Document:

Exhibit
10.135

 

 

NOTICE AMENDMENT

Contract Amendments Required by

SB 260, AB 1455, AB 2907 and AB 1286

 

This Notice Amendment supplements, amends, and is made a part of the
agreement (“Agreement”) presently in force between PacifiCare of California
(“PacifiCare”) and Prospect Medical Group/Central (“Medical Group”).  This Notice Amendment applies to
PacifiCare’s commercial Managed Care Plans and is issued by PacifiCare in
accordance with the provisions of the Agreement which permit PacifiCare to
issue notice amendments as necessary to maintain compliance with changes in
law, and this Notice Amendment does not require the consent of Medical Group.

 

Recitals

 

WHEREAS, the California legislature has enacted Senate Bill 260
(Speier) regarding financial standards and requirements for “risk bearing
organizations” that enter into “risk arrangements” with health care service
plans, the requirements of which are set forth at Section 1375.4 of the
California Health and Safety Code; and

 

WHEREAS, as a result of the passage of SB 260 and the adoption of
Section 1375.4, PacifiCare is required to conform with the financial
reporting requirements established by the California Department of Managed
Health Care that pertain to health care service plans and risk bearing organizations,
which requirements are set forth at Title 28 of the California Code of
Regulations, Sections 1300.75.4 through 1300.75.4.6; and

 

WHEREAS, the California legislature has enacted Assembly Bill 1455
(Scott) regarding claims settlement practices and dispute resolution mechanisms
for health care service plans, the requirements of which amend and supplement
the Knox-Keene Health Care Service Act of 1975; and

 

WHEREAS, as a result of the passage of AB 1455, PacifiCare is required
to conform with the requirements established by the Department of Managed
Health Care regarding claims resolution practices and dispute resolution
mechanisms, which requirements are set forth at Title 28 of the California Code
of Regulations, Sections 1300.71 and 1300.71.38; and

 

WHEREAS, the California legislature has enacted Assembly Bill 2907
(Cohn) regarding amendments to contracts between health care providers and
health care service plans, which supplement the Knox Knox-Keene Health Care
Service Plan Act of 1975 by adding Section 1375.7 to the California Health
and Safety Code; and

 

WHEREAS, the California legislature has enacted Assembly Bill 1286
(Frommer) regarding continuity of care for newly enrolled health plan members
affected by certain enumerated medical conditions whose existing providers do
not participate in the newly enrolled member’s health plan, and regarding
continuity of care for individuals

 

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affected
by such conditions whose providers are leaving a health plan’s provider
network, the provisions of which amend and supplement Section 1373.96 and
other sections of the Knox-Keene Health Care Service Plan Act of 1975; and

 

WHEREAS, the Agreement permits PacifiCare to amend the Agreement in
order to maintain compliance with State and Federal Law by giving notice of
such amendment to Medical Group;

 

NOW, THEREFORE, PacifiCare hereby amends the Provider Agreement as
follows:

 

Amendment

 

Article I

SB
260 REGULATIONS

(FINANCIAL
SOLVENCY)

 

1.                                       Definitions.

 

1.1                                 “IBNR Claims.” The term “IBNR Claims”
shall refer to claims for services provided to Members which are the financial
responsibility of Medical Group, and which have been incurred, but which have
not been reported to Medical Group.

 

1.2                                 “GAAP.” The term “GAAP” shall mean
generally accepted accounting principles, consistently applied.

 

2.                                       Obligations of Health Plan.

 

2.1                                 Monthly Membership Reports. 
Notwithstanding any different provisions of the Agreement, PacifiCare
shall provide the following information to Medical Group on a monthly basis for
Members assigned to Medical Group within ten (10) calendar days following the
start of each month:

 

(a)                                  Membership information containing the
following elements:

 

(i)                                     Member identification number;

(ii)                                  Name;

(iii)                               Birth Date;

(iv)                              Gender;

(v)                                 Address (including zip code);

(vi)                              Managed Care Plan selected;

(vii)                           Employer group identification;

(viii)                        Identity of other third party coverage, if
known;

(ix)                                Enrollment/disenrollment dates;

 

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(x)                                   Medical group/IPA number;

(xi)                                Provider effective date;

(xii)                             Type of change to coverage;

(xiii)                          Co-payment;

(xiv)                         Deductible;

(xv)                            Amount of capitation to be paid per enrollee
per month;

(xvi)                         Primary care physicians, when selection is
required by plan; and

 

(b)                                 The following additional information:

 

(i)                                     Member additions and terminations for the
month (including: Member name, Member identification number); 

(ii)                                  Number of additional Members under each
Managed Care Plan;

(iii)                               Number of deleted Members under each Managed
Care Plan;

 

(c)                                  PacifiCare shall submit all the information
enumerated at Sections 2.1(a) and (b) to Medical Group electronically unless
both PacifiCare and Medical Group agree in writing that written reports may be
submitted instead.

 

(d)                                 If the information from Sections 2.1(a) and (b) are provided in
more than one report, all such reports shall be processed as of the same date.

 

(e)                                  Within forty-five (45) calendar days of the
close of each calendar quarter, PacifiCare shall disclose to Medical Group
through electronic transmission, or in writing if agreed by both PacifiCare and
Medical Group, a reconciliation of any variances between the reports for
information listed in Sections 2.1(a) and (b).

 

2.2                                 Quarterly Risk-Sharing Reports. 
PacifiCare shall provide to Medical Group on a quarterly basis, within
forty-five (45) days of the close of each calendar quarter, a quarterly
risk-sharing report.  The risk sharing
report shall contain a detailed description of each and every amount (including
expenses and income) that is sufficient to allow verification of amounts
allocated to Medical Group and PacifiCare under the Agreement.  Where applicable, the following information,
at minimum, shall be provided in the quarterly risk-sharing report:

 

(a)                                  Total number of Member months;

 

(b)                                 Total budget allocation for the Member
months;

 

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(c)                                  Total expenses paid during the period;

 

(d)                                 A description of each and every amount of
expense allocated to the PacifiCare and to Medical Group by Member identification
number, date of service, description of service by claim codes, net payment,
and date of payment.

2.3                                 Annual Statement. 
PacifiCare shall provide Medical Group with a preliminary payment report
no later than one hundred fifty (150) days following the end of the contract
year consistent with the requirements of Section 2.2 and provide payment,
if any is due, to Medical Group no later than one hundred eighty (180) days
after the close of the contract year or the Agreement’s termination date, whichever
occurs first.

 

2.4                                 Annual Disclosures.  On
the Agreement anniversary date, PacifiCare shall disclose to Medical Group the
following information for each and every type of risk arrangement (traditional
commercial, point of service, small group, and individual plans), other than
the Secure Horizons Health Plan, which may be covered by the Agreement:

 

(a)                                  A matrix of responsibility for medical
expenses (physician, institutional, ancillary, and pharmacy) which will be
allocated to Medical Group, a facility or PacifiCare under the Agreement;

 

(b)                                 Expected/projected utilization rates and unit
costs for each major expense service group (inpatient, outpatient, primary care
physician, specialist, pharmacy, home health, durable medical equipment,
ambulance, and other), as well as the source of the data and the actuarial
methods employed in determining the utilization rates and unit costs by benefit
plan type.

 

(c)                                  All factors used to adjust payments or
risk-sharing targets, including but not limited to the following: age, sex,
localized geographic area, family size, experience rated, and benefit plan
design, including copayment/deductible levels;

 

(d)                                 The amount of payment for each and every
service to be provided under the contract, including any fee schedules or other
factors or units used in determining the fees for each and every service.  To the extent that reimbursement is made
pursuant to a specified fee schedule, the Agreement shall incorporate the fee
schedule by reference, and shall further specify the Medicare RBRVS year
if RBRVS is the methodology used for the fee schedule development.  For any proprietary fee schedule, the
Agreement

 

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shall include sufficient detail that payment amounts related to that
fee schedule can be accurately predicted.

 

(e)                                  In the case of Capitated Payment, PacifiCare
shall disclose the amount to be paid per Member per month and shall provide
details sufficient to allow Medical Group to verify the accuracy and
appropriateness of any deductions from Capitation Payments.

 

Article II

AB 1455 REGULATIONS

(CLAIMS PAYMENT and PROVIDER DISPUTES)

 

3.                                       Claims Adjudication.  In
processing claims, Medical Group shall accept and adjudicate claims for health
care service provided to PacifiCare Members in accordance with the provisions
of Sections 1371, 1371.1, 1371.2, 1371.22, 1371.35, 1371.36, 1371.37, 1371.38,
1371.4, and 1371.8 of the California Health and Safety Code and Sections
1300.71, 1300.71.38, 1300.71.4, and 1300.77.4 of Title 28 of the California
Code of Regulations.

 

4.                                       Quarterly Performance Report. 
Medical Group shall submit a quarterly performance report to PacifiCare
within thirty (30) days of the close of each calendar quarter, and during the
term of this Agreement.  Such report
shall, at minimum, meet the following requirements:

 

4.1                                 The report shall disclose the percentage of
claims paid timely and accurately by Medical Group consistent with Sections
1371, 1371.1, 1371.2, 1371.22, 1371.35, 1371.36, 1371.37, 1371.4, and 1371.8 of
the California Health and Safety Code and Sections 1300.71. 1300.71.38,
1300.71.4 and 1300.77.4 of Title 28 of the California Code of Regulations.

 

4.2                                 The report shall include a tabulated record
of each dispute received by Medical Group from a provider, categorized by date
of receipt, and shall include the identification of each provider, describe the
type of dispute, disposition of each dispute, and state the number of working
days for resolution of each such dispute. 
Each individual dispute contained in a provider’s bundled notice of
dispute shall be reported separately.

 

4.3                                 The report shall be signed by, and include
the written verification of, a principal officer of the Medical Group, as
defined in Section 1300.45(o) of Title 28 of the California Code of
Regulations.  Such verification shall
state that the report is true and correct to the best knowledge and belief of
such principal officer.

 

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5.                                       Provider Dispute Resolution Mechanism.

 

5.1                           Provider Dispute Resolution Mechanisms. 
Medical Group shall establish and maintain a fair, fast, and
cost-effective dispute resolution mechanism to process and resolve provider
disputes in accordance with the provisions of Sections 1371, 1371.1, 1371.2,
1371.22, 1371.35, 1371.36, 1371.37, 1371.4, and 1371.8 of the California Health
and Safety Code and Sections 1300.71, 1300.71.38, 1300.71.4, and 1300.77.4 of
Title 28 of the California Code of Regulations.  PacifiCare may assume responsibility for the administration of
Medical Group’s dispute resolution mechanism and for the timely resolution of
provider disputes in the event Medical Group fails to timely resolve its
provider disputes, including the issuance of a written decision.

 

5.2                           Access to Information. 
Medical Group shall make available to PacifiCare and to the Department
of Managed Health Care all records, notes, and documents regarding Medical
Group’s dispute resolution mechanism(s) and the resolution of all disputes
received from providers.

 

5.3                           Disputes Relating to Medical Necessity and
Utilization Review.  In the event that a provider disagrees with
the resolution of any dispute between such provider and Medical Group which
relates to medical necessity or utilization review, such Medical Group shall
have an unconditional right of appeal for such claim to PacifiCare’s dispute
resolution process for a de novo review and resolution for a period of sixty
(60) working days from Medical Group’s date of determination, as defined at
Section 1300.71(a) of Title 28 of the California Code of Regulations,
pursuant to the provisions of Section 1300.71.38(a)(4) of Title 28 of the
California Code of Regulations.

 

6.                                       Waiver Prohibited. 
Medical Group shall not require or permit a contracted provider to waive
any right conferred upon such provider or any obligation imposed on PacifiCare
by Sections 1371, 1371.1, 1371.2, 1371.22, 1371.35, 1371.36, 1371.37,.1371.4,
and 1371.8 of the California Health and Safety Code and Sections 1300.71,
1300.71.38, 1300.71.4, and 1300.77.4 of Title 28 of the California Code of
Regulations relating to claims processing or payment.  Any contractual provision or other agreement purporting to
constitute, create or result in such a waiver shall be null and void

 

Article III

AB 2907

(PROVIDER’S BILL OF RIGHTS)

 

7.                                 Amendments or Modifications to Agreement. 
Except as otherwise provided in this Article III, all amendments or
modifications to the Agreement shall be effective only upon mutual written
agreement of the parties.

 

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8.                                       Amendments
to Provider Manual.  PacifiCare may
by notice amend or change any or all
provisions of the Provider Manual by providing forty-five (45) business days’
prior written notice to Medical Group unless the amendment is material and is
not made in order to comply with a change in State or Federal Law or
Accreditation Standard, in which case the provisions of Section 11 of this
Amendment, below, shall apply.  Any
notice amendment pursuant to the terms of this Section shall be binding
upon Medical Group at the end of the forty-five (45) business day period.

 

9.                                       Amendments to Agreement to Comply with State
and Federal Law.  PacifiCare may amend this Agreement by
providing thirty (30) calendar days’ prior written notice to Medical Group in
order to maintain compliance with State and Federal Law.  Such amendment shall be binding upon Medical
Group at the end of the thirty (30) calendar day period and shall not require
the consent of Medical Group.

 

10.                                 Amendments to Managed Care Plans. 
PacifiCare may by notice amend or change any or all provisions of the
Managed Care Plans by providing forty-five (45) business days’ prior written
notice to Medical Group unless the amendment is material or it impacts Medical
Group and is not made in order to comply with a change in State or Federal Law
or Accreditation Standard, in which case the provisions of Section 11 of
this Amendment, below.  Any notice
amendment pursuant to the terms of this Section shall be binding upon
Medical Group at the end of the forty-five (45) business day period and shall
not require the consent of Medical Group.

 

11.                                 Material Changes. 
Medical Group and PacifiCare shall seek to agree to amendments to the
Agreement which satisfactorily address material changes proposed by PacifiCare
which are not permitted to be made by a notice amendment pursuant to the terms
of the Agreement or this Amendment or applicable State and Federal Law.  In such event, the applicable amendment
shall not be effective until the parties amend the Agreement through a written
amendment signed by both parties.  For
the purposes of this Section ”material” shall have the meaning set forth
in California Health and Safety Code Section 1375.7(f)(2), which at the
time of execution of this Agreement, states that “material” shall mean a change
to which a reasonable person would attach importance in determining action to
be taken upon such provision.

 

In the event PacifiCare has provided Medical Group with notice of an
amendment pursuant to Sections 8 or 10 of this Amendment, above, and such
amendment is material and the parties are not able to reach a mutual agreement
on the terms of the amendment, Medical Group retains its rights to terminate
the Agreement pursuant to California Health and Safety Code Section 1375.7(b).  If Medical Group desires to exercise its
right to terminate the Agreement pursuant to California Health and Safety Code
Section 1375.7(b), Medical Group agrees to

 

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provide PacifiCare with written notice of its intent to terminate the
Agreement not less than five (5) business days prior to the expiration of the
forty-five (45) business day notice period provided at Sections 8 and 10 and
Medical Group agrees that PacifiCare may withdraw its notice amendment on or
before the expiration of the forty-five (45) business day notice period thereby
canceling Medical Group’s termination right.

 

Article IV

AB
1286

(CONTINUING
CARE)

 

12.                                 Definitions.

 

12.1                           “Acute Condition” means a medical
condition that involves a sudden onset of symptoms due to an illness, injury,
or other medical problem that requires prompt medical attention and that has a
limited duration.

 

12.2                           “Newborn Child” means a newborn child
between birth and age thirty-six (36) months.

 

12.3                           “New Member” means a Member who has
become newly enrolled with PacifiCare and has been assigned to Medical Group.

 

12.4                           “Nonparticipating Provider” means,
with respect to a New Member, a licentiate, as defined in Section 805 of
the California Business and Professions Code, which is not employed by or
contracted with Medical Group for the provision of Covered Services to Members,
but who, at the time such New Member’s coverage with PacifiCare became
effective, was providing Covered Services for one of the Special Circumstances.

 

12.5                           “Pregnancy” means the three trimesters
of pregnancy and the immediate postpartum period.  “Pregnant” shall refer to the state of Pregnancy.

 

12.6                           “Serious Chronic Condition” refers to
a medical condition due to a disease, illness, or other medical problem or
medical disorder that is serious in nature and that persists without full cure
or worsens over an extended period of time or requires ongoing treatment to
maintain remission or prevent deterioration.

 

12.7                           “Special Circumstances” refers to an
Acute Condition, Serious Chronic Condition, Pregnancy, Terminal Illness,
Newborn Care, or Surgery/Other Procedure.

 

12.8                           “Surgery/Other Procedure” refers to a
surgical or other procedure that is authorized by PacifiCare as part of a
documented course of treatment which has been recommended and documented by a
“provider,” as defined

 

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at Section 1345(i) of the California Health and Safety Code, to
occur within one hundred eighty (180) days of the termination, nonrcnewal or
expiration of the Agreement between PacifiCare and Medical Group or an
agreement between Medical Group and one of its Participating Providers or (in
the case of a New Member) within one hundred eighty (180) days of the effective
date of coverage for such New Member.

 

12.9                           “Terminal Illness” refers to an
incurable or irreversible condition that has a high probability or causing
death within one (1) year or less.  “Terminally
III” refers to the state of Terminal Illness.

 

12.10                     “Termination” shall mean (i) the
termination, expiration, or nonrenewal, or any circumstance which results in
the termination, expiration, or nonrenewal, of any arrangement by which a
Participating Provider provides Covered Services to Members, or (ii) the termination,
expiration, or nonrenewal, or any circumstance which results in the
termination, expiration, or nonrenewal, of the Agreement.

 

13.                                 General Continuing Care Obligations of
Provider.  The provisions of this Article IV shall
amend only Medical Group’s obligations to continue to provide Covered Services
to Members in Special Circumstances. 
The provisions of this Article IV shall not modify Medical Group’s
general obligations to continue to provide Covered Services to Members, except
as necessary to modify Medical Group’s obligations to provide Covered Services
to Members in Special Circumstances. 
Notwithstanding the generality of the foregoing, all provisions of the
Agreement pertaining to (i) Medical Group’s general continuing care
obligations, (ii) Medical Group’s obligations to provide continuing care in the
event PacifiCare ceases operating or the Agreement is terminated for
nonpayment, (iii) the survival of all provisions of the Agreement pertaining to
Medical Group’s continuing care obligations, and (iv) Medical Group’s
obligation to provide services to Members transferred to Medical Group from a
terminated PacifiCare provider shall remain in full force and effect without
modification, except as necessary to modify Mcdical Group’s obligations to
provide Covered Services in Special Circumstances as set forth in this
Amendment.

 

14.                                 Special Circumstances Continuing Care
Obligations.

 

14.1                           Termination of Participating Provider. 
Following the Termination of any Participating Provider, Medical Group
shall, at the request of the applicable Member and in accordance with
PacifiCare’s policies and procedures, assure that such Participating Provider
shall provide Covered Services in Special Circumstances as required by this
Article IV.

 

14.2                           Termination of the Agreement. 
Following the Termination of the Agreement, Medical Group shall at the
request of the applicable Member and in accordance with PacificCare’s policies
and procedures, assure that

 

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all of its
Participating Providers shall provide Covered Services in Special Circumstances
to Members as required by this Article IV.

 

14.3                           New
Members.  Following the enrollment
of a New Member into a PacifiCare health plan, Medical Group shall, at the
request of such New Member and in accordance with PacifiCare’s policies and
procedures, assure that the applicable Nonparticipating Provider shall provide
Covered Services in Special Circumstances to New Members as required by this
Article IV.

 

14.4                           Exceptions.

 

(a)                                  Terminated
Participating Providers.  Medical
Group is not obligated to arrange for its terminated Participating Providers to
provide Covered Services in Special Circumstances to Members if the terminated
Participating Provider (i) was terminated for a medical disciplinary cause or
reason, as defined in paragraph (6) of subdivision (a) of Section 805 of
the California Business and Professions Code, or (ii) was terminated for fraud
or other criminal activity, (iii) does not agree to comply, or does not comply,
with the same contractual terms and conditions that were imposed upon such
Participating Provider prior to termination, including, but not limited to,
credentialing, hospital privileging, utilization review, peer review, and
quality assurance requirements, or (iv) has not agreed in advance to
compensation terms for the provision of Covered Services in Special
Circumstances to Members, or does not otherwise accept payment rates for such
services, at rates (and methods of payment) similar to those used by Medical
Group for currently contracting providers providing similar services who are
not capitated and who are practicing in the same or similar geographic area as
the terminated Participating Provider.

 

(b)                                 Nonparticipating
Providers.  Medical Group is not
obligated to arrange for Nonparticipating Providers to provide Covered Services
in Special Circumstances to New Members if the Nonparticipating Provider (i)
fails to agree in writing to be subject to the same contractual terms and
conditions that are imposed upon Medical Group’s currently contracted
participating providers providing similar services who are not capitated and
who are practicing in the same or a similar geographic region as the
Nonparticipating Provider, including, but not limited to, credentialing,
hospital privileging, utilization review, peer review, and quality assurance
requirements, or (ii) has not agreed in advance to compensation terms for the
provision of Covered Services in Special Circumstances to New Members, or does
not otherwise accept payment rates for such services, at rates (and

 

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methods of payment) similar to those used by Medical Group for
currently contracting providers providing similar services who are not
capitated and who are practicing in the same or a similar geographic area as
the Nonparticipating Provider.

 

14.5                           Time Periods for the Provision of Covered
Services in Special Circumstances.

 

(a)                                  Acute Condition.

 

(i)                                     In the case of a Member who has an Acute
Condition, the Covered Services in Special Circumstances shall be provided to
the Member by Medical Group (in the event of Termination of the Agreement), or
by the terminated Participating Provider (in the event of Termination of the
Participating Provider), as the case may be, for the duration of the Acute
Condition.

 

(ii)                                  In the case of a New Member who has an Acute
Condition, Medical Group shall assure that the Covered Services in Special
Circumstances shall be provided by the applicable Nonparticipating Provider for
the duration of the Acute Condition.

 

(b)                                 Serious Chronic Condition.

 

(i)                                     In the case of a Member who has a Serious
Chronic Condition, the Covered Services in Special Circumstances shall be
provided to the Member by Medical Group (in the event of Termination of the
Agreement), or by the terminated Participating Provider (in the event of
Termination of the Participating Provider), as the case may be, for a period
not to exceed twelve (12) months from the contract Termination date.

 

(ii)                                  In the case of a New Member who has a Serious
Chronic Condition, Medical Group shall assure that the Covered Services in
Special Circumstances shall be provided to the New Member by the applicable
Nonparticipating Provider for a period not to exceed twelve (12) months from
the effective date of such New Member’s coverage with PacifiCare.

 

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(c)                                  Pregnancy.

 

(i)                                     In the case of a Member who is Pregnant, the
Covered Services in Special Circumstances shall be provided to the Member by
Medical Group (in the event of Termination of the Agreement), or by the
terminated Participating Provider (in the event of Termination of the
Participating Provider), as the case may be, for the duration of the Pregnancy.

 

(ii)                                  In the case of a New Member who is Pregnant,
Medical Group shall assure that the Covered Services in Special Circumstances
shall be provided to the New Member by the applicable Nonparticipating Provider
for the duration of the Pregnancy.

 

(d)                                 Terminal Illness.

 

(i)                                     In the case of a Member who is Terminally
III, the Covered Services in Special Circumstances shall be provided to the
Member by Medical Group (in the event of Termination of the Agreement), or by
the terminated Participating Provider (in the event of Termination of the
Participating Provider), as the case may be, for the duration of the Terminal
Illness.

 

(ii)                                  In the case of a New Member who is Terminally
III, Medical Group shall assure that the Covered Services in Special
Circumstances shall be provided to the New Member by the applicable
Nonparticipating Provider for the duration of the Terminal Illness.

 

(e)                                  Newborn Child.

 

(i)                                     In the case of a Newborn Child of a Member,
the Covered Services in Special Circumstances shall be provided to the Member’s
Newborn Child by Medical Group (in the event of Termination of the Agreement),
or by the terminated Participating Provider (in the event of Termination of the
Participating Provider), as the case may be, for a period not to exceed twelve
(12) months from the contract termination date.

 

(ii)                                  In the case of a Newborn Child of a New
Member, Medical Group shall assure that the Covered Services in Special
Circumstances shall be provided by the applicable Nonparticipating Provider to
the New Member’s Newborn Child for a period not to exceed twelve (12) months
from

 

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the effective date of such New Member’s coverage with PacifiCare.

 

(f)                                    Surgery/Other Procedure.

 

(i)                                     In the case of a Surgery/Other Procedure, the
Covered Services in Special Circumstances shall be provided to the Member by
Medical Group (in the event of Termination of the Agreement), or by the
terminated Participating Provider (in the event of Termination of the
Participating Provider), as the case may be.

 

(ii)                                  In the case of a Surgery/Other Procedure for
a New Member, Medical Group shall assure that the Covered Services in Special
Circumstances shall be provided to the New Member by the applicable
Nonparticipating Provider.

 

15.                                 Compensation of Participating Providers. 
Medical Group shall be solely responsible for compensating any
terminated Participating Provider or Nonparticipating Provider for the
provision of Covered Services in Special Circumstances to Members and New Members
as agreed upon in writing between Medical Group and the terminated
Participating Provider or at the rate and method of payment used by Medical
Group for its contracting providers providing similar services who are not
capitated and who are practicing in the same or similar geographic area as the
terminated Participating Provider.

 

16.                                 Notifications Regarding Termination. 
Medical Group shall provide ninety (90) calendar days’ prior written
notice to PacifiCare of the termination of any of its Participating Providers
(or such longer time as may be required by the Agreement); provided, however,
that if any Participating Provider is terminated with less than ninety (90)
calendar days’ notice, then Medical Group shall provide written notice to
PacifiCare within five (5) business days of Medical Group becoming aware of
such termination.  Additionally, Medical
Group shall, and Medical Group shall cause the applicable Participating
Provider to, identify to PacifiCare, in writing, any Members who (i) are receiving
treatment from such Participating Provider for an Acute Condition, Serious
Chronic Condition, Pregnancy, or Terminal Illness, (ii) have a Newborn Child,
or (iii) have been authorized to receive a Surgery/Other Procedure.

 

17.                                 Survival.  Medical Group agrees that (i)
all of the provisions of this Article IV. 
as well as all provisions of the Agreement which relate to Medical
Group’s obligation to provide continuing care to PacifiCare Members (even in
the absence of any Special Circumstances), shall survive termination of the
Agreement regardless of the cause giving rise to such termination, and (ii) all
such provisions shall be construed for the benefit of PacifiCare Members.

 

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Article V

GENERAL PROVISIONS

 

18.                                 Applicability of Amendment.  This
Amendment shall not apply to PacifiCare’s Secure Horizons Medicare+Choice
Health Plan.

 

19.                                 Effective Date. 
This Amendment shall be effective on January 1, 2004.

 

20.                                 Construction of Terms. 
Terms used and not otherwise defined in this Amendment shall have the
meanings assigned to them in the Agreement.

 

21.                                 Agreement Remains Effective. 
Except as expressly modified by the terms of this Amendment, all of the
terms and conditions set forth in the Agreement shall remain in full force and
effect.

 

22.                                 Conflicting Terms.  In
the event that the terms or conditions of the Agreement and this Amendment are
in conflict, the terms of this Amendment shall control.

 

23.                                 Changes in Law. 
PacifiCare acknowledges that (i) Governor Schwarzeneggar has ordered a
review of all administrative regulations adopted, amended, or repealed since
January 6, 1999, for the purpose of determining the necessity, authority,
clarity, consistency, reference and non-duplication of such regulations, and
that (ii) the California Healthcare Association has filed a Petition for Writ
of Mandate challenging certain provisions of the regulations adopted by the
Department of Managed Health Care at Title 28 of the California Code of
Administrative Regulations, Sections 1300.71 and 1300.71.38.  Accordingly, PacifiCare reserves the right
to amend any provision(s) of the Agreement or of this Notice Amendment as
reasonable in light of these reviews or any other changes in applicable law or
regulation.

 

14Exhibit 10.136

Blue Shield of California

 

 

HMO

IPA / MEDICAL GROUP

 

SHARED SAVINGS

PROVIDER

AGREEMENT

 

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

 

1

 

HMO IPA / MEDICAL GROUP

SHARED SAVINGS PROVIDER AGREEMENT

TABLE OF CONTENTS

 

SECTION

 

	
  I.

  	
   

  	
  DEFINITIONS

  	
   

  
	
  1.1

  	
   

  	
  Agreement Year

  	
   

  
	
  1.2

  	
   

  	
  Authorization

  	
   

  
	
  1.3

  	
   

  	
  Benefit Program

  	
   

  
	
  1.4

  	
   

  	
  Blue
  Shield Providers

  	
   

  
	
  1.5

  	
   

  	
  Capitated Professional
  Services

  	
   

  
	
  1.6

  	
   

  	
  Capitation

  	
   

  
	
  1.7

  	
   

  	
  Co-payments

  	
   

  
	
  1.8

  	
   

  	
  Covered
  Services

  	
   

  
	
  1.9

  	
   

  	
  Emergency
  Services

  	
   

  
	
  1.10

  	
   

  	
  Evidence
  of Coverage

  	
   

  
	
  1.11

  	
   

  	
  Group Provider

  	
   

  
	
  1.12

  	
   

  	
  Group
  Services Area

  	
   

  
	
  1.13

  	
   

  	
  Health
  Services Contract

  	
   

  
	
  1.14

  	
   

  	
  Medically
  Necessary

  	
   

  
	
  1.15

  	
   

  	
  Member

  	
   

  
	
  1.16

  	
   

  	
  Primary Care Physician

  	
   

  
	
  1.17

  	
   

  	
  Provider Manual

  	
   

  
	
  1.18

  	
   

  	
  Shared
  Risk Services

  	
   

  
	
  1.19

  	
   

  	
  Urgent
  Care Services

  	
   

  
	
  II.

  	
   

  	
  OBLIGATIONS OF GROUP

  	
   

  
	
  2.1

  	
   

  	
  Capitated Professional
  Services

  	
   

  
	
  2.2

  	
   

  	
  Referrals for
  Other Covered Services

  	
   

  
	
  2.3

  	
   

  	
  Availability

  	
   

  
	
  2.4

  	
   

  	
  Standards for
  Provision of Care

  	
   

  
	
  2.5

  	
   

  	
  Providers Not Meeting
  Standards

  	
   

  
	
  2.6

  	
   

  	
  Group
  Service Contracts

  	
   

  
	
  2.7

  	
   

  	
  Quality
  Improvement / Case Management / Utilization Management Programs

  	
   

  
	
  2.8

  	
   

  	
  Right to Re-Assign Members

  	
   

  
	
  2.9

  	
   

  	
  Outpatient
  Drug Formulary and Pharmacy Information

  	
   

  
	
  2.10

  	
   

  	
  Reciprocity

  	
   

  
	
  2.11

  	
   

  	
  Termination
  of Physician / Patient Relationship

  	
   

  
	
  2.12

  	
   

  	
  Encounter Data and
  Other Reporting

  	
   

  
	
  2.13

  	
   

  	
  Disclosures

  	
   

  
	
  2.14

  	
   

  	
  Direct
  Access Programs

  	
   

  
	
  2.15

  	
   

  	
  Addition of New
  Plan Benefit Programs

  	
   

  

 

2

 

	
  SECTION

  	
   

  	
   

  	
   

  
	
  III.

  	
   

  	
  PAYMENT OF PROVIDERS
  BY GROUP

  	
   

  
	
  3.1

  	
   

  	
  Timely
  Group Payment

  	
   

  
	
  3.2

  	
   

  	
  Failure
  to Make Payment

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  IV.

  	
   

  	
  PERFORMANCE OF DELEGATED
  FUNCTIONS

  	
   

  
	
  4.1

  	
   

  	
  Delegation

  	
   

  
	
  4.2

  	
   

  	
  Blue Shield of
  California Monitoring and Oversight

  	
   

  
	
  4.3

  	
   

  	
  Termination of Delegation

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  V.

  	
   

  	
  OBLIGATIONS OF BLUE
  SHIELD OF CALIFORNIA

  	
   

  
	
  5.1

  	
   

  	
  Directory and Use of Names

  	
   

  
	
  5.2

  	
   

  	
  Provider Manual

  	
   

  
	
  5.3

  	
   

  	
  Blue
  Shield of California Reports

  	
   

  
	
  5.4

  	
   

  	
  Administrative
  Services

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  VI.

  	
   

  	
  ELIGIBILITY OF
  BLUE SHIELD OF CALIFORNIA MEMBERS

  	
   

  
	
  6.1

  	
   

  	
  Identification
  Cards and Verification

  	
   

  
	
  6.2

  	
   

  	
  Verification of Eligibility

  	
   

  
	
  6.3

  	
   

  	
  Eligibility List
  and Modifications

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  VII.

  	
   

  	
  COMPENSATION AND
  FINANCIAL TERMS

  	
   

  
	
  7.1

  	
   

  	
  Capitation
  Payments

  	
   

  
	
  7.2

  	
   

  	
  Services
  Other Than Capitated Professional Services

  	
   

  
	
  7.3

  	
   

  	
  Co-payments

  	
   

  
	
  7.4

  	
   

  	
  Stop Loss
  Coverage

  	
   

  
	
  7.5

  	
   

  	
  Shared
  Risk Programs

  	
   

  
	
  7.6

  	
   

  	
  Blue Shield POS
  Benefit Program

  	
   

  
	
  7.7

  	
   

  	
  Third Party
  Liens

  	
   

  
	
  7.8

  	
   

  	
  Groups
  Organized by Geographic Regions

  	
   

  
	
  7.9

  	
   

  	
  Purpose of Incentive
  Programs

  	
   

  
	
  7.10

  	
   

  	
  Blue Shield of California
  Timeliness Guarantee

  	
   

  
	
  7.11

  	
   

  	
  Encounter Data Submission
  Penalties

  	
   

  

 

3

 

	
  SECTION

  	
   

  	
   

  	
   

  
	
  VIII.

  	
   

  	
  PROTECTION OF MEMBERS

  	
   

  
	
  8.1

  	
   

  	
  Non-Discrimination

  	
   

  
	
  8.2

  	
   

  	
  Credentialed
  Providers

  	
   

  
	
  8.3

  	
   

  	
  Charges
  to Members

  	
   

  
	
  8.4

  	
   

  	
  Protection
  of Members

  	
   

  
	
  8.5

  	
   

  	
  Benefits
  Determination

  	
   

  
	
  8.6

  	
   

  	
  Member Complaints and
  Grievances

  	
   

  
	
  8.7

  	
   

  	
  Medical Necessity
  Assistance

  	
   

  
	
  8.8

  	
   

  	
  Free Exchange of
  Information

  	
   

  
	
  8.9

  	
   

  	
  Insurance

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  IX.

  	
   

  	
  MEDICAL
  RECORDS AND CONFIDENTIALITY

  	
   

  
	
  9.1

  	
   

  	
  Medical Records

  	
   

  
	
  9.2

  	
   

  	
  Confidentiality

  	
   

  
	
  9.3

  	
   

  	
  Member
  Access to Records

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  X.

  	
   

  	
  COOPERATION
  WITH AUDITS AND CERTIFICATIONS

  	
   

  
	
  10.1

  	
   

  	
  Disclosure
  of Records

  	
   

  
	
  10.2

  	
   

  	
  Site Evaluations

  	
   

  
	
  10.3

  	
   

  	
  Accreditation
  Surveys

  	
   

  
	
  10.4

  	
   

  	
  Compliance
  Monitoring

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  XI.

  	
   

  	
  RESOLUTION OF DISPUTES

  	
   

  
	
  11.1

  	
   

  	
  Provider Dispute
  Resolution Procedure

  	
   

  
	
  11.2

  	
   

  	
  Arbitration
  of Disputes

  	
   

  
	
  11.3

  	
   

  	
  Cooperation with Member
  Disputes

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  XII.

  	
   

  	
  TERM AND TERMINATION

  	
   

  
	
  12.1

  	
   

  	
  Term

  	
   

  
	
  12.2

  	
   

  	
  Termination Without Cause

  	
   

  
	
  12.3

  	
   

  	
  Termination
  for Cause

  	
   

  
	
  12.4

  	
   

  	
  Notice
  and Cure Period

  	
   

  
	
  12.5

  	
   

  	
  Termination Not an
  Exclusive Remedy

  	
   

  
	
  12.6

  	
   

  	
  Effect
  of Termination

  	
   

  

 

4

 

	
  SECTION

  	
   

  	
   

  	
   

  
	
  XIII.

  	
   

  	
  COMPLIANCE
  WITH LEGAL REQUIREMENTS

  	
   

  
	
  13.1

  	
   

  	
  Consistency with State Law

  	
   

  
	
  13.2

  	
   

  	
  Consistency with Federal
  Law

  	
   

  
	
  13.3

  	
   

  	
  Coordination of Benefits

  	
   

  
	
  13.4

  	
   

  	
  Timely Payment

  	
   

  
	
  13.5

  	
   

  	
  Disclosure of Provider
  Profiling

  	
   

  
	
  13.6

  	
   

  	
  Provider
  Terminations

  	
   

  
	
  XIV.

  	
   

  	
  GENERAL PROVISIONS

  	
   

  
	
  14.1

  	
   

  	
  Waiver of Breach

  	
   

  
	
  14.2

  	
   

  	
  Amendments

  	
   

  
	
  14.3

  	
   

  	
  Entire Agreement

  	
   

  
	
  14.4

  	
   

  	
  Independent
  Contractors

  	
   

  
	
  14.5

  	
   

  	
  Notices

  	
   

  
	
  14.6

  	
   

  	
  Third Party Beneficiaries

  	
   

  
	
  14.7

  	
   

  	
  Assignment,
  Subcontracting, and Addition of PCP’ s

  	
   

  
	
  14.8

  	
   

  	
  Interpretation of Agreement

  	
   

  
	
  14.9

  	
   

  	
  Confidentiality / Trade
  Secrets

  	
   

  
	
  14.10

  	
   

  	
  Non-Solicitation

  	
   

  
	
  14.11

  	
   

  	
  Association
  Disclosure

  	
   

  
	
  EXHIBITS

  	
   

  	
   

  	
   

  
	
  A

  	
   

  	
  Group Information and
  Benefits Programs

  	
   

  
	
  B

  	
   

  	
  Division of Financial
  Responsibilities

  	
   

  
	
  C

  	
   

  	
  Capitation 

  	
   

  
	
  C-1

  	
   

  	
  Capitation Rates

  	
   

  
	
  D

  	
   

  	
  Shared Savings Programs 

  	
   

  
	
  D-1

  	
   

  	
  Shared Savings Fund
  Allocations

  	
   

  
	
  D-2

  	
   

  	
  Shared Savings Fund
  Allocations – Blue Shield 65 Plus

  	
   

  
	
  D-3

  	
   

  	
  Pharmacy Shared Savings
  Fund Allocations

  	
   

  
	
  E

  	
   

  	
  Blue Shield of California
  Allowable Rates

  	
   

  
	
  F

  	
   

  	
  Delegation Responsibilities

  	
   

  
	
   

  	
   

  	
  •

  	
  Attachment
  I – Quality Management Requirements

  	
   

  
	
   

  	
   

  	
  •

  	
  Attachment II – Utilization Management
  Requirements

  	
   

  
	
   

  	
   

  	
  •

  	
  Attachment III – Credentialing
  / Delegation Requirements

  	
   

  
	
   

  	
   

  	
  •

  	
  Attachment IV – Claims Processing
  Requirements 

  	
   

  
	
  G-1

  	
   

  	
  Blue Shield 65 Plus
  Program

  	
   

  
	
  G-2

  	
   

  	
  Blue Shield POS Provisions
  

  	
   

  
	
  H

  	
   

  	
  Professional Stop Loss
  Program

  	
   

  

 

5

 

HMO IPA / MEDICAL GROUP

SHARED SAVINGS PROVIDER AGREEMENT

 

This Agreement is entered into between Prospect Medical Group, Inc  (including Antelope Valley
Medical Group, Nuestra Familia Medical Group, Pegasus Medical Group, Prospect
Medical Group, Prospect Medical Group – Corona, and Prospect Medical Group –
Sherman Oaks), a California corporation (hereinafter “Group”), and California Physicians’ Service, Inc., d.b.a., Blue
Shield of California, a California nonprofit corporation
(hereinafter “Blue Shield”). The Effective Date of this Agreement is the first
day of the month following the 30th day after the signed Agreement
is received from Group.

 

RECITALS

 

A.                                   Blue Shield is licensed as a prepaid health
care service plan under the Knox-Keene Act of 1975 (“the Knox-Keene Act”);

 

B.                                     Blue Shield contracts with individuals,
employer groups and governmental entities to provide or to arrange for the
provision of covered HMO health care services to Members of Blue Shield;

 

C.                                     Group is organized as a legal entity as
identified immediately following Group’s signature on this Agreement and is
licensed and qualified to provide or arrange for the delivery of medical
services to Members of Blue Shield, either directly or through contracting
providers;

 

D.                                    Group and Blue Shield desire that Group
provide or arrange for the delivery of services to Members in accordance with
the terms of this Agreement;

 

E.                                      Except as specifically noted, this Agreement
is applicable to members enrolled under Blue Shield’s HMO Benefit Programs set
forth in Exhibit A, attached hereto. This Agreement shall only apply to
Medicare beneficiaries enrolled in Blue Shield’s Medicare+Choice program (“Blue
Shield 65 Plus”) if such program is specifically identified in Exhibit A. It is
not intended to and does not supersede or amend any other agreement under which
Group or Group Providers provide professional services to Blue Shield’s PPO
Members.

 

6

 

I. DEFINITIONS

 

For
the purposes of this Agreement, terms shall have the following meanings:

 

1.1                                 Agreement Year: is the twelve month period beginning at
12:01 a.m. on the Effective Date of this Agreement, and on each anniversary of
the Effective Date.

 

1.2                                 Authorization: is the procedure for obtaining the prior
approval of Blue Shield, or its delegatee (which may include Group), for the
provision or referral of Covered Services when such approval is required by
Blue Shield.

 

1.3                                 Benefit Program: is a group or individual prepaid HMO benefit
program offered by Blue Shield through health services contracts (and riders
thereto). The Benefit Programs to which this Agreement applies are set forth in
Exhibit A, hereto.

 

1.4                                 Blue Shield Providers(s): are those licensed healthcare providers,
including acute care hospitals (“Blue Shield Hospitals”), which have entered
into agreements with Blue Shield to provide Covered Services to Members.

 

1.5                                 Capitated Professional Services: are those
Covered Services which are described in Exhibit B. hereto as the financial
responsibility of Group. Capitated Professional Services also include any
Covered Services which are not listed in Exhibit B., but which are customarily
provided by IPAs, Medical Groups to their patients. Blue Shield may
periodically amend Capitated Professional Services to include any additional
physician and/or ancillary services which must be provided by law.

 

1.6                                 Capitation: is the monthly payment made by Blue Shield
to Group pursuant to Exhibit C. hereto, which payment, along with applicable
Co-payments, is payment in full for all Capitated Professional Services to
Members.

 

1.7                                 Co-payments: refers to any co-payments, deductibles, and
coinsurance which are specifically described as the financial responsibility of
the Member for a Covered Service in the applicable Health Services Contract
and/or Evidence of Coverage in effect as of the date of service. Any other
amount which Group or Group Provider may seek to recover from Members for
Covered Services constitutes a surcharge and is prohibited by both this
Agreement and by the Knox-Keene Act.

 

1.8                                 Covered Services: are the Medically Necessary healthcare
services which a Member is entitled to receive pursuant to the Health Services
Contract and Evidence of Coverage applicable to the Member. Except as otherwise
provided in the Member’s Health Services Contract and Evidence of Coverage,
Covered Services must generally be referred and authorized in conformity with
the Group’s and Blue Shield’s Utilization Management program.

 

7

 

1.9                                 Emergency Services: are Covered Services to address a medical
condition manifesting itself by acute symptoms of sufficient severity
(including severe pain) so as to cause the prudent layperson to conclude that
the absence of immediate medical attention could reasonably be expected to
result in: (i) placing the Member’s health in serious jeopardy; (ii) serious impairment
to bodily functions; (c) serious dysfunction of any bodily organ or part. For
Blue Shield 65 Plus Members, Emergency Services also include any other services
defined as emergency services in 42 C.F.R. §422.113.

 

1.10                           Evidence of Coverage: is the document issued to the Member
pursuant to California law which describes the benefits, limitations and other
features of the Benefit Program in which the Member is enrolled.

 

1.11                           Group Provider: is a physician (“Group Physician”),
ancillary provider, or other provider with whom Group has entered into a
contract for the provision of Capitated Professional Services.

 

1.12                           Group Service Area: is that aggregate geographic area determined
by and located within a thirty (30) mile radius from Group’s designated participating
hospitals and including all zip codes containing a participating PCP facility.
A PCP facility refers to the Group’s principal and satellite offices, if an
integrated medical group, and to the offices of each of its contracted or
employed PCPs, if an IPA or medical foundation. The zip codes describing the
location of Group’s PCP facilities are set forth in Exhibit A., attached
hereto. If subsequent to the Effective Date of this Agreement, Group adds a new
PCP, the Service Area and zip code list in Exhibit A. shall be automatically
amended if necessary to include the zip code in which the PCP facility is
located. The Group Service Area shall be used to determine in-area from
out-of-area services and to proscribe the maximum area in which Members who
select a Group PCP must live or work.

 

1.13                           Health Services Contract: is the group or
individual contract, applicable to the Member, which sets forth the Benefit
Program and the Covered Services to which the Member is entitled, as well as
the Member’s Co-payment obligation.

 

1.14                           Medically Necessary: services or supplies means those medical
services and supplies which are provided in accordance with recognized
professional medical and surgical practices and standards which are determined
to be: (a) appropriate and necessary for the symptoms, diagnosis or treatment
of the Member’s medical condition; and (b) provided for the diagnosis and
direct care and treatment of such medical condition; and (c) not furnished
primarily for the convenience of the Member, the Member’s family, or the
treating provider or other provider; and (d) furnished at the most appropriate
level which can be provided consistent with generally accepted medical
standards of care; and (e) consistent with Blue Shield Medical Policy.

 

1.15                           Member: is an individual who is, according to Blue Shield’s rules and
policies, eligible for and enrolled (or otherwise covered by Blue Shield as a
newborn) in a Blue Shield Benefit Program

 

8

 

described in Exhibit A., and who has selected or been assigned (either
prospectively or retroactively) to a Group Primary Care Physician as his/her
primary care physician. Blue Shield retains final authority to determine
whether an individual is or is not a Member assigned to a Group PCP.

 

1.16                           Primary Care Physician (PCP): is a family
practitioner, general practitioner, internist, or pediatrician who has been
employed or contracted by Group to provide primary care services to Members and
to be responsible for coordinating, referring, and managing the delivery of
Covered Services to the Member. A PCP shall include an
obstetrician-gynecologist who is qualified and has agreed with Group to serve
as a PCP, and may also include other specialists if approved in writing by Blue
Shield.

 

1.17                           Provider Manual: refers to the manuals developed by Blue
Shield which set forth the operational rules and procedures applicable to the
Group and Group Providers. The Provider Manual will include the HMO Provider
Manual, the HMO Benefit Guidelines and the Blue Shield Medical Policy Manual.

 

1.18                           Shared Savings Services: refer to the
Covered Services which are not Capitated Professional Services and as to which
the Group and Blue Shield share financial responsibility under the Shared
Savings Settlement set forth in Exhibit B.

 

1.19                           Urgent Care Services: are those Covered Services (other than Emergency Services) which are
Medically Necessary to prevent serious deterioration of a Member’s health,
alleviate severe pain, or treat an illness or injury with respect to which
treatment can not reasonably be delayed. For Blue Shield 65 Plus Members,
Urgent Care Services, at a minimum, include all services which are defined by
Center for Medicare and Medicaid Services (CMS) as “Urgently Needed Services”.

 

II. OBLIGATIONS OF GROUP

 

2.1                                 Capitated Professional Services. Group shall
provide or arrange for the provision of all Medically Necessary Capitated
Professional Services to Members and shall be fully financially responsible for
same. Such services shall be provided through Group Providers who have been
credentialed as required by this Agreement and as more fully described in the
Provider Manual. Without limiting the foregoing, Group shall: (i) be
financially responsible for Emergency and Urgent Care Services provided by
healthcare providers in addition to Group Providers, as set forth in Exhibit
B., (ii) refer Members, at Group’s cost and when Group Providers are not
available to provide Medically Necessary Capitated Services, to non-Group
Providers; (iii) provide all preventive health services to which a Member is
entitled under his/her Benefit Plan; and, (iv) make available to Members those
health education programs routinely provided by Group and Group Providers at no
charge to their patients.

 

9

 

2.2                                 Referrals For Other Covered Services.

 

(a)                                  Subject to applicable Authorization
requirements set forth in the Provider Manual, Group shall, as Medically
Necessary, refer Members to Blue Shield Providers (including Blue Shield
Hospitals) for those services which are Covered Services but which are not
Capitated Professional Services. Upon and following such referral, Group shall
coordinate the provision of such Covered Services to Members and ensure
continuity of care.

 

(b)                                 Group shall utilize the organ transplant
provider network established by Blue Shield for the provision of selected organ
transplants. Blue Shield shall, from time to time, designate which transplant
centers are to be utilized for specified transplants.

 

(c)                                  In addition, upon notice by Blue Shield to
Group that Blue Shield has developed other specialty networks for the provision
of Covered Services that are not Capitated Professional Services, Group shall
utilize such applicable specialty network(s) for the provision of such services
to Members, unless (except for the organ transplant provider network referred
to above) Group demonstrates to Blue Shield’s reasonable satisfaction that
Group Providers are able to offer comparable services of comparable quality and
cost effectiveness to the services to be offered by Blue Shield’s specialty
network.

 

2.3                                 Availability.

 

(a)                                  Group shall ensure that routine Capitated
Professional Services shall be available to Members during normal physician
business hours (generally, Monday through Friday, 9:00 a.m. to 5:00 p.m.) and
Emergency Services and telephone advice and referral shall be available, as
Medically Necessary, twenty-four (24) hours per day, seven (7) days per week,
three hundred sixty five (365) days per year. Appointment, scheduling, and
office waiting times shall be within the applicable guidelines set forth in the
Provider Manual. Capitated Professional Services shall at all times during the
term of this Agreement be made readily available through PCP facilities located
in the zip code areas set forth in Exhibit A.

 

(b)                              Group shall ensure that each Group Physician
maintains adequate on-call coverage arrangements with another Group Physician
to provide coverage for Members when that Group Physician is temporarily
unavailable. The provision of services to Members by the on-call Group
Physician shall be governed by the terms of this Agreement.

 

(c)                               Group and Group Providers shall participate
in all Benefit Programs set forth in Exhibit A. Except for those PCPs who
generally only serve, or generally do not serve, geriatric patients in their
practices, or pediatricians who serve only pediatric patients, or OB/GYNs who
serve only female patients, Group shall ensure that each of its PCPs

 

10

 

accepts all of the Members who select them during such times that such
PCP’s practice is open to new patients.

 

(d)                                 Group shall ensure that at any given time,
the practices of an adequate number of its PCPs are open to Members to meet all
access standards required by Blue Shield, and its regulatory agencies. Each
PCP, whether or not his/her practice is closed to new patients, shall accept
each Member (and such Member’s immediate family members) who is or had been a
patient of PCP at anytime during the two (2) years immediately prior to such
Member selecting physician as his/her PCP. Without limiting the foregoing,
Group shall ensure that at anytime that a PCP is accepting new patients of
other health care service plans, such PCP accepts Members hereunder. In the
event a PCP, during the term of this Agreement, elects to close his/her
practice to new Members, or cease to be a Group Provider, Group shall give Blue
Shield sixty (60) days prior written notice of such closure.

 

(e)                                  Group acknowledges that Blue Shield retains
full authority to develop and periodically modify its procedures for Member PCP
selection and the assignment of the Member to a Medical Group when the selected
PCP is in multiple medical groups. Group and its Group Providers shall
cooperate with Blue Shield’s Member PCP selection process and shall assist
Members in selecting a PCP when requested to do so by the Member or Blue
Shield.

 

(f)                                    In providing Capitated Professional Services
hereunder, Group shall comply with all obligations of state and federal law
relating to continuity of care and continued access to terminated providers.

 

(g)                                 Group shall, at all times during the term of
this Agreement, maintain an adequate network of Group Providers in number and
type to comply with the requirements of state and federal law and to ensure
that Members have timely and reasonable access to primary, specialty and
ancillary care, as set forth in the Provider Manual. All providers who are
designated as Group Providers by Group and are communicated to be such by Group
to Blue Shield shall at all times be reasonably available to Members as is
appropriate.

 

2.4                                 Standards For Provision of Care.

 

(a)                                  Group and Group Providers shall maintain
facilities and equipment which meet all applicable legal requirements,
including accessibility, and which otherwise comply with the provider
credentialing requirements developed by Blue Shield for such providers, as more
fully described in the Provider Manual. Accessibility shall include compliance with
the requirements of the Americans With Disabilities Act.

 

11

 

(b)                                 To assist Group in meeting Blue Shield
requirements hereunder, Group shall, through a duly designated representative,
attend occasional provider education/orientation sessions conducted by Blue
Shield.

 

(c)                                  In providing Capitated Professional Services
hereunder Group shall utilize only Group Providers who are credentialed and
re-credentialed in accordance with Blue Shield’s standards as set forth in the
Provider Manual, unless the Medically Necessary service is not available from a
Group Provider. Group and/or each Group Provider shall provide to Blue Shield,
on request, credentialing information, in such form as reasonably required by
Blue Shield.

 

(d)                                 Group represents and warrants that during the
term of this Agreement, each physician through whom it will provide Capitated
Professional Services hereunder shall: (i) maintain a current, unrestricted
license to practice medicine in California; and, (ii) maintain such staff
privileges with at least one Blue Shield Hospital as necessary for physician to
provide services to Members hereunder; and, (iii) be certified and eligible to
participate in the Medicare Program. Group further represents and warrants
that: (iv) each non-physician Group Provider shall maintain a current and
unrestricted license to practice his/her profession or provide the contracted
service; and, (v) use of any physician extender shall be in strict compliance
with the rules of the California Medical Board.

 

(e)                                  Each Group Physician shall authorize each
hospital at which he/she maintains staff privileges to notify Blue Shield
should any disciplinary or other action of any kind be initiated against such
physician which could result in any suspension, reduction, or modification of
his/her hospital privileges.

 

2.5                                 Providers Not Meeting Standards. Group shall
promptly notify Blue Shield as of the date Group knows that a Group Physician
no longer meets any of Blue Shield’s credentialing criteria as set forth in the
Provider Manual.

 

2.6                                 Group Service Contracts. Group shall
provide to Blue Shield a written list of its Group Providers, and each month
notify Blue Shield of any additions or deletions to such list (including any
notices of termination of Group Providers), in addition to which Group shall
provide Blue Shield with immediate notice of termination of Group Providers.
Further, Group shall provide timely response to reasonable periodic requests
from Blue Shield for verification of the current list of Group Providers.
Group’s contracts with Group Providers shall be in writing and shall ensure
that such providers: (a) seek payment for the provided services only from Group
and under no circumstances seek payment from the Member or from Blue Shield;
(b) under no circumstances balance bill or surcharge Members for Covered
Services (including in the event of Group and/or Blue Shield’s insolvency); (c)
maintain and disclose such records to Blue Shield and to Governmental Officials
as set forth in Article IX hereof; (d) permit

 

12

 

Government Officials and Blue Shield to inspect its offices, records,
and facilities as set forth in Article X; (e) cooperate with and
participate in Blue Shield’s and Group’s quality improvement and utilization
management programs and Member grievance and appeal procedures; and, (f)
maintain such professional and general business liability insurance as set
forth in Article VIII hereof. Upon Blue Shield’s request, Group’s form of
provider contract(s), along with the executed signature pages to such
contracts, shall be provided to Blue Shield. Group may maintain the
confidentiality of its payment rates (other than bonus/withhold/shared risk or
savings arrangements), provided that such does not result in concealment or
misunderstanding of other terms and provisions of the contract. Upon Blue
Shield’s request, such contracts shall be promptly amended to contain any
provisions required to be contained in provider contracts by either the
Department of Managed Health Care (“DMHC”), CMS, or any other governmental
agency.

 

2.7                                 Quality Improvement/ Case Management/
Utilization Management Programs. Group and Group Providers shall fully
cooperate with and participate in Blue Shield’s quality improvement and
utilization management programs, including its peer review functions,
authorization procedures, and quality improvement committees, as described in
the Provider Manual. Group shall immediately notify Blue Shield of those Members
and cases which Group has identified as requiring additional resources and case
management (see Provider Manual for commonly referred diagnoses and conditions)
and shall cooperate in the management of these cases. Group and Group Providers
shall fully cooperate with Blue Shield with regard to the Health Employer Data
Information Sets (HEDIS) measurements and HEDIS audits, guideline development,
preventive services utilization, disease/risk management, clinical service
monitoring and quality improvement studies and initiatives. Group and Group
Providers shall comply with Blue Shield’s Medical Policy. The quality
improvement and quality management obligations of Blue Shield are not delegated
to Group; however, Group shall have its own fully functional Quality Management
Program, as described in Attachment 1 to Exhibit F hereto, that is cooperative
with and integrated into the Blue Shield Quality Management Program. Group
shall comply with and accept as final, the decisions of the Blue Shield quality
improvement and utilization management program, and pending resolution of any
dispute through the dispute resolution process, comply with the decisions of
the Blue Shield quality improvement and utilization management program.

 

2.8                                 Right to Re-Assign Members. Blue Shield
reserves the right to re-assign Members from Group to another medical group
contracting with Blue Shield, or from a Group Physician to another Group
Physician, or to limit or deny the assignment or selection of new Members to
Group or a Group Physician Provider: (i) during any termination notice period;
or (ii) if Blue Shield determines that Capitated Professional Services are not
being properly provided to, or arranged for, such Members as required by this
Agreement and that such failure poses an immediate threat to the Members health
and safety. In the event that Blue Shield takes any action permitted by this
Paragraph 2.8, this Agreement shall continue in effect unless terminated by
either party as set forth in Article XII of the Agreement.

 

13

 

2.9                                 Outpatient Drug Formulary and Pharmacy
Information.

 

(a)                                  Group and Group Providers shall comply with
the outpatient drug formulary, drug prior authorization requirements, and
pharmacy benefit design (including maximum supplies, use of generics, and mail
order for maintenance drugs), as adopted and periodically modified by Blue
Shield and as set forth in the Provider Manual.

 

(b)                                 In the event that Blue Shield provides to
Group computerized or electronic data regarding prescriptions obtained by
Members and drugs supplied, Group agrees that such information is provided for
the limited and restricted purpose of utilization management. Under no
circumstances may Group copy or share such data with others, or utilize such
data, in whole or in part, directly or indirectly, to negotiate rebates,
discounts, or contracts with pharmaceutical manufacturers or other suppliers of
pharmaceuticals.

 

(c)                                  Group acknowledges that Blue Shield and its
designees retain sole authority to perform, in relationship to outpatient
pharmacy, claims processing, formulary development, a prior authorization
program, selection and contracting of a pharmacy network, and determination of
pharmacy benefit design.

 

2.10                           Reciprocity.

 

(a)                                  Group shall participate in the statewide Blue
Shield health services delivery network and shall accept referrals of Blue
Shield members (members of Blue Shield who are not Members hereunder) and/or
provide Emergency Services to such members, when such members are the financial
responsibility of other Blue Shield medical groups. Except as Group and the
other medical group to which such Blue Shield member is assigned agree, Group
or Group Providers shall accept as compensation for such services, the rates
set forth in Exhibit E. (the “Blue Shield Allowable Rates”) minus the Blue
Shield member’s applicable Copayment.

 

(b)                                 In the event that a Member receives Emergency
Services or Urgent Care Services from or Group refers a Member for Capitated
Professional Services to a healthcare provider who is neither a Group Provider
nor a provider who is obligated to accept the compensation described in subpart
(a) above, but with whom Blue Shield has negotiated compensation rates, then
Blue Shield, at Group’s request, may compensate such provider for the Capitated
Professional Services provided to the Member and deduct the amount of such
payment from any amount then or thereafter owed by Blue Shield to Group. This
provision is intended for specific occasional services only and Blue Shield
shall have no obligation hereunder to compensate providers contracted to Group
in the event of Group’s default in compensating such providers.

 

14

 

(c)                                  Affiliates. In the event that Group or a Group Provider provides services to an
individual who is not a member of Blue Shield, but who is entitled to coverage
for or payment of the services so provided by virtue of enrollment in a health
plan of an Affiliate of Blue Shield, then Group and Group Providers agree to
render services and to accept payment of the Blue Shield Allowable Rates
(Exhibit E.) from the Affiliate as full and complete payment for such services
less any co-payment, coinsurance or deductible owed by the individual under the
Affiliate health plan. Group agrees to look solely to the Affiliate and not to
Blue Shield for payment for such services. For purposes of this Paragraph,
“Affiliate” means an organization that is: (i) wholly owned by Blue Shield, or,
(ii) under common ownership or control with Blue Shield (a sister corporation),
or, (iii) a joint venturer with Blue Shield in an enterprise under which the
Affiliate is obligated to provide coverage for/pay for the services in
question.

 

2.11                           Termination of Physician/Patient Relationship.

 

(a)                                  Group or a Group Provider may terminate the
professional relationship with a Member only with Blue Shield’s consent and in
accordance with the procedures set forth in the Provider Manual. In the event a
Group Provider terminates his/her relationship with a Member, Group shall
assist the Member in selecting another Group Provider for the provision of
Capitated Professional Services.

 

(b)                                 In no event may either Group or a Group
Provider terminate the professional relationship with a Member because of such Member’s
medical condition, or the amount, variety, or cost of Covered Services that are
required by the Member.

 

(c)                                  Group acknowledges that a Member may request
transfer between PCPs, and between Blue Shield medical groups, in accordance
with the Member’s applicable Health Services Contract and Evidence of Coverage.
As appropriate, Group agrees to accept the transfer of a Blue Shield member to
Group at the request of Blue Shield.

 

(d)                                 Notwithstanding the foregoing, when the
consent of CMS or any other governmental agency to the termination of a
physician-patient relationship is required pursuant to the rules and
regulations governing the Medicare Program or any other governmental program,
neither Group nor a Group Provider may terminate the physician-patient
relationship with a Blue Shield 65 Plus Member or such other Member without
first obtaining the consent of Blue Shield, CMS, or as applicable, the other
governmental agency.

 

2.12                           Encounter Data and Other Reporting. Group shall
submit to Blue Shield such encounter/claims data (“Encounter Data”) as set
forth in and in accordance with the requirements set forth in the Provider
Manual. Group also shall provide to Blue Shield such data regarding Group
turn-around time for authorizations and other administrative services as set
forth in the Provider Manual.

 

15

 

2.13                           Disclosures.

 

(a)                                  In addition to the notice obligation set
forth in Paragraph 2.5, Group shall notify Blue Shield immediately in writing
when it becomes aware of the occurrence of any of the following events: (i)
Group’s or a Group Provider’s liability insurance is canceled, terminated, not
renewed, or materially modified; (ii) Group or a Group Provider has become a
defendant in a lawsuit filed by a Member or is required or agrees to pay
damages to a Member for any reason; (iii) an act of nature or any event occurs
which has a materially adverse effect on Group’s ability to perform its
obligations hereunder; (iv) a petition is filed to declare Group bankrupt or
for reorganization under the bankruptcy laws of the United States or a receiver
is appointed over all or any portion of the Group’s assets; or (v) Group is
sued, or suit is threatened in writing, by a healthcare provider for nonpayment
of compensation; or (vi) any other situation arises which could reasonably be
expected to materially affect Group’s ability to carry out its obligations
under this Agreement. Group shall also provide Plan with thirty (30) days’
advance notice of any proposed material change in the ownership of Group, a
change in its management services organization (if any), or the sale of all or
substantially all of the assets of the Group and obtain Plan’s prior approval
of same, which approval shall not be unreasonably withheld.

 

(b)                                 Annually, within sixty (60) days following
the end of Group’s fiscal year or thirty days following such information being
available to Group, Group shall provide to Blue Shield a copy of its most
recent annual income statement, balance sheet, and statement of cash flow,
which shall be prepared in accordance with generally accepted accounting
principles and shall be certified by Group’s chief executive officer or chief
financial officer. Group shall provide a copy of any audited financial
statements it may have to Blue Shield. A narrative or work sheet describing the
calculation of Group’s IBNR shall accompany the submitted financial statements.
The information set forth in this paragraph shall also be provided by Group to
Blue Shield in the event there is an actual or proposed change in ownership of
Group. Group shall also, upon request, provide Blue Shield with copies of
quarterly financial statements, which shall include a balance sheet, statement
of income and statement of cash flow prepared in accordance with generally
accepted accounting principles.

 

(c)                                  Group shall provide Blue Shield with monthly
claims reports required by Blue Shield in order to comply with state and
federal law and to ensure compliance by Group with the requirements of
Article III. hereof.

 

(d)                                 Blue Shield agrees that it shall treat as
confidential all financial information provided by Group in accordance with
subparts (b) and (c) of this section unless such information is publicly
available, and shall not disclose such information to others except as required
by law or as requested by Blue Shield’s regulators.

 

16

 

2.14                           Direct Access Programs. Group shall
participate in and comply with the Access+ and CareDirect program requirements
as set forth in the Provider Manual.

 

2.15                           Addition of New Plan Benefit Programs. In the event
that Blue Shield develops one or more new Benefit Programs and requests that
Group agree to amend this Agreement to add such new Benefit Program(s) to this
Agreement, Group shall in good faith consider such request and make best
efforts to resolve all matters (including the new Benefit Program compensation)
so that a finalized amendment to this Agreement may be executed within thirty
(30) days of Blue Shield’s request.

 

2.16                           Acceptance
of Members. Group shall accept all Members who select or who are assigned to Group
or Group PCPs and who live or work within the Group Service Area. This
requirement shall not apply to Members with whom the Group’s relationship was terminated
in accordance with section 2.11 hereof. Blue Shield shall undertake
reasonable efforts in accordance with a standard of good faith to assure that
Members who select or are assigned to Group or Group PCPs live or work within
the Group Service Area.

 

III. PAYMENT OF PROVIDERS BY GROUP

 

3.1                                 Timely Group Payment. Group shall process claims from and pay its
Group Providers and other healthcare providers for Capitated Professional
Services (including without limitation the Emergency Services or Urgent Care
Services which are Group’s responsibility hereunder) in a timely fashion as set
forth in Paragraph 13.4 hereof. If Group delegates to a subcontractor (either a
management company, claims administrator, subcontracted capitated provider,
etc.) the obligation to process claims on Group’s behalf, then Group shall: (i)
immediately notify Blue Shield of such delegation, including any change in the
delegated entity, and, (ii) require that the subcontractor comply with the
claims payment procedure requirements set forth in this Agreement.

 

3.2                                 Failure To Make Payment.

 

(a)                                  In the event that Group occasionally fails to
pay a Group Provider or other healthcare provider for Capitated Professional
Services within the time frames set forth in this Agreement, and Blue Shield
reasonably determines that such amount is due and payable by Group, Blue Shield
may, after notice to Group, pay the amount due, and deduct and offset such
payment from any amount then or thereafter payable by Blue Shield to Group.

 

(b)                                 In the event of Group’s continued or repeated
failure to compensate Group Providers or other healthcare providers within the
time limits required by this Agreement as set

 

17

 

forth in Section 13.4, Blue Shield may elect to pay claims on
behalf of Group and offset the amount of such payments, along with a monthly
administrative fee (not to exceed 10% of monthly Capitation) from any amounts
then or thereafter owed by Blue Shield to Group, including capitation. Prior to
any such action, Blue Shield shall have provided Group with written notice of
the repeated failures and an opportunity to cure the noncompliance.

 

(c)                                  Group acknowledges that any such direct
payments to Group Providers by Blue Shield constitute partial mitigation of
damages incurred by Blue Shield for Group’s failure to perform its obligations
under this Agreement.

 

IV. PERFORMANCE
OF DELEGATED FUNCTIONS

 

4.1                                 Delegation. Blue Shield delegates to Group the
responsibilities set forth in Exhibit F, attached hereto, and Group agrees to
accept and perform such delegated responsibilities in full compliance with the
delegation criteria and standards for performance of delegated activities set
forth in Exhibit F, and the Provider Manual. Responsibility for all functions
not so delegated is retained by Blue Shield. With respect to matters delegated,
Blue Shield retains final authority and responsibility, including without
limitation, the determination of the Medical Necessity of Covered Services, the
determination as to which services are Covered Services, and the determination
as to who is or is not a Member.

 

4.2                                 Blue Shield Monitoring and Oversight. Group
acknowledges Blue Shield’s responsibility to monitor Group’s compliance with
the delegation criteria and standards and agrees to cooperate with Blue
Shield’s monitoring of such compliance, as set forth in Exhibit F, and the
Provider Manual.

 

4.3                                 Termination of Delegation.

 

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

 

(b)                                 In lieu of the notice of delegation with
corrective action and opportunity to correct deficiencies, as set forth in
Paragraph 4.3(a) above, Blue Shield may at anytime within its sole discretion,
terminate all or portions of the delegation granted to Group hereunder by
providing no less than sixty (60) days prior written notice. Blue Shield

 

18

 

may also terminate all or portions of the delegation granted to Group
hereunder if Blue Shield determines, after consultation with Group, that Group
either no longer meets all criteria or is not performing (or is reasonably not
likely to perform) the delegated activities in full compliance with the
standards. In such event, Blue Shield shall give to Group no less than thirty
(30) days prior notice of such termination of delegation, and if Group, during
such notice period, cures such deficiencies to Blue Shield’s reasonable
satisfaction, Blue Shield may, in its sole discretion, withdraw such
termination. The reduction amount set forth in Exhibit F, is intended solely as
a penalty and will cease when Group has demonstrated successful implementation
of the corrective action plan.

 

(c)                                  Upon termination of all or part of the
delegation pursuant to this Article IV, Blue Shield may, in its sole
discretion, reduce the Capitation amount otherwise payable to Group hereunder
by a per member amount as set forth in Exhibit F, for each delegated service,
which amount is not intended to represent the portion of the capitation amounts
that are allocated to cover the cost of performance of the delegate service by
Group nor an estimate of the costs incurred by Blue Shield as a result of the
termination of such delegation; rather, the amounts set forth in Exhibit F. are
intended as a penalty for Group’s failure to meet the standards established for
performance of the delegated service.

 

V. OBLIGATIONS OF BLUE SHIELD

 

5.1                                 Directory and Use of Names.

 

(a)                                  Blue Shield shall develop a directory of
Primary Care Physicians and certain specialists and other healthcare providers
participating in Blue Shield which shall be distributed to Members. Blue Shield
may provide a draft of such directory to Group and Group may, within five (5)
working days thereafter, submit to Blue Shield, any additions, deletions, or
modifications to be included in the directory. Group, on behalf of itself and
each of its Group Providers, agrees that the following information may be
included in Blue Shield’s marketing materials, Blue Shield publications
provided to present or potential Members and subscriber groups, and in other
written or electronic information sources provided to present or potential
Members and subscriber groups: (i) Group’s name, address, phone number; (ii)
the names, addresses, phone numbers, areas of practice of its Group Providers
(and other provider specific information); and, (iii) such other types of
information regarding Group and Group Providers which are reasonable to include
in directories, marketing materials, or publications. Group and Group Providers
agree that in the event this Agreement is terminated, or the listing
information is or becomes incorrect or incomplete, Blue Shield will have no
obligation to correct, delete, or update such listing information until such
time as Blue Shield, in its sole discretion, issues a new directory, marketing
material, or Blue Shield publication.

 

19

 

(b)                                 Except as provided in subpart (a) above,
neither Blue Shield nor Group shall use the other’s name, trademark(s), or
service mark(s), without the other’s prior written consent, which consent shall
not be unreasonably withheld.

 

5.2                                 Provider Manual. Blue Shield shall develop a Provider Manual,
and Group and Group Providers shall comply with its provisions. Blue Shield
may, in its discretion, periodically modify the Provider Manual by written
notice to Group. The Provider Manual, as so amended, is incorporated herein by
reference. To the extent of any conflict between this Agreement and the
Provider Manual, the terms of this Agreement shall govern. Blue Shield will
provide Group with 60 days’ advance notice of any proposed changes in the
Provider Manual. In the event Group reasonably concludes that a change in the
Provider Manual is material and would have an adverse financial impact on the
Group, then Group and Blue Shield shall confer in good faith regarding the
change. If Group and Blue Shield are unable to reach agreement regarding the
change, then Group may elect to terminate this Agreement pursuant to
Section 12.2 hereof, and the Provider Manual change to which Group
objected shall not be effective as to Group during the termination notice
period.

 

5.3                                 Blue Shield Reports. Blue Shield shall provide to Group such
reports regarding utilization and other matters as set forth from time to time
in the Provider Manual.

 

5.4                                 Administrative Services. Blue Shield
shall perform those services incident to the administration of a health care
service plan including, but not limited to, the processing of enrollment
applications, assignment of Members to PCPs, and the administration of claims
for Covered Services which are not Capitated Professional Services or Capitated
Hospital Services.

 

VI.
ELIGIBILITY OF BLUE SHIELD
MEMBERS

 

6.1                                 Identification Cards and Verification. Blue Shield shall issue identification
cards to Members as set forth in the Provider Manual. Production of such
identification cards shall be indicative of a person’s status as a Member, but
shall not be conclusive of such status. Blue Shield shall provide or shall make
available to Group in formats that may be accessed by Group electronically or
telephonically, information regarding Member status and Group/Primary Care
Physician selection.

 

6.2                                 Verification of Eligibility. As set forth in
the Provider Manual, Group and Group Providers shall verify the eligibility of
Members and provide services to individuals claiming eligibility but whose name
does not appear on Blue Shield’s Eligibility List. Verification of eligibility
shall not limit the rights of Blue Shield to retroactively adjust eligibility,
as set forth in Paragraph 6.3 of this Agreement.

 

20

 

6.3                                 Eligibility List and Modifications.

 

(a)                                  Blue Shield shall provide to Group on a
monthly basis within ten days of the start of the month, a member eligibility
report and a member eligibility change report, as further described in the
Provider Manual. These reports shall be submitted to the Group electronically,
unless both Blue Shield and the Group agree that it may be submitted in
writing. Blue Shield shall attempt to discourage retroactive cancellation or
retroactive addition of Members. However, Blue Shield may make exceptions as
may be necessary for administrative or business reasons. Subsequent Capitation
to Group will be adjusted to reflect the retroactive addition or deletion of Members.
With the exception of retroactive changes for Members enrolled in Blue Shield
65 Plus and those Members enrolled through FEHBP, retroactive additions or
deletions shall not exceed ninety (90) days.

 

(b)                                 In the event Blue Shield retroactively
deletes a Member and Group has provided Capitated Services to such deleted
Member during the period of retroactive deletion, Blue Shield shall compensate
Group for such services only if Group has unsuccessfully billed the Member
through two (2) billing cycles. The amount owed by Blue Shield for such Covered
Services provided during the period of retroactive deletion shall be the Blue
Shield Allowable Rates set forth in Exhibit E., net of any Co-payments.
Notwithstanding the foregoing, Blue Shield shall have no obligation to
compensate Group for such services in the event that such Member is covered
during the period of retroactive deletion by another health care service plan,
insurer, or third party payor (including Medicare).

 

(c)                                  In the event a person is retroactively added
as a Member, Blue Shield’s financial responsibility shall be the payment of
Capitation for the period of retroactive addition. Any payments collected from
such Member by Group or Group Providers for Covered Services hereunder, other
than applicable Co-payments, shall be refunded to the Member.

 

21

 

VII. COMPENSATION & FINANCIAL TERMS

 

7.1                                 Capitation Payments.

 

(a)                                  Blue Shield shall pay Group, on a monthly
basis, the applicable Capitation set forth in Exhibit C. Such Capitation shall
be paid for Members not enrolled in the Blue Shield 65 Plus Benefit Program no
later than the twentieth (20th) day of the month. Capitation shall be paid for
Members who are enrolled in Blue Shield’s Blue Shield 65 Plus Benefit Program
no later than the later occurring of the twentieth (20th) day of the month or
five (5) business days following the date Blue Shield receives the CMS
capitation payment for such Members.

 

(b)                                 Medicare Primary. For those Members for whom Medicare is
primary, Group or Group Providers shall bill Medicare as the primary payor for
Medicare covered benefits. For such Members, Blue Shield shall pay a reduced
Capitation as set forth in Exhibit C., and Group shall be financially
responsible for all Capitated Professional Services (including those which are
not Medicare benefits) which are Covered Services for said Members. In
addition, neither Group nor Group Providers may charge or collect from such
Members the Member’s Medicare coinsurance and deductible. The Medicare Primary
Member, however, shall be responsible for his/her applicable Co-payment set
forth in the applicable Health Services Contract and Evidence of Coverage.

 

(c)                                  The Capitation paid shall be for all Members
eligible on the first (1st) day of the month for which the Capitation is to be
paid, who have chosen a Group physician as their PCP. Group shall accept
payment of Capitation in accordance with this Agreement, and applicable
Co-payments and coordination of benefits collections, as payment in full for
all Capitated Professional Services, administrative services, and other
services rendered by Group pursuant to this Agreement.

 

(d)                                 In the event this Agreement terminates on a
day other than the last day of a month, Blue Shield may pro-rate the Capitation
due for said month based on the number of days in said month covered by the
Agreement to the total number of calendar days in said month.

 

7.2                                 Services Other Than Capitated Professional
Services.

 

(a)                                  In the event that Group provides Emergency
Services, Urgent Care Services, or authorized Covered Services to Blue Shield’s
HMO members who are not Members hereunder (and for whom such services are not
the financial responsibility of another capitated Blue Shield medical group),
Group shall bill Blue Shield for the provision of such services as set forth in
the Provider Manual. Blue Shield shall pay Group for the services described in
this Paragraph 7.2 at the rates set forth in Exhibit E., minus any

 

22

 

applicable Co-payment. All such billings shall be delivered to Blue
Shield within sixty (60) days of the date of service. Blue Shield may deny
payment for any bills not received by Blue Shield within one hundred eighty
(180) days of the date of service and in such event, neither Group nor Group
Providers may bill the Member for such services.

 

(b)                                 Notwithstanding the foregoing subpart (a), in
the event that Blue Shield is not the primary payor, Group shall not make any
demand for payment from Blue Shield until all primary sources of payment have
been pursued. Blue Shield’s obligation hereunder with respect to such Covered
Services provided to members who are not Members hereunder, shall be limited to
the amount, if any, which when added to the amount obtained by Group from such
primary payors, equals the amount of compensation to which Group is entitled
under this Agreement for such services.

 

7.3                                 Co-payments. Group shall collect and retain, as
additional compensation, the Member’s applicable Co-payment for Covered
Services provided. Such Co-payment obligation shall not be waived by Group or
Group Providers.

 

7.4                                 Stop Loss Coverage. During the term of this Agreement, Group
shall either obtain professional stop loss coverage through Blue Shield under the
terms and conditions set forth in Exhibit H attached hereto or shall obtain
professional stop loss coverage from a third party insurer acceptable to Blue
Shield. Upon request, certificates and other proof of such coverage shall be
provided to Blue Shield. Group shall provide Blue Shield with timely notice of
cancellation of coverage or change in carrier. If Group elects to have Blue
Shield provide such stop loss coverage, by so indicating on the Signature Page
hereto, Blue Shield shall provide and charge Group for stop loss coverage as
set forth in Exhibit H.

 

7.5                                 Shared Savings Programs.

 

(a)                                  Blue Shield shall establish a Shared Savings
Program pursuant to which Blue Shield and Group share savings for the cost of
Covered Shared Savings Services provided to Members during the Agreement Year.
The provisions of the Shared Savings Program for Members who are enrolled in
Benefit Programs other than Blue Shield 65 Plus are set forth in Part A of
Exhibit D. The provisions of the Shared Savings Program for Blue Shield 65 Plus
Members are set forth in Part B of Exhibit D.

 

(b)                                 Blue Shield shall establish a Pharmacy Shared
Savings Fund Program pursuant to which Blue Shield and Group share savings for
the cost of Covered Outpatient Prescription Drug services provided to Blue
Shield 65 Plus Members during the Agreement Year. The provisions of the
Pharmacy Shared Savings Fund Program are set forth in Part C. of Exhibit D.

 

23

 

(c)                                  Blue Shield may offset any amount owed to
Blue Shield by Group under a Shared Savings Program, Pharmacy Shared Savings
Fund, or other risk sharing or incentive agreement (regardless of year owed or
under which agreement owed) from any amount, other than Capitation and
Professional Stop Loss Program payments made pursuant to Exhibit H, owed by
Blue Shield to Group under this or any other agreement between Blue Shield and
Group.

 

(d)                                 In the event that Group has contracted with a
provider for services at rates which are more favorable than the rates obtained
by Blue Shield and a Shared Savings Service is provided by such provider to a
Member hereunder, Group shall make best efforts to cooperate with Blue Shield
to obtain such more favorable rate for the provision of such Shared Savings
Service to such Member.

 

(e)                                  In the event Group wishes to dispute Blue
Shield determinations regarding the Shared Savings Program settlements, it
shall notify Blue Shield in writing within sixty (60) days following such
settlement determination, and if such dispute is not resolved by the parties,
Group may request arbitration as set forth in Article XI.

 

7.6                                 Blue Shield POS Benefit Program. This Agreement
shall apply to Blue Shield POS Benefit Programs only if so indicated on Exhibit
A. attached hereto. Compensation to Group for Members enrolled in a Blue Shield
POS Benefit Program shall be as described in Exhibit G-2 attached hereto. Blue
Shield may offset surpluses in the POS Out-of-Network Funds settlements against
any deficits in any other risk or incentive agreement. Blue Shield shall not
offset any deficits in the POS Out-of-Network Funds settlements against any
other amounts owed to Group by Blue Shield.

 

7.7                                 Third Party Liens. In the event a Member seeks and obtains a
recovery from a third party or a third party’s insurer for injuries caused to
that Member, and only to the extent permitted by the Member’s Evidence of
Coverage and by California law, Group shall have the right to assert a third
party lien for and to recover from the Member the reasonable value of Capitated
Professional Services provided to the Member by Group for the injuries caused
by the third party. Group’s pursuit and recovery under third party liens shall
be conducted in strict accordance with the procedures set forth in the Provider
Manual. Blue Shield shall similarly have the right to assert a lien for and
recover for payments made by Blue Shield for such injuries. Group shall
cooperate with Blue Shield in identifying such third party liability claims and
in providing such information, within such time frames, as set forth in the
Provider Manual.

 

7.8                                 Groups Organized By Geographic Regions. In the event that Blue Shield and Group have agreed that Group will
provide services to Members in specified multiple geographic regions, such
regions shall be described in Exhibit A., and Blue Shield shall pay Group
Capitation based upon the region in which the Member selects a Group PCP.
Shared Savings settlements shall be determined on a region by region basis,
with any amounts owed by Blue Shield to

 

24

 

Group for one region(s) offset by any amounts owed by Group to Blue
Shield for any other region(s).

 

7.9                                 Purpose of Incentive Programs. The parties
understand that any payments made directly or indirectly to the Group under the
incentive provisions set forth in this Agreement, including the Shared Savings
Program (Paragraph 7.5), are not made as an inducement to reduce or limit
Medically Necessary Covered Services to any specific Member.

 

7.10                           Blue Shield Timeliness Guarantee. Except for
reasons not attributable to Blue Shield (e.g., natural disaster), in the event
that Blue Shield fails to:

 

(i)                                     Provide to Group a Member eligibility list on
or before the 10th day of each month, Blue Shield shall, as a penalty, pay to
Group ten cents ($0.10) for each Member, as the number of Members are
determined by the list once provided. If the list is provided by the 10th day
of the month, no penalty is payable even if the list is incomplete or is
subsequently corrected; and,

 

(ii)                                  Pay monthly Capitation to Group within the
time limits required by this Agreement, Blue Shield shall pay interest on the
unpaid Capitation until paid, at the Bank of America prime rate plus two
percent (2%) per annum. Such interest is not payable if Capitation is paid
within such time limits, regardless of whether such Capitation is incomplete or
subsequently corrected.

 

7.11                           Encounter Data Submission Penalties. Based on Blue
Shield’s quarterly determinations and following no less than thirty (30) days
prior notice to Group, Blue Shield may withhold a portion of Group’s
Capitation, as set forth in Exhibit C., in the event that Blue Shield
determines that a significant portion (as described in the Provider Manual) of
the monthly Encounter Data which Group is obligated to provide (Paragraph 2.12)
has not been delivered to Blue Shield within the prior quarter. If at the
quarterly determination next following such withhold, Blue Shield determines
that Group has satisfactorily delivered to Blue Shield the previously
non-delivered Encounter Data, such withheld Capitation shall be paid to Group,
without interest. In the event that Group does not deliver such Encounter Data
to Blue Shield prior to such quarterly determination, Blue Shield shall be
entitled to retain such withheld Capitation and will continue to deduct from
the Group’s Capitation and retain such deductions as described in Exhibit C.
from each quarter’s Capitation. If at a later date Group resumes the timely and
complete submission of encounter data as required by this Agreement, then Blue
Shield will cease deducting these penalties from Group’s Capitation beginning
as of the month in which compliance is demonstrated by Group.

 

VIII. PROTECTION OF MEMBERS

 

8.1                                 Non-discrimination. Except as otherwise provided in this
Agreement, Group and Group Providers shall make Capitated Services available to
Members in the same manner, in

 

25

 

accordance with the same standards, and with no less availability as
Group and Group Providers provide services to their other patients. Group and
Group Providers shall not discriminate against any Member in its provision of
Covered Services on account of race, sex, color, religion, national origin,
ancestry, age, physical or mental handicap, health status, disability, need for
medical care, sexual preference, or veteran’s status, or status as a Member of
Blue Shield.

 

8.2                                 Credentialed Providers. In providing
Capitated Services hereunder, and except as otherwise provided in Paragraph
2.4, Group shall utilize only Group Providers who are credentialed and
re-credentialed in accordance with Blue Shield’s standards as set forth in the
Provider Manual. Group and/or each Group Provider shall provide to Blue Shield,
on request, credentialing information, in such form as reasonably required by
Blue Shield.

 

8.3                                 Charges to Members.

 

(a)                                  In no event, including but not limited to
nonpayment by Blue Shield or Group, or Blue Shield’s or Group’s insolvency or
breach of this Agreement (or breach by Group of its agreement with Group
Provider), shall Group and Group Providers bill, charge, collect a deposit
from, impose a surcharge on, seek compensation, remuneration or reimbursement
from or have any recourse against, Members or an individual responsible for
their care for Covered Services. Nor shall Group or a Group Provider seek
payment from Members or individuals responsible for their care, for payments
for Covered Services denied by Blue Shield or Group because such bill or claim
was not timely or properly submitted, or because the rendered services were not
Medically Necessary or Authorized. Whenever Blue Shield receives notice of a
violation of this Paragraph 8.3, it shall take appropriate action (including
without limitation the right to reimburse the Member the amount of any payment
and offset the amount of such payment from any amounts then or thereafter owed
by Blue Shield to Group).

 

(b)                                 Group and Group Providers shall not bill or
collect from a Member any charges in connection with Non-Covered Services,
non-Authorized services, or services determined not to be Medically Necessary
unless Group, or as applicable, the Group Provider, has first obtained a
written acknowledgment from the Member that such services are either not
Covered Services, not Authorized, or not Medically Necessary, and that the
Member, or the Member’s legal representative, is financially responsible for
the cost of such services. Such acknowledgment shall be obtained prior to the
time that such services are provided to the Member and shall be in such form as
meets the applicable requirements set forth in the Provider Manual.

 

(c)                                  Group agrees that, in the event of Blue
Shield’s insolvency or other cessation of operations, Covered Services to
Members will continue through the period for which their premiums have been
paid, and Covered Services to Members confined in an

 

26

 

inpatient facility on the date of insolvency or other cessation of
operations will continue until the Member’s discharge.

 

(d)                                 The provisions of this Paragraph 8.3 shall:
(i) survive the termination of this Agreement (and any agreement between Group
and Group Provider) regardless of the cause giving rise to termination and
shall be construed to be for the benefit of Members; and, (ii) supersede any
oral or written contrary agreement (now existing or hereafter entered into)
between the Group or Group Provider and the Member.

 

(e)                                  The provisions of this Paragraph 8.3 shall be
incorporated into any agreement between the Group and its contracted healthcare
providers. This Paragraph 8.3 shall not be changed without the prior approval
of the appropriate government regulatory agency.

 

8.4                                 Protection of Members. In the event that Blue Shield or a Member
notifies Group that a Group Provider (or physician providing coverage for such
Group Provider), or another provider who provided Capitated Professional
Services to the Member is billing, suing, or otherwise attempting to collect
(“Collection”) payment from the Member or person responsible for the Member’s
care, other than Co-payments, Group shall immediately take all reasonable and
appropriate actions to stop such Collection. In the event that Group is unable
to timely stop such Collection, as determined by Blue Shield, Blue Shield may
take any steps it deems appropriate, including payment of the claim, to stop
such Collection. In such event, Blue Shield may deduct and offset such payment
from any amount then or thereafter payable by Blue Shield to Group.

 

8.5                                 Benefits Determination. All final
decisions regarding coverage are reserved to Blue Shield, and Group shall refer
Members who have inquiries or disputes regarding such coverage to Blue Shield
for response and resolution. This provision, however, does not and shall not be
construed to prohibit any physician from providing any medical treatment, or
other advice which such physician believes to be in the best interest of the
patient.

 

8.6                                 Member Complaints and Grievances. Group shall
promptly notify Blue Shield of receipt of any claims, including professional
liability claims filed or asserted by a Member against Group or a Group
Provider. Group shall cooperate with Blue Shield in identifying, processing,
and resolving all Member grievances and other complaints, in accordance with
Blue Shield’s complaint/grievance process and time limits set forth in the
Provider Manual, as well as in accordance with such time limits as required by
state and/or federal law. Group shall comply with Blue Shield’s resolution of
any such complaints or grievances including specific findings, conclusions and
orders of the Department of Managed Health Care.

 

8.7                                 Medical Necessity Assistance. In all cases
where the Group and/or a Group Provider has made a determination regarding the
Medical Necessity of a medical service requested or provided to a Member, Group
shall, upon the request of Blue Shield, assist Blue Shield in determining the
Medical Necessity of such service and provide relevant medical records to Blue
Shield and

 

27

 

participate in any grievance, arbitration, and/or other proceedings in
which such Medical Necessity determination is an issue. Moreover, Group agrees
to cooperate with and abide by the Medical Necessity determination of any external
review entity to which Blue Shield is either obligated by law to submit such
disputes or for which Blue Shield has implemented a program to submit such
disputes to external review.

 

8.8                                 Free Exchange of Information. No provision of
this Agreement shall be construed to prohibit, nor shall any provision in any
contract between Group and its employees or subcontractors prohibit, the free,
open and unrestricted exchange of any and all information of any kind between
health care providers and Members regarding the nature of the Member’s medical
condition, the health care treatment options and alternatives available and
their relative risks and benefits, whether or not covered or excluded under the
Member’s health plan, and the Member’s right to appeal any adverse decision
made by Group or Blue Shield regarding coverage of treatment which has been
recommended or rendered. Moreover, Group shall not penalize nor sanction any
health care provider in any way for engaging in such free, open and
unrestricted communication with a Member nor for advocating for a particular
service on a Member’s behalf.

 

8.9                                 Insurance.

 

(a)                                  Group and Group Providers shall maintain
professional liability (malpractice) insurance and general liability insurance
coverage in the minimum amount of One Million Dollars ($1,000,000) per
occurrence and Three Million Dollars ($3,000,000) annual aggregate per
physician per year for all physicians who are partners, associates or employees
of Group and warrants that all physicians with which Group contracts will carry
professional liability coverage in the same amount. If Group or its Group
Providers or subcontracts have a claims made malpractice insurance policy, then
they agree to keep the policy in effect for at least five (5) years past any
termination of this Agreement or purchase extended reporting coverage (tail
insurance).

 

(b)                                 Each Group Provider who is not a physician
shall maintain insurance as set forth above, but with commercially reasonable
policy limits appropriate to the risk being insured.

 

(c)                                  Group and Group Providers shall maintain
Workers’ Compensation insurance covering all employees of Group or, as
applicable, of Group Provider.

 

(d)                                 Group shall notify Blue Shield and provide
evidence to Blue Shield at the time of any amendment, change or modification to
such insurance coverage and at any time on reasonable request by Blue Shield
during the term of this Agreement.

 

28

 

IX. MEDICAL
RECORDS & CONFIDENTIALITY

 

9.1                                 Medical Records. Group and Group Providers shall maintain the
usual and customary records for Members in the same manner as for other
patients of Group and Group Providers. Group will require that all Group
Physicians establish and maintain in an accurate and timely manner for each
Member who has obtained care from such physician a medical record which is
organized in a manner which contains such demographic and clinical information
as is necessary, in the opinion of the Blue Shield medical director and the
Group medical director, to provide documentation as to the medical problems and
medical services provided to the Member. Such record shall include a historical
record of diagnostic and therapeutic services recommended or provided by, or
under the direction of, the provider. Such records shall be in such a form as
to allow trained health professionals, other than the provider, to readily
determine the nature and extent of the Member’s medical problem and the
services provided and permit peer review of the care provided. Such records
shall, on request, and within reasonable time requirements, be made available
without charge to Blue Shield and its designated agents. Without limiting the
foregoing, Group shall, without charge, transmit Member’s medical records
information to a Member’s other providers, to Government Officials, and to Blue
Shield for purposes of utilization management, quality improvement and other
Blue Shield administrative purposes. Upon termination of this Agreement, or the
re-assignment or transfer of Members, one copy of such records shall be
provided without charge to the Member’s new medical group upon request.

 

9.2                                 Confidentiality. Group and Group Providers shall comply with
all applicable state and federal laws regarding privacy and confidentiality of
medical information and records, including mental health records. Group and
Group Providers shall develop policies and procedures to ensure that Member
medical records are not disclosed in violation of Cal. Civ. Code §§ 56,
et seq. To the extent Group receives, maintains or transmits medical or
personal information of Members electronically, Group shall comply with all
state and federal laws relating to the protection of such information
including, but not limited to, the Health Insurance Portability and Accountability
Act (HIPAA) provisions on security and confidentiality and any CMS regulations
or directives relating to Medicare beneficiaries.

 

9.3                                 Member Access to Records. Group and Group
Providers shall ensure that Members have access to their medical records in
accordance with the requirements of state and federal law.

 

X. COOPERATION
WITH AUDITS & CERTIFICATIONS

 

10.1                           Disclosure of Records.

 

(a)                                  Group and each Group Provider shall comply
with all provisions of the Omnibus Reconciliation Act of 1980 regarding access
to books, documents, and records. Without limiting the foregoing, Group shall
maintain such records and provide such

 

29

 

information to Blue Shield as well as to DMHC, CMS, any Peer Review
Organization (“PRO”) with which Blue Shield contracts as required by CMS, the
U.S. Comptroller General, their designees and any other governmental officials
entitled to such access by law (collectively, “Governmental Officials”) as
required by law and as may be necessary for compliance by Blue Shield with the
provisions of all state and federal laws governing Blue Shield. Blue Shield and
Government Officials shall have access to, and copies of, at reasonable time
upon request, the medical records, books, charts, and papers relating to the
Provider’s provision of health care services to Members, the cost of such
services, and payment received by the Provider from the Member (or from others
on their behalf), and to the financial condition of the provider. Such records
described herein shall be maintained at least six (6) years from the end of
each Agreement Year, and, if this Agreement is applicable to Blue Shield 65
Plus, six (6) years from the close of CMS’ fiscal year in which the contract
was in effect (or for a particular record or group of records, a longer time
period when or DMHC requests such longer record retention and Group is notified
of such request by Blue Shield), and in no event for a shorter period than as
may be required by the Knox-Keene Act and the regulations promulgated
thereunder. All records of Group/Providers shall be maintained in accordance
with the general standards applicable to such book or record keeping and shall
be maintained during any governmental audit or investigation.

 

(b)                                 Group shall, on request, disclose to
Government Officials the method and amount of compensation or other
consideration to be received by it from Blue Shield or payable by Group to its
subcontractors. Group shall maintain and make available to Government
Officials: (i) its subcontracts, and (ii) compensation/financial records
relating to such subcontracts and compensation from Blue Shield.

 

(c)                                  Upon forty-eight (48) hours notice, Group
shall make any records of its quality improvement and utilization review
activities pertaining to Members and provider credentialing files available to
Blue Shield’s quality and utilization review committee. Such sharing of records
between the two committees shall be in accordance with, and limited to,
Sections 1157 of the California Evidence Code and 1370 of the California Health
and Safety Code and shall not be construed as a waiver of any rights or
privileges conferred on either party by those statutes.

 

(d)                                 Blue Shield, at its sole cost and expense,
and with reasonable prior notice to Group, may from time to time audit the
books and records of Group as they relate to its services, claims payments,
authorization turn-around times, reporting, and billings under this Agreement.

 

10.2                           Site Evaluations. Group and Group Providers shall permit Government
Officials and Blue Shield to conduct periodic site evaluations and inspections
of their facilities and records. In the event that Government Officials or Blue
Shield find any deficiencies in such facilities or

 

30

 

records, Group, or Group Provider, as applicable, shall have thirty
(30) days to substantially correct such deficiencies which are identified by
such Government Officials or Blue Shield.

 

10.3                           Accreditation Surveys. Group and Group
providers shall cooperate in the manner described in Paragraphs 10.1 and 10.2
hereof with respect to surveys and site evaluations relating to accreditation
of Blue Shield by NCQA or any other accrediting organization. Further, Group
agrees to implement any changes reasonably required as a result of all such
surveys.

 

10.4                           Compliance Monitoring. Group shall
cooperate with Blue Shield in the performance of any monitoring, studies,
evaluations analyses or surveys required by Government Officials or accrediting
organizations of Group’s performance of services hereunder.

 

XI. RESOLUTION OF DISPUTES

 

11.1                           Provider Dispute Resolution Procedure. Blue Shield and Group agree to meet and confer in good faith to
resolve any disputes that arise under this Agreement, except for dispute
relating to the procedure whereby this Agreement may be terminated, which
disputes shall be governed exclusively by Paragraph 11.2 hereof. If such
disputes remain unresolved, they may be referred to the Blue Shield Provider
Dispute Resolution Committee. Disputes may be submitted in writing addressed to
Blue Shield Dispute Resolution Committee, Attn: Network Manager, Provider
Services, P. O. Box 629011, El Dorado Hills, CA 95762-9011. Disputes referred
to the Blue Shield Provider Dispute Resolution Committee shall be decided
within thirty (30) days of referral. If such disputes cannot be resolved by the
Blue Shield Provider Dispute Resolution Committee, Blue Shield and Group agree
to submit the dispute to binding arbitration pursuant to Section 11.2 of
this Agreement. Group further agrees that the procedures set forth in this
Paragraph 11.1 may be used in the event that a Group Provider has a dispute
with Group. Pursuit by Group of a dispute through the processes described in
this Article XI. shall not modify nor relieve Group of any obligations to
continue to provide services to Members in accordance with and to comply with
all terms of this Agreement.

 

11.2                           Arbitration of Disputes. If any dispute,
controversy, or misunderstanding (other than a claim of medical malpractice)
arises between the parties to this Agreement which exceeds the jurisdiction of
Small Claims Court, which was not resolved in the Provider Dispute Resolution
procedure set forth in Paragraph 11.1, and which may directly or indirectly
concern or involve any term, covenant, or condition hereof, the parties shall
settle the dispute by final and binding arbitration in San Francisco, Los
Angeles, San Diego or Sacramento, California, whichever city is closest to the
Group. Arbitration shall be conducted under the Commercial Rules of the
American Arbitration Association. The arbitration decision shall be binding on
both parties. It is agreed that the arbitrator shall be bound by applicable
state and federal law and that the arbitrator shall issue written findings of
fact and conclusions of law. The arbitrator shall have no authority to award
damages or provide a remedy which would not be available

 

31

 

to
such prevailing party in a court of law nor shall the arbitrator have the
authority to award punitive damages. The cost of the arbitration shall be
shared equally by Group and Plan. Each party shall be responsible for its own
attorneys’ fees.

 

11.3                           Cooperation With Member Disputes. Group and Group
Providers shall cooperate in the Member grievance and appeals process as
described in the Provider Manual.

 

XII. TERM & TERMINATION

 

12.1                           Term. When executed by both parties, this Agreement shall become effective
as of the Effective Date, and shall continue in effect for three (3) years
thereafter, unless earlier terminated as set forth below. Unless either party
notifies the other party at least one hundred eighty (180) days prior to the
expiration of said initial three (3) year term, this Agreement shall, following
expiration of the initial term, continue in effect for additional one (1) year
terms until terminated as set forth below.

 

12.2                           Termination Without Cause. Either party
may terminate this Agreement at anytime without cause by giving to the other
party at least one hundred eighty (180) calendar days written notice of
termination. The termination shall become effective the first day of the month
following the expiration of the notice period.

 

12.3                           Termination for Cause. Either party may, subject to the cure period
set forth in Paragraph 12.4, terminate this Agreement for material cause after
written notice as set forth hereinafter. The following shall constitute a
material cause for termination:

 

(a)                                  By Group if: (i) Blue Shield fails to pay Group the Capitation due to Group
hereunder within twenty (20) days of such payment’s due date; or, (ii)
revocation of Blue Shield’s license necessary for the performance of this
Agreement; or, (iii) Blue Shield breaches any material term, covenant, or condition
of this Agreement.

 

(b)                                 By Blue Shield if: (i) the filing of bankruptcy by a parent
or subsidiary or substantial deterioration in the financial condition of a
parent, affiliate or subsidiary, or, (ii) Group fails to provide quality
medical services consistent with the standards set forth in this Agreement and
in the Provider Manual; or, (iii) Group breaches any material term, covenant,
or condition of this Agreement.

 

Notwithstanding any provision of Paragraph 12.4 to the contrary, Blue
Shield may immediately terminate this Agreement in the event that Group is
excluded from participation in Medicare or Group fails to maintain all
insurance required herein, or if Blue Shield, after consultation with Group,
determines in good faith that continuation of this Agreement may reasonably be
expected to jeopardize the health, safety, or welfare of Members, or if Blue
Shield reasonably determines, after consulting with Group, that Group is likely
to be

 

32

 

financially unable to provide and/or pay for, in a competent and timely
manner, Capitated Professional Services.

 

12.4                           Notice and Cure Period. A party seeking to terminate this Agreement
for material breach shall notify the other party in writing of the nature of the
breach and the other party shall have thirty (30) days from the receipt of such
notice to cure or otherwise eliminate such cause. If the other party does not
remedy the breach, to the reasonable satisfaction of the non-breaching party,
this Agreement shall terminate at the end of the thirty (30) day period.

 

12.5                           Termination Not an Exclusive Remedy. The termination
of this Agreement by either party pursuant to this Article XII is not an
exclusive remedy and such terminating party retains whatever rights in law or
equity as may be necessary to enforce its rights under this Agreement.

 

12.6                           Effect of Termination. As of the date of termination, this
Agreement shall be considered of no further force or effect whatsoever, and
each of the parties shall be relieved and discharged herefrom, except that:

 

(a)                                  Termination shall not affect any rights or
obligations hereunder which have previously accrued, or shall hereafter 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.

 

(b)                                 Group shall, at Blue Shield’s option,
continue rendering Capitated Professional Services after the termination of
this Agreement to Members assigned to Group at the capitation rates in effect immediately
prior to the date of termination, for the duration of the contracts in effect
with Blue Shield through which Members are enrolled with Blue Shield, or until
such time as Blue Shield has arranged for an alternative source of services for
each such Member from other contracting providers.

 

(c)                                  Group shall, in the event of Blue Shield’s
insolvency, continue rendering Capitated Professional Services to any Member
who is an inpatient of a hospital until such Member’s discharge or transfer to
another appropriate facility.

 

(d)                                 The following paragraphs of this Agreement
shall survive the termination of this Agreement, whether such termination is
the result of rescission or otherwise: Paragraphs 2.9(b), 3.1, 5.1, 8.3, 8.4,
8.6, 8.7, 8.8, 10.1, 11.1, 11.2, 14.9, and 14.10.

 

XIII. COMPLIANCE WITH LEGAL REQUIREMENTS

 

13.1                      Consistency with State Law. This Agreement
is subject to the requirements of Chapter 2.2 of Division 2 of the California
Health & Safety Code (the Knox-Keene Act) and of Title 28 of the

 

33

 

California Code of Regulations. Any provision required to be in this
Agreement by either of the above Codes shall bind Blue Shield and Group,
whether or not provided in this Agreement. Group shall require that Group
Providers similarly comply with all applicable provisions of the Act and Rules.

 

13.2                           Consistency with Federal Law. If this
Agreement applies to Blue Shield 65 Plus, Group shall comply and Group shall
require that its Group Providers comply with the statutes and regulations and
CMS instructions which govern Blue Shield’s Agreement with CMS. Moreover, Group
and Group Providers shall comply with the additional obligations set forth in
Exhibit G-1 hereto. Group also agrees that, to the extent ERISA statutes and
regulations apply to the claims payment and Member complaint functions
performed by Group, Group and Group Providers shall comply with all such
requirements.

 

13.3                           Coordination of Benefits. Group agrees
that coordination of benefits, benefit determinations under the Medicare
Secondary Payor rules, and Workers’ Compensation recoveries shall be conducted
by Group in accordance with the procedures set forth in the Provider Manual.

 

13.4                           Timely Payment. In making payments to Group Providers and
other providers for Capitated Professional Services as set forth in
Article III. hereof, Group shall comply and shall cause all subcontractors
to whom claims payment obligations are delegated to comply with the timeliness
requirements set forth in applicable state and federal law, including, but not
limited to, Section 1371 of the Knox-Keene Act and any applicable CMS
rules and regulations.

 

13.5                           Disclosure of Provider Profiling. Group shall,
upon request from Blue Shield and as further described in the Provider Manual,
provide Blue Shield with information regarding any “economic profiling” of
Group Providers by Group in order to permit Blue Shield to comply with the
provisions of Section 1367.02 of the Knox-Keene Act. Further, to the
extent that group utilizes “economic profiling” as defined in
Section 1367.02, Group shall provide copies of economic profiling
information to Group Providers in accordance with the requirements of
Section 1367.02.

 

13.6                           Provider Terminations. In the event
that a subcontract with a Group Provider is denied, suspended or terminated,
Group shall provide the provider with written notice of the reason for the
action as required by state and federal law, including any standards and
profiling data Group used to evaluate the provider, the number and mix of
similar health care providers that Group needs (if applicable), and notice of
the provider’s right to appeal the action, including notice of the process and
timing to request a hearing. In the event Group terminates a contract with a
Group Provider for deficiencies in the quality of care provider, Group shall
give notice of the action to the appropriate licensing and disciplinary bodies.

 

13.7                           Financial Solvency Reporting. The Group shall comply with any and all
applicable reporting requirements set forth in the Knox-Keene Act and
regulations..

 

34

 

13.8                           Blue Shield Reporting Requirements Blue Shield shall submit Quarterly and
Annual reports to the Department of Managed Health Care in compliance with the
legal requirements of Title 28, California Code of
Regulations § 1300.75.4.3.

 

XIV. GENERAL PROVISIONS

 

14.1                           Waiver of Breach. The waiver of any breach of this Agreement
by either party shall not constitute a continuing waiver of any subsequent
breach of either the same or any other provisions of this Agreement.

 

14.2                           Amendments. Except as provided in this Paragraph 14.2
and in Paragraphs 1.5 and 5.2, this Agreement may be amended only by mutual,
written consent of Blue Shield and Group’s duly authorized representatives.
Notwithstanding the foregoing, or if Blue Shield’s legal counsel determines in
good faith that this Agreement must be modified to be in compliance with
applicable federal or state law or to meet the requirements of accreditation organizations
which accredit Blue Shield and its providers, Blue Shield may amend this
Agreement by delivering to Group (the “Notice Date”) a copy of the
modifications (the “Legally-Required Modifications”) along with the reasons
therefore, and such modification(s) shall be deemed accepted by Group and an
amendment to this Agreement if Group does not, within thirty (30) days
following said Notice Date, deliver to Blue Shield its written objection of
such Legally-Required Modification(s). In the event that Group timely objects
to such Legally-Required Amendment, then Group and Blue Shield shall confer in
good faith regarding the amendment. In the event Group and Blue Shield cannot
resolve Group’s objection, Group may terminate this Agreement on ninety (90) days
prior written notice to Blue Shield and the amendment to which Group objected
shall not be effective as to Group during the termination notice period.

 

14.3                           Entire Agreement. This Agreement, all attachments and Exhibits
referenced in this Agreement and attached hereto, and the Provider Manual, as
amended from time to time, are incorporated herein by reference, and constitute
the entire understanding between the parties relating to the subject matter
hereof. This Agreement does not supersede or modify any agreement between the
parties pertaining to Blue Shield’s PPO Benefit Programs, including without
limitation, any Physician Member Application and Agreement between the parties
or between Blue Shield and Group physicians.

 

14.4                           Independent Contractors. In the
performance of each party’s work, duties, and obligations pursuant to this
Agreement, each of the parties shall at all times be acting and performing as
an independent contractor, and nothing in the Agreement shall be construed or
deemed to create a relationship of employer and employee or partner or joint
venturer or principal and agent. Each party agrees to indemnify, defend and
hold harmless the other party from any claims, causes of action or costs,
including reasonable attorneys’ fees, arising out of the indemnifying parties
alleged or actual negligence or otherwise improper performance of its
obligations hereunder.

 

35

 

14.5                           Notices. Any notices or other communication made or
contemplated by this Agreement to be in writing shall be deemed to have been
received by the party to whom it is addressed three (3) days after it is
deposited in the United States mail, certified postage prepaid, return receipt
requested, or the date of delivery by Federal Express or similar commercial
courier service, and addressed as set forth in Exhibit A., or to such other
address as either party from time to time informs the other in writing.
Further, notice may be given during normal business hours by facsimile
transmission to the number set forth in Exhibit A. which shall be deemed
received upon facsimile transmission confirmation, or by personal delivery to
the address set forth in Exhibit A. which shall be deemed received upon receipt
of a signature from the person or office at the designated address.

 

14.6                           Third Party Beneficiaries. Except as set
forth in Paragraph 2.10, neither Members nor any other third parties are
intended by the parties hereto to be third party beneficiaries under this
Agreement, and no action to enforce the terms of this Agreement may be brought
against either party by any person who is not a party hereto.

 

14.7                           Assignment, Subcontracting, and Addition of PCPs.

 

(a)                                  Neither Blue Shield nor Group shall assign,
transfer, or subcontract its rights, duties, or obligations under this
Agreement without the prior written consent of the other party.

 

(b)                                 For purposes of providing services to Members
hereunder, Group may not add as PCPs any physician whose principal medical
office is located outside the postal zip codes set forth as PCP Zip Codes in
Exhibit A., without Blue Shield’s prior written consent, which consent may be
granted or withheld by Blue Shield in its sole discretion.

 

14.8                           Interpretation of Agreement. In the event of
any ambiguity in this Agreement, this Agreement shall be interpreted according
to its fair intent and not for or against any one party on the basis of which
party drafted the Agreement. This Agreement shall be governed in all respects,
whether as to validity, construction, capacity, performance or otherwise, by
the laws of the State of California and such federal laws as are applicable to
Blue Shield. If for any reason any provision of this Agreement is held invalid,
the remaining provisions shall remain in full force and effect. The captions
herein are for convenience only and shall not affect the meaning or
interpretation of the Agreement.

 

14.9                           Confidentiality/Trade Secrets. The
compensation terms of this Agreement and all terms relating to compensation
shall be confidential. Group shall not disclose such terms (other than to
Government Officials) except with the prior written consent of Blue Shield.
However, nothing herein shall prohibit Group or Group Providers from disclosing
to Members and others the method by which they are compensated (e.g.,
capitation, fee-for-service, etc.); it is the precise compensation amounts for
which confidential treatment is required by this provision.

 

36

 

14.10                     Non-Solicitation. During the term of this Agreement, and for
one (1) year thereafter, neither Group nor Group Providers shall solicit,
induce, or encourage any Member to disenroll from Blue Shield or select another
health care service plan for healthcare services. Notwithstanding the foregoing,
Group and Group Providers shall be entitled to freely communicate with Members
regarding any aspect of their health status or treatment.

 

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

 

37

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their authorized representatives:

 

	
  BLUE SHIELD OF CALIFORNIA

  	
   

  	
  PROSPECT MEDICAL GROUP, INC.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Signature:

  	
   

  	
   

  	
  Signature:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Print Name: 

  	
   Lisa
  Farnan

  	
   

  	
  Print Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title: 

  	
    Vice
  President, Provider Relations

  	
   

  	
  Title: 

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
  Date:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  GROUP
  TAX I.D. NUMBER:

  	
   

  	
   

  	
   

  
	
  GROUP
  IS A:

  	
  ý

  	
  IPA

  	
  o

  	
  Ltd. Knox-Keene Licensee 

  	
   

  
	
   

  	
  o

  	
  Integrated Medical Group

  	
  o

  	
  Other (Specify):

  	
   

  
	
   

  	
  o

  	
  Foundation

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  IN RESPECT TO THE PROFESSIONAL STOP LOSS COVERAGE (AND
  APPLICABLE CHARGES BY PLAN), THE GROUP ELECTS AS FOLLOWS:

  
	
   

  	
   

  	
   

  	
   

  
	
  The Professional Stop Loss Coverage set forth in
  Schedule I:

  
	
   

  	
   

  	
   

  	
   

  
	
  Will
  Participate o

  	
   

  	
  o  Will NOT Participate

  	
   

  
								

 

<<>>

 

38

 

Exhibit A

 

HMO
IPA/Medical Group Agreement 

GROUP INFORMATION & BENEFIT PROGRAMS

 

	
  Name of Group:

  	
  PROSPECT MEDICAL GROUP, INC.

  	
   

  
	
  Effective Date:

  	
   

  

 

1.                                       Address for Notice:

 

 

	
  If to Blue Shield

  	
   

  	
  If to Group

  
	
  Blue
  Shield of California

  	
   

  	
  Prospect
  Medical Group, Inc.

  
	
  50
  Beale Street

  	
   

  	
  1920
  E. 17th Street, Suite 200

  
	
  San
  Francisco, CA 94105

  	
   

  	
  Santa
  Ana, CA 92705

  
	
  Attn:
  Vice President, Provider Relations

  	
   

  	
  Attn:

  
	
  Fax
  No. :415-229-6290

  	
   

  	
  Fax
  No:

  

 

2.                                       (a) Group Regions:

 

(b)                                 Zip Codes (See Attached Exhibit A-1)

 

3.                                       Benefit Programs: This Agreement is applicable to the
following Benefit Programs:

 

(1)                                  Commercial Group, Point of Service and
Individual 

 

Plans, including Healthy Families  ý  Yes  o
 No

 

(2)                                  Blue Shield 65 Plus (Medicare+Choice)  ý   Yes 
 o 
 No

 

(3)                                  Other (Describe)

 

•                                          For Blue Shield 65+, Members will be
permitted to select Group and its Primary Care Physicians if they reside
anywhere within the Medicare contract service area in which Group is located,
in accordance with Medicare guidelines.

 

<<>>

 

39

 

EXHIBIT A-1

PLAN SERVICE
AREA

PROSPECT
MEDICAL GROUP INC. (ANTELOPE VALLEY MEDICAL GROUP/PEGASUS MEDICAL GROUP)

 

Effective
Date:

 

The Service Area consists of the following geographic area (city/zip
code):

 

	
  CITY NAME

  	
   

  	
  ZIP CODE

  	
   

  
	
  Acton

  	
   

  	
  93510

  	
   

  
	
  Canyon Country

  	
   

  	
  91351

  	
   

  
	
  Canyon Country

  	
   

  	
  91386

  	
   

  
	
  Castaic

  	
   

  	
  91310

  	
   

  
	
  Edwards

  	
   

  	
  93523

  	
   

  
	
  Edwards

  	
   

  	
  93524

  	
   

  
	
  Lake Hughes

  	
   

  	
  93532

  	
   

  
	
  Lancaster

  	
   

  	
  93534

  	
   

  
	
  Lancaster

  	
   

  	
  93535

  	
   

  
	
  Lancaster

  	
   

  	
  93536

  	
   

  
	
  Lancaster

  	
   

  	
  93539

  	
   

  
	
  Lancaster

  	
   

  	
  93584

  	
   

  
	
  Lancaster

  	
   

  	
  93586

  	
   

  
	
  Littlerock

  	
   

  	
  93543

  	
   

  
	
  Llano

  	
   

  	
  93544

  	
   

  
	
  Mojave

  	
   

  	
  93501

  	
   

  
	
  Mojave

  	
   

  	
  93502

  	
   

  
	
  Palmdale

  	
   

  	
  93550

  	
   

  
	
  Palmdale

  	
   

  	
  93551

  	
   

  
	
  Palmdale

  	
   

  	
  93552

  	
   

  
	
  Palmdale

  	
   

  	
  93590

  	
   

  
	
  Palmdale

  	
   

  	
  93591

  	
   

  
	
  Palmdale

  	
   

  	
  93599

  	
   

  
	
  Pearblossom

  	
   

  	
  93553

  	
   

  
	
  Rosamond

  	
   

  	
  93560

  	
   

  
	
  Santa Clarita

  	
   

  	
  91350

  	
   

  
	
  Santa Clarita

  	
   

  	
  91380

  	
   

  
	
  Valencia

  	
   

  	
  91354

  	
   

  
	
  Valyermo

  	
   

  	
  93563

  	
   

  

 

The
Service Area outlined in this Exhibit A-1 may be updated periodically to
reflect changes in IPA Provider locations and/or Zip Code additions or
deletions identified by Plan or the U.S. Postal Service.

 

40

 

EXHIBIT A-1

PLAN SERVICE
AREA

PROSPECT
MEDICAL GROUP INC. (CORONA)

 

Effective Date:

 

The Service Area consists of the following geographic area (city/zip
code):

 

	
  CITY NAME

  	
   

  	
  ZIP CODE

  	
   

  
	
  Anaheim

  	
   

  	
  92801

  	
   

  
	
  Anaheim

  	
   

  	
  92802

  	
   

  
	
  Anaheim

  	
   

  	
  92803

  	
   

  
	
  Anaheim

  	
   

  	
  92804

  	
   

  
	
  Anaheim

  	
   

  	
  92805

  	
   

  
	
  Anaheim

  	
   

  	
  92806

  	
   

  
	
  Anaheim

  	
   

  	
  92807

  	
   

  
	
  Anaheim

  	
   

  	
  92808

  	
   

  
	
  Anaheim

  	
   

  	
  92812

  	
   

  
	
  Anaheim

  	
   

  	
  92814

  	
   

  
	
  Anaheim

  	
   

  	
  92815

  	
   

  
	
  Anaheim

  	
   

  	
  92816

  	
   

  
	
  Anaheim

  	
   

  	
  92817

  	
   

  
	
  Anaheim

  	
   

  	
  92825

  	
   

  
	
  Anaheim

  	
   

  	
  92850

  	
   

  
	
  Anaheim

  	
   

  	
  92899

  	
   

  
	
  Atwood

  	
   

  	
  92811

  	
   

  
	
  Azusa

  	
   

  	
  91702

  	
   

  
	
  Baldwin Park

  	
   

  	
  91706

  	
   

  
	
  Bloomington

  	
   

  	
  92316

  	
   

  
	
  Brea

  	
   

  	
  92821

  	
   

  
	
  Brea

  	
   

  	
  92822

  	
   

  
	
  Brea

  	
   

  	
  92823

  	
   

  
	
  Buena Park

  	
   

  	
  90620

  	
   

  
	
  Buena Park

  	
   

  	
  90621

  	
   

  
	
  Buena Park

  	
   

  	
  90622

  	
   

  
	
  Buena Park

  	
   

  	
  90624

  	
   

  
	
  Chino

  	
   

  	
  91708

  	
   

  
	
  Chino

  	
   

  	
  91710

  	
   

  
	
  Chino Hills

  	
   

  	
  91709

  	
   

  
	
  Claremont

  	
   

  	
  91711

  	
   

  
	
  Colton

  	
   

  	
  92324

  	
   

  
	
  Corona

  	
   

  	
  91718

  	
   

  
	
  Corona

  	
   

  	
  92877

  	
   

  
	
  Corona

  	
   

  	
  92878

  	
   

  
	
  Corona

  	
   

  	
  92879

  	
   

  
	
  Corona

  	
   

  	
  92880

  	
   

  
	
  Corona

  	
   

  	
  92881

  	
   

  
	
  Corona

  	
   

  	
  92882

  	
   

  
	
  Corona

  	
   

  	
  92883

  	
   

  
	
  Costa Mesa .

  	
   

  	
  92626

  	
   

  
	
  Costa Mesa

  	
   

  	
  92627

  	
   

  
	
  Costa Mesa

  	
   

  	
  92628

  	
   

  
	
  Covina

  	
   

  	
  91722

  	
   

  
	
  Covina

  	
   

  	
  91723

  	
   

  
	
  Covina

  	
   

  	
  91724

  	
   

  
	
  Cypress

  	
   

  	
  90630

  	
   

  
	
  Diamond Bar

  	
   

  	
  91765

  	
   

  
	
  East Irvine

  	
   

  	
  92650

  	
   

  
	
  Fontana

  	
   

  	
  92334

  	
   

  
	
  Fontana

  	
   

  	
  92335

  	
   

  
	
  Fontana

  	
   

  	
  92336

  	
   

  
	
  Fontana

  	
   

  	
  92337

  	
   

  
	
  Foothill Ranch

  	
   

  	
  92610

  	
   

  
	
  Fullerton

  	
   

  	
  92831

  	
   

  
	
  Fullerton

  	
   

  	
  92832

  	
   

  
	
  Fullerton

  	
   

  	
  92833

  	
   

  
	
  Fullerton

  	
   

  	
  92834

  	
   

  
	
  Fullerton

  	
   

  	
  92835

  	
   

  
	
  Fullerton

  	
   

  	
  92836

  	
   

  
	
  Fullerton

  	
   

  	
  92837

  	
   

  
	
  Fullerton

  	
   

  	
  92838

  	
   

  
	
  Garden Grove

  	
   

  	
  92840

  	
   

  
	
  Garden Grove

  	
   

  	
  92841

  	
   

  
	
  Garden Grove

  	
   

  	
  92842

  	
   

  
	
  Garden Grove

  	
   

  	
  92843

  	
   

  
	
  Garden Grove

  	
   

  	
  92844

  	
   

  
	
  Garden Grove

  	
   

  	
  92845

  	
   

  
	
  Garden Grove

  	
   

  	
  92846

  	
   

  
	
  Glendora

  	
   

  	
  91740

  	
   

  
	
  Glendora

  	
   

  	
  91741

  	
   

  
	
  Grand Terrace

  	
   

  	
  92313

  	
   

  
	
  Guasti

  	
   

  	
  91743

  	
   

  
	
  Hacienda Heights

  	
   

  	
  91745

  	
   

  
	
  Irvine

  	
   

  	
  92602

  	
   

  
	
  Irvine

  	
   

  	
  92603

  	
   

  
	
  Irvine

  	
   

  	
  92604

  	
   

  
	
  Irvine

  	
   

  	
  92606

  	
   

  
	
  Irvine

  	
   

  	
  92612

  	
   

  
	
  Irvine

  	
   

  	
  92614

  	
   

  
	
  Irvine

  	
   

  	
  92616

  	
   

  
	
  Irvine

  	
   

  	
  92618

  	
   

  
	
  Irvine

  	
   

  	
  92619

  	
   

  
	
  Irvine

  	
   

  	
  92620

  	
   

  
	
  Irvine

  	
   

  	
  92623

  	
   

  
	
  Irvine

  	
   

  	
  92697

  	
   

  
	
  Irvine

  	
   

  	
  92709

  	
   

  
	
  Irvine

  	
   

  	
  92710

  	
   

  
	
  La Habra

  	
   

  	
  90631

  	
   

  
	
  La Habra

  	
   

  	
  90632

  	
   

  
	
  La Habra

  	
   

  	
  90633

  	
   

  
	
  La Mirada

  	
   

  	
  90637

  	
   

  
	
  La Mirada

  	
   

  	
  90638

  	
   

  
	
  La Mirada

  	
   

  	
  90639

  	
   

  
	
  La Palma

  	
   

  	
  90623

  	
   

  
	
  La Puente

  	
   

  	
  91744

  	
   

  
	
  La Puente

  	
   

  	
  91746

  	
   

  
	
  La Puente

  	
   

  	
  91747

  	
   

  
	
  La Puente

  	
   

  	
  91749

  	
   

  
	
  La Verne

  	
   

  	
  91750

  	
   

  
	
  Laguna Hills

  	
   

  	
  92653

  	
   

  
	
  Laguna Hills

  	
   

  	
  92654

  	
   

  
	
  Lake Elsinore

  	
   

  	
  92530

  	
   

  
	
  Lake Elsinore

  	
   

  	
  92531

  	
   

  
	
  Lake Elsinore

  	
   

  	
  92532

  	
   

  
	
  Lake Forest

  	
   

  	
  92630

  	
   

  
	
  Loma Linda

  	
   

  	
  92350

  	
   

  
	
  Loma Linda

  	
   

  	
  92354

  	
   

  
	
  Loma Linda

  	
   

  	
  92357

  	
   

  
	
  March Air Force Base

  	
   

  	
  92518

  	
   

  
	
  Mira Loma

  	
   

  	
  91752

  	
   

  
	
  Mission Viejo

  	
   

  	
  92690

  	
   

  
	
  Mission Viejo

  	
   

  	
  92691

  	
   

  
	
  Mission Viejo

  	
   

  	
  92692

  	
   

  
	
  Montclair

  	
   

  	
  91763

  	
   

  
	
  Mt Baldy

  	
   

  	
  91759

  	
   

  
	
  Norco

  	
   

  	
  92860

  	
   

  
	
  Ontario

  	
   

  	
  91758

  	
   

  
	
  Ontario

  	
   

  	
  91761

  	
   

  
	
  Ontario

  	
   

  	
  91762

  	
   

  
	
  Ontario

  	
   

  	
  91764

  	
   

  
	
  Ontario

  	
   

  	
  91798

  	
   

  
	
  Orange

  	
   

  	
  92856

  	
   

  

 

41

 

	
  Orange

  	
   

  	
  92857

  	
   

  
	
  Orange

  	
   

  	
  92859

  	
   

  
	
  Orange

  	
   

  	
  92862

  	
   

  
	
  Orange

  	
   

  	
  92863

  	
   

  
	
  Orange

  	
   

  	
  92864

  	
   

  
	
  Orange

  	
   

  	
  92865

  	
   

  
	
  Orange

  	
   

  	
  92866

  	
   

  
	
  Orange

  	
   

  	
  92867

  	
   

  
	
  Orange

  	
   

  	
  92868

  	
   

  
	
  Orange

  	
   

  	
  92869

  	
   

  
	
  Perris

  	
   

  	
  92570

  	
   

  
	
  Perris

  	
   

  	
  92571

  	
   

  
	
  Perris

  	
   

  	
  92572

  	
   

  
	
  Perris

  	
   

  	
  92599

  	
   

  
	
  Placentia

  	
   

  	
  92870

  	
   

  
	
  Placentia

  	
   

  	
  92871

  	
   

  
	
  Pomona

  	
   

  	
  91766

  	
   

  
	
  Pomona

  	
   

  	
  91767

  	
   

  
	
  Pomona

  	
   

  	
  91768

  	
   

  
	
  Pomona

  	
   

  	
  91769

  	
   

  
	
  Pomona

  	
   

  	
  91797

  	
   

  
	
  Pomona

  	
   

  	
  91799

  	
   

  
	
  Rancho Cucamonga

  	
   

  	
  91701

  	
   

  
	
  Rancho Cucamonga

  	
   

  	
  91729

  	
   

  
	
  Rancho Cucamonga

  	
   

  	
  91730

  	
   

  
	
  Rancho Cucamonga

  	
   

  	
  91737

  	
   

  
	
  Rancho Cucamonga

  	
   

  	
  91739

  	
   

  
	
  Rancho Santa Margarita

  	
   

  	
  92688

  	
   

  
	
  Redlands

  	
   

  	
  92373

  	
   

  
	
  Redlands

  	
   

  	
  92374

  	
   

  
	
  Redlands

  	
   

  	
  92375

  	
   

  
	
  Rialto

  	
   

  	
  92376

  	
   

  
	
  Rialto

  	
   

  	
  92377

  	
   

  
	
  Riverside

  	
   

  	
  92501

  	
   

  
	
  Riverside

  	
   

  	
  92502

  	
   

  
	
  Riverside

  	
   

  	
  92503

  	
   

  
	
  Riverside

  	
   

  	
  92504

  	
   

  
	
  Riverside

  	
   

  	
  92505

  	
   

  
	
  Riverside

  	
   

  	
  92506

  	
   

  
	
  Riverside

  	
   

  	
  92507

  	
   

  
	
  Riverside

  	
   

  	
  92508

  	
   

  
	
  Riverside

  	
   

  	
  92509

  	
   

  
	
  Riverside

  	
   

  	
  92513

  	
   

  
	
  Riverside

  	
   

  	
  92514

  	
   

  
	
  Riverside

  	
   

  	
  92515

  	
   

  
	
  Riverside

  	
   

  	
  92516

  	
   

  
	
  Riverside

  	
   

  	
  92517

  	
   

  
	
  Riverside

  	
   

  	
  92519

  	
   

  
	
  Riverside

  	
   

  	
  92521

  	
   

  
	
  Riverside

  	
   

  	
  92522

  	
   

  
	
  Rowland Heights

  	
   

  	
  91748

  	
   

  
	
  San Bernardino

  	
   

  	
  92401

  	
   

  
	
  San Bernardino

  	
   

  	
  92402

  	
   

  
	
  San Bernardino

  	
   

  	
  92403

  	
   

  
	
  San Bernardino

  	
   

  	
  92404

  	
   

  
	
  San Bernardino

  	
   

  	
  92405

  	
   

  
	
  San Bernardino

  	
   

  	
  92406

  	
   

  
	
  San Bernardino

  	
   

  	
  92407

  	
   

  
	
  San Bernardino

  	
   

  	
  92408

  	
   

  
	
  San Bernardino

  	
   

  	
  92410

  	
   

  
	
  San Bernardino

  	
   

  	
  92411

  	
   

  
	
  San Bernardino

  	
   

  	
  92412

  	
   

  
	
  San Bernardino

  	
   

  	
  92413

  	
   

  
	
  San Bernardino

  	
   

  	
  92414

  	
   

  
	
  San Bernardino

  	
   

  	
  92415

  	
   

  
	
  San Bernardino

  	
   

  	
  92418

  	
   

  
	
  San Bernardino

  	
   

  	
  92420

  	
   

  
	
  San Bernardino

  	
   

  	
  92423

  	
   

  
	
  San Bernardino

  	
   

  	
  92424

  	
   

  
	
  San Bernardino

  	
   

  	
  92427

  	
   

  
	
  San Dimas

  	
   

  	
  91773

  	
   

  
	
  Santa Ana

  	
   

  	
  92701

  	
   

  
	
  Santa Ana

  	
   

  	
  92702

  	
   

  
	
  Santa Ana

  	
   

  	
  92703

  	
   

  
	
  Santa Ana

  	
   

  	
  92704

  	
   

  
	
  Santa Ana

  	
   

  	
  92705

  	
   

  
	
  Santa Ana

  	
   

  	
  92706

  	
   

  
	
  Santa Ana

  	
   

  	
  92707

  	
   

  
	
  Santa Ana

  	
   

  	
  92711

  	
   

  
	
  Santa Ana

  	
   

  	
  92712

  	
   

  
	
  Santa Ana

  	
   

  	
  92735

  	
   

  
	
  Santa Ana

  	
   

  	
  92799

  	
   

  
	
  Silverado

  	
   

  	
  92676

  	
   

  
	
  Tustin

  	
   

  	
  92780

  	
   

  
	
  Tustin

  	
   

  	
  92781

  	
   

  
	
  Tustin

  	
   

  	
  92782

  	
   

  
	
  Upland

  	
   

  	
  91784

  	
   

  
	
  Upland

  	
   

  	
  91785

  	
   

  
	
  Upland

  	
   

  	
  91786

  	
   

  
	
  Villa Park

  	
   

  	
  92861

  	
   

  
	
  Walnut

  	
   

  	
  91788

  	
   

  
	
  Walnut

  	
   

  	
  91789

  	
   

  
	
  Walnut

  	
   

  	
  91795

  	
   

  
	
  West Covina

  	
   

  	
  91790

  	
   

  
	
  West Covina

  	
   

  	
  91791

  	
   

  
	
  West Covina

  	
   

  	
  91792

  	
   

  
	
  West Covina

  	
   

  	
  91793

  	
   

  
	
  Wildomar

  	
   

  	
  92595

  	
   

  
	
  Yorba Linda

  	
   

  	
  92885

  	
   

  
	
  Yorba Linda

  	
   

  	
  92886

  	
   

  
	
  Yorba Linda

  	
   

  	
  92887

  	
   

  

 

The
Service Area outlined in this Exhibit A-1 may be updated periodically to
reflect changes in IPA Provider locations and/or Zip Code additions or
deletions identified by Plan or the U.S. Postal Service.

 

42

 

EXHIBIT A-1

PLAN SERVICE
AREA

PROSPECT
MEDICAL GROUP INC. (ORANGE COUNTY REGION AND NUESTRA FAMILIA MEDICAL GROUP)

 

Effective
Date:

 

The Service Area consists of the following geographic area (city/zip
code):

 

	
  CITY NAME

  	
   

  	
  ZIP CODE

  	
   

  
	
  Alhambra

  	
   

  	
  91801

  	
   

  
	
  Alhambra

  	
   

  	
  91802

  	
   

  
	
  Alhambra

  	
   

  	
  91803

  	
   

  
	
  Alhambra

  	
   

  	
  91804

  	
   

  
	
  Alhambra

  	
   

  	
  91841

  	
   

  
	
  Alhambra

  	
   

  	
  91896

  	
   

  
	
  Alhambra

  	
   

  	
  91899

  	
   

  
	
  Aliso Viejo

  	
   

  	
  92656

  	
   

  
	
  Aliso Viejo

  	
   

  	
  92698

  	
   

  
	
  Altadena

  	
   

  	
  91001

  	
   

  
	
  Altadena

  	
   

  	
  91003

  	
   

  
	
  Anaheim

  	
   

  	
  92801

  	
   

  
	
  Anaheim

  	
   

  	
  92802

  	
   

  
	
  Anaheim

  	
   

  	
  92803

  	
   

  
	
  Anaheim

  	
   

  	
  92804

  	
   

  
	
  Anaheim

  	
   

  	
  92805

  	
   

  
	
  Anaheim

  	
   

  	
  92806

  	
   

  
	
  Anaheim

  	
   

  	
  92807

  	
   

  
	
  Anaheim

  	
   

  	
  92808

  	
   

  
	
  Anaheim

  	
   

  	
  92812

  	
   

  
	
  Anaheim

  	
   

  	
  92814

  	
   

  
	
  Anaheim

  	
   

  	
  92815

  	
   

  
	
  Anaheim

  	
   

  	
  92816

  	
   

  
	
  Anaheim

  	
   

  	
  92817

  	
   

  
	
  Anaheim

  	
   

  	
  92825

  	
   

  
	
  Anaheim

  	
   

  	
  92850

  	
   

  
	
  Anaheim

  	
   

  	
  92899

  	
   

  
	
  Artesia

  	
   

  	
  90701

  	
   

  
	
  Artesia

  	
   

  	
  90702

  	
   

  
	
  Atwood

  	
   

  	
  92811

  	
   

  
	
  Azusa

  	
   

  	
  91702

  	
   

  
	
  Baldwin Park

  	
   

  	
  91706

  	
   

  
	
  Bell

  	
   

  	
  90201

  	
   

  
	
  Bell Gardens

  	
   

  	
  90202

  	
   

  
	
  Bellflower

  	
   

  	
  90706

  	
   

  
	
  Bellflower

  	
   

  	
  90707

  	
   

  
	
  Brea

  	
   

  	
  92821

  	
   

  
	
  Brea

  	
   

  	
  92822

  	
   

  
	
  Brea

  	
   

  	
  92823

  	
   

  
	
  Buena Park

  	
   

  	
  90620

  	
   

  
	
  Buena Park

  	
   

  	
  90621

  	
   

  
	
  Buena Park

  	
   

  	
  90622

  	
   

  
	
  Buena Park

  	
   

  	
  90624

  	
   

  
	
  Capistrano Beach

  	
   

  	
  92624

  	
   

  
	
  Cerritos

  	
   

  	
  90703

  	
   

  
	
  Chino

  	
   

  	
  91708

  	
   

  
	
  Chino

  	
   

  	
  91710

  	
   

  
	
  Chino Hills

  	
   

  	
  91709

  	
   

  
	
  Claremont

  	
   

  	
  91711

  	
   

  
	
  Compton

  	
   

  	
  90220

  	
   

  
	
  Compton

  	
   

  	
  90221

  	
   

  
	
  Compton

  	
   

  	
  90222

  	
   

  
	
  Compton

  	
   

  	
  90223

  	
   

  
	
  Compton

  	
   

  	
  90224

  	
   

  
	
  Corona Del Mar

  	
   

  	
  92625

  	
   

  
	
  Costa Mesa

  	
   

  	
  92626

  	
   

  
	
  Costa Mesa

  	
   

  	
  92627

  	
   

  
	
  Costa Mesa

  	
   

  	
  92628

  	
   

  
	
  Covina

  	
   

  	
  91722

  	
   

  
	
  Covina

  	
   

  	
  91723

  	
   

  
	
  Covina

  	
   

  	
  91724

  	
   

  
	
  Cypress

  	
   

  	
  90630

  	
   

  
	
  Dana Point

  	
   

  	
  92629

  	
   

  
	
  Diamond Bar

  	
   

  	
  91765

  	
   

  
	
  Downey

  	
   

  	
  90239

  	
   

  
	
  Downey

  	
   

  	
  90240

  	
   

  
	
  Downey

  	
   

  	
  90241

  	
   

  
	
  Downey

  	
   

  	
  90242

  	
   

  
	
  Duarte

  	
   

  	
  91009

  	
   

  
	
  Duarte

  	
   

  	
  91010

  	
   

  
	
  East Irvine

  	
   

  	
  92650

  	
   

  
	
  El Toro

  	
   

  	
  92609

  	
   

  
	
  Fontana

  	
   

  	
  92337

  	
   

  
	
  Foothill Ranch

  	
   

  	
  92610

  	
   

  
	
  Fountain Valley

  	
   

  	
  92708

  	
   

  
	
  Fountain Valley

  	
   

  	
  92728

  	
   

  
	
  Fullerton

  	
   

  	
  92831

  	
   

  
	
  Fullerton

  	
   

  	
  92832

  	
   

  
	
  Fullerton

  	
   

  	
  92833

  	
   

  
	
  Fullerton

  	
   

  	
  92834

  	
   

  
	
  Fullerton

  	
   

  	
  92835

  	
   

  
	
  Fullerton

  	
   

  	
  92836

  	
   

  
	
  Fullerton

  	
   

  	
  92837

  	
   

  
	
  Fullerton

  	
   

  	
  92838

  	
   

  
	
  Garden Grove

  	
   

  	
  92840

  	
   

  
	
  Garden Grove

  	
   

  	
  92841

  	
   

  
	
  Garden Grove

  	
   

  	
  92842

  	
   

  
	
  Garden Grove

  	
   

  	
  92843

  	
   

  
	
  Garden Grove

  	
   

  	
  92844

  	
   

  
	
  Garden Grove

  	
   

  	
  92845

  	
   

  
	
  Garden Grove

  	
   

  	
  92846

  	
   

  
	
  Gardena

  	
   

  	
  90247

  	
   

  
	
  Gardena

  	
   

  	
  90248

  	
   

  
	
  Gardena

  	
   

  	
  90249

  	
   

  
	
  Hacienda Heights

  	
   

  	
  91745

  	
   

  
	
  Harbor City

  	
   

  	
  90710

  	
   

  
	
  Hawaiian Gardens

  	
   

  	
  90716

  	
   

  
	
  Huntington Beach

  	
   

  	
  92605

  	
   

  
	
  Huntington Beach

  	
   

  	
  92615

  	
   

  
	
  Huntington Beach

  	
   

  	
  92646

  	
   

  
	
  Huntington Beach

  	
   

  	
  92647

  	
   

  
	
  Huntington Beach

  	
   

  	
  92648

  	
   

  
	
  Huntington Beach

  	
   

  	
  92649

  	
   

  
	
  Huntington Park

  	
   

  	
  90255

  	
   

  
	
  Irvine

  	
   

  	
  92602

  	
   

  
	
  Irvine

  	
   

  	
  92603

  	
   

  
	
  Irvine

  	
   

  	
  92604

  	
   

  
	
  Irvine

  	
   

  	
  92606

  	
   

  
	
  Irvine

  	
   

  	
  92612

  	
   

  
	
  Irvine

  	
   

  	
  92614

  	
   

  
	
  Irvine

  	
   

  	
  92616

  	
   

  

 

43

 

	
  Irvine

  	
   

  	
  92618

  	
   

  
	
  Irvine

  	
   

  	
  92619

  	
   

  
	
  Irvine

  	
   

  	
  92620

  	
   

  
	
  Irvine

  	
   

  	
  92623

  	
   

  
	
  Irvine

  	
   

  	
  92697

  	
   

  
	
  Irvine

  	
   

  	
  92709

  	
   

  
	
  Irvine

  	
   

  	
  92710

  	
   

  
	
  La Habra

  	
   

  	
  90631

  	
   

  
	
  La Habra

  	
   

  	
  90632

  	
   

  
	
  La Habra

  	
   

  	
  90633

  	
   

  
	
  La Mirada

  	
   

  	
  90637

  	
   

  
	
  La Mirada

  	
   

  	
  90638

  	
   

  
	
  La Mirada

  	
   

  	
  90639

  	
   

  
	
  La Palma

  	
   

  	
  90623

  	
   

  
	
  Laguna Beach

  	
   

  	
  92651

  	
   

  
	
  Laguna Beach

  	
   

  	
  92652

  	
   

  
	
  Laguna Hills

  	
   

  	
  92653

  	
   

  
	
  Laguna Hills

  	
   

  	
  92654

  	
   

  
	
  Laguna Niguel

  	
   

  	
  92607

  	
   

  
	
  Laguna Niguel

  	
   

  	
  92677

  	
   

  
	
  Lake Forest

  	
   

  	
  92630

  	
   

  
	
  Lakewood

  	
   

  	
  90711

  	
   

  
	
  Lakewood

  	
   

  	
  90712

  	
   

  
	
  Lakewood

  	
   

  	
  90713

  	
   

  
	
  Lakewood

  	
   

  	
  90714

  	
   

  
	
  Lakewood

  	
   

  	
  90715

  	
   

  
	
  Lomita

  	
   

  	
  90717

  	
   

  
	
  Los Alamitos

  	
   

  	
  90720

  	
   

  
	
  Los Alamitos

  	
   

  	
  90721

  	
   

  
	
  Midway City

  	
   

  	
  92655

  	
   

  
	
  Mission Viejo

  	
   

  	
  92690

  	
   

  
	
  Mission Viejo

  	
   

  	
  92691

  	
   

  
	
  Mission Viejo

  	
   

  	
  92692

  	
   

  
	
  Montebello

  	
   

  	
  90640

  	
   

  
	
  Newport Beach

  	
   

  	
  92658

  	
   

  
	
  Newport Beach

  	
   

  	
  92659

  	
   

  
	
  Newport Beach

  	
   

  	
  92660

  	
   

  
	
  Newport Beach

  	
   

  	
  92661

  	
   

  
	
  Newport Beach

  	
   

  	
  92662

  	
   

  
	
  Newport Beach

  	
   

  	
  92663

  	
   

  
	
  Newport Coast

  	
   

  	
  92657

  	
   

  
	
  Norwalk

  	
   

  	
  90650

  	
   

  
	
  Norwalk

  	
   

  	
  90651

  	
   

  
	
  Norwalk

  	
   

  	
  90652

  	
   

  
	
  Norwalk

  	
   

  	
  90659

  	
   

  
	
  Orange

  	
   

  	
  92856

  	
   

  
	
  Orange

  	
   

  	
  92857

  	
   

  
	
  Orange

  	
   

  	
  92859

  	
   

  
	
  Orange

  	
   

  	
  92862

  	
   

  
	
  Orange

  	
   

  	
  92863

  	
   

  
	
  Orange

  	
   

  	
  92864

  	
   

  
	
  Orange

  	
   

  	
  92865

  	
   

  
	
  Orange

  	
   

  	
  92866

  	
   

  
	
  Orange

  	
   

  	
  92867

  	
   

  
	
  Orange

  	
   

  	
  92868

  	
   

  
	
  Orange

  	
   

  	
  92869

  	
   

  
	
  Paramount

  	
   

  	
  90723

  	
   

  
	
  Pico Rivera

  	
   

  	
  90660

  	
   

  
	
  Pico Rivera

  	
   

  	
  90661

  	
   

  
	
  Pico Rivera

  	
   

  	
  90662

  	
   

  
	
  Pico Rivera

  	
   

  	
  90665

  	
   

  
	
  Placentia

  	
   

  	
  92870

  	
   

  
	
  Placentia

  	
   

  	
  92871

  	
   

  
	
  Rancho Santa Margarita

  	
   

  	
  92688

  	
   

  
	
  Rowland Heights

  	
   

  	
  91748

  	
   

  
	
  San Clemente

  	
   

  	
  92672

  	
   

  
	
  San Clemente

  	
   

  	
  92673

  	
   

  
	
  San Clemente

  	
   

  	
  92674

  	
   

  
	
  San Dimas

  	
   

  	
  91773

  	
   

  
	
  San Juan Capistrano

  	
   

  	
  92675

  	
   

  
	
  San Juan Capistrano

  	
   

  	
  92693

  	
   

  
	
  Santa Ana

  	
   

  	
  92701

  	
   

  
	
  Santa Ana

  	
   

  	
  92702

  	
   

  
	
  Santa Ana

  	
   

  	
  92703

  	
   

  
	
  Santa Ana

  	
   

  	
  92704

  	
   

  
	
  Santa Ana

  	
   

  	
  92705

  	
   

  
	
  Santa Ana

  	
   

  	
  92706

  	
   

  
	
  Santa Ana

  	
   

  	
  92707

  	
   

  
	
  Santa Ana

  	
   

  	
  92711

  	
   

  
	
  Santa Ana

  	
   

  	
  92712

  	
   

  
	
  Santa Ana

  	
   

  	
  92735

  	
   

  
	
  Santa Ana

  	
   

  	
  92799

  	
   

  
	
  Santa Fe Springs

  	
   

  	
  90670

  	
   

  
	
  Santa Fe Springs

  	
   

  	
  90671

  	
   

  
	
  Seal Beach

  	
   

  	
  90740

  	
   

  
	
  Silverado

  	
   

  	
  92676

  	
   

  
	
  Stanton

  	
   

  	
  90680

  	
   

  
	
  Surfside

  	
   

  	
  90743

  	
   

  
	
  Trabuco Canyon

  	
   

  	
  92678

  	
   

  
	
  Trabuco Canyon

  	
   

  	
  92679

  	
   

  
	
  Tustin

  	
   

  	
  92780

  	
   

  
	
  Tustin

  	
   

  	
  92781

  	
   

  
	
  Tustin

  	
   

  	
  92782

  	
   

  
	
  Villa Park

  	
   

  	
  92861

  	
   

  
	
  Westminster

  	
   

  	
  92683

  	
   

  
	
  Westminster

  	
   

  	
  92684

  	
   

  
	
  Westminster

  	
   

  	
  92685

  	
   

  
	
  Whittier

  	
   

  	
  90601

  	
   

  
	
  Whittier

  	
   

  	
  90602

  	
   

  
	
  Whittier

  	
   

  	
  90603

  	
   

  
	
  Whittier

  	
   

  	
  90604

  	
   

  
	
  Whittier

  	
   

  	
  90605

  	
   

  
	
  Whittier

  	
   

  	
  90606

  	
   

  
	
  Whittier

  	
   

  	
  90607

  	
   

  
	
  Whittier

  	
   

  	
  90608

  	
   

  
	
  Whittier

  	
   

  	
  90609

  	
   

  
	
  Whittier

  	
   

  	
  90610

  	
   

  
	
  Whittier

  	
   

  	
  90612

  	
   

  
	
  Yorba Linda

  	
   

  	
  92885

  	
   

  
	
  Yorba Linda

  	
   

  	
  92886

  	
   

  
	
  Yorba Linda

  	
   

  	
  92887

  	
   

  

 

The Service Area outlined in this Exhibit A-1 may be updated
periodically to reflect changes in IPA Provider locations and/or Zip Code
additions or deletions identified by Plan or the U.S. Postal Service.

 

44

 

EXHIBIT A-1

PLAN SERVICE AREA

PROSPECT
MEDICAL GROUP INC. (SHERMAN OAKS REGION) 

Effective Date:

 

The
Service Area consists of the following geographic area (city/zip code):

 

	
  CITY NAME

  	
   

  	
  ZIP CODE

  	
   

  
	
  Agoura Hills

  	
   

  	
  91301

  	
   

  
	
  Agoura Hills

  	
   

  	
  91376

  	
   

  
	
  Alhambra

  	
   

  	
  91801

  	
   

  
	
  Alhambra

  	
   

  	
  91802

  	
   

  
	
  Alhambra

  	
   

  	
  91803

  	
   

  
	
  Alhambra

  	
   

  	
  91804

  	
   

  
	
  Alhambra

  	
   

  	
  91841

  	
   

  
	
  Alhambra

  	
   

  	
  91896

  	
   

  
	
  Alhambra

  	
   

  	
  91899

  	
   

  
	
  Altadena

  	
   

  	
  91001

  	
   

  
	
  Altadena

  	
   

  	
  91003

  	
   

  
	
  Arcadia

  	
   

  	
  91006

  	
   

  
	
  Arcadia

  	
   

  	
  91007

  	
   

  
	
  Arcadia

  	
   

  	
  91066

  	
   

  
	
  Arcadia

  	
   

  	
  91077

  	
   

  
	
  Bell

  	
   

  	
  90201

  	
   

  
	
  Bell Gardens

  	
   

  	
  90202

  	
   

  
	
  Beverly Hills

  	
   

  	
  90209

  	
   

  
	
  Beverly Hills

  	
   

  	
  90210

  	
   

  
	
  Beverly Hills

  	
   

  	
  90211

  	
   

  
	
  Beverly Hills

  	
   

  	
  90212

  	
   

  
	
  Beverly Hills

  	
   

  	
  90213

  	
   

  
	
  Brandeis

  	
   

  	
  93064

  	
   

  
	
  Burbank

  	
   

  	
  91501

  	
   

  
	
  Burbank

  	
   

  	
  91502

  	
   

  
	
  Burbank

  	
   

  	
  91503

  	
   

  
	
  Burbank

  	
   

  	
  91504

  	
   

  
	
  Burbank

  	
   

  	
  91505

  	
   

  
	
  Burbank

  	
   

  	
  91506

  	
   

  
	
  Burbank

  	
   

  	
  91507

  	
   

  
	
  Burbank

  	
   

  	
  91508

  	
   

  
	
  Burbank

  	
   

  	
  91510

  	
   

  
	
  Burbank

  	
   

  	
  91521

  	
   

  
	
  Burbank

  	
   

  	
  91522

  	
   

  
	
  Burbank

  	
   

  	
  91523

  	
   

  
	
  Burbank

  	
   

  	
  91526

  	
   

  
	
  Calabasas

  	
   

  	
  91302

  	
   

  
	
  Calabasas

  	
   

  	
  91372

  	
   

  
	
  Canoga Park

  	
   

  	
  91303

  	
   

  
	
  Canoga Park

  	
   

  	
  91304

  	
   

  
	
  Canoga Park

  	
   

  	
  91305

  	
   

  
	
  Canoga Park

  	
   

  	
  91309

  	
   

  
	
  Canyon Country

  	
   

  	
  91351

  	
   

  
	
  Canyon Country

  	
   

  	
  91386

  	
   

  
	
  Castaic

  	
   

  	
  91310

  	
   

  
	
  Castaic

  	
   

  	
  91384

  	
   

  
	
  Chatsworth

  	
   

  	
  91311

  	
   

  
	
  Chatsworth

  	
   

  	
  91312

  	
   

  
	
  Chatsworth

  	
   

  	
  91313

  	
   

  
	
  Culver City

  	
   

  	
  90230

  	
   

  
	
  Culver City

  	
   

  	
  90231

  	
   

  
	
  Culver City

  	
   

  	
  90232

  	
   

  
	
  Culver City

  	
   

  	
  90233

  	
   

  
	
  El Segundo

  	
   

  	
  90245

  	
   

  
	
  Encino

  	
   

  	
  91316

  	
   

  
	
  Encino

  	
   

  	
  91416

  	
   

  
	
  Encino

  	
   

  	
  91426

  	
   

  
	
  Encino

  	
   

  	
  91436

  	
   

  
	
  Glendale

  	
   

  	
  91201

  	
   

  
	
  Glendale

  	
   

  	
  91202

  	
   

  
	
  Glendale

  	
   

  	
  91203

  	
   

  
	
  Glendale

  	
   

  	
  91204

  	
   

  
	
  Glendale

  	
   

  	
  91205

  	
   

  
	
  Glendale

  	
   

  	
  91206

  	
   

  
	
  Glendale

  	
   

  	
  91207

  	
   

  
	
  Glendale

  	
   

  	
  91208

  	
   

  
	
  Glendale

  	
   

  	
  91209

  	
   

  
	
  Glendale

  	
   

  	
  91210

  	
   

  
	
  Glendale

  	
   

  	
  91221

  	
   

  
	
  Glendale

  	
   

  	
  91222

  	
   

  
	
  Glendale

  	
   

  	
  91225

  	
   

  
	
  Glendale

  	
   

  	
  91226

  	
   

  
	
  Granada Hills

  	
   

  	
  91344

  	
   

  
	
  Granada Hills

  	
   

  	
  91394

  	
   

  
	
  Hawthorne

  	
   

  	
  90250

  	
   

  
	
  Hawthorne

  	
   

  	
  90251

  	
   

  
	
  Hermosa Beach

  	
   

  	
  90254

  	
   

  
	
  Huntington Park

  	
   

  	
  90255

  	
   

  
	
  Inglewood

  	
   

  	
  90301

  	
   

  
	
  Inglewood

  	
   

  	
  90302

  	
   

  
	
  Inglewood

  	
   

  	
  90303

  	
   

  
	
  Inglewood

  	
   

  	
  90304

  	
   

  
	
  Inglewood

  	
   

  	
  90305

  	
   

  
	
  Inglewood

  	
   

  	
  90306

  	
   

  
	
  Inglewood

  	
   

  	
  90307

  	
   

  
	
  Inglewood

  	
   

  	
  90308

  	
   

  
	
  Inglewood

  	
   

  	
  90309

  	
   

  
	
  Inglewood

  	
   

  	
  90310

  	
   

  
	
  Inglewood

  	
   

  	
  90311

  	
   

  
	
  Inglewood

  	
   

  	
  90312

  	
   

  
	
  Inglewood

  	
   

  	
  90313

  	
   

  
	
  Inglewood

  	
   

  	
  90397

  	
   

  
	
  Inglewood

  	
   

  	
  90398

  	
   

  
	
  La Canada Flintridge

  	
   

  	
  91011

  	
   

  
	
  La Canada Flintridge

  	
   

  	
  91012

  	
   

  
	
  La Crescenta

  	
   

  	
  91214

  	
   

  
	
  La Crescenta

  	
   

  	
  91224

  	
   

  
	
  Lawndale

  	
   

  	
  90260

  	
   

  
	
  Lawndale

  	
   

  	
  90261

  	
   

  
	
  Los Angeles

  	
   

  	
  90001

  	
   

  
	
  Los Angeles

  	
   

  	
  90002

  	
   

  
	
  Los Angeles

  	
   

  	
  90003

  	
   

  
	
  Los Angeles

  	
   

  	
  90004

  	
   

  
	
  Los Angeles

  	
   

  	
  90005

  	
   

  
	
  Los Angeles

  	
   

  	
  90006

  	
   

  
	
  Los Angeles

  	
   

  	
  90007

  	
   

  
	
  Los Angeles

  	
   

  	
  90008

  	
   

  
	
  Los Angeles

  	
   

  	
  90009

  	
   

  
	
  Los Angeles

  	
   

  	
  90010

  	
   

  
	
  Los Angeles

  	
   

  	
  90011

  	
   

  
	
  Los Angeles

  	
   

  	
  90012

  	
   

  
	
  Los Angeles

  	
   

  	
  90013

  	
   

  
	
  Los Angeles

  	
   

  	
  90014

  	
   

  
	
  Los Angeles

  	
   

  	
  90015

  	
   

  
	
  Los Angeles

  	
   

  	
  90016

  	
   

  
	
  Los Angeles

  	
   

  	
  90017

  	
   

  
	
  Los Angeles

  	
   

  	
  90018

  	
   

  
	
  Los Angeles

  	
   

  	
  90019

  	
   

  
	
  Los Angeles

  	
   

  	
  90020

  	
   

  
	
  Los Angeles

  	
   

  	
  90021

  	
   

  
	
  Los Angeles

  	
   

  	
  90022

  	
   

  
	
  Los Angeles

  	
   

  	
  90023

  	
   

  
	
  Los Angeles

  	
   

  	
  90024

  	
   

  
	
  Los Angeles

  	
   

  	
  90025

  	
   

  
	
  Los Angeles

  	
   

  	
  90026

  	
   

  
	
  Los Angeles

  	
   

  	
  90027

  	
   

  
	
  Los Angeles

  	
   

  	
  90028

  	
   

  
	
  Los Angeles

  	
   

  	
  90029

  	
   

  
	
  Los Angeles

  	
   

  	
  90030

  	
   

  

 

45

 

	
  Los Angeles

  	
   

  	
  90031

  	
   

  
	
  Los Angeles

  	
   

  	
  90032

  	
   

  
	
  Los Angeles

  	
   

  	
  90033

  	
   

  
	
  Los Angeles

  	
   

  	
  90034

  	
   

  
	
  Los Angeles

  	
   

  	
  90035

  	
   

  
	
  Los Angeles

  	
   

  	
  90036

  	
   

  
	
  Los Angeles

  	
   

  	
  90037

  	
   

  
	
  Los Angeles

  	
   

  	
  90038

  	
   

  
	
  Los Angeles

  	
   

  	
  90039

  	
   

  
	
  Los Angeles

  	
   

  	
  90040

  	
   

  
	
  Los Angeles

  	
   

  	
  90041

  	
   

  
	
  Los Angeles

  	
   

  	
  90042

  	
   

  
	
  Los Angeles

  	
   

  	
  90043

  	
   

  
	
  Los Angeles

  	
   

  	
  90044

  	
   

  
	
  Los Angeles

  	
   

  	
  90045

  	
   

  
	
  Los Angeles

  	
   

  	
  90046

  	
   

  
	
  Los Angeles

  	
   

  	
  90047

  	
   

  
	
  Los Angeles

  	
   

  	
  90048

  	
   

  
	
  Los Angeles

  	
   

  	
  90049

  	
   

  
	
  Los Angeles

  	
   

  	
  90050

  	
   

  
	
  Los Angeles

  	
   

  	
  90051

  	
   

  
	
  Los Angeles

  	
   

  	
  90052

  	
   

  
	
  Los Angeles

  	
   

  	
  90053

  	
   

  
	
  Los Angeles

  	
   

  	
  90054

  	
   

  
	
  Los Angeles

  	
   

  	
  90055

  	
   

  
	
  Los Angeles

  	
   

  	
  90056

  	
   

  
	
  Los Angeles

  	
   

  	
  90057

  	
   

  
	
  Los Angeles

  	
   

  	
  90058

  	
   

  
	
  Los Angeles

  	
   

  	
  90059

  	
   

  
	
  Los Angeles

  	
   

  	
  90060

  	
   

  
	
  Los Angeles

  	
   

  	
  90061

  	
   

  
	
  Los Angeles

  	
   

  	
  90062

  	
   

  
	
  Los Angeles

  	
   

  	
  90063

  	
   

  
	
  Los Angeles

  	
   

  	
  90064

  	
   

  
	
  Los Angeles

  	
   

  	
  90065

  	
   

  
	
  Los Angeles

  	
   

  	
  90066

  	
   

  
	
  Los Angeles

  	
   

  	
  90067

  	
   

  
	
  Los Angeles

  	
   

  	
  90068

  	
   

  
	
  Los Angeles

  	
   

  	
  90070

  	
   

  
	
  Los Angeles

  	
   

  	
  90071

  	
   

  
	
  Los Angeles

  	
   

  	
  90072

  	
   

  
	
  Los Angeles

  	
   

  	
  90073

  	
   

  
	
  Los Angeles

  	
   

  	
  90074

  	
   

  
	
  Los Angeles

  	
   

  	
  90075

  	
   

  
	
  Los Angeles

  	
   

  	
  90076

  	
   

  
	
  Los Angeles

  	
   

  	
  90077

  	
   

  
	
  Los Angeles

  	
   

  	
  90078

  	
   

  
	
  Los Angeles

  	
   

  	
  90079

  	
   

  
	
  Los Angeles

  	
   

  	
  90080

  	
   

  
	
  Los Angeles

  	
   

  	
  90081

  	
   

  
	
  Los Angeles

  	
   

  	
  90082

  	
   

  
	
  Los Angeles

  	
   

  	
  90083

  	
   

  
	
  Los Angeles

  	
   

  	
  90084

  	
   

  
	
  Los Angeles

  	
   

  	
  90086

  	
   

  
	
  Los Angeles

  	
   

  	
  90087

  	
   

  
	
  Los Angeles

  	
   

  	
  90088

  	
   

  
	
  Los Angeles

  	
   

  	
  90089

  	
   

  
	
  Los Angeles

  	
   

  	
  90091

  	
   

  
	
  Los Angeles

  	
   

  	
  90093

  	
   

  
	
  Los Angeles

  	
   

  	
  90094

  	
   

  
	
  Los Angeles

  	
   

  	
  90095

  	
   

  
	
  Los Angeles

  	
   

  	
  90096

  	
   

  
	
  Los Angeles

  	
   

  	
  90097

  	
   

  
	
  Los Angeles

  	
   

  	
  90099

  	
   

  
	
  Los Angeles

  	
   

  	
  90101

  	
   

  
	
  Los Angeles

  	
   

  	
  90102

  	
   

  
	
  Los Angeles

  	
   

  	
  90103

  	
   

  
	
  Los Angeles

  	
   

  	
  90174

  	
   

  
	
  Los Angeles

  	
   

  	
  90185

  	
   

  
	
  Malibu

  	
   

  	
  90263

  	
   

  
	
  Malibu

  	
   

  	
  90264

  	
   

  
	
  Malibu

  	
   

  	
  90265

  	
   

  
	
  Manhattan Beach

  	
   

  	
  90266

  	
   

  
	
  Manhattan Beach

  	
   

  	
  90267

  	
   

  
	
  Marina Del Rey

  	
   

  	
  90292

  	
   

  
	
  Marina Del Rey

  	
   

  	
  90295

  	
   

  
	
  Maywood

  	
   

  	
  90270

  	
   

  
	
  Mission Hills

  	
   

  	
  91345

  	
   

  
	
  Mission Hills

  	
   

  	
  91346

  	
   

  
	
  Mission Hills

  	
   

  	
  91395

  	
   

  
	
  Monrovia

  	
   

  	
  91016

  	
   

  
	
  Monrovia

  	
   

  	
  91017

  	
   

  
	
  Montebello

  	
   

  	
  90640

  	
   

  
	
  Monterey Park

  	
   

  	
  91754

  	
   

  
	
  Monterey Park

  	
   

  	
  91755

  	
   

  
	
  Monterey Park

  	
   

  	
  91756

  	
   

  
	
  Montrose

  	
   

  	
  91020

  	
   

  
	
  Montrose

  	
   

  	
  91021

  	
   

  
	
  Moorpark

  	
   

  	
  93020

  	
   

  
	
  Moorpark

  	
   

  	
  93021

  	
   

  
	
  Newhall

  	
   

  	
  91321

  	
   

  
	
  Newhall

  	
   

  	
  91322

  	
   

  
	
  North Hills

  	
   

  	
  91343

  	
   

  
	
  North Hills

  	
   

  	
  91393

  	
   

  
	
  North Hollywood

  	
   

  	
  91601

  	
   

  
	
  North Hollywood

  	
   

  	
  91602

  	
   

  
	
  North Hollywood

  	
   

  	
  91603

  	
   

  
	
  North Hollywood

  	
   

  	
  91605

  	
   

  
	
  North Hollywood

  	
   

  	
  91606

  	
   

  
	
  North Hollywood

  	
   

  	
  91609

  	
   

  
	
  North Hollywood

  	
   

  	
  91611

  	
   

  
	
  North Hollywood

  	
   

  	
  91612

  	
   

  
	
  North Hollywood

  	
   

  	
  91615

  	
   

  
	
  North Hollywood

  	
   

  	
  91616

  	
   

  
	
  North Hollywood

  	
   

  	
  91618

  	
   

  
	
  Northridge

  	
   

  	
  91324

  	
   

  
	
  Nonhridge

  	
   

  	
  91325

  	
   

  
	
  Northridge

  	
   

  	
  91326

  	
   

  
	
  Northridge

  	
   

  	
  91327

  	
   

  
	
  Northridge

  	
   

  	
  91328

  	
   

  
	
  Northridge

  	
   

  	
  91329

  	
   

  
	
  Northridge

  	
   

  	
  91330

  	
   

  
	
  Oak Park

  	
   

  	
  91377

  	
   

  
	
  Pacific Palisades

  	
   

  	
  90272

  	
   

  
	
  Pacoima

  	
   

  	
  91331

  	
   

  
	
  Pacoima

  	
   

  	
  91333

  	
   

  
	
  Pacoima

  	
   

  	
  91334

  	
   

  
	
  Palos Verdes Peninsula

  	
   

  	
  90274

  	
   

  
	
  Panorama City

  	
   

  	
  91402

  	
   

  
	
  Panorama City

  	
   

  	
  91412

  	
   

  
	
  Paramount

  	
   

  	
  90723

  	
   

  
	
  Pasadena

  	
   

  	
  91050

  	
   

  
	
  Pasadena

  	
   

  	
  91051

  	
   

  
	
  Pasadena

  	
   

  	
  91101

  	
   

  
	
  Pasadena

  	
   

  	
  91102

  	
   

  
	
  Pasadena

  	
   

  	
  91103

  	
   

  
	
  Pasadena

  	
   

  	
  91104

  	
   

  
	
  Pasadena

  	
   

  	
  91105

  	
   

  
	
  Pasadena

  	
   

  	
  91106

  	
   

  
	
  Pasadena

  	
   

  	
  91107

  	
   

  
	
  Pasadena

  	
   

  	
  91109

  	
   

  
	
  Pasadena

  	
   

  	
  91110

  	
   

  
	
  Pasadena

  	
   

  	
  91114

  	
   

  
	
  Pasadena

  	
   

  	
  91115

  	
   

  
	
  Pasadena

  	
   

  	
  91116

  	
   

  
	
  Pasadena

  	
   

  	
  91117

  	
   

  
	
  Pasadena

  	
   

  	
  91121

  	
   

  
	
  Pasadena

  	
   

  	
  91123

  	
   

  
	
  Pasadena

  	
   

  	
  91124

  	
   

  
	
  Pasadena

  	
   

  	
  91125

  	
   

  
	
  Pasadena

  	
   

  	
  91126

  	
   

  
	
  Pasadena

  	
   

  	
  91129

  	
   

  
	
  Pasadena

  	
   

  	
  91131

  	
   

  
	
  Pasadena

  	
   

  	
  91175

  	
   

  
	
  Pasadena

  	
   

  	
  91182

  	
   

  
	
  Pasadena

  	
   

  	
  91184

  	
   

  
	
  Pasadena

  	
   

  	
  91185

  	
   

  
	
  Pasadena

  	
   

  	
  91186

  	
   

  
	
  Pasadena

  	
   

  	
  91187

  	
   

  
	
  Pasadena

  	
   

  	
  91188

  	
   

  

 

46

 

	
  Pasadena

  	
   

  	
  91189

  	
   

  
	
  Pasadena

  	
   

  	
  91191

  	
   

  
	
  Playa Del Rey

  	
   

  	
  90293

  	
   

  
	
  Playa Del Rey

  	
   

  	
  90296

  	
   

  
	
  Rancho Palos Verdes

  	
   

  	
  90275

  	
   

  
	
  Redondo Beach

  	
   

  	
  90277

  	
   

  
	
  Redondo Beach

  	
   

  	
  90278

  	
   

  
	
  Reseda

  	
   

  	
  91335

  	
   

  
	
  Reseda

  	
   

  	
  91337

  	
   

  
	
  Rosemead

  	
   

  	
  91770

  	
   

  
	
  Rosemead

  	
   

  	
  91771

  	
   

  
	
  Rosemead

  	
   

  	
  91772

  	
   

  
	
  San Fernando

  	
   

  	
  91340

  	
   

  
	
  San Fernando

  	
   

  	
  91341

  	
   

  
	
  San Gabriel

  	
   

  	
  91775

  	
   

  
	
  San Gabriel

  	
   

  	
  91776

  	
   

  
	
  San Gabriel

  	
   

  	
  91778

  	
   

  
	
  San Marino

  	
   

  	
  91108

  	
   

  
	
  San Marino

  	
   

  	
  91118

  	
   

  
	
  Santa Clarita

  	
   

  	
  91350

  	
   

  
	
  Santa Clarita

  	
   

  	
  91380

  	
   

  
	
  Santa Clarita

  	
   

  	
  91382

  	
   

  
	
  Santa Clarita

  	
   

  	
  91383

  	
   

  
	
  Santa Monica

  	
   

  	
  90401

  	
   

  
	
  Santa Monica

  	
   

  	
  90402

  	
   

  
	
  Santa Monica

  	
   

  	
  90403

  	
   

  
	
  Santa Monica

  	
   

  	
  90404

  	
   

  
	
  Santa Monica

  	
   

  	
  90405

  	
   

  
	
  Santa Monica

  	
   

  	
  90406

  	
   

  
	
  Santa Monica

  	
   

  	
  90407

  	
   

  
	
  Santa Monica

  	
   

  	
  90408

  	
   

  
	
  Santa Monica

  	
   

  	
  90409

  	
   

  
	
  Santa Monica

  	
   

  	
  90410

  	
   

  
	
  Santa Monica

  	
   

  	
  90411

  	
   

  
	
  Sherman Oaks

  	
   

  	
  91403

  	
   

  
	
  Sherman Oaks

  	
   

  	
  91413

  	
   

  
	
  Sherman Oaks

  	
   

  	
  91423

  	
   

  
	
  Sherman Oaks

  	
   

  	
  91495

  	
   

  
	
  Sierra Madre

  	
   

  	
  91024

  	
   

  
	
  Sierra Madre

  	
   

  	
  91025

  	
   

  
	
  Simi Valley

  	
   

  	
  93062

  	
   

  
	
  Simi Valley

  	
   

  	
  93063

  	
   

  
	
  Simi Valley

  	
   

  	
  93065

  	
   

  
	
  Simi Valley

  	
   

  	
  93093

  	
   

  
	
  Simi Valley

  	
   

  	
  93094

  	
   

  
	
  Simi Valley

  	
   

  	
  93099

  	
   

  
	
  South El Monte

  	
   

  	
  91733

  	
   

  
	
  South Gate

  	
   

  	
  90280

  	
   

  
	
  South Pasadena

  	
   

  	
  91030

  	
   

  
	
  South Pasadena

  	
   

  	
  91031

  	
   

  
	
  Stevenson Ranch

  	
   

  	
  91381

  	
   

  
	
  Studio City

  	
   

  	
  91604

  	
   

  
	
  Studio City

  	
   

  	
  91614

  	
   

  
	
  Sun Valley

  	
   

  	
  91352

  	
   

  
	
  Sun Valley

  	
   

  	
  91353

  	
   

  
	
  Sunland

  	
   

  	
  91040

  	
   

  
	
  Sunland

  	
   

  	
  91041

  	
   

  
	
  Sylmar

  	
   

  	
  91342

  	
   

  
	
  Sylmar

  	
   

  	
  91392

  	
   

  
	
  Tarzana

  	
   

  	
  91356

  	
   

  
	
  Tarzana

  	
   

  	
  91357

  	
   

  
	
  Temple City

  	
   

  	
  91780

  	
   

  
	
  Thousand Oaks

  	
   

  	
  91358

  	
   

  
	
  Thousand Oaks

  	
   

  	
  91360

  	
   

  
	
  Thousand Oaks

  	
   

  	
  91362

  	
   

  
	
  Toluca Lake

  	
   

  	
  91610

  	
   

  
	
  Topanga

  	
   

  	
  90290

  	
   

  
	
  Torrance

  	
   

  	
  90501

  	
   

  
	
  Torrance

  	
   

  	
  90502

  	
   

  
	
  Torrance

  	
   

  	
  90503

  	
   

  
	
  Torrance

  	
   

  	
  90504

  	
   

  
	
  Torrance

  	
   

  	
  90505

  	
   

  
	
  Torrance

  	
   

  	
  90506

  	
   

  
	
  Torrance

  	
   

  	
  90507

  	
   

  
	
  Torrance

  	
   

  	
  90508

  	
   

  
	
  Torrance

  	
   

  	
  90509

  	
   

  
	
  Torrance

  	
   

  	
  90510

  	
   

  
	
  Tujunga

  	
   

  	
  91042

  	
   

  
	
  Tujunga

  	
   

  	
  91043

  	
   

  
	
  Universal City

  	
   

  	
  91608

  	
   

  
	
  Valencia

  	
   

  	
  91354

  	
   

  
	
  Valencia

  	
   

  	
  91355

  	
   

  
	
  Valencia

  	
   

  	
  91385

  	
   

  
	
  Valley Village

  	
   

  	
  91607

  	
   

  
	
  Valley Village

  	
   

  	
  91617

  	
   

  
	
  Van Nuys

  	
   

  	
  91388

  	
   

  
	
  Van Nuys

  	
   

  	
  91401

  	
   

  
	
  Van Nuys

  	
   

  	
  91404

  	
   

  
	
  Van Nuys

  	
   

  	
  91405

  	
   

  
	
  Van Nuys

  	
   

  	
  91406

  	
   

  
	
  Van Nuys

  	
   

  	
  91407

  	
   

  
	
  Van Nuys

  	
   

  	
  91408

  	
   

  
	
  Van Nuys

  	
   

  	
  91409

  	
   

  
	
  Van Nuys

  	
   

  	
  91410

  	
   

  
	
  Van Nuys

  	
   

  	
  91411

  	
   

  
	
  Van Nuys

  	
   

  	
  91470

  	
   

  
	
  Van Nuys

  	
   

  	
  91482

  	
   

  
	
  Van Nuys

  	
   

  	
  91496

  	
   

  
	
  Van Nuys

  	
   

  	
  91497

  	
   

  
	
  Van Nuys

  	
   

  	
  91499

  	
   

  
	
  Venice

  	
   

  	
  90291

  	
   

  
	
  Venice

  	
   

  	
  90294

  	
   

  
	
  Verdugo City

  	
   

  	
  91046

  	
   

  
	
  West Hills

  	
   

  	
  91307

  	
   

  
	
  West Hills

  	
   

  	
  91308

  	
   

  
	
  West Hollywood

  	
   

  	
  90069

  	
   

  
	
  Westlake Village

  	
   

  	
  91359

  	
   

  
	
  Westlake Village

  	
   

  	
  91361

  	
   

  
	
  Westlake Village

  	
   

  	
  91363

  	
   

  
	
  Winnetka

  	
   

  	
  91306

  	
   

  
	
  Winnetka

  	
   

  	
  91396

  	
   

  
	
  Woodland Hills

  	
   

  	
  91364

  	
   

  
	
  Woodland Hills

  	
   

  	
  91365

  	
   

  
	
  Woodland Hills

  	
   

  	
  91367

  	
   

  
	
  Woodland Hills

  	
   

  	
  91371

  	
   

  
	
  Woodland Hills

  	
   

  	
  91399

  	
   

  

 

47

 

	
   

  	
  [LOGO]

  
	
   

  	
  Blue Shield 

  
	
   

  	
  of California

  
	
   

  	
  An Independent Member

  of the Blue Shield Association

  

 

Exhibit B

 

HMO
IPA/Medical Group Agreement

DIVISION OF FINANCIAL RESPONSIBILITIES

 

	
  Name of Group:

  	
   

  	
  PROSPECT MEDICAL GROUP, INC.

  
	
  Effective Date:

  	
   

  	
   

  

 

Pursuant to the disclosure requirements as set forth in Title 28,
California Code of Regulations § 1300.75.4.1(a), the attached Division of
Financial Responsibility (DOFR), informs Group of the allocation of financial
risk assumed under the contract. The matrix details the responsibility for
medical expenses, including physician, institutional and ancillary costs, which
will be allotted to the group, the hospital, the plan and any shared risk
funds.

 

Note: AB 2420 (The Richman Bill), which allows Medical Groups to
exclude risk for injectable drugs administered in the physician’s office, does
not apply to BSC Medicare 65 Plus. Financial responsibility for these drugs
remain Medical Group or Shared Savings responsibility as indicated below.

 

 

SEE
FOLLOWING PAGES FOR

DIVISION
OF FINANCIAL RESPONSIBILITIES

CHART

 

48

 

	
  SERVICES

  	
   

  	
  MEDICAL

  GROUP

  	
   

  	
  SHARED

  SAVINGS

  	
   

  	
  BLUE

  SHIELD

  
	
  PREVENTIVE SERVICES

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  •  Health Education/Promotion

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  Immunizations/Serum:

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •   Adult Immunizations

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •   Childhood Immunizations
  first recommended for use by the American Academy of Pediatrics on or after
  1/1/0l and Prevnar

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •   Other Childhood
  Immunizations

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •  
  Routine Physical Exams

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •  
  Vision/Hearing Screenings

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  HEALTH CARE PROFESSIONAL

  (OUTPATIENT AND OFFICE)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  •   Administration – injectable
  drugs and immunization

  mono-globulins

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •  
  Allergy Testing/Serum

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •  
  Amniocentesis

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •  
  Biofeedback

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •  
  Chiropractic (Non-Rider Benefit)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •  
  Diagnosis, Therapy, Treatment & Triage

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •   Emergency Services Within
  Service Area or at nearest designated trauma center

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •   Emergency Services Outside
  Service Area – (or designated trauma center) — Commercial Members

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •   Emergency Services Outside
  Service Area – (or at designated trauma center) — Blue Shield 65+

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •   Office Visit Supplies
  (Splints, Casts, Bandages, Dressings, etc.)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •  
  Office Visits/Consultation/Surgery

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •  
  Pathology/Radiology/Anesthesia (including Dental)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •  
  Patient Counseling

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  

 

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

 

49

 

	
  SERVICES

  	
   

  	
  MEDICAL

  GROUP

  	
   

  	
  SHARED

  SAVINGS

  	
   

  	
  BLUE

  SHIELD

  
	
  •  
  Podiatry

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •  
  Pre-and Post-Transplant Services

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •  
  Radiation Therapy

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •  
  Acute Detox

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  • 
   Psychiatric/Substance Abuse – Commercial Members whose benefits
  renew or become effective on or after 7/1/00.

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •   Urgent Care Services

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  HEALTH CARE PROFESSIONAL (INPATIENT)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  •  
  Diagnosis, Treatment & Therapy

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •  
  Emergency Services Within Service Area

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •   Emergency Services Outside
  Service Area – Commercial Members

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •  
  Emergency Services Outside Service Area – Blue Shield 65+

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •  
  Pathology/Radiology/Anesthesia

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •  
  Transplant (all inclusive case rates)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •   Transplant
  (physician fees excluded from case rate payment)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •   Urgent
  Care Services

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •   Visits/Consultations/Surgery

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  FACILITY SERVICES (INPATIENT)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  •   Emergency Services Within
  Service Area

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •   Emergency Services Outside
  Service Area – Commercial Members

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •   Emergency Services Outside
  Service Area – Blue Shield 65+

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •   Facility and Supplies

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •   Acute Detox

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •   Psychiatric/Substance Abuse
  for Blue Shield 65+ and for Commercial Members whose benefits have not been
  renewed since 7/1/00.

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •   Psychiatric/Substance
  Abuse- Commercial Members whose benefits renew or become effective on or
  after 7/1/00.

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •   Take Home Drugs

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •   Transplant

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •   Urgent Care Services

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  

 

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

 

50

 

	
  SERVICES

  	
   

  	
  MEDICAL

  GROUP

  	
   

  	
  SHARED

  SAVINGS

  	
   

  	
  BLUE

  SHIELD

  
	
  FACILITY SERVICES (OUTPATIENT)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  •   Chemotherapy/Chemotherapy
  Drugs/Injectable Drugs

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •  
  Detox

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •  
  Diagnostic Testing

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •  
  Emergency Services Within
  Service Area

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •   Emergency Services Outside
  Service Area – Commercial Members

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •   Emergency Services Outside
  Service Area – Blue Shield 65+

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •   Endoscopic Studies not
  performed in physician’s office

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •  
  False Labor OB Check at Hospital

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •   Fetal Genetic Testing

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •   Fetal Monitoring

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •   Invasive Cardiology

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •   Lab/Radiology/Ancillary
  Services

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •   Lithotripsy

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •   Other Services

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •   Pre and Post Transplant
  Services

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •   Pre-admission Testing

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •   Psychiatric/Substance Abuse
  Day Treatment – Commercial Members whose benefits renew or become effective
  on or after 7/1/00.

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •   Psychiatric/Substance Abuse
  O/P Counseling – Commercial Members whose benefits renew or become effective
  on or after 7/1/00.

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •   Radiation Therapy

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •   Renal Dialysis

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •   Surgery/Surgical Procedures
  (Including Laser)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •   Urgent Care Services

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  PREGNANCY AND MATERNITY CARE

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  •   Alternate Birth Center

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •  
  Normal Delivery/C-Section

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •   Prenatal/Postnatal Visits

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  

 

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

 

51

 

	
  SERVICES

  	
   

  	
  MEDICAL

  GROUP

  	
   

  	
  SHARED

  SAVINGS

  	
   

  	
  BLUE

  SHIELD

  
	
  FAMILY PLANNING

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  •   Abortions

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •   Counseling

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •   Infertility
  (Diagnostics/Treatment - Limited Benefits)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •  
  Tubal Ligation

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •  
  Vasectomy

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  DENTAL SERVICES

  (FOR REPAIR OF ACCIDENT/INJURY ONLY)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  •  
  Facility

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •  
  Professional

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  BLOOD

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  •  
  Blood Transfusions

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •  
  Blood/Blood Products (Autologous)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •  
  Blood/Blood Products from Blood Bank

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •  
  Clotting Factors

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  SKILLED NURSING FACILITY CARE (SNF)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  •  
  Facility

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •  
  Professional

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  INSTITUTIONAL HOSPICE

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  •  
  Facility

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •  
  Professional

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  MEDICATIONS

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  •  
  Facility Take Home Drugs

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •   Outpatient Prescription
  Drugs

  (Excluding Take Home, Injectables, & Blue Shield 65+)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •   Outpatient Prescription
  Drugs

  (Excluding Take Home and Injectables) Blue Shield 65+  

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •   Therapeutic Injectables
  provided in MD office and other therapeutic injectables in an implantable
  dosage form not already specified in this DOFR

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •   High-Cost Injectables
  greater than $10,000 administered in MD Office as outlined in the Provider
  Manual

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  

 

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

 

52

 

	
  SERVICES

  	
   

  	
  MEDICAL

  GROUP

  	
   

  	
  SHARED

  SAVINGS

  	
   

  	
  BLUE

  SHIELD

  
	
  •   Chemotherapeutic Injectable provided in
  MD office  (includes some
  Chemo-Injectables listed under High-Cost Injectables exclusion)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •   Chemo-adjunct injectable therapies for
  side effects provided in MD office

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •   Therapeutic Injectables provided for
  self-administration as home use, either through contracted Alternate Care
  Services Provider, a Plan contracted pharmacy or Home Health Agency.

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  VISION CARE

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  •   Implanted Lenses (Cataract Surgery)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •   Lenses and Frames due to medical eye
  conditions

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •   Non-Cataract Related Rx Lenses and Frames

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •   Vision Screening

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  HOME HEALTH CARE (HHC) & HOME HOSPICE

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  •   Agency Visit

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •   Home Medical Equipment (HME)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •   Medical Supplies/IV Solutions Associated
  with HHC Treatment Blue Shield

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •   Physician Home Visit

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •   Licensed Per Diem Hospice (does not apply
  to Blue Shield 65+)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  REHAB THERAPY (PT, ST, OT, RT, CARDIAC)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  •  
  Inpatient

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •   Outpatient

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  OTHER SERVICES

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  •   Colostomy/Ostomy
  Supplies/Parental/Enteral Nutritional Supplements (OP)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •   Diabetic glucose testing machines,
  insulin pump & syringes

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •   Disposable Diabetic Testing Supplies
  (Blue Shield 65+)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •   Disposable Diabetic Testing Supplies
  (non-Blue Shield 65 Plus)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •   Insulin

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  

 

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

 

53

 

	
  SERVICES

  	
   

  	
  MEDICAL

  GROUP

  	
   

  	
  SHARED

  SAVINGS

  	
   

  	
  BLUE

  SHIELD

  
	
  •  
  Orthotics/Prostheses (External) – Commercial -$50 or Under

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •  
  Orthotics/Prostheses (External) - Commercial –Over $50

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •  
  Orthotics/Prosthetics (External) - Blue Shield 65+

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •  
  Surgically Implanted Devices

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •   Cancer Clinical Trials and
  all Covered Services directly relating to the provision of the said trials –
  Commercial.

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  AMBULANCE

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  •  
  In Area

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •  
  Out of Area

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  OPTIONAL BENEFITS

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  •  
  Acupuncture Rider

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •  
  Chiropractic Rider

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •  
  Dental Rider

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •  
  Outpatient Prescription Drug Rider

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •  
  Hearing Aids

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •  
  Infertility Rider (Gifts, etc.)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •  
  Podiatric Rider

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  •  
  Vision Rider

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  

 

NOTE:
This is intended only as summaries guide of financial responsibility as stated
in the contract. It is not possible to list all medical services. If you have
any questions as to the financial responsibility for a service not listed
above, Blue Shield follows Medicare guidelines for all product lines. Services
covered under Medicare Part A are Shared Savings Fund responsibility and
services covered under Medicare Part B are Medical Group responsibility.

 

<<>>

 

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

 

54

 

	
   

  	
  [LOGO]

  
	
   

  	
  Blue Shield 

  
	
   

  	
  of California

  
	
   

  	
  An Independent Member

  of the Blue Shield Association

  

 

Exhibit B-1

Injectables
Notification/Waiver

 

The Richman Bill (AB 2420), mandates that health plans can no longer
require IPA/Medical Groups to assume financial responsibility for injectable
drugs over $250 per dose for Commercial Members. This new law will be effective
for provider contracts issued, amended, delivered or renewed on or after
July 1, 2003.

 

Unless the IPA/Medical Group is willing to accept risk for these
services, the Richman Bill requires that risk for injectables such as
chemotherapy/adjunctive chemotherapy, hemophilia drugs, transplant drugs, adult
vaccines, self-injectable medication and other office injectables be assigned
to the Plan. The Bill does not apply to home-infusion drugs.

 

Signature below constitutes Provider’s acceptance or non-acceptance of
injectables risk as well as full understanding of Provider’s rights under AB
2420 as outlined by Plan.

 

o                                    Group Agrees to Waive Rights under
AB2420-Richman Bill and accept some or all financial risk for Injectable drugs
covered by this legislation:

 

o                                    Group Agrees to Exercise all Rights under
AB2420-Richman Bill and will not accept risk for any Injectable drugs covered
by this legislation.

 

 

	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  
					

 

<<>>

 

55

 

	
   

  	
  [LOGO]

  
	
   

  	
  Blue Shield 

  
	
   

  	
  of California

  
	
   

  	
  An Independent Member

  of the Blue Shield Association

  

 

Exhibit C  

HMO IPA/Medical Group Agreement

CAPITATION

 

	
  Name of Group:

  	
   

  	
  PROSPECT MEDICAL GROUP, INC.

  
	
  Effective Date:

  	
   

  	
   

  

 

CAPITATION PAYMENTS: Pursuant to Article VII of the
Agreement, Blue Shield shall pay to Group, based upon the Member’s Benefit
Program, the monthly per member per month (PMPM) Capitation set forth in
Exhibit C-1 hereto. Capitation for non-Blue Shield 65 Plus Members is a
specified dollar rate based upon the Member’s benefit plan design, including
co-payment levels and age/sex category. Per Exhibit C- 1, the capitation rate
for each member is a product of the Member’s age/sex category multiplied by the
corresponding base rate multiplied by the applicable co-pay adjustment factor.
The sum of the individual capitation rates for assigned Members will be added
to determine the Group’s aggregate Capitation payable for any given month.
Capitation for Blue Shield 65 Plus Members is a percentage of the Medicare
premium received by Blue Shield from CMS for the basic medical benefits for
such Members and excludes any premium paid by CMS, the Member or an Employer
Group for rider benefits that are not the financial responsibility of Group.

 

Information on actuarial cost and utilization assumptions, as required
by Title 28, California Code of Regulations § 1300.75.4.1(a) is further
described in the Provider Manual and is updated at least annually. The
information presented therein regarding cost and utilization is provided by way
of example only and is based broadly on historical data in Blue Shield’s
possession. It is not a statement of fact or opinion of what will actually
occur and is not offered as an accurate predictor of the experience of any
specific Group. It is not intended to reflect the actual cost or utilization
incurred by any specific Group, does not predict the actual costs to any
specific group or patient mix, and has not been risk adjusted in any way
(capitation adjustments for age, sex and benefit plan design are reflected in
this Exhibit C.).  Group recognizes that
its actual utilization and unit costs will likely differ from the examples
given and could be higher or lower. Group should not rely on this information
in evaluating its own financial risk, but, rather, should review its own
patient mix, utilization and cost information as well as other available
information, consult with its own financial and actuarial advisors in
evaluating the information contained herein, and make its own independent
business judgment in deciding to enter into the financial risk arrangements
under the Agreement based on its own independent assessment.

 

ENCOUNTER DATA SUBMISSION PENALTIES: In the event that Group fails to comply with
the encounter data submission requirements described in Paragraph 2.12 hereof,
then the amounts to be deducted or withheld from Group Capitation on a monthly
basis as provided in Paragraph 7.11 hereof are identified in Exhibit C-1 as
“Penalties for Deficient Encounter Data Submission”.

 

<<>>

 

56

 

	
   

  	
  [LOGO]

  
	
   

  	
  Blue Shield 

  
	
   

  	
  of California

  
	
   

  	
  An Independent Member

  of the Blue Shield Association

  

 

Exhibit C-1

HMO IPA/Medical Group Agreement

CAPITATION
RATES 

 

	
  Name of Group:

  	
   

  	
  PROSPECT MEDICAL GROUP, INC.

  
	
  Effective Date:

  	
   

  	
   

  

 

As of  / /2004, the effective net yield (which includes
the deduction for Stop Loss, if applicable) for the following PMPMs and factors
are $47.21 for the HMO Group, $36.92 for HMO IFP, $38.83 for POS, $45.65 for
the PERS Group, and $45.79 pmpm in aggregate, based on the 07/01/2003
membership.

 

The actual capitation payment for each month will be
calculated based on the actual member mix for each age/sex/copay level
category.

 

A. Members Other Than Blue Shield 65 Plus 

Members

 

Age &
Sex Categories and Capitation Fees

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Benefit /
  Rate Adjustment

  	
   

  
	
  Category

  	
   

  	
  Age/Sex
  Adjusted Capitation (PMPM)

  	
   

  	
  Office
  Visit Copay Factor

  	
   

  
	
  Sex

  	
   

  	
  Age

  	
   

  	
  Group

  (non-POS)

  	
   

  	
  IFP

  (non-POS)

  	
   

  	
  POS

  (In-network)

  	
   

  	
  PERS

  (non-POS)

  	
   

  	
  Office
  Visit

  Copay

  	
   

  	
  Factor

  	
   

  
	
  F

  	
   

  	
  0-1

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  $

  	
  0

  	
   

  	
  1.081

  	
   

  
	
  F

  	
   

  	
  2-6

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  $

  	
  1

  	
   

  	
  1.071

  	
   

  
	
  F

  	
   

  	
  7-18

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  $

  	
  2

  	
   

  	
  1.061

  	
   

  
	
  F

  	
   

  	
  19-21

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  $

  	
  3

  	
   

  	
  1.052

  	
   

  
	
  F

  	
   

  	
  22-24

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  $

  	
  4

  	
   

  	
  1.043

  	
   

  
	
  F

  	
   

  	
  25-29

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  $

  	
  5

  	
   

  	
  1.034

  	
   

  
	
  F

  	
   

  	
  30-34

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  $

  	
  6

  	
   

  	
  1.026

  	
   

  
	
  F

  	
   

  	
  35-39

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  $

  	
  7

  	
   

  	
  1.017

  	
   

  
	
  F

  	
   

  	
  40-44

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  $

  	
  8

  	
   

  	
  1.009

  	
   

  
	
  F

  	
   

  	
  45-49

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  $

  	
  9

  	
   

  	
  1.001

  	
   

  
	
  F

  	
   

  	
  50-54

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  $

  	
  10

  	
   

  	
  0.994

  	
   

  
	
  F

  	
   

  	
  55-59

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  $

  	
  11

  	
   

  	
  0.986

  	
   

  
	
  F

  	
   

  	
  60-64

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  $

  	
  12

  	
   

  	
  0.979

  	
   

  
	
  F

  	
   

  	
  65 + (NM)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  $

  	
  13

  	
   

  	
  0.972

  	
   

  
	
  F

  	
   

  	
  65 + (M)*

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  $

  	
  14

  	
   

  	
  0.965

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  15

  	
   

  	
  0.958

  	
   

  
	
  M

  	
   

  	
  0-1

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  $

  	
  16

  	
   

  	
  0.951

  	
   

  
	
  M

  	
   

  	
  2-6

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  $

  	
  17

  	
   

  	
  0.944

  	
   

  
	
  M

  	
   

  	
  7- 18

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  $

  	
  18

  	
   

  	
  0.937

  	
   

  
	
  M

  	
   

  	
  19-21

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  $

  	
  19

  	
   

  	
  0.930

  	
   

  
	
  M

  	
   

  	
  22-24

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  $

  	
  20

  	
   

  	
  0.923

  	
   

  
	
  M

  	
   

  	
  25-29

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  $

  	
  21

  	
   

  	
  0.917

  	
   

  
	
  M

  	
   

  	
  30-34

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  $

  	
  22

  	
   

  	
  0.910

  	
   

  
	
  M

  	
   

  	
  35-39

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  $

  	
  23

  	
   

  	
  0.903

  	
   

  
	
  M

  	
   

  	
  40-44

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  $

  	
  24

  	
   

  	
  0.897

  	
   

  
	
  M

  	
   

  	
  45-49

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  $

  	
  25

  	
   

  	
  0.890

  	
   

  
	
  M

  	
   

  	
  50-54

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  $

  	
  30

  	
   

  	
  0.858

  	
   

  
	
  M

  	
   

  	
  55-59

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  $

  	
  35

  	
   

  	
  0.825

  	
   

  
	
  M

  	
   

  	
  60-64

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  $

  	
  40

  	
   

  	
  0.793

  	
   

  
	
  M

  	
   

  	
  65 + (NM)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  $

  	
  45

  	
   

  	
  0.760

  	
   

  
	
  M

  	
   

  	
  65 + (M)*

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  $

  	
  50

  	
   

  	
  0.728

  	
   

  

 

*
=  Medicare Primary

*** All references to capitation rates have been deleted.

 

57

 

As of   /  /2005, the effective net yield
(which includes the deduction for Stop Loss, if applicable) for the following
PMPMs and factors are $50.05 for the HMO Group, $39.13 for HMO IFP, $41.15 for
POS, $48.39 for the PERS Group, and $48.54 pmpm in aggregate, based on the
07/01/2003 membership.

 

The actual capitation payment for each month will be
calculated based on the actual member mix for each age/sex/copay level
category.

 

A. Members Other Than Blue Shield 65 Plus

Members

 

Age & Sex Categories and
Capitation Fees

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Benefit /
  Rate Adjustment

  	
   

  
	
  Category

  	
   

  	
  Age/Sex
  Adjusted Capitation (PMPM)

  	
   

  	
  Office
  Visit Copay Factor

  	
   

  
	
  Sex

  	
   

  	
  Age

  	
   

  	
  Group

  (non-POS)

  	
   

  	
  IFP

  (non-POS)

  	
   

  	
  POS

  (In-network)

  	
   

  	
  PERS

  (non-POS)

  	
   

  	
  Office
  Visit

  Copay

  	
   

  	
  Factor

  	
   

  
	
  F

  	
   

  	
  0-1

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  $

  	
  0

  	
   

  	
  1.081

  	
   

  
	
  F

  	
   

  	
  2-6

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  $

  	
  1

  	
   

  	
  1.071

  	
   

  
	
  F

  	
   

  	
  7-18

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  $

  	
  2

  	
   

  	
  1.061

  	
   

  
	
  F

  	
   

  	
  19-21

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  $

  	
  3

  	
   

  	
  1.052

  	
   

  
	
  F

  	
   

  	
  22-24

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  $

  	
  4

  	
   

  	
  1.043

  	
   

  
	
  F

  	
   

  	
  25-29

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  $

  	
  5

  	
   

  	
  1.034

  	
   

  
	
  F

  	
   

  	
  30-34

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  $

  	
  6

  	
   

  	
  1.026

  	
   

  
	
  F

  	
   

  	
  35-39

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  $

  	
  7

  	
   

  	
  1.017

  	
   

  
	
  F

  	
   

  	
  40-44

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  $

  	
  8

  	
   

  	
  1.009

  	
   

  
	
  F

  	
   

  	
  45-49

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  $

  	
  9

  	
   

  	
  1.001

  	
   

  
	
  F

  	
   

  	
  50-54

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  $

  	
  10

  	
   

  	
  0.994

  	
   

  
	
  F

  	
   

  	
  55-59

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  $

  	
  11

  	
   

  	
  0.986

  	
   

  
	
  F

  	
   

  	
  60-64

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  $

  	
  12

  	
   

  	
  0.979

  	
   

  
	
  F

  	
   

  	
  65 + (NM)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  $

  	
  13

  	
   

  	
  0.972

  	
   

  
	
  F

  	
   

  	
  65 + (M)*

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  $

  	
  14

  	
   

  	
  0.965

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  15

  	
   

  	
  0.958

  	
   

  
	
  M

  	
   

  	
  0-1

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  $

  	
  16

  	
   

  	
  0.951

  	
   

  
	
  M

  	
   

  	
  2-6

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  $

  	
  17

  	
   

  	
  0.944

  	
   

  
	
  M

  	
   

  	
  7- 18

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  $

  	
  18

  	
   

  	
  0.937

  	
   

  
	
  M

  	
   

  	
  19-21

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  $

  	
  19

  	
   

  	
  0.930

  	
   

  
	
  M

  	
   

  	
  22-24

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  $

  	
  20

  	
   

  	
  0.923

  	
   

  
	
  M

  	
   

  	
  25-29

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  $

  	
  21

  	
   

  	
  0.917

  	
   

  
	
  M

  	
   

  	
  30-34

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  $

  	
  22

  	
   

  	
  0.910

  	
   

  
	
  M

  	
   

  	
  35-39

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  $

  	
  23

  	
   

  	
  0.903

  	
   

  
	
  M

  	
   

  	
  40-44

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  $

  	
  24

  	
   

  	
  0.897

  	
   

  
	
  M

  	
   

  	
  45-49

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  $

  	
  25

  	
   

  	
  0.890

  	
   

  
	
  M

  	
   

  	
  50-54

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  $

  	
  30

  	
   

  	
  0.858

  	
   

  
	
  M

  	
   

  	
  55-59

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  $

  	
  35

  	
   

  	
  0.825

  	
   

  
	
  M

  	
   

  	
  60-64

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  $

  	
  40

  	
   

  	
  0.793

  	
   

  
	
  M

  	
   

  	
  65 + (NM)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  $

  	
  45

  	
   

  	
  0.760

  	
   

  
	
  M

  	
   

  	
  65 + (M)*

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  $

  	
  50

  	
   

  	
  0.728

  	
   

  

 

*
=   Medicare Primary

*** All references to capitation rates have been deleted.

 

58

 

The preceding capitation rates do not apply to Members enrolled through
the Healthy Families Program. For Healthy Family Program Members, the following
capitation rates shall apply:

 

Orange County

Prospect Medical Group

	
  Age 0 – 11.99
  months

  	
   

  	
  ***PMPM

  
	
  Age 1 year – 18
  years 11.99 mos.

  	
   

  	
  ***PMPM

  

 

Los Angeles County

Antelope Valley Medical Group

Nuestra Familia Medical Group

Pegasus Medical Group

Prospect Medical Group – Sherman
Oaks

	
  Age 0 – 11.99
  months

  	
   

  	
  ***PMPM

  
	
  Age 1 year – 18
  years 11.99 mos.

  	
   

  	
  ***PMPM

  

 

Riverside County

Prospect Medical Group - Corona

	
  Age 0 – 11.99
  months

  	
   

  	
  ***PMPM

  
	
  Age 1 year – 18
  years 11.99 mos.

  	
   

  	
  ***PMPM

  

 

B.                                    BLUE SHIELD 65 PLUS MEMBERS
– BASIC CAPITATION

 

Thirty Six and three quarters  percent (36.75%)
of the Monthly CMS Capitation received by Blue Shield from CMS and the
equivalent percentage of the actual Monthly Blue Shield 65 Plus Premium (as
described below) which Blue Shield determines, according to its actuarial
standards and methodology, to be for a benefit that is included in the Member’s
basic benefit plan and for which Group bears financial risk. Blue Shield will
retain 100% of premiums collected for benefits considered supplemental to the
basic benefit plan (as described below). Blue Shield may make monthly
retroactive adjustments to reflect any retroactive adjustments made by CMS to the
Monthly CMS Capitation.

 

The “Monthly CMS Capitation” refers to the monthly premium payment made
by CMS to Blue Shield as payment to Blue Shield for the provision of services
to the Blue Shield 65 Plus Members enrolled in Blue Shield.

 

The “Monthly Blue Shield 65 Plus Premium Payments” refers those
additional premium payments which Blue Shield receives directly from the member
or from the employer group for basic benefit plan provisions.

 

“Supplemental Benefits” are benefits offered to enhance the basic benefit
provided by Blue Shield in the Member’s county of residence. Additional
premiums (beyond the base plan premium, if applicable) are collected from
Members and employer groups for such benefits.

 

59

 

Group shall have no financial responsibility for the administration
and/or delivery of such benefits.

 

C.                                    PENALTIES FOR DEFICIENT
ENCOUNTER DATA SUBMISSION

If minimum submission requirements are not met, as defined in the
Provider Manual, and are not corrected within a thirty (30) day notice period,
Group shall be subject to a penalty of three percent (3%) of the Group’s
commercial capitation payment and, if applicable, one percent (1%) of the
Group’s Blue Shield 65 Plus capitation payment for the period(s) in question
from the monthly capitation payments until the deficiency is corrected.

 

<<>>

 

60

 

	
   

  	
  [LOGO]

  
	
   

  	
  Blue Shield 

  
	
   

  	
  of California

  
	
   

  	
  An Independent Member

  of the Blue Shield Association

  

 

Exhibit D

 

HMO IPA/Medical
Group Agreement 

SHARED SAVINGS PROGRAMS

 

	
  Name of Group:

  	
   

  	
  PROSPECT MEDICAL GROUP, INC.

  
	
  Effective Date:

  	
   

  	
   

  

 

A.                                    COMMERCIAL MEMBERS

 

FUNDING: For Members other than those enrolled in Blue Shield 65 Plus
plans and Blue Shield POS Benefit Programs, Blue Shield will allocate to a
Shared Savings Fund a per Member per month amount set forth in Exhibit D-1 for
all Members assigned to Group, subject to retroactive adjustments either upward
or downward due to retroactive changes in membership. [See Exhibit G-2 for
provisions relating to Blue Shield POS Benefit Programs and POS Shared Savings
Funds.]

 

CHARGING OF PAYMENTS: Blue Shield shall charge against the Shared
Savings Fund all payments made by Blue Shield for such Members during the
annual term of the Agreement which are designated as Shared Savings Services in
Exhibit B, less payments received by Blue Shield as a result of third-party
reimbursement, Workers’ Compensation recoveries and coordination of benefits
payments. Blue Shield shall include any payments for Shared Savings Services
which are paid prior to the date of the settlement, as well as a reasonable
allowance, as determined by Blue Shield’s actuaries, for incurred but not paid
(IBNP) claims. Any costs for Shared Savings Services not included in any annual
settlement shall be carried forward and included in the Shared Savings
settlement for the succeeding Agreement Year. In addition, if this Agreement is
replaced or superceded any other agreement between the parties which contained
a risk sharing arrangement for similar services; then the following shall also
be charged against the Shared Savings Fund described herein: (i) any deficit in
the final settlement of that risk sharing arrangement and, (ii) any claims for
risk services which were incurred but not included in the settlement of the
risk arrangement in the prior agreement.

 

SHARED SAVINGS FUND SETTLEMENT: The Shared Savings
Fund shall be settled on an annual basis, within one hundred eighty (180) days
following the end of each annual term of the Agreement (being a 90 day claims
run out and a 90 day determination period).

 

SURPLUS: If the total actual cost of Shared Savings
Services is less than the total allocation to the Shared Savings Fund, then
Group shall be entitled to fifty percent (50%)
of the amount by which the allocation exceeds the costs, not to exceed twenty five percent

 

61

 

 

(25%) of the total Physician Group Capitation for
the Shared Savings period, minus any carry forward resulting from deficits from
previous Agreement years.

 

DEFICIT: If the total actual cost of Shared Savings
services is more than the total allocation to the Shared Savings Fund, then *** of the amount by which the actual costs exceed the total allocation,
not to exceed *** of the total Physician Group capitation for
the Shared Savings period, shall be allocated to Group and shall be handled as
follows: (i) the excess may be deducted from any other settlements or payments,
except capitation and Professional Stop Loss Program payments made pursuant to
Exhibit H, due to Group from Blue Shield, and, (ii) any remaining amounts shall
be carried forward into future Agreement years and shall be deducted from any
Shared Savings payments to Group in future years.

 

SUMMARIES & SETTLEMENTS: Blue Shield shall
provide to Group a Shared Savings Program quarterly Report and a Shared Savings
Annual Settlement, as further described in the Provider Manual.

 

B.                                    BLUE SHIELD 65 PLUS MEMBERS

 

FUNDING: For Members enrolled in Blue Shield 65 Plus
plans, Blue Shield will allocate to a Shared Savings Fund a per Member per
month percentage amount set forth in Exhibit D-2 for all Members assigned to
Group, subject to retroactive adjustments either upward or downward due to
retroactive changes in membership.

 

CHARGING OF PAYMENTS: Blue Shield shall charge
against the Shared Savings Fund all payments made by Blue Shield for such
Members during the annual term of the Agreement which are designated as Shared
Savings Services in Exhibit B, less payments received by Blue Shield as a
result of third-party reimbursement, Workers’ Compensation recoveries and
coordination of benefits payments. Blue Shield shall include any payments for
Shared Savings Services which are paid prior to the date of the settlement, as
well as a reasonable allowance, as determined by Blue Shield’s actuaries, for
incurred but not paid (IBNP) claims. Any costs for Shared Savings Services not
included in any annual settlement shall be carried forward and included in the
Shared Savings settlement for the succeeding Agreement Year. In addition, if
this Agreement is replaced or superceded any other agreement between the
parties which contained a risk sharing arrangement for similar services; then
the following shall also be charged against the Shared Savings Fund described
herein: (i) any deficit in the final settlement of that risk sharing
arrangement and, (ii) any claims for risk services which were incurred but not
included in the settlement of the risk arrangement in the prior agreement.

 

SHARED SAVINGS FUND SETTLEMENT: The Shared Savings
Fund shall be settled on an annual basis, within one hundred eighty (180) days
following the end of each annual term of the Agreement (being a 90 day claims
run out and a 90 day determination period).

 

62

 

SURPLUS: If the total actual cost of Shared Savings Services is less
than the total  allocation
to the Shared Savings Fund, then Group shall be entitled to *** of the amount
by which the allocation exceeds the costs, not to exceed *** of the total Physician Group capitation for the Shared Savings period,
minus any carry forward resulting from deficits from previous Agreement years.

 

DEFICIT: If the total actual cost of Shared Savings
Services is more than the total allocation to the Shared Savings Fund, then *** of the amount by which the actual costs exceed the total allocation,
not to exceed *** of the total Physician Group capitation for
the Shared Savings period, shall be allocated to Group and shall be handled as
follows: (i) the excess may be deducted from any other settlements or payments,
except capitation and Professional Stop Loss Program payments made pursuant to
Exhibit H, due to Group from Blue Shield, and, (ii) any remaining amounts shall
be carried forward into future Agreement years and shall be deducted from any
Shared Savings payments to Group in future years.

 

SUMMARIES & SETTLEMENTS: Blue Shield shall
provide to Group a Shared Savings Program Quarterly Report and a Shared Savings
Annual Settlement, as further described in the Provider Manual.

 

C.                                    PHARMACY SHARED SAVINGS FUND

 

FUNDING: For Members enrolled in Blue Shield 65 Plus, Blue Shield will
allocate to a separately administered Pharmacy Shared Savings Fund a per member
per month percentage amount as set forth in Exhibit D-3 for all Members
assigned to Group. All membership is subject to retroactive adjustments either
upward or downward due to retroactive changes in membership.

 

CHARGING OF PAYMENTS: Blue Shield will charge
against the Pharmacy Shared Savings Fund the actual cost paid by Blue Shield
for outpatient prescription drug services provided to assigned members, as well
as a reasonable allowance, as determined by Blue Shield’s actuaries, for
incurred but not paid (IBNP) outpatient prescription drug claims. Pharmacy
costs include the ingredient cost for Covered Services rendered to Members for
which the Pharmacy Shared Savings Fund is financially responsible per Exhibit
B, professional dispensing fees paid to participating pharmacies, less
associated pharmacy co-payment revenue. Any costs for outpatient prescription
drug services not included in any annual settlement shall be carried forward
and included in the Pharmacy Risk Fund settlement for the succeeding Agreement
Year. In addition, if this Agreement is replaced or superceded any other
agreement between the parties which contained a risk sharing arrangement for
similar services; then the following shall also be charged against the Shared
Savings Fund described herein: (i) any deficit in the final settlement of that
risk sharing arrangement and, (ii) any claims for risk services which were
incurred but not included in the settlement of the risk arrangement in the
prior agreement.

 

63

 

PHARMACY RISK FUND SETTLEMENT: The Pharmacy Shared Savings Fund shall
be settled on an annual basis, within one hundred eighty (180) days following
the end of each annual term of the Agreement (being a 90 day claims run out and
a 90 day determination period).

 

SURPLUS: If the total actual cost of outpatient
prescription drugs is less than the total allocation to the Pharmacy Risk Fund,
then Group shall be entitled to *** of the amount by
which the allocation exceeds the costs, not to exceed *** of the Pharmacy Shared Savings Fund allocation for the Shared Savings
period, minus any carry forward resulting from deficits from previous Agreement
years.

 

DEFICIT: If the total actual cost of Pharmacy Shared
Savings services is more than the total allocation to the Pharmacy Shared
Savings Fund, then *** of the amount by which the actual costs
exceed the total allocation, not to exceed *** of the Pharmacy
Shared Savings Fund allocation for the Shared Savings period, shall be
allocated to Group and shall be handled as follows: (i) the excess may be
deducted from any other settlements or payments, except capitation and
Professional Stop Loss Program payments made pursuant to Exhibit H, due to
Group from Blue Shield, and, (ii) any remaining amounts shall be carried forward
into future Agreement years and shall be deducted from Pharmacy Shared Savings
Payments to Group in future years.

 

SUMMARIES & SETTLEMENTS: Blue Shield shall provide to Group, as
further described in the Provider Manual, on a quarterly basis, a summary of
the Pharmacy Shared savings expenses along with a comparison to the Pharmacy
Shared Savings Funding and utilization data pertaining to the cost of
prescriptions written on a physician specific basis. Blue Shield shall also
provide to Group a Shared Savings Annual Settlement.

 

<<>>

 

64

 

	
   

  	
  [LOGO]

  
	
   

  	
  Blue Shield 

  
	
   

  	
  of California

  
	
   

  	
  An Independent Member

  of the Blue Shield Association

  

 

Exhibit D-1

HMO
IPA/Medical Group Agreement

SHARED
SAVINGS FUND ALLOCATIONS

 

	
  Name of Group:

  	
   

  	
  PROSPECT MEDICAL GROUP, INC.

  
	
  Effective Date:

  	
   

  	
   

  

 

As of   /  /2004, the effective net yield
(which includes the deduction for Stop Loss, if applicable) for the following
PMPMs are $44.28 for the HMO Group, $38.01 for the HMO IFP, and $42.73 for the
HMO PERS based on the 07/01/2003 membership.

 

The actual allocation to Shared Saving Fund for each month
will be calculated based on the actual member mix for each age/sex category.

 

Members Other Than Blue Shield 65 Plus Members

 

Age & Sex Categories and Shared Savings Allocations

 

	
  Category

  	
   

  	
  Shared
  Savings Allocation (PMPM)

  	
   

  
	
  Sex

  	
   

  	
  Age

  	
   

  	
  Group

  (non-POS)

  	
   

  	
  IFP

  (non-POS)

  	
   

  	
  PERS

  (non-POS)

  	
   

  
	
  F

  	
   

  	
  0 - 1

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  F

  	
   

  	
  2 - 6

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  F

  	
   

  	
  7 - 18

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  F

  	
   

  	
  19 - 21

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  F

  	
   

  	
  22 - 24

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  F

  	
   

  	
  25 - 29

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  F

  	
   

  	
  30 - 34

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  F

  	
   

  	
  35 - 39

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  F

  	
   

  	
  40 - 44

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  F

  	
   

  	
  45 - 49

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  F

  	
   

  	
  50 - 54

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  F

  	
   

  	
  55 - 59

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  F

  	
   

  	
  60 - 64

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  F

  	
   

  	
  65 + (NM)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  F

  	
   

  	
  65 + (M) *

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  M

  	
   

  	
  0 - 1

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  M

  	
   

  	
  2 - 6

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  M

  	
   

  	
  7 - 18

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  M

  	
   

  	
  19 - 21

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  M

  	
   

  	
  22 - 24

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  M

  	
   

  	
  25 - 29

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  M

  	
   

  	
  30 - 34

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  M

  	
   

  	
  35 - 39

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  M

  	
   

  	
  40 - 44

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  M

  	
   

  	
  45 - 49

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  M

  	
   

  	
  50 - 54

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  M

  	
   

  	
  55 - 59

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  M

  	
   

  	
  60 - 64

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  M

  	
   

  	
  65 + (NM)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  M

  	
   

  	
  65 + (M) *

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  

 

* = Medicare Primary

*** All references to the dollar amount of shared savings allocations
have been deleted.

 

65

 

As of   /  /2005, the effective net yield
(which includes the deduction for Stop Loss, if applicable) for the following
PMPMs are $48.72 for the HMO Group, $41.81 for the HMO IFP, and $47.01 for the
HMO PERS based on the 07/01/2003 membership.

 

The actual allocation to Shared Saving Fund for each month
will be calculated based on the actual member mix for each age/sex category.

 

Members Other Than Blue Shield 65 Plus Members

 

Age & Sex Categories and Shared Savings Allocations

 

	
  Category

  	
   

  	
  Shared
  Savings Allocation (PMPM)

  	
   

  
	
  Sex

  	
   

  	
  Age

  	
   

  	
  Group

  (non-POS)

  	
   

  	
  IFP

  (non-POS)

  	
   

  	
  PERS

  (non-POS)

  	
   

  
	
  F

  	
   

  	
  0 - 1

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  F

  	
   

  	
  2 - 6

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  F

  	
   

  	
  7 - 18

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  F

  	
   

  	
  19 - 21

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  F

  	
   

  	
  22 - 24

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  F

  	
   

  	
  25 - 29

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  F

  	
   

  	
  30 - 34

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  F

  	
   

  	
  35 - 39

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  F

  	
   

  	
  40 - 44

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  F

  	
   

  	
  45 - 49

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  F

  	
   

  	
  50 - 54

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  F

  	
   

  	
  55 - 59

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  F

  	
   

  	
  60 - 64

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  F

  	
   

  	
  65 + (NM)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  F

  	
   

  	
  65 + (M) *

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  M

  	
   

  	
  0 - 1

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  M

  	
   

  	
  2 - 6

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  M

  	
   

  	
  7 - 18

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  M

  	
   

  	
  19 - 21

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  M

  	
   

  	
  22 - 24

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  M

  	
   

  	
  25 - 29

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  M

  	
   

  	
  30 - 34

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  M

  	
   

  	
  35 - 39

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  M

  	
   

  	
  40 - 44

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  M

  	
   

  	
  45 - 49

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  M

  	
   

  	
  50 - 54

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  M

  	
   

  	
  55 - 59

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  M

  	
   

  	
  60 - 64

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  M

  	
   

  	
  65 + (NM)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  M

  	
   

  	
  65 + (M) *

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  

 

* = Medicare Primary

*** All references to the dollar amount of
shared savings allocations have been deleted.

 

66

 

	
   

  	
  [LOGO]

  
	
   

  	
  Blue Shield 

  
	
   

  	
  of California

  
	
   

  	
  An Independent Member

  of the Blue Shield Association

  

 

Exhibit D-2

 

HMO
IPA/Medical Group Agreement

SHARED
SAVINGS FUND ALLOCATIONS

 

	
  Name of Group:

  	
   

  	
  PROSPECT MEDICAL GROUP, INC.

  
	
  Effective Date:

  	
   

  	
   

  

 

BLUE SHIELD 65 PLUS MEMBERS

 

*** of the Monthly CMS Capitation received by Blue Shield from CMS.

 

<<>>

 

67

 

	
   

  	
  [LOGO]

  
	
   

  	
  Blue Shield 

  
	
   

  	
  of California

  
	
   

  	
  An Independent Member

  of the Blue Shield Association

  

 

Exhibit D-3

 

HMO
IPA/Medical Group Agreement 

PHARMACY SHARED SAVINGS FUND ALLOCATIONS

 

	
  Name of Group:

  	
   

  	
  PROSPECT MEDICAL GROUP, INC.

  
	
  Effective Date:

  	
   

  	
   

  

 

BLUE SHIELD 65 PLUS MEMBERS

 

*** of the Monthly CMS Capitation received by Blue Shield from CMS.

 

<<>>

 

68

 

	
   

  	
  [LOGO]

  
	
   

  	
  Blue Shield 

  
	
   

  	
  of California

  
	
   

  	
  An Independent Member

  of the Blue Shield Association

  

 

Exhibit E

 

HMO
IPA/Medical Group Agreement

BLUE SHIELD
ALLOWABLE RATES

 

	
  Name of Group:

  	
   

  	
  PROSPECT MEDICAL GROUP, INC.

  
	
  Effective Date:

  	
   

  	
   

  

 

The following shall constitute Blue Shield Allowable Rates to be paid
to Group or Group Providers for Reciprocity (Paragraph 2.10), Retroactive
Deletions (Paragraph 6.3(b)), and Services Other Than Capitated Professional
Services (Paragraph 7.2):

 

The lesser of *** of the Blue Shield
PPO Physician Allowances in effect on the date of service, or the amount paid
by the Group (or Group Provider) for the services, if any, (excluding
Capitation payment), minus the Member’s/individual’s applicable copayment,
coinsurance or deductible. Further detail regarding Blue Shield’s proprietary
fee schedule is provided upon request.

 

All injectable drugs excluded from Group risk as noted in Exhibit B,
shall be reimbursed by Blue Shield at “cost”. “Cost is defined as Average
Wholesale Price (AWP) less ***.  AWP
refers to the Average Wholesale Price listed in nationally recognized pricing
sources as determined by Blue Shield, and is updated twice annually.

 

<<>>

 

69

 

	
   

  	
  [LOGO]

  
	
   

  	
  Blue Shield 

  
	
   

  	
  of California

  
	
   

  	
  An Independent Member

  of the Blue Shield Association

  

 

Exhibit F

 

HMO
IPA/Medical Group Agreement

DELEGATION
RESPONSIBILITIES

 

	
  Name of Group:

  	
   

  	
  PROSPECT MEDICAL GROUP, INC.

  
	
  Effective Date:

  	
   

  	
   

  

 

1.                                       Delegation Responsibilities & Penalties. The capitation amounts paid to Group by
Blue Shield as set forth in Paragraph 7.1 (a) of this Agreement are based on
Blue Shield’s expectation that the Group accepts and will perform delegation of
the requirements set forth as Group’s responsibility in Attachments I, II, III and
IV of this Exhibit F. The quality improvement and quality management
obligations of Blue Shield are not delegated to Group; however, Group shall
have its own fully functional Quality Management Program, as described in
Attachment 1, that is cooperative with and integrated into the Blue Shield
Quality Management Program. In accordance with paragraph 4.3 (c) of this
Agreement, the net monthly capitation penalty reduction for any de-delegated
function shall be as follows:

 

	
   

  	
   

  	
  Commercial

  	
   

  	
  Blue
  Shield 65+

  	
   

  
	
  UM / Professional

  	
   

  	
  3.0

  	
  %

  	
  3.0

  	
  %

  
	
  UM / Shared Savings

  	
   

  	
  3.0

  	
  %

  	
  3.0

  	
  %

  
	
  Credentialing

  	
   

  	
  0.5

  	
  %

  	
  0.5

  	
  %

  
	
  Claims Processing

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Non-contracted Only Penalty

  	
   

  	
  0.7

  	
  %

  	
  0.7

  	
  %

  
	
  All Claims Penalty

  	
   

  	
  7.0

  	
  %

  	
  7.0

  	
  %

  
	
  Non-contracted Only Payment Withhold *

  	
   

  	
  8.5

  	
  %

  	
  8.5

  	
  %

  
	
  All Claims Payment Withhold

  	
   

  	
  85.0

  	
  %

  	
  85.0

  	
  %

  

 

* = Subject to actual claims
paid experience.

 

1.                                       De-delegation penalties for Claims Processing
do not apply in cases where Blue Shield participates in joint administration of
claims processing on Group’s premises, however, Group shall reimburse Blue
Shield for Blue Shield’s cost of providing on site assistance and shall provide
workstations and equipment as required.

 

2.                                       De-legation Criteria and Standards. Blue Shield has developed and adopted
delegation criteria and standards for performance of delegated activities for
the delegation of utilization management, medical record audits, credentialing,
professional site reviews, and claims processing. These criteria and standards
as set forth in the Provider Manual and this Exhibit F, may be modified from
time to time by Blue Shield. Group warrants to Blue Shield that it meets the
criteria for the activities, and is willing to, and capable of, performing such
delegated activities in full compliance with the standards. Group shall

 

70

 

promptly notify Blue Shield in writing, within no less than seven (7)
business days, in the event it ceases, in whole or in part, to meet such
criteria.

 

3.                                       Blue Shield Monitoring and Oversight. Blue Shield shall be entitled to conduct
audits of Group’s compliance with the criteria and standards. Group shall
provide reasonable access during regular business hours to its claims, claims
supporting documentation, Member inquiry files, credentialing files, clinical
and medical records of Members as applicable and reasonably necessary to
evaluate Group’s performance of its delegated activities. In the event Group
has insufficient data and records relating to Members to permit Blue Shield to
evaluate a particular activity under review, then Group shall provide
sufficient documents and information on non-Members, with all non-Member
identifying information deleted to preserve the confidentiality of such
information, in order to permit Blue Shield to evaluate Group’s performance of
such activity.        Group shall participate in an annual
evaluation and quarterly meetings between Blue Shield and Group staff. In
addition, Group shall provide to Blue Shield periodic reports on delegated
activities as set forth in the Provider Manual. Group shall take such
corrective actions as requested by Blue Shield through the audit review process
within such time lines as established by Blue Shield.

 

4.                                       Shared Savings Service Authorization/ Medical
Policy.  When authorization responsibility for Shared
Savings Services is delegated to Group, Group shall pre-authorize Shared
Savings Services (or, as appropriate, retroactively authorize Emergency
Services) and shall provide a copy of such authorization to Blue Shield within
seven (7) days following the authorization. Group shall provide to Blue Shield
weekly reports setting forth authorizations granted and denied, as set forth in
the Provider Manual. All utilization management and authorizations of Group
shall be consistent with Blue Shield’s Medical Policy.

 

5.                                       Blue Shield Request for Records, Files and
Reports Related to Delegated Credentialing and Recredentialing. 
Blue Shield shall be entitled to conduct audits of Group’s compliance
with the criteria and standards of Delegated Credentialing and Recredentialing.
Group shall provide reasonable access during regular business hours to
credentialing files, as reasonably necessary to evaluate Group’s performance of
it’s delegated activities. Group shall submit copies of credentialing/recredentialing
files for review by governmental, accrediting and regulatory review agencies.
Submission of documents by Group will be within the required timeframe of the
requesting agency. Group shall participate in an annual evaluation and
quarterly meetings between Blue Shield and Group staff. In addition, Group
shall provide to Blue Shield periodic reports on delegated activities as set
forth in the Provider Manual.  Group
shall take such corrective actions as requested by Blue Shield through the
audit review process within such time lines as established by Blue Shield.

 

<<>>

 

71

 

Attachment I to Exhibit F

 

BLUE SHIELD
OF CALIFORNIA

QUALITY
MANAGEMENT (QM) REQUIREMENTS *

 

	
  QI Standard Per BSC

  	
   

  	
  Activities
  Performed by 

  Group

  	
   

  	
  Group
  Reporting 

  Frequency to BSC

  	
   

  	
  BSC
  Oversight

  
	
  1.   Program
  Structure 

  	
   

  	
  •   Written QM Program 

  •   QM Program accountable to Governing Body.

  •   Program evaluated annually
  and updated.

  •   Designated physician has
  substantial involvement.

  •   QM committee meets
  quarterly, at a minimum.

  •   Annual QM work plan.

  •   Annual QM evaluation.

  	
   

  	
  •   Submit QM Program annually.

  •   Submit workplan annually.

  •   Submit program evaluation
  annually.

  	
   

  	
  1.  Review
  and approval of:

  •  
  Program
•  
  Work plan
•  
  Annual evaluation
•   QI
  Policies
•   QI
  Procedures
•  
  Clinical Guidelines
• 
  Access Guidelines

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.   Program Operations 

  	
   

  	
  •   Provider QI Committee
  recommends policy decisions, reviews QI activities, institutes needed actions
  and ensures follow-up.

  •   Contemporaneous, signed and
  dated minutes.

  •   Physicians actively
  participate in QI program.

  •   QI program coordinates

  monitoring activity throughout organization.

  	
   

  	
  •   Group policies and
  procedures related to QI submitted annually and any updates and changes
  submitted quarterly.

  •   Annual Report to include
  monitoring activities and results, and improvements.

  	
   

  	
  •   Annual on-site assessment to
  include review of minutes.

  •   Annual review of monitoring reported to BSC’s QI/UM
  Committee.    

  

 

*Quality Management is not a delegatable function and therefore not
subject to de-delegation.

 

72

 

	
  QI Standard Per BSC

  	
   

  	
  Activities
  Performed by

  Group

  	
   

  	
  Group
  Reporting

  Frequency to BSC

  	
   

  	
  BSC
  Oversight

  
	
  3.   Health
  Services Contracts
  

  	
   

  	
  •   Negotiate contracts with subcontractors if written prior
  approval obtained from BSC. 

  •   Include in contract w/subcontracted vendors the requirement that
  the subcontracted vendor is obligated to participate in and be compliant with
  the BSC QI process and findings.

  	
   

  	
   

  	
   

  	
  •   Prospective review and approval of BSC contract for appropriate
  contract language

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.   Availability
  of  Primary Care
  Practitioners

  	
   

  	
  •   Access studies 

  •   Keep BSC aware of closed PCP
  practices. 

  •   Keep BSC aware of changes in
  status of contracted providers.

  	
   

  	
   

  	
   

  	
  •   Review of open/closed panels
   

  •   Monitoring of patient
  geographic access to PCP and
  specialists offices 

  •   Monitoring of appropriate referrals to out-of-network
  providers 

  •   Review of patient complaint trends re: access and availability
  to care and services.  

  •   Review of results of access studies

  

 

*Quality Management is not a delegatable function and
therefore not subject to de-delegation.

 

73

 

	
  QI Standard Per BSC

  	
   

  	
  Activities
  Performed

  by Group

  	
   

  	
  Group
  Reporting

  Frequency to BSC

  	
   

  	
  BSC
  Oversight

  
	
  5.   Accessibility of  Services – BSC is Responsible
  for Establishing access Guidelines for:

  •  
  Wait times  

  •  
  Appointments  

  •  
  After-hours care  

  •  
  Telephone access;  

  •  
  Access for referrals tospecialty care  

  •  
  Development of access
  study design, methodology and tools  

  	
   

  	
  •   Participate in BSC’s access surveys.  

  •  
  Schedule member
  appointments based on access
  guidelines.    

  •  
  Perform internal IPA/MG access study. 

  	
   

  	
  •  
  Quarterly access study results
  as performed by IPA/MG 

  	
   

  	
  •   Access Study Data results 

  •  
  Review Group’s Access Guidelines  

  •   Review of access-related
  patient complaints    

  •   Trend reports of member  complaints
  re: access 

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.     Member Satisfaction 

  	
   

  	
  •   Participate in Group’s Member Satisfaction Surveys.

  	
   

  	
  •   Quarterly

  	
   

  	
  •   Review of member complaint
  data

  •   Review of member surveydata. 

  •   Review of BSC’s disenrollment for quality of care issues
  data.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.     Health Management  Systems – BSC Designs
  population - based programs toidentify and manage chronic conditions
  of BSC members.

  	
   

  	
  •   Data collection  

  •   Program Implementation as
  provided by BSC  

  •  
  Provider & staff education as provided by BSC

  	
   

  	
  •   Annual submission of program
  design.

  •   Annual submission of BSC
  member participation list. 

  	
   

  	
  •   Review by BSC of all
  provider-based chronic care initiatives. 

  •   Reconciliation of member  participation
  list against BSC list of members assigned to Group with those chronic
  conditions being addressed, to ensure identification of all potentially
  eligible members. 

  •   Verification with individual  providers
  of participation in the chronic care initiatives.

  

 

*Quality Management is not a delegatable function and therefore not
subject to de-delegation.

 

74

 

	
  QI Standard Per BSC

  	
   

  	
  Activities
  Performed by

  Group

  	
   

  	
  Group
  Reporting

  Frequency to BSC

  	
   

  	
  BSC
  Oversight

  
	
  8.   Clinical
  Practice  Guidelines —
  acute and chronic services.

  	
   

  	
  •   Adopts BSC guidelines
  

  •   Disseminates guidelines to
  providers. 

  •   Measures performance against no less than 2 high-volume,
  high-risk problem-prone guidelines annually. 

  •   Submits for review toBSC individually developed guidelines
  and/or chosen industry established guidelines for review.

  	
   

  	
  •   Annual submission of guidelines.  

  •   Submission of results of
  review of performance measurement against guide-lines to be included in the
  annual report.

  	
   

  	
  •   BSC annual assessment to
  include process of guideline development, performance measurement, and
  distribution.

  •  
  BSC to review and approve all
  guidelines.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.   Scope and
  Content of  non-preventive
  clinical QI issues: BSC identifies meaningful clinical issues for plan-wide
  monitoring and review.

  	
   

  	
  •   Adopts BSC guidelines. 

  •   Educates group providers in
  the application and use of the BSC established processes.

  	
   

  	
  •   Annual submission of guidelines. 

  •   Submission of resultsof review of performance measurement
  against guidelines to be included in the annual report.

  	
   

  	
   

  

 

*Quality Management is not a delegatable function and
therefore not subject to de-delegation.

 

75

 

	
  QI Standard Per BSC

  	
   

  	
  Activities Performed by

  Group

  	
   

  	
  Group Reporting

  Frequency to BSC

  	
   

  	
  BSC Oversight

  
	
  10.   Clinical
  Measurement Activities:

  •  
  Data collection

  •  
  Measurement

  •  
  Data analysis

  •  
  Intervention &
  Implementation

  Related
  to:

  •      Primary care services

  •     High-volume specialty services

  •      Behavioral Health services

  •      Institutional services

  •      Over/under utilization
  monitoring

  •      Issues that affect
  continuity and coordination of care and service.

  	
   

  	
  •   Identify Group key clinical
  areas for study development

  •   Data collection

  •   Data analysis

  •   Recommend and develop
  interventions

  	
   

  	
  •   Prior to study
  implementation

  •   On-going reports during
  implementation of study

  •   Clinical activity findings
  reported no less than quarterly

  	
   

  	
  •   Prospective review and
  approval of clinical measurement activities

  •   Quarterly review of
  monitoring activity results

  

 

*Quality Management is not a delegatable function and
therefore not subject to de-delegation.

 

76

 

	
  QI Standard Per BSC

  	
   

  	
  Activities Performed by

  Group

  	
   

  	
  Group Reporting

  Frequency to BSC

  	
   

  	
  BSC Oversight

  
	
  11.   Intervention
  & follow-up for clinical issues

  	
   

  	
  •   Implementation of action
  plan to immediate care and service

  •   Evaluate affects of actions
  taken

  	
   

  	
  •   Prior to study
  implementation.

  •   On-going reports during
  implementation of study

  •   Clinical activity findings
  reported no less than quarterly

  	
   

  	
  •   Prospective review and
  approval of clinical measurement activities

  •   Quarterly review of
  monitoring activity results

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12.   Effectiveness
  of QI Program and Demonstration of Required Improvements

  	
   

  	
  •   Group to participate in QI
  program by submission of required data. Group responsible for maintaining
  separate QI program for group function and issues.

  	
   

  	
  •   Annual QI program evaluation

  •   QI meeting minutes

  •   QI quarterly reporting on
  activities listed in QI Plan

  	
   

  	
  •   Submission of QI annual
  evaluation.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13.   Grievance
  process/ Complaint handling & reporting

  	
   

  	
  •   Group to coordinate with BSC
  for communication and management of Grievance and Appeals resolution.

  	
   

  	
   

  	
   

  	
  •   Annual review of Group’s
  complaint policies and procedures

  •   Quarterly review of
  complaint log

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  14.   QI
  oversight

  	
   

  	
  •   Group to participate in BSC
  QI process by implementation, submission and evaluation of required audits
  and provision of data as needed for evaluation of processes and function.

  	
   

  	
   

  	
   

  	
  •   Pre-delegation on-site audit

  •  
  Annual on-site audit

  •   Committee meeting minutes

  •   On-going review of Group
  delegation activities.

  

 

*Quality Management is not a delegatable function and therefore not
subject to de-delegation.

 

<<>>

 

77

 

Attachment II to Exhibit F

 

BLUE SHIELD
OF CALIFORNIA

QUALITY MANAGEMENT (QM) REQUIREMENTS *

 

	
  UM Standard per BSC

  	
   

  	
  Activities
  Delegated to

  Group

  	
   

  	
  Group
  Reporting

  Frequency to BSC

  	
   

  	
  BSC
  Oversight

  
	
  1.   UM
  program Structure & Process:

  •  
  Programs

  •  
  Work Plan

  •  
  Annual Eval.

  	
   

  	
  •   Compose written UM Program
  description Work Plan and Plan Evaluation as outlined in BSC Delegation
  Standards.

  	
   

  	
  •   Annual

  	
   

  	
  Review
  and submission, annually, of:

  •   UM
  Program

  •   UM
  Work plan

  •   UM
  Annual Eval.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.   Prior-authorization

  	
   

  	
  •   Conduct prior authorization
  according to time frames description as outlined in BSC Delegation Standards.

  	
   

  	
  •  
  Frequency of reporting to BSC will be no less than quarterly.

  	
   

  	
  •   Retro-review of referrals

  •   Inter-Rater Reliability
  Studies

  •   Authorization and Denials

  •   Review trends in QI
  reporting and patient complaints

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.   Concurrent review

  	
   

  	
  •   Conduct concurrent review
  according to time frames description as outlined in BSC Delegation Standards.

  	
   

  	
  •  
  Frequency of reporting to BSC will be no less than quarterly.

  	
   

  	
  •   Retro-review of concurrent
  review decisions

  •   Bed day report

  •   Review trends in QI
  reporting and patient complaints

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.   Case
  Management– Coordination of care and services required to assure appropriate
  and timely intervention and care for chronic conditions, high risk, out of
  area, out of net-work cases, and difficult cases.

  	
   

  	
  •   Conduct case management
  according to time frames description as outlined in BSC Delegation Standards.

  	
   

  	
  •  
  Frequency of reporting to BSC will be no less than quarterly.

  	
   

  	
  •   Retro-review of case
  management files

  •   Review trends in QI
  reporting and patient complaints

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.   Discharge Planning

  	
   

  	
  •   Conduct discharge planning
  according to time description as outlined in BSC Delegation Standards.

  	
   

  	
  •  
  Frequency of reporting to BSC will be no less than quarterly

  	
   

  	
  •   Retro-review of discharge
  planning cases

  •   Review trends in QI
  reporting and patient complaints

  

 

78

 

	
  QI Standard Per BSC

  	
   

  	
  Activities
  Performed by

  Group

  	
   

  	
  Group
  Reporting

  Frequency to BSC

  	
   

  	
  BSC
  Oversight

  
	
  6.   DME

  	
   

  	
  •  Conduct DME according to time frames
  description as outlined in BSC Delegation Standards.

  	
   

  	
  •  Frequency of reporting to BSC
  will be no less than quarterly

  	
   

  	
  •   Retro-review of DME
  authorization and denials

  •   Review trends in QI
  reporting and patient complaints

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.   Home Health

  	
   

  	
  •   Conduct DME according to
  time frames description as outlined in BSC Delegation Standards.

  	
   

  	
  •   Frequency of reporting to
  BSC will be no less than quarterly

  	
   

  	
  •   Retro-review of home health
  authorization and denials

  •   Review trends in QI
  reporting and patient complaints

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.   Institutional Reporting

  	
   

  	
  •   Conduct concurrent review
  and monitoring for appropriateness and submission of reports/encounter data
  for all admits.

  	
   

  	
  •   Monthly to BSC

  	
   

  	
  •   Assure institutional report
  is sent to accountable Health Plan monthly

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.   Decision Criteria

  •   Medical appropriateness

  •   LOS

  •   Catastrophic Case Management

  	
   

  	
  •   Development of criteria.

  •   Day-to-day monitoring of
  criteria in the in-patient and ambulatory settings

  	
   

  	
  •   Frequency of reporting to
  BSC will be no less than quarterly

  	
   

  	
  •   Annual review of evidence of
  adoption of criteria

  •   Inter-rater reliability
  study

  •   Bed day report

  •   Catastrophic case report

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.  
  Standards for UM Decision-making

  •   Pre-authorizations

  •   Referrals

  •   Expedited referrals

  •   Denials for medical
  necessity

  •   Retrospective review

  •   Concurrent review

  	
   

  	
  •   Day-to-day accounting of
  In-patient review

  •   Referrals management

  •   Medical necessity
  decision-making for patients receiving care in in-patient and ambulatory
  settings within the industry and BSC defined parameters.

  	
   

  	
  •   Frequency of reporting to
  BSC will be no less than quarterly.

  	
   

  	
  •   Review of denial letters for
  appropriate regulatory language and timeframes

  •   Retro-review of
  authorizations/ referrals/ denials for medical necessity

  •   Bed day report

  •   Inter-rater reliability
  study.

  

 

79

 

	
  QI Standard Per BSC

  	
   

  	
  Activities
  Performed by

  Group

  	
   

  	
  Group
  Reporting

  Frequency to BSC

  	
   

  	
  BSC
  Oversight

  
	
  11.   OOA
  Patient  Management

  	
   

  	
  •   Day-to-day case management of out-of- area patients in in-patient and ambulatory settings when group is capitated for OOA management with BSC notification;BSC to manage when shared savings.

  	
   

  	
  •   Frequency of reporting to BSC will be concurrent, weekly, but in all cases no less than quarterly.

  	
   

  	
  •  Bed day report

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12.  
  Technology  Assessment

  	
   

  	
  •   Group is responsible toreport and coordinate authorization requests for care that is considered experimental and/or investigational. Group is responsible for the adherence to BSC P&Ps regarding the authorization of new technology
  and coordination of benefits
  interpretation.

  	
   

  	
  •   Concurrent

  	
   

  	
  •  Review of IPA/MG submitted denials for appropriateness and
  compliance with BSC P&Ps

  •  Review of Appeals overturned

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13.  
  Continuity of Care.

  	
   

  	
  •   Group responsible for thedevelopment of P&P and ongoing day-to-day management of continuity of care issues as needed and in compliance with current regulatory requirements and BSC criteria.

  	
   

  	
   

  	
   

  	
  •  Review and approval of submitted P&Ps

  •  Annual review of utilization Management
  minutes of IPA/MG

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  14.   Behavioral
  Health  Management

  	
   

  	
  •   The group is further responsible for the coordination and continuity of care related to mental health care issues.

  	
   

  	
   

  	
   

  	
  •   Review and approval of submitted P&Ps

  •   Annual review of Utilization
  Management minutes of IPA/MG

  •   Medical Records review PCPs with >50 members, every other year

  

 

80

 

	
  QI Standard Per BSC

  	
   

  	
  Activities
  Performed by

  Croup

  	
   

  	
  Group
  Reporting

  Frequency to BSC

  	
   

  	
  BSC
  Oversight

  
	
  15.   Benefit
  Development Interpretation

  	
   

  	
  •   Compliance with benefit
  interpretation as provided by BSC.

  	
   

  	
  •   Concurrent submission of ALL
  denials.

  	
   

  	
  •   Concurrent review of denials.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  16.   Oversight
  of Delegated UM activities

  	
   

  	
  •   Preparation, maintenance,
  and availability of all documents that demonstrate UM/QM activity in keeping
  with regulatory compliance.

  	
   

  	
  •   At least quarterly.

  	
   

  	
  •   Quarterly audits.

  

 

<<>>

 

81

 

	
   

  	
  [LOGO]

  
	
   

  	
  Blue Shield 

  
	
   

  	
  of California

  
	
   

  	
  An Independent Member

  of the Blue Shield Association

  

Attachment III to Exhibit F

 

BLUE SHIELD
OF CALIFORNIA

CREDENTIALING/DELEGATION REQUIREMENTS

 

	
  Standard per BSC

  	
   

  	
  Delegateable

  Status

  	
   

  	
  Activities
  Delegated to

  Group

  	
   

  	
  Group
  Reporting

  Frequency to

  BSC

  	
   

  	
  BSC
  Oversight

  
	
  1.  Credentialing
  structure & process:

  •   Policies & procedures

  •   Committee / Review body

  	
   

  	
  •  
  Non-delegateable

  establishment of standards

  	
   

  	
  Development
  &  implementation of  relevant
  policies and procedures:

  •  Scope

  •  Criteria

  •  Decision-making

  •  Committee/ review body

  •  Protection of provider rights

  •  Medical Director or designee’s responsibilities

  •  Peer Review/ Disciplinary Action

  •  Documentation of Agreement

  •  Initial evaluation

  •  Oversight organization retains right
  of approval/ disapproval

  	
   

  	
  •  Annual

  	
   

  	
  Review
  of annual  submission of:
  

  •  Policies and Procedures

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.  Initial
  credentialing process  

  	
   

  	
  •   Non-delegateable
establishment of standards  

  	
   

  	
  •  Completion of application

  •  Primary source verification  

  •  Verification of information from monitoring organizations

  •  Identification of sanction activity  

  	
   

  	
  •  Group submits at least quarterly reports
  of which providers have been appointed or declined
  for appointment by the Credentials Committee

   

  	
   

  	
  •  BSC performs at least annual onsite
  review of a sampling of initial
  credentialing files and
  committee minutes.

  

 

82

 

	
  Standard per BSC

  	
   

  	
  Delegateable
  Status

  	
   

  	
  Activities
  Delegated

  to Group

  	
   

  	
  Group
  Reporting

  Frequency to BSC

  	
   

  	
  BSC
  Oversight

  
	
  3.   Recredentialing
  process

  	
   

  	
  •   Non-delegateable establishment of standards

  	
   

  	
  •  Primary source verification

  •  Review of information from monitoring organizations within 180
  days of credentialing  

  •  PCP Performance appraisal
  which includes: member complaints, QI results, UM reports, and member  satisfaction(optional)

  •  Recredentialing is performed at least every two years.

  	
   

  	
  •  Group submits at least quarterly reports
  of which providers have been re- appointed or declined
  for reappointment by the Credentials Committee

  	
   

  	
  •  BSC performs at least annual on-site review of a sampling of re- credentialing files and committee  minutes.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.   Office
  Site Visits

  	
   

  	
  •   Non-delegateable establishment of standards

  	
   

  	
  •  Initial office site visit for potential PCP’S and
  OB/Gyn’s which includes evaluation of medical record keeping  practices

  	
   

  	
   

  	
   

  	
  BSC
  performs at  least annual
  review of:

  •  Policies & procedures describing office site visits Initial credentialing files to assess evidence of office site visits

  

 

83

 

	 
	
  Standard per BSC

  	
   

  	
  Delegateable
  Status

  	
   

  	
  Activities
  Delegated

  to Group

  	
   

  	
  Group
  Reporting

  Frequency to BSC

  	
   

  	
  BSC
  Oversight

  
	
  5.  Credentialing
  file maintenance

  	
   

  	
  •  Non- delegateable establishment of standards

  	
   

  	
  •  Maintenance of individual provider credentialing/ recredentialing files.  

  •  Submission of copy of provider credentialing
  recredentialing file at therequest of BSC

  	
   

  	
  •  As requested for governmental, accreditation and
  regulatory review.

  	
   

  	
  BSC performs at least annual review of:

  •   Policies
  & procedures describing submission of files upon request of BSC for the
  purposes of meeting governmental, accrediting and regulatory agency review
  requests. BSC requests for copy of credentialing/ recredentialing file for
  review by governmental, accrediting and regulatory agency review will be
  within the required time frame of requesting agency.

  
										

 

<<>>

 

84

 

	
   

  	
  [LOGO]

  
	
   

  	
  Blue Shield 

  
	
   

  	
  of California

  
	
   

  	
  An Independent Member

  of the Blue Shield Association

  

 

Attachment IV to Exhibit F

 

BLUE SHIELD
OF CALIFORNIA

CLAIMS PROCESSING REQUIREMENTS

 

	
  Standard per BSC

  	
   

  	
  Activities
  Delegated to Group

  	
   

  	
  Group
  Reporting

  Frequency to BSC

  	
   

  	
  BSC Oversight

  
	
  1.   Payment

  •  
  Timeliness

  •  
  Payment Accuracy

  •  
  Denials

  	
   

  	
  •   Payment /processing of
  claims for all services which are the Group’s responsibility per this
  agreement and state or federal regulations.

  	
   

  	
  •  
  Monthly

  	
   

  	
  •   Monthly report review.

  •  
  Periodic audits

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.   Claims Forwarding

  	
   

  	
  •   Forwarding of claims which
  are not the group’s payment responsibility within industry standard of 8
  calendar days.

  	
   

  	
  •  
  None

  	
   

  	
  •   As required.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.  
  Self-Monitoring and Reporting

  	
   

  	
  •   Internal quality assurance
  testing procedures. Monthly report submission per industry standard format.

  	
   

  	
  •  
  Monthly

  	
   

  	
  •  
  Monthly report review.

  •  
  Periodic audits.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.  
  Sub-delegation of claims processing through capitation. (This does not
  refer to a TPA or management company arrangement for Group’s entire claims
  processing.)

  	
   

  	
  •   Continued compliance with
  all requirements. Monitor sub-delegated claim shops employing all means used
  by Blue Shield or government regulators in their oversight. If sub-capitated
  organization engages a TPA or management company, those must be audited by
  Group.

  	
   

  	
  •   Monthly including breakout
  of sub-capitated entities.

  	
   

  	
  •   Periodic audits

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.   Audits
  and Audit Preparation and Follow-Up (for CMS, DMHC, BSC)

  	
   

  	
  •   Preparation including
  producing accurate claims universe lists, providing detailed information in a
  standard questionnaire, selecting and retrieving requested documents; claims,
  back-up records, checks/payment confirmation, and written corrective action
  plans in accordance with BSC instructions.

  	
   

  	
  •   As
  requested

  	
   

  	
  •  
  Periodic audits

  •  
  Random focused audits 

  •  
  Focused reviews

  

 

<<>>

 

85

 

	
   

  	
  [LOGO]

  
	
   

  	
  Blue Shield

  
	
   

  	
  of California

  
	
   

  	
  An Independent Member

  of the Blue Shield Association

  

 

Exhibit G-1

 

HMO IPA/Medical Group Agreement

BLUE SHIELD 65 PLUS PROVISIONS

 

	
  Name of Group:

  	
   

  	
  PROSPECT MEDICAL GROUP, INC.

  	
   

  
	
  Effective Date:

  	
   

  	
   

  

 

Group and Group Physicians specifically agree to serve Blue Shield 65
Plus Members pursuant to the terms and conditions of this Agreement and the
following requirements:

 

1.                                       This Agreement shall apply to Blue Shield 65
Plus Members who are enrolled in Blue Shield’s Medicare+ Choice Plan.

 

2.                                       DEFINITIONS - The following definitions shall apply for Blue
Shield 65 Plus Members in addition to the Definitions set forth in
Article I of the Agreement:

 

A.                                   “Emergency Medical Condition” shall
mean a medical condition manifesting itself by acute symptoms of sufficient
severity (including severe pain) such that a prudent layperson, with an average
knowledge of health and medicine, could reasonably expect the absence of
immediate medical attention to result in (1) serious jeopardy to the health of
the individual or, in the case of a pregnant woman, the health of the woman or
her unborn child; or (2) serious impairment to bodily functions; or (3) serious
dysfunction of any bodily organ or part.

 

B.                                     “Emergency Services” shall mean those
medical and hospital services required that are (i) furnished by a Physician qualified
to furnish emergency services; and (ii) needed to evaluate or stabilize an
Emergency Medical Condition.

 

C.                                     “Member” shall mean a Medicare
beneficiary who is enrolled in the Health Plan’s Medicare+Choice program (“Blue
Shield 65 Plus Choice Plan”) who is assigned to a Group Physician and Hospital.

 

D.                                    “Urgently Needed Services” will mean
medical services received outside of the Service Area which are, in the
judgment of a prudent layperson, required without delay in order to prevent
serious deterioration of Enrollee’s health as a result of an illness or injury.

 

3.                                       OBLIGATIONS OF GROUP - The Obligation set forth in
Article II.  Paragraph 2.6 of the
Agreement is modified to add the following at the end of current text of
Paragraph 2.6 and shall apply to Blue Shield 65 Plus Members:

 

86

 

“Group will comply and have its Group Providers comply with state and
federal laws and regulations including but not limited to physician incentives,
and stop loss insurance requirements. 
Group shall include in its contracts with Group Providers all provisions
required by federal and state laws, including the BBA and related
regulations.  Group shall ensure that,
on or before December 31, 1999, all contracts with Group Providers comply
with all applicable Medicare+Choice regulations as described in this Exhibit H,
and as outlined in the Provider Manual. 
Further, to the extent Group subcapitates other provider organizations
and the contracts with such organizations delegate to the organization
responsibility for claims processing, including the right to pay or deny
claims, Group’s contracts with such Group Providers shall require that they
comply with the provisions of this Exhibit G-1.  Further, Group shall comply with the provisions set forth in
Exhibit F of this Agreement and in the Provider Manual.”

 

The Obligation set forth in Article II.  Paragraph 2.12 of the Agreement is modified to add the following
at the end of the current text of Paragraph 2.12 and shall apply to Blue Shield
65 Plus Members:

 

“Submission of Electronic Encounter Data.  Group agrees to furnish Blue Shield with
complete encounter data for Capitated Professional Services rendered to Members
in the HCFA 1500 format.  The encounter
data will be furnished to Blue Shield through Electronic Data Interchange and
shall be received by Blue Shield ninety (90) days following the date of
service.  Group also agrees to furnish
medical records that may be required to obtain any additional information or
corroborate the encounter data.  Group
further agrees to have its CEO attest and certify the completeness and
truthfulness of the encounter data submitted. 
Failure by Blue Shield to receive encounter data within stipulated time
frame will result in Group receiving reduced compensation as described in
Paragraph 7.11 of this Agreement as well as grounds for termination of this
Agreement.”

 

4.                                       COMPLIANCE WITH LEGAL
REQUIREMENTS – In addition
to the requirements set forth in Article XIII of the Agreement, the following
new Paragraphs shall also apply:

 

13.7                           Provider Terminations.  If
Blue Shield terminates a Group Provider without cause, Blue Shield must provide
Group at least sixty (60) days notice. 
If Group terminates a Group Provider without cause, Group must provide
Blue Shield at least sixty (60) days notice.

 

13.8                           Medicare+ Choice. 
Group will comply and have its Group Providers comply with state and
federal laws and regulations including but not limited to physician incentives,
and stop loss insurance requirements. 
Group shall submit to Blue Shield on an annual basis descriptive
information regarding its Physician Incentive Plan (PIP) as required by
CMS.  Group shall submit such information
utilizing the CMS PIP Disclosure Forms. 
Group shall include in its contracts with Group Providers all provisions
required by federal and state laws, including the

 

87

 

BBA and related regulations. 
Group shall ensure that, on or before December 31, 1999, all
contracts with Group Providers comply with all applicable Medicare+ Choice
regulations as described in this Amendment and as outlined in the Provider
Manual.

 

Group understands that payments made by Blue Shield are, in whole or in
part, derived from federal funds, and therefore provider and its subcontractors
are subject to certain laws that are applicable to individuals and entities
receiving federal funds.  Group agrees
to comply with all applicable Medicare laws, regulations and CMS instructions
including Title VI of the Civil Rights Act of 1964, Section 504 of the
Rehabilitation Act of 1973, the Age Discrimination Act of 1975, the Americans
with Disabilities Act, and to require their subcontractors to do the same.  Group agrees to include the requirements of
this section in its contracts or subcontracts with other Participating
Providers or entities.

 

In making payments to Group Physicians and other Group Providers for
Covered Services, Group shall comply with the timeliness requirements set forth
in applicable federal law, including, but not limited to, any applicable CMS
rules and regulations.

 

13.9                           CMS Participation Requirements. 
Group is prohibited from employing or contracting with an individual who
is excluded from participation in Medicare for the provision of any of the
following: healthcare services, utilization review services, medical social
work services and administrative services. 
In the event Group fails to comply with the above, Blue Shield reserves
the right to pass through to the Group any sanctions imposed by CMS for
violation of this prohibition.

 

13.10                     Organization Determination Process. 
Blue Shield may delegate the process of utilization management to the
Group.  If such delegation occurs, Group
shall comply with Medicare regulations and CMS instructions pertaining to
timely organization determinations by Group as to whether to provide, deny,
reduce or discontinue a Covered Service to a Member.  Such determinations shall be made in accordance with procedures
and instructions set forth in the Provider Manual.  Group shall submit to Blue Shield on a monthly basis a report
which tracks the requests for organization determinations and expedited reviews
and the timeframe within which decisions were made by Group.  This section is subject to change as determined
by CMS regulations, policies and instructions.

 

13.11                     Private Contract. 
Group understands that Blue Shield is prohibited by CMS from paying
capitation to, or including in its network, any provider that has entered into
a private contract with a Member for the provision of services.  Blue Shield reserves the right to terminate
any such provider from its network. 
Further, if the provider so terminated was a Group Physician, Blue
Shield shall have the right to

 

88

 

reduce Group’s capitation by the amount of any capitation that was paid
either directly or indirectly to such provider(s).  This provision shall remain in effective for a period of two (2)
years from the time that all direct contracts between provider and Member have
been terminated.

 

13.12                     Health Assessment. 
Blue Shield must conduct a health assessment of all Members within
ninety (90) days of the effective date of Member’s enrollment with Blue
Shield.  Group agrees to cooperate in
such health assessment process.

 

13.13                     Utilization Management Plan. 
Prior to the execution of this Agreement, and if utilization management
functions are delegated to Group by Blue Shield, Group will provide Blue Shield
with a written Utilization Management Plan for the purpose of review and
approval by Blue Shield.  Group shall
notify Blue Shield within thirty (30) days of any changes involving the rules,
regulations, authorities and responsibilities for the Utilization Management
Plan, which shall be subject to reasonable approval thereof by Blue Shield.

 

The Utilization Management Plan shall include procedures approved by
Blue Shield to identify, assess, establish, and implement a treatment plan for
Members who have complex or serious medical conditions, and for direct access
of Members to services as mandated by the BBA and related regulations.  Group agrees to comply with Blue Shield’s
Medical Policies.  All Group denial
letters shall be reviewed and approved by Blue Shield.  Group agrees to cooperate with Blue Shield
in furnishing the required reports identified in the Provider Manual.”

 

5.                                       PLAN QUALITY IMPROVEMENT – Following Paragraph 2.7 of the Agreement,
the following provisions shall also apply.

 

“Blue Shield retains responsibility for Quality Improvement and Quality
Management Programs.  Quality
Improvement and Quality Management Programs are not delegated to Group.  Group however agrees to comply with Blue
Shield’s Quality Improvement Program for both hospital and office based
care.  Blue Shield’s Quality Improvement
Program shall be developed in consultation with Blue Shield Providers to ensure
that practice guidelines of quality improvement and quality management pursuant
to Medicare regulations and CMS instructions are met.  Group agrees to maintain a Quality Management Program which
states that Group will review on a prospective, concurrent and retrospective
basis the quality, appropriateness, level of care and utilization of Group
Providers.  The Quality Management
Program will include among others an annual evaluation, annual quality
management goals, proposed quality management studies, a description of the
quality management committee and frequency of meetings.  Group shall notify Blue Shield of any
changes to the Quality Management Plan which shall be subject to prior approval
by Blue Shield.”

 

89

 

6.                                       PROVIDER MANUAL – In Article V. of the Agreement, the
following provisions shall be added to the end of Paragraph 5.2:

 

Precedence.  The Provider Manual and all revisions
thereto shall be consistent with the laws and regulations governing the
Medicare+ Choice program, the regulations established by CMS, the Knox-Keene
Act and the provisions of this Agreement. 
In the event of any conflict or inconsistency between the Provider
Manual, the Agreement, and/or any of the cited state or federal laws and
regulations, the provision which governs shall be determined by apply the
following order of precedence: the BBA, CMS regulations and instructions, the
Knox-Keene Act and regulations, the Agreement and, then, the Provider Manual.

 

<<>>

 

90

 

	
   

  	
  [LOGO]

  
	
   

  	
  Blue Shield

  
	
   

  	
  of California

  
	
   

  	
  An Independent Member

  of the Blue Shield Association

  

 

Exhibit G-2

 

HMO IPA/Medical Group Agreement

BLUE SHIELD POS PROVISIONS

 

	
  Name of Group:

  	
   

  	
  PROSPECT MEDICAL GROUP, INC.

  	
   

  
	
  Effective Date:

  	
   

  	
   

  

 

This Exhibit implements the Blue Shield HMO POS Benefit Program (“BSC
POS”) pursuant to which BSC POS Members may receive Covered Services on either an
In-Network Services or Out-of-Network Services basis (as defined below).

 

1.                                       Definitions.  In addition to the
definitions set forth in the Agreement, the following definitions apply to this
Exhibit G-2:

 

(a)                                  BSC POS Member refers to a Member enrolled in the BSC HMO
POS Benefit Program.

 

(b)                                 In-Network Services refers to Covered Services which are not
Out-of-Network Services.

 

(c)                                  BSC POS Institutional Services are those Covered Services provided to a BSC
POS Member, which are identified in the Division of Financial Responsibility
(Exhibit B.) as Shared Savings (other than Outpatient Prescription Drugs).

 

(d)                                 BSC POS Professional Services are Covered Services provided to a BSC POS
Member which are defined as Capitated Professional Services in Paragraph 1.5 of
the Agreement.

 

(e)                                  Out-of-Network Services refers to Covered Services provided to a BSC
POS Member on the basis of the Member’s self-referral, other than: (i) Services
provided by the Member’s PCP (or physician providing on-call coverage for such
PCP); (ii) Emergency or Urgent Care Services not requiring authorization under
Blue Shield’s utilization management rules; or, (iii) Services not requiring a
PCP referral or authorization from Blue Shield and/or Group or which Members,
in general, have a right to self-refer.

 

2.                                       Financial Responsibility.  The
Capitation payable to Group pursuant to Exhibit C shall cover, and Group shall
be financially responsible for: (i) all BSC POS Professional Services which are
In-Network Services; and, (ii) all Out-of-Network BSC POS Professional Services
provided by Group Providers. Except as otherwise provided herein, Blue Shield
shall be financially responsible for Out-of-Network BSC POS Professional
Services

 

91

 

provided by providers who are not Group Providers. Those BSC POS
Professional Services which are Blue Shield’s financial responsibility
hereunder will be included in the POS Out-of-Network Professional Fund
settlement described in Paragraph 8 of this Exhibit G-2. Those BSC POS
Out-of-Network Institutional Service which are the financial responsibility of
Blue Shield, will be included in the POS Out-of-Network Institutional Fund
settlement described in Paragraph 9 of this Exhibit G-2. Covered BSC POS
In-Network Institutional Services which are identified as Shared Savings
Services in Exhibit B will be included in the POS In-Network Shared Savings
Fund settlement described in Paragraph 7 of this Exhibit G-2. Covered
outpatient prescription drug services which are Blue Shield’s responsibility
will be included in the Pharmacy Shared Savings Fund settlement described in
Exhibit D.

 

3.                                       Administrative Services.              As set forth in the Provider Manual, Blue
Shield shall advise Group as to which Members are BSC POS Members. In addition:

 

(a)                                  Following Blue Shield’s receipt of a claim
for BSC POS Professional Services, Blue Shield, within such time frames as set
forth in the Provider Manual, shall provide a copy of such claim to Group.
Thereafter, and within such time frames as set forth in the Provider Manual,
Group shall make an initial determination, and so advise Blue Shield in
writing, as to which of such claims are for In-Network Services, which are for
Out-of-Network Services provided by a Group Provider, and which are for Out-of-Network
Services provided by other than a Group Provider.

 

(b)                                 In the event that Group (rather than Blue
Shield) receives a claim for BSC POS Professional Service which it determines
to be for Out-of-Network Services provided by other than a Group Provider,
Group shall, within such time frames as set forth in the Provider Manual,
provide Blue Shield with a copy of the claim and its initial determination.

 

(c)                                  In the event a Group Provider refers a BSC
POS Member for a Covered Service on an In-Network basis, but the Group
Provider, rather than the Member, fails to comply with Group’s utilization
management requirements, such Covered Service shall be deemed an In-Network
Service, and the Member’s financial responsibility shall be limited to the
applicable Copayment for In-Network Services. The Group may refuse to
compensate a Group Provider for such services to the extent permitted in its
contract with the Group Provider providing the service.

 

(d)                                 Blue Shield may, on its own initiative, or in
the event a BSC POS Member or a provider disputes Group’s initial
determinations made pursuant to this Paragraph 3, adjudicate whether a service
was an In-Network or Out-of-Network Service and if an Out-of-Network Service,
whether or not provided by a Group Provider. Blue Shield may also, at its
expense and upon reasonable notice to Group, periodically audit Group’s initial
determinations made pursuant to this Paragraph 3. Group shall cooperate with
such audits and adjudications and provide such information and

 

92

 

documentation regarding its initial determinations as reasonably
requested by Blue Shield. Subject to the Dispute Resolution provisions in this
Agreement, Blue Shield’s determination shall be binding upon Group. Subject to
such dispute resolution procedures: (i) In the event that Blue Shield
determines that it has erroneously paid for services as Out-of-Network Services
from non-Group Providers, which were, in fact, In-Network Services (or
Out-of-Network Services provided by Group Providers), such amounts shall within
ninety (90) days following notice by Blue Shield to Group of such determination
(and the completion of any requested dispute resolution procedures) be refunded
to Blue Shield by Group and Blue Shield may, in its sole discretion, off-set
such amounts from any monies owed to Group by Blue Shield; and (ii) In the
event that Blue Shield determines that Group has erroneously paid for BSC POS
Professional Services as In-Network Services or Out-of-Network Services
provided by Group Providers which were, in fact, Out-of-Network Services
provided by non-Group Providers, Blue Shield shall within ninety (90) days
after such determination, or within ninety (90) days after such determination
is made through the requested dispute resolution procedures, refund the amounts
so paid to Group.

 

(e)                                  Summaries & Settlements: Blue Shield shall provide to Group on a
quarterly basis a summary of the funding and expenses in the Shared Savings
Program.

 

4.                                       Additional Group Payment Responsibility. Notwithstanding any provision of this
Exhibit G-2 to the contrary, Group shall be financially responsible for
Out-of-Network Covered Services provided by Non-Group Providers to the extent
such services were obtained by the BSC POS Member on an Out-of-Network basis as
a direct result of Group’s failure, on an In-Network basis, to timely provide
or arrange for such Covered Services for the BSC POS Member. Such services
shall be excluded from the POS Out-of-Network Fund settlement.

 

5.                                       Group Cooperation with Out-of-Network
Providers. In the event that
a BSC POS Member elects to obtain Out-of-Network Services, Group shall
cooperate with the provider of such Out-of-Network Services to ensure
coordination and continuity of care and, upon request of such provider of
Out-of-Network Services (and with the BSC POS Member’s written authorization),
provide copies of the BSC POS Member’s relevant medical records to such
provider.

 

6.                                       Coordination of Benefits for Out-of-Network
Claims. Blue Shield is solely
entitled to collect and retain any and all third party liens, coordination of
benefits, or any other payments obtained from third party payments for
Out-of-Network Services provided to BSC POS Members by non-Group Providers. Any
funds received by Blue Shield for POS Out-of-Network services shall be credited
by Blue Shield in the POS Out-of-Network Fund settlement described in Paragraph
7 of this Exhibit G-2.

 

93

 

7.                                       POS In-Network Shared Savings Fund Settlement. Blue Shield shall establish a POS
In-Network Shared Savings Fund as follows:

 

(a)                                  Funding: For BSC POS Members Blue Shield will allocate to a POS In-Network
Shared Savings Fund a per Member per month amount set forth in Schedule 1
to this Exhibit G-2 for all Members assigned to Group, subject to retroactive
adjustments either upward or downward due to retroactive changes in membership.

 

(b)                                 Charging of Payments: Blue Shield shall charge against the POS
In-Network Shared Savings Fund all payments made by Blue Shield for such BSC
POS Members during the annual term of the Agreement for In-Network services
which are designated as Shared Savings Services in Exhibit B, less payments
received by Blue Shield as a result of third-party reimbursement, Workers’
Compensation recoveries and coordination of benefits payments. Blue Shield
shall include any payments for Shared Savings Services which are paid prior to
the date of the settlement, as well as a reasonable allowance, as determined by
Blue Shield’s actuaries, for incurred but not paid (IBNP) claims. Any costs for
Shared Savings Services not included in any annual settlement shall be carried
forward and included in the Shared Savings settlement for the succeeding
Agreement Year.

 

(c)                                  POS In-Network Shared Savings Fund Settlement: The POS In-Network Shared Savings Fund
shall be settled on an annual basis, within one hundred eighty (180) days
following the end of each annual term of the Agreement (being a ninety (90) day
claims run out and a ninety (90) day determination period).

 

(d)                                 If the total actual cost of Shared Savings
services is less than the total allocation to the POS In-Network Shared Savings
Fund, then Group shall be entitled to *** of the amount by which the allocation
exceeds the costs, minus any carry forward resulting from deficits from
previous Agreement years.

 

(e)                                  If the total actual cost of Shared Savings
services is more than the total allocation to the POS In-Network Shared Savings
Fund, then *** of the amount by which the actual costs exceed the total
allocation shall be allocated to Group and shall be handled as follows: (i) the
excess may be deducted from any other settlements or payments, except
Capitation and Professional Stop Loss Program payments made pursuant to Exhibit
H, due to Group from Blue Shield, and, (ii) any remaining amounts shall be
carried forward into future Agreement Years and shall be deducted from any
Shared Savings payments to Group in future years.

 

8.                                       POS Out-of-Network Professional Fund
Settlement. Blue Shield shall
establish a POS Out-of-Network Professional Fund.

 

94

 

(a)                                  Funding of Out-of-Network Professional Fund - Blue Shield will allocate on a monthly
basis the amounts set forth in Schedule 1 to this Exhibit G-2 for all BSC
POS Members assigned to Group, subject to retroactive adjustments due to
retroactive changes in members (the “POS Out-of-Network Professional Budget”).

 

(b)                                 Allocation of POS Out-of-Network Professional
Expenses - The POS
Out-of-Network Professional Fund shall be charged for all Covered
Out-of-Network Professional services which are paid by Blue Shield for BSC POS
Members assigned to Group (the “POS Out-of-Network Professional Expenses”).
Blue Shield shall include any payments for Shared Savings Services which are
paid prior to the date of the settlement, as well as a reasonable allowance, as
determined by Blue Shield’s actuaries, for incurred but not paid (IBNP) claims.
Any costs for Shared Savings Services not included in any annual settlement
shall be carried forward and included in the Shared Savings settlement for the
succeeding Agreement Year.

 

(c)                                  Timing of POS Out-of-Network Professional
Fund Settlement – On an
Agreement year basis, Blue Shield shall perform a reconciliation of the POS
Out-of-Network Professional Fund. Such settlement shall be performed within
ninety (90) days following the end of the Agreement Year. Any amounts due from
Blue Shield to Group shall be paid within ninety (90) days thereafter.

 

(d)                                 Out-of-Network Professional Fund Surplus – For any Agreement Year in which the POS
Out-of-Network Professional Budget exceeds the POS Out-of-Network Professional
Expenses, IPA shall be entitled to *** of the POS Out-of-Network Professional
Fund surplus, minus any POS Out-of-Network Professional Fund or POS
Out-of-Network Institutional Fund deficit carried forward from a previous
Agreement Year.

 

(e)                                  Out-of-Network Professional Fund Deficit – For any Agreement Year in which the POS
Out-of-Network Professional Expenses exceed the POS Out-of-Network Professional
Budget, Blue Shield shall offset *** of any out-of-network Professional deficit
against any out-of-network Institutional surplus. If a deficit results, Blue
Shield shall carry such deficit forward into future Agreement Years and the
deficit carryover shall be offset against any Out-of-Network Professional or
Institutional Fund Surpluses in future years. In the event the Deficit carried
forward exceeds the Surplus in a future year, the remaining deficit shall
continue to be carried forward and offset against any Surpluses in subsequent
years.

 

9.                                       POS Out-of-Network Institutional Fund
Settlement.  Blue Shield shall establish a POS
Out-of-Network Institutional Fund.

 

95

 

(a)                                  Funding of Out-of-Network Institutional Fund - Blue Shield will allocate on a monthly
basis the amounts set forth in Schedule 1 to this Exhibit G-2 for all BSC
POS Members assigned to Group, subject to retroactive adjustments due to
retroactive changes in members (the “POS Out-of-Network Institutional Budget”).

 

(b)                                 Allocation of POS Out-of-Network
Institutional Expenses - The
POS Out-of-Network Institutional Fund shall be charged for all Covered
Out-of-Network Institutional services which are paid by Blue Shield for BSC POS
Members assigned to Group (the “POS Out-of-Network Institutional Expenses”).
Blue Shield shall include any payments for Shared Savings Services which are
paid prior to the date of the settlement, as well as a reasonable allowance, as
determined by Blue Shield’s actuaries, for incurred but not paid (IBNP) claims.
Any costs for Shared Savings Services not included in any annual settlement
shall be carried forward and included in the Shared Savings settlement for the
succeeding Agreement Year.

 

(c)                                  Timing of POS Out-of-Network Institutional
Fund Settlement – On an
Agreement Year basis, Blue Shield shall perform a reconciliation of the POS
Out-of-Network Institutional Fund. Such settlement shall be performed within
ninety (90) days following the end of the Agreement Year. Any amounts due from
Blue Shield to Group shall be paid within ninety (90) days thereafter.

 

(d)                                 Out-of-Network Institutional Fund Surplus – For any Agreement Year in which the POS
Out-of-Network Institutional Budget exceeds the POS Out-of-Network
Institutional Expenses, IPA shall be entitled to *** of the POS Out-of-Network
Institutional Fund surplus minus any POS Out-of-Network Professional Fund or
POS Out-of-Network Institutional Fund deficit carried forward from a previous
Agreement year.

 

(e)                                  Out-of-Network Institutional Fund Deficit – For any Agreement Year in which the POS
Out-of-Network Institutional Expenses exceed the POS Out-of-Network
Institutional Budget, Blue Shield shall offset *** of any out-of-network
Institutional deficit against any out-of-network Professional surplus. If a
deficit results, Blue Shield shall carry such deficit forward into future
Agreement Years and the deficit carryover shall be offset against any
Out-of-Network Professional or Institutional Fund Surpluses in future years. In
the event the Deficit carried forward exceeds the Surplus in a future year, the
remaining deficit shall continue to be carried forward and offset against any
Surpluses in subsequent years.

 

<<>>

 

96

 

	
   

  	
  [LOGO]

  
	
   

  	
  Blue Shield

  
	
   

  	
  of California

  
	
   

  	
  An Independent Member

  of the Blue Shield Association

  

 

Exhibit
G-2, Schedule 1

HMO
IPA/Medical Group Agreement

POS FUND
ALLOCATIONS

 

	
  Name of Group:

  	
   

  	
  PROSPECT MEDICAL GROUP, INC.

  	
   

  
	
  Effective Date:

  	
   

  	
   

  

 

As of   /   /2004, the effective net
yield (which includes the deduction for Stop Loss, if applicable) for the
following PMPMs are $34.75 for the POS In-network Shared Saving, $16.78 for POS
Out-of-network Professional, and $14.90 for the POS Out-of-network
Institutional, based on the 07/01/2003 membership.

 

The actual allocation to POS Fund for each month will be
calculated based on the actual member mix for each age/sex category.

 

Members Other Than Blue Shield 65 Plus Members

 

	
  Age &
  Sex Categories and POS Fund Allocations

  	
   

  
	
  Category

  	
   

  	
  POS Fund
  Allocation (PMPM)

  	
   

  
	
  Sex

  	
   

  	
  Age

  	
   

  	
  IN-NETWORK

  SHARED SAVINGS

  	
   

  	
  OUT-OF-NETWORK

  PROFESSIONAL

  	
   

  	
  OUT-OF-NETWORK

  INSTITUTIONAL

  	
   

  
	
  F

  	
   

  	
  0 - 1

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  F

  	
   

  	
  2 - 6

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  F

  	
   

  	
  7 - 18

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  F

  	
   

  	
  19 - 21

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  F

  	
   

  	
  22 - 24

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  F

  	
   

  	
  25 - 29

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  F

  	
   

  	
  30 - 34

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  F

  	
   

  	
  35 - 39

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  F

  	
   

  	
  40 - 44

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  F

  	
   

  	
  45 - 49

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  F

  	
   

  	
  50 - 54

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  F

  	
   

  	
  55 - 59

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  F

  	
   

  	
  60 - 64

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  F

  	
   

  	
  65 + (NM)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  F

  	
   

  	
  65 + (M) *

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  M

  	
   

  	
  0 - 1

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  M

  	
   

  	
  2 - 6

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  M

  	
   

  	
  7 - 18

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  M

  	
   

  	
  19 - 21

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  M

  	
   

  	
  22 - 24

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  M

  	
   

  	
  25 - 29

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  M

  	
   

  	
  30 - 34

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  M

  	
   

  	
  35 - 39

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  M

  	
   

  	
  40 - 44

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  M

  	
   

  	
  45 - 49

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  M

  	
   

  	
  50 - 54

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  M

  	
   

  	
  55 - 59

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  M

  	
   

  	
  60 - 64

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  M

  	
   

  	
  65 + (NM)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  M

  	
   

  	
  65 + (M) *

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  

 

* = Medicare Primary

*** All references to the POS Fund Allocations have been deleted.

 

97

 

As of    /   /2005, the
effective net yield (which includes the deduction for Stop Loss, if applicable)
for the following PMPMs are $38.23 for the POS In-network Shared Saving, $17.79
for POS Out-of-network Professional, and $16.38 for the POS Out-of-network
Institutional, based on the 07/01/2003 membership.

 

The actual allocation to POS Fund for each month will be
calculated based on the actual member mix for each age/sex category.

 

Members Other Than Blue Shield 65 Plus Members

 

	
  Age &
  Sex Categories and POS Fund Allocations

  	
   

  
	
  Category

  	
   

  	
  POS Fund
  Allocation (PMPM)

  	
   

  
	
  Sex

  	
   

  	
  Age

  	
   

  	
  IN-NETWORK

  SHARED SAVINGS

  	
   

  	
  OUT-OF-NETWORK

  PROFESSIONAL

  	
   

  	
  OUT-OF-NETWORK

  INSTITUTIONAL

  	
   

  
	
  F

  	
   

  	
  0 - 1

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  F

  	
   

  	
  2 - 6

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  F

  	
   

  	
  7 - 18

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  F

  	
   

  	
  19 - 21

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  F

  	
   

  	
  22 - 24

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  F

  	
   

  	
  25 - 29

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  F

  	
   

  	
  30 - 34

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  F

  	
   

  	
  35 - 39

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  F

  	
   

  	
  40 - 44

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  F

  	
   

  	
  45 - 49

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  F

  	
   

  	
  50 - 54

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  F

  	
   

  	
  55 - 59

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  F

  	
   

  	
  60 - 64

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  F

  	
   

  	
  65 + (NM)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  F

  	
   

  	
  65 + (M) *

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  M

  	
   

  	
  0 - 1

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  M

  	
   

  	
  2 - 6

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  M

  	
   

  	
  7 - 18

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  M

  	
   

  	
  19 - 21

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  M

  	
   

  	
  22 - 24

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  M

  	
   

  	
  25 - 29

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  M

  	
   

  	
  30 - 34

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  M

  	
   

  	
  35 - 39

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  M

  	
   

  	
  40 - 44

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  M

  	
   

  	
  45 - 49

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  M

  	
   

  	
  50 - 54

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  M

  	
   

  	
  55 - 59

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  M

  	
   

  	
  60 - 64

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  M

  	
   

  	
  65 + (NM)

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  M

  	
   

  	
  65 + (M) *

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  

 

* = Medicare Primary

*** All references to the POS Fund Allocations have been deleted.

 

98

 

	
   

  	
  [LOGO]

  
	
   

  	
  Blue Shield

  
	
   

  	
  of California

  
	
   

  	
  An Independent Member

  of the Blue Shield Association

  

 

Exhibit H

 

HMO
IPA/Medical Group Agreement

PROFESSIONAL STOP LOSS PROGRAM

 

	
  Name of Group:

  	
   

  	
  PROSPECT MEDICAL GROUP, INC.

  	
   

  
	
  Effective Date:

  	
   

  	
   

  

 

A.                                   Commencement of Stop Loss Program:

 

If, as set forth on the Signature Page to the Agreement, Group elects
to participate in this Stop Loss Program, this Exhibit H is added to the HMO
Medical Agreement (the “Agreement”) between Group and Blue Shield.  The Stop Loss Program set forth in this
Exhibit H commences with respect to Capitated Professional Services provided to
Members on the following date:

 

	
         

  	
  The
  Effective Date of the Agreement

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  OR,

  	
   

  
	
   

  	
   

  	
   

  
	
         

  	
  [Specify
  Date]
                   ,
  19

  	
   

  

 

The commencement date for this Stop Loss Program shall not cause either
a modification of the Agreement Year, as set forth in the Agreement, nor, if
the initial time period covered by the Stop Loss Program is less than a full
Agreement Year, a proration of the Attachment Level set forth below.

 

Notwithstanding any provision of the Agreement or this Exhibit H to the
contrary, Blue Shield shall have no obligation to permit Group to commence the
Stop Loss Program other than as of the first day of an Agreement Year.

 

B.                                     Termination or Modification of Stop Loss
Program:

 

(1)                                  Group may at anytime, without terminating the
Agreement and by no less than sixty (60) days prior written notice to Blue
Shield, terminate this Stop Loss Program and (delete this Exhibit from the
Agreement), provided that Group provides to Blue Shield, in conjunction with
such termination notice, a certificate of insurance demonstrating that Group
has (or will have as of the effective date of such termination) stop loss
coverage in compliance with Paragraph 7.4 of the Agreement. In the event of
such termination, the Stop Loss Attachment Level described below will not be
prorated.

 

(2)                                  Blue Shield may, without terminating the
Agreement and by no less than sixty (60) days prior written notice to Group,
terminate this Stop Loss Program as to Group

 

99

 

(and delete this Exhibit from the Agreement) as of midnight of the last
day of the Agreement Year.

 

(3)                                  Blue Shield may, by no less than sixty (60)
days prior written notice to Group, modify the provisions of this Stop Loss
Program, including without limitation the Stop Loss Program Charges specified
below. Such modification shall be effective as of the first day of the
Agreement Year which immediately follows the Agreement Year in which such
notice is given.

 

C.                                     Stop Loss Program:

 

(1)                                  For the Stop Loss Program Charges set forth
in Part D below, Blue Shield shall reimburse Group for *** that portion of the
Allowable Costs (as described herein) of Capitated Professional Services
provided during any one (1) Agreement Year to any one (1) Member which exceeds
the Attachment Level and which are Group’s financial responsibility under the
Agreement.

 

(2)                                  In addition to the defined terms of the
Agreement, the following terms have the following meanings for this Stop Loss
Program:

 

(i)                                     The Attachment Level is *** of
Allowable Costs incurred by Group for the provision of Capitated Professional
Services to any one (1) Commercial Member (including POS Members) in any one
(1) Agreement Year. The Attachment Level is *** of Allowable Costs incurred by
Group for the provision of Capitated Professional Services to any one (1) Blue
Shield 65 Plus Member in any one (1) Agreement Year.

 

(ii)                                  Allowable Costs (both for determining the Attachment Level
and Stop Loss Program reimbursement after the Attachment Level is reached) are
the lesser of the amount actually paid (other than capitation payments) by
Group for such Capitated Professional Services, or *** of the Blue Shield’s PPO
Physician Allowances in effect at the time. Allowable Costs are reduced by: (a)
the Member’s applicable Copayments; and (b) any amount for which Group is
entitled to reimbursement or payment from any other source.

 

(3)                                  Group shall submit to Blue Shield any claims
for Stop Loss Program reimbursement within ninety (90) days of the end of the
Agreement Year in which the services, for which Stop Loss Program reimbursement
is claimed, were provided. Blue Shield may deny any claims not submitted within
said time period. Claims shall be in such form, containing such information,
and provided to Blue Shield as set forth in the Provider Manual.

 

100

 

(4)                                  Stop Loss Program reimbursement is provided
only for Capitated Professional Services which are provided to an eligible
Member in conformity with the terms and conditions of the Agreement, including,
without limitation, any provisions requiring Authorizations and case management
program notification and cooperation. Without limiting the foregoing, Stop Loss
Program reimbursement is not paid for any monetary compensation payable to a
Member for any reason, including Group’s negligence in providing or arranging
or failing to provide services.

 

(5)                                  Group shall promptly notify Blue Shield of
all cases for which the Attachment Level is reached or for which it is
reasonably likely that the Attachment Level will be reached.

 

(6)                                  Group shall, as a condition of such Stop Loss
Program reimbursement, provide to Blue Shield all information necessary for
Blue Shield to determine its Stop Loss Program obligation hereunder.

 

(7)                                  Stop Loss Program reimbursement shall be
payable by Blue Shield at the later occurring of: (i) the date of the Shared
Savings Settlement described in Exhibit D to the Agreement; or, (ii) ninety
(90) days following the timely, complete, and uncontested submission to Blue
Shield of Group’s Stop Loss Program reimbursement claim.

 

(8)                                  Blue Shield reserves the right to audit
Group’s Stop Loss Program claims and other information provided pursuant to
this Exhibit H. In the event such audit determines that there has been an
underpayment in Stop Loss Program reimbursement, Blue Shield shall pay to Group
the amount of such underpayment within forty-five (45) working business days thereafter.
In the event such audit determines that there has been an overpayment in Stop
Loss Program reimbursement, Group shall pay to Blue Shield the amount of such
overpayment within forty-five (45) working business days thereafter.
Alternatively, Blue Shield may, at its election, offset such overpayment from
any amount then or thereafter owed by Blue Shield to Group.

 

D.                                    Stop Loss Program Charges to Group:

 

As reimbursement to Blue Shield for the Stop Loss Program coverage
provided pursuant to this Exhibit, Blue Shield shall deduct from Capitation
payable to Group pursuant to the Agreement, the following per Member per Month
(PMPM) amounts:

 

	
  Commercial

  	
   

  	
   

  	
  *** PMPM

  	
   

  
	
  Point
  of Service (POS)

  	
   

  	
   

  	
  ***
  PMPM

  	
   

  
	
  Blue
  Shield 65 Plus

  	
   

  	
   

  	
  ***
  of Group’s Capitation Amount

  	
   

  

 

101

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