1
EXHIBIT 10.3
SECOND AMENDMENT
TO
RISK SHARING AGREEMENT
BY AND BETWEEN
ALLEGHENY HEALTH, EDUCATION & RESEARCH FOUNDATION
AND
COVENTRY CORPORATION
ON BEHALF OF MEMBER COMPANIES
THIS AGREEMENT is executed the 30th day of June 1997, by and between
HealthAmerica Pennsylvania, Inc., a Pennsylvania corporation licensed to operate
a health maintenance organization ("HealthAmerica"), Coventry Corporation, a
Delaware corporation ("Coventry") for and on behalf of the Member Companies (as
hereinafter defined) other than HealthAmerica, and Allegheny Health, Education
and Research Foundation, a Pennsylvania nonprofit corporation ("AHERF").
WHEREAS, HealthAmerica and Coventry entered into a Risk Sharing Agreement with
AHERF on March 31, 1997; and
WHEREAS, the parties to said Agreement desire to amend said Agreement to
incorporate additional Coventry Corporation subsidiaries with service areas in
both the state of Ohio and the state of West Virginia.
NOW, THEREFORE, in consideration of the mutual covenants, premises and
undertakings herein and intending to be legally bound hereby, the parties agree
as follows:
1. Section 1.17, DEFINITIONS, which defines "Member Company" shall be
modified to read as follows:
"Member Company" shall mean HealthAmerica or any other direct
or indirect subsidiary of Coventry that offers a program to
cover individuals in the Commonwealth of Pennsylvania, the
State of Ohio and the State of West Virginia, including
HealthAmerica Pennsylvania, Inc., d/b/a HealthAssurance HMO
("HealthAssurance HMO"), relative to the State of Ohio and
Coventry Health Plan of West Virginia, Inc. ("West Virginia
HMO"), relative to the State of West Virginia, Coventry Health
Care Management Corporation, d/b/a HealthAssurance
("HealthAssurance") and Coventry Health and Life Insurance
Company ("CHL") relative to Pennsylvania, Ohio and West
Virginia.
2. Section 1.28 DEFINITIONS, shall be amended to read as follows:
"Western Region" shall be expanded to mean the following:
Pennsylvania counties: Allegheny, Washington, Greene,
Somerset, Fayette, Westmoreland, Armstrong, Beaver, Xxxxxx and
Indiana; the following Ohio counties: Belmont, Jefferson,
Mahoning, Trumbull, Harrison, Carroll, Astabula and
Columbiana, subject to receipt of any requisite regulatory
approvals; the following West
2
*CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE COMMISSION.
Virginia counties: Xxxxxxx, Xxxxxx, Doddridge, Hancock,
Xxxxxxxx, Xxxxx Marion, Marshall, Monongalia, Ohio, Preston,
Taylor, Upshur, and Xxxxxx.
3. Wherever HealthAmerica is mentioned in the Agreement, the Agreement shall
be deemed to read as follows:
"HealthAmerica or Member Company".
4. Section 2.4.1., [_]* The foregoing terms shall be effective upon the
later of: (1) the date such provider becomes an AHERF Affiliated
Provider, or (ii) the date of this Agreement."
5. Section 3.1.8, DUTIES OF AHERF, shall be revised to read as follows:
"HealthAmerica or Member Company, HCFA, NCQA and the
Commonwealth of Pennsylvania, State of Ohio and State of West
Virginia shall have the right to review AHERF's book and
records pertaining to provision of services to Covered
Individuals, including, but not limited to, quality
improvement and utilization management programs, and all data
on utilization of medical services and providers of those
services pertaining to Covered Individuals. AHERF shall have
the right to review HealthAmerica's and Member Company's books
and records pertaining to its premium collection activities,
coordination of benefits, subrogation, and claims payment
activities, in each case to the extent pertaining to Covered
Individuals and to the extent such functions have not been
delegated to AHERF hereunder."
3
6. Section 3, DUTIES OF AHERF, shall be expanded, specifically for purposes
of compliance with West Virginia Code Section 114-43-3, as it relates to
West Virginia HMO, to add the following terms and conditions:
3.1.9 AHERF shall provide to West Virginia HMO regular written
reports prepared on a West Virginia statutory accounting
basis, at least quarterly, stating AHERF's current assets and
identifying in the aggregate all payments made or owed to its
providers in sufficient detail for West Virginia HMO and the
Commissioner to determine if the payments are being made in a
timely manner and which identify in the aggregate the
reasonably estimated incurred but not reported health care
costs. West Virginia HMO shall monitor said reports referred
to in this Section 3.1.9.
3.1.10 AHERF shall permit West Virginia HMO and the
Commissioner, both singularly and jointly, upon reasonable
prior notice, to audit, inspect and copy its books, records,
and other evidence of its operations which are, in the
discretion of West Virginia HMO or the Commissioner, relevant
to AHERF's obligations under the Agreement for the purpose of
determining its compliance with all requirements legally
mandated by statute, rule or the Agreement. Any review is
subject to any confidentiality requirements imposed by State
or Federal law.
7. Section 4.2.1.3, HEALTHAMERICA OR MEMBER COMPANY OVERSIGHT, shall be
amended to read as follows:
"The parties understand and agree that pursuant to state
requirements regarding integrated delivery systems and NCQA, a
Member Company is required to retain oversight of the
Delegated Functions. A Member Company shall not be required to
delegate a Delegated Function hereunder unless and until the
Member Company and AHERF mutually agree to the frequency and
content of periodic reports to be provided by AHERF to the
Member Company in order to assist HealthAmerica in performing
its oversight duties hereunder. A Member Company shall conduct
an annual on-site audit of AHERF to ensure compliance with
HealthAmerica's, or Member Company's Pennsylvania's, Ohio's or
West Virginia's as appropriate, and NCQA standards."
8. Section 4.2.1.4, STANDARD OF PERFORMANCE, shall be revised to read as
follows:
"All Delegated Functions shall be performed in accordance with
standards satisfactory to the Member Company, which standards
shall be no less than the standards required by NCQA, the
Pennsylvania Department of Health ("DOH") or the Pennsylvania
Insurance Department ("DOI"), including, without limitation,
the requirements set forth in the DOH's Statement of Policy
and the DOI's Statement of Policy, each as amended from time
to time, respectively set forth at 28 Pa. Code '9.401 et seq.
and 31 Pa. Code '301.301 et seq. (collectively the "Statement
of Policy"); the State of Ohio
4
and the State of West Virginia, including the requirements
set forth in West Virginia Code Section 114-43 et. seq.
Further, all Delegated Functions shall be subject to
performance monitoring by the Member Company and the DOH,
the State of Ohio, and the State of West Virginia and is
subject to independent validation by the Member Company,
DOH, the State of Ohio and the State of West Virginia and an
independent quality review/assessment approved by the DOH,
the State of Ohio and the State of West Virginia.
HealthAmerica or Member Company may elect to rescind any
delegated duties if, in HealthAmerica's or Member Company's
sole opinion, AHERF's performance of such functions may
jeopardize either the health or safety of HealthAmerica's or
Member Company's members, or HealthAmerica's or Member
Company's compliance with applicable regulations or other
certification requirements."
9. Section 4.2.3, ACCESS TO RECORDS, shall be amended to read as follows:
"AHERF shall provide, and cause practitioners and providers to
provide, any Member Company, DOH, the State of Ohio, and the
State of West Virginia and an independent review/assessment
organization with access to medical and other records
concerning the provision of Covered Services to Covered
Individuals by and through AHERF and AHERF Providers."
10. Section 5.9, NO BALANCE BILLING, shall be amended to read as follows:
"AHERF hereby agrees that in no event, including but not
limited to, non-payment by a Member Company, a Member Company
insolvency or breach of the Agreement, shall AHERF xxxx,
charge or collect a deposit from, seek compensation,
remuneration or reimbursement from, or have any recourse
against, Covered Individuals or persons other than a Member
Company acting on their behalf for Covered Services. This
Section shall not prohibit collection of Copayments,
Coinsurance, Deductibles or Financial Penalties made in
accordance with the terms of the applicable Covered
Individual's contract with a Member Company nor billing for
non-Covered Service for which Covered Individuals have had
prior notification and approved.
"AHERF further agrees that: (i) the no balance billing
provision herein shall survive the termination of the
Agreement regardless of the cause giving rise to termination
and shall be construed to be for the benefit of Covered
Individuals; and (ii) this no balance billing provision
supersedes any oral or written contrary Agreement now existing
or hereafter entered between AHERF and a Covered Individual or
a person acting on his/her behalf.
"Any modification, addition or deletion to the provisions of
this Section shall become effective on a date no earlier that
sixty (60) days after the Pennsylvania Secretary of Health and
the requisite governmental body of the State of Ohio and the
State of West Virginia, have received written notice of such
proposed change."
5
11. Section 17, NOTICES, shall be amended to include the following additional
companies:
HealthAmerica Pennsylvania, Inc. d/b/a/ HealthAssurance HMO
0000 Xxxxxx Xxxxx
Xxxxxxxxxx, XX 00000-0000
and
Coventry Health Plan of West Virginia, Inc.
000 Xxxxxxxx Xxxx
Xxxxxxxx, XX 00000
12. Section 19, AFFIRMATIVE ACTION, shall be amended to read as follows:
"Each party hereunder is an Equal Opportunity Employer which
maintains an Affirmative Action Program. The parties shall
comply with Executive Order 11246, the Vietnam Era Veterans
Readjustment Act of 1974, the Drug Free Workplace Act of 1988,
the Vocational Rehabilitation Act and similar legislation in
transactions relating to any government contract. The parties
further agree to take affirmative action to ensure that
applicants are employed and that employees are treated during
employment without regard to their race, color, religious,
creed, ancestry, national origin, sex, sexual orientation, or
disability. Each party will ensure that all of its
subcontractors will abide by these requirements and the
requirements imposed on state contractors and subcontractor
under the Contract Compliance Regulation issued by the
Pennsylvania Human Relations Commission as set forth at 16 Pa.
Code Chapter 49 and the applicable statutes and regulations
for the State of Ohio and the State of West Virginia, each of
which will be incorporated in this Agreement and those
subcontracts by reference."
13. Section 22, GOVERNING LAW, shall be amended to read as follows:
"This Agreement shall be governed by the laws of the
Commonwealth of Pennsylvania as it pertains to HealthAmerica
Pennsylvania, Inc., the State of Ohio as it pertains to
HealthAmerica Pennsylvania, Inc. d/b/a HealthAssurance HMO,
and the State of West Virginia as the Agreement pertains to
Coventry Health Plan of West Virginia, Inc. Any actions,
lawsuit or claim brought by either party pertaining to breach,
reformation or interpretation of this Agreement as it relates
to HealthAmerica Pennsylvania, Inc. shall be exclusively
brought in Pittsburgh, Pennsylvania."
14. Paragraph 23, APPROVALS, shall be amended to read as follows:
"Notwithstanding anything else contained herein, this
Agreement shall not take effect except and until all requisite
regulatory approvals have been received from the Commonwealth
of Pennsylvania, including but not limited to, the
Pennsylvania
6
Department of Health, the State of Ohio and the State of
West Virginia. The parties shall, in good faith, cooperate
with each other and the respective governmental bodies for
the respective states of Ohio, West Virginia and
Pennsylvania in providing requested information, including
but not limited to, specific documentation as deemed
necessary to obtain said approvals."
15. ALL OTHER TERMS. Notwithstanding anything contained herein, all other
terms of the Agreement shall remain unaltered and in full force and
effect.
[REST OF PAGE INTENTIONALLY BLANK]
7
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the day
and year first above written.
Allegheny Health, Education HealthAmerica Pennsylvania, Inc.
& Research Foundation
/s/ Xxxxx X. XxXxxxxxx /s/ Xxxxxx X. Xxxxx
--------------------------- ------------------------------------
Xxxxx X. XxXxxxxxx Xxxxxx X. Xxxxx
Executive Vice President and President and Chief Executive Officer
Chief Financial Officer
Coventry Corporation
/s/ Xxxxxx X. Xxxxx
------------------------------------
Xxxxxx X. Xxxxx
Senior Vice President
HealthAmerica Pennsylvania, Inc. d/b/a
HealthAssurance HMO
/s/ Xxxxxx X. Xxxxx
------------------------------------
By: Xxxxxx X. Xxxxx
Title: President and Chief Executive
Officer
Coventry Health Plan of West Virginia, Inc.
/s/ Xxxxxx X. Xxxxx
------------------------------------
By: Xxxxxx X. Xxxxx
Title: President and Chief Executive
Officer
