Document:

Exhibit 10.177

 

AMENDMENT

to the

PROVIDER SERVICES AGREEMENT

between

HEALTH NET INC., AFFILIATES

and

STARCARE MEDICAL GROUP DBA GATEWAY MEDICAL GROUP

 

The Provider Services
Agreement (“Agreement”), effective March 1, 1999, between StarCare Medical
Group, dba Gateway Medical Group, (“PPG”) and Health Net Inc., Affiliates
(“HNI”), subsequently amended July 1, 2000, and October 10, 2000, is hereby
amended effective February 1, 2002.

 

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

 

1.             All
references to the California Department of Corporations (“DOC”) shall hereby be
deleted and replaced by the California Department of Managed Health Care
(“DMHC”).

 

2.             Section
2.17. 
Quality Improvement Program.  shall be deleted in its entirety and replaced by the following:

 

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 HNI 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,
HNI 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.

 

PPG
recognizes the importance of the establishment of health care measurement
systems to evaluate, along with the continuum of care, the performance of hospitals,
physicians, and other healthcare providers. 
PPG agrees to support efforts to address quality, cost of care, access,
Member satisfaction and functional status through participation in the
development of valid performance measurement systems.  Performance measurement systems should examine process and
outcome and incorporate the following criteria:  standard indicators and definitions, uniform data, accuracy, and
state of the art risk adjustments.  PPG
is aware that participation in the development of performance measurement
systems may require the commitment of financial and human resources.

 

3.             Section
4.9.  Third
Party Recoveries, Workers’ Compensation.  shall be deleted in its entirety and
replaced by the following:

 

4.9          Third Party Recoveries, Workers’ Compensation.  In
the event PPG provides services to HNI 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 value of Covered Services rendered pursuant to SB1471 and the
applicable provisions of the Coverage Certificate and as set forth in the
Operations Manual.  PPG shall notify HNI
of any third party payor and shall, upon request from HNI, provide HNI with an
accounting of all such sums recovered. 
In the event HNI has compensated PPG for such Covered Services, PPG
agrees to immediately refund such amounts paid to HNI.

 

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

 

1

 

4.             Article
VI TERM AND TERMINATION. Section 6.1 Term is deleted in its entirety and
replaced as follows:

 

6.1          Term.  The term of this Amendment
shall commence February 1, 2002, and shall continue in effect for a period of
twenty-four (24) months (“Initial Term”). 
Thereafter, this Agreement shall automatically renew for successive
one-year (1) 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.

 

5.             Article
VI TERM AND TERMINATION.  Section 6.2
Without Cause Termination is deleted in its entirety and replaced as follows:

 

6.2          Without Cause Termination.  After
the Initial Term 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 HNI provides
PPG with such notice, HNI may, at its option, begin to transition Members
immediately under this Agreement to another Participating Provider after such
notice.

 

6.             Addendum
B, COMMERCIAL HEALTH MAINTENANCE ORGANIZATION (HMO) AND COMMERCIAL POINT OF
SERVICE (POS) BENEFIT PROGRAMS is deleted in its entirety and replaced with the
new Addendum attached hereto.

 

7              Addendum
B.2 DIVISION OF RESPONSIBILITY MATRIX OF HMO, PPG AND SHARED RISK/HOSPITAL
CAPITATED SERVICES COMMERCIAL HMO AND POINT OF SERVICE BENEFIT PROGRAMS is
deleted in its entirety and replaced with the new Addendum attached hereto.

 

8.             ADDENDUM I HEALTHY FAMILIES PROGRAM is added
and attached hereto.

 

Except as provided in this
Amendment, all other provisions of the Agreement between HNI and Provider not
inconsistent herewith shall remain in full force and effect.

 

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.

 

	
  StarCare
  Medical Group Inc, dba

  Gateway Medical Group, Inc

  	
  Health Net
  Inc., Affiliates

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Michael Olson

  	
   

  	
  /s/ Christopher Ciano

  	
   

  
	
  Michael Olson

  	
  Christopher Ciano

  
	
   

  	
   

  
	
  Director of Contracting

  	
  Senior Vice President &
  General Manager, South

  
	
   

  	
   

  
	
  2/11/02

  	
   

  	
  03-05-02

  	
   

  
	
  Date

  	
  Date

  
	
   

  	
   

  
	
  33-0843838

  	
   

  	
   

  
	
  Federal Tax Identification
  Number

  	
   

  
					

 

2

 

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 HNI set forth in this Addendum are only the obligations of
Health Net (hereafter “HMO”) and not the obligations of HNI or any other
Affiliate of HNI.  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.

 

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.

 

6.             Withhold Fund and Determination of Maximum Downside of
Shared Risk Deficits.  Notwithstanding any provision in this
Agreement or in any Addendum hereto to the contrary.  PPG’s total downside liability for all Shared Risk Budget
deficits shall not exceed twenty percent (20%) of PPG’s gross annual
Capitation.  Any and all Withhold Fund
amounts as set forth herein shall be applied to offset such total downside
liability.

 

3

 

B.            STANDARD HMO.

 

1.             Professional Captation Rates.

 

1.1          Capitation Rales.  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

  
	
  February
  1, 2002, through December 31, 2002, $*** PMPM

  
	
  January
  1, 2003, $*** PMPM

  

 

2.             Professional Slop 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.

 

	
  Standard

  HMO Shared Risk Budget

  
	
  January
  1, 2002, through December 31, 2002, $46.00 PMPM

  
	
  January
  1, 2003, $*** 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.

 

In the event
the shared risk claims exceed the shared risk budget at the interim settlement date, HMO may, at its sole
discretion, withhold from PPG’s gross monthly capitation up to *** of PPG’s
monthly capitation and may continue such withhold until the final shared risk
settlement.  The withheld amount shall
be placed in the Withhold Fund as described in the Agreement.  If there is a deficit at the time of final
settlement, HMO may at it’s sole discretion, continue to withhold up to *** of
PPG’s capitation for Standard HMO Members and place such amount in the Withhold
Fund as described in this 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.

 

4

 

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 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 *** 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 ***.

 

4.             AIDS.  On a network wide basis,
reinsurance programs shall be established by HMO to cover the payment of
expenses incurred in the treatment of Members who have been diagnosed with
Acquired Immune Deficiency Syndrome (“AIDS Members”).

 

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.

 

4.3          AIDS Reinsurance Premium.  The
Reinsurance Program rates, as set forth

 

5

 

below, shall be  deducted from PPG’s Capitation:

	
  •

  	
   

  	
  AIDS Reinsurance effective
  February 1, 2002 thru May 31, 2002

  	
   

  	
  - *** PMPM

  
	
  •

  	
   

  	
  AIDS Reinsurance effective
  June 1, 2002

  	
   

  	
  - *** PMPM

  

 

5.             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 not to a Shared Risk Program.  PPG Capitation, Professional Stop Loss and
Reinsurance Programs 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.

 

	
  Small Group

  HMO Capitation

  
	
  Effective
  February 1, 2002, through December 31, 2002, *** PMPM

  
	
  Effective
  January 1, 2003, *** 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.

 

	
  Small Group

  HMO Shared Risk Budget

  
	
  Effective
  January 1, 2002, through December 31, 2002, *** PMPM

  
	
  Effective
  January 1, 2003, *** 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 HMO Members and place such
amount in the Withhold Fund as described in the Agreement.

 

In the event
the shared risk claims exceed the shared risk budget at the interim settlement date, HMO may, at its sole
discretion, withhold from PPG’s gross monthly capitation up to five percent
(5%) of PPG’s monthly capitation and may continue such withhold until the
final shared risk settlement.  The
withheld amount shall be placed in the Withhold Fund as described in the
Agreement.  If there is a deficit at the
time of final settlement, HMO may at it’s sole discretion, continue to withhold
up to *** of PPG’s capitation for Small Group HMO Members and place such amount
in the Withhold Fund as described in this 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

 

6

 

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.

 

3.3          Shared Risk Budget Surplus.  In
the event of a Shared Risk Budget surplus, PPG’s share of the surplus shall be
limned 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 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 *** 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 ***.

 

4.             AIDS 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 effective
  February 1, 2002 thru May 31, 2002

  	
   

  	
  - *** PMPM

  
	
  •

  	
   

  	
  AIDS Reinsurance effective
  June 1, 2002

  	
   

  	
  - *** PMPM

  

 

7

 

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.

 

	
  Individual

  HMO Capitation

  
	
  Effective
  February 1, 2002, through December 31, 2002, *** PMPM

  
	
  Effective
  January 1, 2003, *** 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.

 

	
  Individual

  HMO Shared Risk Budget

  
	
  Effective January 1, 2002, through December 31, 2002, *** PMPM

  
	
  Effective
  January I, 2003, *** 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 HMO Members and place such amount in the Withhold Fund as described
in the Agreement.

 

In the event
the shared risk claims exceed the shared risk budget at the interim settlement date, HMO may, at its sole
discretion, withhold from PPG’s gross monthly capitation up to five percent
(5%) of PPG’s monthly capitation and may continue such withhold until the final
shared risk settlement.  The withheld
amount shall be placed in the Withhold Fund as described in the Agreement.  If there is a deficit at the time of final
settlement, HMO may at it’s sole discretion, continue to withhold up to five
percent (5%) of PPG’s capitation for Individual HMO Members and place such
amount in the Withhold fund as described in this 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

 

8

 

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 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 ***.

 

4.             AIDS 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 effective
  February 1, 2002 thru May 31, 2002

  	
   

  	
  - *** PMPM

  
	
  •

  	
   

  	
  AIDS Reinsurance effective
  June 1, 2002

  	
   

  	
  - *** PMPM

  

 

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
*** 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.

 

9

 

2.             Reinsurance Programs.  PPG’s
professional stop loss level shall be 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 Transfer
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:

 

	
  Medicare

  Supplement HMO

  	
   

  	
  Medicare

  Supplement POS

  
	
  $***
  PMPM

  	
   

  	
  $***
  PMPM

  

 

2.             Reinsurance Programs. 
Medicare Supplement Members shall not be included in the Professional
Stop Loss Program, the AIDS 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, Medicare
Supplemental 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-Network Shared Risk Program,
and c) any surplus resulting from the Institutional In-Network and
Out-of-Network Shared Risk Program.

 

10

 

3.             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 *** Withhold (Professional Capitation).  This Withhold shall partially fund the
Professional Out-of-Network Budget.

 

Effective
January 1, 2003, 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 *** Withhold (Professional Capitation).  This Withhold shall partially fund the
Professional Out-of-Network Budget.

 

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 *** 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 not to exceed
*** of PPG’s annual gross capitation, 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
***.  Actual Shared Risk Budget shall
fluctuate from month to month to the extent that PPG’s age, sex and benefit
plan mix fluctuates.

 

	
  Standard POS Shared Risk

  + 10%=

  	
   

  	
  Small
  Croup POS

  Shared Risk

  + 10%=

  	
   

  	
  Individual
  POS

  Shared Risk

  + 10%=

  	
   

  
	
  Effective January 1, 2002 through December
  31, 2002, $*** PMPM

  	
   

  	
  $*** PMPM

  	
   

  	
  $*** PMPM

  	
   

  
	
  Effective January 1, 2003, *** PMPM

  	
   

  	
  $*** PMPM

  	
   

  	
  $*** PMPM

  	
   

  

 

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.

 

11

 

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 m 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 eighty percent (80%) 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 ***

 

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.

 

(b)           Out-of-Network Professional Stop Loss. PPG’s Out-of-Network Professional
Stop Loss threshold shall be *** per 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 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.

 

I.              Pharmacy Shared Risk Program.  Not
applicable.  PPG does not participate in
Pharmacy Shared Risk Program.

 

J.             Immunizations:  PPG
assumes financial responsibility for immunization under the capitation rate set
forth in this Addendum.  New
immunizations approved by American Academy of Pediatrics, after the effective
date of the Agreement, shall be reimbursed at rates that are negotiated based
on experiential data, which shall be mutually agreed upon by HMO and PPG.

 

12

 

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 2/1/2002

 

	
   

  	
   

  	
  PPG

  CAPITATED

  SERVICES

  	
   

  	
  HMO RISK

  SERVICES

  	
   

  	
  SHARED
  RISK/

  HOSPITAL

  CAPITATED

  SERVICES

  
	
  AIDS – Drugs

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  AIDS – Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  AIDS – Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  ALLERGY IMMUNOTHERAPY

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  ALLERGY TESTING

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  ALPHA-FETOPROTEIN

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  AMBULANCE

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      In Area (30 Mile Radius)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Out of Area

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  ANESTHESIOLOGY

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  BIOFEEDBACK

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  BLOOD/BLOOD PRODUCTS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Autologous/Homologous

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Blood Bank

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Storage and Collection of
  Blood

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  CHEMICAL DEPENDENCY

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Inpatient Facility
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Inpatient Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Outpatient Facility
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Outpatient Professional
  Component Inpatient

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Detox Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Inpatient Detox
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  CHEMOTHERAPY

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Drugs, including Epogen,
  Neupogen and adjunctive therapies

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  CHIROPRACTIC (Medicare Approved)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  COLOSTOMY SUPPLIES

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  CONSULTATIONS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  COSMETIC SURGERY

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  (Medically
  Necessary)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  CRITICAL
  CARE VISITS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  

 

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

 

13

 

	
   

  	
   

  	
  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

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Epogen, Neupogen

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  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

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  IMMUNIZATIONS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  

 

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

 

14

 

	
   

  	
   

  	
  PPG

  CAPITATED

  SERVICES

  	
   

  	
  HMO RISK

  SERVICES

  	
   

  	
  SHARED
  RISK/

  HOSPITAL

  CAPITATED

  SERVICES

  
	
  INFANT
  APNEA MONITOR

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  INJECTABLES,
  SELF ADMINISTERED

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  IN PATIENT
  VISITS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  IVF &
  GIFT

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  LITHOTRIPSY

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Professional 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

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Radiation Therapy-Inpatient

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Technical/Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Radiation Therapy-Outpatient

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Technical/facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  

 

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

 

15

 

	
   

  	
   

  	
  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 a Hospital Stay:

  Surgical Supplies, Equipment, etc.

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Related to an Outpatient Office Visit:

  Splints, Casts, Bandages, 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)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Covered Immunosupressives

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Organ Procurement

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  TRANSPLANT
  EVALUATIONS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •      Professional

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  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)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  

 

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

 

16

 

ADDENDUM I

 

HEALTHY FAMILIES PROGRAM

 

PPG
understands and agrees that the obligations of HNI set forth in this Addendum
shall be the obligations of HEALTH NET of California, (HEALTH NET), an
Affiliate of HNI, and not the obligations of HNI or any other Affiliate of HNI.

 

HEALTH
NET entered into an agreement with the California Managed Risk Medical
Insurance Board (“MRMIB”) to arrange for the provision of Covered Services to
persons who are eligible under the California Children’s Health Insurance
Program (aka and hereinafter “Healthy Families Program”) and enrolled in, or
otherwise assigned to HEALTH NET, on a prepaid basis.  The Healthy Families Program is a government sponsored health
care program administered by the State of California, funded in part by federal
funds, and arranged by HMOs and their participating providers.

 

Notwithstanding
any provision in the Agreement to the contrary, PPG understands and agrees that
PPG shall arrange and provide health care services to Healthy Families Members
in accordance with the benefits and program requirements of the Healthy
Families Agreement.  PPG understands
that Evidence of Coverage documents are subject to change and approval by MRMIB
and PPG hereby agrees to arrange and provide health care services in accordance
with such changes.

 

A.    GENERAL PROVISIONS

 

1.             Provision of Covered Services.  PPG
shall arrange Covered Services for assigned Members.  For the purposes of this Addendum, “Covered Services” means those
health care services, supplies and items set that are specified as being
covered under the Healthy Families Agreement. 
PPG shall ensure that it and its Participating Providers arrange Covered
Services for Members, in accordance with the following, each of which is hereby
incorporated by reference as if set out in full herein:

 

1.1           The terms and conditions of this Addendum and the Agreement.

 

1.2           The terms and conditions of HEALTH NET’s Healthy Families Agreement with
MRMIB, and the applicable Evidence of Coverage.

 

1.3           HEALTH NET’s Healthy Families policies and procedures and provider
bulletins.

 

1.4           Healthy Families Program regulations and statutes.

 

1.5           All laws applicable to PPG or HEALTH NET.

 

1.6           HEALTH NET’s Utilization Management Program and Quality Management
Program.

 

1.7           Standards requiring services to be provided in the same manner, and with
the same availability, as services are rendered to other patients.

 

1.8           No less than the minimum clinical quality of care and performance
standards that are professionally recognized and/or adopted, accepted or
established by HEALTH NET

 

1.9           The most recent recommendations of the American Academy of Pediatrics
(AAP) with regard to Recommendations for Preventative Pediatric Health Care, or
other preventative care standards mandated by MRMIB

 

2.             Reports and Information.  PPG
and its Participating Providers shall provide HEALTH NET,

 

17

 

within the time requested by
HEALTH NET, with all such reports and information as HEALTH NET may require to
allow it to meet the reporting requirements under the Healthy Families
Agreement or any applicable law.  Such
reporting obligations include, but are not limited to, monthly reporting to
HEALTH NET of referrals of Members to the following programs:  California Children’s Services, referrals of
Members with possible Serious Emotional Disturbance to the County Mental Health
Department, and alcohol and drug treatment referrals to Managed Health Network.

 

3.             Carve-out of California
Children’s Services (CCS) Program services.  Health care services to treat
CCS-eligible conditions are “carved out” of HEALTH NET’s coverage obligations
under the Healthy Families Agreement. 
However, PPG and us Participating Providers are required to identify and
timely refer Members with possible CCS-eligible conditions to the County CCS
Program.  Upon referral, the
Participating Provider shall inform the Member’s parent or guardian.  The CCS Program requires eligible children
to be treated at CCS-certified facilities by CCS-paneled providers.  The CCS Program may require transfer to CCS-certified
facilities with CCS-paneled providers. 
The CCS Program is financially responsible for payment of health care
costs to treat a CCS-eligible condition. 
The parties understand and agree that HEALTH NET is not financially
responsible for payment of services related to CCS-eligible conditions.

 

4.             Referral of Members having possible mental health
conditions to Managed Health Network.  PPG and its Participating
Providers are required to identify and timely refer Members with possible
mental health conditions (other than Serious Emotional Disturbance as set out
in the following section) to HEALTH NET’s affiliate and subcontractor, Managed
Health Network.  Managed Health Network
is financially responsible for payment of treatment of covered mental health
services.

 

5.             Services for Members with Serious Emotional Disturbance
(SED).  Health care services to treat SED are the
responsibility of the County Mental Health Department.  However, PPG and its Participating Providers
are required to identify and timely refer Members with possible SED to the
County Mental Health Department.  Upon
referral, the Participating Provider shall inform the Member’s parent or
guardian.  The County Mental Health
Department is responsible for the provision and payment of health care costs to
treat SED.

 

6.             Cultural and Linguistic Services.  PPG
and its Participating Providers shall: 
(1) not require or encourage Members to utilize family members or
friends as interpreters; (2) record the language needs of Members in the
medical record; and (3) document Member request or refusal of interpreter
services in the Member’s medical record. 
PPG and its Participating Providers shall arrange interpreter services
for Members either through telephone language services or face-to-face
interpreters.  PPG and its Participating
Providers are encouraged to directly make these interpretive services
available, however, HEALTH NET’s Member Services Department is available to
provide certain interpretive assistance to facilitate Member-provider
communications upon request.

 

7.             Initial Health Assessments.  PPG
and its Participating Providers shall offer an initial health assessment to
their assigned members within 120 days of their enrollment in HEALTH NET’s
Healthy Families Plan.

 

8.             Eligibility.  Eligibility and commencement of
enrollment under Healthy Families is determined by MRMIB.  Commencement of coverage can occur at any
day of a month.

 

9.             Copayments.  Copayments are subject to a
$250 annual limitation and PPG and its Participating Providers are encouraged
to make extended payment arrangements available to Members experiencing an
inability to pay a required copayment.

 

B.            REIMBURSEMENT PROVISIONS

 

1.             PPG shall be compensated according to this
Addendum I and this Addendum shall be applicable to only those Healthy Families
listed on the Commercial HMO remittance summaries.  HNI will modify this Addendum I to reflect a new rate structure
for adults, pending federal approval of expanding this program to parents

 

2.             Compensation for PPG
Capitated Services.  As compensation for rendering PPG Capitated
Services.  HEALTH NET shall pay PPG
Capitation as set forth in this Addendum I for each Healthy Families

 

18

 

Member 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 HEALTH NET 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
Healthy Families Members for whom Capitation is being paid.  In the event of a Capitation error,
resulting in an overpayment or underpayment to PPG, HEALTH NET shall adjust
subsequent Capitation to offset such error.

 

3.             Compensation to Other
Providers of PPG Capitated Services.  PPG shall compensate all
providers who render PPG Capitated Services to Healthy Families 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. 
HEALTH NET may pay such claims at the lesser of HEALTH NET’S contract
rate with such provider, if any, PPG’s subcontract terms or provider’s billed
charges.  HEALTH NET shall deduct any
such claim amounts paid from PPG’s Capitation, as set forth in the Operations
Manual.

 

4.             Contracted Services.  PPG
and Member Physicians shall render Contracted Services which are not PPG
Capitated Services to Members covered under this Addendum I and shall be
compensated on a fee-for-service basis at one hundred percent of the Medi-Cal
Fee Schedule.  PPG shall submit claims
in accordance with the terms of this Agreement and State and federal law.

 

5.             Withhold Fund and
Determination of Maximum Downside of Shared Risk Deficits. 
Notwithstanding any provision in this Agreement or in any Addendum
hereto to the contrary.  PPG’s total downside
liability for all Shared Risk Budget deficits shall not exceed *** of PPG’s
gross annual Capitation.  Any and all
Withhold Fund amounts, if applicable, as set forth herein shall be applied to
offset such total downside liability.

 

6.             Newborns.  PPG
shall provide Covered Services to a child born to a Member for the month of
birth and the following month.  For a
child born in the month immediately preceding the mother’s membership.  PPG shall provide Covered Services to the
child during the mother’s first month of enrollment.  No additional Capitation Compensation will be made to PPG for the
child for such periods under these circumstances.

 

7.             Professional Capitation
Rates.

 

7.1           Capitation Rates.  PPG
Capitation for Healthy Families Members shall be determined on a monthly basis
by multiplying the number of members by the flat capitation amount set forth in
Addendum I.

 

	
  Healthy Families Capitation

  
	
  ***
  PMPM

  

 

8.             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.

 

9.             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

 

9.1           Shared Risk Budget. 
HEALTH NET 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.

 

	
  Healthy Families Shared Risk Budget

  
	
  January
  1, 2002, through December 31, 2002, *** PMPM

  
	
  January
  1, 2003, $49.00 PMPM

  

 

19

 

9.2           Shared Risk Administration.  Each
Reconciliation Period, HEALTH NET shall calculate Shared Risk Claims in
accordance with the Operations Manual and compare such claim cost to the
corresponding Shared Risk Budget. 
HEALTH NET 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.

 

9.3           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 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.

 

9.4           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 HEALTH NET.

 

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.

 

9.5           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 ***.

 

10.           AIDS Reinsurance Programs.  On a
network wide basis, reinsurance programs shall be established by HEALTH NET to
cover the payment of expenses incurred in the treatment of Members who have
been diagnosed with Acquired Immune Deficiency Syndrome (“AIDS Members”).

 

10.1         AIDS Reinsurance. 
Professional, institutional, and pharmacy costs for AIDS Members shall
be the financial responsibility of HEALTH NET, as set forth in the Operations
Manual.  Additionally, the pharmacy cost
for HIV drugs shall be the financial responsibility of HEALTH NET under this
Program.  PPG shall receive prior
authorization from HEALTH NET for an elective inpatient admission of an AIDS
Member.  In addition, PPG shall provide
HEALTH NET 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

 

20

 

to
notify HEALTH NET as set forth in this paragraph, AIDS related claims for such
Members shall not be eligible for payment under this Program.

 

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

	
  •

  	
   

  	
  AIDS Reinsurance effective
  February 1, 2002 thru May 31, 2002

  	
   

  	
  - *** PMPM

  
	
  •

  	
   

  	
  AIDS Reinsurance effective
  June 1, 2002

  	
   

  	
  - *** PMPM

  

 

11.           Immunizations:

 

11.1         Immunizations: 
Claims for immunizations approved by the American Academy of Pediatrics
and administered by PPG shall be submitted to HNI using the HCFA 1500 forms and
billed using the appropriate CPT-4 codes. 
Compensation shall be the lesser of a) the PPG’s billed charges; b) the
Average Wholesale Price (AWP) as established by First Databank and as reflected
in HNI’s database which is updated semi-annually, less *** or c) the lowest
acquisition cost provided through services made available by HNI.  AWP reimbursement is based on the lowest AWP
for the specific antigen.  Multi-dose vials
shall be reimbursed on a per dose basis.

 

21

 

ADDENDUM I.1

 

AGE, SEX AND BENEFIT FACTORS

 

The age, sex and benefit plan
factors shall be developed by HEALTH NET based upon actuarial assumptions
consistent with existing actuarial assumptions and HEALTH NET’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.

 

	
  Sex

  	
   

  	
  Age

  	
   

  	
  Inst

  Factor

  
	
  Child

  	
   

  	
  0

  	
   

  	
  5.228

  
	
   

  	
   

  	
  1

  	
   

  	
  0.644

  
	
   

  	
   

  	
  2 – 4

  	
   

  	
  0.406

  
	
   

  	
   

  	
  5 – 9

  	
   

  	
  0.296

  
	
   

  	
   

  	
  10 – 14

  	
   

  	
  0.338

  
	
   

  	
   

  	
  15 – 19

  	
   

  	
  0.607

  

 

A.2          Benefit Plan Factors for PPG Capitation and Hospital Capitaion/Shared
Risk Budgets

 

Healthy
Families

	
  Plan

  	
   

  	
  Inst

  Factor

  
	
  9Y

  	
   

  	
  0.9334

  
	
  TBA

  	
   

  	
   

  
	
  TBA

  	
   

  	
   

  

 

22

 

ADDENDUM I.2

 

DIVISION OF RESPONSIBILITY

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

 

HEALTHY FAMILIES 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.  CCS-eligible services are excluded from HMO
Risk Services.

 

MATRIX EFFECTIVE 2/1/2002

 

	
   

  	
   

  	
  PPG

  CAPITATED

  SERVICES

  	
   

  	
  HMO RISK

  SERVICES

  	
   

  	
  SHARED
  RISK/

  HOSPITAL

  CAPITATED

  SERVICES

  
	
  AIDS – Drugs-Children 0-21 years

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  AIDS – Drugs-Adults 21 and older

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  AIDS – Facility Component-Children 0-21

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  AIDS – Facility Component-Adults 21 and older

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  AIDS – Professional Component-Children 0-21

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  AIDS – Professional Component-Adults 21 and
  older

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  ALLERGY
  IMMUNOTHERAPY

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  ALLERGY
  TESTING

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  ALPHA-FETOPROTEIN

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  AMBULANCE

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •  In
  Area (30 Mile Radius)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •  Out
  of Area

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  ANESTHESIOLOGY

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  BIOFEEDBACK

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  BLOOD/BLOOD
  PRODUCTS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Autologous/Homologous Blood Bank

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  • 
  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

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  

 

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

 

23

 

	
   

  	
   

  	
  PPG

  CAPITATED

  SERVICES

  	
   

  	
  HMO RISK

  SERVICES

  	
   

  	
  SHARED
  RISK/

  HOSPITAL

  CAPITATED

  SERVICES

  
	
  COSMETIC
  SURGERY

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  (Medically Necessary)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Professional 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

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Epogen, Neupogen

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •       Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  HEPATITIS-B

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  HOME
  HEALTH

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  HOME
  VISITS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  HOSPICE

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  • 
  Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •  Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  

 

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

 

24

 

	
   

  	
   

  	
  PPG

  CAPITATED

  SERVICES

  	
   

  	
  HMO RISK

  SERVICES

  	
   

  	
  SHARED
  RISK/

  HOSPITAL

  CAPITATED

  SERVICES

  
	
  HOSPITAL
  BASED PHYSICIANS –

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Inpatient,
  Ambulatory Surgery or Emergency Room Admissions

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  • 
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  • 
  Technical Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  IMMUNIZATIONS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  INFANT
  APNEA MONITOR

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  INJECTABLES,
  SELF ADMINISTERED

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  INPATIENT
  VISITS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  IVF & GIFT

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  LITHOTRIPSY

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Professional 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 – Inpatient-Serious Emotional
  Disturbances (SED)-Children 0-21

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  • 
  Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  • 
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  MENTAL HEALTH – Outpatient

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  • 
  Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Professional
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  MENTAL HEALTH – Outpatient-Serious Emotional Disturbance(SED)-Children 0-21

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  • 
  Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  • 
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  OFFICE VISITS

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  PATIENT EDUCATION

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  

 

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

 

25

 

	
   

  	
   

  	
  PPG

  CAPITATED

  SERVICES

  	
   

  	
  HMO RISK

  SERVICES

  	
   

  	
  SHARED
  RISK/

  HOSPITAL

  CAPITATED

  SERVICES

  
	
  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

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  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 a Hospital Stay:

  Surgical Supplies, Equipment, etc...

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •  Related to an Outpatient Office Visit:

  Splints, Casts, Bandages, 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

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  

 

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

 

26

 

	
   

  	
   

  	
  PPG

  CAPITATED

  SERVICES

  	
   

  	
  HMO RISK

  SERVICES

  	
   

  	
  SHARED
  RISK/

  HOSPITAL

  CAPITATED

  SERVICES

  
	
  TRANSPLANTS (Non-experimental)-Children 0-21

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Covered Immunosupressives

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Organ Procurement

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  TRANSPLANTS (Non-experimental)-Adults 21 and older

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Covered Immunosupressives

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Organ Procurement

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  TRANSPLANT
  EVALUATIONS-Children
  0-21

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Professional

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  TRANSPLANT
  EVALUATIONS-Adults
  21 and older

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Professional

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  URGENT
  CARE VISITS –
  In-Area

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  URGENT
  CARE VISITS –
  Out-of-Area

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  VISION
  CARE

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  • 
  Exams

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  • 
  Medically Necessary Care

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  • 
  Implanted Lenses (Cataract Surgery)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  • 
  Lenses and Frames (Non-Cataract)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  

 

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

 

27Exhibit
10.178

 

 

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

 

CaliforniaCare

 

MEDICAL SERVICES AGREEMENT

 

 

CALIFORNIACARE

 

MEDICAL SERVICES AGREEMENT

 

TABLE OF CONTENTS

 

 

	
  I.

  	
  RECITALS

  	
   

  
	
  II.

  	
  DEFINITIONS

  	
   

  
	
  III.

  	
  RELATIONSHIP
  BETWEEN BLUE CROSS AND PARTICIPATING MEDICAL GROUP

  	
   

  
	
  IV.

  	
  PARTICIPATING
  MEDICAL GROUP SERVICES AND RESPONSIBILITIES

  	
   

  
	
  V.

  	
  BLUE CROSS
  SERVICES AND RESPONSIBILITIES

  	
   

  
	
  VI.

  	
  ELIGIBILITY LISTINGS

  	
   

  
	
  VII

  	
  COMPENSATION TO
  PARTICIPATING MEDICAL GROUP

  	
   

  
	
  VIII.

  	
  ENROLLMENT
  PROTECTION

  	
   

  
	
  IX.

  	
  NON-CAPITATED
  SERVICES

  	
   

  
	
  X.

  	
  OUTPATIENT
  PRESCRIPTION DRUG EXPENSE

  	
   

  
	
  XI.

  	
  QUALITY
  MANAGEMENT BONUS

  	
   

  
	
  XII.

  	
  BILLING FOR
  HMO-USA AWAY FROM HOME CARE SERVICES

  	
   

  
	
  XIII.

  	
  TERM OF
  AGREEMENT TERMINATION

  	
   

  
	
  XIV.

  	
  ARBITRATION OF
  DISPUTES BETWEEN BLUE CROSS AND PARTICIPATING MEDICAL GROUP

  	
   

  
	
  XV.

  	
  CALIFORNIACARE
  MEMBER GRIEVANCE SYSTEM

  	
   

  
	
  XVI.

  	
  MISCELLANEOUS
  PROVISIONS

  	
   

  

 

 

EXHIBITS

 

 

	
  Exhibit
  A

  	
  Covered Medical Services

  
	
  Exhibit A(1)

  	
  Division of Financial
  Responsibilities

  
	
  Exhibit
  B

  	
  CALIFORNIACARE Hospitals

  
	
  Exhibit C

  	
  Administrative
  Responsibilities of PARTICIPATING MEDICAL GROUP

  
	
  Exhibit D

  	
  Capitation

  
	
  Exhibit E

  	
  Physician
  Fee Schedule

  
	
  Exhibit F

  	
  Non-Capitated
  Performance Schedule

  
	
  Exhibit G

  	
  Compensation
  for Services to BLUE CROSS PLUS Members

  
	
  Exhibit G-1

  	
  BLUE
  CROSS PLUS 1997 Baseline Capitation

  
	
  Exhibit H

  	
  Outpatient
  Prescription Drug Performance Schedule

  
	
  Exhibit I

  	
  Quality
  Management Bonus Schedule

  
	
  Exhibit J

  	
  PARTICIPATING
  MEDICAL GROUP Facilities

  

 

 

CALIFORNIACARE

 

MEDICAL SERVICES AGREEMENT

 

This
AGREEMENT is effective on January 1,
1997 between BLUE CROSS OF CALIFORNIA and Affiliates (jointly and
severally “BLUE CROSS”) and Gateway
Medical Group  (“PARTICIPATING MEDICAL GROUP”).

 

I.              RECITALS

 

1.01    BLUE CROSS is a California Corporation licensed by the California
Commissioner of Corporations to operate a health care service plan pursuant to
the Knox-Keene Health Care Service Plan Act of 1975 and the Rules of the
California Commissioner of Corporations promulgated thereunder (California
Health & Safety Code, Sections 1340 to 1399.64 and California Code of
Regulations, Sections 1300.43 to 1300.99, collectively, the “Knox-Keene Act”),
including without limitation to issue Benefit Agreements covering the provision
of health care services and to enter into agreements with PARTICIPATING MEDICAL
GROUP.

 

1.02    PARTICIPATING MEDICAL GROUP is a Professional
Corporation, a legal entity organized under the laws of the State of
California and comprised of physicians who desire to provide and arrange for
health services to persons who are enrolled in BLUE CROSS’ CALIFORNIACARE
programs.

 

II.            DEFINITIONS

 

2.01    “Adjusted, Per Member Per Month Non-Capitated Expense”  means
the PARTICIPATING MEDICAL GROUP’s Per Member Per Month Non-Capitated Expense
after adjustments for the PARTICIPATING MEDICAL GROUP’s mix of Member age/sex
and plan, and the PARTICIPATING MEDICAL GROUP’s stop-loss and regional
relativities for use in identifying the PARTICIPATING MEDICAL GROUP’s
Non-Capitated Performance Settlement.

 

2.02    “Affiliate” means a
corporation or other organization owned or controlled, either directly or
through parent or subsidiary corporations, by BLUE CROSS, or under common
control with BLUE CROSS.

 

2.03    “Age/Sex Factors”
means the factors used to adjust PARTICIPATING MEDICAL GROUP’s Per Member Per
Month Non-Capitated Expenses to account for cost variations attributable to the
mix of Member age and sex.

 

2.04    “Alternative Birthing Center Services” means services rendered by an Alternative Birthing Center. Alternative
Birthing Center Services include related services such as equipment, surgical and
anesthetic supplies, oxygen and drugs, blood and blood processing, laboratory
procedures and diagnostic imaging.

 

1

 

2.05    “Ambulance Services” means transportation services provided by a
licensed ambulance company.

 

2.06    “Attachment Point” is
the point at which no settlement shall be made if the PARTICIPATING MEDICAL
GROUP’s Adjusted Per Member Per Month Non-Capitated Expense equals or exceeds
that amount. The Attachment Point is shown in the Non-Capitated Performance
Settlement Schedule as set forth in Exhibit F.

 

2.07    “Away From Home Care”
means urgent care, Away from Home Emergency Care, routine care, and follow-up
care as defined in the HMO-USA member’s plan certificate or benefit agreement.

 

2.08    “Benefit Agreement(s)”
means the written agreement(s) entered into between BLUE CROSS and groups or
individuals, under which BLUE CROSS provides, indemnifies, or administers
health benefits to persons enrolled in BLUE CROSS programs including, but not
limited to, the CALIFORNIACARE programs or the BLUE CROSS PLUS program.
“Benefit Agreement(s)” also mean arrangements established by BLUE CROSS and/or
one or more of its Affiliates, or by persons or entities utilizing the BLUE
CROSS Managed Care Network pursuant to a contract with BLUE CROSS and/or one or
more of its Affiliates. Subject to the terms hereof, BLUE CROSS and/or one or
more of its Affiliates may contract, on PARTICIPATING MEDICAL GROUP’s behalf,
with Other Payors wishing to utilize the services of the BLUE CROSS Managed
Care Network, incorporating the terms and conditions of this Agreement.

 

2.09    “BLUE CROSS Managed Care Network” means the network of health care providers that have entered into
contracts with BLUE CROSS and/or one or more of its Affiliates pursuant to
which those providers have agreed to participate in the CALIFORNIACARE, BLUE
CROSS PLUS and other programs that are to be conducted pursuant to Benefit
Agreements.

 

2.10    “BLUE CROSS PLUS”
means a point of service option benefit plan offered by BLUE CROSS under which
enrolled Members may, at the time benefits are selected, elect to receive
benefits from either a CALIFORNIACARE provider or another licensed provider.

 

2.11    “CALIFORNIACARE” means
direct care prepayment plan(s) offered by BLUE CROSS.

 

2.12    “CALIFORNIACARE Case Manager”  means
a CALIFORNIACARE employee charged with assisting PARTICIPATING MEDICAL GROUPs
in case management.

 

2.13    “CALIFORNIACARE Coordinator” means an employee of PARTICIPATING MEDICAL GROUP as set forth in
Section 4.08B.

 

2.14    “CALIFORNIACARE Hospital” means a hospital which has entered into an agreement with BLUE CROSS to
provide Hospital Services to Members.

 

2.15    “CALIFORNIACARE Quality Management Representative”  means
an employee of BLUE CROSS responsible for the CALIFORNIACARE Quality Management
Program.

 

2.16    “Capitation” means a
uniform prepayment fee per Member per month, adjusted by age-sex, based on the
Benefit Agreement issued to each Subscriber and the services due thereunder.

 

2.17    “Capitation Services”
means all CALIFORNIACARE Covered Medical Services which are not otherwise
defined in this Agreement or in the Division of Financial Responsibilities
(Exhibit A-1 hereto) as Non-Capitated Services.

 

2

 

2.18    “Case Management Program” means a program that assesses the Member’s medical needs and includes
working with PARTICIPATING MEDICAL GROUP and other Participating Provider to
explore and coordinate treatment alternatives that may (1) be more cost
effective; (2) result in better medical outcomes; (3) achieve benefit savings;
and (4) increase Member satisfaction.

 

2.19    “Case Management Stop-Loss Threshold” means the level at which stop-loss under Section 9.03 herein shall
apply to PARTICIPATING MEDICAL GROUP’s Non-Capitated Performance Settlement.

 

2.20    “Covered Medical Services”  means the services and benefits
covered under the Benefit Agreements. A matrix of those services and benefits
is set forth in Exhibit A (incorporated by reference herein).

 

2.21    “Covered Persons”
means Members, enrollees, dependents and other beneficiaries who are covered by
an Affiliate’s Benefit Agreement or by an Other Payor.

 

2.22    “Customary and Reasonable Charges” (C&R) means:

 

A.       “Customary”
means the fee that falls within the range of prevailing fees charged by
physicians and surgeons or other licensed providers of the same service within
the same area for the performance of a specific service or procedure, and

 

B.        “Reasonable”
means the fee that meets the requirements of Customary and is justified,
considering complications or special circumstances with respect to the
performed services or procedure.

 

C&R charges are
determined by BLUE CROSS.

 

2.23    “Emergency” means a
sudden unexpected onset of a medical condition manifesting itself by acute
symptoms of sufficient severity (including, without limitation, sudden and
unexpected severe pain) such that the absence of immediate medical attention
could reasonably result in any of the following:

 

A.       Placing
the patient’s health in serious jeopardy.

 

B.        Serious
impairment to bodily functions.

 

C.        Other
serious medical consequences, or

 

D.       Serious
and/or permanent dysfunction of any bodily organ or part.

 

2.24    “Enrollment Protection”
is a program to limit PARTICIPATING MEDICAL GROUP’s risk with respect to any
individual Member who requires Capitation Services in excess of the limit of
liability per individual Member per calendar year, as set forth in
Article VIII, ENROLLMENT PROTECTION, below

 

2.25    “Extension of Benefits”
means extended benefits which may be available to Members who are totally
disabled on the date of termination of their Benefit Agreement. Extended
benefits shall have the meaning set forth in the group coverage agreement
applicable to the Member.

 

3

 

2.26    “Health Professional” means any of the following: A doctor of medicine or osteopathy licensed
to practice medicine or osteopathy where the care is received, or a dentist, an
optometrist, a podiatrist or chiropodist, a clinical psychologist, a
chiropractor, a clinical social worker, a marriage family and child counselor a
physical therapist, a speech pathologist, an audiologist an occupational
therapist, a physician assistant, a registered nurse, a nurse practitioner
and/or nurse midwife providing services within the scope of practice as defined
by the appropriate clinical license and/or regulatory board.

 

2.27    “Hemodialysis Services”
means services rendered by a Medicare certified hemodialysis provider.
Hemodialysis Services include facility charges, use of facility equipment and
supplies, laboratory tests and drugs administered in conjunction with on-site
treatment.

 

2.28    “HMO-USA” means a
nationwide network of Blue Cross and Blue Shield Plan HMOs (Participating
Plans) sponsored by Blue Cross and Blue Shield Association (BCBSA). BCBSA
Participating Plan HMOs have entered into Agreements to provide each other’s
members with guest memberships, urgent care and Emergency care, routine care,
and follow-up care as pre-approved and authorized by BLUE CROSS when the member
is traveling away from his or her Home HMO-USA participating plan.

 

2.29    “Home HMO” means the
participating plan in which a HMO-USA participating plan member is enrolled.

 

2.30    “Hospice Services”
means services rendered to terminally ill patients, by a Medicare certified
hospice provider that are (a) covered by a Benefit Agreement and (b) ordered or
authorized by PARTICIPATING MEDICAL GROUP.

 

2.31    “Hospital Services”
means Medically Necessary acute and sub-acute care inpatient and hospital
outpatient services and supplies which are both (a) covered by a Benefit
Agreement, and (b) ordered or authorized by a PARTICIPATING MEDICAL GROUP
Physician. Hospital Services do not include long-term non-acute care.

 

2.32    “Host HMO” means any
participating plan in whose Service Area a HMO-USA participating plan member
temporarily stays except the member’s Home HMO.

 

2.33    “Independent Practice Association”  means an incorporated
association of independent physicians which has entered into an agreement with
BLUE CROSS to provide and arrange for health services to Members.

 

2.34    “Inpatient Hospital Services” means services which include inpatient hospital days for semi-private
accommodations, or special treatment units, or private room accommodations if
specifically authorized as Medically Necessary by PARTICIPATING MEDICAL GROUP
Physician.

 

2.35    “Medically Necessary”
means services or supplies which, under the provisions of this Agreement, are
determined to be:

 

A.       Appropriate
and necessary for the symptoms, diagnosis or treatment of the medical
condition;

 

B.        Provided
for the diagnosis or direct care and treatment of the medical condition;

 

C.        Within
standards of good medical practice within the organized medical community

 

4

 

D.       Not
primarily for the convenience of the Member, the Member’s physician, or another
provider; and

 

E.        The most
appropriate supply or level of service which can safely be provided. For
hospital stays, this means that acute care as an inpatient is necessary due to
the kinds of 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 in a less intensified medical setting.

 

2.36    “Member” means a
Subscriber or enrolled dependent covered by a Benefit Agreement.

 

2.37    “Member Months” means
a count that records one Member month for each month the Member is enrolled in
the CALIFORNIACARE program or the BLUE CROSS PLUS program.

 

2.38    “Non-Capitated Expenses”
means the actual expenses incurred by BLUE CROSS to provide Non-Capitated
Services to Members, as ordered, authorized or referred by PARTICIPATING
MEDICAL GROUP Physicians.

 

2.39    “Non-Capitated Performance Settlement” means amount paid to PARTICIPATING MEDICAL GROUP for managing
Non-Capitated Services.

 

2.40    “Non-Capitated Performance Settlement Schedule” means a schedule of PMPM Non-Capitated
Performance Settlement amounts associated with varying PMPM Non-Capitated
Expenses.  The Non-Capitated Performance
Settlement Schedule is set forth in Exhibit F.

 

2.41    “Non-Capitated Services”
means the designated services set forth in Article IX and Exhibit A-1.

 

2.42    “Operations Manual”
means the CaliforniaCare PMG Operations Manual.

 

2.43    “Other Payor” means
persons or entities utilizing the BLUE CROSS Managed Care Network pursuant to
an agreement with BLUE CROSS, including without limitation, other Blue Cross
and/or Blue Shield Plans, self-administered or self-insured programs providing
health care benefits, or employers or insurers.

 

2.44    “Out-of-Area Emergency Services” means Emergency services which are rendered to a Member at a distance
of more than twenty (20) mile radius from the medical offices of PARTICIPATING
MEDICAL GROUP or the Satellite Facility to which the Member is assigned.  When PARTICIPATING MEDICAL GROUP is
organized as an Independent Practice Association Out-of-Area Emergency Services
are those Emergency services which are rendered to a Member at a distance of
more than twenty (20) mile radius from a hospital designated in Exhibit B as a
Service Area hospital. Out-of-Area Emergency Services shall also include Out of
Area urgently needed services to prevent serious deterioration of a Member’s
health resulting from unforeseen illness or injury for which treatment cannot
be delayed until the Member returns to the Service Area.

 

2.45    “Outpatient Hospital Services” means services which include the facility component of outpatient
surgery, pre-admission testing, laboratory and radiology services.

 

2.46    “Outpatient Prescription Drug Expense” means the benefit amount paid by BLUE CROSS for a Member’s covered
outpatient prescription drugs.

 

2.47    “Outpatient Prescription Drug Settlement” means an amount paid to PARTICIPATING MEDICAL
GROUP for managing Outpatient Prescription Drug Expenses.

 

5

 

2.48    “Outpatient Prescription Drug Settlement Schedule” means a schedule of outpatient
prescription drug settlement amounts associated with varying Per Member per
Month Outpatient Prescription Drug Expenses. 
The Schedule is set forth Exhibit H

 

2.49    “PARTICIPATING MEDICAL GROUP Physician” means a duly licensed physician who is a
shareholder partner, associate, contractor or employee of PARTICIPATING MEDICAL
GROUP.

 

2.50    “Per Member Per Month (PMPM) Non-Capitated Expense” means the average monthly medical
Non-Capitated Expense per Member attributable to the PARTICIPATING MEDICAL
GROUP.

 

2.51    “Per Member Per Month (PMPM) Outpatient Prescription Drug Expense” means the average monthly Outpatient
Prescription Drug Expenses per Member for PARTICIPATING MEDICAL GROUP’s Members
with outpatient prescription drug benefits.

 

2.52    “Plan Factors” means
factors used to adjust the PARTICIPATING MEDICAL GROUP’s PMPM Non-Capitated
Expense to account for cost variations attributable to the mix of Member
Benefit Agreements.  The Non-Capitated
Expense Plan Factors include a durational factor for the durational plans.

 

2.53    “Primary Care Physician”
means the PARTICIPATING MEDICAL GROUP Physician responsible for coordinating
and controlling the delivery of Covered Medical Services to the Member.  Primary Care Physicians include general and
family practitioners, internists and pediatricians, and such other specialists
as BLUE CROSS may approve in writing to be designated Primary Care Physicians.

 

2.54    “Quality Management Committee” means a committee of physicians and other licensed health care
providers, at least fifty percent (50%) of whom participate in CALIFORNIACARE,
which meets regularly to review the Quality Management Program.

 

2.55    “Quality Management Program” means a program which provides review by physicians and other health
professionals of the appropriateness and adequacy of the delivery of health
services.

 

2.56    “Related Hospital Services” means services rendered to Members as part of, and concurrent with
Inpatient Hospital Services, Outpatient Hospital Services, Hemodialysis
Services, Skilled Nursing Facility Services, Alternative Birthing Center
Services and Hospice Services, including the use of facility equipment,
surgical and anesthetic supplies, oxygen and drugs except for take-home drugs,
blood and blood processing, laboratory procedures and diagnostic imaging.

 

2.57    “Referral Services”
means Capitation Services which are rendered to Members through a process
established by PARTICIPATING MEDICAL GROUP.

 

2.58    “Region Factor” means
the factors used to adjust PARTICIPATING MEDICAL GROUP’s PMPM Non-Capitated
Expense to account for cost variations across BLUE CROSS’ corporate regions.

 

2.59    “Satellite Facility”
means a medical facility separate from PARTICIPATING MEDICAL GROUP’s principal
place of business, which is dependent upon, and responsible to, PARTICIPATING
MEDICAL GROUP.  It is a facility that
meets the CALIFORNIACARE Satellite Criteria set forth in the Operations Manual
and is approved by BLUE CROSS prior to being designated a CALIFORNIACARE
Satellite Facility.

 

6

 

2.60    “Service Area” means
the geographical area within a thirty (30) mile radius of the medical offices
of PARTICIPATING MEDICAL GROUP or any Satellite Facility to which the Member is
assigned, or, in the case of an independent Practice Association, the medical
office of the PARTICIPATING MEDICAL GROUP Physician, The designation of a
particular geographical area shall not be construed as giving PARTICIPATING
MEDICAL GROUP an exclusive right to that Service Area.

 

2.61    “Skilled Nursing Facility Services” means inpatient and related services provided by a licensed skilled
nursing facility.  Skilled Nursing
Facility Services excludes custodial care.

 

2.62    “Stop-Loss Factor”
means the factor used to adjust the PARTICIPATING MEDICAL GROUP’s PMPM
Non-Capitated Expense to account for cost variations due to different Case
Management Stop-Loss thresholds.

 

2.63    “Subscriber”  means an individual who has qualified for
and is covered under a Benefit Agreement.

 

2.64    “Urgent Care Center”
is a facility that meets CALIFORNIACARE’s Urgent Care Center criteria as set
forth in the Operations Manual, and is approved by BLUE CROSS prior to being
designated as a CALIFORNIACARE Urgent Care Center.

 

2.65    “Utilization Management Program” means a program approved by BLUE CROSS and designed to review and
manage the utilization of Covered Medical Services.

 

III.           RELATIONSHIP BETWEEN BLUE CROSS AND PARTICIPATING MEDICAL GROUP

 

3.01    BLUE CROSS and PARTICIPATING MEDICAL GROUP are independent
entities.  Nothing in this Agreement
shall be construed, or be deemed to create, a relationship of employer and
employee or principal and agent, or any relationship other than that of
independent parties contracting with each other solely for the purpose of
carrying out the provisions of this Agreement.

 

3.02    BLUE CROSS and PARTICIPATING MEDICAL GROUP agree that PARTICIPATING
MEDICAL GROUP Physicians shall maintain a physician-patient relationship with
each Member assigned to PARTICIPATING MEDICAL GROUP.  PARTICIPATING MEDICAL GROUP shall be solely responsible to the Member
for treatment and medical care with respect to the provision of Capitation
Services and arrangements for Non-Capitated Services.

 

3.03    Except as specifically provided herein, nothing in this Agreement is
intended to be construed, or be deemed to create, any rights or remedies in any
third party, including, but not limited to, a Member or a provider of services,
other than PARTICIPATING MEDICAL GROUP.

 

3.04    PARTICIPATING MEDICAL GROUP consents to the memorializing of its legal
obligations with BLUE CROSS and each particular Affiliate in one or more
separate written agreements that shall not alter the substance of those
obligations.

 

3.05    PARTICIPATING MEDICAL GROUP agrees that each arrangement by which
PARTICIPATING MEDICAL GROUP performs services for Covered Persons that utilize
the BLUE CROSS Managed Care Network shall constitute an independent legal
relationship between PARTICIPATING MEDICAL GROUP and that Affiliate or Other
Payor.

 

7

 

3.06    PARTICIPATING MEDICAL GROUP hereby expressly acknowledges its
understanding that this Agreement constitutes a contract between PARTICIPATING
MEDICAL GROUP and BLUE CROSS as an independent corporation, operating under a
license with the Blue Cross and Blue Shield Association, an association of
independent Blue Cross and Blue Shield Plans (the “Association”), permitting
BLUE CROSS to use the Blue Cross service mark in the State of California and
that BLUE CROSS is not contracting as the agent of the Association.  PARTICIPATING MEDICAL GROUP further
acknowledges and agrees that it has not entered into this Agreement based upon
representations by any person other than BLUE CROSS and that no person entity,
or organization other than BLUE CROSS, or the applicable Affiliate, shall be
held accountable or liable to PARTICIPATING MEDICAL GROUP for any of BLUE
CROSS’, or the applicable Affiliate’s, obligations to PARTICIPATING MEDICAL
GROUP created under this Agreement. 
This section shall not create any additional obligations whatsoever
on the part of BLUE CROSS, other than those obligations created under other
provisions of this Agreement.

 

IV.           PARTICIPATING MEDICAL GROUP SERVICES AND RESPONSIBILITIES

 

PARTICIPATING MEDICAL GROUP and PARTICIPATING MEDICAL GROUP Physicians
agree as follows

 

4.01    Provision of Services.

 

A.       To
promptly provide, arrange through referral, or authorize all Capitation
Services, and to authorize or arrange for the provision of all Non-Capitated
Services, and further, to accept full financial responsibility for all
Capitation Services provided, authorized or arranged through referral by
PARTICIPATING MEDICAL GROUP in accordance with the provisions of this
Agreement.

 

B.        To
provide a Primary Care Physician selected by the Member to oversee the
continuity of care for each Member who appears on PARTICIPATING MEDICAL GROUP’s
Eligibility Report.

 

C.        To
maintain a sufficient number of Primary Care Physicians to guarantee that there
is the equivalent of at least one full-time Primary Care Physician to each two
thousand (2,000) Members served by PARTICIPATING MEDICAL GROUP.  All Primary Care Physicians shall be
PARTICIPATING MEDICAL GROUP Physicians.

 

D.       To assure
that privileges of PARTICIPATING MEDICAL GROUP Physicians at CALIFORNIACARE
Hospitals shall be adequate to meet the requirements for the CALIFORNIACARE
Hospital Services to which Members are entitled under the terms of the Benefit
Agreement(s).

 

E.        To
engage the Referral Services of duly licensed board certified consultants,
specialists and duly certified allied health professionals, responsible for
delivering Covered Medical Services to Members.  A list of all referral physicians to whom PARTICIPATING MEDICAL
GROUP refers Members for Referral Services shall be provided to BLUE CROSS upon
request.

 

F.        To
ensure that all PARTICIPATING MEDICAL GROUP Physicians and all PARTICIPATING
MEDICAL GROUP employees responsible for delivering Covered Medical Services to
Members, continually meet all applicable federal and state laws and regulations
and all legal standards of care.

 

8

 

G.        That if
BLUE CROSS determines in good faith that any PARTICIPATING MEDICAL GROUP
Physician(s).

 

(1)      does not meet the requirements specified herein: or

(2)      that the health, safety or welfare of Members is jeopardized by
continuation of any PARTICIPATING MEDICAL GROUP Physician to provide services
to Members; or

(3)      if PARTICIPATING MEDICAL GROUP Physician(s) furnishes false, incomplete,
or inaccurate information to BLUE CROSS in the application to participate; or

(4)      at any time during the term of this Agreement, a PARTICIPATING MEDICAL
GROUP Physician(s) suffers revocation, termination or suspension of Physician’s
medical license or medical staff privileges: or

(5)      the ability of the PARTICIPATING MEDICAL GROUP Physician(s) to perform
the services covered by this Agreement is otherwise impaired;

 

PARTICIPATING MEDICAL GROUP warrants that upon written request of BLUE
CROSS said PARTICIPATING MEDICAL GROUP Physician(s) shall be excluded from
providing services to Members under this Agreement.  PARTICIPATING MEDICAL GROUP and PARTICIPATING MEDICAL GROUP
Physician(s) may present to BLUE CROSS for further consideration any additional
information or explanation regarding PARTICIPATING MEDICAL GROUP Physician’s
compliance with the requirements set forth herein.  However, BLUE CROSS retains the right to make the final decision
regarding a PARTICIPATING MEDICAL GROUP Physician’s participation under this
Agreement.

 

4.02    Accessibility and Continuity of Care.

 

A.       To
promptly provide or arrange for available and accessible Covered Medical
Services for each Member assigned to PARTICIPATING MEDICAL GROUP, in accordance
with that Member’s Benefit Agreement and this Agreement, and to provide those
services in and through facilities designated in Exhibit J (incorporated by
reference herein).

 

B.        That all
Covered Medical Services, (including consultation and Referral Services),
ambulatory care services, diagnostic laboratory, diagnostic imaging and
therapeutic radiology services, home health services and preventive health
services shall be available to Members a minimum of forty (40) hours per week,
except for weeks including holidays. 
The foregoing services shall be available beyond normal business hours
during additional hours to be scheduled by PARTICIPATING MEDICAL GROUP.

 

C.        To
promptly provide, arrange or authorize all Emergency services for each Member
assigned to PARTICIPATING MEDICAL GROUP. 
Authorization of any Emergency services, as set forth in
Section 2.23 herein, shall not be withheld by PARTICIPATING MEDICAL GROUP
regardless of whether PARTICIPATING MEDICAL GROUP is notified within
forty-eight (48) hours from the time such Emergency services were
rendered.  PARTICIPATING MEDICAL GROUP
shall comply with all requirements set forth in California Health and Safety
Code Section 1371.4(a) - (d).

 

D.       That
PARTICIPATING MEDICAL GROUP shall manage and facilitate access to Emergency
services within a twenty (20) mile radius of each Satellite Facility and
PARTICIPATING MEDICAL GROUP’s main facility at all times, twenty-four (24)
hours a day, seven (7) days a week.  In
the event that PARTICIPATING MEDICAL GROUP is an Independent Practice
Association, PARTICIPATING MEDICAL GROUP shall manage and facilitate access to
Emergency services within a twenty (20) mile radius of the Hospital(s)
designated in Exhibit B (incorporated by reference herein) as the
CALIFORNIACARE Hospital(s) within PARTICIPATING MEDICAL GROUP’s Service Area.

 

9

 

E.        To
admit, or authorize admission of, Members solely to the CALIFORNIACARE
Hospitals listed in Exhibit B, except (a) when Medically Necessary in an
Emergency situation or (b) when Covered Medical Services are not available in a
CALIFORNIACARE Hospital or (c) as otherwise required under Section 4.02F
or (d) when requested to do so in writing by the Member, with the written
understanding that admission to a hospital, other than those listed in Exhibit
B, is not a Covered Medical Service, except as stated above in this Section 4.02E.

 

F.        Notwithstanding
Section 4.02E, for those Members that require transplant services (solid
organ and bone marrow/stem cell) that are Covered Medical Services,
PARTICIPATING MEDICAL GROUP agrees to admit, or authorize the inpatient
admission or outpatient treatment of Members, solely at those CALIFORNIACARE
Hospitals whose transplant programs have been approved by BLUE CROSS and
identified as such in the Operations Manual.

 

PARTICIPATING MEDICAL GROUP will provide notification to BLUE CROSS of
all potential transplant cases, including deferred or denied cases, when such
cases are considered by PARTICIPATING MEDICAL GROUP’s Utilization Management
Program Committee or other similar PARTICIPATING MEDICAL GROUP functional
committee, except for Emergencies in which case PARTICIPATING MEDICAL GROUP
shall provide notification within two (2) business days of the admission.  The format of such notification is provided
in the Operations Manual.

 

G.        That in
circumstances where a Member requires specialized tertiary care or because of
bed unavailability in a CALIFORNIACARE Hospital, the Member must be admitted to
a non-CaliforniaCare in-area or out-of-area facility for Hospital Services,
then until the Member is transferred to a CALIFORNIACARE Hospital, the
PARTICIPATING MEDICAL GROUP will be financially responsible for care the same
as if care had been provided in a CALIFORNIACARE Hospital, and the
Non-Capitated Services arrangement as set forth in Article IX of this
Agreement will apply.

 

H.       To use a
referral request process by which Capitation Services are to be rendered by
Health Professionals other than the Members Primary Care Physician, including
PARTICIPATING MEDICAL GROUP Physicians or other Health Professionals who do not
belong to PARTICIPATING MEDICAL GROUP. 
This process shall assure that:

 

(1)      All Health Professionals who provide Referral Services follow
appropriate billing procedures.

(2)      That the Health Professional must look only to PARTICIPATING MEDICAL
GROUP for payment of Covered Medical Services and shall not bill the Member,
except for applicable co-payments and for non-Covered Medical Services.

(3)      Primary Care Physicians who determine that a referral is necessary, may
issue a referral without the prior authorization of PARTICIPATING MEDICAL
GROUP’s Utilization Management Program to physicians in the following
specialties:  Cardiology, Dermatology,
Endocrinology, Ear, Nose and Throat, Gastroenterology, General Surgery,
Hematology, Neurology, Obstetrics-Gynecology, Oncology, Ophthalmology,
Orthopedic Surgery, Podiatry, Routine Laboratory, Routine X-ray and Urology.

(4)      For referrals to specialists or providers, or services other than those
listed in (3) above, PARTICIPATING MEDICAL GROUP shall review and issue an
authorization or denial of a request for referral within five (5) business days
of receipt of such request or admission to hospital.

 

I.         That
visits to the Member’s home within the PARTICIPATING MEDICAL GROUP Service
Area, by a Primary Care Physician shall occur as necessary within that
Physician’s discretion.

 

10

 

J.         To
assure that Members shall not be subject to discrimination in access to Covered
Medical Services.

 

K.       That
PARTICIPATING MEDICAL GROUP facilities shall be reasonably accessible to the physically
handicapped.

 

L.        To
provide health education and wellness programs for Members within the
guidelines indicated in the “CaliforniaCare Health Education and Wellness
Manual.” Programs are to be delivered in accordance with these guidelines which
provide for disease prevention and management and the promotion of healthier
life-styles.

 

4.03    Utilization/Quality Management and Grievance Procedures.

 

To cooperate with BLUE CROSS’ administration of its internal quality of
care review and grievance procedures. 
The parties acknowledge and agree that authority to perform Utilization
Management Program activities and Quality Management Program activities under
this Agreement is a delegation of BLUE CROSS authority pursuant to Sections
1370 and 1370.1 of the Health and Safety Code, and all or part of this
authority may be revoked at any time. 
The scope of delegated authority shall be as set forth in the
Utilization Management Program guidelines and the Quality Management Program
guidelines issued by BLUE CROSS and provided to PARTICIPATING MEDICAL
GROUP.  The proceedings of the
Utilization Management and Quality Management Committees shall be strictly
confidential between BLUE CROSS and PARTICIPATING MEDICAL GROUP and are subject
to the protections set forth in Sections 1370 and 1370.1.

 

4.04    Quality Management Program.

 

To adopt and maintain a Quality Management Program consistent with BLUE
CROSS standards and approved by BLUE CROSS. 
This program will cover all Covered Medical Services provided or
arranged by PARTICIPATING MEDICAL GROUP for Members.  PARTICIPATING MEDICAL GROUP agrees to allow on-site review of its
Quality Management Program by BLUE CROSS staff.

 

A.       The
Quality Management Program shall:

 

(1)      Provide for Quality Management review by PARTICIPATING MEDICAL GROUP
Physicians and other Health Professionals.

(2)      Provide for review of all services provided to Members by PARTICIPATING
MEDICAL GROUP.

(3)      Stress health outcomes by providing health education and wellness
programs for Members.

 

B.        The
Quality Management Program shall include, but not be limited to the following
activities:

 

(1)      Credentialing and recredentialing of all PARTICIPATING MEDICAL GROUP
Physicians and allied Health Professional providers.

(2)      Credentialing and recredentialing of all Health Professionals or
providers under contract with or employed by PARTICIPATING MEDICAL GROUP

(3)      Incident identification and risk management.

(4)      Member grievance resolution.

(5)      General and focused health care audits.

(6)      Development and implementation of appropriate recommendations.

 

11

 

(7)      Documentation of remedial procedures for instances of inappropriate or
substandard service(s) and/or failure to provide needed Medically Necessary
Covered Medical Service(s).

 

C.        BLUE
CROSS shall validate PARTICIPATING MEDICAL GROUP’s development and
implementation of the Quality Management Program through regular audit
activities as follows:

 

(1)      The CALIFORNIACARE Quality Management Department shall review PARTICIPATING
MEDICAL GROUP’s Quality Management Program on an annual basis through a
scheduled on-site audit.

(2)      The CALIFORNIACARE Quality Management Representative shall notify
PARTICIPATING MEDICAL GROUP of any deficiencies or areas needing improvement.

(3)      PARTICIPATING MEDICAL GROUP shall take corrective action to eliminate
any deficiencies in areas needing improvement within a reasonable period of
time.

(4)      BLUE CROSS shall conduct follow-up reviews as necessary.

 

D.       PARTICIPATING
MEDICAL GROUP shall:

 

(1)      Make available to BLUE CROSS summaries of all minutes and notes from any
and all Quality Management Committees and/or activities which specifically
relate to Members.

(2)      Provide BLUE CROSS with access to all PARTICIPATING MEDICAL GROUP
Quality Management data directly or indirectly relating to Members.

(3)      Make available to BLUE CROSS all composite Quality Management Program
data which include Members in the composite data set and provide such detail as
is available regarding those Members.

(4)      Make known to BLUE CROSS any and all adverse actions taken against a
PARTICIPATING MEDICAL GROUP Physician when such action is the result of
deficiencies in quality of medical care.

(5)      Provide the CALIFORNIACARE Medical Director (or the Medical Director’s
clinical designee) with a schedule designating the time and place of all
Quality Management Committee meetings that relate to Members, in order that he
or she shall, in the Medical Director’s discretion attend.  The CALIFORNIACARE Medical Director shall
notify the PARTICIPATING MEDICAL GROUP in advance of his or her attendance and
shall not be excluded from any deliberation on activities related to Members.

(6)      Permit BLUE CROSS to evaluate and utilize the data obtained from the
CALIFORNIACARE Quality Management Program in a manner that satisfies BLUE CROSS
requirements for quality assurance, for BLUE CROSS internal use only.

(7)      Implement any necessary changes in procedures, in order to fully comply
with all quality assurance standards, as mutually agreed by the parties, and
provide BLUE CROSS with the minutes of Quality Management Committee meetings
and reviews that relate to Members.

(8)      Report to BLUE CROSS quarterly on activities or actions of PARTICIPATING
MEDICAL GROUP’s Quality Management Committee as such activities or actions
relate to Members.

 

4.05    Utilization Management Program.

 

To adopt and maintain a Utilization Management Program consistent with
BLUE CROSS standards and approved by BLUE CROSS.  This program will cover all Covered Medical Services provided or
arranged by PARTICIPATING MEDICAL GROUP for Members PARTICIPATING MEDICAL GROUP
agrees to allow on-site review of Utilization Management Program by BLUE CROSS.

 

12

 

A.       The
Utilization Management Program shall:

 

(1)      Include the development and implementation of appropriate
recommendations.

(2)      include documentation of remedial procedures for instances of inappropriate or substandard services(s) and
or failure to provide Medically Necessary Covered Medical Services.

(3)      Assure that PARTICIPATING MEDICAL GROUP’s primary consideration is the
quality of services rendered to Members.

(4)      Assure that all services provided to Members are Medically Necessary.

(5)      Work closely with CALIFORNIACARE Hospitals.

(6)      Encompass inpatient, outpatient, and ancillary care.

(7)      Utilize prospective, concurrent, and retrospective review.

(8)      Assure that all adverse utilization review decisions are made by a
licensed physician, and no denial of a requested service shall be made except by a licensed physician experienced in
the area being reviewed.  Denial
decisions shall be provided to Members in writing.

(9)      Permit BLUE CROSS to have access to all PARTICIPATING MEDICAL GROUP
Utilization Management data directly or indirectly relating to Members.

 

B.        BLUE
CROSS shall validate PARTICIPATING MEDICAL GROUP’s development and
implementation of the Utilization Management Program through regular audit
activities as follows:

 

(1)      The CALIFORNIACARE Quality Management Department shall review
PARTICIPATING MEDICAL GROUP Utilization Management Program on an annual basis
through a scheduled on-site audit.

(2)      The CALIFORNIACARE Quality Management Representative shall notify
PARTICIPATING MEDICAL GROUP of any deficiencies or areas needing improvement.

(3)      PARTICIPATING MEDICAL GROUP shall take corrective action to eliminate
any deficiencies in areas needing improvement within a reasonable period of
time.

(4)      BLUE CROSS shall conduct follow-up reviews as necessary.

 

C.        PARTICIPATING
MEDICAL GROUP Shall:

 

(1)      Make available to BLUE CROSS summaries of all minutes and notes from any
and all Utilization Management Committees and/or activities which relate to
Members.

(2)      Make available to BLUE CROSS upon request all composite Utilization
Management data which include Members in the composite data set and provide
such detail as is available regarding those Members.

(3)      Provide the CALIFORNIACARE Medical Director (or the Medical Director’s
clinical designee) with a schedule designating the time and place of all
Utilization Management Committee meetings that relate to Members, in order that
he or she shall, in the Medical Director’s discretion, attend.  The CALIFORNIACARE Medical Director shall
notify the PARTICIPATING MEDICAL GROUP in advance of his or her attendance and
shall not be excluded from any deliberation on activities related to Members.

 

4.06    Records and Reserves.

 

A.       BLUE CROSS shall have access at reasonable times
upon demand to the books, records and papers of PARTCIPATING MEDICAL GROUP
relating to the services PARTICIPATING MEDICAL GROUP provides to Members, to
the cost thereof, and to payments PARTICIPATING MEDICAL GROUP receives from
Members or others on their behalf. 
PARTICIPATING MEDICAL GROUP shall maintain such records and provide such
information to BLUE CROSS and the Commissioner of Corporations as may be
necessary

 

13

 

for BLUE CROSS’ compliance with the requirements of the Knox-Keene
Act.  PARTICIPATING MEDICAL GROUP shall
maintain such records for at least five (5) years, and such obligations shall
not be terminated upon a termination of this Agreement, whether by rescission
or otherwise.

 

B.        PARTICIPATING
MEDICAL GROUP agrees to provide BLUE CROSS with audited financial statements of
PARTICIPATING MEDICAL GROUP no later than three (3) months after the end of its
fiscal year, and BLUE CROSS shall maintain strict confidentiality of said
records.  Audited financial statements
shall illustrate net operating surplus or profit (after taxes).  Documents shall include the following:

 

(1)      Balance sheets

(2)      Statements of revenues and expenses

(3)      Statements of cash flow

 

PARTICIPATING MEDICAL GROUP further agrees that BLUE CROSS shall have
the right to require audited financial statements, in addition to the latest
fiscal year, at any time, upon request, with reasonable notice, if BLUE CROSS
pays for the audit.

 

C.        To
maintain financial reserves adequate to cover all risks assumed by
PARTICIPATING MEDICAL GROUP hereunder, including, but not limited to,
unanticipated claims for Referral Services that are the potential
responsibility of PARTICIPATING MEDICAL GROUP.

 

D.       That all
information shall be provided to each party to this Agreement pursuant to
procedures designed to protect the confidentiality of patient medical records
in accordance with applicable legal requirements, recognized standards of
professional practice and generally accepted procedures followed by health
maintenance organizations (HMOs).

 

E.        Upon
termination of this Agreement, PARTICIPATING MEDICAL GROUP shall, upon advance
written notice from BLUE CROSS, make available to BLUE CROSS and permit BLUE
CROSS to copy the medical records of each Member who has been assigned to
PARTICIPATING MEDICAL GROUP.

 

4.07    Insurance Programs or Policies.

 

PARTICIPATING MEDICAL GROUP agrees to maintain professional liability
insurance, or other risk protection program, acceptable as defined under A, and
B, below to BLUE CROSS.  Notification by
PARTICIPATING MEDICAL GROUP of cancellation or material modification of the
coverage under such professional liability insurance or other risk protection
program is to be made to BLUE CROSS within thirty (30) days prior to any
cancellation or modification.  Copies of
the agreements or documents evidencing professional liability insurance or
other risk protection required under this section shall be provided to
BLUE CROSS upon execution of this Agreement.

 

A.       Professional
Liability Insurance

 

The coverage to be provided under this section shall be in minimum
amounts of ONE MILLION DOLLARS ($1,000,000.00) for any one (1) incident, THREE
MILLION DOLLARS ($3,000,000.00) annual aggregate.  PARTICIPATING MEDICAL GROUPs which are organized as Independent
Practice Associations shall ensure that PARTICIPATING MEDICAL GROUP Physicians
maintain professional liability insurance in minimum amounts of ONE MILLION
DOLLARS ($1,000,000.00) for any one incident and THREE MILLION DOLLARS
($3,000,000.00) annual aggregate Furthermore, PARTICIPATING MEDICAL GROUPs
organized as Independent Practice Associations shall maintain directors and

 

14

 

officers liability in minimum amounts of ONE MILLION DOLLARS
($1,000,000.00) for any one incident. 
ONE MILLION DOLLARS ($1,000,000.00) annual aggregate.

 

B.        Other
insurance

 

(1)      General Liability Insurance.  In addition to
Subsection A., above, PARTICIPATING MEDICAL GROUP shall also maintain a
policy or program of comprehensive general liability insurance (or other risk
protection) with minimum coverage including no less than ONE HUNDRED THOUSAND
DOLLARS ($100,000.00) for PARTICIPATING MEDICAL GROUP’s property together with
combined single limit bodily injury and property damage insurance of not less
that SIX HUNDRED THOUSAND DOLLARS ($600.000.00).

 

(2)      Workers’ Compensation.  PARTICIPATING MEDICAL GROUP’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.

 

4.08    Administrative Responsibilities.

 

A.       To comply
with all CALIFORNIACARE administrative policies and procedures in the areas
listed in Exhibit C (incorporated by reference herein) and as set forth in the
Operations Manual (incorporated by reference herein) and to comply with all
applicable state and federal laws and regulations relating to the delivery of
Covered Medical Services.

 

B.        To
provide a CALIFORNIACARE Coordinator who will create a liaison with BLUE CROSS
and assist Members in accordance with the procedures set forth in the Operations
Manual, and who will be available to Members during all regular office hours of
PARTICIPATING MEDICAL GROUP for the purpose of assisting Members to resolve any
problems which may arise or be perceived by the Member.

 

C.        To
notify BLUE CROSS within Fifteen (15) days concerning:

 

(1)      Any material change in the bylaws, membership, ownership or officers of
PARTICIPATING MEDICAL GROUP which might affect BLUE CROSS or this Agreement.

 

(2)      Any legal or governmental action initiated against a PARTICIPATING MEDICAL
GROUP Physician or against PARTICIPATING MEDICAL GROUP which might affect BLUE
CROSS or this Agreement including, but not limited to, any change in
PARTICIPATING MEDICAL GROUP Physician(s) licensure, insurance, certification,
malpractice, disciplinary experience or physical or mental health status.

 

(3)      Any other situation that may interfere with PARTICIPATING MEDICAL
GROUP’s or PARTICIPATING MEDICAL GROUP Physician’s duties and obligations under
this Agreement.

 

D.       To obtain
BLUE CROSS’ prior written approval for any literature related to CALIFORNIACARE
and intended for Members.

 

E.        To
continually meet all criteria for PARTICIPATING MEDICAL GROUPs, set forth in
the Operations Manual, and to continually meet all criteria for Satellite
Facilities (if applicable) set forth in the Operations Manual.

 

15

 

F.        To
provide BLUE CROSS, on a monthly basis, all ambulatory encounter data either
directly or through PARTICIPATING MEDICAL GROUP’s billing agent in the file
format as shown in the Operations Manual.

 

G.        To
comply with BLUE CROSS programs related to the management of pharmaceutical
expenses.

 

H.       That all
financial terms of this Agreement shall be and remain confidential and shall
not be disclosed to any third party, except as required by law or as required
to supply information required by any financial institution.

 

4.09    Payments and Member Billing.

 

A.       To accept
the monthly Capitation payment from BLUE CROSS as payment in full for
Capitation Services (including all Referral Services) provided or arranged
hereunder, and not to seek additional payments or compensation from Members for
Covered Medical Services.  The foregoing
restriction shall not apply to co-payments, which may be collected by
PARTICIPATING MEDICAL GROUP in accordance with the applicable provisions of the
Benefit Agreement(s), nor shall it apply to billings and collections with
respect to non-Covered Medical Services rendered to Members by PARTICIPATING
MEDICAL GROUP.  However, to the extent that
the PARTICIPATING MEDICAL GROUP’s billing office is aware of the Member’s
payment responsibility, PARTICIPATING MEDICAL GROUP agrees to advise the Member
of that payment responsibility prior to rendering any service requiring a
co-payment, or any non-Covered Medical Service.

 

If PARTICIPATING MEDICAL GROUP should receive any surcharge or payment
from a Member, in addition to those permissible charges set forth above,
PARTICIPATING MEDICAL GROUP shall promptly refund the full amount thereof to
the Member.

 

B.        To never
charge any Member for any health service which has been deemed not Medically
Necessary or not appropriate after utilization review by PARTICIPATING MEDICAL
GROUP, unless the Member specifically requests the service and acknowledges in
writing that the service is not a Covered Medical Service under the Member’s
Benefit Agreement.

 

C.        That
BLUE CROSS and PARTICIPATING MEDICAL GROUP respectively acknowledge that the
authority and responsibility for coordination of benefits shall be carried out in
accordance with the provisions set forth in the Benefit Agreements and the
Operations Manual.

 

D.       That
PARTICIPATING MEDICAL GROUP shall promptly notify, in writing, the
CALIFORNIACARE Case Management Department of all cases that reach the
Enrollment Protection or Case Management Stop-Loss levels specified herein.

 

E.        To pay
all Health Professionals and hospitals who have rendered authorized Referral
Services or Out-of-Area Emergency Services to Members, within forty-five (45)
working days following receipt of a clean, undisputed claim, consistent with
the regulations of the Commissioner of Corporations governing BLUE CROSS.

 

4.10    Membership.

 

A.       To accept
any and all Members who select PARTICIPATING MEDICAL GROUP until such time as
PARTICIPATING MEDICAL GROUP shall have provided ninety (90) days prior written
notice to BLUE CROSS that it has reached its maximum capacity as set forth in
Section 16.08 herein, or that it anticipates reaching such maximum within
ninety (90) days from the date of the notice to BLUE CROSS.  The maximum capacity of PARTICIPATING

 

16

 

MEDICAL GROUP designated in Section 16.08 shall be reduced only
upon ninety (90) days written notice to BLUE CROSS.  The parties acknowledge their understanding that enrollment from
individual accounts, or changes in selection of PARTICIPATING MEDICAL GROUP by
Members, are not entirely within the control of BLUE CROSS.

 

B.        That
PARTICIPATING MEDICAL GROUP will not request, demand, require or otherwise seek
the transfer or removal of any Member from the care of PARTICIPATING MEDICAL
GROUP, based on that Member’s need of, or utilization of, Medically Necessary
services.

 

C.        PARTICIPATING
MEDICAL GROUP agrees that, in the event a Member who is covered for workers’
compensation benefits by a workers’ compensation carrier affiliated with BLUE
CROSS, seeks services for a work-related illness or injury, PARTICIPATING
MEDICAL GROUP shall have the option to (a) provide such Medically Necessary
medical services or (b) refer such Member to a provider that participates in
the Prudent Buyer Comp provider network or the CalCare Comp provider network,
whichever is applicable.  In the event
that PARTICIPATING MEDICAL GROUP elects to treat such Member, PARTICIPATING
MEDICAL GROUP shall complete a Doctor’s First Report of Injury as defined in
the California Labor Code.  As payment
for such medical services rendered, PARTICIPATING MEDICAL GROUP agrees to
accept, as payment in full, compensation in accordance with the fee schedule set
forth in Exhibit E of the Agreement (incorporated by reference herein).  PARTICIPATING MEDICAL GROUP further agrees
that, in the event such Member requires medical services in connection with
such work-related illness or injury beyond the treatment provided at the
initial visit, PARTICIPATING MEDICAL GROUP shall refer such Member only to a
provider that participates in the Prudent Buyer Comp provider network or the
CalCare Comp provider network, whichever is applicable.

 

D.       That
unless agreed to in writing by BLUE CROSS, this Agreement shall not apply to
organized physician groups (including but not limited to, Independent Practice
Associations) that PARTICIPATING MEDICAL GROUP acquires, manages or affiliates
with subsequent to the effective date of this Agreement.

 

E.        When the
BLUE CROSS Managed Care Network is utilized by an Affiliate or Other Payor,
PARTICIPATING MEDICAL GROUP agrees to provide services to Covered Persons of
that Affiliate or Other Payor in accordance with the terms of this Agreement.  BLUE CROSS shall compensate PARTICIPATING
MEDICAL GROUP in accordance with the terms of this Agreement for services
provided to Covered Persons of any such Other Payor.  When an Other Payor utilizes the Managed Care Network, such Other
Payor shall comply with the terms of this Agreement.

 

In the event the BLUE CROSS Managed Care Network is to be utilized by an
Other Payor that has operational requirements that are materially different
from those required under this Agreement, BLUE CROSS agrees to notify
PARTICIPATING MEDICAL GROUP in writing thirty (30) days prior to the
commencement of such utilization. 
PARTICIPATING MEDICAL GROUP may decline to provide services to such
Other Payor by providing written notice of such decision to BLUE CROSS within
ten (10) days of receipt of notice by BLUE CROSS referenced above.

 

17

 

V.            BLUE CROSS
SERVICES AND
RESPONSIBILITIES

 

BLUE CROSS agrees.

 

5.01    To perform, or arrange for the performance of, all necessary accounting
and enrollment functions with respect to marketing and administering the
CALIFORNIACARE program, and to issue an identification card to each Subscriber
or to each Subscriber and one additional eligible Member covered under a
two-party or family contract as described in the Operations Manual.

 

5.02    To provide PARTICIPATING MEDICAL GROUP with Member Eligibility Reports,
as set forth in Article VI.

 

5.03    That, to the extent compatible with its obligations to BLUE CROSS
hereunder, PARTICIPATING MEDICAL GROUP reserves the right to provide
professional services to persons who are not Members.

 

5.04    To provide PARTICIPATING MEDICAL GROUP with claims paid and
Non-Capitated Services data as described in the Operations Manual.

 

5.05    To make trained personnel available to PARTICIPATING MEDICAL GROUP to
assist in Quality Management activities, the establishment of procedures for
pre-admission medical review and concurrent medical review of Members who
require, or may require, hospitalization.

 

5.06    To notify PARTICIPATING MEDICAL GROUP of any CALIFORNIACARE Group
Benefit Agreements between BLUE CROSS and employers, government agencies, or
any other groups, which may substantially affect enrollment at PARTICIPATING
MEDICAL GROUP.

 

5.07    To undertake reasonable efforts, in accordance with a standard of good
faith, to assure that Members assigned to PARTICIPATING MEDICAL GROUP will live
or work within the Service Area defined in this Agreement.  However, BLUE CROSS reserves the right to
assign any Members to PARTICIPATING MEDICAL GROUP at the Member’s open
enrollment period, or when the Member changes residence, or when BLUE CROSS
determines such transfer to be in the Member’s best interest due to special
circumstances under the terms of the Member’s Benefit Agreement.

 

5.08    To exercise reasonable efforts to negotiate special rates with hospitals
and other providers who contract with BLUE CROSS to render Non-Capitated
Services to Members and to pay hospitals in accord with those agreements.

 

5.09    To notify and consult with PARTICIPATING MEDICAL GROUP with respect to
the development of any material changes, as determined by BLUE CROSS, or
amendments to the Benefit Agreements, and to obtain PARTICIPATING MEDICAL
GROUP’s consent to changes that BLUE CROSS believes may materially affect
PARTICIPATING MEDICAL GROUP, except for changes required by law.  The foregoing consent will not be
unreasonably withheld by PARTICIPATING MEDICAL GROUP, so long as Capitation
payments are adjusted as mutually agreed to reflect any additional services
which may be required due to any amendment or change in Member benefits.

 

5.10    To 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 BLUE CROSS, on the condition
that PARTICIPATING MEDICAL GROUP cooperates in providing BLUE CROSS with any
information and assistance reasonably required.  PARTICIPATING MEDICAL GROUP is not required to provide
information which is confidential in any other existing contract of
PARTICIPATING MEDICAL GROUP.

 

18

 

5.11    That nothing contained in this Agreement is intended to interfere with
the professional relationship between any Member and the Member’s PARTICIPATING
MEDICAL GROUP Physician(s).

 

5.12    To collect, or arrange to have collected, all premiums, Member payments
and other items of income to which BLUE CROSS is entitled under its group and
individual contracts or otherwise, except for (a) co-payments, (b) payments for
non-Covered Medical Services, (c) coordination of benefits payments for
professional services which may be collected by PARTICIPATING MEDICAL GROUP
under the conditions set forth in the Member’s Benefit Agreement, and (d) third
party liability payments for professional services.  Pursuant to the Benefit Agreement(s) BLUE CROSS may hold a lien
on third party liability payments in the amount of benefits paid by BLUE CROSS
and the value of medical care provided under CALIFORNIACARE for the treatment
of the illness, injury or condition for which a third party is liable.  BLUE CROSS shall assign to PARTICIPATING
MEDICAL GROUP that portion of any such lien related to professional services
rendered under this Agreement by PARTICIPATING MEDICAL GROUP.  PARTICIPATING MEDICAL GROUP’S methods of
collection of such payments shall be conducted in a reasonable and nonegregious
manner and only proper legal procedures may be used to enforce such payment.

 

5.13    To consult with PARTICIPATING MEDICAL GROUP regarding any material
changes, as determined by BLUE CROSS, in operating procedures and policies, as
set forth in the Operations Manual, and to provide PARTICIPATING MEDICAL GROUP
with an opportunity to comment on any policy and procedural changes which may
have a substantial impact on PARTICIPATING MEDICAL GROUP.

 

VI.           ELIGIBILITY LISTINGS

 

6.01    Eligibility listings of Members of employer groups who have personally
selected, or been assigned to, PARTICIPATING MEDICAL GROUP shall be provided in
the following manner:

 

A.       BLUE
CROSS shall maintain, update and distribute monthly, Member Eligibility Reports
listing the persons who are eligible to receive Covered Medical Services during
the applicable month.

 

B.        PARTICIPATING
MEDICAL GROUP shall receive a copy of the Eligibility Reports at PARTICIPATING
MEDICAL GROUP’S main site.  Should
PARTICIPATING MEDICAL GROUP request reports in an electronic format, paper
reports will continue to be provided for an additional ninety (90) days
only.  As described in the Operations
Manual, BLUE CROSS will charge a fee of between Fifty Dollars ($50.00) and Five
Hundred Dollars ($500.00) per report, for each of the following:

 

(1)      duplicate copies of paper reports.

(2)      copies of paper reports delivered in addition to reports in electronic
format after the ninety  (90) day
parallel reporting period  (tape,
diskette, NDM or other electronic medium).

(3)      duplicate reports for prior months.

 

C.        BLUE
CROSS will discourage retroactive cancellation by an employer group of more
than ninety (90) days from BLUE CROSS’ applicable monthly billing process
date.  However, when no services have
been rendered BLUE CROSS may make occasional exceptions due to legitimate
administrative processing requirements. 
Notwithstanding any retroactive cancellation of a Member by an employer
group of more than ninety (90) days. 
BLUE

 

19

 

CROSS shall not be entitled to any refund of Capitation payments made
for such Member beyond the ninety (90) day period.  BLUE CROSS will attempt to discourage retroactively adding any
Member after the applicable billing is reconciled.  In the event BLUE CROSS finds it necessary to assign up to ninety
(90) days retroactively, a new Member to PARTICIPATING MEDICAL GROUP.  Capitation payment for that Member shall be
made, and PARTICIPATING MEDICAL GROUP agrees to be responsible for all Covered
Medical Services due that Member under the terms of the Member’s Benefit
Agreement which were provided or arranged by PARTICIPATING MEDICAL GROUP, from
the date the Member was assigned.

 

D.       In the
event care is provided to an ineligible person, based on an erroneous or
delayed Eligibility Report, BLUE CROSS shall be financially responsible for all
care provided by PARTICIPATING MEDICAL GROUP prior to the time PARTICIPATING
MEDICAL GROUP received notice of that person’s ineligibility and, on the
condition that PARTICIPATING MEDICAL GROUP shall supply BLUE CROSS with
evidence that PARTICIPATING MEDICAL GROUP has unsuccessfully sought payment for
all or a portion of the charges from the ineligible person, or the person
having legal responsibility for the ineligible person, through two billing
cycles or through a period of sixty (60) days, whichever is greater.  In that event, BLUE CROSS responsibility for
physician compensation shall be measured as set forth in Exhibit E or the
actual billed amount, whichever is less. 
The obligations of BLUE CROSS under this Subsection D shall be
conditioned upon the exercise of prudent judgment by PARTICIPATING MEDICAL
GROUP, evidenced by reasonable efforts to contact BLUE CROSS for verification
of the eligibility of each Member prior to providing or arranging Covered
Medical Services.

 

VII.          COMPENSATION TO PARTICIPATING MEDICAL GROUP

 

7.01    Exhibits D. G and G-1 (all incorporated by reference herein) set forth
Capitation payments for new and renewing business.  The applicable Capitation payment for each Member assigned to
PARTICIPATING MEDICAL GROUP, shall be paid monthly, prorated in accordance with
Member eligibility.

 

Such Capitation payment shall be adjusted for Member age, sex and
Benefit Agreement in accordance with age, sex and plan relativities that have
been developed by BLUE CROSS based upon actuarial assumptions and BLUE CROSS’
utilization experience.  BLUE CROSS
reserves the right to adjust such relativity factors, upon contract renewal,
based upon BLUE CROSS’ experience.

 

7.02    Capitation shall be paid in consideration for providing Capitation
Services and arranging Non-Capitated Services for each Member assigned to
PARTICIPATING MEDICAL GROUP and in consideration for all Capitation Services
arranged through referral for Members by PARTICIPATING MEDICAL GROUP.  The Capitation payment shall be made by the
tenth of each month and shall be computed on the basis of the most current
group and individual information available. 
In the event that an error is made in the computation of the Capitation
payment resulting in an overpayment or underpayment to PARTICIPATING MEDICAL
GROUP, BLUE CROSS reserves the right to adjust subsequent Capitation payments
to PARTICIPATING MEDICAL GROUP to offset such overpayment or underpayment.

 

Each Capitation payment shall be accompanied by a remittance
summary.  The remittance summary
identifies the total Capitation amount payable, including retroactivity and
identifies those Members whose retroactivity had a financial impact on the
total Capitation payment.  A complete
listing of Members that are eligible for Capitation Services is provided in the
monthly Eligibility Report, as set forth in Article VI.

 

20

 

7.03    PARTICIPATING MEDICAL GROUP agrees that in no event shall any allowable
co-payment or reimbursement amount, or sum thereof due PARTICIPATING MEDICAL
GROUP exceed the cost to PARTICIPATING MEDICAL GROUP of providing the service
or item which was billed.

 

7.04    PARTICIPATING MEDICAL GROUP agrees to continue to provide or arrange for
all Covered Medical Services and benefits to any Member, or former Member, who
is eligible for coverage under the Extension of Benefits provision of the
Benefit Agreements, in exchange for the then current Capitation amount per
Member per month of the Benefit Agreement type under which the Member is, or
was enrolled.  Under the circumstances
described in this Section 7.04 BLUE CROSS shall be financially responsible
for Non-Capitated Services.

 

7.05    PARTICIPATING MEDICAL GROUP agrees to be responsible for professional
and technical charges, as described in Exhibit A-1 (incorporated by reference
herein), for laboratory, radiology and diagnostic testing procedures and
diagnostic imaging examinations rendered to Members, as a part of, and
concurrent with benefits set forth in this Agreement, whether billed by the
hospital or by a qualified health professional.

 

7.05    In the event a referral provider has not been reimbursed for authorized
Referral Services or that any other provider has not been reimbursed by
PARTICIPATING MEDICAL GROUP as required under their agreement for services
provided to Members within forty-five (45) working days following receipt of a
clean, undisputed claim, then after notice BLUE CROSS shall have the option to
pay a clean and uncontested claim and deduct such payment (including any
interest payable under Health & Safety Code Section 1371), plus an
administrative charge equal to ten percent (10%) of the claim amount, from any
money due from BLUE CROSS to PARTICIPATING MEDICAL GROUP.  If a total of five (5) or more instances occur
where any provider associated with PARTICIPATING MEDICAL GROUP bills a Member
in violation of this Agreement during any calendar year, BLUE CROSS may, in its
sole discretion, suspend the assignment of new Members to PARTICIPATING MEDICAL
GROUP until such time as PARTICIPATING MEDICAL GROUP has rectified the problem
to BLUE CROSS’ satisfaction.

 

VIII         ENROLLMENT PROTECTION

 

8.01    Enrollment Protection is a program designed to limit PARTICIPATING
MEDICAL GROUP’s liability for Capitation Services expense.

 

8.02    For PARTICIPATING MEDICAL GROUPs with less than two thousand (2,000)
Members, on the effective date of this Agreement, the liability of
PARTICIPATING MEDICAL GROUP for expenses for Capitation Services rendered to
any single Member during the calendar year shall be limited to the first SIX
THOUSAND DOLLARS ($6,000.00) of such expenses.

 

8.03    If PARTICIPATING MEDICAL GROUP’s assigned CALIFORNIACARE and BLUE CROSS
PLUS enrollment is two thousand (2,000) or more Members, on the effective date
of this Agreement, PARTICIPATING MEDICAL GROUP agrees to accept risk under
either Subsection A or Subsection B, as indicated below.

 

A.       The
liability of PARTICIPATING MEDICAL GROUP for expenses for Capitation Services
rendered to any single Member during the calendar year, shall be limited to the
first EIGHT THOUSAND DOLLARS ($8,000.00) of Capitation Services expenses, which
have been incurred by PARTICIPATING MEDICAL GROUP for that Member, or

 

21

 

B.        The
liability of PARTICIPATING MEDICAL GROUP for expenses for Capitation Services
rendered to any single Member during the calendar year, shall be limited to the
first TWENTY-FIVE THOUSAND DOLLARS ($25,000.00) of Capitation Services expenses
which have been incurred by PARTICIPATING MEDICAL GROUP for that Member.

 

PARTICIPATING MEDICAL GROUP
hereby elects to accept risk pursuant to Section 8.03

o A.   o B.   (Check one).

 

8.04    Notwithstanding Section 8.02 or 8.03 above, the liability of
PARTICIPATING MEDICAL GROUP for expenses for Capitation Services for Members
who have been diagnosed as having Acquired Immune Deficiency Syndrome (AIDS)
shall be limited to FIFTEEN HUNDRED DOLLARS ($1,500.00) for any Member who has
been diagnosed as having AIDS according to the most current criteria
established by the Center for Disease Control (CDC) at the time of the
diagnosis.

 

8.05    The total expenses of PARTICIPATING MEDICAL GROUP for Capitation
Services rendered to any single Member during the calendar year shall be
calculated according to the fee schedule set forth in Exhibit E.  In the event the foregoing calculation for
any given procedure results in a figure greater than the actual cost of the
procedure as billed by a third party, then the actual cost for that procedure
shall be deemed to be the amount actually paid by PARTICIPATING MEDICAL GROUP.

 

8.06    Expenses in connection with the following services shall not be included
as Capitation Services expenses incurred by PARTICIPATING MEDICAL GROUP in
reaching the Enrollment Protection level:

 

A.       Services
rendered in connection with Workers’ Compensation cases.

 

B.        Services
for which payment is obtained from third-party sources.

 

C.        Services
for which payment is obtained from BLUE CROSS through any coverage other than
CALIFORNIACARE.

 

All co-payments applicable to Capitation Services rendered to Members
shall be subtracted from Capitation Services expenses.  When the PARTICIPATING MEDICAL GROUP is
capitated by two coverages for one Member, the PARTICIPATING MEDICAL GROUP
agrees to coordinate all related co-payments under the Coordination of Benefits
rules in the Member’s Benefit Agreement.

 

8.07    PARTICIPATING MEDICAL GROUP shall maintain records necessary to evidence
having reached the Enrollment Protection level.  After reaching the Enrollment Protection level with regard to any
Member, during the remainder of the calendar year PARTICIPATING MEDICAL GROUP
shall bill BLUE CROSS for one hundred percent (100%) of services rendered, or
provided, to that Member by PARTICIPATING MEDICAL GROUP, calculated in
accordance with Sections 8.02, 8.03, 8.04, 8.05 and 8.06.  Reimbursement to PARTICIPATING MEDICAL GROUP
for Enrollment Protection shall be made by BLUE CROSS in accordance with the
lesser of actual billed charges or the fee schedule set forth in Exhibit
E, on a monthly basis, within forty-five (45) working days of submission of
complete and accurate documentation by PARTICIPATING MEDICAL GROUP.  Services which are not set forth in Exhibit
E shall be reimbursed by BLUE CROSS at the actual charges paid by PARTICIPATING
MEDICAL GROUP.

 

22

 

8.08    PARTICIPATING MEDICAL GROUP and BLUE CROSS acknowledge and agree that
PARTICIPATING MEDICAL GROUP limitations of liability as set forth in this
Article VIII shall be conditioned upon submission of clean undisputed
claims to BLUE CROSS no later than twelve (12) months after the date of the
service rendered to Members.  Any claims
under the Enrollment Protection program which would otherwise be the
responsibility of BLUE CROSS under this Agreement shall be the financial
responsibility of PARTICIPATING MEDICAL GROUP if a clean undisputed claim is
not submitted within twelve (12) months of the date of service.  For the purpose of this Agreement, a clean
claim shall mean a claim that meets all BLUE CROSS requirements with respect to
back-up information.

 

IX.           NON-CAPITATED
SERVICES

 

9.01    Non-Capitated Services, as defined in this Article, shall include
Covered Medical Services, as set forth in the applicable Benefit Agreement and
as authorized or referred by PARTICIPATING MEDICAL GROUP.

 

The Covered Medical Services encompassed in Non-Capitated Services are
delineated in Exhibit A(1) and include, but are not limited to:

 

A.       Inpatient
Hospital Services (exclusive of professional charges).

 

B.        Outpatient
Hospital Services (exclusive of professional charges).

 

C.        Hemodialysis
Services (exclusive of professional charges).

 

D.       In-Area
Emergency Room Facility Services (exclusive of professional charges).

 

E.        Related
Hospital Services.

 

F.        Skilled
Nursing Facility Services.

 

G.        Ambulance
Services.

 

H.       Home
Health Services.

 

I.         Alternative
Birthing Center Services (exclusive of professional charges).

 

J.         Ten
percent (10%) of expenses related to Out-of-Area Emergency Services (Facility
and Professional Expenses).

 

K.       Durable
Medical Equipment and prosthetic devices.

 

L.        Hospice
Services.

 

M.      Fifty
percent (50%) of the average wholesale price (AWP) related to chemotherapy
drugs (intravenously administered) and injectable medications administered
during a visit to the physician’s office (excluding take-home insulin).

 

N.       Mammography
Services.

 

23

 

9.02    Billing for Non-Capitated Services shall be as follows.

 

A.       The
provider of Non-Capitated Services may bill BLUE CROSS directly, in which case,
BLUE CROSS shall reimburse said provider within forty-five (45) working days
following receipt of a clean, undisputed claim accompanied by an authorization
from PARTICIPATING MEDICAL GROUP; or,

 

B.        The
provider of Non-Capitated Services may bill PARTICIPATING MEDICAL GROUP, in
which case, PARTICIPATING MEDICAL GROUP shall bill BLUE CROSS for
reimbursement.  BLUE CROSS shall
reimburse PARTICIPATING MEDICAL GROUP within forty-five (45) working days
following BLUE CROSS’s receipt of a clean undisputed claim from PARTICIPATING
MEDICAL GROUP, on the condition that such claim shall be submitted to BLUE
CROSS no later than twelve (12) months after the date of service.  This section shall only apply for the
following Non-Capitated Services: mammography services, DME, prosthetics and
injectable medications (including chemotherapy drugs and infused substances).

 

In either case described above, BLUE CROSS shall pay contracting
providers at the rate negotiated between BLUE CROSS and said provider.  In the case of non-contracting providers,
BLUE CROSS shall pay the lesser of: the actual billed charges, or the maximum
allowable rate according to the BLUE CROSS Customary and Reasonable charges, or
the rate arranged for by a CALIFORNIACARE Case Manager.

 

9.03    Case Management Stop-Loss.

 

A.       The Case
Management Program is a program in which a Member’s medical needs are assessed
by PARTICIPATING MEDICAL GROUP in conjunction with a CALIFORNIACARE Case
Manager to explore and coordinate treatment alternatives.  PARTICIPATING MEDICAL GROUP should notify
the CALIFORNIACARE Case Manager prior to the Member achieving the applicable
Case Management Stop-Loss Threshold, as described below.

 

B.        For
PARTICIPATING MEDICAL GROUPs with enrollment of Twenty-Four Thousand (24,000)
or more Member Months for the calendar year, the Case Management Stop-Loss
Threshold for an individual Member shall be SIXTY THOUSAND DOLLARS ($60,000.00)
of Non-Capitated Expenses.

 

For PARTICIPATING MEDICAL GROUPs with enrollment of less than
Twenty-Four Thousand (24,000) Member Months, the Case Management Stop-Loss
Threshold shall be THIRTY-FIVE THOUSAND DOLLARS ($35,000.00) of Non-Capitated
Expenses.

 

C.        Authorized
expenses for Member’s Non-Capitated Services, up to the Case Management
Stop-Loss Threshold specified above will be accrued toward PARTICIPATING
MEDICAL GROUP’s PMPM Non-Capitated Expenses. 
Additionally, ten percent (10%) of expenses between the applicable Case
Management Stop-loss Threshold and ONE HUNDRED AND FIFTY THOUSAND DOLLARS
($150,000) incurred by an individual Member will be accrued toward
PARTICIPATING MEDICAL GROUP’s PMPM Non-Capitated Expenses.  Non- Capitated expenses greater than ONE
HUNDRED AND FIFTY THOUSAND DOLLARS ($150,000) for any individual Member will
not be included in PARTICIPATING MEDICAL GROUP’s PMPM Non-Capitated Expenses.

 

24

 

D.       The Case
Management Stop-loss Thresholds described above will apply to Members whose
treatment includes transplants (solid organ and bone marrow/stem cell), except
in those cases where PARTICIPATING MEDICAL GROUP fails to notify BLUE CROSS, as
described in Section 4.02F.  When
PARTICIPATING MEDICAL GROUP fails to provide such notice, all of that Member’s Non-Capitated
Expenses will be included in PARTICIPATING MEDICAL GROUP’s PMPM Non-Capitated
Expenses.

 

9.04    Calculating PARTICIPATING MEDICAL GROUP PMPM Non-Capitated Expenses.

 

The Non-Capitated Expenses shall include actual expenses incurred by
BLUE CROSS to provide Non-Capitated Services to Members, as authorized or
referred by the PARTICIPATING MEDICAL GROUP. 
Expenses above the Case Management Stop-Loss Threshold, as set forth in
Section 9.03, and expenses incurred by Members or former Members covered under
the Extension of Benefits provision of the Benefit Agreements are excluded from
PARTICIPATING, MEDICAL GROUP’s Non-Capitated Expenses for purposes of
determining the Non-Capitated Performance Settlement.

 

BLUE CROSS shall accrue Non-Capitated Expenses by each PARTICIPATING
MEDICAL GROUP by the calendar year the services were incurred and paid through
one hundred and twenty (120) days (April 30) after year-end.  Beginning in year two (2) of this Agreement,
any claims received after calculation of the final Non-Capitated Performance
Settlement will be charged to the following year’s Non-Capitated Expenses.  Any Non-Capitated Services treatments that
begin in one calendar year and extend into the next year shall accrue to the
year the treatment began. 
Notwithstanding the aforementioned, any claims for Non-Capitated
Services or Shared Risk Services (as defined in the CALIFORNIACARE Medical
Services Agreement in effect for years prior to 1997) paid after April 30,
1997 will be charged to the 1997 Non-Capitated Expense.

 

PARTICIPATING MEDICAL GROUP’s PMPM Non-Capitated Expense is the quotient
of PARTICIPATING MEDICAL GROUP’s Non-Capitated Expenses divided by
PARTICIPATING MEDICAL GROUP’s calendar year Member Months.

 

BLUE CROSS shall provide PARTICIPATING MEDICAL GROUP with quarterly
reports advising them of their Non-Capitated Expenses.  The Operations Manual describes the
PARTICIPATING MEDICAL GROUP reports.

 

9.05    Non-Capitated Performance Settlement Schedule.

 

Non-Capitated Performance Settlement Schedule shall mean a
schedule that will be the basis for determining the Non-Capitated
Performance Settlement.  This
schedule presents BLUE CROSS’s prior year aggregate PMPM Non-Capitated
Expenses adjusted by factors to account for medical inflation.  Exhibit F (incorporated by reference herein)
sets forth the Non-Capitated Performance Settlement Schedule.

 

9.06    Calculating the Non-Capitated Performance Settlement.

 

A.       PARTICIPATING
MEDICAL GROUP’s Adjusted PMPM Non-Capitated Expense.

 

PARTICIPATING MEDICAL GROUP’s Adjusted PMPM Non-Capitated Expenses is
the quotient of PARTICIPATING MEDICAL GROUP’s PMPM Non-Capitated Expenses
divided by the composite of PARTICIPATING MEDICAL GROUP’s Age/Sex, Plan,
Stop-Loss and Region Factors.

 

25

 

The PARTICIPATING MEDICAL GROUP’s PMPM Non-Capitated Expense is adjusted
to account for the PARTICIPATING MEDICAL GROUP’s mix of Members and make the
PARTICIPATING MEDICAL GROUP’s PMPM Non-Capitated Expenses comparable to the
Non-Capitated Performance Settlement Schedule, as set forth in Exhibit F.

 

B.        Non-Capitated
Performance Settlement.

 

If the PARTICIPATING MEDICAL GROUP’s Adjusted PMPM Non-Capitated Expense
is equal to or greater than the Attachment Point, the PARTICIPATING MEDICAL
GROUP will not receive a Non-Capitated Performance Settlement.  If the PARTICIPATING MEDICAL GROUP’s
Adjusted PMPM Non-Capitated Expense is less than the Attachment Point, the
PARTICIPATING MEDICAL GROUP will receive a Non-Capitated Performance
Settlement.

 

The PMPM Non-Capitated Performance Settlement is determined by
allocating a portion of the difference between the Attachment Point and the
PARTICIPATING MEDICAL GROUP’s Adjusted PMPM Non-Capitated Expense.  The proportion of the difference allocated
to the PMPM Non-Capitated Performance Settlement is according to the
Non-Capitated Performance Settlement Schedule, set forth in Exhibit F.  The PMPM Non-Capitated Performance
Settlement amount multiplied by the PARTICIPATING MEDICAL GROUP’s calendar year
Member Months determines the total Non-Capitated Performance Settlement.

 

Within forty-five (45) working days after April 30, BLUE CROSS
shall pay the Non-Capitated Performance Settlement if a Non-Capitated
Performance Settlement amount is due to the PARTICIPATING MEDICAL GROUP.

 

Notwithstanding the above, in the event this Agreement is terminated,
BLUE CROSS shall calculate the Non-Capitated Performance Settlement in
accordance with this Article IX and shall pay PARTICIPATING MEDICAL GROUP
a preliminary Non-Capitated Performance Settlement equal to eighty percent
(80%) of any amount due PARTICIPATING MEDICAL GROUP based upon this
calculation.  Twelve (12) months
following the calculation and payment of the preliminary Non-Capitated
Performance Settlement, BLUE CROSS shall calculate a final Non-Capitated
Performance Settlement in accordance with this Article IX and shall pay
any amount due PARTICIPATING MEDICAL GROUP, less any amounts paid at the time
of preliminary Non-Capitated Performance Settlement.  In the event monies paid PARTICIPATING MEDICAL GROUP at the time
of the preliminary Non-Capitated Performance Settlement exceed the final
Non-Capitated Performance Settlement. 
PARTICIPATING MEDICAL GROUP shall reimburse BLUE CROSS any amounts owed
within forty-five (45) working days of notification from BLUE CROSS.

 

X.            OUTPATIENT
PRESCRIPTION DRUG
EXPENSE

 

10.01  Calculating PARTICIPATING MEDICAL GROUP PMPM Outpatient Prescription
Drug Expenses (“PMPM OPDE”).

 

The Outpatient Prescription Drug Expense (“OPDE”) shall include expenses
incurred by BLUE CROSS to provide covered outpatient prescription drugs to
Members assigned to PARTICIPATING MEDICAL GROUP.

 

BLUE CROSS shall accrue OPDE for each PARTICIPATING MEDICAL GROUP by the
calendar year the services were incurred and paid through one hundred and
twenty (120) days after year-end. 
Beginning in year two (2) of this Agreement, any claims received after
calculation of the final Outpatient Prescription Drug Settlement will be
charged to the following year’s OPDE. 
Notwithstanding the aforementioned, any claims for outpatient
prescription drug services

 

26

 

incurred prior to 1997 but paid after the final Non-Capitated
Performance Settlement calculation for 1996 and if applicable, for subsequent
years, will be charged to the following year’s OPDE.

 

PARTICIPATING MEDICAL GROUP’s PMPM OPDE is the quotient of PARTICIPATING
MEDICAL GROUP’s OPDE divided by the PARTICIPATING MEDICAL GROUP’s calendar year
Member Months for Members with outpatient prescription drug benefits.

 

BLUE CROSS shall provide PARTICIPATING MEDICAL GROUP with quarterly
reports advising them of their OPDE. 
Report formats are described in the Operations Manual.

 

10.02  Outpatient Prescription Drug Settlement Schedule.

 

The Outpatient Prescription Drug Settlement Schedule set forth at
Exhibit H (incorporated by reference herein) will be the basis for determining
PARTICIPATING MEDICAL GROUP’s Outpatient Prescription Drug Settlement.

 

10.03  Calculating the Outpatient Prescription Drug Settlement.

 

If PARTICIPATING MEDICAL GROUP’s PMPM OPDE is less than the Outpatient
Prescription Drug Expense Target, the PARTICIPATING MEDICAL GROUP will receive
an Outpatient Prescription Drug Settlement. 
If the PARTICIPATING MEDICAL GROUP’s PMPM Outpatient Prescription Drug
Expense is equal to or greater than the Outpatient Prescription Drug Expense
Target, the PARTICIPATING MEDICAL GROUP will not receive an Outpatient
Prescription Drug Settlement.

 

A.       Outpatient
Prescription Drug Settlement.

 

The PMPM Outpatient Prescription Drug Settlement is determined by
allocating a portion of the difference between the OPDE Target, and the
PARTICIPATING MEDICAL GROUP’s PMPM Outpatient Prescription Drug Expense.  The proportion of the difference allocated to
the PMPM Outpatient Prescription Drug Settlement is determined in accordance
with the Outpatient Prescription Drug Schedule, set forth in Exhibit H.

 

B.        Formulary
Utilization Incentive.

 

If PARTICIPATING MEDICAL GROUP’s use of the BLUE CROSS Outpatient
Prescription Drug Formulary (the “Formulary”) is equal to or greater than
ninety-five percent (95%), as described in Exhibit H, and PARTICIPATING MEDICAL
GROUP’s PMPM OPDE is less than the OPDE Target, an additional $0.10 PMPM will
be added to PARTICIPATING MEDICAL GROUP’s PMPM Outpatient Prescription Drug
Settlement.

 

The amount of the Outpatient Prescription Drug Settlement and Formulary
utilization incentive will be based on the applicable PMPM Settlement
calculation under Exhibit H multiplied by PARTICIPATING MEDICAL GROUP’s Member
Months for Members with outpatient prescription drug benefits.  Within forty-five (45) working days after
April 30, BLUE CROSS will pay any Outpatient Prescription Drug Settlement
that is due PARTICIPATING MEDICAL GROUP for the previous year.

 

Notwithstanding the above, in the event this Agreement is terminated,
BLUE CROSS shall calculate the Outpatient Prescription Drug Settlement in
accordance with this Article X and shall pay PARTICIPATING MEDICAL GROUP a
preliminary Outpatient Prescription Drug Settlement equal to eighty percent
(80%) of any amount due PARTICIPATING MEDICAL GROUP based upon this
calculation.  Twelve (12) months
following the calculation and payment of the preliminary Outpatient
Prescription Drug Settlement, BLUE CROSS shall calculate a final

 

27

 

Outpatient Prescription Drug Settlement in accordance with this
Article X and shall pay any amount due PARTICIPATING MEDICAL GROUP less
any amounts paid at the time of preliminary Outpatient Prescription Drug
Settlement.  In the event monies paid
PARTICIPATING MEDICAL GROUP at the time of the preliminary Outpatient
Prescription Drug Settlement exceed the final Outpatient Prescription Drug
Settlement, PARTICIPATING MEDICAL GROUP shall reimburse BLUE CROSS any amounts
owed within forty-five (45) working days of notification from BLUE CROSS.

 

XI.           QUALITY MANAGEMENT BONUS

 

Blue Cross will evaluate PARTICIPATING MEDICAL GROUP’s Quality
Management Program and Member quality of care using a scorecard.  PARTICIPATING MEDICAL GROUP will be notified
of the scorecard parameters and scoring methodology prior to the start of each
year, as described in the Operations Manual.

 

PARTICIPATING MEDICAL GROUP must meet minimum eligibility criteria to
receive a scorecard score and therefore to be eligible for a Quality Management
Bonus.  These criteria include a minimum
of 12.000 Member months for a calendar year and submission to BLUE CROSS of all
necessary encounter data.

 

A Quality Management Bonus will be paid if PARTICIPATING MEDICAL GROUP’s
performance on the scorecard is average or above average.  No Quality Management Bonus will be paid if
PARTICIPATING MEDICAL GROUP’s scorecard performance is below average.  BLUE CROSS will notify PARTICIPATING MEDICAL
GROUP of the scorecard results sixty (60) days following the end of the
calendar year.

 

The Quality Management Bonus paid to PARTICIPATING MEDICAL GROUP, should
a payment be due in accordance with the PMPM Quality Management Bonus
Schedule shown in Exhibit I (incorporated by reference herein), will be
made by the fifteenth of June following the end of the calendar year for
which it is based.

 

XII.         BILLING FOR HMO-USA AWAY FROM HOME CARE SERVICES

 

12.01  PARTICIPATING MEDICAL GROUP agrees to render or refer urgent care,
Emergency services, follow-up care and routine services, as Host HMO to
out-of-state members of HMO-USA participating plans, when such care is
prearranged by BLUE CROSS.  Urgent care
as it relates to the HMO-USA Away From Home Care Program means outpatient
medical care which the Host HMO determines is required for an unexpected
illness or injury that is not life threatening, but which cannot reasonably be
postponed until the HMO-USA participating plan member returns to the service
area of the member’s Home HMO.

 

All medical services rendered at PARTICIPATING MEDICAL GROUP or
Satellite Facilities and all Referral Services rendered to members of HMO-USA
participating plans, due to unavailability of the required services at
PARTICIPATING MEDICAL GROUP, shall be paid by BLUE CROSS.  For services PARTICIPATING MEDICAL GROUP
provides directly to members of HMO-USA participating plans, BLUE CROSS shall
reimburse PARTICIPATING MEDICAL GROUP at PARTICIPATING MEDICAL GROUP’s invoiced
amount, not to exceed reimbursement in accordance with Exhibit E of this
Agreement.  For Referral Services,
PARTICIPATING MEDICAL GROUP may instruct providers of Referral Services to bill
BLUE CROSS directly or, such providers may bill PARTICIPATING MEDICAL GROUP, in
which case, PARTICIPATING MEDICAL GROUP shall be reimbursed by BLUE CROSS.  In all cases, PARTICIPATING MEDICAL GROUP or
provider of Referral Services shall note on the claim that services were

 

28

 

rendered to a member of an HMO-USA participating plan.  Neither PARTICIPATING MEDICAL GROUP nor
provider of Referral Services shall bill members of HMO-USA participating
plans.

 

12.02  BLUE CROSS agrees to pay PARTICIPATING MEDICAL GROUP within forty-five
(45) working days of receipt of a completed professional services claim form
for authorized services rendered to members of HMO-USA participating plans.

 

XIII.        TERM OF AGREEMENT TERMINATION

 

13.01  This Agreement shall be in effect for
a      (      )
year period (the “Initial Term”) from the date noted on page 1.  Unless written notice of intent not to renew
or of intent to modify this Agreement is provided at least one hundred twenty
(120) days prior to completion of the Initial Term or any subsequent renewal
period, this Agreement shall renew upon the same terms and conditions for
consecutive one year periods each year thereafter.

 

13.02  Should this Agreement be terminated pursuant to Section 13.01
above, PARTICIPATING MEDICAL GROUP agrees to continue to provide Capitation
Services and to arrange Non-Capitated Services for all Members assigned to
PARTICIPATING MEDICAL GROUP, including any Members who become eligible during
the notice period set forth in Section 13.01 above; and to provide these
services consistent with the terms and conditions of the applicable Benefit
Agreements, in such case, Capitation Services rendered to Members shall be
compensated at the applicable rates set forth in Exhibit E, until the annual
anniversary dates of the Benefit Agreements of Members assigned to
PARTICIPATING MEDICAL GROUP.

 

In the event this Agreement is terminated, BLUE CROSS shall have the
right, but not the obligation, to directly pay any bills for expenses for
Referral Services rendered to Members assigned to PARTICIPATING MEDICAL GROUP
which remain outstanding on the date of termination.  BLUE CROSS shall immediately be notified in writing of all such
outstanding bills for Referral Services and BLUE CROSS shall have the right to
set off the amount of such payments against any amount due PARTICIPATING
MEDICAL GROUP for Capitation and Non-Capitated Services pursuant to
Article IX, or any other payments due PARTICIPATING MEDICAL GROUP.

 

The right to set off such payments against any amounts due under this
Agreement shall be in addition to any other rights BLUE CROSS may have under
this Agreement, or in law or in equity.

 

13.03  Termination of this Agreement shall not affect any rights 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.

 

Without limiting the foregoing, if this Agreement is terminated,
PARTICIPATING MEDICAL GROUP shall continue to provide and be compensated under
the terms of this Agreement for Covered Medical Services provided to each
Member who is under the care of PARTICIPATING MEDICAL GROUP at the time of that
termination, until the services being rendered to that Member are completed or
reasonable and medically appropriate provision is made for the assumption of
such services by another contracting provider.

 

29

 

13.04  In the event of a material breach of this Agreement the party claiming
the breach shall give written notice to the other, with registered or certified
mail.  The notice shall specify the
breach with as much detail as possible. 
The party receiving the notice shall then have thirty (30) days to
commence curing the breach.  If the
breach is not cured to the satisfaction of the complaining party within sixty
(60) days after the notice is received by the other party, this Agreement shall
terminate at the end of the sixtieth (60th) day or if the breach is by
PARTICIPATING MEDICAL GROUP, BLUE CROSS may in the alternative freeze
enrollment of PARTICIPATING MEDICAL GROUP and/or withhold *** percent *** of
the Capitation until such breach is cured to BLUE CROSS’ satisfaction.

 

XIV.        ARBITRATION OF DISPUTES BETWEEN BLUE CROSS AND PARTICIPATING MEDICAL GROUP

 

14.01  PARTICIPATING MEDICAL GROUP and BLUE CROSS agree to meet and confer in
good faith to resolve any problems or disputes that may arise under this
Agreement.

 

14.02  Any problem or dispute arising under this Agreement and/or concerning
the terms of this Agreement that is not satisfactorily resolved under
Section 14.01 shall be arbitrated. 
The arbitration shall be initiated by either party making a written
demand for arbitration on the other party. 
Arbitration shall be conducted by the American Arbitration Association
(AAA) under the Commercial Rules of the AAA. 
The arbitration shall also be subject to California Code of Civil
Procedure.  Title Nine,
Section 1280, et. seq.,
unless otherwise mutually agreed.  The
parties agree that the decision of the arbitrator shall be final and binding as
to each of them, except to the extent that California or Federal law provide
for the review of arbitration proceedings. 
Issues as to whether malpractice was committed by a physician shall not
be subject to Arbitration by the AAA unless otherwise agreed in writing by the
parties and the AAA.

 

14.03  Arbitration Fee.  In all cases submitted to AAA, the parties
agree to share equally the AAA administrative fee as well as the arbitrator’s
fee, if any, unless otherwise assessed by the arbitrator.  The administrative fee shall be advanced by
the initiating party.

 

14.04  Enforcement of Award.  The parties agree that the arbitrator’s
award may be enforced in any court having jurisdiction thereof by the filing of
a petition to enforce said award.  Costs
of filing may be recovered by the party that initiates the action to have an
award enforced.

 

14.05  Alternative Dispute Settlement Techniques. 
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 AAA, or the
parties may initiate such other procedures as they may mutually agree upon.

 

14.06  Limitation.  Nothing contained herein is intended to
create, nor shall it be construed to create, any right of any Member to
independently initiate the arbitration procedure established in this
Article.  This limitation shall not
prevent BLUE CROSS from initiating such procedures as the representative of its
Members, or PARTICIPATING MEDICAL GROUP from initiating such procedures on
behalf of Members for whom they have assumed responsibility for the provision
of Capitation Services, and for arranging Non-Capitated Services provided that
in any such case BLUE CROSS or PARTICIPATING MEDICAL GROUP, respectively, shall
be considered the initiating party for the purposes of Section 14.03
hereof.

 

14.07  Each party hereto agrees to notify the other at the earliest reasonable
time in the event of any dispute which may be arbitrated, and in the event
either party becomes aware of facts or circumstances which indicate a
reasonable possibility of litigation with any third person or entity, and which
are relevant to any rights, obligations, or other responsibilities under this
Agreement.

 

30

 

XV.         CALIFORNIACARE
MEMBER GRIEVANCE
SYSTEM

 

15.01  In the event a Member perceives a problem which the CALIFORNIACARE
Coordinator is unable to satisfactorily resolve, the Member shall be advised to
complete a Grievance Form and submit it to the CALIFORNIACARE Coordinator.  The grievance shall be reviewed and resolved
if possible, by the PARTICIPATING MEDICAL GROUP’s Quality Management Committee.

 

15.02  PARTICIPATING MEDICAL GROUP shall maintain a log of all grievances heard
by PARTICIPATING MEDICAL GROUP’s Quality Management Committee filed by Members
who are assigned to PARTICIPATING MEDICAL GROUP and shall, on a quarterly
basis, forward a copy of each grievance to the CALIFORNIACARE Quality
Management Representative.

 

15.03  PARTICIPATING MEDICAL GROUP shall provide a written response to Member
within fifteen (15) working days of receipt of grievance.  In the event a grievance cannot be resolved
by the PARTICIPATING MEDICAL GROUP’s Quality Management Committee to the
complaining Member’s satisfaction within fifteen (15) working days of receipt,
the Member may appeal to BLUE CROSS using the procedures in the Member’s
Benefit Agreement and in the Operations Manual.  In the event that the Member appeals to BLUE CROSS, PARTICIPATING
MEDICAL GROUP agrees to provide BLUE CROSS with a response to the grievance and
the pertinent medical records within ten (10) days from the date of such
request by BLUE CROSS.

 

15.04  The Member shall be notified of the disposition of the complaint by BLUE
CROSS within fifteen (15) working days of making the appeal.

 

XV.         MISCELLANEOUS
PROVISIONS

 

16.01  Amendment.  This Agreement or any part or
section of it may be amended at any time during the term of the Agreement
by mutual written consent of duly authorized representatives of BLUE CROSS and
PARTICIPATING MEDICAL GROUP.

 

16.02  Assignment.  BLUE CROSS and PARTICIPATING MEDICAL GROUP,
pursuant to mutual written agreement, may assign rights and duties established
under this Agreement, provided that no such assignment shall adversely affect
the rights or duties of Members or be in conflict with the requirements of
state or federal laws or regulations under which BLUE CROSS is licensed or
regulated.

 

16.03  Marketing, Advertising and Publicity.  BLUE CROSS shall have the
right to use the name of PARTICIPATING MEDICAL GROUP for purposes of informing
Members and prospective Members of the identity of PARTICIPATING MEDICAL GROUP.

 

Except as provided above, BLUE CROSS and PARTICIPATING MEDICAL GROUP
each reserve the right to control the use of their respective names and all
symbols, trademarks or service marks presently existing, or later
established.  In addition, except as provided
above, neither BLUE CROSS nor PARTICIPATING MEDICAL GROUP shall use the other
party’s name, symbols, trademarks or service marks in advertising or
promotional materials, or otherwise, without the prior written consent of that
party, and shall cease any such usage immediately upon written notice of the
party, or on termination of this Agreement, whichever first occurs.

 

16.04  Sole Agreement.  This Agreement with its Exhibits and the
Operations Manual, represents the entire agreement between the parties hereto
and supersedes any and all prior or contemporaneous, written or oral
agreements, representations or understandings.

 

31

 

16.05  Independent Contractors.  PARTICIPATING MEDICAL GROUP shall furnish
care or other benefits to Members as an independent contractor, and BLUE CROSS
shall not be liable for any claim or demand on account of damages arising out
of, or in connection with, any injuries suffered by any Member while receiving
care from, or care authorized by, PARTICIPATING MEDICAL GROUP or any of its
Member Physicians.

 

16.06  Severability.  If any term, provision, covenant or
condition of this Agreement is held by a court of competent jurisdiction to be
invalid, void or unenforceable, the remainder of the provisions hereof shall
remain in full force and effect and shall in no way be affected, impaired, or
invalidated as a result of such decision.

 

16.07  Notices.  Any notice which is required or permitted to
be given pursuant to this Agreement shall be in writing and shall either be
personally delivered, or sent by registered or certified mail, in the United
States Postal Service, return receipt requested, postage prepaid, addressed to
each party at its principal office or at the address provided in writing to the
other.  Notices shall be effective when
received.

 

16.08  Maximum Capacity.  The Maximum Capacity of PARTICIPATING
MEDICAL GROUP during the term of this Agreement shall be
                
Members.

 

16.09  Knox-Keene Act.  BLUE CROSS is subject to the requirements of
the Knox-Keene Act and any provision required to be in this Agreement
thereunder shall bind BLUE CROSS and PARTICIPATING MEDICAL GROUP, whether or
not expressly provided in this Agreement.

 

16.10  Solicitation of Members.  The business relationship between BLUE CROSS
and its Members, and BLUE CROSS and the employer groups with which it
contracts, shall be deemed the property of BLUE CROSS.  Similarly, all lists of Members accepted by
PARTICIPATING MEDICAL GROUP under the provisions of this Agreement and of the
employer groups to which they belong, shall be deemed the property of BLUE
CROSS.  During the term of this
Agreement or any renewal thereof, and for a period of one (1) year from the
date of termination.  PARTICIPATING
MEDICAL GROUP agrees and will require its PARTICIPATING MEDICAL GROUP
Physicians and all other contracted Health Professionals to agree, that they
will not, within the service area of BLUE CROSS: (1) interfere with BLUE CROSS,
contract and/or property rights; (2) advise or counsel any Member or employer
groups to disenroll from BLUE CROSS, (3) solicit such Member or employer group
to become enrolled with any other health maintenance organization, preferred
provider organization or any other similar hospitalization or medical payment
plan or insurance company;  or (4)
disclose proprietary BLUE CROSS information. 
This section shall not apply to general mailings unless the
mailings specifically target BLUE CROSS Members and as long as the mailings do
not violate the intent of this section.

 

16.11  Confidentiality.  PARTICIPATING MEDICAL GROUP and BLUE CROSS
agree to keep confidential, except as otherwise required by applicable law or
this Agreement, the terms and conditions of this Agreement and any amendments
thereto.  Violation of the above shall
be deemed a material breach.

 

16.12  Waiver.  The waiver by either party of a failure to
perform any covenant or condition set forth in this Agreement shall not act as
a waiver of performance for a subsequent breach of the same or any other
covenant or condition set forth in this Agreement.

 

32

 

16.13  Governing Law.  This Agreement shall be construed and
enforced in accordance with the laws of the State of California.

 

 

	
  BLUE CROSS OF CALIFORNIA

  	
  PARTICIPATING MEDICAL GROUP

  
	
   

  	
   

  
	
   

  	
   

  
	
  Signature:

  	
  /s/ Ferial Bahremand

  	
   

  	
  Signature:

  	
  /s/ Raj Takhar

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
  Ferial
  Bahremand

  	
   

  	
  Name:

  	
  RAJ
  TAKHAR

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  Vice
  President Network Development &

  	
   

  	
  Title:

  	
  CEO

  	
   

  
	
   

  	
  Management

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
  2/7/97

  	
   

  	
  Date:

  	
  11-26-96

  	
   

  

 

33

 

EXHIBIT A

 

COVERED
MEDICAL SERVICES

 

I.              Medical and Surgical Services

 

A.       Physician’s
services at the:

 

(1)      Physician’s office: the Member shall pay any copayment directly to the
physician for each such visit

 

(2)      Hospital or Skilled Nursing Facility

 

B.        Professional
services of an anesthetist or anesthesiologist

 

C.        Diagnostic
X-ray examinations

 

D.       Laboratory
tests

 

E.        Radiation
therapy in Physician’s office, including use of X-ray, radium, cobalt and other
radioactive substances

 

F.        Professional
services of other participating Health Professionals

 

G.        Professional
services of a physician at the Member’s home when the Member is too ill or
disabled to be seen during regular office hours.  The Member shall pay the amounts set forth in the Member’s
Benefit Agreement to the physician for each such visit.

 

II.            Psychiatric Care Benefits 

 

A.       Inpatient
Visits

 

Physician’s hospital visits shall be limited as set forth in the
Member’s Benefit Agreement during each calendar year and the Member shall pay
the amounts set forth in the Member’s Benefit Agreement to the physician for
each such visit.

 

B.        Outpatient
Visits or Sessions

 

Outpatient care shall be provided for short-term evaluation of the
Member’s condition when such care is ordered by the attending PARTICIPATING
MEDICAL GROUP Physician.  Charges and
limitations as set forth in the Member’s Benefit Agreement.  This care shall not include visits for psychoanalysis.

 

III.           Covered Preventive Care Benefits

 

The following services shall be provided when performed by, authorized
by, or deemed appropriate by the Member’s Primary Care Physician.  The Member shall pay any copayment listed in
the Member’s Benefit Agreement directly to the physician for each service
performed.

 

A.       Well baby
care through age 2 years, including immunizations.

 

B.        Scheduled
physical examinations as set forth in the Member’s Benefit Agreement.

 

C.        Pediatric
and adult immunizations.

 

D.       Eye
examinations.

 

E.        Infertility
studies for Members aged 18 or over.

 

*** Confidential
Treatment Requested

 

A-1

 

F.        Ear
examinations.

 

G.        Health
education services as follows:

 

(1)      Health education services and education in the appropriate use of health
services and in the contribution each Member can make to the maintenance of
his/or her own health.

 

(2)      Instruction in personal health care measures.

 

(3)      Information about services provided, including recommendations on
generally accepted medical standards for use and frequency of such services.

 

H.       Services
such as pre- and post-hospitalization planning; referral to services provided
through community health and social welfare agencies and related family
counseling for the physical, emotional and economic impact of illness and disability.

 

I.         Allergy
testing and administration of injections.

 

A-2

 

EXHIBIT A(1)

CALIFORNIACARE

 

DIVISION OF
FINANCIAL RESPONSIBILITIES

 

	
  List of Benefits / Services

  	
   

  	
  Capitation

  	
   

  	
  Non-

  Capitated

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ACUPUNCTURE

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  AIDS

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Inpatient Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  ALLERGY TESTING & TREATMENT

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Serums

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  AMBULANCE: Air or Ground

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  In-Area

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Out-of-Area

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  AMNIOCENTESIS

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Outpatient Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  ANESTHETICS, Administration of

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  ARTIFICIAL EYE

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  *       ARTIFICIAL INSEMINATION

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  ARTIFICIAL LIMBS (Prosthetic Device)

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  BIOFEEDBACK

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  BLOOD AND BLOOD PRODUCTS

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  From Blood Bank

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Autologous Blood Donation

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  *       CHEMICAL DEPENDENCY REHABILITATION

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Inpatient Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Inpatient Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Outpatient Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Outpatient Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  

 

	
  *

  	
  As
  set forth in the applicable Benefit Agreement

  
	
  ***

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

  

 

 

A(1)-1

 

	
  List of Benefits / Services

  	
   

  	
  Capitation

  	
   

  	
  Non-

  Capitated

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  CHEMOTHERAPY DRUGS (intravenously administered)

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Chemotherapy Drugs

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  CHIROPRACTIC (Referred
  Service only)

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  CIRCUMCISION

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  COLOSTOMY SUPPLIES

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Inpatient Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Outpatient Dispensing

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  In Conjunction with Home Health

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  DENTAL SERVICES

  	
   

  	
   

  	
   

  	
   

  
	
  (accidental injury to sound
  natural teeth and dental work necessary for the construction of non-dental
  structures)

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Inpatient Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  DETOXIFICATION

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Inpatient Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  *       DURABLE MEDICAL EQUIPMENT (DME)

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  EMERGENCY ADMISSIONS: In-Area 

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  EMERGENCY ADMISSIONS: Out-of-Area 

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  EMERGENCY ROOM: In-Area

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  

 

	
  *

  	
  As
  set forth in the applicable Benefit Agreement

  
	
  ***

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

  

 

A(1)-2

 

	
  List of Benefits / Services

  	
   

  	
  Capitation

  	
   

  	
  Non-

  Capitated

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EMERGENCY ROOM: Out-of-Area

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  EMPLOYMENT PHYSICAL EXAMS

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  ENDOSCOPIC STUDIES

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Inpatient / Outpatient Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  EXPERIMENTAL PROCEDURES

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  FAMILY PLANNING SERVICES

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Inpatient Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Outpatient Clinic or Non-Hospital Facility
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  FETAL MONITORING

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Inpatient Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  GENETIC TESTING

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  HEALTH EDUCATION

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  **    HEALTH EVALUATIONS / PHYSICALS

  (required by third party or outside
  agency)

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  *       HEARING AIDS

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  HEARING SCREENING

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  HEMODIALYSIS

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Inpatient / Outpatient Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  

 

	
  *

  	
  As
  set forth in the applicable Benefit Agreement

  
	
  **

  	
  Routine
  physical examinations or tests which do not directly treat an actual illness,
  injury or condition unless authorized by a Primary Care Physician except in
  no event will any physical examination or test required by employment or
  government authority, or at the request of a third party such as a school,
  camp or sport affiliated organization be covered.

  
	
  ***

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

  

 

 

A(1)-3

 

	
  List of Benefits / Services

  	
   

  	
  Capitation

  	
   

  	
  Non-

  Capitated

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  HEPATITIS B VACCINE / GAMMA GLOBULIN

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  HOME HEALTH (including medications)

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  HOSPICE (in lieu of acute inpatient or SNF care)

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Inpatient Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  HOSPITAL BASED PHYSICIANS

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Anesthesiology

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Audiology

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Cardiology

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Emergency Medicine

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  General Surgery

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Neonatology

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Nephrology

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Neurology

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Neurosurgery

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Obstetrics / Gynecology

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Orthopedic Surgery

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Pathology

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Pediatrics

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Physical Medicine

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Pulmonary Medicine

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Radiology

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Radiation Oncology

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Urology

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  *       HOSPITALIZATION / INPATIENT SERVICES, SUPPLIES & TESTING

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  In-Area

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Out-of-Area (Emergency)

  	
   

  	
  ***

  	
   

  	
  ***

  

 

	
  *

  	
  As
  set forth in the applicable Benefit Agreement

  
	
  ***

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

  

 

A(1)-4

 

	
  List of Benefits / Services

  	
   

  	
  Capitation

  	
   

  	
  Non-

  Capitated

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  IMMEDIATE CARE

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  IMMUNIZATION SERUMS (pediatric)

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  IMMUNIZATION SERUMS (Adult)

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  INFANT APNEA MONITOR (DME)

  	
   

  	
   

  	
   

  	
   

  
	
  (in conjunction with or
  concurrent with authorized inpatient admission)

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  OUTPATIENT INFANT APNEA MONITOR

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  *       INFERTILITY(Diagnosis / Treatment)

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  * Inpatient Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  * Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  INFUSION THERAPY

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Inpatient / Outpatient Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Infused Substances

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  INJECTABLE MEDICATIONS: Outpatient

  	
   

  	
   

  	
   

  	
   

  
	
  (excluding take-home insulin)

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  LABORATORY SERVICES

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Inpatient Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Outpatient Hospital Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Outpatient Clinic or Non-Hospital Facility
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  *       LITHOTRIPSY

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Inpatient / Outpatient Hospital Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  MAMMOGRAPHY

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Technical Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  

 

	
  *

  	
  As
  set forth in the applicable Benefit Agreement

  
	
  ***

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

  

 

A(1)-5

 

	
  List of Benefits / Services

  	
   

  	
  Capitation

  	
   

  	
  Non-

  Capitated

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  MENTAL HEALTH

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  * Inpatient Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  * Inpatient Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  * Outpatient Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  NUTRITIONIST / DIETITIAN

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  OBSTETRICAL SERVICES

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Inpatient Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Inpatient Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Outpatient Diagnostic Services

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  OFFICE VISIT SUPPLIES, SPLINTS, CASTS, BANDAGES,
  DRESSINGS etc.

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  ORGAN TRANSPLANTS (non-experimental)

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Inpatient Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  *       OUTPATIENT DIAGNOSTIC SERVICES & TREATMENTS

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Primary Care Physicians

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Specialty Physicians

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  OUTPATIENT CLINIC OR NON-HOSPITAL FACILITY
  COMPONENT FOR DIAGNOSTIC SERVICES & TREATMENTS

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  These services include, but are not limited to the
  following:

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Angiograms

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  CAT Scan

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  2-D Echo

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  EEG

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  EKG (aka: ECG)

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  EMG

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Holter Monitor

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  MRI

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Treadmill

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Ultrasound

  	
   

  	
  ***

  	
   

  	
  ***

  

 

	
  *

  	
  As set forth in the
  applicable Benefit Agreement

  
	
  ***

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

  

 

A(1)-6

 

	
  List of Benefits / Services

  	
   

  	
  Capitation

  	
   

  	
  Non-

  Capitated

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  OUTPATIENT DIAGNOSTIC SERVICES & TREATMENTS

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Professional Component for:

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Anesthesiology

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Audiology

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Cardiology

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Emergency Medicine

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  General Surgery

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Neonatology

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Nephrology

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Neurology

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Obstetrics / Gynecology

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Orthopedics

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Pathology

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Pediatrics

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Physical Medicine

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Pulmonary Medicine

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Radiation Oncology

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Radiology

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Urology

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  OUTPATIENT SURGERY

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Professional Component for:

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Anesthesiology

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Audiology

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Cardiology

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Emergency Medicine

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Neonatology

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Neurology

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Nephrology

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Orthopedics

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Pathology

  	
   

  	
  ***

  	
   

  	
  ***

  

 

	
  *

  	
  As set forth in the
  applicable Benefit Agreement

  
	
  ***

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

  

 

 

A(1)-7

 

	
  List of Benefits / Services

  	
   

  	
  Capitation

  	
   

  	
  Non-

  Capitated

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  OUTPATIENT SURGERY: Professional Component

  	
   

  	
   

  	
   

  	
   

  
	
  continued

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Pediatrics

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Physical Medicine

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Pulmonary Medicine

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Radiation Oncology

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Radiology

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Urology

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  PEDIATRIC SERVICES (newborn)

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  PHYSICAL THERAPY

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Inpatient Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Outpatient Clinic or Non-Hospital Facility
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Inpatient / Outpatient Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  PHYSICIAN VISITS

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  To Hospital

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  To Skilled Nursing Facility

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  To Patient Home

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  PHYSICIAN OFFICE VISITS

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Consultations

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Specialty Visits

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  PODIATRY SERVICES

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  PREADMISSION TESTING

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Inpatient Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Outpatient Hospital Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Outpatient Clinic or Non-Hospital Facility
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Inpatient / Outpatient Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  PRE-EXISTING PREGNANCY

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Inpatient Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  

 

	
  *

  	
  As
  set forth in the applicable Benefit Agreement

  
	
  ***

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

  

 

 

A(1)-8

 

	
  List of Benefits / Services

  	
   

  	
  Capitation

  	
   

  	
  Non-

  Capitated

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  PREGNANCY SERVICES

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Inpatient Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  PROSTHETIC DEVICES

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  RADIATION THERAPY

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Inpatient Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Outpatient Hospital Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Outpatient Clinic Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  RADIOLOGY SERVICES

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Inpatient Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Outpatient Hospital Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Outpatient Clinic or Non-Hospital Facility
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  RECONSTRUCTIVE SURGERY

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Inpatient Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  REFRACTIONS

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  REHABILITATION SERVICES

  	
   

  	
   

  	
   

  	
   

  
	
  (Short Term: Physical Therapy,
  Occupational Therapy, Speech Therapy, Cardiac Therapy)

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Inpatient Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Inpatient Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Outpatient Clinic or Non-Hospital Facility
  Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Outpatient Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  ROUTINE PHYSICAL EXAMINATIONS

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  SKILLED NURSING FACILITY (SNF)

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  SPECIALIST CONSULTATIONS

  	
   

  	
  ***

  	
   

  	
  ***

  

 

	
  *

  	
  As
  set forth in the applicable Benefit Agreement

  
	
  ***

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

  

 

A(1)-9

 

	
  List of Benefits / Services

  	
   

  	
  Capitation

  	
   

  	
  Non-

  Capitated

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SURGICAL SUPPLIES

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Inpatient Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Outpatient Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  TEMPORO-MANDIBULAR JOINT SYNDROME (TMJ)

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Dental Treatment

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Professional Component

  	
   

  	
   

  	
   

  	
   

  
	
  (for the diagnosis and medically
  necessary correction)

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Inpatient Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  TRANSFUSIONS

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  From Blood Bank

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Autologous Blood Donations

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  URGENT CARE: In-Area

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  URGENT CARE: Out-of-Area

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Facility Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Professional Component

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  VISION SCREENING

  	
   

  	
  ***

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  VISION CARE

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Medically Necessary Care

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Refraction

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Lenses / Frames (covered by optional rider)

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Contact lenses (fitting only)

  	
   

  	
  ***

  	
   

  	
  ***

  

 

	
  *

  	
  As
  set forth in the applicable Benefit Agreement

  
	
  ***

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

  

 

A(1)-10

 

EXHIBIT B

 

CALIFORNIACARE
HOSPITALS

 

 

B-1

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00067-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00067-of-00352.parquet"}]]