Second Amendment to Services and License Agreement
EXHIBIT
10.52
Second
Amendment to Services and License Agreement
Second
Amendment to Services and License Agreement made
as
of the 1st day of April 2006 (“Effective Date of Second Amendment”), by
CareAdvantage, Inc. (“CareAdvantage” or “CAI”), a Delaware corporation with its
principal place of business at 000-X Xxxxx Xxx Xxxxx, Xxxxxx, Xxx Xxxxxx 00000,
and Xxxxxx Foundation Health Plan of the Northwest (“Kaiser”), with its
principal place of business at 000 XX Xxxxxxxxx Xx., Xxxxx 000, Xxxxxxxx, Xxxxxx
00000.
Whereas,
Kaiser
and CareAdvantage have entered into a Services and License Agreement as of
January 1, 2005 (the “Agreement”), which Agreement was amended as of January 1,
2006 (“First Amendment”);
Whereas,
the parties desire to further amend the Agreement to provide for quarterly
updates of paid claims data, to provide for analysis using APR-DRGs groupings,
and to provide for training account managers with respect to customer
communications and to extend the term of the Agreement;
Whereas,
the parties also desire to amend the compensation payable under the Agreement;
Now,
Therefore,
in
consideration of the premises the parties agree as follows:
1. Quarterly
Processing of Paid Claims Data.
Commencing as of the Effective Date of the Second Amendment, Attachment 1.1
of
the Agreement is amended in its entirety as provided in Attachment 1.1.1
attached hereto.
2. APR-DRGs.
Commencing as of the Effective Date of the Second Amendment,
a. Section
1.1 of the Agreement is amended by substituting “Attachments 1.1.1 and 1.1.2”
for “Attachment 1.1”;
b. adding
new Attachment 1.1.2 as attached hereto;
c. amending
Section 2.2 of the Agreement to add immediately prior to the end of the first
sentence the following: “, including the right to access and use the Portal to
consider APR-DRG groupings on Kaiser Data.” (The parties acknowledge that
initially, the APR-DRG groupings will be available merely through written
reports and not at the Portal; CAI expects that the APR-DRG groupings will
become available at the Portal no later than the second quarter
2007.)
3. Training
in Customer-Specific Communications
a. Additional
Services.
Commencing as of the Effective Date of the Second Amendment, in accordance
with
Section 1.2 of the Agreement, CareAdvantage will provide the following
Additional Services: Following CareAdvantage’s release of the processed Kaiser
Data received in March and September, CareAdvantage will provide a one-day
on-site communications training program to Kaiser account managers with respect
to five to ten customers to be selected by Kaiser. In connection with each
customer selected for the training program, CareAdvantage will learn Xxxxxx’x
current strategy for maintaining and retaining the customer and will prepare
a
report profiling the customer based on its paid claims experience. The training
program will focus on adapting Xxxxxx’x strategy as indicated by the
customer-specific report and, consistent with that strategy, communicating
to
the customer the contents of the report; the program will include drafting
cover
letters and preparing for (but not attending) meetings with customers to review
the customer-specific reports.
b. Additional
Compensation.
Commencing as of the Effective Date of the Second Amendment, in accordance
with
Section 4.2 of the Agreement, Kaiser will pay CAI for the Additional Services
for training set forth herein $* for each customer selected. Such amounts shall
be paid (1) one-half upon Xxxxxx’x advising CareAdvantage of those customers
selected, and (2) the balance within thirty (30) days of completion of each
semi-annual training program.
*
Portions of this page have been omitted pursuant to a Confidential Treatment
request and filed separately with the Commission.
1
4. Term.
Commencing as of the Effective Date of the Second Amendment, Section 5.1 is
amended by substituting “March 31, 2008” for “December 31, 2006.”
5. Compensation.
Commencing
as of the Effective Date of the Second Amendment:
a. Section
4.1 of the Agreement is amended in its entirety as follows:
4.1. Generally.
Kaiser
shall pay CareAdvantage for the services and license provided under this
Agreement, as amended (including but not limited to APR-DRG Recurring Services),
the sum of $* per month plus $* PMPM for each discrete member in the Kaiser
Data
in excess of *. During the term of this Agreement, compensation shall be payable
without invoice quarterly commencing on the 1st day of April 2006, and on the
1st
day of
each subsequent quarter; payment for the quarter commencing April 1, 2006,
shall
be $* (which assumes * members). Payments made pursuant to the foregoing
sentence shall be reconciled to the Kaiser Data that Kaiser makes available
to
CareAdvantage pursuant to Attachment 1.1.1, and CareAdvantage shall pay any
reconciling adjustment to Kaiser within thirty (30) days of its making a
determination that such adjustment is owing, and Kaiser shall pay any
reconciling adjustment to CareAdvantage within thirty (30) days of
CareAdvantage’s notifying it in writing that such adjustment is owing.
Notwithstanding the preceding sentence, in no event shall CareAdvantage be
required to pay a reconciling adjustment to Kaiser for any quarter in excess
of
$*.
b. There
is
added a new Section 4.1.1 as follows:
4.1.1 Credit.
Kaiser
shall be allowed a one-time credit in the amount of $* to the compensation
otherwise due CareAdvantage on April 1, 2006,.
c. There
is
added a new Section 4.4.1 as follows:
4.4.1. On
Account of Increases in Kaiser Northwest’s Covered
Population. CareAdvantage’s
compensation under Section 4.1 has been determined by assuming that the Kaiser
Data contains at least 500,000 but less than 750,000 discrete members. If the
Kaiser Data increases beyond 750,000 members, then in lieu of the amounts
provided by Section 4.1, the rate shall be determined in accordance with
Attachment 4.4.1.
d. There
is
added a new Attachment 4.4.1 as attached hereto.
6. Except
to
the extent set forth herein, the Agreement, as amended, shall remain in full
force and effect.
*
Portions
of this page have been omitted
pursuant to a Confidential Treatment request and filed separately with the
Commission.
2
This
Second Amendment may be executed in several counterparts, each of which is
an
original but all of which shall constitute one and the same
instrument.
In
Witness Whereof,
the
parties have executed this Second Amendment as of the date set forth
above.
|
CAREADVANTAGE,
INC.
|
|
XXXXXX FOUNDATION HEALTH PLAN OF THE
NORTHWEST
|
||
| By: | Xxxxxx X. Xxxxxx | By: | Xxxx X. Xxxxxx | |
| CEO | Title: VP Product & Business Development | |||
3
ATTACHMENT
1.1.1
CRG
RECURRING SERVICES
During
the term of this Agreement, no later than the 1st day of March, June, September,
and December, Kaiser will provide CareAdvantage with claims data for all
claims
in the Covered Population paid subsequent to Xxxxxx’x last providing
CareAdvantage with its paid claims data. Within approximately four weeks
of
CareAdvantage’s receipt of this data, CareAdvantage will:
| · |
Load
data into data processing
environment
|
| · |
Conduct
technical and initial clinical review of data (review for
completeness)
|
| · |
Run
data through conversion program
|
| · |
Validate
data conversion
|
| · |
Prepare\run
data files though CRG algorithms
|
| · |
Validate
CRG assignments (validity check)
|
| · |
Program
reports to generate analyses with updated data
elements
|
| · |
Review
RPNavigator analyses results
|
| · |
Move
into production environment
|
| · |
Deliver
observations summary report (which would address significant changes
from
previous periods)
|
Thereafter,
CareAdvantage will conduct at least one day of on-site consulting per quarter,
including data analytical and operational integration reviews.
During
the term of this Agreement, CareAdvantage will maintain telephone support
for
technical and clinical inquiries 6:00 a.m. through 6:00 p.m., Pacific Time,
Monday through Friday.
(The
four-week schedule provided by this Attachment assumes that there will be
no
change in Xxxxxx’x claims system(s) and business rules from those provided by
Kaiser to CareAdvantage on or before September 1, 2004. In the event of any
such
change, the four-week schedule is subject to adjustment, and any additional
services required by CareAdvantage on account of such changes will be billed
in
accordance with Attachment 4.2.)
4
ATTACHMENT
1.1.2
APR-DRG
RECURRING SERVICES
During
the term of this Agreement, on a semi-annual basis (during March and September),
upon receipt of the Kaiser Data as provided in Attachment 1.1.1 CAI will
perform
the following tasks within four weeks:
| · |
Load
data into data processing
environment
|
| · |
Conduct
technical and initial clinical review of data (review for
completeness)
|
| · |
Run
data through conversion program
|
| · |
Validate
data conversion
|
| · |
Prepare\run
data files though APR-DRG algorithm
|
| · |
Validate
APR-DRG assignments (validity
check)
|
| · |
Conduct
clinical analysis
|
| · |
Program
reports to generate analyses with updated data
elements
|
| · |
Review
analyses results
|
| · |
Deliver
Executive Summary with Key Findings and Observations summary report
|
During
the term of this Agreement, CareAdvantage will maintain telephone support
for
technical and clinical inquiries 6:00 a.m. through 6:00 p.m., Pacific Time,
Monday through Friday.
(The
four-week schedule provided by this Attachment assumes that there will be
no
change in Xxxxxx’x claims system(s) and business rules from those provided by
Kaiser to CareAdvantage on or before September 1, 2004. In the event of any
such
change, the four-week schedule is subject to adjustment, and any additional
services required by CareAdvantage on account of such changes will be billed
in
accordance with Attachment 4.2.)
5
ATTACHMENT
4.4.1
PMPM
FEES FOR INCREASES IN DISCRETE MEMBERS IN KAISER DATA
|
Number
of Discrete Members
|
Fees
|
|
at
least 500,000 but less than 750,000
|
$*
per month plus $* PMPM for each member over 500,000
|
|
at
least 750,000 but less than 1,000,000
|
$*
per month plus $* PMPM for each member over 750,000
|
|
at
least 1,00,000 but less than 3,000,000
|
$*
per month plus $* PMPM for each member over 1,000,000
|
|
more
than 3,000,000
|
to
be determined
|
| · |
Portions
of this page have been omitted pursuant to a Confidential Treatment
request and filed separately
with the Commission
|
6
