Document:

Exhibit
10.118

 

AMENDMENT

to
the

PARTICIPATING PROVIDER AGREEMENT

between

FOUNDATION HEALTH SYSTEMS AFFILIATES

and

PROSPECT MEDICAL GROUP

 

The Provider Services
Agreement dated January 1, 1998 between Prospect Medical Group (“PPG”) and
Foundation Health Systems Affiliate(s) (“FHS”) is hereby amended effective
January 1, 1998.

 

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

 

1.                                       Section 1.10, Emergency, shall be
deleted in its entirety and replaced with the following:

 

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.

 

2.                                       Section 1.17, Operations Manual, shall
be amended to add the following sentence:

 

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.

 

3.                                       Section 4.3, Offsetting, Subsection (d)
shall be amended to add the following sentence:

 

In
no event shall PPG be required to make any cash payments to FHS for any deficit
in a shared risk program for institutional services.

 

4.                                       Section 4.9, Third Party Recoveries,
shall be deleted in its entirety and replaced with the following:

 

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.

 

5.                                       Section 4.10, Occupationally Ill/Injured or
Workers’ Compensation shall be deleted in its entirety:

 

The
remainder of Article IV, Compensation, shall be renumbered accordingly.

 

6.                                       Section 6.6, Termination of an Affiliate,
shall be amended to add the following paragraph:

 

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.

 

7.                                       A new Section 8.5, Provider Dispute
Resolution Procedure, shall be inserted to read as follows:

 

1

 

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.

 

The remainder of Article VIII, General
Provisions, is renumbered accordingly.

 

Except as so amended, all other provisions of the Agreement shall
remain unchanged and in effect.

 

2Exhibit 10.119

 

AMENDMENT

to the

PROVIDER SERVICES AGREEMENT

between

FOUNDATION HEALTH SYSTEMS AFFILIATES

and

PROSPECT MEDICAL GROUP

 

The Provider Services Agreement (“Agreement”), dated January 1, 1998,
between Prospect Medical Group (“PPG”) and Foundation Health Systems
Affiliate(s) (“FHS”) is hereby amended effective July 1, 2000.

 

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

 

1.       Addendum B Section B 1.1,
STANDARD HMO Professional Capitation Rates. 
Capitation Rates, is deleted in its entirety effective July 1, 2000 and
replaced as follows:

 

B.                                    STANDARD HMO.

 

1.                                      Professional Capitation
Rates.

 

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

 

	
  Standard

  HMO Capitation

  
	
  $
  *** PMPM

  

 

2.       Addendum B, Section B.3.1
STANDARD HMO, Shared Risk Budget is deleted in its entirety effective January
1, 2001 and replaced as follows:

 

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

 

	
  Standard

  HMO Shared Risk

  Budget

  Rates Effective

  January 1, 2001

  
	
  $ *** PMPM

  

 

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

 

 

3.       Addendum
B, Section C 1.1, SMALL GROUP. 
Professional Capitation Rates. 
Capitation Rates, is deleted in its entirety effective July 1, 2000 and
replaced as follows:

 

C.                                    SMALL GROUP HMO.

 

1.                                      Professional Capitation
Rates.

 

	
  Small Group

  HMO Capitation

  
	
  $ *** PMPM

  

 

 

4.       Addendum
B, Section C.3 SMALL GROUP HMO, Shared Risk Budget is deleted in its entirety
January 1, 2001 and replaced as follows:

 

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

 

	
  Small Group

  HMO Shared Risk

  Budget Rates Effective

  January
  1, 2001

  
	
  $
  *** PMPM

  

 

?                  Addendum
C MEDICARE HEALTH MAINTENANCE ORGANIZATION
(HMO) AND MEDICARE POINT OF SERVICE (POS) BENEFIT PROGRAMS Section A DEFINITIONS
item A HCFA is deleted in its entirety and replaced as follows:
amended to add the following new Section F.

 

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

 

7)              Addendum
C MEDICARE HEALTH MAINTENANCE ORGANIZATION
(HMO) AND MEDICARE POINT OF SERVICE (POS) BENEFIT is amended to add the following new Section F.

 

?  HCFA REQUIRED LANGUAGE

 

I                    DEFINITIONS

 

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

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

 

 

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.

 

 

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 *** 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.

 

 

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 internal 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
Agreement by their officers duly authorized to be effective on the date and
year first written above.

 

	
  Prospect Medical Company

  	
  Foundation Health Systems Affiliates

  
	
   

  	
   

  
	
  /s/ Peter G.
  Goll

  	
   

  	
  /s/ Christopher Ciano

  	
   

  
	
  Signature

  	
   

  	
  Christopher Ciano

  	
   

  
	
   

  	
  Senior Vice
  President & General Manager -South

  
	
   

  	
   

  
	
  Peter G.
  Goll

  	
   

  	
   

  
	
  Print Name

  	
   

  
	
   

  	
   

  
	
  Senior Vice
  President

  	
   

  	
   

  
	
  Title

  	
   

  
	
   

  	
   

  
	
  8-23-00

  	
   

  	
  09/26/00

  	
   

  
	
  Date

  	
  Date

  
	
   

  	
   

  
	
  330219957

  	
   

  	
   

  
	
  Federal Tax
  Identification Number

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