  TQ

  	
   

  	
  0.9856

  	
   

  	
  1.0075

  	
   

  
	
  W8

  	
   

  	
  1.0162

  	
   

  	
  0.9776

  	
   

  
	
  W9

  	
   

  	
  0.9112

  	
   

  	
  0.9774

  	
   

  

 

40

 

A.3 Benefit
Plan Factors for PPG Capitation and Hospital Capitation/Shared Risk Budgets
Effective March 1. 1999

 

Small Group HMO

 

	
  Plan

  	
   

  	
  Prof
  Factor

  	
   

  	
  Inst
  Factor

  	
   

  
	
  C4

  	
   

  	
  0.9958

  	
   

  	
  1.0075

  	
   

  
	
  C5

  	
   

  	
  0.9016

  	
   

  	
  0.9893

  	
   

  
	
  Ql

  	
   

  	
  0.9877

  	
   

  	
  0.9749

  	
   

  
	
  Q2

  	
   

  	
  0.9350

  	
   

  	
  0.9367

  	
   

  
	
  Q3

  	
   

  	
  0.8834

  	
   

  	
  0.8703

  	
   

  
	
  Q4

  	
   

  	
  0.8346

  	
   

  	
  0.8179

  	
   

  
	
  Q5

  	
   

  	
  0.9958

  	
   

  	
  1.0103

  	
   

  
	
  Q6

  	
   

  	
  0.9016

  	
   

  	
  0.9921

  	
   

  
	
  Q7

  	
   

  	
  0.8346

  	
   

  	
  0.8179

  	
   

  
	
  Q8

  	
   

  	
  0.9350

  	
   

  	
  0.9747

  	
   

  
	
  QT

  	
   

  	
  0.9867

  	
   

  	
  1.0057

  	
   

  
	
  QU

  	
   

  	
  0.8977

  	
   

  	
  0.9898

  	
   

  
	
  QV

  	
   

  	
  0.9001

  	
   

  	
  0.9297

  	
   

  
	
  QW

  	
   

  	
  0.9001

  	
   

  	
  0.9297

  	
   

  
	
  QX

  	
   

  	
  0.9476

  	
   

  	
  0.9927

  	
   

  
	
  QY

  	
   

  	
  0.9960

  	
   

  	
  1.0086

  	
   

  
	
  QZ

  	
   

  	
  0.9960

  	
   

  	
  1.0086

  	
   

  
	
  V1

  	
   

  	
  0.9926

  	
   

  	
  0.9833

  	
   

  
	
  V2

  	
   

  	
  0.9291

  	
   

  	
  0.9335

  	
   

  
	
  V3

  	
   

  	
  0.8135

  	
   

  	
  0.8226

  	
   

  
	
  V4

  	
   

  	
  0.7968

  	
   

  	
  0.7147

  	
   

  
	
  V5

  	
   

  	
  0.9970

  	
   

  	
  0.9726

  	
   

  
	
  V6

  	
   

  	
  0.9607

  	
   

  	
  1 0101

  	
   

  
	
  V7

  	
   

  	
  0.8943

  	
   

  	
  0.8767

  	
   

  
	
  V8

  	
   

  	
  0.9454

  	
   

  	
  0.9726

  	
   

  

 

Individual HMO

 

	
  Plan

  	
   

  	
  Prof
  Factor

  	
   

  	
  Inst
  Factor

  	
   

  
	
  Health Net 10

  	
   

  	
  0.9034

  	
   

  	
  0.9014

  	
   

  
	
  Health Net 10
  Plus

  	
   

  	
  0.9034

  	
   

  	
  0.9014

  	
   

  
	
  Health Net 20

  	
   

  	
  0.8063

  	
   

  	
  0.7079

  	
   

  
	
  Health Net 35

  	
   

  	
  0.6831

  	
   

  	
  0.6278

  	
   

  

 

Medicare Supplement HMO

 

	
  Plan

  	
   

  	
  Prof
  Factor

  	
   

  
	
  Medicare
  Conversion Plan J

  	
   

  	
  1.2018

  	
   

  
	
  Medicare COB $0
  Copay

  	
   

  	
  1.1169

  	
   

  
	
  Medicare COB $5
  and up Copay

  	
   

  	
  0.6326

  	
   

  

 

Medicare
Supplement POS

 

	
  Plan

  	
   

  	
  Prof Factor

  	
   

  
	
  POS Medicare COB
  $0 Copay

  	
   

  	
  1.1169

  	
   

  
	
  POS Medicare COB
  $5 and up Copay

  	
   

  	
  0.6326

  	
   

  

 

41

 

A.4
Benefit Plan Factors for PPG Standard POS Capitation and Standard POS Shared
Risk Budgets

Effective March 1, 1999

 

Standard POS

 

	
  Plan

  	
   

  	
  Prof

  Factor

  	
   

  	
  Inst

  Factor

  	
   

  
	
  AA

  	
   

  	
  0.9452

  	
   

  	
  0.9300

  	
   

  
	
  AB

  	
   

  	
  1.0431

  	
   

  	
  0.8885

  	
   

  
	
  AD

  	
   

  	
  0.9452

  	
   

  	
  0.8996

  	
   

  
	
  AG

  	
   

  	
  0.8981

  	
   

  	
  0.9255

  	
   

  
	
  AH

  	
   

  	
  0.9452

  	
   

  	
  0.9325

  	
   

  
	
  AJ

  	
   

  	
  0.8981

  	
   

  	
  0.9242

  	
   

  
	
  AW

  	
   

  	
  0.9452

  	
   

  	
  0.9325

  	
   

  
	
  BA

  	
   

  	
  0.9480

  	
   

  	
  0.9247

  	
   

  
	
  BC

  	
   

  	
  0.9747

  	
   

  	
  0.9489

  	
   

  
	
  BD

  	
   

  	
  0.9485

  	
   

  	
  0.9489

  	
   

  
	
  BE

  	
   

  	
  0.9566

  	
   

  	
  0.9489

  	
   

  
	
  BF

  	
   

  	
  0.8981

  	
   

  	
  0.9475

  	
   

  
	
  BG

  	
   

  	
  0.9095

  	
   

  	
  0.9475

  	
   

  
	
  BH

  	
   

  	
  0.9485

  	
   

  	
  0.9486

  	
   

  
	
  BI

  	
   

  	
  0.9747

  	
   

  	
  0.9489

  	
   

  
	
  BJ

  	
   

  	
  0.9747

  	
   

  	
  0.9483

  	
   

  
	
  BK

  	
   

  	
  1.0228

  	
   

  	
  0.9504

  	
   

  
	
  BL

  	
   

  	
  0.9966

  	
   

  	
  0.9515

  	
   

  
	
  BM

  	
   

  	
  0.9934

  	
   

  	
  0.9289

  	
   

  
	
  BN

  	
   

  	
  0.9095

  	
   

  	
  0.9489

  	
   

  
	
  BO

  	
   

  	
  0.9792

  	
   

  	
  0.9478

  	
   

  
	
  BP

  	
   

  	
  0.9095

  	
   

  	
  0.9499

  	
   

  
	
  BQ

  	
   

  	
  0.9774

  	
   

  	
  0.9501

  	
   

  
	
  BR

  	
   

  	
  0.9774

  	
   

  	
  0.9501

  	
   

  
	
  BS

  	
   

  	
  0.9485

  	
   

  	
  0.8420

  	
   

  
	
  BT

  	
   

  	
  0.9014

  	
   

  	
  0.8420

  	
   

  
	
  BU

  	
   

  	
  0.9747

  	
   

  	
  0.9266

  	
   

  
	
  BV

  	
   

  	
  0.9271

  	
   

  	
  0.9286

  	
   

  
	
  BW

  	
   

  	
  0.9492

  	
   

  	
  0.9138

  	
   

  
	
  BX

  	
   

  	
  0.9452

  	
   

  	
  0.9014

  	
   

  
	
  BY

  	
   

  	
  0.9501

  	
   

  	
  0.8256

  	
   

  
	
  BZ

  	
   

  	
  0.9590

  	
   

  	
  0.9468

  	
   

  
	
  CA

  	
   

  	
  0.9950

  	
   

  	
  0.9448

  	
   

  
	
  CB

  	
   

  	
  0.9983

  	
   

  	
  0.9448

  	
   

  
	
  CC

  	
   

  	
  0.9837

  	
   

  	
  0.9448

  	
   

  
	
  CD

  	
   

  	
  0.9870

  	
   

  	
  0.9448

  	
   

  
	
  CE

  	
   

  	
  0.9432

  	
   

  	
  0.8441

  	
   

  
	
  CF

  	
   

  	
  0.9465

  	
   

  	
  0.8441

  	
   

  
	
  CG

  	
   

  	
  0.9318

  	
   

  	
  0.8441

  	
   

  
	
  CH

  	
   

  	
  0.9351

  	
   

  	
  0.8441

  	
   

  
	
  CI

  	
   

  	
  0.8924

  	
   

  	
  0.7791

  	
   

  
	
  CJ

  	
   

  	
  0.8957

  	
   

  	
  0.7791

  	
   

  
	
  CK

  	
   

  	
  0.8811

  	
   

  	
  0.7791

  	
   

  
	
  CL

  	
   

  	
  0.8844

  	
   

  	
  0.7791

  	
   

  
	
  CM

  	
   

  	
  0.8440

  	
   

  	
  0.7398

  	
   

  
	
  CN

  	
   

  	
  0.8473

  	
   

  	
  0.7398

  	
   

  
	
  CO

  	
   

  	
  0.8326

  	
   

  	
  0.7398

  	
   

  
	
  CP

  	
   

  	
  0.8359

  	
   

  	
  0.7398

  	
   

  
	
  DA

  	
   

  	
  0.9566

  	
   

  	
  0.9325

  	
   

  
	
  DB

  	
   

  	
  0.9747

  	
   

  	
  0.9489

  	
   

  
	
  DC

  	
   

  	
  0.9566

  	
   

  	
  0.9489

  	
   

  
	
  DD

  	
   

  	
  0.9095

  	
   

  	
  0.9475

  	
   

  
	
  DE

  	
   

  	
  0.9714

  	
   

  	
  0.9300

  	
   

  
	
  DF

  	
   

  	
  0.9714

  	
   

  	
  0.8996

  	
   

  
	
  DG

  	
   

  	
  0.9243

  	
   

  	
  0.9255

  	
   

  
	
  DH

  	
   

  	
  0.9566

  	
   

  	
  0.9325

  	
   

  
	
  DI

  	
   

  	
  0.9566

  	
   

  	
  0.9300

  	
   

  
	
  DJ

  	
   

  	
  0.9095

  	
   

  	
  0.9255

  	
   

  
	
  DK

  	
   

  	
  0.9095

  	
   

  	
  0.9274

  	
   

  
	
  DL

  	
   

  	
  0.9714

  	
   

  	
  0.9293

  	
   

  
	
  DM

  	
   

  	
  0.9095

  	
   

  	
  0.7851

  	
   

  
	
  DN

  	
   

  	
  0.8643

  	
   

  	
  0.7138

  	
   

  
	
  DO

  	
   

  	
  0.9795

  	
   

  	
  0.8941

  	
   

  
	
  DP

  	
   

  	
  0.9777

  	
   

  	
  0.9405

  	
   

  
	
  DQ

  	
   

  	
  0.9892

  	
   

  	
  0.9492

  	
   

  
	
  DR

  	
   

  	
  0.9485

  	
   

  	
  0.8680

  	
   

  
	
  DS

  	
   

  	
  0.9747

  	
   

  	
  0.9520

  	
   

  
	
  DT

  	
   

  	
  0.9128

  	
   

  	
  0.9481

  	
   

  
	
  DU

  	
   

  	
  0.9014

  	
   

  	
  0.9481

  	
   

  
	
  DV

  	
   

  	
  0.9788

  	
   

  	
  0.9577

  	
   

  
	
  DW

  	
   

  	
  0.9747

  	
   

  	
  0.9489

  	
   

  
	
  DX

  	
   

  	
  0.9452

  	
   

  	
  0.9300

  	
   

  
	
  DY

  	
   

  	
  0.9566

  	
   

  	
  0.9300

  	
   

  
	
  DZ

  	
   

  	
  0.9886

  	
   

  	
  0.9372

  	
   

  
	
  FN

  	
   

  	
  0.9832

  	
   

  	
  0.9247

  	
   

  
	
  FQ

  	
   

  	
  0.9832

  	
   

  	
  0.9496

  	
   

  
	
  FP

  	
   

  	
  0.9347

  	
   

  	
  0.8485

  	
   

  
	
  FO

  	
   

  	
  0.9347

  	
   

  	
  0.8471

  	
   

  
	
  FR

  	
   

  	
  0.9808

  	
   

  	
  0.9247

  	
   

  
	
  FS

  	
   

  	
  0.9621

  	
   

  	
  0.9254

  	
   

  
	
  FT

  	
   

  	
  0.9619

  	
   

  	
  0.9454

  	
   

  
	
  FU

  	
   

  	
  0.9743

  	
   

  	
  0.9499

  	
   

  
	
  FV

  	
   

  	
  0.9813

  	
   

  	
  0.9119

  	
   

  
	
  FW

  	
   

  	
  0.9667

  	
   

  	
  0.9416

  	
   

  
	
  FX

  	
   

  	
  0.9565

  	
   

  	
  0.9287

  	
   

  
	
  FY

  	
   

  	
  0.9394

  	
   

  	
  0.8970

  	
   

  
	
  FZ

  	
   

  	
  0.9421

  	
   

  	
  0.9429

  	
   

  
	
  ga

  	
   

  	
  0.9485

  	
   

  	
  0.9309

  	
   

  
	
  GB

  	
   

  	
  0.9095

  	
   

  	
  0.9499

  	
   

  
	
  GC

  	
   

  	
  0.9791

  	
   

  	
  0.9478

  	
   

  
	
  GD

  	
   

  	
  0.9300

  	
   

  	
  0.9485

  	
   

  
	
  GE

  	
   

  	
  0.9242

  	
   

  	
  0.9242

  	
   

  
	
  GF

  	
   

  	
  0.9858

  	
   

  	
  0.9489

  	
   

  
	
  GG

  	
   

  	
  1.0245

  	
   

  	
  0.9604

  	
   

  
	
  GH

  	
   

  	
  0.9786

  	
   

  	
  0.9489

  	
   

  
	
  GI

  	
   

  	
  0.9242

  	
   

  	
  0.9292

  	
   

  
	
  GJ

  	
   

  	
  1.0269

  	
   

  	
  0.9511

  	
   

  
	
  GK

  	
   

  	
  0.9567

  	
   

  	
  0.9483

  	
   

  
	
  GL

  	
   

  	
  0.9746

  	
   

  	
  0.9483

  	
   

  
	
  GM

  	
   

  	
  0.9712

  	
   

  	
  0.9065

  	
   

  
	
  GN

  	
   

  	
  0.9251

  	
   

  	
  0.9405

  	
   

  
	
  GQ

  	
   

  	
  0.9242

  	
   

  	
  0.9242

  	
   

  
	
  GR

  	
   

  	
  0.9493

  	
   

  	
  0.9060

  	
   

  
	
  GS

  	
   

  	
  0.9094

  	
   

  	
  0.9489

  	
   

  
	
  GT

  	
   

  	
  1.0228

  	
   

  	
  0.9504

  	
   

  
	
  GU

  	
   

  	
  0.9242

  	
   

  	
  0.9242

  	
   

  
	
  KA

  	
   

  	
  0.9823

  	
   

  	
  0.9425

  	
   

  
	
  KB

  	
   

  	
  0.9730

  	
   

  	
  0.9247

  	
   

  
	
  KC

  	
   

  	
  0.9850

  	
   

  	
  0.8643

  	
   

  
	
  KD

  	
   

  	
  0.9789

  	
   

  	
  0.9279

  	
   

  
	
  KE

  	
   

  	
  0.9832

  	
   

  	
  0.9305

  	
   

  
	
  LA

  	
   

  	
  0.9714

  	
   

  	
  0.9300

  	
   

  
	
  LB

  	
   

  	
  0.9566

  	
   

  	
  0.9485

  	
   

  
	
  LC

  	
   

  	
  0.9566

  	
   

  	
  0.9300

  	
   

  
	
  LD

  	
   

  	
  0.9714

  	
   

  	
  0.8996

  	
   

  
	
  LE

  	
   

  	
  0.9714

  	
   

  	
  0.9305

  	
   

  
	
  LF

  	
   

  	
  0.9714

  	
   

  	
  0.9331

  	
   

  
	
  LG

  	
   

  	
  0.9243

  	
   

  	
  0.9255

  	
   

  
	
  LH

  	
   

  	
  0.9566

  	
   

  	
  0.9325

  	
   

  
	
  LI

  	
   

  	
  0.9714

  	
   

  	
  0.9068

  	
   

  
	
  LJ

  	
   

  	
  0.9243

  	
   

  	
  0.9242

  	
   

  
	
  LK

  	
   

  	
  0.8981

  	
   

  	
  0.8677

  	
   

  
	
  LL

  	
   

  	
  0.9566

  	
   

  	
  0.9300

  	
   

  
	
  LM

  	
   

  	
  0.9452

  	
   

  	
  0.9378

  	
   

  
	
  LN

  	
   

  	
  0.9452

  	
   

  	
  0.9397

  	
   

  
	
  LO

  	
   

  	
  0.8948

  	
   

  	
  0.9176

  	
   

  
	
  LP

  	
   

  	
  0.9566

  	
   

  	
  0.8996

  	
   

  
	
  LQ

  	
   

  	
  0.9243

  	
   

  	
  0.9291

  	
   

  
	
  LR

  	
   

  	
  0.9714

  	
   

  	
  0.9356

  	
   

  
	
  LS

  	
   

  	
  0.9095

  	
   

  	
  0.9255

  	
   

  
	
  LT

  	
   

  	
  0.8658

  	
   

  	
  0.7138

  	
   

  
	
  LU

  	
   

  	
  0.9095

  	
   

  	
  0.9242

  	
   

  
	
  LV

  	
   

  	
  0.9584

  	
   

  	
  0.9325

  	
   

  
	
  LW

  	
   

  	
  0.9714

  	
   

  	
  0.9325

  	
   

  
	
  LX

  	
   

  	
  0.9095

  	
   

  	
  0.7851

  	
   

  
	
  LY

  	
   

  	
  0.9599

  	
   

  	
  0.9485

  	
   

  
	
  LZ

  	
   

  	
  0.8643

  	
   

  	
  0.7138

  	
   

  
	
  NP

  	
   

  	
  0.9777

  	
   

  	
  0.9405

  	
   

  
	
  OA

  	
   

  	
  0.9452

  	
   

  	
  0.9276

  	
   

  
	
  OB

  	
   

  	
  0.9452

  	
   

  	
  0.9276

  	
   

  
	
  OC

  	
   

  	
  0.9452

  	
   

  	
  0.8420

  	
   

  
	
  OD

  	
   

  	
  0.9128

  	
   

  	
  0.8481

  	
   

  
	
  OE

  	
   

  	
  0.9112

  	
   

  	
  0.8481

  	
   

  
	
  OF

  	
   

  	
  0.9714

  	
   

  	
  0.9065

  	
   

  
	
  OG

  	
   

  	
  0.9492

  	
   

  	
  0.9138

  	
   

  
	
  OI

  	
   

  	
  0.9942

  	
   

  	
  0.8972

  	
   

  
	
  OK

  	
   

  	
  0.8981

  	
   

  	
  0.8420

  	
   

  
	
  OL

  	
   

  	
  0.9452

  	
   

  	
  0.9500

  	
   

  
	
  OM

  	
   

  	
  0.9452

  	
   

  	
  0.9468

  	
   

  
	
  ON

  	
   

  	
  0.9452

  	
   

  	
  0.9276

  	
   

  
	
  OO

  	
   

  	
  0.9452

  	
   

  	
  0.9303

  	
   

  
	
  OP

  	
   

  	
  0.9452

  	
   

  	
  0.9276

  	
   

  
	
  OQ

  	
   

  	
  0.9452

  	
   

  	
  0.9300

  	
   

  
	
  OR

  	
   

  	
  0.9460

  	
   

  	
  0.8256

  	
   

  
	
  OS

  	
   

  	
  0.9452

  	
   

  	
  0.9533

  	
   

  
	
  OT

  	
   

  	
  1.0098

  	
   

  	
  0.9405

  	
   

  
	
  OU

  	
   

  	
  0.9526

  	
   

  	
  0.9484

  	
   

  
	
  OV

  	
   

  	
  0.9124

  	
   

  	
  0.9286

  	
   

  
	
  OW

  	
   

  	
  0.9452

  	
   

  	
  0.9309

  	
   

  
	
  OX

  	
   

  	
  0.9452

  	
   

  	
  0.8654

  	
   

  
	
  OY

  	
   

  	
  0.9452

  	
   

  	
  0.9276

  	
   

  
	
  OZ

  	
   

  	
  0.9452

  	
   

  	
  0.9313

  	
   

  
	
  PA

  	
   

  	
  0.9452

  	
   

  	
  0.9323

  	
   

  
	
  PB

  	
   

  	
  0.9307

  	
   

  	
  0.8654

  	
   

  
	
  PC

  	
   

  	
  0.9452

  	
   

  	
  0.8420

  	
   

  
	
  PD

  	
   

  	
  0.8981

  	
   

  	
  0.8420

  	
   

  
	
  PE

  	
   

  	
  0.9453

  	
   

  	
  0.9465

  	
   

  
	
  PF

  	
   

  	
  0.9960

  	
   

  	
  0.9312

  	
   

  
	
  PG

  	
   

  	
  1.0367

  	
   

  	
  0.9405

  	
   

  
	
  PH

  	
   

  	
  0.9501

  	
   

  	
  0.8256

  	
   

  
	
  PI

  	
   

  	
  0.9492

  	
   

  	
  0.9099

  	
   

  
	
  PJ

  	
   

  	
  0.9714

  	
   

  	
  0.9473

  	
   

  
	
  PK

  	
   

  	
  0
  9566

  	
   

  	
  0.9325

  	
   

  
	
  PL

  	
   

  	
  0.9340

  	
   

  	
  0.8680

  	
   

  
	
  PM

  	
   

  	
  0.9485

  	
   

  	
  0.9276

  	
   

  
	
  PN

  	
   

  	
  0.9452

  	
   

  	
  0.9498

  	
   

  
	
  PO

  	
   

  	
  0.9485

  	
   

  	
  0.9303

  	
   

  
	
  PP

  	
   

  	
  1.0313

  	
   

  	
  0.9405

  	
   

  
	
  PQ

  	
   

  	
  0.9452

  	
   

  	
  0.8554

  	
   

  
	
  PR

  	
   

  	
  0.9485

  	
   

  	
  0.9232

  	
   

  
	
  PS

  	
   

  	
  0.9934

  	
   

  	
  0.9014

  	
   

  
	
  PT

  	
   

  	
  0.9340

  	
   

  	
  0.8680

  	
   

  
	
  PU

  	
   

  	
  0.9933

  	
   

  	
  0.9002

  	
   

  
	
  PV

  	
   

  	
  0.9095

  	
   

  	
  0.8420

  	
   

  
	
  PW

  	
   

  	
  1.0270

  	
   

  	
  0.9511

  	
   

  
	
  PX

  	
   

  	
  0.9714

  	
   

  	
  0.9287

  	
   

  
	
  PY

  	
   

  	
  0.9599

  	
   

  	
  0.8420

  	
   

  
	
  PZ

  	
   

  	
  0.9128

  	
   

  	
  0.8420

  	
   

  
	
  XA

  	
   

  	
  0.9452

  	
   

  	
  0.8725

  	
   

  
	
  XB

  	
   

  	
  0.8298

  	
   

  	
  0.9195

  	
   

  
	
  XC

  	
   

  	
  0.9451

  	
   

  	
  0
  9022

  	
   

  
	
  XD

  	
   

  	
  0.9566

  	
   

  	
  0.8328

  	
   

  
	
  XE

  	
   

  	
  0.9422

  	
   

  	
  0.7891

  	
   

  
	
  XF

  	
   

  	
  0.9452

  	
   

  	
  0.8275

  	
   

  
	
  XG

  	
   

  	
  1.0793

  	
   

  	
  0.9494

  	
   

  
	
  XI

  	
   

  	
  1.0793

  	
   

  	
  0.9298

  	
   

  
	
  XJ

  	
   

  	
  0.8981

  	
   

  	
  0.8275

  	
   

  
	
  XK

  	
   

  	
  0.9782

  	
   

  	
  0.8426

  	
   

  
	
  XL

  	
   

  	
  0.9942

  	
   

  	
  0.8972

  	
   

  
	
  XM

  	
   

  	
  0.9451

  	
   

  	
  0.9022

  	
   

  
	
  XN

  	
   

  	
  0.9452

  	
   

  	
  0.9183

  	
   

  
	
  XO

  	
   

  	
  0.8564

  	
   

  	
  0.9195

  	
   

  
	
  XP

  	
   

  	
  0.9819

  	
   

  	
  0.8661

  	
   

  
	
  XQ

  	
   

  	
  0.8981

  	
   

  	
  0.7513

  	
   

  
	
  XR

  	
   

  	
  0.8493

  	
   

  	
  0.9195

  	
   

  
	
  XS

  	
   

  	
  0.9681

  	
   

  	
  0.7837

  	
   

  
	
  XT

  	
   

  	
  0.9452

  	
   

  	
  0.9022

  	
   

  
	
  XU

  	
   

  	
  0.9452

  	
   

  	
  0.8934

  	
   

  
	
  XV

  	
   

  	
  0.9452

  	
   

  	
  0.9113

  	
   

  
	
  XW

  	
   

  	
  0.9452

  	
   

  	
  0.9229

  	
   

  
	
  XY

  	
   

  	
  0.9782

  	
   

  	
  0.8502

  	
   

  
	
  XZ

  	
   

  	
  0.9966

  	
   

  	
  0.9289

  	
   

  

 

42

 

A.4 Benefit Plan Factors for PPG
Small Group POS Capitation and Small Group POS Shared Risk Budgets

Effective March 1, 1999

 

Small Group POS

 

	
  Plan

  	
   

  	
  Prof
  Factor

  	
   

  	
  Inst
  Factor

  	
   

  
	
  QA

  	
   

  	
  0.9877

  	
   

  	
  0.9427

  	
   

  
	
  QB

  	
   

  	
  0.9350

  	
   

  	
  0.8421

  	
   

  
	
  QC

  	
   

  	
  0.8346

  	
   

  	
  0.7381

  	
   

  
	
  QD

  	
   

  	
  0.9442

  	
   

  	
  0.8422

  	
   

  
	
  QE

  	
   

  	
  0.9946

  	
   

  	
  0.9427

  	
   

  

 

43

 

B.           Age/Sex and Benefit Plan Factors for Pharmacy Budgets:

 

B. 1 Age/Sex Factors for Pharmacy Budgets Effective March 1,
1999

 

	
  Age

  	
   

  	
  Male

  	
   

  	
  Female

  	
   

  
	
  0

  	
   

  	
   

  	
  0.231

  	
   

  	
  0.231

  	
   

  
	
  1

  	
   

  	
   

  	
  0.366

  	
   

  	
  0.366

  	
   

  
	
  2 - 4

  	
   

  	
   

  	
  0.323

  	
   

  	
  0.323

  	
   

  
	
  5 - 9

  	
   

  	
   

  	
  0.289

  	
   

  	
  0.289

  	
   

  
	
  10 - 14

  	
   

  	
   

  	
  0.276

  	
   

  	
  0.276

  	
   

  
	
  15 - 19

  	
   

  	
   

  	
  0.408

  	
   

  	
  0.408

  	
   

  
	
  20 - 24

  	
   

  	
   

  	
  0.280

  	
   

  	
  0.714

  	
   

  
	
  25 - 29

  	
   

  	
   

  	
  0.382

  	
   

  	
  0.868

  	
   

  
	
  30 - 34

  	
   

  	
   

  	
  0.547

  	
   

  	
  0.919

  	
   

  
	
  35 - 39

  	
   

  	
   

  	
  0.756

  	
   

  	
  1.067

  	
   

  
	
  40 - 44

  	
   

  	
   

  	
  0.974

  	
   

  	
  1.265

  	
   

  
	
  45 - 49

  	
   

  	
   

  	
  1.295

  	
   

  	
  1.654

  	
   

  
	
  50 - 54

  	
   

  	
   

  	
  1.746

  	
   

  	
  2.198

  	
   

  
	
  55 - 59

  	
   

  	
   

  	
  2.133

  	
   

  	
  2.573

  	
   

  
	
  60 - 64

  	
   

  	
   

  	
  2.610

  	
   

  	
  3.000

  	
   

  
	
  65 +

  	
   

  	
   

  	
  3.175

  	
   

  	
  3.467

  	
   

  

 

44

 

B.2 Benefit Plan Factors for Pharmacy
Budgets Effective March 1, 1999

 

	
  Plan

  	
   

  	
  Factor

  	
   

  
	
  01

  	
   

  	
   

  	
  1.3376

  	
   

  
	
  02

  	
   

  	
   

  	
  1.1000

  	
   

  
	
  03

  	
   

  	
   

  	
  0.6448

  	
   

  
	
  04

  	
   

  	
   

  	
  1.1000

  	
   

  
	
  05

  	
   

  	
   

  	
  0.7255

  	
   

  
	
  06

  	
   

  	
   

  	
  1.1102

  	
   

  
	
  07

  	
   

  	
   

  	
  0.6448

  	
   

  
	
  08

  	
   

  	
   

  	
  1.1000

  	
   

  
	
  09

  	
   

  	
   

  	
  1.1000

  	
   

  
	
  0A

  	
   

  	
   

  	
  1.7495

  	
   

  
	
  0B

  	
   

  	
   

  	
  1.6378

  	
   

  
	
  0C

  	
   

  	
   

  	
  1.7578

  	
   

  
	
  0D

  	
   

  	
   

  	
  1.6457

  	
   

  
	
  0E

  	
   

  	
   

  	
  1.7827

  	
   

  
	
  0F

  	
   

  	
   

  	
  0.5134

  	
   

  
	
  0G

  	
   

  	
   

  	
  0.9368

  	
   

  
	
  0H

  	
   

  	
   

  	
  0.7255

  	
   

  
	
  0I

  	
   

  	
   

  	
  0.8948

  	
   

  
	
  0J

  	
   

  	
   

  	
  1.7578

  	
   

  
	
  0P

  	
   

  	
   

  	
  1.1577

  	
   

  
	
  0R

  	
   

  	
   

  	
  1.1577

  	
   

  
	
  0S

  	
   

  	
   

  	
  l.0470

  	
   

  
	
  0T

  	
   

  	
   

  	
  0.6771

  	
   

  
	
  0U

  	
   

  	
   

  	
  1.1577

  	
   

  
	
  0V

  	
   

  	
   

  	
  1.1577

  	
   

  
	
  0W

  	
   

  	
   

  	
  0.7232

  	
   

  
	
  0X

  	
   

  	
   

  	
  0.9409

  	
   

  
	
  0Y

  	
   

  	
   

  	
  0.6411

  	
   

  
	
  0Z

  	
   

  	
   

  	
  1.0945

  	
   

  
	
  10

  	
   

  	
   

  	
  0.7564

  	
   

  
	
  11

  	
   

  	
   

  	
  0.5166

  	
   

  
	
  12

  	
   

  	
   

  	
  0.4105

  	
   

  
	
  13

  	
   

  	
   

  	
  0.4806

  	
   

  
	
  14

  	
   

  	
   

  	
  0.5590

  	
   

  
	
  16

  	
   

  	
   

  	
  1.0821

  	
   

  
	
  17

  	
   

  	
   

  	
  0.6411

  	
   

  
	
  18

  	
   

  	
   

  	
  0.7292

  	
   

  
	
  19

  	
   

  	
   

  	
  1.1000

  	
   

  
	
  1A

  	
   

  	
   

  	
  1.6037

  	
   

  
	
  1B

  	
   

  	
   

  	
  1.5013

  	
   

  
	
  1C

  	
   

  	
   

  	
  1.6115

  	
   

  
	
  1D

  	
   

  	
   

  	
  1.5087

  	
   

  
	
  1E

  	
   

  	
   

  	
  1.1102

  	
   

  
	
  1F

  	
   

  	
   

  	
  1.1102

  	
   

  
	
  1G

  	
   

  	
   

  	
  0.7412

  	
   

  
	
  1H

  	
   

  	
   

  	
  0.7412

  	
   

  
	
  1I

  	
   

  	
   

  	
  1.1102

  	
   

  
	
  1J

  	
   

  	
   

  	
  0.7564

  	
   

  
	
  1K

  	
   

  	
   

  	
  1.1102

  	
   

  
	
  1L

  	
   

  	
   

  	
  0.8989

  	
   

  
	
  1M

  	
   

  	
   

  	
  0.7564

  	
   

  
	
  1N

  	
   

  	
   

  	
  0.8625

  	
   

  
	
  1O

  	
   

  	
   

  	
  0.6845

  	
   

  
	
  1P

  	
   

  	
   

  	
  0.5991

  	
   

  
	
  1Q

  	
   

  	
   

  	
  1.1000

  	
   

  
	
  1R

  	
   

  	
   

  	
  0.9368

  	
   

  
	
  1S

  	
   

  	
   

  	
  1.0945

  	
   

  
	
  1T

  	
   

  	
   

  	
  1.1157

  	
   

  
	
  1U

  	
   

  	
   

  	
  0.9119

  	
   

  
	
  1V

  	
   

  	
   

  	
  1.1000

  	
   

  
	
  1W

  	
   

  	
   

  	
  1.1102

  	
   

  
	
  1X

  	
   

  	
   

  	
  0.8989

  	
   

  
	
  1Y

  	
   

  	
   

  	
  1.2135

  	
   

  
	
  1Z

  	
   

  	
   

  	
  1.1000

  	
   

  
	
  20

  	
   

  	
   

  	
  0.7292

  	
   

  
	
  23

  	
   

  	
   

  	
  0.9368

  	
   

  
	
  24

  	
   

  	
   

  	
  1.1157

  	
   

  
	
  26

  	
   

  	
   

  	
  1.1000

  	
   

  
	
  2A

  	
   

  	
   

  	
  1.4635

  	
   

  
	
  2B

  	
   

  	
   

  	
  1.3699

  	
   

  
	
  2C

  	
   

  	
   

  	
  1.4704

  	
   

  
	
  2D

  	
   

  	
   

  	
  1.3768

  	
   

  
	
  2E

  	
   

  	
   

  	
  1.4912

  	
   

  
	
  2F

  	
   

  	
   

  	
  0.9409

  	
   

  
	
  2G

  	
   

  	
   

  	
  0.6448

  	
   

  
	
  2H

  	
   

  	
   

  	
  1.1000

  	
   

  
	
  2I

  	
   

  	
   

  	
  0.6448

  	
   

  
	
  2J

  	
   

  	
   

  	
  0.6882

  	
   

  
	
  2L

  	
   

  	
   

  	
  1.1761

  	
   

  
	
  2M

  	
   

  	
   

  	
  1.1157

  	
   

  
	
  2N

  	
   

  	
   

  	
  1.1157

  	
   

  
	
  2O

  	
   

  	
   

  	
  0.7412

  	
   

  
	
  2P

  	
   

  	
   

  	
  1.1577

  	
   

  
	
  2Q

  	
   

  	
   

  	
  1.1102

  	
   

  
	
  2R

  	
   

  	
   

  	
  1.1102

  	
   

  
	
  2S

  	
   

  	
   

  	
  0.8989

  	
   

  
	
  2T

  	
   

  	
   

  	
  0.7292

  	
   

  
	
  2U

  	
   

  	
   

  	
  0.8989

  	
   

  
	
  2V

  	
   

  	
   

  	
  0.7269

  	
   

  
	
  2W

  	
   

  	
   

  	
  0.8989

  	
   

  
	
  2X

  	
   

  	
   

  	
  0.6448

  	
   

  
	
  2Y

  	
   

  	
   

  	
  0.7269

  	
   

  
	
  2Z

  	
   

  	
   

  	
  1.2135

  	
   

  
	
  30

  	
   

  	
   

  	
  1.1102

  	
   

  
	
  31

  	
   

  	
   

  	
  1.1102

  	
   

  
	
  32

  	
   

  	
   

  	
  0.7255

  	
   

  
	
  33

  	
   

  	
   

  	
  0.7269

  	
   

  
	
  34

  	
   

  	
   

  	
  1.1102

  	
   

  
	
  35

  	
   

  	
   

  	
  1.1102

  	
   

  
	
  36

  	
   

  	
   

  	
  1.1102

  	
   

  
	
  37

  	
   

  	
   

  	
  1.1102

  	
   

  
	
  38

  	
   

  	
   

  	
  1.2135

  	
   

  
	
  39

  	
   

  	
   

  	
  0.8791

  	
   

  
	
  3A

  	
   

  	
   

  	
  1.3311

  	
   

  
	
  3B

  	
   

  	
   

  	
  1.2458

  	
   

  
	
  3C

  	
   

  	
   

  	
  1.3376

  	
   

  
	
  3D

  	
   

  	
   

  	
  1.2518

  	
   

  
	
  3E

  	
   

  	
   

  	
  1.3311

  	
   

  
	
  3F

  	
   

  	
   

  	
  1.3376

  	
   

  
	
  3G

  	
   

  	
   

  	
  1.3311

  	
   

  
	
  3I

  	
   

  	
   

  	
  0.8989

  	
   

  
	
  3J

  	
   

  	
   

  	
  0.8989

  	
   

  
	
  3K

  	
   

  	
   

  	
  1.1157

  	
   

  
	
  3L

  	
   

  	
   

  	
  0.6448

  	
   

  
	
  3M

  	
   

  	
   

  	
  0.8671

  	
   

  
	
  3N

  	
   

  	
   

  	
  1.2135

  	
   

  
	
  3O

  	
   

  	
   

  	
  1.4704

  	
   

  
	
  3P

  	
   

  	
   

  	
  0.8989

  	
   

  
	
  3Q

  	
   

  	
   

  	
  1.4912

  	
   

  
	
  3R

  	
   

  	
   

  	
  0.6882

  	
   

  
	
  3S

  	
   

  	
   

  	
  0.5166

  	
   

  
	
  3T

  	
   

  	
   

  	
  0.7292

  	
   

  
	
  3U

  	
   

  	
   

  	
  1.6378

  	
   

  
	
  3V

  	
   

  	
   

  	
  0.7255

  	
   

  
	
  3X

  	
   

  	
   

  	
  0.7398

  	
   

  
	
  3Y

  	
   

  	
   

  	
  0.9967

  	
   

  
	
  3Z

  	
   

  	
   

  	
  0.5590

  	
   

  
	
  40

  	
   

  	
   

  	
  0.7292

  	
   

  
	
  41

  	
   

  	
   

  	
  0.9119

  	
   

  
	
  42

  	
   

  	
   

  	
  1.1637

  	
   

  
	
  46

  	
   

  	
   

  	
  1.1637

  	
   

  
	
  47

  	
   

  	
   

  	
  1.3588

  	
   

  
	
  48

  	
   

  	
   

  	
  0.9368

  	
   

  
	
  49

  	
   

  	
   

  	
  1.2310

  	
   

  
	
  4A

  	
   

  	
   

  	
  1.2080

  	
   

  
	
  4B

  	
   

  	
   

  	
  1.1305

  	
   

  
	
  4E

  	
   

  	
   

  	
  1.2015

  	
   

  
	
  4F

  	
   

  	
   

  	
  1.2836

  	
   

  
	
  4G

  	
   

  	
   

  	
  1.1000

  	
   

  
	
  4H

  	
   

  	
   

  	
  1.1000

  	
   

  
	
  4I

  	
   

  	
   

  	
  1.1102

  	
   

  
	
  4K

  	
   

  	
   

  	
  1.0032

  	
   

  
	
  4L

  	
   

  	
   

  	
  1.0945

  	
   

  
	
  4M

  	
   

  	
   

  	
  0.9917

  	
   

  
	
  4N

  	
   

  	
   

  	
  0.9331

  	
   

  
	
  4P

  	
   

  	
   

  	
  0.9548

  	
   

  
	
  4Q

  	
   

  	
   

  	
  0.9548

  	
   

  
	
  4R

  	
   

  	
   

  	
  1.1000

  	
   

  
	
  4S

  	
   

  	
   

  	
  1.1102

  	
   

  
	
  4T

  	
   

  	
   

  	
  1.1000

  	
   

  
	
  4U

  	
   

  	
   

  	
  0.7398

  	
   

  
	
  4V

  	
   

  	
   

  	
  1.0945

  	
   

  
	
  4W

  	
   

  	
   

  	
  1.2135

  	
   

  
	
  4X

  	
   

  	
   

  	
  1.1000

  	
   

  
	
  4Y

  	
   

  	
   

  	
  0.7269

  	
   

  
	
  51

  	
   

  	
   

  	
  0.7255

  	
   

  
	
  52

  	
   

  	
   

  	
  0.7292

  	
   

  
	
  53

  	
   

  	
   

  	
  0.6448

  	
   

  
	
  54

  	
   

  	
   

  	
  0.5166

  	
   

  
	
  55

  	
   

  	
   

  	
  0.7292

  	
   

  
	
  56

  	
   

  	
   

  	
  0.6448

  	
   

  
	
  57

  	
   

  	
   

  	
  0.5166

  	
   

  
	
  58

  	
   

  	
   

  	
  0.7255

  	
   

  
	
  59

  	
   

  	
   

  	
  0.6448

  	
   

  
	
  5A

  	
   

  	
   

  	
  1.0945

  	
   

  
	
  5B

  	
   

  	
   

  	
  1.1157

  	
   

  
	
  5C

  	
   

  	
   

  	
  1.1000

  	
   

  
	
  5D

  	
   

  	
   

  	
  1.0299

  	
   

  
	
  5E

  	
   

  	
   

  	
  1.0834

  	
   

  
	
  5F

  	
   

  	
   

  	
  1.1577

  	
   

  
	
  5G

  	
   

  	
   

  	
  1.1637

  	
   

  
	
  5H

  	
   

  	
   

  	
  1.1798

  	
   

  
	
  5I

  	
   

  	
   

  	
  1.1180

  	
   

  
	
  5J

  	
   

  	
   

  	
  0.6005

  	
   

  
	
  5K

  	
   

  	
   

  	
  1.1821

  	
   

  
	
  5L

  	
   

  	
   

  	
  1.1577

  	
   

  
	
  5M

  	
   

  	
   

  	
  1.1000

  	
   

  
	
  5N

  	
   

  	
   

  	
  1.0834

  	
   

  
	
  5O

  	
   

  	
   

  	
  0.7292

  	
   

  
	
  5P

  	
   

  	
   

  	
  1.1577

  	
   

  
	
  5Q

  	
   

  	
   

  	
  0.5973

  	
   

  
	
  5R

  	
   

  	
   

  	
  0.7292

  	
   

  
	
  5S

  	
   

  	
   

  	
  0.7255

  	
   

  
	
  5T

  	
   

  	
   

  	
  1.1000

  	
   

  
	
  5U

  	
   

  	
   

  	
  1.1157

  	
   

  
	
  5V

  	
   

  	
   

  	
  1.1000

  	
   

  
	
  5W

  	
   

  	
   

  	
  1.1157

  	
   

  
	
  5X

  	
   

  	
   

  	
  0.7412

  	
   

  
	
  5Y

  	
   

  	
   

  	
  0.7412

  	
   

  
	
  5Z

  	
   

  	
   

  	
  1.7495

  	
   

  
	
  61

  	
   

  	
   

  	
  1.1102

  	
   

  
	
  62

  	
   

  	
   

  	
  1.1102

  	
   

  
	
  63

  	
   

  	
   

  	
  1.7578

  	
   

  
	
  64

  	
   

  	
   

  	
  0.9409

  	
   

  
	
  65

  	
   

  	
   

  	
  0.7292

  	
   

  
	
  66

  	
   

  	
   

  	
  1.1637

  	
   

  
	
  67

  	
   

  	
   

  	
  1.1637

  	
   

  
	
  68

  	
   

  	
   

  	
  1.1000

  	
   

  
	
  69

  	
   

  	
   

  	
  0.8989

  	
   

  
	
  6A

  	
   

  	
   

  	
  0.9917

  	
   

  
	
  6B

  	
   

  	
   

  	
  1.1157

  	
   

  
	
  6C

  	
   

  	
   

  	
  0.9967

  	
   

  
	
  6D

  	
   

  	
   

  	
  1.0945

  	
   

  
	
  6E

  	
   

  	
   

  	
  0.9750

  	
   

  
	
  6F

  	
   

  	
   

  	
  1.0424

  	
   

  
	
  6G

  	
   

  	
   

  	
  0.6005

  	
   

  
	
  6H

  	
   

  	
   

  	
  1.1577

  	
   

  
	
  6I

  	
   

  	
   

  	
  1.1102

  	
   

  
	
  6J

  	
   

  	
   

  	
  1.1102

  	
   

  
	
  6K

  	
   

  	
   

  	
  0.8989

  	
   

  
	
  6L

  	
   

  	
   

  	
  0.8989

  	
   

  
	
  6M

  	
   

  	
   

  	
  1.1180

  	
   

  
	
  6N

  	
   

  	
   

  	
  1.1180

  	
   

  
	
  6O

  	
   

  	
   

  	
  1.1102

  	
   

  
	
  6P

  	
   

  	
   

  	
  1.0424

  	
   

  
	
  6Q

  	
   

  	
   

  	
  0.9280

  	
   

  
	
  6R

  	
   

  	
   

  	
  1.1637

  	
   

  
	
  6S

  	
   

  	
   

  	
  0.8805

  	
   

  
	
  6T

  	
   

  	
   

  	
  1.1102

  	
   

  
	
  6U

  	
   

  	
   

  	
  1.1102

  	
   

  
	
  6V

  	
   

  	
   

  	
  1.1102

  	
   

  
	
  6W

  	
   

  	
   

  	
  1.1102

  	
   

  
	
  6X

  	
   

  	
   

  	
  1.1102

  	
   

  
	
  6Y

  	
   

  	
   

  	
  1.7578

  	
   

  
	
  6Z

  	
   

  	
   

  	
  1.2241

  	
   

  
	
  71

  	
   

  	
   

  	
  1.1102

  	
   

  
	
  72

  	
   

  	
   

  	
  1.1102

  	
   

  
	
  73

  	
   

  	
   

  	
  0.8948

  	
   

  
	
  74

  	
   

  	
   

  	
  1.1102

  	
   

  
	
  75

  	
   

  	
   

  	
  0.9368

  	
   

  
	
  76

  	
   

  	
   

  	
  0.8989

  	
   

  
	
  77

  	
   

  	
   

  	
  0.9368

  	
   

  
	
  78

  	
   

  	
   

  	
  0.9409

  	
   

  
	
  79

  	
   

  	
   

  	
  0.8948

  	
   

  
	
  7A

  	
   

  	
   

  	
  0.8948

  	
   

  
	
  7B

  	
   

  	
   

  	
  0.8371

  	
   

  
	
  7C

  	
   

  	
   

  	
  0.8989

  	
   

  
	
  7D

  	
   

  	
   

  	
  0.8768

  	
   

  
	
  7E

  	
   

  	
   

  	
  0.8768

  	
   

  
	
  7F

  	
   

  	
   

  	
  0.9368

  	
   

  
	
  7G

  	
   

  	
   

  	
  0.9409

  	
   

  
	
  7H

  	
   

  	
   

  	
  1.1102

  	
   

  
	
  7I

  	
   

  	
   

  	
  1.1102

  	
   

  
	
  7J

  	
   

  	
   

  	
  0.9409

  	
   

  
	
  7K

  	
   

  	
   

  	
  0.9368

  	
   

  
	
  7L

  	
   

  	
   

  	
  0.8989

  	
   

  
	
  7M

  	
   

  	
   

  	
  0.8371

  	
   

  
	
  7N

  	
   

  	
   

  	
  0.9368

  	
   

  
	
  7O

  	
   

  	
   

  	
  0.8989

  	
   

  
	
  7P

  	
   

  	
   

  	
  0.8948

  	
   

  
	
  7Q

  	
   

  	
   

  	
  0.7527

  	
   

  
	
  7R

  	
   

  	
   

  	
  1.7578

  	
   

  
	
  7S

  	
   

  	
   

  	
  1.7578

  	
   

  
	
  7T

  	
   

  	
   

  	
  1.1102

  	
   

  
	
  7U

  	
   

  	
   

  	
  1.1102

  	
   

  
	
  7V

  	
   

  	
   

  	
  1.1102

  	
   

  
	
  7W

  	
   

  	
   

  	
  1.1102

  	
   

  
	
  7X

  	
   

  	
   

  	
  1.1102

  	
   

  
	
  7Y

  	
   

  	
   

  	
  1.1102

  	
   

  
	
  7Z

  	
   

  	
   

  	
  1.7495

  	
   

  
	
  82

  	
   

  	
   

  	
  1.1000

  	
   

  
	
  8A

  	
   

  	
   

  	
  1.1102

  	
   

  
	
  8B

  	
   

  	
   

  	
  0.8989

  	
   

  
	
  8C

  	
   

  	
   

  	
  0.8948

  	
   

  
	
  8E

  	
   

  	
   

  	
  0.7869

  	
   

  
	
  8F

  	
   

  	
   

  	
  0.8404

  	
   

  
	
  8G

  	
   

  	
   

  	
  1.1102

  	
   

  
	
  8H

  	
   

  	
   

  	
  1.0032

  	
   

  
	
  8I

  	
   

  	
   

  	
  0.8989

  	
   

  
	
  8J

  	
   

  	
   

  	
  0.8989

  	
   

  
	
  8K

  	
   

  	
   

  	
  0.8989

  	
   

  
	
  8L

  	
   

  	
   

  	
  1.6115

  	
   

  
	
  8M

  	
   

  	
   

  	
  0.9986

  	
   

  
	
  8N

  	
   

  	
   

  	
  0.9548

  	
   

  
	
  8P

  	
   

  	
   

  	
  1.1000

  	
   

  
	
  8R

  	
   

  	
   

  	
  1.7864

  	
   

  
	
  8S

  	
   

  	
   

  	
  1.0618

  	
   

  
	
  8T

  	
   

  	
   

  	
  0.5590

  	
   

  
	
  8U

  	
   

  	
   

  	
  1.6346

  	
   

  
	
  8V

  	
   

  	
   

  	
  1.1637

  	
   

  
	
  8X

  	
   

  	
   

  	
  0.6448

  	
   

  
	
  8Y

  	
   

  	
   

  	
  0.7255

  	
   

  
	
  8Z

  	
   

  	
   

  	
  0.7527

  	
   

  
	
  91

  	
   

  	
   

  	
  1.2135

  	
   

  
	
  92

  	
   

  	
   

  	
  1.1577

  	
   

  
	
  93

  	
   

  	
   

  	
  0.7292

  	
   

  
	
  96

  	
   

  	
   

  	
  0.9368

  	
   

  
	
  9A

  	
   

  	
   

  	
  0.7232

  	
   

  
	
  9B

  	
   

  	
   

  	
  0.6771

  	
   

  
	
  9C

  	
   

  	
   

  	
  0.7269

  	
   

  
	
  9D

  	
   

  	
   

  	
  0.7232

  	
   

  
	
  9E

  	
   

  	
   

  	
  0.7048

  	
   

  
	
  9F

  	
   

  	
   

  	
  0.7527

  	
   

  
	
  9G

  	
   

  	
   

  	
  0.7564

  	
   

  
	
  9H

  	
   

  	
   

  	
  0.7675

  	
   

  
	
  9I

  	
   

  	
   

  	
  0.7269

  	
   

  
	
  9J

  	
   

  	
   

  	
  0.7232

  	
   

  
	
  9L

  	
   

  	
   

  	
  1.7495

  	
   

  
	
  9M

  	
   

  	
   

  	
  0.6411

  	
   

  
	
  9N

  	
   

  	
   

  	
  0.7048

  	
   

  
	
  9O

  	
   

  	
   

  	
  0.6448

  	
   

  
	
  9P

  	
   

  	
   

  	
  0.6411

  	
   

  
	
  9Q

  	
   

  	
   

  	
  0.6411

  	
   

  
	
  9R

  	
   

  	
   

  	
  0.7527

  	
   

  
	
  9S

  	
   

  	
   

  	
  0.6411

  	
   

  
	
  9T

  	
   

  	
   

  	
  0.9409

  	
   

  
	
  9U

  	
   

  	
   

  	
  1.2135

  	
   

  
	
  9W

  	
   

  	
   

  	
  0.6448

  	
   

  
	
  9X

  	
   

  	
   

  	
  1.1102

  	
   

  
	
  9Y

  	
   

  	
   

  	
  1.1000

  	
   

  
	
  9Z

  	
   

  	
   

  	
  1.0424

  	
   

  
	
  Al

  	
   

  	
   

  	
  1.7578

  	
   

  
	
  Bl

  	
   

  	
   

  	
  0.7292

  	
   

  
	
  B2

  	
   

  	
   

  	
  0.7564

  	
   

  
	
  B3

  	
   

  	
   

  	
  0.7564

  	
   

  
	
  B4

  	
   

  	
   

  	
  0.7292

  	
   

  
	
  B5

  	
   

  	
   

  	
  0.8989

  	
   

  
	
  B6

  	
   

  	
   

  	
  1.1798

  	
   

  
	
  B7

  	
   

  	
   

  	
  1.1637

  	
   

  
	
  B8

  	
   

  	
   

  	
  0.7255

  	
   

  
	
  B9

  	
   

  	
   

  	
  0.7255

  	
   

  
	
  C2

  	
   

  	
   

  	
  0.6536

  	
   

  
	
  C3

  	
   

  	
   

  	
  0.6536

  	
   

  
	
  C5

  	
   

  	
   

  	
  0.9091

  	
   

  
	
  C7

  	
   

  	
   

  	
  0.7292

  	
   

  
	
  C8

  	
   

  	
   

  	
  0.7292

  	
   

  
	
  C9

  	
   

  	
   

  	
  0.7412

  	
   

  
	
  Dl

  	
   

  	
   

  	
  0.7412

  	
   

  
	
  D2

  	
   

  	
   

  	
  0.7292

  	
   

  
	
  D3

  	
   

  	
   

  	
  0.7689

  	
   

  
	
  D4

  	
   

  	
   

  	
  0.7689

  	
   

  
	
  D5

  	
   

  	
   

  	
  0.7689

  	
   

  
	
  D6

  	
   

  	
   

  	
  0.7195

  	
   

  
	
  E2

  	
   

  	
   

  	
  0.7721

  	
   

  
	
  E3

  	
   

  	
   

  	
  0.8989

  	
   

  
	
  E5

  	
   

  	
   

  	
  0.7412

  	
   

  
	
  E7

  	
   

  	
   

  	
  1.1157

  	
   

  
	
  F1

  	
   

  	
   

  	
  0.7292

  	
   

  
	
  F3

  	
   

  	
   

  	
  0.7412

  	
   

  
	
  F4

  	
   

  	
   

  	
  0 7292

  	
   

  
	
  F7

  	
   

  	
   

  	
  0.7398

  	
   

  
	
  I2

  	
   

  	
   

  	
  1.0106

  	
   

  
	
  I3

  	
   

  	
   

  	
  0.6171

  	
   

  
	
  I8

  	
   

  	
   

  	
  1.1798

  	
   

  
	
  I9

  	
   

  	
   

  	
  0
  6448

  	
   

  
	
  OH

  	
   

  	
   

  	
  1.7578

  	
   

  
	
  P3

  	
   

  	
   

  	
  0.5134

  	
   

  
	
  P4

  	
   

  	
   

  	
  0.6517

  	
   

  
	
  P9

  	
   

  	
   

  	
  1.1157

  	
   

  
	
  Q4

  	
   

  	
   

  	
  0.7255

  	
   

  
	
  S1

  	
   

  	
   

  	
  1.1277

  	
   

  
	
  S2

  	
   

  	
   

  	
  1.8025

  	
   

  
	
  S3

  	
   

  	
   

  	
  0.8768

  	
   

  
	
  S4

  	
   

  	
   

  	
  1.6378

  	
   

  
	
  S5

  	
   

  	
   

  	
  1.1102

  	
   

  
	
  S6

  	
   

  	
   

  	
  1.1102

  	
   

  
	
  S7

  	
   

  	
   

  	
  1.7578

  	
   

  
	
  S8

  	
   

  	
   

  	
  0.8768

  	
   

  
	
  S9

  	
   

  	
   

  	
  1.7495

  	
   

  

 

45

 

ADDENDUM B.2

 

DIVISION OF RESPONSIBILITY

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

 

COMMERCIAL HMO AND POINT OF SERVICE BENEFIT PROGRAMS

 

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

 

MATRIX EFFECTIVE 3/1/99

 

	
   

  	
   

  	
  PPG
  CAPITATED

  SERVICES

  	
   

  	
  HMO RISK

  SERVICES

  	
   

  	
  SHARED

  RISK/HOSPITAL

  CAPITATED

  SERVICES

  
	
  AIDS - Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  AIDS - Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  AIDS - Drugs

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  ALLERGY
  IMMUNOTHERAPY

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  ALLERGY
  TESTING

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  ALPHA-FETOPROTEIN

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  AMBULANCE

  •  In
  Area (30 Mile Radius)

  •  Out
  of Area

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  ANESTHESIOLOGY

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  BIOFEEDBACK

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  BLOOD/BLOOD
  PRODUCTS

  •  Blood Bank
•  Autologous/Homologous
•  Storage and Collection of Blood

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  CHEMICAL
  DEPENDENCY

  •  Inpatient Facility Component
• 
  Inpatient Professional Component
• 
  Outpatient Facility Component
• 
  Outpatient Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  CHEMOTHERAPY

  •  Drugs, including Epogen, Neupogen and
  adjunctive therapies
• 
  Facility Component
• 
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  CHIROPRACTIC
  (Medicare Approved) 

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  COLOSTOMY
  SUPPLIES

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  CONSULTATIONS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  

 

R:
Reinsurance purchased by PPG from HMO. 
Claims shall be submitted to and processed by Health Net’s Claims Dept.

 

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

 

46

 

	
   

  	
   

  	
  PPG
  CAPITATED

  SERVICES

  	
   

  	
  HMO RISK

  SERVICES

  	
   

  	
  SHARED

  RISK/HOSPITAL

  CAPITATED

  SERVICES

  
	
  COSMETIC SURGERY

  (Medically Necessary)
• 
  Professional Component

  • 
  Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  CRITICAL
  CARE VISITS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  DENTAL
  SERVICES

  (When a covered benefit)

  •  Facility Component

  •  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  DIAGNOSTIC
  TESTING - Outpatient
  Facility &  Professional

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  DURABLE
  MEDICAL EQUIPMENT

  •  Outpatient
• 
  Surgically Implanted

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  EMERGENCY
  ADMISSIONS – In-Area
• 
  Facility Component
• 
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  EMERGENCY
  ADMISSIONS – Out of
  Area
• 
  Facility Component
• 
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  EMERGENCY
  ROOM VISITS – In
  Area

  • 
  Facility Component

  • 
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  EMERGENCY
  ROOM VISITS – Out-of-Area
• 
  Facility Component
• 
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  EXTENDED
  CARE/SKILLED NURSING FACILITY

  •  Facility Component
• 
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  GROWTH
  HORMONES

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  HEARING
  AIDS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  HEMODIALYSIS

  •  Facility Component
•  Professional Component
•  Epogen, Neupogen

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  HEPATITIS-B

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  HOME
  HEALTH

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  HOME
  VISITS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  

 

R: Reinsurance
purchased by PPG from HMO.  Claims shall
be submitted to and processed by Health Net’s Claims Dept

 

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

 

47

 

	
   

  	
   

  	
  PPG
  CAPITATED

  SERVICES

  	
   

  	
  HMO RISK

  SERVICES

  	
   

  	
  SHARED

  RISK/HOSPITAL

  CAPITATED

  SERVICES

  
	
  HOSPICE

  • 
  Facility Component
•  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  HOSPITAL
  BASED PHYSICIANS -

  Inpatient, Ambulatory
  Surgery or Emergency Room Admissions

  •  Professional
  Component
• 
  Technical Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  IMMUNIZATIONS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  INFANT
  APNEA MONITOR

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  INJECTIBLES,
  SELF ADMINISTERED

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  INPATIENT
  VISITS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  IVF & GIFT

  •  Professional Component
• 
  Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  LITHOTRIPSY

  •  Professional Component
• 
  Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  MATERNITY - Deliveries and Non-Deliveries
• 
  Facility Component
• 
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  MEDICAL
  ADMISSIONS

  •  Facility Component
• 
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  MENTAL
  HEALTH – Inpatient
• 
  Facility Component
• 
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  MENTAL
  HEALTH – Outpatient
• 
  Facility Component
• 
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  OFFICE
  VISITS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  PATIENT
  EDUCATION

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  PATHOLOGY - Inpatient, Ambulatory

  Surgery or Emergency Room

  • 
  Professional Component

  • 
  Technical Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  PATHOLOGY
  – Office

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  

 

R: Reinsurance purchased by PPG from HMO.  Claims shall be submitted to and processed
by Health Net’s Claims Dept

 

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

 

48

 

	
   

  	
   

  	
  PPG
  CAPITATED

  SERVICES

  	
   

  	
  HMO RISK

  SERVICES

  	
   

  	
  SHARED

  RISK/HOSPITAL

  CAPITATED

  SERVICES

  
	
  PATHOLOGY
  – Outpatient
• 
  Professional Component
• 
  Technical Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  PERIODIC
  EXAMS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  PRE
  ADMISSION - Outpatient

  Laboratory, X-ray

  (within 72 hrs. or related admission)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  PROSTHETIC/ORTHOTIC
  DEVICES

  •  Outpatient
• 
  Surgically Implanted

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  RADIOLOGY - Inpatient, Ambulatory Surgery or Emergency
  Room
• 
  Professional Component
• 
  Technical Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  RADIOLOGY – Office

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  RADIOLOGY
  – Outpatient
• 
  Professional Component
• 
  Technical Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  SPEECH AND
  HEARING EXAMS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  SUPPLIES- Medical, Surgical, Office

  •  Related to an Outpatient Office Visit:

  Splints, Casts, Bandages, etc...

  •  Related to a Hospital Stay:

  Surgical Supplies, Equipment, etc...

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  SUPPLIES,
  DIABETIC

  •  Chem. Strips, Lancet, Needles, Syringes
• 
  Glucometer

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  SURGERY – Inpatient
• 
  Facility Component
• 
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  SURGERY – Office

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  SURGERY – Outpatient
• 
  Facility Component
• 
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  THERAPEUTIC
  INJECTIONS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  THERAPY: Physical, Occupational, Speech
• 
  Inpatient
• 
  Outpatient/Office

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  

 

R: Reinsurance
purchased by PPG from HMO.  Claims shall
be submitted to and processed by Health Net’s Claims Dept

 

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

 

49

 

	
   

  	
   

  	
  PPG
  CAPITATED

  SERVICES

  	
   

  	
  HMO RISK

  SERVICES

  	
   

  	
  SHARED

  RISK/HOSPITAL

  CAPITATED

  SERVICES

  
	
  TRANSPLANTS (Non-experimental)
• 
  Facility Component
• 
  Professional Component
• 
  Organ Procurement
• 
  Covered Immunosupressives

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  TRANSPLANT
  EVALUATIONS

  •  Professional
• 
  Facility

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  URGENT
  CARE VISITS – In-Area

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  URGENT
  CARE VISITS –
  Out-of-Area

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  VISION
  CARE

  •  Exams and Medically Necessary Care
• 
  Implanted Lenses (Cataract Surgery)
• 
  Lenses and Frames (Non-Cataract)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  

 

R: Reinsurance
purchased by PPG from HMO.  Claims shall
be submitted to and processed by Health Net’s Claims Dept

 

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

 

50

 

ADDENDUM C

 

MEDICARE HEALTH MAINTENANCE ORGANIZATION (HMO) AND
MEDICARE POINT OF

SERVICE (POS) BENEFIT PROGRAMS

 

PPG
understands and agrees that the obligations of FHS set forth in this Addendum
are only the obligations of Health Net (hereafter “HMO”) and not the
obligations of FHS or any other Affiliate of FHS.  PPG shall be compensated according to this Addendum C and this
Addendum shall be applicable to only those Medicare HMO and Medicare POS
Members listed on the applicable Capitation remittance summaries.  Pursuant to Section 8.18. Entire Agreement,
PPG understands and agrees that the compensation and provisions under the
agreement between PPG and the entity formerly known as Foundation Health, a
California Health Plan, are applicable to those Medicare HMO and Medicare POS
Member listed on the Foundation Health capitation remittance summary and that
the Foundation Health agreement shall remain in full force and in effect for
those Members until such time those Members are no longer enrolled in
Foundation Health Benefit Programs.

 

A.            DEFINITIONS.  For
purposes of this Addendum C, the definitions included herein shall have the
meaning required by law to applicable Medicare Benefit Programs.

 

1.             HCFA.  The Health Care Financing Administration
which is the agency of the federal government responsible for administration of
the Medicare Benefit program.

 

2.             Medicare Enrollment Area.  The
area approved by HCFA and the State regulatory agency as the area in which HMO
may market and enroll Medicare HMO and Medicare POS Members.  At any given time during the term of this
Agreement, the Medicare Enrollment Area consists of the list of zip codes
currently approved by HCFA and or the State regulatory agency as the Medicare
Enrollment Area. (This is not the area for which PPG shall be responsible for
“in-area” services.)

 

3.             Monthly Revenue.  The
amount equal to the sum of the applicable HCFA payment, the county premium, if
any, less specific amounts withheld to cover the actual cost of supplemental
benefits that are not PPG Capitated Services, including but not limited to,
pharmacy, vision, and dental benefits, commissions, or taxes.  If any, as set forth in Addendum C, plus POS
premium, if any. The withhold amounts shall be revised annually and Capitation
adjustments made accordingly.

 

B.            MEDICARE HMO BENEFIT PROGRAMS.

 

1.             HMO Benefit Program.  The
Medicare HMO Benefit Program shall apply to Medicare HMO Members; any per
Member per month (“PMPM”) or any percent of Monthly Revenue calculation under
Addendum C shall be based on Medicare HMO Members.

 

2.             Capitation: PPG Capitated
Services.

 

2.1          Compensation for PPG Capitated Services.  As
compensation for rendering PPG Capitated Services as defined herein, HMO shall
pay PPG Capitation at *** of Monthly Revenue as set forth below for each
Medicare HMO Member eligible to receive such services from PPG during any
particular month.  Capitation shall be
computed on the basis of the most current information available and shall be
paid by HMO by wire transfer on or before the fifteenth (15th) day of each
month or the first business day following the fifteenth if the fifteenth is a
holiday or on a weekend or within two (2) days of HCFA’s payment to HMO,
whichever is later.  Each Capitation
payment shall be accompanied by a remittance summary.  The remittance summary identifies the total Capitation payable
and those Medicare HMO Members for whom Capitation is being paid.  In the event of a Capitation error,
resulting in an overpayment or underpayment to PPG, HMO shall adjust subsequent
Capitation to offset such error.

 

51

 

2.2          Professional Stop
Loss Program.

 

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

 

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

 

2.4          Compensation for
Employer Group Retirees.  As
compensation for supplemental benefits sold to employer group retirees for
Medicare HMO Members, HMO shall pay PPG the applicable PMPM rates as
illustrated below.

 

	
  Supplemental Benefit

  	
   

  	
  PMPM

  	
   

  
	
  $5 office visit
  & specialist consultation copay waived

  	
   

  	
  ***

  	
   

  
	
  $5 vision and
  hearing exam copay waived

  	
   

  	
  ***

  	
   

  
	
  $20 outpatient
  mental health copay waived

  	
   

  	
  ***

  	
   

  
	
  $20 outpatient
  substance abuse copay waived

  	
   

  	
  ***

  	
   

  

 

HMO shall develop and
adjust supplemental benefits PMPM rates on a calendar year basis and forward
such rates to PPG on or before December 15th of the prior year.

 

3.             Dual Risk Program.  PPG shall establish a Hospital Capitated
Services incentive arrangement with the Primary Hospital which is Martin
Luther Hospital; 1830 West Romneya Drive; Anaheim. CA 92801 Hospital
Capitated Services for Medicare HMO Members who have selected PPG are the
financial responsibility of the Primary Hospital.  PPG shall provide HMO with a written description of such incentive
arrangement and any changes thereto within sixty (60) days of its
establishment, or any amendment.  Except
in the case of an Emergency, all such services must be authorized by PPG and be
provided or coordinated through the Primary Hospital.

 

4.             Pharmacy Budget.  Each month, HMO shall fund the Pharmacy
Budget as set forth in this Addendum C for applicable Medicare HMO Members.

 

C.            MEDICARE POS BENEFIT PROGRAM.

 

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

 

52

 

2.             Definitions.

 

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

 

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

 

3.             Capitation: PPG Capitated
Services.

 

3.1          Capitation Rate.  PPG shall be compensated for
rendering professional In-Network Services to Medicare POS Members at the
percent of Monthly Revenue for Medicare HMO Members as set forth in this
Addendum C, less a *** withhold (Professional Out-of-Network Withhold), for
each Medicare POS Member eligible to receive such services from PPG during any
particular month.

 

In the event PPG’s enrollment
exceeds five hundred (500) Medicare POS Members, the Professional Out-of-Network
Withhold percentage shall be equal to (i) PPG’s prior year’s professional
Out-of-Network costs, divided by the total of PPG’s Capitation for Medicare POS
Members (prior to the Professional Out-of-Network Withhold) rounded to the
nearest multiple of five, ***, or (ii) *** if there is no prior year experience
or if PPG has 500 or less Medicare POS Members.  On or before December 15th of each year, HMO shall notify PPG of PPG’s Out-of-Network experience
incurred between July 1 of the previous year and June 30 of the current year
and the calculation noted above, and such shall be PPG’s Professional
Out-of-Network Withhold percentage for the following year.

 

Capitation shall be
calculated on the basis of the most current information available and shall be
paid by HMO by wire transfer on or before the fifteenth (15th) day of each
month, or the first business day following the fifteenth if the fifteenth is a
holiday or on a weekend, or within two (2) days of HCFA’s payment to HMO,
whichever is later.  Each Capitation
payment shall be accompanied by a remittance summary.  The remittance summary identifies the total Capitation payable
and those Medicare POS Members for whom Capitation is being paid.  In the event of a Capitation error,
resulting in an overpayment or underpayment to PPG, HMO shall adjust subsequent
Capitation to offset such error.

 

3.2          Professional Stop Loss
Program.

 

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

 

(b)           Out-of-Network Professional Stop Loss: PPG’s Out-of-Network Professional
Stop Loss threshold shall be *** per Medicare POS Member during the calendar
year.  The cost to PPG for the
Out-of-Network Professional Stop Loss program shall be *** of applicable Medicare POS Member’s HCFA
payment and county premium, if any, which shall be deducted from PPG’s
Out-of-Network Risk Sharing Fund.

 

3.3          Professional Out-of-Network Withhold Fund.  The
Professional Out-of-Network Withhold Fund shall be equal to the amount withheld
from POS Capitation as described above. 
Each year, HMO shall calculate the difference between the amount in the
Professional Out-of-Network Withhold Fund and the actual claims.  PPG’s share of the difference shall be
***.  PPG shall not be subject to any
downside.

 

53

 

4.             POS Shared Risk.

 

4.1          POS Shared Risk Budget.  Each
month, HMO shall fund the POS Shared Risk Budget for POS Shared Risk Services
at *** of Monthly Revenue for Medicare HMO Members as set forth in this
Addendum  C.  HMO shall calculate and pay POS Shared Risk
Claims.

 

4.2          POS Shared Risk Budget Surplus.  In
the event of a POS Shared Risk Budget surplus, PPG’s share of the surplus shall
be the lesser of *** , or an amount not to exceed twenty percent (20%) of the
annual gross PPG Capitation.

 

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

 

4.4          Shared Risk Reinsurance.  PPG
shall participate in the POS Shared Risk Reinsurance Program.  The cost to the PPG for the POS Shared Risk
Reinsurance Program shall be calculated as follows:

 

(a)           Out-of-Area Emergency and Urgently Needed Services: *** of applicable
Medicare POS Member’s HCFA payment and county premium, if any.

 

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

 

(b)           In-Network and Out-of-Network POS Shared Risk Services: *** of
applicable Medicare POS Member’s HCFA payment and county premium, if any.

 

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

 

D.            ADMINISTRATION OF SHARED RISK BUDGET FOR MEDICARE HMO
AND POS.

 

1.             Shared Risk Administration.  Each
Reconciliation Period, HMO shall calculate Shared Risk Claims in accordance
with the Operations Manual and compare such claims to the corresponding Shared
Risk Budget.

 

HMO
shall perform both an interim and final settlement.  In the event any amounts remain in the Withhold Fund following
the reconciliation of any shared risk program, those excess funds shall be paid
to PPG by April 30 of the following year. 
In the event that such claims are less than the Shared Risk Budget for
the Interim Period, PPG’s share of the settlement shall be ***, subject to
Section 4.3 of this Agreement.  Shared
Risk Claims with dates of service within the Reconciliation Period and paid by
March 31 of the following year shall be used in the calculation.  Shared Risk Services incurred within the
Reconciliation Period but paid after March 31 of the following year will be
included in the next Reconciliation Period calculation.

 

2.              Pharmacy Reconciliation For Medicare HMO Members.  [This
section does not apply to all group members, including POS Members.] For each
Reconciliation Period, HMO shall calculate pharmacy claims subject to this
Program as outlined in the Operations Manual. 
HMO shall compare such claims to the corresponding Pharmacy Budget.  In the event pharmacy claims are less than
the Pharmacy Budget, PPG’s share of the Pharmacy

 

54

 

Budget
surplus shall be ***.  In the event
pharmacy claims exceed the Pharmacy Budget, PPG’s share of the Pharmacy Budget
deficit shall be ***.  HMO shall perform
an interim and final settlement for the Pharmacy Risk Sharing Program.  The timing of these settlements shall
correspond to the interim and final settlements of other shared risk
programs.  Subject to Section 4.3 of
this Agreement any Pharmacy Budget deficit shall be offset against any amounts
payable by HMO or any amounts remaining in the Withhold Fund, or shall be
offset against Capitation.  In the event
the Withhold Fund eliminates the Pharmacy Budget deficit, any amounts remaining
in the Withhold Fund shall be paid to PPG within one hundred twenty (120)
calendar days after the end of the Reconciliation Period.

 

E.             MEDICARE SELECT BENEFIT
PROGRAMS

 

1.             Medicare Select Programs.  Under
the Medicare Select Programs PPG shall accept Medicare assignment from Members
for Contracted Services covered under the Medicare Program, and shall bill and
accept payment from Medicare as payment in full for such services, except for
applicable Copayments and deductibles. 
PPG shall bill HMO and not Members for such Copayments and deductibles
or for Contracted Services rendered that are not covered under Medicare, but
which are covered under the applicable Medicare Select Program.  PPG shall submit claims to HMO in accordance
with the terms of the Agreement.

 

2.             Compensation for Medicare Select Members.  PPG
shall be paid the fee-for-service compensation rates as set forth in Addendum E
of the Agreement for Contracted Services rendered under the Medicare Select
Program.

 

F.             OTHER SERVICES.

 

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

 

55

 

ADDENDUM C.1

 

SUPPLEMENTAL BENEFITS COSTS

 

For purposes of calculating PPG’s Capitation, the specific amounts set
forth below as a percent of the applicable HCFA payment and the county premium,
if any, shall be withheld to cover the actual cost of supplemental benefits
that are not PPG Capitated Services, and commissions and taxes, if any.  Such supplemental benefits may include, but
are not limited to, pharmacy, vision, and dental benefits.  On an annual basis, these withheld amounts
shall be revised, forwarded to PPG, and incorporated into this Agreement by
reference.

 

	
  County

  	
   

  	
  Percent

  	
   

  
	
  Alameda

  	
   

  	
  6.58

  	
  %

  
	
  Butte

  	
   

  	
  0.00

  	
  %

  
	
  Colusa

  	
   

  	
  0.00

  	
  %

  
	
  Contra Costa

  	
   

  	
  7.58

  	
  %

  
	
  El Dorado

  	
   

  	
  5.65

  	
  %

  
	
  Fresno

  	
   

  	
  6.17

  	
  %

  
	
  Glenn

  	
   

  	
  0.00

  	
  %

  
	
  Kern

  	
   

  	
  12.26

  	
  %

  
	
  Los Angeles

  	
   

  	
  7.42

  	
  %

  
	
  Madera

  	
   

  	
  5.93

  	
  %

  
	
  Marin

  	
   

  	
  4.66

  	
  %

  
	
  Mariposa

  	
   

  	
  6.23

  	
  %

  
	
  Napa

  	
   

  	
  0.00

  	
  %

  
	
  Orange

  	
   

  	
  8.80

  	
  %

  
	
  Placer

  	
   

  	
  7.48

  	
  %

  
	
  Plumas

  	
   

  	
  0.00

  	
  %

  
	
  Riverside

  	
   

  	
  6.13

  	
  %

  
	
  Sacramento

  	
   

  	
  9.06

  	
  %

  
	
  San Bernardino

  	
   

  	
  6.17

  	
  %

  
	
  San Diego

  	
   

  	
  9.70

  	
  %

  
	
  San Francisco

  	
   

  	
  6.09

  	
  %

  
	
  San Joaquin

  	
   

  	
  8.56

  	
  %

  
	
  San Luis Obispo

  	
   

  	
  0.00

  	
  %

  
	
  San Mateo

  	
   

  	
  7.82

  	
  %

  
	
  Santa Barbara

  	
   

  	
  8.58

  	
  %

  
	
  Santa Clara

  	
   

  	
  8.11

  	
  %

  
	
  Sierra

  	
   

  	
  0.00

  	
  %

  
	
  Solano

  	
   

  	
  0.00

  	
  %

  
	
  Sonoma

  	
   

  	
  4.83

  	
  %

  
	
  Stanislaus

  	
   

  	
  7.26

  	
  %

  
	
  Sutter

  	
   

  	
  0.00

  	
  %

  
	
  Tulare

  	
   

  	
  0.00

  	
  %

  
	
  Ventura

  	
   

  	
  6.24

  	
  %

  
	
  Yolo

  	
   

  	
  7.12

  	
  %

  
	
  Yuba

  	
   

  	
  0.00

  	
  %

  

 

56

 

ADDENDUM C.2

 

PHARMACY SHARED RISK BUDGETS

 

For purposes of calculating PPG’s Pharmacy Budget, the specific amounts
set forth below as a percent of the applicable HCFA payment and the county
premium, if any, are applicable.  On an
annual basis, these amounts shall be revised, forwarded to PPG, and
incorporated into this Agreement by reference.

 

	
  County

  	
   

  	
  Percent

  	
   

  
	
  Alameda

  	
   

  	
  5.40

  	
  %

  
	
  Butte

  	
   

  	
  0.00

  	
  %

  
	
  Colusa

  	
   

  	
  0.00

  	
  %

  
	
  Contra Costa

  	
   

  	
  6.40

  	
  %

  
	
  El Dorado

  	
   

  	
  5.05

  	
  %

  
	
  Fresno

  	
   

  	
  5.56

  	
  %

  
	
  Glenn

  	
   

  	
  0.00

  	
  %

  
	
  Kern

  	
   

  	
  10.86

  	
  %

  
	
  Los Angeles

  	
   

  	
  6.31

  	
  %

  
	
  Madera

  	
   

  	
  5.32

  	
  %

  
	
  Marin

  	
   

  	
  4.17

  	
  %

  
	
  Mariposa

  	
   

  	
  5.60

  	
  %

  
	
  Napa

  	
   

  	
  0.00

  	
  %

  
	
  Orange

  	
   

  	
  7.61

  	
  %

  
	
  Placer

  	
   

  	
  6.16

  	
  %

  
	
  Plumas

  	
   

  	
  0.00

  	
  %

  
	
  Riverside

  	
   

  	
  5.61

  	
  %

  
	
  Sacramento

  	
   

  	
  7.84

  	
  %

  
	
  San Bernardino

  	
   

  	
  5.67

  	
  %

  
	
  San Diego

  	
   

  	
  8.36

  	
  %

  
	
  San Francisco

  	
   

  	
  4.88

  	
  %

  
	
  San Joaquin

  	
   

  	
  7.19

  	
  %

  
	
  San Luis Obispo

  	
   

  	
  0.00

  	
  %

  
	
  San Mateo

  	
   

  	
  6.35

  	
  %

  
	
  Santa Barbara

  	
   

  	
  7.97

  	
  %

  
	
  Santa Clara

  	
   

  	
  6.71

  	
  %

  
	
  Sierra

  	
   

  	
  0.00

  	
  %

  
	
  Solano

  	
   

  	
  0.00

  	
  %

  
	
  Sonoma

  	
   

  	
  4.30

  	
  %

  
	
  Stanislaus

  	
   

  	
  5.84

  	
  %

  
	
  Sutter

  	
   

  	
  0.00

  	
  %

  
	
  Tulare

  	
   

  	
  0.00

  	
  %

  
	
  Ventura

  	
   

  	
  5.73

  	
  %

  
	
  Yolo

  	
   

  	
  6.50

  	
  %

  
	
  Yuba

  	
   

  	
  0.00

  	
  %

  

 

57

 

ADDENDUM
C.3

DIVISION
OF FINANCIAL RESPONSIBILITY

MATRIX OF HMO AND PPG CAPITATED SERVICES

MEDICARE
BENEFIT PROGRAM

 

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

 

MATRIX EFFECTIVE 3/1/99

 

	
   

  	
   

  	
  PPG
  CAPITATED

  SERVICES

  	
   

  	
  HMO RISK

  SERVICES

  	
   

  	
  SHARED
  RISK/HOSPITAL

  CAPITATED SERVICES

  
	
  AIDS - Facility
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  AIDS -
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  AIDS - Drugs

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  ALLERGY IMMUNOTHERAPY

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  ALLERGY TESTING

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  ALPHA-FETOPROTEIN

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  AMBULANCE

  In Area (30 Mile Radius)

  Out-of-Area

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  ANESTHESIOLOGY

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  BIOFEEDBACK

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  BLOOD/BLOOD
  PRODUCTS

  Blood Bank

  Autologous/Homologous

  Storage and Collection of Blood

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  CHEMICAL DEPENDENCY

  • Inpatient
  Facility Component

  • Inpatient
  Professional Component

  • Outpatient
  Facility Component

  • Outpatient
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  CHEMOTHERAPY

  • Drugs,
  including Epogen, Neupogen and adjunctive therapies

  • Facility
  Component

  • Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  CHIROPRACTIC (Medicare Approved)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  COLOSTOMY SUPPLIES

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  CONSULTATIONS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  COSMETIC SURGERY

  (Medically
  Necessary)

  Professional Component

  Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  CRITICAL CARE VISITS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  

 

R:            Reinsurance purchased by PPG from HMO.  Claims shall be submitted to and processed
by Health Net’s Claims Dept.

 

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

 

 

58

 

	
   

  	
   

  	
  PPG
  CAPITATED

  SERVICES

  	
   

  	
  HMO RISK

  SERVICES

  	
   

  	
  SHARED
  RISK/HOSPITAL

  CAPITATED SERVICES

  
	
  DENTAL SERVICES

  (When a covered benefit)

  •  Facility Component

  •  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  DIAGNOSTIC TESTING -
  Outpatient

  Facility & Professional

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  DURABLE MEDICAL EQUIPMENT

  •  Outpatient

  •  Surgically Implanted

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  EMERGENCY ADMISSIONS – In-Area

  •  Facility Component

  •  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  EMERGENCY ADMISSIONS - Out-of-Area

  •  Facility Component

  •  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  EMERGENCY ROOM VISITS - In-Area

  •  Facility Component

  •  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  EMERGENCY ROOM VISITS – Out-of-Area

  •  Facility Component

  •  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  EXTENDED CARE/SKILLED NURSING
  FACILITY

  •  Facility
  Component

  •  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  GROWTH HORMONES

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  HEARING AIDS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  HEMODIALYSIS

  •  Facility
  Component

  •  Professional Component

  •  Epogen, Neupogen

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  HEPATITIS–B

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  HOME HEALTH

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  HOME VISITS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  HOSPICE

  •  Facility
  Component

  •  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  HOSPITAL BASED PHYSICIANS –

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Inpatient, Ambulatory Surgery or Emergency Room
  Admissions

  •  Professional
  Component

  •  Technical Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  

 

R:  Reinsurance purchased by PPG
from HMO.  Claims shall be
submitted to and processed by Health Net’s Claims Dept.

 

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

 

59

 

	
   

  	
   

  	
  PPG
  CAPITATED

  SERVICES

  	
   

  	
  HMO RISK

  SERVICES

  	
   

  	
  SHARED
  RISK/HOSPITAL

  CAPITATED SERVICES

  
	
  IMMUNIZATIONS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  INFANT APNEA MONITOR

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  INJECTIBLES, SELF ADMINISTERED

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  INPATIENT VISITS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  IVF
  & GIFT

  Professional Component

  Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  LITHOTRIPSY

  Professional Component

  Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  MATERNITY -
  Deliveries and Non-Deliveries

  •  Facility Component

  •  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  MEDICAL ADMISSIONS

  •  Facility Component

  •  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  MENTAL HEALTH -
  Inpatient

  •  Facility Component

  •  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  MENTAL HEALTH -
  Outpatient

  • 
  Facility Component
•  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  OFFICE VISITS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  PATIENT EDUCATION

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  PATHOLOGY
  - Inpatient, Ambulatory Surgery or Emergency Room

  •  Professional Component

  •  Technical Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  PATHOLOGY -
  Office

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  PATHOLOGY -
  Outpatient

  •  Professional Component

  •  Technical Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  PERIODIC EXAMS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  PRE ADMISSION -
  Outpatient

  Laboratory, X-ray

  (within 72 hrs. or related admission)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  PROSTHETIC/ORTHOTIC DEVICES

  •  Outpatient

  •  Surgically Implanted

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  

 

R:  Reinsurance
purchased by PPG from HMO.  Claims shall
be submitted to and processed by Health Net’s Claims Dept.

 

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

 

60

 

	
   

  	
   

  	
  PPG
  CAPITATED

  SERVICES

  	
   

  	
  HMO RISK

  SERVICES

  	
   

  	
  SHARED
  RISK/HOSPITAL

  CAPITATED SERVICES

  
	
  RADIOLOGY - Inpatient, Ambulatory Surgery or Emergency Room

  • 
  Professional Component
• 
  Technical Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  RADIOLOGY - Office

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  RADIOLOGY - Outpatient
•  Professional Component
• 
  Technical Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  SPEECH AND
  HEARING EXAMS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  SUPPLIES- Medical, Surgical, Office

  •  Related to an Outpatient Office Visit:

  Splints, Casts, Bandages, etc...

  •  Related to a Hospital Stay:

  Surgical Supplies, Equipment, etc...

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  SUPPLIES,
  DIABETIC

  Chem. Strips, Lancet, Needles, Syringes Glucometer

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  SURGERY - Inpatient

  • 
  Facility Component
• 
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  SURGERY - Office

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  SURGERY - Outpatient

  • Facility Component
• Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  THERAPEUTIC
  INJECTIONS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  THERAPY: Physical, Occupational, Speech
• 
  Inpatient
• 
  Outpatient/Office

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  TRANSPLANTS
  (Non-experimental)
• 
  Facility Component
• 
  Professional Component
• 
  Organ Procurement
• 
  Covered Immunosupressives

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  TRANSPLANT
  EVALUATIONS
• 
  Professional
• 
  Facility

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  URGENT
  CARE VISITS –
  In-Area

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  URGENT
  CARE VISITS –
  Out-of-Area

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  VISION
  CARE
• 
  Exams and Medically Necessary Care
• 
  Implanted Lenses (Cataract Surgery)
• 
  Lenses and Frames (Non-Cataract)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  

 

R:  Reinsurance
purchased by PPG from HMO.  Claims shall
be submitted to and processed by Health Net’s Claims Dept.

 

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

 

61

 

ADDENDUM D

 

PREFERRED PROVIDER ORGANIZATION (PPO)

EXCLUSIVE PROVIDER ORGANIZATION (EPO)

POINT OF SERVICE (POS)

 

BENEFIT PROGRAMS

 

PPG
understands that Affiliates or Payors contracted with FHS who are qualified may
provide PPO, EPO and POS Benefit Programs. 
FHS shall provide PPG with a listing of all such Payors, as updated from
time to time by FHS.  Notwithstanding
any provision in this Agreement, PPG and Member Physicians understand and agree
that each Payor is solely responsible for paying PPG and/or Member Physicians
for those individuals to whom Payor provides health care coverage.  In no event shall FHS or any FHS Affiliate
be responsible for any payment which is the financial responsibility of a Payor
and PPG shall seek compensation for such services only from Payor.  Pursuant to Section 8.18, Entire
Agreement, PPG understands and agrees that the compensation and provisions
under the agreement between PPG and the entity formerly known as Foundation
Health, a California Health Plan, is applicable to those PPO, EPO and POS
Members with Foundation Health Identification Cards and such agreement shall
remain in full force and effect for those PPO, EPO and POS Members.  PPG shall be compensated according to this
Addendum D and this Addendum shall be applicable to those PPO, EPO and POS
Members with Health Net or other FHS Affiliate Identification Cards.

 

A.            BENEFIT PROGRAM REQUIREMENTS

 

PPG
agrees:

 

1.             That
all Member Physicians will comply with the terms and conditions of this
Addendum, the terms of the applicable Benefit Programs, and of the Operations
Manual.

 

2.             To
comply with FHS efforts to provide Case Management.  PPG agrees to provide PPG’s written treatment plan within five
(5) working days of receipt of request from FHS.  A treatment plan includes a statement of diagnosis, current
patient condition, current or proposed treatment, and anticipated outcomes.

 

3.             That
if PPG admits or arranges for an inpatient admission to a non- Participating
Provider or facility for an elective procedure, PPG shall document that PPG has
given such Member prior notice of the following:

 

a)             Provider
or facility is non-participating;

 

b)            The
non-Participating Provider or facility will not be restricted to seeking
payment only from FHS; and

 

c)             The
non-Participating provider or facility may bill the Member for amounts other
than deductibles, Copayments, and medical services not covered under the
Member’s Coverage Certificate.

 

4.             That
PPG may appeal a Utilization/Care Management decision as set forth in the
Operations Manual.

 

5.             FHS
agrees that any determination under the Utilization/Care Management Program
that a Member’s services rendered by PPG were not Medically Necessary shall not
retroactively affect PPG’s right to payment hereunder if such services were
authorized by FHS prior to admission and the information provided by PPG to FHS
regarding the Member’s medical condition was substantially true and accurate.

 

62

 

B.            PPO AND EPO BENEFIT PROGRAMS

 

1.             Compensation Method.  As
compensation for rendering Contracted Services under this Addendum D, PPG shall
be paid in accordance with the rates set forth in Addendum E.  Such compensation shall be paid within the
time and subject to the billing requirements set forth in this Agreement.  The above notwithstanding for self-insured
and other such Payers,  FHS shall not be
obligated to pay all or any portion of any PPG claim on a Payor’s behalf unless
and until FHS has received sufficient funds from the applicable Payor to cover
such claim.  In the event such Payor
fails to provide funds to FHS, PPG may seek payment from Member up to the rates
specified in Addendum E, unless prohibited by applicable law.

 

In the event that a PPG
Participating Physician enters into an independent contract arrangement with
FHS for PPO services, the rates established in such independent Physician
Service Agreement shall prevail, and claims will be adjudicated according to
the fee schedule established in said independent Agreement.

 

C.           POINT OF SERVICE BENEFIT PROGRAMS

 

1.             Benefit Program Design. 
Under a Point of Service Benefit Program, Members may elect, at the time
of obtaining each Covered Service, to utilize either: (1) HMO coverage through
their selected or assigned PCP: (2) optional Preferred Provider Organization
(“PPO”) coverage available through PPO Participating Providers; or (3) other
indemnity coverage through either non-Participating Providers, or Participating
Providers where other Benefit Program Requirements are not met.

 

2.             Compensation Method.  PPG
shall render Contracted Services on a fee-for-service basis to Members of FHS’
Point of Service Benefit Programs covered under the PPO option of such Benefit
Programs.  As compensation for rendering
such Contracted Services, PPG shall be paid the fee-for-service compensation
rates set forth in Addendum E.  Such
compensation shall be paid within the time and subject to the billing
requirements set forth in this Agreement.

 

63

 

ADDENDUM E

 

FEE -FOR-SERV1CE COMPENSATION SCHEDULE

 

PPG
or Member Physician shall be compensated for non-capitated Contracted Services,
less applicable Copayments, in an amount equal to the lesser of: (a) *** of the
Medicare allowable charges based on the Medicare Resource Based Relative Value
Scale (RBRVS) unit values and HCFA Geographical Practice Cost Indices as
published in the most current published edition of the Federal Register; (b)
seventy-five percent (75%) of PPG’s allowable billed charges; or (c) such other
fee schedules as may be established or adopted from time to time by FHS.

 

For “by report” procedures,
procedures not listed, or procedures with relativities not established in
RBRVS, PPG shall be compensated at *** of PPG or the Participating Provider’s
billed charges, less any applicable Copayment.

 

Anesthesiology
Services:

PPG or Participating Provider
shall be compensated for Contracted Services at (a) *** per unit value in the
American Society of Anesthesiology Relative Value study or (b) *** of the
Participating Provider’s billed charges, whichever is less.

 

Assistant Surgeons:

PPG or Participating Provider
shall be compensated for Contracted Services at twenty percent (20%) of the
surgeon’s reimbursement as determined above.

 

Total
Obstetrical Care:        (for HMO Benefit Programs)

Services
included in global reimbursement (professional and technical component):

	
   

  	
   Total OB care,
  vaginal delivery

  	
   

  	
  *** global rate

  
	
   

  	
   Total OB care,
  Cesarean delivery

  	
   

  	
  *** global rate

  

 

Services
included in global reimbursement for total OB care:

office visits (sick care as well as routine)

consultations including initial OB consultation

emergency department visits

therapeutic injections

amniocentesis

fetal contraction stress test

fetal non-stress test

fetal monitoring, including initiation or supervision

version

delivery of placenta

ultrasound

laboratory tests

venipuncture

specimen collection and laboratory supplies

educational materials/nutritional counseling

OB standby

other services which do not warrant extra charge:  delivery of twins/multiple births, physician’s supervision of
home care, hospitalization during pregnancy for conditions such as
pre-clempsia, HTN

 

Antepartum care only:

	
  First trimester only

  	
   

  	
  ***

  
	
  Second trimester only

  	
   

  	
  ***

  

 

64

 

	
  First and second trimester
  only

  	
   

  	
  ***

  
	
  Third trimester excluding
  delivery

  	
   

  	
  ***

  
	
  Third trimester including
  delivery

  	
   

  	
  ***

  

 

CONFIDENTIAL, PROPRIETARY AND TRADE SECRET

 

65

 

ADDENDUM F

 

MEDI-CAL
BENEFIT PROGRAM

 

This Page Intentionally Left Blank

 

66

 

ADDENDUM G

 

CHAMPUS/TRICARE
AND OTHER GOVERNMENT BENEFIT PROGRAMS

 

PPG
understands and agrees that the obligations of FHS set forth in this Addendum
are the obligations of Foundation Health Federal Service Inc., an Affiliate of
FHS (“FHFS”), and not obligations of FHS, or any other Affiliate of FHS.  FHFS may contract with the United States
Department of Defense (“DoD”) to arrange for the provision of health and
administrative services to certain Members of the Civilian Health and Medical
Program of the Uniformed Services (“CHAMPUS), and may contract with other
local, State or federal agencies to arrange for the provision of health,
administrative and certain other services to the Beneficiaries of other local,
State and/or federal programs.

 

A.           CHAMPUS/TRICARE DEFINITIONS

 

1.             Member (Beneficiary).  A person who is eligible to receive Covered
Services under the FHFS Benefit Program included in this Addendum, including a
newborn baby who is a dependent of Member during the first 120 days following
the baby’s birth and/or 120 days following legal adoption.

 

2.             Copayment and Cost Shares.  That
portion of the cost of Covered Services that a Member is obligated to pay under
a particular Benefit Program, including a deductible and co-insurance.  A Copayment is a fixed dollar amount.  A Cost Share is a percentage of the
applicable Participating Provider contract rate.  FHFS will advise Participating Providers of the amounts or
methods by which Copayments and/or Cost Shares may be determined and/or as
outlined in the TRICARE Network Provider Manual.

 

3.             Primary Care Manager (PCM).  is a
TRICARE Prime military/civilian network PPG or network clinic site, or clinic
site at a Military Treatment Facility (MTF) whose primary responsibility is to
coordinate and manage the delivery of Covered Services to Members selected or
assigned to such PPG.

 

4.             Supplemental Care.   FHFS
will work with MTF (Military Treatment Facility) Commanders to define Supplemental
Care needs and to extend CHAMPUS/TRICARE contract rates to the MTF’s for those
services.

 

B.            CHAMPUS/TRICARE PROGRAMS AND REGULATIONS

 

1.             CHAMPUS/TRICARE Programs.  CHAMPUS/TRICARE Programs are those services and benefits which
require the use of the services of a contracted medical provider network and
are purchased by the United States Government through the authorized agency
pursuant to Chapter 55 of Title 10 of the United States Code and the
regulations promulgated thereunder.

 

2.             CHAMPUS/TRICARE Regulations.  FHFS
is obligated to comply with all applicable CHAMPUS/TRICARE regulations,
operations manuals, Automated Data Processing manuals, policy manuals and the
prime contract technical proposals, and with the American Disabilities
Act.  These documents provide a
comprehensive description of the applicable CHAMPUS/TRICARE program benefits
and operational requirements.  The
parties to this Addendum acknowledge that all services rendered by PPG
hereunder are governed by such requirements. 
FHFS shall provide PPG with all information regarding such requirements
as necessary for proper compliance.

 

3.             CHAMPUS/TRICARE Term.   Term
of this Agreement will remain in effect as defined in Section 6.1, unless the
term of Foundation Health Federal Services’ prime contract expires or is
pursuant to termination by the Government of Foundation Health Federal
Services’ prune contract to provide health services.

 

67

 

C.            OTHER GOVERNMENTAL PROGRAMS.  FHFS
may contract with local, State or federal entities to provide medical delivery
programs such as universal health care programs, or other Benefit Programs for
which FHFS has contracted with a Payor to provide Participating Provider
networks, or certain Covered Services, PPG shall render-Contracted Services
covered under such other governmental benefit programs, and shall bill and
accept payment from FHFS or a Payor as payment in full for such services,
except for applicable Copayments as set forth in this Addendum.

 

D.           PROVIDER OBLIGATIONS

 

1.             Contracted Services.  PPG
shall provide Covered Services to Members of CHAMPUS/TRICARE, CHAMPUS/TRICARE
Supplemental Care in accordance with the terms and conditions of those
programs.  PPG shall be solely
responsible for the quality of Covered Services rendered by PPG to
Members.  PPG must be contracted and
accept assignment for both CHAMPUS/TRICARE and Medicare as Participating
Providers in order to render services to CHAMPUS/TRICARE Members.  FHFS shall provide PPG with the Benefit
Program Requirements of the CHAMPUS/TRICARE, and CHAMPUS/TRICARE
Supplement.  Such Benefit Program
Requirements may include Utilization Care Management Program and Quality
Improvement Program requirements with which PPG shall comply in rendering
Covered Services under this Agreement. 
PPG and/or office staff is obligated to attend a PPG seminar and/or
agree to have read the TRICARE Network Provider Manual prior to rendering
Covered Services under this Agreement. 
Participating Providers shall monitor the accessibility of care to
Enrollees, and adhere to the following standards: a) office wait times for
non-emergencies shall not exceed 30 minutes; b) wait times for appointments
shall not exceed 4 weeks for well visits, 1 week for routine visits, nor 1 day for
acute illness.  Participating Providers
shall comply with the FHFS’ reasonable efforts to monitor and evaluate same.

 

2.             Specialty Providers.  FHFS
requires all specialty providers to request a CHAMPUS/TRICARE Prime Member to
sign a release of medical information at each visit, to include ancillary
services associated with each visit whereby the PCM and/or the MTF Commanders
are designated as the recipients of the medical records Specialty providers are
required to submit the medical records to the PCM and/or MTF Commander within
14 days for all routine referrals.

 

3.             Eligibility.  Except in an Emergency, PPG shall verify the
eligibility of Members before providing Covered Services.  FHFS shall make a good faith effort to
confirm the eligibility of any Member when such is in question.  Eligibility of all CHAMPUS/TRICARE and other
governmental program Members may be verified by the designated agent of such
program (e.g., Defense Enrollment Eligibility Reporting System).  However, if the designated agent initially
indicates that a patient is a Member under the applicable CHAMPUS/TRICARE or
other governmental program, and that patient is later determined to be
ineligible at the time of service, then FHFS shall deny any claims for payment
due to non-eligibility, and PPG may seek compensation from the patient or the
patient’s other health insurance coverage.

 

4.             Access Requirements.  When
required by a particular CHAMPUS/TRICARE program.  PPG understands that the Military Treatment Facility (MTF) is the
first resource for health care for CHAMPUS/TRICARE Members, and that Members
gain access to the civilian CHAMPUS/TRICARE provider network only through
referral of the Health Care Finder Program, or a Member’s Primary Care Manager
(“PCM”), in coordination with the Health Care Finder (HCF) Program.  PPG agrees to provide services to
CHAMPUS/TRICARE Members for non-emergency services only after obtaining
appropriate Referral by Member’s PCM, and/or prior authorization through the
HCF Program.

 

5.             Benefit Program Phase-Out.  PPG
agrees to use its best efforts to submit all CHAMPUS/TRICARE claims within 30
days from date of service or discharge during the Phase-out period of a DoD
prime contract.

 

68

 

6.             Active Duty Personnel.  When
required under a DoD prime Contract. 
PPG shall render Covered Services to United States military active duty
personnel and seek compensation from the appropriate service organization at
the same rates as provided in this Addendum. 
If the Active Duty Service Member is enrolled in TRICARE Prime under the
Geographic Separate Unit (GSU) Program Provider shall seek compensation from
FHFS

 

7.             CHAMPUS/TRICARE Quality and Utilization Review Programs.  PPG
agrees to comply with all provisions of the CHAMPUS/TRICARE Quality and
Utilization Review programs, including the provision of medical records and
other documentation for cases being reviewed by FHFS or another CHAMPUS/TRICARE
contractor in compliance with these programs. 
PPG further authorizes such CHAMPUS/TRICARE National Quality Monitoring
Contractors to release all review data obtained through medical record and
other document audit to FHFS. (Per TRICARE Network Provider Manual, approved by
DoD.)

 

8.             Prior Authorization and Referrals. 
Unless a particular Benefit Program or Utilization/Care Management
Program contains no such requirement, and except in an Emergency, PPG agrees
not to seek payment from FHFS or a Payor for Covered Services rendered to a
Member unless Prior Authorization or a Referral was obtained for the rendering
of such services.  Such Prior
Authorization or Referral may be issued by FHFS.  or the applicable Payor. 
If Prior Authorization or a Referral cannot be obtained, PPG agrees to
notify FHFS or the applicable Payor and the appropriate Participating Provider,
as applicable as soon as possible, but no later than twenty-four (24) hours
after providing the Covered Services, or ordering the other Covered Services,
or on the next working day. (Sec TRICARE Network Provider Manual.)

 

9.             Conditions for Reimbursement for Non-Covered Services.  Neither a Member nor FHFS, nor any Payor shall be liable to pay
PPG for any Contracted Services rendered by PPG to a Member which is determined
under a Utilization/Care Management Program not to be Medically Necessary.  Provided, however, PPG may bill a Member for
non-Covered Services rendered by PPG to such Member only if the Member is
notified in advance that the services to be provided are not Covered Services
under the Member’s Benefit Program and the Member requests in writing that PPG
render the non-Covered Services prior to the rendition of such services.

 

10.          Coordination of Benefit.  Notwithstanding any other provision of this Agreement, PPG agrees
to conduct Coordination of Benefits in accordance with the policies and
procedures established by FHFS or a Payor for the applicable Benefit
Program.  PPG shall not bill Member for
any portion of Covered Services not paid by the primary carrier when FHFS or a
Payor is the secondary carrier, but shall instead seek compensation from FHFS
or Payor for such service.  When a
Member has coverage which is primary through another carrier then FHFS’ or a
Payor’s compensation to PPG shall be limited to the difference between the
amount paid by the primary carrier and the contract rates, including Copayments
and cost shares.

 

11.          Name or Logo.  In no
event shall PPG market or advertise the CHAMPUS/TRICARE Program or other
governmental programs without the prior written consent of FHFS.

 

E.            CHAMPUS PRIME AND EXTRA BENEFIT PROGRAMS AND COMPENSATION

 

1.             Fee-for-Service Contracted Services.  PPG
shall render Contracted Services to Members of CHAMPUS/TRICARE Programs,
including the TRICARE Prime and TRICARE Extra Programs and shall accept as
payment in full, the lesser of: a negotiated percentage of CMAC (CHAMPUS
Maximum Allowable Charges, not to exceed 100% of such charges), or the rates
set forth in this Addendum G for Covered Services and all other services
(including payment for any and all sales, use or other applicable taxes on the
sale or delivery of medical services) rendered under this Agreement to Members,
less Copayment or Cost Share amounts payable by Members in accordance with the
Benefit Program.  Such compensation shall
be paid within 30 working days of receipt by FHFS of a complete and accurate
claim for Contracted Services rendered to a Member in accordance with the

 

69

 

provisions
of this Agreement.  In the case where
preauthorization is required, but not obtained prior to services being
rendered, the claim will be denied.

 

2.             Compensation.  Compensation to PPG for the delivery of
Medically Necessary Covered Contracted Services will be the lesser of *** of
the CHAMPUS Maximum Allowable Charges or *** of billed charges for those
services which have a defined Allowable. 
If there is no CMAC reimbursement defined for a procedure code
reimbursement will be at the lesser of *** of billed charges or 80% of the
CHAMPUS area prevailing rates.  Services
for which a procedure code has not been assigned or are unvalued by
CHAMPUS/TRICARE, compensation will be the lesser of Average Wholesale Price
minus *** of billed charges.

 

3.             Recoupment.  In accordance with Section 4.3 (d) of this
Agreement, FHFS shall have the right to conduct recoupments from PPG for
amounts owed to FHFS per the CHAMPUS Operations Manual.

 

The
above rates reflect reimbursement for medical surgical services ONLY.  (These rates DO NOT include any

Behavioral Health Units).

 

CONFIDENTIAL, PROPRIETARY AND TRADE SECRET

 

70

 

ADDENDUM H

 

OCCUPATIONALLY ILL/INJURED OR WORKERS’ COMPENSATION BENEFIT

PROGRAMS

 

FHS
or its affiliates shall contract with Payors, to provide Occupationally
Ill/Injured or Workers’ Compensation Benefit Programs for Members for work
related injuries and diseases compensable under State Occupationally
Ill/Injured or Workers’ Compensation law. 
PPG shall render Contracted Services to Members for occupational
illnesses and injuries covered such Benefit Programs.  FHS shall provide PPG with a listing of all such Payors as
updated from time to tune by FHS, including those Payors for whom FHS serves
only in an administrative capacity.  The
listing shall include the Payors’ utilization management administrator and
claims administrator when such is not FHS.

 

A.           COMPENSATION.

 

1.             Billing and Payment.  As
compensation for the delivery of Contracted Services, limited as described
above, PPG shall be paid in accordance with the rates set forth below.  Such compensation shall be paid within the
time and subject to the billing requirements set forth in Section 4.3 of the
Agreement.  The above notwithstanding,
for self-insured and other such Payors, FHS shall not be obligated to pay all
or any portion of any PPG claim, as allowed by applicable law, unless and until
FHS has received sufficient funds from the applicable Payor to cover such
claim.  Physician claims shall be coded
and submitted according to the Official California Workers’ Compensation
Medical Fee Schedule (Fee Schedule).

 

2.             Rates.  Reimbursements under the Agreement shall be
the lessor of: (a) the physician’s usual and customary charges (“UCR”): (b) ***
of the Fee Schedule adopted by the State of California department of Industrial
Relations, Division of Workers’ Compensation; or (c) the allowable charge based
on the Medicare Resource Based Relative Value Scale (RBRVS) unit values and
HCFA Geographical Practice Cost Indices.

 

“By report” procedures,
unlisted procedures and relativitites not established in RBRVS shall be subject
to FHS’ review and based upon relative complexity shall be assigned a unit
value and subsequently reimbursed in accordance with the HCFA Cost
Indices.  If a unit value cannot be reasonably
determined, reimbursement shall be at 60% of billed charges.

 

B.            OTHER
DUTIES

 

1.             Requirements for Eligibility
Verification and Service Authorization.  The applicable Occupationally Ill/Injured or
Workers’ Compensation Utilization/Care Improvement Programs may require PPG to
(a) verify Member eligibility to receive Contracted Services; (b) verify that
the Member’s injury or disease has been determined to “arise out of and in the
course of employment”; (c) determine the requested treatment is Medically
Necessary to cure and relieve the work-related condition; and (d) obtain a
referral or prior authorization to provide Contracted Services prior to
rendering such services.  PPG agrees to
comply with all requirements.  FHS shall
advise PPG of all applicable Utilization/Care Improvement Program requirements.

 

2.             Reports.  PPG agrees to furnish, upon request, all
information reasonably required by FHS or a Payor to verify and provide written
substantiation of the provision of Contracted Services, and the charges for
such services.

 

3.             Return to Work.  In addition to Contracted Services, and
without further compensation from FHS or a Payor, PPG shall work with FHS and
each Payor to develop a return-to-work program for each Member

 

71

 

ADDENDUM H.1

 

OCCUPATIONALLY ILL/INJURED OR WORKERS’ COMPENSATION RATE
SCHEDULE

 

Physician claims shall be
coded and submitted according to the Official California Workers’ Compensation
Medical Fee Schedule (Fee Schedule). 
Reimbursements under the Agreement shall be the lesser of: (a) the
physician’s usual and customary charges (“UCR”); (b) *** of the Fee Schedule
adopted by the State of California Department of Industrial Relations, Division
of Workers’ Compensation; or (c) the allowable charges based on the Medicare Resource
Based Relative Value Scale (RBRVS) unit values and HCFA Geographical Practice
Cost Indices as published in the most current published edition of the Federal
Register.

 

HCFA Has not developed a
geographically adjusted fee schedule for anesthesiology.  Anesthesiology is reimbursed based upon
CPT-4 codes.  FHS is following HCFA
guidelines for Anesthesiology (American Society of Anesthesiologists (ASA)
guidelines).  The HCFA conversion factor
will be multiplied by an adjustment factor to equate reimbursement *** per
unit.

 

For “by report” procedures,
procedures not listed, or procedures with relativities established in RBRVS,
PPG will be compensated at *** of PPG’s billed charges not to exceed usual, of
reasonable, and customary charges, less any applicable Copayment.  Usual, reasonable, and customary means the
usual charge made by a physician or supplier of services, medicines, or
supplies and will not exceed the general level of charges made by others
rendering or furnishing such services, medicines, or supplies within an area in
which the charge is incurred for sickness or injuries comparable in severity
and nature to the sickness or injury being treated.  The term “area” as it would apply to any particular service,
medicine or supply means a county or such greater areas as is necessary to
obtain a representative cross section of level of charges.

 

Unlisted procedures shall be
subject to FHS’ review and, based upon relative complexity, shall be assigned a
unit value and subsequently reimbursed in accordance with the above conversion
factors.  RBRVS is updated and modified
from time to time.

 

CONFIDENTIAL,
PROPRIETARY AND TRADE SECRET

 

72Exhibit 10.174

 

Health Net Medicare+Choice (M+C)

Addendum to Provider Agreement

 

This Addendum or
Exhibit (the “Addendum”) is entered into by Health Net and StarCare Medical
Group dba Gateway Medical Group (“Provider”) effective October 1, 1999 and is
intended to amend the agreement between Health Net and Provider to add language
required by HCFA for participation as a Medicare+Choice contracted provider or
organization.

 

Whereas, HCFA
requires specific contract language be incorporated into contracts and subcontracts
to comply with the provisions of the Balanced Budget Act of 1997;

 

Whereas, Provider
wishes to provide services to Medicare beneficiaries who elected to enroll in
Health Net, and Health Net wishes Provider to provide services to such Medicare
beneficiaries;

 

Whereas, Provider
agrees to the addition of the following language as an Addendum to the
agreement between Health Net and Provider which shall apply to Health Net
Seniority Plus Members.

 

NOW, THEREFORE,
the parties agree as follows:

 

I. DEFINITIONS

 

1.1.         Downstream
Providers means a health care provider who or which is contracted with Provider to
render services to Members.

 

1.2.         Health
Care Financing Administration (HCFA) means the agency within the Department of
Health and Human Services that administers the Medicare Program.

 

1.3.         Member
means
an individual who has enrolled in or elected coverage in Health Net Seniority
Plus, an M+C Organization.

 

II. ACCESS:  RECORDS AND FACILITIES

 

Provider agrees:

 

2.1.         To give the Department of Health and Human
Services (HHS), and the General Accounting Office (GAO) or their designees the
right to audit, evaluate, inspect books, contracts, medical records, patient
care documentation, other records of subcontractors, or related entities for
the later of six (6) years, or for periods exceeding six (6) years, for reasons
specified in the federal regulation.

 

2.2.         To safeguard the privacy of any information
that identifies a particular Member and to maintain such records in an accurate
and timely manner.

 

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

 

1

 

III. ACCESS: BENEFITS
& COVERAGE

 

Provider agrees:

 

3.1.         To not discriminate based on health status.

 

3.2.         To pay for emergency and urgently needed
services consistent with federal regulations, if such services are Provider’s
liability.

 

3.3          To pay for renal dialysis services for
Members temporarily outside the service area, if such services are Provider’s
liability.

 

3.4.         To direct access to mammography screening
and influenza vaccinations.

 

3.5.         To not collect any co-payment or other cost
sharing for influenza vaccine and pneumoccal vaccines.

 

3.6.         To direct access to in-network women’s
health specialist for women for routine and preventative services.

 

3.7.         To have approved procedures to identify,
assess and establish a treatment plan for Members with complex or serious
medical conditions.

 

3.8.         To provide access to benefits in a manner
described by HCFA.

 

IV. MEMBER PROTECTIONS

 

Provider agrees;

 

4.1.         To work with Health Net in conducting a
health assessment of all new Members within ninety (90) days of the effective
date of enrollment.

 

4.2.         To provide all covered benefits to Members
in a manner consistent with professionally recognized standards of health care.

 

4.3.         To comply with all confidentiality and
Member record accuracy requirements.

 

4.4          To hold harmless and protect Members from
incurring financial liabilities that are the legal obligation of Health Net or
Provider.  In no event, including but
not limited to, nonpayment or breach of an agreement by Health Net, Provider,
or any intermediary, shall Provider bill, charge, collect a deposit from or
receive other compensation or remuneration from a Member.  Provider shall not take any recourse against
a Member, or a person acting on behalf of a Member, for services provided.  This provision also does not prohibit (i)
collection of applicable coinsurance, deductibles, or co-payments, as specified
in the Evidence of Coverage, or (ii) collection of fees for non-covered
services, provided the Member was informed in advance of the cost and elected
to have non-covered services rendered.

 

4.5.         To protect Members who are hospitalized from
loss of benefits through the date of discharge or through the period of time
HCFA premiums are paid.

 

2

 

V. DELEGATION

 

Provider agrees:

 

5.1.         To maintain delegated functions consistent
with Health Net’s requirements and compliant with M+C’s regulations and Health
Net’s policy and procedures as set forth in the Health Net Seniority Plus
Participating Provider Group Operations Manual.

 

5.2.         To comply with any applicable delegation
requirements between Health Net and Provider.

 

VI. PAYMENT AND FEDERAL FUNDS

 

Provider agrees:

 

6.1.         To include specific payment and incentive
arrangements in agreements with all Downstream Providers.

 

6.2.         To pay claims promptly according to HCFA
standards and comply with all payment provisions of state and federal law.  HCFA requires non-contracted provider claims
to be paid within thirty (30) days of receipt and contracted provider claims to
be paid within sixty (60) days of receipt.

 

6.3.         That Members health services are being paid
for with Federal funds, and as such, payments for such services are subject to
laws applicable to individuals or entities receiving Federal funds.

 

VII. REPORTING AND DISCLOSURE

 

Provider agrees:

 

7.1.         To submit to Health Net all data, including
medical records, necessary to characterize the content and purpose of each
encounter with Member.

 

7.2.          To submit and
certify the completeness and truthfulness of all encounter data.

 

VIII. QUALITY ASSURANCE / QUALITY
IMPROVEMENT

 

Provider Agrees:

 

8.1.         To cooperate with an independent quality
review and improvement organization’s activities pertaining to provision of
services for Members.

 

8.2.         To comply with Health Net’s medical policy,
quality assurance program, and medical management program.

 

3

 

IX. COMPLIANCE

 

Provider agrees:

 

9.1.         That Provider must notify any contracting
healthcare provider being terminated, in writing, of the reason(s) for denial,
suspension or termination determinations.

 

9.2.         To provide Health Net with at least sixty
(60) days written notice before terminating an agreement without cause.

 

9.3.         To meet the requirements of all other laws
and regulation, including Title VI of the Civil Rights Act of 1964, the Age
Discrimination Act of 1975, the Americans with Disabilities Act, and all other
laws applicable to recipients of Federal funds.

 

9.4.         To comply with all applicable Health Net
procedures and Health Net Seniority Plus Participating Provider Group
Operations Manual including, but not limited to, the accountability provisions.

 

9.5.         To comply with and require that all
Downstream Providers comply with applicable state and Federal laws and
regulations, including Medicare laws and regulations and HCFA instructions.

 

9.6.         To not employ or contract with individuals excluded
from participation in Medicare under Section 1128 or 1128A of the Social
Security Act.

 

9.7.         To adhere to Medicare’s appeals, expedited
appeals and expedited review procedures for Health Net Members, including
gathering and forwarding information on appeals to Health Net, as necessary.

 

X. PRIVATE FEE FOR SERVICE

 

Provider agrees:

 

10.1.       That contracts with private Fee-for-Service
providers must specify uniform Fee-for-Service payment rates.

 

10.2.       That Provider cannot charge more than cost
sharing and balanced billing amounts permitted under the applicable Health Net
plan.  Health Net must specify cost
sharing amounts, and balance billing may not exceed fifteen percent (15%) of
uniform payment rate.

 

XI. ADOPTION OF MEDICARE RISK
PROGRAM CONTRACT REQUIREMENTS

 

Provider agrees:

 

11.1.        That all contracts
must be signed and dated.

 

11.2.        To serve Members
during the term of this Addendum.

 

11.3.       To comply with the regulatory requirements
and Health Net’s guidelines promulgated by HCFA, which are more fully
documented in Health Net’s policies, procedures, and manuals.

 

4

 

Except as provided
in this Addendum, all other provisions of the Agreement between Health Net and
Provider not inconsistent herewith shall remain in full force and effect.  This Addendum shall remain in force as a
separate but integral addition to such Agreement to ensure compliance with
required HCFA provisions, and shall terminate upon the termination of such
Agreement.

 

IN WITNESS WHEREOF,
the parties hereto have executed this Addendum the date set forth below each
signature.

 

	
  StarCare Medical Group dba Gateway

  Medical Group

  	
  Health Net

  
	
   

  	
   

  
	
  By:

  	
  /s/ Marlean Free

  	
   

  	
  By:

  	
  /s/ Christopher Ciano

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
  Marlean Free

  	
   

  	
  Name

  	
  Christopher
  Ciano

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  Director

  	
   

  	
  Title:

  	
  Senior
  Vice President and

  General Manager

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
  8/30/99

  	
   

  	
  Date:

  	
  11/8/00

  	
   

  

 

5

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