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EXHIBIT 10.21
MANAGEMENT SERVICES AGREEMENT
This Management Services Agreement (this "Agreement") is made and entered into
as of this 1st day of April, 1996, by and between QUALITYCARE NETWORK OF
TEXAS, LTD., a Texas limited partnership ("QCN, Ltd."), and IPA MANAGEMENT
ASSOCIATES, INC., D/B/A NORTH AMERICAN MEDICAL MANAGEMENT - TEXAS, a Texas
corporation ("Manager").
W I T N E S S E T H:
WHEREAS, QCN, Ltd. is a management service organization which intends to act as
an agent on behalf of those physicians, independent practice associations,
physician practice groups, hospitals and outpatient clinics (collectively the
"QCN Network"), which retain and appoint QCN, Ltd. to act on their behalf to
negotiate, arrange, execute and administer managed care contracts with third
party payors, including, but not limited to, insurance companies, health
maintenance organizations, employer self-funded plans, health plans, and other
managed care organizations; and
WHEREAS, QCN, Ltd. desires to retain the services of Manager, and Manager
desires to provide to QCN, Ltd., the managerial services necessary for the
negotiation, arrangement and administration of certain risk managed care
contracts entered into by QCN, Ltd. on behalf of the participating physicians
and providers of the QCN Network;
NOW, THEREFORE, in consideration of the foregoing and the mutual agreements and
covenants contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby forever acknowledged and confessed,
QCN, Ltd. agrees to retain Manager to provide to QCN, Ltd. such managerial
services as described herein, and Manager agrees to provide such services on the
terms and conditions provided in this Agreement.
ARTICLE I
DEFINITIONS
As used in this Agreement, each of the following terms shall have the meaning
set forth below:
1.1 "BENEFIT AGREEMENT" shall mean the contract which establishes
a Payor's obligation to the Enrollee for the payment of medical, hospital or
other health care benefits.
1.2 "COVERED SERVICES" shall mean those medical services
enumerated in Payor Contracts which Participating Providers are obligated to
provide to Enrollees.
1.3 "ENROLLEE" shall mean any eligible individual who is covered
under a Benefit Agreement offered by a Payor and entitled to receive the Covered
Services pursuant to such Benefit Agreement.
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1.4 "EXCLUSIVE AREA" shall mean the counties listed on EXHIBIT "A"
attached hereto and incorporated herein by reference for all purposes.
1.5 "IPA'S" shall mean those independent practice associations which
meet the definition of Participating Providers hereunder.
1.6 "MANAGERIAL SERVICES" shall mean those services to be provided by
Manager to QCN, Ltd. pursuant to the terms of this Agreement as described in
Article III hereof.
1.7 "MHS" shall mean Methodist Healthcare System of San Antonio, Ltd.,
a Texas limited partnership.
1.8 "OUTCOMES MEASUREMENT PROGRAM" shall mean either the outcomes
measurement program developed, established and administered by QCN, Ltd. or its
agents for outcomes measurement activities, or a similar program developed,
established and administered by a Payor.
1.9 "PARTICIPATING PROVIDERS" shall mean any independent practice
association, or, if the context so indicates, any physician, physician practice
group, hospital, outpatient clinic, or other health care provider has entered
into a Participation Agreement with QCN, Ltd.
1.10 "PARTICIPATION AGREEMENTS" shall mean the Contract Services
Agreements by and between QCN, Ltd. and the IPAs and those several Physician
Service Agreements, Physician Specialists Service Agreements, Ancillary Service
Contracts and Hospital Service Agreement between QCN, Ltd. and its Participating
Providers pursuant to which the Participating Providers agree to provide Covered
Services to Enrollees under Payor Contracts entered into by QCN, Ltd., on behalf
of such Participating Provider.
1.11 "PAYOR" shall mean any entity having a current valid Payor
Contract with Participating Providers, executed by QCN, Ltd. as agent for
Participating Providers, which pays, indemnifies, or makes payments on behalf of
Enrollees for medical and hospital costs. This definition includes, but is not
limited to, insurance companies, health maintenance organizations, managed care
organizations, preferred provider organizations, Medicare and Medicaid, third
party administrators, a partially or fully self-insured employer, a multiple
employer trust or an employee welfare benefit plan, and the clients of any of
the preceding entities.
1.12 "PAYOR CONTRACT" shall mean an agreement between any of the
Participating Providers and a Payor, executed by QCN, Ltd. as agent for the
Participating Providers, pursuant to which some or all of the Participating
Providers will render Covered Services to Enrollees for amounts determined and
established in such agreement. Payor Contracts as used in this Agreement shall
include only Risk Contracts.
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1.13 "POOLS" shall mean any reserve fund, withhold amount, risk or
bonus pools required or permitted under any Payor Contract.
1.14 "RISK CONTRACTS" shall mean any agreement with any Payor
pursuant to which the Participating Providers involved in the Payor Contract
share substantial financial risk.
1.15 "UTILIZATION MANAGEMENT PROGRAM" shall mean (i) the
utilization management program developed, established and administered by QCN,
Ltd. or its agents for the determination of the medical necessity of medical
services provided to Enrollees, (ii) a utilization management program developed
by a Payor and administered by QCN, Ltd., or (iii) a utilization management
program developed, established and administered by a Payor.
ARTICLE II
GENERAL
2.1 RETENTION OF MANAGER. QCN, Ltd. hereby retains Manager for the
purpose of rendering all Managerial Services as specified in Article III hereof
(which shall not include any third party administrative services performed with
regard to any contract with a preferred provider organization), and Manager
accepts such retention, subject at all times to the provisions of this
Agreement.
2.2 ENGAGEMENT TERMS. QCN, Ltd. retains Manager as its sole and
exclusive provider of Managerial Services. Subject to Section 8.2 hereof,
Manager agrees that Manager will provide all services described in this
Agreement exclusively to QCN, Ltd., and that Manager will not provide such
services to any other organizations in the Exclusive Area. Manager shall provide
such Managerial Services to QCN, Ltd. as QCN, Ltd. may reasonably request.
Manager is expressly authorized to provide such Managerial Services in any
reasonable manner Manager deems appropriate to meet the day-to-day requirements
of the business needs of QCN, Ltd. and the QCN Network, unless instructed
otherwise by QCN, Ltd. Manager shall perform the Managerial Services at
locations provided by Manager. Manager shall comply with all applicable federal,
state, and local laws, regulations and restrictions in the conduct of its
obligations under this Agreement.
2.3 NEW SERVICES. Manager, at its option, shall have the first
right to provide additional or new business management and other services
necessary to support QCN, Ltd. if QCN, Ltd. deems such additional or new
services necessary. Should Manager decline to provide the new or additional
services, QCN, Ltd. may perform or purchase such services from others at its
own expense. The parties agree that for Payor Contracts which provide for the
payment of compensation amounts to Participating Physicians which are determined
by fee schedules in the Payor Contracts rather than capitation, NAMM shall be
authorized to negotiate for access fees to be paid to QCN, Ltd. (or for marginal
markups to the physician fee schedule amounts to be retained by QCN, Ltd.) to
compensate QCN, Ltd. for implementing the Payor Contracts and for its activities
in processing and repricing physician claims submitted to the Payor.
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2.4 MEETINGS. QCN, Ltd. shall notify Manager in writing and shall
provide Manager or its assignees the opportunity to be present and heard at all
meetings of QCN, Ltd.'s governing body (QCN, Inc.), or meetings of QCN, Ltd.
with any Participating Providers. QCN, Ltd. and Manager shall notify each other
and shall provide each other the opportunity to be present at and participate
in all meetings of either QCN, Ltd. or Manager with any Payor or potential or
prospective Payor.
2.5 REVIEW PROCESS. Manager shall, on behalf of QCN, Ltd., notify
an IPA of and forward to such IPA any Payor Contract to be entered into by QCN,
Ltd. as attorney-in-fact for such IPA at least ten (10) days prior to the date
such Payor Contract is presented to the Board of Directors of QualityCare
Network, Inc. (the General Partner of QCN, Ltd.) for approval.
ARTICLE III
MANAGERIAL SERVICES
3.1 PERFORMANCE OF MANAGEMENT FUNCTIONS. Manager may provide or
arrange for others to provide the Managerial Services called for by this
Agreement; provided, however, before any party other than Manager may provide
such services, QCN, Ltd. must have approved the provision of such services by
such party in writing. Manager shall perform the Managerial Services in
accordance with those general standards and instructions of QCN, Ltd. which
have been provided to Manager in writing. Manager covenants and agrees that,
at all times during the performance of its Managerial Services, it will adhere
to the Mission, Vision, Values and Policy on Quality of MHS, a copy of which is
attached hereto as EXHIBIT "B" and incorporated herein by reference for all
purposes, and further covenants and agrees that it will adhere to the Social
Principles of The United Methodist Church in the form attached hereto as
EXHIBIT "C" and incorporated herein by reference for all purposes.
3.2 FINANCIAL PLANNING AND GOALS. Manager shall prepare annual
capital and operating budgets reflecting in reasonable detail anticipated
revenues and expenses and sources and uses of capital for the provision of
Managerial Services, the development of the QCN Network, and the negotiation
and administration of Payor Contracts. Said budget shall be presented to the
governing board of QCN, Ltd. no later than the commencement of each fiscal
year of QCN, Ltd. Manager and QCN, Ltd. agree to make decisions regarding
capitation rates, Manager's administrative budget, and other financial terms
consistent with prudent business practices and in the best interests of the
QCN Network. The parties acknowledge that the budget may need to be amended
from time to time to reflect variances reasonably explained by volume
fluctuations.
3.3 FINANCIAL RECORDS. Manager shall maintain accurate records
regarding the provision of its Managerial Services and shall prepare and
maintain financial books and records reflecting the administration of the Payor
Contracts, including any amounts retained in or distributed out of any Pools on
an annual basis. Such records shall be kept in accordance with generally
accepted accounting principles, consistently applied (or, if applicable, in
accordance with tax basis accounting principles consistently applied), and
recognized standards of
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professional practice. Manager shall provide the IPAs with an accounting on the
periodic basis agreed to by the IPAs and QCN, Ltd. If QCN, Ltd. desires an audit
of any of the financial records maintained by Manager pursuant to any of the
provisions of this Agreement, it may obtain an audit at reasonable times, upon
reasonable notice and at QCN, Ltd.'s cost; provided, however, if such audit
reveals that Manager has overstated its reimbursable costs to QCN, Ltd. by five
percent (5%) or more, the cost of such audit shall be borne by Manager, and the
expense of such audit shall not be reimbursable under Section 6.2 hereof.
3.4 ACCESS. Upon reasonable notice to Manager, and without
interference with the normal conduct of its business, QCN, Ltd.'s officers,
members of QCN, Ltd.'s governing body, or agents appointed by either shall have
the right to audit, examine, and make copies of books of account maintained by
Manager with respect to the provision of Managerial Services.
3.5 CONTRACT ADMINISTRATION SERVICES.
(a) Manager shall act as risk manager for QCN, Ltd., and
shall be responsible for performing any and all services necessary for the
administration of the Payor Contracts, including, but not limited to,
monitoring, managing and maintaining and keeping accurate records with respect
to any Pools established by QCN, Ltd. Manager also shall be responsible for
monitoring any Pools required under any Payor Contract. Manager shall be
responsible for determining those amounts which must be retained in the Pools
established by QCN, Ltd. and the distribution of such amounts when required
under the policies and procedures of QCN, Ltd.
(b) Manager shall develop and maintain such actuarial
information with respect to Covered Services provided or requested to be
provided by Participating Providers as necessary for Manager to develop for QCN,
Ltd. compensation arrangements with Payors which compensation arrangements are
mutually beneficial for Participating Providers and QCN, Ltd.
(c) Manager shall assist or act on behalf of QCN, Ltd. in
negotiating and arranging Payor Contracts and shall assist QCN, Ltd. in
establishing appropriate compensation arrangements in accordance with the
criteria established from time to time by QCN, Ltd.
(d) Manager shall establish and maintain credit and
billing and collection policies and procedures and shall xxxx and collect all
fees or amounts due from Payors for Covered Services provided by Participating
Providers. QCN, Ltd. hereby grants Manager a special power of attorney and
appoints Manager for the term hereof to be its true and lawful attorney-in-fact
for the following purposes: (i) to xxxx, collect and receive any amounts owed by
Payors to Participating Providers under Payor Contracts; and (ii) to take
possession of and endorse in the name of the appropriate Participating Provider
any payment intended as payment under a Payor Contract, including any notes,
checks, money orders, insurance payments and other instruments received as
payment therefor, for the sole purpose of depositing such payments in the
appropriate Accounts (as hereinafter defined).
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(e) Manager shall be responsible for distributing those
amounts due to Participating Providers under the terms of the applicable
Participation Agreement for such Participating Provider, in accordance with the
policies and procedures of QCN, Ltd. and/or the IPA.
(f) Manager shall have access to the checking accounts of
the IPAs into which revenues from Payor Contracts are deposited (the
"Accounts"). In connection with the administration of funds under this Section
3.5 and throughout the term of this Agreement, QCN, Ltd. hereby grants Manager
a special power of attorney and appoints Manager as QCN, Ltd.'s true and lawful
agent and attorney-in-fact, and Manager hereby accepts such special power of
attorney and appointment, to deposit appropriate funds into such Accounts as
designated by either QCN, Ltd. or the appropriate IPA and to make withdrawals
from such Accounts solely for (i) the payments to be made to those
Participating Providers or other providers who perform health care services or
ancillary services as required by applicable Payor Contracts and Participation
Agreements, (ii) the establishment or maintenance of any Pools, (iii) the
payments to be made to QCN, Ltd. pursuant to the terms of this Agreement, or
(iv) as otherwise requested by QCN, Ltd. Manager shall be obligated to deposit
any monies or other assets it receives for any reason on behalf of QCN, Ltd. or
any Participating Provider in the Accounts as designated by QCN, Ltd.
Notwithstanding the special power of attorney granted to Manager hereunder,
QCN, Ltd., as agent for Participating Providers, may continue to draw checks on
the Accounts.
(g) Manager shall design, supervise and maintain custody
of all files and records relating to the administration of the Payor Contracts.
Patient medical records shall not be maintained by Manager and shall at all
times be and remain the property of the Participating Providers.
(h) Manager shall provide to QCN, Ltd. the data
necessary for QCN, Ltd. to accurately prepare its annual income tax returns.
Manager, however, shall have no responsibility for the preparations, filing, or
protesting of QCN, Ltd.'s federal or state income tax returns or the payment of
such income taxes.
(i) Manager shall be responsible for providing all such
services necessary for QCN, Ltd. to fulfill its obligations to any IPA who has
entered into a Contract Services Agreement with QCN, Ltd. in substantially the
form attached hereto as EXHIBIT "D".
3.6 QCN NETWORK DEVELOPMENT AND PHYSICIAN RECRUITMENT. Manager
shall perform administrative services reasonably necessary and appropriate to
develop the QCN Network, such as identifying potential candidates for
participation in the QCN Network. However, it will be and remain the
responsibility of QCN, Ltd. to select and contract with Participating Providers
performing Covered Services, and Manager shall have no authority whatsoever
with respect to such activities.
3.7 CREDENTIALING. Manager shall develop and assist QCN, Ltd. in
(i) implementing the IPA's credentialing process, (ii) administering the
credentialing and re-credentialing process
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implemented by QCN, Ltd. under QCN, Ltd.'s or the IPA's own standards or those
required by any Payor (including, but not limited to, obtaining information
regarding licensure, medical staff participation, insurance coverage and other
information relevant to credentialing standards of QCNI, Ltd. or the Payors),
and (iii) arranging interviews and reporting the results of the credentialing of
each physician to the appropriate committee or to the governing body of QCN,
Ltd. or the appropriate IPA; provided, however, that QCN, Ltd. shall make the
ultimate decision as to the suitability and compliance with credentialing and
re-credentialing standards of any physician to become associated with the QCN
Network, and QCN, Ltd. shall be responsible for implementing the appropriate
credentialing standards and offering or denying a Participation Agreement to a
health care provider.
3.8 UTILIZATION MANAGEMENT, OUTCOMES MEASUREMENT AND QUALITY
IMPROVEMENT. Manager shall assist the Participating Providers in complying with
any Utilization Management Program, Outcomes Measurement Program, or quality
improvement programs implemented by any Payor or by QCN, Ltd. or by the IPA's.
Such outcomes measurement and utilization management function shall be carried
out in accordance with the requirements of the applicable Payor Contract and any
requirements or standards adopted by QCN, Ltd. or the IPAs. Manager shall assist
QCN, Ltd. and the IPA's in establishing any Utilization Management Program,
Outcomes Measurement Program or quality improvement program requested by QCN,
Ltd. or the IPA's. Manager shall implement and monitor the Utilization
Management Program, Outcomes Measurement Program and quality improvement program
designed to monitor and evaluate the quality of Covered Services provided by
Participating Providers and to review the professional skills of potential
participating providers (including, without limitation, determining whether each
such provider may provide Covered Services and the scope and conditions of such
privileges) prior to permitting such persons to provide Covered Services.
3.9 PRE-CERTIFICATION, REFERRAL PRE-CERTIFICATION SERVICES. In
accordance with the requirements established in the applicable Payor Contract or
by QCN, Ltd., Manager shall establish on QCN, Ltd.'s behalf a system for (i)
verification of Enrollee eligibility, (ii) processing referral requests from
Participating Providers, (iii) reviewing each referral, based upon established
medical criteria, to ensure that the referral is appropriate under the
applicable requirements regarding medical necessity and utilization and (iv)
assuring that referral authorizations are processed, routed to the appropriate
specialty care provider, or denied. QCN, Ltd. and Manager agree that the Manager
shall be responsible for the implementation and management of the systems
described in this Section 3.9 but that the Participating Providers shall be
responsible for the day to day management of referrals pursuant to the systems
developed by Manager.
3.10 DELEGATION OF AUTHORITY TO NEGOTIATE. Manager shall be
responsible for negotiating on behalf of the Participating Providers any Payor
Contracts, including the details of compensation or reimbursement arrangements,
in accordance with criteria and rates established from time to time by QCN, Ltd.
and/or the Participating Providers. QCN, Ltd. agrees that Manager shall have the
opportunity to participate in the negotiations of any Payor Contracts, except
any Payor Contract with a preferred provider organization.
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3.11 INSURANCE. Manager shall be responsible for obtaining and
maintaining all appropriate insurance covering QCN, Ltd., and QCN, Ltd. shall
reimburse Manager for its costs of such insurance in accordance with Section
6.2.
ARTICLE IV
AGREEMENTS AND RESPONSIBILITIES OF QCN, LTD.
4.1 LICENSES. QCN, Ltd. shall comply with all applicable federal,
state and local laws, regulations and restrictions in the conduct of its
obligations under this Agreement.
4.2 ACCESS. At all times during the term of this Agreement, QCN,
Ltd, shall permit Manager to have access to all of QCN, Ltd's books, records
and reports, contracts, agreements, licenses, surveys, accreditations and any
and all other information reasonably necessary for or requested by Manager to
perform its duties under this Agreement.
4.3 ADVANCES. QCN, Ltd. agrees to advance Manager an amount equal
to Manager's anticipated expenses for providing Managerial Services for a
month. Manager shall accurately record such advances in the books and records
maintained by Manager pursuant to this Agreement. Manager and QCN, Ltd. shall
reconcile Manager's actual monthly expenses and anticipated expenses advanced
at the end of each month. To the extent there is a discrepancy between the
actual and the anticipated expenses for any month the Manager shall reflect
such discrepancy in its books and records, and any resulting credit or debit
balance shall be carried over to the next month.
ARTICLE V
INSURANCE AND INDEMNIFICATION
Manager shall purchase and maintain the types and levels of insurance
set forth on EXHIBIT "E" attached hereto and incorporated herein by reference
for all purposes. Manager shall provide QCN, Ltd. with appropriate certificates
or other evidence of such insurance as requested by QCN, Ltd.
ARTICLE VI
COMPENSATION TO MANAGER
6.1 COMPENSATION FOR MANAGERIAL SERVICES. In consideration for
the Managerial Services provides by Manager to QCN, Ltd. under the terms of
this Agreement, Manager shall be paid compensation which shall be calculated
and paid as set forth on EXHIBIT "F" attached hereto and incorporated herein by
reference for all purposes.
6.2 REIMBURSEMENT OF MANAGER EXPENSES. Manager shall be
reimbursed for all expenses incurred by Manager for Managerial Services
provided with respect to activities of QCN, Ltd. in the Exclusive Area;
provided, however, to the extent Manager provides any management or other
services to any party under any "Grandfathered Contract" or pursuant to
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any "Additional Business" as defined in Section 8.2 hereof, then Manager shall
be responsible for accurately accounting for the costs of such services, and all
costs incurred by Manager pursuant to the Grandfathered Contract or Additional
Business shall be allocated to such Grandfathered Contract or Additional
Business by Manager and shall reduce the costs otherwise reimbursable to Manager
by QCN, Ltd., on a dollar-for-dollar basis. Profits or losses (as opposed to
costs) of Manager will not be credited or charged to QCN, Ltd. Manager shall
allow QCN, Ltd. to audit its financial books and records relating to QCN, Ltd.,
the Grandfathered Contract or the Additional Business.
ARTICLE VII
TERM AND TERMINATION
7.1 TERM AND RENEWAL OPTIONS. The initial term of this Agreement
shall commence on the date first set forth above and shall expire on the seventh
(7th) anniversary of that date, unless extended or earlier terminated pursuant
to the terms hereof. This Agreement shall automatically renew for two (2)
additional seven (7) year terms, unless either party (the "Non-Renewing Party")
provides written notice to the other at least one hundred eighty (180) days
prior to the expiration of the then current term that such other party is
currently failing to meet a Material Condition to Renewal (as hereinafter
defined), and that the Non-Renewing Party does not, as a consequence, elect to
renew the Agreement when the current term ends.
(a) Material Conditions for Renewal - QCN, Ltd. Option.
Upon the occurrence of one or more of the following failures to meet expected
conditions, QCN, Ltd. may elect not to renew this Agreement for an additional
term:
(1) The QCN Network has failed to generate a
surplus for two of the last three fiscal years prior to the end of the term. The
determination of whether the QCN Network will generate a surplus in the final
fiscal year of the term will be based upon projections for the QCN Network for
that year that incorporate reasonable estimates and assumptions.
(2) The QCN Network enrollment during the prior
fiscal year has averaged less than 40,000 commercial equivalent lives (one
Medicare life is equal to three commercial equivalent lives and one commercial
life is equal to one commercial equivalent life).
(b) Material Conditions for Renewal - Manager Option.
Upon the occurrence of one or more of the following failures to meet expected
conditions, Manager may elect not to renew this Agreement for an additional
term:
(1) The QCN Network has failed to generate a
surplus for two of the last three fiscal years prior to the end of the term. The
determination of whether the QCN Network will generate a surplus in the final
fiscal year of the term will be, based upon
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projections for the QCN Network for that year that incorporate reasonable
estimates and assumptions.
(2) The QCN Network enrollment during the prior
fiscal year has averaged less than 40,000 commercial equivalent lives.
7.2 Termination. This Agreement may be terminated, other
provisions notwithstanding, under any of the following circumstances:
(a) Termination by Agreement. In the event QCN, Ltd. and
Manager shall mutually agree to terminate in writing.
(b) Termination on Notice for Default. This Agreement
may be terminated by either party in the event that the other party shall be in
default in the performance of any material covenant, duty or obligation under
this Agreement, and such default shall not have been cured within sixty (60)
days following written notice to the other party. The non-defaulting party shall
have the right to terminate this Agreement; provided, however, if during the
sixty (60) day cure period the defaulting party has made and is continuing to
make a good faith effort to cure such default, but the process of cure requires
additional time, and the granting of such additional time does not materially
damage or materially prejudice any rights of QCN, Ltd. or Manager, this
Agreement shall not terminate so long as the defaulting party is making a good
faith effort to cure such default, and so long as such continuing default does
not materially damage or materially prejudice any rights of QCN, Ltd. or
Manager.
(c) Termination for Specific Events. This Agreement may
be terminated by either party in the event of the dissolution of the other party
or upon the other party's failure to remain viable as a legal entity.
(d) Bankruptcy or Insolvency. By either party in the
event the other party shall apply for or consent to the appointment of a
receiver, trustee or liquidator of all or a substantial part of its assets, file
a voluntary petition in bankruptcy, admit in writing its inability to pay its
debts regularly as they become due, make a general assignment for the benefit of
creditors, file a petition or an answer seeking reorganization or arrangement
with creditors or to take advantage of any insolvency law, or in the event an
order, judgment or decree shall be entered by a court of competent jurisdiction
adjudicating such party a bankrupt or insolvent, or approving a petition seeking
reorganization of a party, or appointment of a receiver, trustee or liquidator
of all or a substantial part of its assets.
(e) Material Corporate Malfeasance. By either party in
the event the other party is convicted of a felony as an entity or commits an
act of corporate malfeasance which, in the reasonable opinion of the other
party, would have a high likelihood of injuring the reputation of the other
party or its members or affiliates.
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(f) Termination Due to Legislative or Administrative
Changes. As set forth below, in the event that there shall be a change in
Medicare or Medicaid statutes, regulations, or instruction (or in the
application thereof), the adoption of new legislation, judicial interpretations,
or a change in any other third party payor reimbursement system, or any similar
matter which materially and adversely affects either party's rights or
obligations, then the parties shall cooperate to take such actions as may be
necessary to either reform the transaction such that the parties feel
comfortable with it or to the extent necessary to assure the closest possible
compliance with statutory, regulatory and common law demands. Nothing in this
Agreement shall be interpreted to require either party at any time to do
anything that is illegal or contrary to statute.
7.3 EFFECT OF TERMINATION. Upon termination of this Agreement,
neither party shall have any further obligations hereunder, except for (i)
obligations accruing prior to the effective date of termination, and (ii)
obligations, promises or covenants set forth herein that are expressly made to
survive termination of this Agreement.
ARTICLE VIII
GENERAL PROVISIONS
8.1 SYSTEMS AND INFORMATION.
(a) System Interface. Manager acknowledges and agrees
that, in order to provide the Managerial Services to QCN, Ltd. contemplated
hereby, and in order to participate in expansion opportunities in Texas with
QCN, Ltd., Manager will use its best efforts to provide whatever conversion
system or other software is necessary to cause its computer system to interface
effectively with that of MHS and QCN, Ltd. The costs associated therewith will
be reflected in the budget. The parties acknowledge that the Participating
Providers may desire to interface with Manager's computer system or access data
via modem, and Manager agrees to accommodate the Participating Providers to the
extent it does not impose an undue financial or operational burden on Manager.
(b) Ownership of Systems. The parties acknowledge that
MHS is the owner of a license (the "License") to use the EZ Cap software program
(the "Software"). The parties agree to use their best efforts to cause the
licensor of the Software to consent to the transfer of the License from MHS to
QCN, Ltd. If the License to use the Software is transferred to QCN, Ltd., such
License shall remain the exclusive property of QCN, Ltd. or its assigns;
provided, however, that Manager shall have access to data files created by and
stored within the Software for the purposes of performing the Managerial
Services. If it becomes necessary to expand the scope of the License as a result
of an increase in the number of Participating Providers in the QCN Network, QCN,
Ltd. shall be responsible for taking all actions necessary or required to expand
the scope of the License at its own expense. The parties further acknowledge
that Manager has developed certain ancillary software programs (the "Ancillary
Software") to customize the functions of the Software to meet the Manager's
specifications. QCN, Ltd. hereby acknowledges that the Ancillary Software and
all management information
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TO QCN, LTD.: QUALITYCARE NETWORK OF TEXAS,
LTD.
7550 111 10 West
Suite 1000
San Antonio, Texas 78229
Attn:
--------------------------------
TO MANAGER: EPA MANAGEMENT ASSOCIATES,
INC. D/B/A
NORTH AMERICAN MEDICAL
MANAGEMENT - TEXAS
00 Xxxxxx Xxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Attn: General Counsel
or to such other address of which either party shall notify the other in
writing.
8.6 BINDING ON SUCCESSORS. This Agreement shall be binding upon
the parties hereto and their respective successors and assigns, if any. It is
not the intention of QCN, Ltd. or Manager that Payors or Enrollees shall be
third party beneficiaries of the obligations of either party to this Agreement,
and no such Payors and Enrollees shall have the right to enforce any such
obligations.
8.7 WAIVER OF PROVISIONS. Any waiver of any terms and conditions
hereof must be in writing and signed by the parties hereto. The waiver of any of
the terms and conditions of this Agreement shall not be construed as a waiver of
any subsequent breach of the same or any other terms and conditions hereof.
8.8 GOVERNING LAW. The validity, interpretation and performance of
this Agreement shall be governed by and construed in accordance with the laws of
the State of Texas. The parties acknowledge that neither Manager nor QCN, Ltd.
is authorized or qualified to engage in any activity which may be construed or
deemed to constitute the practice of medicine or be in the business of
insurance. To the extent any act or service required of Manager in this
Agreement, or any obligation of QCN, Ltd., should be construed or deemed, by any
governmental authority, agency or court to constitute the practice of medicine
or be in the business of insurance, the performance of said act or service by
Manager or QCN, Ltd., as applicable, shall be deemed waived and forever
unenforceable.
8.9 SEVERABILITY. The provisions of this Agreement shall be deemed
severable, and if any portion shall be held invalid, illegal or unenforceable
for any reason, the remainder of this Agreement shall be effective and binding
upon the parties provided that the substance of the economic relationship
created by this Agreement remains materially unchanged.
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8.17 EVENTS EXCUSING PERFORMANCE. Manager and QCN, Ltd. shall not
be liable to the other party for failure to perform any of the services required
herein in the event of strikes, lock-outs, calamities, acts of God, or other
events over which the respective party has no control for so long as such events
continue and for a reasonable period of time thereafter.
8.18 DISPUTE RESOLUTION. Should a dispute arise out of this
contact, the parties to the dispute shall first attempt to resolve it through
direct discussions in the spirit of mutual cooperation. If the parties' attempts
to resolve their disagreements through negotiation fail, the dispute shall be
mediated by a mutually acceptable third party to be chosen by the disputing
parties within thirty (30) days after written notice by one of them demanding
mediation. The disputing parties shall share the costs of the mediation equally.
By mutual agreement the parties may postpone mediation until each has completed
some specified but limited discovery about the dispute. By mutual agreement the
parties may use a nonbinding form of dispute resolution other than mediation.
Any nonbinding dispute resolution process conducted under the term of this
section shall be confidential as required by the Tex. Civ. Prac. and Rem. Code
Sec. 154.053 and 154.073. In the event that a negotiated or mediated resolution
is not obtained within the time periods provided by this section, the parties
may pursue any available legal or equitable remedy.
IN WITNESS WHEREOF, this Agreement is entered into and executed as of
the date first written above.
OCN, LTD.:
QUALITYCARE NETWORK OF TEXAS, LTD.
By: QualityCare Network, Inc.,
its General Partner
By: /s/
----------------------------------------------------------
its
----------------------------------, ------------------
MANAGER
EPA MANAGEMENT ASSOCIATES, INC.
D/B/A NORTH AMERICAN MEDICAL
MANAGEMENT - TEXAS
By: /s/
----------------------------------------------------------
its Regional Director
-----------------------,
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