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Exhibit 10.10
FORM OF PREFERRED PROVIDER AGREEMENT
FOR
PHARMACEUTICAL AND RELATED SERVICES
AGREEMENT, dated as of __________, 1997, between Xxxxxxx Enterprises,
Inc., a Delaware corporation ("Company"), formerly known as New Xxxxxxx
Holdings, Inc., and PharMerica Corporation, a Delaware corporation ("Provider"),
formerly known as Capstone Pharmacy Services, Inc. ("Capstone").
WHEREAS, Company directly or through its subsidiaries, Xxxxxxx Health
and Rehabilitation Services, Inc. and American Transitional Hospitals, Inc., or
any other Subsidiary (as defined) or Affiliate (as defined) of Company (the
applicable "Facility Operator"), operates (by reason of its ownership thereof,
or its lease thereof, or by reason of management agreements or investments in
joint ventures) long term care nursing facilities, assisted living facilities
and/or certain transitional hospital facilities (all of such facilities
currently operated being listed on Exhibit "A" hereto, and herein referred to as
the "Company LTC Facilities"); and
WHEREAS, Provider is engaged in the business of providing
pharmaceutical and related services as an independent contractor for health care
facilities; and
WHEREAS, certain of the Company LTC Facilities prior to the effective
date of this Agreement have had in effect one or more provider agreements
relating to the provision of pharmaceutical and/or related services to such
facilities ("Pre-Existing Provider Agreements") by Provider or one of Provider's
predecessors, while certain other Company LTC Facilities currently have
agreements with other providers for the provision of pharmaceutical and/or
related services ("Other Provider Agreements"); and
WHEREAS, Company has found using several different providers of
pharmaceutical product, distribution and dispensing services to service the
Company LTC Facilities to be inefficient in many cases and believes it to be in
its best interest to enter into an agreement pursuant to which such services
will be available to it from a single provider; and
WHEREAS, Company has extensive knowledge of the quality of Provider's
pharmaceutical product, distribution and dispensing services pursuant to the
Pre-Existing Provider Agreements; and
WHEREAS, Company believes that due to the quality of Provider's
operations and Provider's experience, size and national presence, Provider will
be able to provide pharmaceutical product, distribution and dispensing services,
as well as the other services which may be provided under this Agreement, to the
Company LTC Facilities in a consistent manner and on terms and conditions more
favorable to the Company LTC Facilities than are being rendered under Other
Provider Agreements, and Provider desires to provide said services, in each case
on the terms and subject to the conditions specified in this Agreement; and
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WHEREAS, Provider desires to provide the services described herein to
the Company LTC Facilities and in consideration of its status as a preferred
provider is willing to make certain long-term commitments to the Company LTC
Facilities and their residents and patients as provided herein;
NOW THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by the parties hereto, the parties hereto agree as follows:
1. AGREEMENTS.
(a) Replacement of Pre-Existing Provider Agreements. As soon
as practicable after the execution of this Agreement, Company and Provider will
cooperate to assure the execution of, and Company shall cause the applicable
Facility Operator to replace the Pre-Existing Provider Agreements in each
Company LTC Facility with, counterpart agreements, as applicable in the case of
each Company LTC Facility which previously had one or more of such agreements,
in the respective forms set forth as Exhibits "B," "C," "D" and "E" (such forms
of agreement being referred to individually as a "Facility Agreement" and
collectively as the "Facility Agreements"), so that after such counterpart
Facility Agreements shall have been executed, Provider will continue to serve
for the duration of the term of this Agreement, subject to the terms and
conditions of this Agreement and the applicable Facility Agreements, as the
provider in the applicable Company LTC Facility of the pharmaceutical and/or
related services previously covered by the Pre-Existing Provider Agreements, all
on the terms and conditions set forth therein, except that the pricing of
pharmaceutical products and services to be in effect with respect to such
Facility Agreements shall be as set forth on a schedule to be attached thereto.
Upon such execution, each such Facility Agreement shall thereafter be referred
to under this Agreement as an "Existing Facility Agreement."
(b) Addition of New Provider Agreements. If, during the term
of this Agreement:
(i) any Other Provider Agreement shall expire or be
terminated for any reason at a Company LTC Facility or a New Facility (as
hereinafter defined);
(ii) any Existing Provider Agreement shall expire or
be terminated for any reason at a Company LTC Facility other than for cause as
provided therein or as a result of the circumstances described in Paragraph
7(h), below; or
(iii) any long term care or assisted living facility
or transitional hospital which is not a Company LTC Facility on the effective
date of this Agreement is hereafter acquired, owned, operated or managed
(collectively, an "Acquisition") by the Company or a Facility Operator (a "New
Facility"), which New Facility at the time at the time of Acquisition is not
served by an Other Provider Agreement required pursuant to contractual
obligations;
then the Company or the applicable Facility Operator and Provider shall, upon
the terms and subject to the conditions and procedures of this Agreement,
negotiate in good faith to enter into
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one or more Facility Agreements in the form and substance attached as Exhibits
"B" through "E" inclusive (each, a "New Provider Agreement") pursuant to which
Provider shall agree to provide such Qualifying Competitive Services (as
hereinafter defined) as may be covered by the particular Facility Agreement for
a term of years commencing on the date of said Facility Agreement, subject to
renewal as provided therein; provided, that no such New Provider Agreement shall
have a term exceeding the then remaining and unexpired term of this Agreement,
without regard for renewal or extension of the term described herein. The
foregoing agreement to enter into one or more New Provider Agreements is subject
to the following proviso: if either the Company or Provider reasonably
determines in good faith that, due to legitimate business reasons, it is not
feasible to enter into New Provider Agreements with respect to an Acquisition as
described in Section 1(b)(iii) herein, the party making such determination of
non-feasibility shall promptly notify the other party of its reasons for such
determination, and the parties shall thereupon cooperate in good faith to the
extent feasible to: (1) eliminate or cure the conditions adversely affecting the
reasonability of entering into the New Provider Agreements with respect to the
New Facility, or (2) concur that the New Facility should be excused from the
requirement to enter into a New Provider Agreement.
(c) Certain Definitions. As used in this Agreement:
(i) "Affiliate" of any person means any person or
entity which on the date in question, directly or indirectly is controlled by
such person; and, for such purposes, a person shall be deemed to "control"
another person or entity if is the "beneficial owner" (as that term is defined
in Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended)
of greater than twenty percent (20%) of any class of voting securities (or other
voting interests) of a controlled entity which is a publicly-traded entity, or
forty percent (40%) of an privately-held entity, or if such person possesses,
directly or indirectly, the power to direct or cause the direction of the
management of policies of the controlled entity with respect to the matters
covered by this Agreement, whether through ownership of stock, by contract or
otherwise.
(ii) "Material Number" when used in connection with
an aggregation of Pre-Existing Provider Agreements or, as applicable, Existing
Provider Agreements and New Provider Agreements, means at any time of
determination a number of long term care facilities equal to ten percent (10%)
of the aggregate of the Company's long term care facilities at the time
(including both Company LTC Facilities and New Facilities) having Pre-Existing
Provider Agreements or, as applicable, Existing Provider Agreements and New
Provider Agreements.
(iii) "Qualifying Competitive Services" means
Services offered by Provider with respect to a Company LTC Facility or a New
Facility which at the time are equivalent to or more competitive (in terms of
price, terms and conditions, quality, timeliness and the range and type of
services and products) than those then being provided to the Company LTC
Facility or New Facility, as determined by the Facility Operator in its good
faith judgment. During the initial term of this Agreement, the price, terms and
conditions with respect to contracts for Services provided under Existing
Provider Agreements to any Company LTC Facility shall be deemed to be Qualifying
Competitive Services.
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(iv) "Services" means any one or more pharmaceutical
and related services, consulting services, clinical laboratory services,
intravenous ("IV") services, enteral/urological services, wound care services,
the provision of medical-surgical supplies and participating in clinical trials
research activities.
(v) "Subsidiary" of any party means any entity if
such party possesses, directly or indirectly, greater than a 50% ownership
interest thereof.
(d) Restriction on Certain Activities. Company for itself and
its Subsidiaries and Affiliates agrees that during the initial term hereof
neither Company, any Subsidiary or any Affiliate will engage in the provision of
Services to any person or entity; provided, that this covenant shall be subject
to and shall not be construed to limit, inhibit or restrict the Company, any
Subsidiary or Affiliate at any time or in any way from engaging in any conduct
or activity permitted by the terms of the Non-competition Agreement of even date
between Company and Capstone, a true copy of which is attached hereto as
Exhibit "F."
2. PROCEDURE.
During the term of this Agreement, thirty (30) days prior to
the scheduled expiration of, or as promptly as practicable prior to, or, if not
practicable prior to, then promptly following the termination of any Other
Provider Agreement with any Company LTC Facility which continues to be operated
by Company or one of its Subsidiaries or Affiliates, or in the case of
Acquisition by the Company of a New Facility, within thirty (30) days after such
Acquisition:
(a) Notice. Company shall give notice to Provider of such
expiration or termination of an Other Provider Agreement at a Company LTC
Facility or the Acquisition of a New Facility described in Paragraph 1(b)(iii),
such notice to include a statement as to whether or not such New Facility will
continue to be covered by an Other Provider Agreement pursuant to Paragraph
1(b)(iii), and expressing the reasons therefor (any Company LTC Facility or New
Facility as to which an Other Provider Agreement is contemplated to terminate or
expire or has terminated or expired being referred to as an "Available
Facility");
(b) Completion of New Provider Agreement. Provider and the
applicable Facility Operator shall in good faith negotiate to complete, with
respect to a proposed New Provider Agreement for such Available Facility, any
items which remain blank on the applicable Facility Agreement providing for such
Services as the parties may agree upon, and any other terms or conditions
necessary to provide Qualifying Competitive Services, including, without
limitation, the pricing of services and products to be supplied pursuant to said
Facility Agreement;
(c) Required Approvals Obtained. The applicable Facility
Operator shall diligently pursue obtaining any customary consent or approval of
any person or entity, or of any Federal, state, local or other governmental or
quasi-governmental agency, bureau, board, administrator, court, commission,
department, instrumentality, body or other authority having jurisdiction over it
or the operation of its business or its assets, and if applicable, of the owner
of any Available Facility managed by Company or the applicable Subsidiary or
Affiliate, in each
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case, necessary or appropriate to entering into the proposed New Provider
Agreement and the performance of the transactions contemplated thereby
("Required Approvals");
(d) Representations and Warranties Reaffirmed. Provider and
Company each automatically shall be deemed to have remade each of their
representations and warranties made in this Agreement as of the date of the
execution and delivery of the applicable proposed New Provider Agreement; and
(e) Execution of New Provider Agreement. The applicable
Facility Operator and Provider shall execute and deliver the applicable proposed
New Provider Agreement and such New Provider Agreement shall become effective
immediately upon termination (or expiration) of the applicable Other Provider
Agreement, or if such Other Provider Agreement already shall have been
terminated, then immediately upon execution and delivery of the New Provider
Agreement, or upon such other date as the applicable Facility Operator and
Provider shall agree.
3. CONDITIONS.
(a) Satisfaction of Conditions. Neither Company or any
Facility Operator, on the one hand, nor Provider on the other hand, shall have
any obligation to enter into any proposed New Provider Agreement with respect to
any Available Facility unless the following conditions shall have been satisfied
within thirty (30) days after delivery by Company to Provider of the notice
required pursuant to Paragraph 2(a), above:
(i) the applicable New Provider Agreement shall
provide for Qualifying Competitive Services, and shall provide that said
Services shall continue thereafter to be Qualifying Competitive Services within
the meaning of Paragraph 1(c)(iii) hereof; and
(ii) all Required Approvals shall have been obtained.
(b) Provider Breach of Representations and Warranties. Neither
Company nor any Facility Operator shall be obligated to enter into any proposed
New Provider Agreement with respect to any Available Facility if Provider shall
have breached, which breach shall be continuing, any of its material
representations, warranties or obligations under this Agreement or under a
Material Number, in the aggregate, of Pre-Existing Provider Agreements, or as
applicable, Existing Provider Agreements and New Provider Agreements.
(c) Company or Facility Operator Breach of Representations and
Warranties. Provider shall not be obligated to enter into any proposed New
Provider Agreement if Company or any Facility Operator shall have breached,
which breach shall be continuing, any of its material representations,
warranties or obligations under this Agreement or under a Material Number of
Pre-Existing Provider Agreements or, as applicable, Existing Provider Agreements
and New Provider Agreements.
4. CONFLICTING PROVISIONS. If any of the provisions of this Agreement
shall conflict with or be inconsistent with any of the provisions of any New
Provider Agreement, the
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provisions of such New Provider Agreement shall govern with respect to the
subject matter of such New Provider Agreement.
5. REPRESENTATIONS AND WARRANTIES OF COMPANY.
(a) Corporate Power and Authority. Company has the full
corporate power and authority to make, execute, deliver and perform its
obligations under this Agreement, including all Schedules and Exhibits hereto,
and the other agreements, instruments, certificates and documents required or
contemplated hereby or thereby to be executed or delivered by it ("Company
Transaction Documents"), and all of the transactions contemplated hereby and
thereby to be performed by it. Such execution, delivery, performance and
consummation have been duly authorized by all necessary action, corporate or
otherwise, on the part of Company, its directors and stockholders.
(b) No Conflicts or Breaches. Neither the execution or
delivery of this Agreement or any of the Company Transaction Documents by
Company nor the performance by Company of the transactions contemplated hereby
and thereby, conflicts with, or constitutes a breach of or a default under (i)
its certificate of incorporation or by-laws; or (ii) any applicable judgment,
order, writ, injunction, or decree of any court.
(c) Agreements in Full Force and Effect. Each of the
Pre-Existing Provider Agreements or, as applicable, Existing Provider Agreements
and New Provider Agreements in effect on the date this representation and
warranty is made is in full force and effect and Company and the Facility
Operators are not in material default under a Material Number of such
agreements.
(d) Authority to Bind Subsidiaries, etc. Company has the
requisite authority to cause this Agreement to be binding on its Subsidiaries,
Affiliates and Facility Operators.
6. REPRESENTATIONS AND WARRANTIES OF PROVIDER.
(a) Corporate Power and Authority. Provider has the full
corporate power and authority to make, execute, deliver and perform its
obligations under this Agreement, including all Schedules and Exhibits hereto,
and the other agreements, instruments, certificates and documents required or
contemplated hereby or thereby to be executed or delivered by it ("Provider
Documents"), and all of the transactions contemplated hereby and thereby to be
performed by it. Such execution, delivery, performance and consummation have
been duly authorized by all necessary action, corporate or otherwise, on the
part of Provider, its directors and stockholders.
(b) No Conflicts or Breaches. Neither the execution or
delivery of this Agreement or any of the Provider Documents by Provider nor the
performance by Provider of the transactions contemplated hereby and thereby,
conflicts with, or constitutes a breach of or a default under (i) its
certificate of incorporation or by-laws; or (ii) any applicable judgment, order,
writ, injunction, or decree of any court.
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(c) Agreements in Full Force and Effect. Each of the
Pre-Existing Provider Agreements or, as applicable, Existing Provider Agreements
and New Provider Agreements in effect on the date of this representation and
warranty is made is in full force and effect and Provider is not in material
default under a Material Number of any such agreements.
7. TERM.
(a) Length of Agreement. This Agreement shall commence as of
the date hereof (the "Commencement Date") and shall terminate on the fifth
anniversary of the Commencement Date (the "Scheduled Termination Date"), unless
sooner terminated as hereinafter provided.
(b) Right of First Refusal. In order to encourage continuity
and uniformity in the provision of quality Services, that parties agree that
Provider shall be granted a right of first refusal with respect to renewal of
this Agreement for one subsequent five year renewal term, subject to all of the
terms and conditions of this Paragraph 7.
(c) Negotiation for Renewal. Within 180 days, but not less
than 120 days prior to the Scheduled Termination Date, Provider shall, if it
desires to renew this Agreement, submit to Company and the applicable Facility
Operator, Provider's proposed prices with respect to each category of Services
proposed to be provided at the Company LTC Facilities and the New Facilities
(the "Proposed Prices"), which Provider shall certify in Provider's best
judgment as being, together with other terms and conditions set forth in the
applicable agreements, Qualifying Competitive Services. The parties shall
thereafter negotiate in good faith regarding adoption of such Proposed Prices to
be in effect during the proposed renewal term of this Agreement under the
Existing Facility Agreements and New Facility Agreements. If the parties are
able to reach agreement on the Proposed Prices, this Agreement and each Existing
Facility Agreement and New Facility Agreement shall thereupon be renewed on the
Scheduled Termination Date for a term of five years.
(d) Qualifying Alternative Bids. If the parties are unable to
reach agreement on the Proposed Prices, and in any event at the Company's
option, not later than 90 days prior to the Scheduled Termination Date, the
Company may solicit proposals (each a "Qualifying Alternative Bid" and
collectively, the "Qualifying Alternative Bids") from any other national
pharmacy provider for it to provide the Services to the Company and covering at
least 75% of the Company LTC Facilities and New Facilities then being served by
Provider (such number of facilities being collectively referred to in this
Paragraph 7 as the "Requisite Facilities") during the ensuing five year period.
As used herein, "national pharmacy provider" means a provider of institutional
pharmacy services which alone or with Affiliates has the capability of servicing
at least 75% of the Company's LTC Facilities and New Facilities then being
served by Provider.
(e) Procedure for Renewal. Upon receipt of such Qualifying
Alternative Bids to provide the Services to the Company and the Requisite
Facilities during the ensuing five years, if such Qualifying Alternative Bid or
Bids are equal to or greater than the Proposed Prices offered by the Provider,
this Agreement, the Existing Provider Agreements and the New Provider Agreements
shall thereupon be renewed with Provider for a five year term, commencing on the
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Scheduled Termination Date, on the terms and conditions set forth herein and
therein, except that the prices for the Services shall be the Proposed Prices
during such renewal term. If such Qualifying Alternative Bid or Bids are less
than the Proposed Prices with respect to the provision of the Services, Company
shall provide such Qualifying Alternative Bids to Provider, not less than 45
days prior to the Scheduled Termination Date. Provider shall thereupon have the
opportunity to revise its offer to provide the Services and adjust its Proposed
Prices in all Company LTC Facilities and New Facilities then being served by
Provider for the ensuing five year period to an amount (the "Average Alternative
Prices") equal to (i) the average of the three lowest Qualifying Alternative
Bids received by the Company with respect to such Requisite Facilities, or (ii)
if there are less than three national pharmacy providers at the time which
submit Qualifying Alternative Bids, the average of the two Qualifying
Alternative Bids received by the Company with respect to such Requisite
Facilities, or (iii) if there are less than two national pharmacy providers at
the time which submit Qualifying Alternative Bids, the Qualifying Alternative
Bid received by the Company with respect to the Requisite Facilities.
(f) Notification of Exercise of First Refusal Right. If
Provider elects to meet the Qualifying Alternative Bid or Bids, as applicable,
with respect to the Requisite Facilities, it shall notify Company not less than
30 days prior to the Scheduled Termination Date of Provider's election to
continue to provide the Services at the Average Alternative Prices to the
Company LTC Facilities and New Facilities then being served by Provider for the
ensuing five years, and this Agreement, the Existing Provider Agreements and the
New Provider Agreements shall thereupon be renewed on such terms and conditions
as are set forth herein and therein, subject to the modifications as to prices
for the Services as hereinabove set forth.
(g) Expiration of Agreement Upon Failure to Exercise First
Refusal Right. If Provider does not elect to provide the Services at the Average
Alternative Prices as hereinabove set forth, then this Agreement, the Company
LTC Agreements and the New Provider Agreements shall expire and terminate on the
Scheduled Termination Date.
(h) Termination. This Agreement may be terminated and, except
as to liabilities or claims of either party hereto which shall have theretofore
accrued or arisen, the obligations of the parties hereto with respect to this
Agreement may be terminated, upon the happening of any of the following events:
(i) (A) if a Bankruptcy Event (as hereinafter defined)
shall occur with respect to Provider; or
(B) if Provider, after written notice thereof by
Company to Provider, shall fail to keep, observe, or perform any of the material
covenants, agreements, terms or provisions of this Agreement (and such default
shall continue for a period of sixty (60) days after notice of such default) or
of an aggregate Material Number of Pre-Existing Provider Agreements or, as
applicable, Existing Provider Agreements and New Provider Agreements to be kept,
observed, or performed by Provider (and such default shall continue uncured
during any appropriate grace period set forth in such agreements); or
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(C) if Provider shall, in any material respect,
breach (as of the date made) any representations or warranty contained in this
Agreement, or if Provider shall in any material respect breach (as of the date
made) any representation or warranty contained in a Material Number of
Pre-Existing Provider Agreements or, as applicable, Existing Provider Agreements
and New Provider Agreements;
then in case of any such event and upon the expiration of the period of grace
applicable thereto (if any), the term of this Agreement shall be terminated, at
the option of Company, upon written notice to Provider.
(ii) (A) if a Bankruptcy Event shall occur with
respect to Company; or
(B) if Company shall fail to keep, observe, or
perform any material covenant, agreement, term or provision of this Agreement to
be kept, observed, or performed by it (and such default shall continue for a
period of sixty (60) days after notice of such default) or if Company and/or the
Facility Operators shall fail to keep, observe, or perform any of the material
covenants, agreements, terms or provisions of an aggregate Material Number of
Pre-Existing Provider Agreements or, as applicable, Existing Provider Agreements
and New Provider Agreements to be kept, observed, or performed by Company and/or
Facility Operators (and such default shall continue uncured during any
applicable grace period set forth in such agreements); or
(C) If Company shall, in any material respect,
breach (as of the date made) any representation or warranty contained in this
Agreement, or if Company and/or the Facility Operators shall breach, in any
material respect, any representation or warranty contained in an aggregate
Material Number of any Pre-Existing Provider Agreements or, as applicable,
Existing Provider Agreements and New Provider Agreements;
then in case of any such event and upon the expiration of the period of grace
applicable thereto (if any), the term of this Agreement shall be terminated, at
Provider's option upon written notice to Company.
(i) Change in Law or Regulation.
(i) If, during the term of this Agreement, there
shall be (A) a change in the Medicare or Medicaid statute, regulations, or
general instructions (or in the application thereof), or any governmental payor
system, including but not limited to the Veterans Administration ("VA"), or (B)
the adoption of new legislation or regulations applicable to this Agreement or
any Pre-Existing Provider Agreement, Existing Provider Agreement or New Provider
Agreement (collectively, for purposes of this Paragraph 7, "Affected
Agreements"), or (C) a change in any other third party reimbursement system, or
(D) the initiation of enforcement action with respect to legislation,
regulations, or instructions applicable to any Affected Agreements, any of which
changes, legislation, regulations or action affects the continuing legality of
any Affected Agreements or the ability of Company to obtain reimbursement for
the full cost of any Services at the levels then in effect, as provided to
Company by Provider,
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Company may, at any time within one year of the effective date as to Company, of
such changes, legislation, regulation or action, upon written notice as provided
herein, propose an amendment to any such Affected Agreement, modifying the same
to the minimum extent necessary to assure the continuing legality of such
Affected Agreement or to eliminate the future impediment or impairment to
reimbursement. For periods beginning January 1, 1998, in the event that
reimbursement is denied for any facility covered by an Affected Agreement for
covered items or Services under the Medicare program because Provider's charges
exceed the usual, customary and reasonable charges for such Services or covered
items, as evidenced by a Notice of Medicare Reimbursement ("NPR"), any change to
such Affected Agreement effectuated for the purpose of obtaining reimbursement
shall be made applicable only for reimbursement periods subsequent to the period
to which the NPR related, for the remainder of the term of such Affected
Agreement. In the event that Provider is unable or unwilling to supply the items
or Services at price levels sufficient to assure such reimbursement, then
Company may, at its sole option, elect to obtain such items or Services from
other sources or to accept the prices offered by Provider.
(ii) If, during the term of this Agreement, the
system of reimbursement under which Medicare, Medicaid or any other third party
governmental payor reimburses providers of health care services such as Company
for covered items and Services (hereinafter, the "Affected Services") shall be
changed by law or regulation, from an existing cost-based reimbursement system
to any other system, including but not limited to a prospective payment system,
under which Company, its Affiliates or any Facility Operator is placed at risk
for full reimbursement of the Affected Services covered by an Affected
Agreement, then the parties agree that, at any time within one year of the
effective date of such change as to Company, upon written notice of such change
as provided herein, they shall prospectively renegotiate the pricing terms with
respect to the Affected Services under any such Affected Agreement to reflect
the impact of such risk-based reimbursement for the remainder of the term of
this Agreement or, at their option, the parties may elect to negotiate a
risk-based pricing structure for any such Affected Agreement. In either event,
the parties agree that they shall negotiate in good faith to achieve a fair
distribution of any adverse impact of such change in the reimbursement system as
it impacts the Affected Services. In the event the parties are unable to reach
agreement on modified pricing terms with respect to Affected Services
(hereinafter, the "Adjusted Pricing Structure"), Company on written notice to
Provider may elect to take the following procedures:
(A) Company may solicit proposals (each a
"Proposed Alternative Bid" and collectively, the "Proposed Alternative Bids")
from any other qualified pharmacy provider for it to provide the Affected
Services to the Company LTC Facilities and New Facilities, if any, then being
served by Provider and which are affected by such changes in the reimbursement
system (such facilities being collectively referred to in this Paragraph 7(i) as
the "Affected Facilities") during the remainder of the term of the Affected
Agreement then in effect. As used herein, "qualified pharmacy provider" means a
provider of institutional pharmacy services which alone or with Affiliates has
the capability of servicing at least 75% of the Affected Facilities then being
served by Provider.
(B) Upon receipt of such Proposed Alternative
Bids to provide the Affected Services to the Company and the Affected
Facilities, if all such Proposed Alternative Bid or Bids are equal to or greater
than the Adjusted Pricing Structure last offered by
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the Provider, Company shall forthwith notify Provider of that fact, and the
Adjusted Pricing Structure last offered by Provider shall thereupon be in effect
for the duration of the term of the Affected Agreement with respect to the
Affected Services, subject to the continuing application of all the other terms
and conditions of the Affected Agreement, including the provisions of this
Paragraph 7(i). If any of such Proposed Alternative Bid or Bids is less than the
Adjusted Pricing Structure last offered by Provider for the Affected Services,
Company shall provide such Proposed Alternative Bids to Provider within 30 days
after receipt of the last of such Bid or Bids. Provider shall thereupon have the
opportunity to revise its Adjusted Pricing Structure to provide the Affected
Services in all the Affected Facilities then being served by Provider for the
duration of the term of the Affected Agreement then in effect to an amount (the
"Average Adjusted Pricing Structure") equal to (i) the average of the three
lowest Proposed Alternative Bids received by Company with respect to such
Affected Facilities, or (ii) if there are less than three qualified pharmacy
providers at the time which submit Proposed Alternative Bids, the average of the
two Proposed Alternative Bids received by Company with respect to the Affected
Facilities, or (iii) if there are less than two qualified pharmacy providers at
the time which submit Proposed Alternative Bids, the Proposed Alternative Bid
received by Company with respect to the Affected Facilities.
(C) If Provider elects to meet the Proposed
Alternative Bid or Bids, as applicable, with respect to the Affected Facilities,
as set forth in subparagraph (B) above, it shall notify Company not less than 30
days after receipt of all the Proposed Alternative Bids by Provider of
Provider's election to continue to provide the Affected Services under the
Average Adjusted Pricing Structure to the Affected Facilities for the duration
of the term of the Affected Agreement then in effect, subject to the continuing
application of all the other terms and conditions of the Affected Agreement,
including the provisions of this Paragraph 7(i).
(D) If Provider does not elect to provide the
Affected Services under the Average Adjusted Pricing Structure as hereinabove
set forth, then Company may, at its sole option, elect to obtain such Affected
Services from any of the qualified pharmacy providers whose Proposed Bid is
equal to or less than the Average Adjusted Pricing Structure or accept the
Adjusted Pricing Structure last offered by Provider for the duration of the term
of the Affected Agreement then in effect.
(iii) If, during the term of this Agreement, the
system of reimbursement under which Medicare, Medicaid or any other governmental
third-party payor reimburses providers of health care services such as the
Company for Affected Services shall be changed, by law or regulation, from an
existing cost-based reimbursement system to any other system, including but not
limited to a Prospective Payment System, under which Company is required to
absorb, as part of an all-inclusive rate or payment, the cost of Affected
Services covered by any Affected Agreement which were previously billed by
Provider directly to Medicare, Medicaid or other governmental third-party payor,
then the parties agree that, at any time within one year of the effective date
of such change as to Company, upon written notice of such change as provided
herein, they shall prospectively renegotiate the pricing terms with respect to
the Affected Services under any such Affected Agreement to reflect the impact of
such risk-based reimbursement for the remainder of the term of this Agreement,
and this Agreement and any other Affected Agreement shall be amended to reflect
the new prices for those Affected Services.
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In the event the parties are unable to reach agreement on modified pricing terms
with respect to Affected Services, Company on written notice to Provider may
elect to follow the procedures set forth in subparagraphs 7(i)(ii)(A) through
(D), inclusive, to determine the Adjusted Pricing Structure for the Affected
Services to be in effect with Provider or other qualifying pharmacy providers
for the duration of the term of the Affected Agreement then in effect.
(j) Bankruptcy Event Defined. A "Bankruptcy Event" shall be
deemed to occur with respect to a party if it shall apply for or consent to the
appointment of a receiver, trustee, or liquidator or for all or a substantial
part of its assets, file a voluntary petition in bankruptcy, make a general
assignment for the benefit of creditors, file a petition or an answer seeking
reorganization or arrangement with creditors or take advantage of any insolvency
law, or if an order, judgment or decree shall be entered by any court of
competent jurisdiction, on the application of a credit, adjudicating it as
bankrupt or insolvent or approving a petition seeking reorganization or
appointing a receiver, trustee, or liquidator of all or a substantial part of
its assets, and other such order, judgment or decree shall continue unstayed and
in effect for any period of ninety (90) consecutive days.
(k) No Limit on Right to Damages. Termination of this
Agreement by default by either party shall not limit the rights of the
non-defaulting party to damages or otherwise.
8. CONFIDENTIALITY.
(a) Confidential Information.
(i) Provider recognizes and acknowledges that, by
virtue of entering into this Agreement and providing services to Company and the
Facility Operators hereunder and under the Pre-Existing Provider Agreements,
Existing Provider Agreements and the New Provider Agreements, Provider and its
staff will have access to certain information of Company and the Facility
Operators that is confidential and constitutes valuable, special and unique
property of Company and the Facility Operators ("Confidential Information").
Provider agrees that, except as otherwise required by applicable law, neither it
nor any of its staff will at any time, either during or subsequent to the term
of this Agreement, disclose to others, use, copy or permit to be copied, without
the express prior written consent of Company, except pursuant to its duties
under the Pre-Existing Provider Agreements, Existing Provider Agreements and New
Provider Agreements, any Company Confidential Information including but not
limited to, information which concerns any Company LTC Facility's or New
Facility's patients, costs, prices, or treatment methods at any time used,
developed or made by Company or any Facility Operator and which is not otherwise
available to the public (otherwise than through Provider).
(ii) Company recognizes and acknowledges that, by
virtue of entering into this Agreement and accepting services from Provider
hereunder and under the Pre-Existing Provider Agreements, Existing Provider
Agreements and New Provider Agreements, Company, Facility Operators and their
respective staffs will have access to certain information of Provider that is
confidential and constitutes valuable, special and unique property of Provider
("Provider Confidential Information"). Company agrees that, except as otherwise
required by applicable
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law, it, the Facility Operators and their respective staffs will not at any
time, either during or subsequent to the term of this Agreement, disclose to
others, use, copy or permit to be copied, without the express prior written
consent of Provider, except pursuant to its duties under the Pre-Existing
Provider Agreements, Existing Provider Agreements and New Provider Agreements,
any Provider Confidential Information.
(b) No Disclosure of Agreement. Except for disclosure to their
legal counsel, accountants, or financial advisors, Provider and its staff, on
the one hand, and Company, the Facility Operators and their staff, on the other
hand, shall not disclose the terms of this Agreement to any person who is not a
party or signatory to this Agreement, unless disclosure thereof is required by
law or otherwise authorized by this Agreement or except in connection with the
proposed sale of one or more of the Available Facilities. Notwithstanding the
foregoing, both parties recognize and acknowledge that this Agreement (but not
necessarily the exhibits) may be required to be filed as an exhibit to certain
registration statements and reports filed by both parties with the Securities
and Exchange Commission, and that any such filings shall not be deemed to result
in a breach of the terms of this Agreement.
(c) Patient Records Confidential. Neither Provider nor any of
its staff shall disclose to any third party, except where permitted or required
by law or where such disclosure is expressly approved by Company in writing, any
patient or medical record information regarding any Company LTC Facility or New
Facility patients, and Provider and all of its staff shall comply with all
Federal and state laws and regulations, and all reasonable rules, regulations,
and policies of each Company LTC Facility and New Facility regarding the
confidentiality of such information.
(d) Return of Confidential Information. Upon termination of
this Agreement by either party for any reason whatsoever, each party shall
forthwith return to the other, all material constituting or containing
Confidential Information and the returning party will not thereafter use,
appropriate or reproduce such information or disclose such information to any
third party.
(e) Public Information. Confidential information shall not
include information which is or becomes public or which was in possession of the
party prior to receiving it from the other party or which was developed by the
party disclosing or using it.
(f) Strict Compliance. Failure to strictly comply with the
provisions of this Paragraph 8 shall be a material breach of this Agreement.
Each party acknowledges that this is a continuing obligation and that such
obligation shall survive the termination of this Agreement. Each party further
acknowledges that the restrictions contained in this Paragraph 8 are reasonable
and necessary to protect the legitimate business interests of the other party
and that any violation thereof by one party would result in irreparable harm to
the other party. Accordingly, in the event of an actual or a threatened breach
by either party of the provisions of this Paragraph 8, the other party shall be
entitled to obtain from any court of competent jurisdiction a preliminary or
permanent injunction enjoining the breaching party from disclosing such
information. Nothing herein shall be construed as prohibiting either party from
pursuing any other remedies available to it for such breach or threatened
breach, including the recovery of damages.
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9. Miscellaneous Provisions.
(a) No Advertising. No party hereto shall use the name of the
other party in any advertising publication, or prospectus without prior written
approval of such party.
(b) Notices. Any notice, demand, or communication required,
permitted, or desired to be given hereunder, shall be deemed sufficiently given
when personally delivered or mailed by prepared certified mail, return receipt
requested, or sent by nationally-recognized overnight courier, or by facsimile
transmission (receipt confirmed), addressed as follows:
to Company: Xxxxxxx Enterprises, Inc.
0000 Xxxxxx Xxxxxx, Xxxxx 00-X
Xxxx Xxxxx, XX 00000-0000
Attention: Xxxxx X. Xxxxx
Chairman of the Board
Fax No.: 000-000-0000
With copies to: Xxxxxx X. Xxxxxxxxxxx, Esq.
Executive Vice President, Secretary and
General Counsel
Xxxxxxx Enterprises, Inc.
0000 Xxxxxx Xxxxxx, Xxxxx 00-X
Xxxx Xxxxx, XX 00000-0000
Fax No.: 000-000-0000
and
H. Xxxx Xxxxxxx, III, Esq.
Xxxxxx, Xxxxxxx, Xxxxxx & Xxxxxx, PLC
000 Xxxxxx Xxxxxx - Xxxxx 0000
Xxxxxx Xxxx, XX 00000
Fax No.: 000-000-0000
to Provider: PharMerica Corporation
0000 Xxxxx Xxxx Xxxxx
Xxxxx, XX 00000
Attention: _________________
Fax No.: 000-000-0000
with copies to: ________________________
or to such other or additional addresses as may be provided by either party from
time to time in the manner described above.
(c) No Partnership or Joint Venture Created. Nothing contained
in this Agreement shall constitute or be construed to be or create a partnership
or joint venture between
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Company, any Facility Operator, any of their respective successors or assigns on
the one part, and Provider, its successors, or assigns on the other party.
(d) Governing Law. The validity of this Agreement, the
interpretation of the rights and duties of the parties hereunder and the
construction of the terms hereof, shall be governed in accordance with the laws
of the State of Delaware applicable to contracts executed, delivered and to be
fully performed in said state without giving effect to contrary principles of
conflict of laws, except to the extent that any additional written agreement
entered into pursuant to this Agreement by both parties may otherwise
specifically provide.
(e) No Waiver. A waiver by either party of a breach or failure
to perform shall not constitute a waiver of any subsequent breach or failure.
(f) Severability. If any part of this Agreement should be held
to be void or unenforceable, such part will be treated as severable, leaving
valid the remainder of this Agreement notwithstanding the part or parts found
void or unenforceable.
(g) Binding Agreement. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto, and each of their
respective successors and permitted assigns, but shall not be assigned by any
party without the prior written consent of the other party. Any change in
control of Provider shall be deemed an assignment of this Agreement to the new
party in control for this purpose. Notwithstanding the foregoing, Provider shall
be permitted to delegate or subcontract any of its obligations under this
Agreement or under any Existing Provider Agreement or New Provider Agreement to
any Subsidiary or Affiliate of Provider other than in the event of a change in
control. This Agreement is intended solely for the benefit of the parties hereto
and there is no intention, expressed or otherwise, to create rights of interest
for any party or person other than Provider, Company and the Facility Operators.
This Agreement shall be enforceable only by the parties hereto and their
successors in interest by virtue of an assignment which is not prohibited under
the terms of this Agreement, and except as set forth in the preceding sentence,
no other person shall have the right to enforce any of the provisions contained
herein.
(h) Headings for Reference Only. The Paragraph and other
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement.
(i) No Modifications Except in Writing. This Agreement cannot
be changed or modified except by another agreement in writing signed by the
other party sought to be charged therewith or by its duly authorized agent.
(j) Construction. Any ambiguities contained in this Agreement
shall not in any way be construed in a manner which would interpret such
ambiguities against the drafter of this Agreement.
(k) Entire Agreement. This Agreement supersedes all previous
contracts and agreements between the parties and constitutes the entire
agreement between the parties. No oral
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statements or prior written material not specifically incorporated herein shall
be of any force and effect, and no changes in or additions to this Agreement
shall be recognized unless incorporated herein by written amendment, such
amendment(s) to become effective on the date(s) stipulated therein.
(l) Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be an original, but all of which, when
taken together, shall constitute one and the same agreement.
(m) Disposition of Facilities. Nothing contained in this
Agreement shall be deemed to prohibit the right of Company or any Facility
Operator to sell or otherwise dispose of any Company LTC Facility or New
Facility or to assign any lease or a management agreement with respect thereto
so long as any such acquiror of such Company LTC Facility or New Facility
assumes the liabilities and obligations of this Agreement or any Pre-Existing
Provider Agreement, Existing Provider Agreement or New Provider Agreement then
in effect. Notwithstanding any provision in the foregoing sentence to the
contrary, nothing in this Agreement shall be construed to require Company to
operate or continue to operate any Company LTC Facility or New Facility for any
length of time, to make any payment under this Agreement to Provider for failure
to continue to operate any such facility, or to otherwise be required to deal
further with Provider in respect of any facility where the Company's right to
operate such facility under lease or management agreement with a third party
expires or terminates pursuant to the terms thereof.
(n) Maintenance of Records. Provider shall keep and maintain
such records relating to its services rendered hereunder and under any Existing
Provider Agreement or New Provider Agreement in accordance with accepted
professional standards and practices, and as may be required by Company and by
any fiscal intermediary, federal, state or local governmental agency or
authority, or any other party to whom xxxxxxxx for Provider's services are
rendered. Provider further agrees to make all such records available upon
request for inspection or copying by Company, subject to any federal or state
laws relating to confidentiality of such records. Without limiting the
generality of the foregoing, until the expiration of four (4) years after the
termination of this Agreement, Provider shall make available, upon request of
the Comptroller General of the United States General Accounting Office or the
Office of the Inspector General of the United States Department of Health and
Human Services, or any of their duly authorized representatives, a copy of this
Agreement, any Existing Provider Agreement and any New Provider Agreement, and
such books, documents and records as are necessary to certify the nature and
extent of the costs of the services provided by Provider under this Agreement,
any Existing Provider Agreement and New Provider Agreement at any time in force
during the term of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Preferred Provider Agreement effective as of the day and year first above
written.
PHARMERICA CORPORATION XXXXXXX ENTERPRISES, INC.
By: By:
--------------------------------- -------------------------
Name: Name:
------------------------------- -----------------------
Title: Title:
----------------------------- ----------------------
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Exhibit to PPA
CONSULTANT PHARMACIST SERVICES AGREEMENT
THIS CONSULTANT PHARMACIST SERVICES AGREEMENT (this "Agreement"), in
accordance with the terms of that certain Preferred Provider Agreement for
Pharmaceutical and Related Services between Xxxxxxx Enterprises, Inc. and
PharMerica Corporation (the "PPA") is made effective this ____ day of
_____________199__ by and between *_________________________ d/b/a
**____________________________, located at _________________________________
(the "FACILITY"), and ________________________, a Delaware corporation with its
principal place of business at PharMerica Corporation, d/b/a
___________________________________, duly licensed as a pharmacy in this state,
located at ______________________________________ ("PROVIDER"). In consideration
of the mutual promises set forth below in the body of this Agreement, the
parties agree as follows:
1. TERM
The term of this Agreement shall commence on ___________, 1997, and
shall continue in full force and effect for a period of five (5) years
thereafter. This Agreement shall be renewed at the end of the initial term by
written agreement of both parties in accordance with the terms of the PPA. This
Agreement, may, however, be terminated immediately for cause upon the occurrence
of one of the following events: (a) dissolution and/or bankruptcy of either
party; (b) the making of a general assignment for the benefit of creditors by
either party, (c) after written notice by Facility of a default by PROVIDER and
a reasonable time, not to exceed sixty (60) days for Provider to cure such
default, the failure of PROVIDER to provide the services agreed to in this
Agreement in a manner not reasonably satisfactory to FACILITY or that causes
FACILITY to be out of compliance with federal, state or local licensure and/or
certification requirements; or (d) PROVIDER's becoming insolvent or having a
receiver appointed because of insolvency.
2. CONSULTANT PHARMACIST SERVICES
The parties agree that PROVIDER is to provide consultant services under
the terms and conditions of this Agreement and in accordance with any applicable
requirements of federal, state or local laws, rules and/or regulations,
including provisions of the Omnibus Budget Reconciliation Acts (OBRA) of 1937
and 1990. Also, the parties agree that PROVIDER is to provide consultant
services under the general supervision of a qualified Pharmacist who is
responsible to FACILITY's Administrator for developing, coordinating,
supervising and reviewing all pharmaceutical services. PROVIDER may employ
suitable and lawfully authorized ancillary personnel, including, but not limited
to, licensed nurses to provide such authorized ancillary personnel, including,
but not limited to, licensed nurses to provide such services. PROVIDER shall
serve as FACILITY's exclusive provider of services specified herein so long as
PROVIDER is not in breach of this Agreement.
------------
* Fill in name of correct Corporate Subsidiary.
**Fill in name of Facility.
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PROVIDER agrees to:
a. Review the drug regime of each resident in FACILITY at the
time of PROVIDER's visit at least once a month and report in writing any
irregularity to FACILITY's Administrator, Director of Nursing Services, arid
where appropriate, the individual resident's physician.
b. Serve on FACILITY's Quality Assurance Committee or
committees of similar function.
c. Submit, at least quarterly, a written report to FACILITY's
Quality Assurance Committee or committee of similar function on the status of
FACILITY pharmaceutical service and staff performance.
d. Prepare and maintain FACILITY's Pharmacy Policy and
Procedure Manual.
e. Assist FACILITY in the accounting, destruction and
reconciliation of unused controlled substances as prescribed by. law, rule or
regulation.
f. Assist FACILITY's administrative staff in establishing and
implementing policies and procedures for the safe and effective distribution,
control and use of drugs.
g. Participate as required in FACILITY's in service training
program for the licensed nursing staff.
h. Meet all other responsibilities required of a consultant
pharmacist as set forth in federal, state and local news, rules and regulations.
FACILITY agrees to:
a. Designate employees(s) responsible for implementing
services contemplated in this Agreement who will be coordinator(s) with
PROVIDER.
b. Provide space for PROVIDER's consultants to perform duties
listed herein.
c. Assist PROVIDER's consultants in gaining access to storage
areas, reports, records and personnel necessary to carry out duties listed
herein.
d. Whenever possible, coordinate in services and meetings
listed herein with PROVIDER so that PROVIDER'S consultants can provide such
services efficiently with a minimum number of on-site visits to FACILITY.
To assist PROVIDER, FACILITY shall provide space for PROVIDER to
perform the on-site duties listed herein and designate FACILITY employee(s) who
shall act as coordinator with PROVIDER regarding services provided by PROVIDER
to FACILITY. In addition, FACILITY will
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attempt to coordinate in service training and all the FACILITY committee
meetings listed herein with PROVIDER to minimize the number of on-site visits
required of PROVIDER to FACILITY.
3. COMPENSATION
PROVIDER and FACILITY shall agree to a Schedule of Rates prior to the
effective date of this Agreement Such Schedule of Rates shall be attached to and
incorporated by reference into this Agreement as Exhibit A. PROVIDER agrees to
devote a sufficient number of hours based upon FACILITY's needs, during
regularly scheduled visits to carry out PROVIDER's responsibilities. FACILITY
shall pay PROVIDER for all rendered services within sixty (60) days following
the day on which PROVIDER's invoices have been received by FACILITY for the
applicable billing period. FACILITY shall review each invoice and use its
reasonable efforts to notify PROVIDER of any credit adjustments determined by
FACILITY to be due FACILITY from PROVIDER on such invoice within four (4)
business days after receipt of PROVIDER'S invoice if FACILITY is on a weekly
billing cycle and within fifteen (15) business days if FACILITY is on a monthly
billing cycle. PROVIDER shall accordingly issue a credit in the amount of any
such adjustment on the invoice due in the next billing cycle after receipt by
PROVIDER of notice of such adjustment by FACILITY. If FACILITY does not notify
PROVIDER of adjustments within such applicable four (4) or fifteen (15) business
day period, PROVIDER shall issue an appropriate credit in the amount of any such
adjustment on the next invoice after receipt of such notice of adjustment.
4. CIVIL RIGHTS
PROVIDER shall comply with Titles VI and VII of the Civil Rights Act of
1964, Section 503 and 504 of the Rehabilitation Act of 1973, and all
requirements imposed by or pursuant to the regulations of the Department of
Health and Human Services issued pursuant to these Acts.
5. RECORDS
Pursuant to Section 1395(V)(l)(i) of Title 42 of the United States
Code, with respect to any services furnished under this Agreement, the value or
cost of which is Ten Thousand Dollars ($10,000) or more over a twelve (12) month
period, until the expiration of four (4) years after the termination of this
Contract, PROVIDER shall make available upon written request from the Secretary
of the United States Department of Health and Human Services, or upon written
request from the Comptroller General of the United States General Accounting
Office, or any of their duly authorized representatives, a copy of this Contract
and such books, documents, and records as are necessary to certify the nature
and extent of the costs of the services provided by PROVIDER under this
Agreement. PROVIDER further agrees to provide any records to FACILITY as may be
required under the Omnibus Budget Reconciliation Acts of 1987 or 1990.
PROVIDER further agrees that in the event PROVIDER carries out any of
his duties under this Agreement through a subcontract with a value or cost of
Ten Thousand Dollars ($10,000) or more over a twelve (12) month period, such
subcontract shall contain a clause to the effect that until the expiration of
four (4) years after the furnishing of such services pursuant to such
subcontract, the subcontractor shall make available, upon written request from
the Secretary of the United States Department of Health and Human Services, or
upon written request from the Comptroller General
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of the United States General Accounting Office, or any of their duly authorized
representatives, the subcontract and such books, documents and records of such
organization are necessary to verify the nature and extent of such costs.
PROVIDER agrees to save, indemnity and hold. harmless FACILITY of and
from all liability, loss. costs or expenses incurred directly or indirectly
because of failure to comply with the obligations set forth above in Paragraph 5
or for any inaccurate or fraudulent claims submitted to FACILITY by PROVIDER for
billing purposes.
6. CHANGE IN LAW OR REGULATION
a. If, during the term of this Agreement, there shall be (i) a
change in the Medicare or Medicaid statute, regulations, or general instructions
(or in the application thereof), or any governmental payor system, including but
not limited to the Veterans Administration ("VA"), or (ii) the adoption of new
legislation or regulations applicable to this Agreement (for purposes of this
Paragraph 6 (an "Affected Agreement", and together with any other similarly
affected agreement for pharmaceutical and/or related services between Xxxxxxx
Enterprises, Inc. and PharMerica Corporation or their respective subsidiaries or
Affiliates, the "Affected Agreements"), or (iii) a change in any other third
party reimbursement system, & (iv) the initiation of enforcement action with
respect to legislation, regulations, or instructions applicable to this
Agreement, any of which changes, legislation, regulations or action affects the
continuing legality of this Agreement or the ability of FACILITY to obtain
reimbursement for the full cost of any consultant pharmacist services
(collectively, for purposes of this Paragraph 6, the "Services") at the levels
then in effect, as charged to FACILITY by PROVIDER, FACILITY may, at any time
within one year of the effective date as to FACILITY, of any such changes,
legislation, regulation or action, upon written notice as provided herein,
propose an amendment to this Agreement, modifying the same to the minimum extent
necessary to assure the continuing legality of this Agreement or to eliminate
the future impediment or impairment to reimbursement. For periods beginning
January 1, 1998, in the event that reimbursement is denied for the FACILITY
covered by this Agreement for covered items or Services under the Medicare
program because PROVIDER'S charges exceed the usual, customary and reasonable
charges for such Services or covered items, as evidenced by a Notice of Medicare
Reimbursement ("NPR"), FACILITY shall provide PROVIDER as promptly as
practicable with a copy of such NPR, and any change to this Agreement
effectuated for the purpose of obtaining reimbursement shall be made applicable
to all reimbursement periods subsequent to the period to which the NPR related,
for the remainder of the term of this Agreement. In the event that PROVIDER is
unable or unwilling to supply the items or Services at price levels sufficient
to assure such reimbursement, then FACILITY may, at its sole option, elect to
obtain such items or Services from other sources or to accept the prices offered
by PROVIDER.
b. If; during the term of this Agreement, the system of
reimbursement under which Medicare, Medicaid or any other third party
governmental payor reimburses providers of health care services such as FACILITY
for covered Services (hereinafter, the "Affected Services") shall be changed by
law or regulation, from an existing cost-based reimbursement system to any other
system, including but not limited to a prospective payment system, under which
FACILITY or its Affiliates (as hereinafter defined) is placed at risk for full
reimbursement of the Affected Services covered by this Agreement, then the
parties agree that, at any time within one year of the
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effective date as to FACILITY, of any such change, upon written notice of such
change as provided herein, they shall prospectively renegotiate the pricing
terms with respect to the Affected Services under this Agreement to reflect the
impact of such risk-based reimbursement for the remainder of the term of this
Agreement or, at their option, the parties may elect to negotiate a risk-based
pricing structure for this Agreement. In either event, the parties agree that
they shall negotiate in good faith to achieve a fair distribution of any adverse
impact of such change in the reimbursement system as it impacts the Affected
Services. in the event the parties are unable to reach agreement on modified
pricing terms with respect to Affected Services (hereinafter, the "Adjusted
Pricing Structure"), FACILITY on written notice to PROVIDER may elect to take
the following procedures;
(1) FACILITY, acting alone if it has the only
Affected Agreement with PROVIDER for similarly situated Services being provided
by PROVIDER, or in concert with any other Affiliates having Affected Agreements
with PROVIDER for similarly situated Services, may solicit proposals (each a
"Proposed Alternative Bid" and collectively, the "Proposed Alternative Bids")
from any other qualified pharmacy provider for it or them, as applicable, to
provide the Affected Services to it or them, as applicable, which are affected
by such changes in the reimbursement system (such facilities, whether one or
more, being referred to in this Paragraph 6 collectively as the "Affected
Facilities") during the remainder of the term of the Affected Agreement then in
effect As used herein, "qualified pharmacy provider" means a provider of
institutional pharmacy services which alone or with Affiliates has the
capability of servicing the FACILITY and at least 75% of the other Affected
Facilities then being served by PROVIDER.
(2) Upon receipt of such Proposed Alternative Bids to
provide the Affected Services to the FACILITY and the other Affected Facilities,
if any, if all such Proposed Alternative Bids are equal to or greater than the
Adjusted Pricing Structure last offered by the PROVIDER, FACILITY shall
forthwith notify PROVIDER of that fact, and the Adjusted Pricing Structure last
offered by PROVIDER shall thereupon be in effect for the duration of the term of
this Agreement with respect to the Affected Services, subject to the continuing
application of all the other terms and conditions of this Agreement, including
the provisions of this Paragraph 6. If any of such Proposed Alternative Bids is
less than the Adjusted Pricing Structure last offered by PROVIDER for the
Affected Services, FACILITY shall provide such Proposed Alternative Bids to
PROVIDER within 30 days after receipt of the last of such Bid or Bids. PROVIDER
shall thereupon have the opportunity to revise its Adjusted Pricing Structure to
provide the Affected Services in the FACILITY and in all other similarly
situated Affected Facilities, if any, then being served by PROVIDER for the
duration of the term then in effect of this Agreement and such other Affected
Agreements, as applicable, to an amount (the "Average Adjusted Pricing
Structure") equal to (i) the average of the three lowest Proposed Alternative
Bids received by FACILITY with respect to such Affected Services, or (ii) if
there are less than three qualified pharmacy providers at the time which submit
Proposed Alternative Bids, the average of the two Proposed Alternative Bids
received by FACILITY with respect to the Affected Services, or (iii) if there
are less than two qualified pharmacy providers at the time which submit Proposed
Alternative Bids, the Proposed Alternative Bid received by FACILITY with respect
to the Affected Services.
(3) If PROVIDER elects to meet the Proposed
Alternative Bid or Bids, as applicable, with respect to the Affected Services,
as set forth in subparagraph (2) above, it shall notify FACILITY not less than
30 days after receipt of all the Proposed Alternative Bids by
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PROVIDER of PROVIDER's election to continue to provide the Affected Services
under the Average Adjusted Pricing Structure to the Facility for the duration of
the term of this Agreement then in effect, subject to the continuing application
of all the other terms and conditions of this Agreement, including the
provisions of this Paragraph 6.
(4) If PROVIDER does not elect to provide the
Affected Services under the Average Adjusted Pricing Structure as hereinabove
set forth, then FACILITY may, at its sole option, elect to obtain such Affected
Services from any of the qualified pharmacy providers whose Proposed Bid is
equal to or less than the Average Adjusted Pricing Structure or accept the
Adjusted Pricing Structure last offered by PROVIDER for the duration of the term
of this Agreement then in effect.
c. If, during the term of this Agreement, the system of
reimbursement under which Medicare, Medicaid or any other governmental
third-party payor reimburses providers of health care services such as the
FACILITY for Affected Services shall be changed, by law or regulation, from an
existing cost-based reimbursement system to any other system, including but not
limited to a Prospective Payment System, under which FACILITY is required to
absorb, as part of an all-inclusive rate or payment, the cost of Affected
Services covered by this Agreement which were previously billed by PROVIDER
directly to Medicare, Medicaid or other governmental third-party payor, then the
parties agree that, at any time within one year of the effective date as to
FACILITY, of any such change, upon written notice of such change as provided
herein, they shall prospectively renegotiate the pricing terms with respect to
the Affected Services under this Agreement to reflect the impact of such
risk-based reimbursement for the remainder of the term of this Agreement, and
this Agreement shall be amended to reflect the new prices for those Affected
Services. In the event the parties are unable to reach agreement on modified
pricing terms with respect to Affected Services, FACILITY on written notice to
PROVIDER may elect to follow the procedures set forth in subparagraphs 6 b (1)
through (4), inclusive, to determine the Adjusted Pricing Structure for the
Affected Services to be in effect with PROVIDER or other qualifying pharmacy
providers for the duration of the term of this Agreement then in effect.
d. FACILITY shall have sole discretion as to any election to
appeal, settle or compromise the amounts denied, disallowed or recouped by
Medicare, Medicaid or any other third party reimbursement source.
7. QUALIFICATIONS
PROVIDER represents and warrants that it and any and all of its
employees, agents or servants which will provide services under this Agreement
have all the necessary qualifications, certifications and/or licenses required
by federal, state and local laws and regulations to provide the services
required under this Agreement. Each individual providing services under this
Agreement will provide FACILITY with a copy of his/her current license in effect
on the effective date of this Agreement and at each successive renewal.
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8. INSURANCE AND INDEMNITY
Subject to the minimum coverage requirements set forth below, PROVIDER
shall procure and maintain at all times throughout the term of this Agreement
such insurance as will fully protect PROVIDER from all acts, errors or omissions
while performing the services provided for in this Agreement.
PROVIDER shall submit to FACILITY prior to the effective date of this
Agreement, a certificate of insurance issued by an insurer authorized to conduct
insurance business in this state and reasonably acceptable to FACILITY,
indicating that PROVIDER has complete liability insurance coverage, including
coverage for any acts of professional malpractice Such insurance shall be in
amounts reasonably satisfactory to FACILITY or in amounts required by the laws
of this state, whichever is greater, but shall not be in amounts less than
$1,000,000 aggregate per year for injuries or incidents to persons and $100,000
each occurrence property damage coverage. Coverage less than stated amounts must
be approved in writing in advance by FACILITY's Corporate Risk Management
Department Said certificate shall provide that the insurer will not cancel said
policy of insurance without giving FACILITY thirty (30) days advance written
notice. Further, PROVIDER shall provide FACILITY thirty (30) days advance
written notice.(or as soon as practicable) as to any material restriction,
limitation, modification or revision to coverage contemplated herein.
PROVIDER shall save, indemnify and hold FACILITY harmless of and from
any and all liability, loss, costs and expenses incurred directly or indirectly
from any acts, errors or Omissions by PROVIDER, its agents, employees or
invitees from any cause arising from or relating to PROVIDER's performance under
this Agreement.
Within the limits of its applicable insurance coverage, and to the
extent not otherwise inconsistent with state law, FACILITY shall save, indemnify
and hold PROVIDER harmless of and from any and all liability, loss, costs and
expenses incurred directly or indirectly from any acts, errors or omissions by
FACILITY, its agents, employees or invitees from any cause arising from or
related to FACILITY's performance under this Agreement.
9. EQUIPMENT AND SUPPLIES
When PROVIDER uses equipment and/or supplies provided by FACILITY,
PROVIDER shall use such equipment and supplies properly and be solely
responsible for injuries or damages resulting from any misuse. In addition,
PROVIDER shall notify FACILITY promptly in writing whenever equipment or
supplies provided by FACILITY and used by PROVIDER for providing services need
repair or replacement. When PROVIDER uses his/her own equipment and supplies,
PROVIDER agrees to save, indemnify and hold FACILITY harmless of and from the
use, misuse or failure of such equipment and supplies. PROVIDER shall maintain
his/her own equipment and supplies in good operating condition and repair and in
accordance with manufacturer's recommendations and all applicable federal, state
and local laws.
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10. INDEPENDENT CONTRACTOR
This Agreement does not constitute a hiring of PROVIDER as an employee
of FACILITY. It is the parties' intention that PROVIDER shall be an independent
contractor and not FACILITY's employee. PROVIDER shall retain discretion and
judgment regarding the manner and means of providing services to FACILITY
subject to all applicable laws, regulations and FACILITY's policies. FACILITY
assumes professional and administrative responsibility for the services rendered
only to the extent that FACILITY will assure itself that (1) PROVIDER is
qualified by education and/or experience to render the services contracted for;
and (2) PROVIDER is satisfying the obligation set forth herein in a timely
manner. This Agreement shall not be construed as a partnership and FACILITY
shall not be liable for any obligations incurred by PROVIDER.
11. CONFIDENTIALITY
PROVIDER agrees to respect and abide by all federal, state and local
laws pertaining to confidentiality and disclosure with regard to all information
and records obtained or reviewed in the course of providing services to FACILITY
and/or its residents. In the course of the relationship established between
PROVIDER and FACILITY, certain confidential information about each party and/or
its parent organization may be disclosed to the other party. Such information
includes, without limitation, FACILITY resident names, medical records, business
information and similar information of any kind whatsoever (collectively
referred to as "Confidential Information"). PROVIDER and FACILITY shall hold
Confidential Information in the strictest confidence as fiduciaries and shall
not, voluntarily or involuntarily, sell, transfer, publish, disclose or
otherwise make available to others, any portion of the Confidential Information
or related materials without the express written consent of the other party
except as provided for under paragraph 5 herein. PROVIDER and FACILITY shall use
their best efforts to protect the Confidential Information consistent with the
manner in which they protect their most confidential business and client
information.
12. ATTORNEY'S FEES
If suit is brought to enforce any of the terms or conditions of this
Agreement, the prevailing party shall be entitled to recover such sums as the
court may fix as costs and reasonable attorney's fees, in addition to any other
relief to which it may be entitled.
13. NOTICES
Any notice required to be provided to any party to this Agreement shall
be in writing and shall be considered effective three (3) days after date of
deposit with the United States Postal Service by certified or registered mail,
first class postage prepaid, return receipt requested, or by facsimile
transmission (receipt confirmed) and addressed to the party as follows:
FACILITY:
------------------------------
------------------------------
------------------------------
Attention:
-------------------
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and to: Xxxxxxx Enterprises, Inc.
0000 Xxxxxx Xxx., Xxxxx 00-X
Xxxx Xxxxx, XX 00000-0000
Attention: Xxxxx X. Xxxxx, Chairman of the Board
Facsimile: 000-000-0000
with copies to: Xxxxxx X. Xxxxxxxxxxx, Esq.
Executive Vice President, Secretary and General Counsel
Xxxxxxx Enterprises, Inc.
0000 Xxxxxx Xxxxxx, Xxxxx 00-X
Xxxx Xxxxx, XX 00000-0000
Facsimile: 501452-3760
and
H. Xxxx Xxxxxxx, III, Esq.
Xxxxxx, Xxxxxxx, Xxxxxx & Xxxxxx, PLC
000 Xxxxxx Xxxxxx - Xxxxx 0000
Xxxxxx Xxxx, XX 00000
Facsimile: 000-000-0000
PROVIDER: PharMerica Corporation
0000 Xxxxx Xxxx Xxxxx
Xxxxx, XX 00000
Attention: ____________________
Facsimile: 000-000-0000
with copies to:
--------------------------------
--------------------------------
--------------------------------
or to such other or additional addresses as may be provided by either party from
time to time in the manner described above.
14. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware.
15. BINDING ON SUCCESSORS
This Agreement shall be binding on and shall inure to the benefit of
any and all successors, trustees, assignees, agents, heirs, executors,
administrators, personal representatives, and any other successor in interest of
the parties to this Agreement.
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16. NON-ASSIGNABILITY
Neither this Agreement nor any of the duties or obligations of PROVIDER
hereunder shall be assigned or delegated by PROVIDER without prior written
consent of FACILITY.
17. INTEGRATION
This Agreement supersedes all previous agreements, oral or written,
between the parties and embodies the complete Agreement between the parties.
This Agreement may only be amended or modified by written agreement signed by
both parties.
IN WITNESS WHEREOF, the parties by their duly authorized
representatives have entered into this Agreement as of the date first above
written.
FACILITY: *
-----------------------------------
d/b/a **
----------------------------
By:
--------------------------------
Title:
-----------------------------
PROVIDER: PHARMERICA CORPORATION
By:
--------------------------------
Title:
-----------------------------
------------------
* Fill in name of correct Corporate Subsidiary.
**Fill in name of Facility.
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EXHIBIT A
SCHEDULE OF RATES
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Exhibit to PPA
INTRAVENOUS THERAPY SERVICES AND PRODUCTS AGREEMENT
THIS INTRAVENOUS THERAPY SERVICES AND PRODUCTS AGREEMENT (the
"Agreement"), in accordance with the terms of that certain Preferred Provider
Agreement for Pharmaceutical and Related Services between Xxxxxxx Enterprises,
Inc. and PharMerica Corporation (the "PPA") is made effective this ____ day of
________________199___ by and between *_________________________ d/b/a
**____________________________, located at PharMerica Corporation (the
"FACILITY"), and ________________________, a Delaware corporation with its
principal place of business at _______________________________________________
d/b/a ___________________________________, duly licensed as a pharmacy in this
state, located at ______________________________________ ("PROVIDER"). In
consideration of the mutual promises set forth below in the body of this
Agreement, the parties agree as follows:
1. TERM
The term of this Agreement shall commence on ___________, 1997, and
shall continue in full force and effect for a period of five (5) years
thereafter unless terminated earlier pursuant to this Paragraph. This Agreement
shall be renewed at the end of the stated term by written agreement of both
parties in accordance with the PPA. This Agreement may, however, be terminated
immediately for cause upon the occurrence of any one of the following events:
(a) dissolution and/or bankruptcy of either party; ('))the making of a general
assignment for the benefit of creditors by either party; (c) after written
notice by Facility of a default by PROVIDER and a reasonable time, not to exceed
sixty (60) days for PROVIDER to cure such default, the failure of PROVIDER to
provide the health care products and/or services agreed to in this Agreement in
a manner reasonably satisfactory to FACILITY or that causes FACILITY to be out
of compliance with federal, state or local licensure or certification
requirements; or (d) PROVIDER's becoming insolvent or having a receiver
appointed because of insolvency.
"Infusion therapy services" in this Agreement means all drugs,
equipment and supplies needed to carry out a physician's order for intravenous
or continuous subcutaneous infusion therapy, with the assistance of a registered
pharmacist.
The parties agree that PROVIDER is to provide infusion therapy services
under the terms and conditions of this Agreement and in accordance with any
applicable requirements of Federal, State, or Local laws, rules, and/or
regulations, including provisions of the Omnibus Budget Reconciliation Acts
(OBRA) of 1987 and 1990. PROVIDER shall have the right to serve as FACILITY's
exclusive provider of such services subject to the right of patients, patients'
payors or insurers, and patients' physicians to choose another provider.
--------------------
* Fill in name of correct Corporate Subsidiary.
**Fill in name of Facility.
30
PROVIDER agrees to:
a. Supply and replenish a separate inflision therapy emergency
kit.
b. Label inflision therapy supplies in accordance with
Federal, State and local laws, rules and regulations.
c. Provide routine inlusion therapy services six (6) days a
week, and emergency inflision therapy services to FACILITY twenty-four (24)
hours per day, seven (7) days a week.
d. Provide routine inlusion therapy Policy and Procedure
manual.
e. Provide and maintain inlusion pumps as necessary for
inlusion services. All such pumps remain the property of the PROVIDER.
f. Maintain a clinical profile on each inflision therapy
patient and monitor for allergies, drug interaction, and other therapeutic
concerns on an ongoing basis.
g. Xxxx patients or third party payers for inlusion therapy
services provided, including drugs, solutions, supplies and inlusion pump use.
h. Provide to FACILITY a copy of all billed charges from
PROVIDER to payors other than the FACILITY for all residents of FACILITY.
FACILITY agrees to:
a. Provide proper billing information such as admission data,
source of payment status changes, and Medicaid information on. a prompt and
timely basis.
b. Designate the employee(s) responsible for implementing the
services contemplated in this Agreement who shall act as coordinator(s) with
PROVIDER.
2. SERVICES
Subject to the terms and conditions herein and in accordance with any
applicable federal, state or local laws, rule and/or regulations, PROVIDER
agrees to provide FACILITY with intravenous solutions, medications and related
services as are consistent with the FACILITY resident's plan of care and
according to physician orders and on an accurate and timely basis. Other
specific services to be provided by PROVIDER are set forth in Exhibit A, which
is attached to and incorporated by reference into this Agreement.
3. COMPENSATION
FACILITY agrees to pay PROVIDER for the intravenous therapy services
and products according to the Schedule of Rates or Methodology for Determining
Payment Rates set forth in Exhibit B, which is attached to and incorporated by
reference into this Agreement.
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PROVIDER will receive payment by one or more of the following methods:
(Both parties must initial the choice(s) selected).
_____ 3.1 PROVIDER will be compensated for intravenous therapy services and
products provided to FACILITY residents by directly billing the
resident, the resident's responsible party, Medicare, Medicaid, a
managed care organization or any other third party reimbursement
source (collectively referred to as the "Appropriate Parry").
PROVIDER will not look to FACILITY for payment, in whole or in
part. In the event, PROVIDER fails to receive payment in whole or
in part, from any Appropriate Payor for health care products
and/or related services provided to FACILITY residents, PROVIDER
will not look to FACILITY for payment, in whole or in part, and
PROVIDER will have no right of recovery against FACILITY.
Notwithstanding the foregoing, it is agreed that PROVIDER
reserves the right to discontinue the provision of intravenous
therapy services and products for nonpayment by or on behalf
of any patient or third party payer, upon not less than thirty
(30) days' notice, unless FACILITY elects prior to the end of
such thirty (30) day period to have PROVIDER xxxx FACILITY for
such services and products in the luture and to reimburse
PROVIDER for unpaid prior services and products billed to such
patient or third party payor.
_____ 3.2 Notwithstanding paragraph 3.1 above, FACILITY may agree to provide
PROVIDER's intravenous therapy services and products to certain
FACILITY residents where such services will be paid for as part
of a per diem, all-inclusive rate or other direct payment to
FACILITY by an Appropriate. Payor. Under such circumstances,
FACILITY will give PROVIDER written notice of those residents and
the services and/or products for which FACILITY has agreed to
receive direct payment prior to the provision of the services
and/or products to FACILITY resident(s). (In the absence of such
written notice from FACILITY to PROVIDER, PROVIDER will look only
to an Appropriate Payor, if any, for payment.) PROVIDER will then
submit to FACILITY on a monthly basis an invoice for those
services and/or products received by FACILITY residents in
accordance with the Schedule of Rates or Methodology for
Determining Payment Rates set forth in Exhibit B and which will
remain in effect for the term of this Agreement. In those
instances in which PROVIDER bills FACILITY for services or
products pursuant to this paragraph, PROVIDER shall xxxx FACILITY
on a weekly basis if FACILITY is on the A5400 dispensing system;
if FACILITY is not on such system, PROVIDER shall xxxx FACILITY
on a monthly basis. The invoice will reflect the services and/or
products received from the first day of the applicable billing
period to the last day of the applicable billing period and will
be submitted to FACILITY within ______ days of the end of the
applicable billing period. FACILITY agrees to pay PROVIDER within
sixty (60) days of receipt of PROVIDER's invoices. FACILITY shall
review each invoice and use its reasonable efforts to notify
PROVIDER of any credit adjustments determined by FACILITY to be
due FACILITY from PROVIDER on such invoice within four (4)
business days after receipt of PROVIDER's invoice if FACILITY is
on a weekly billing cycle and within fifteen (15) business days
if
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FACILITY is on a monthly billing cycle. PROVIDER shall
accordingly issue a credit in the amount of any such adjustment
on the invoice due in the next billing cycle after receipt by
PROVIDER of notice of such adjustment by FACILITY. If FACILITY
does not notify PROVIDER of adjustments within such applicable
four (4) or fifteen (15) business day period, PROVIDER shall
issue an appropriate credit in the amount of any such adjustment
on the next invoice after receipt of such notice of adjustment.
PROVIDER shall give FACILITY thirty (30) days' written notice
prior to changing FACILITY's applicable billing period under this
paragraph.
_____ 3.3 Notwithstanding paragraph 3.1 above, FACILITY may order or
request PROVIDER'S intravenous therapy services and products to
be provided directly to FACILITY (and not to or on behalf of a
particular resident) where such services and/or products will be
paid for directly by FACILITY. Under such circumstances FACILITY
will give PROVIDER written notice of those services and/or
products for which FACILITY will pay PROVIDER directly. PROVIDER
will submit to FACILITY on a monthly basis an invoice for such
services and/or products in accordance with the Schedule of Rates
or Methodology for Determining Payment Rates set out in Exhibit
B. In those instances in which PROVIDER bills FACILITY for
services or products pursuant to this paragraph, PROVIDER shall
xxxx FACILITY on a weekly basis if FACILITY is on the A5400
dispensing system; if FACILITY is not on such system, PROVIDER
shall xxxx FACILITY on a monthly basis. The invoice will reflect
the services and/or products received by FACILITY from the first
day of the applicable billing period to the last day of the
applicable billing period, will be in the form required by
FACILITY and will be submitted to FACILITY within days of the end
of the applicable billing period. FACILITY agrees to pay PROVIDER
within sixty (60) days of receipt of PROVIDER's invoices.
FACILITY shall review each invoice and use its reasonable efforts
to notify PROVIDER of any credit adjustments determined by
FACILITY to be due FACILITY from PROVIDER on such invoice within
four (4) business days after receipt of PROVIDER's invoice if
FACILITY is on a weekly billing cycle and within fifteen (15)
business days if FACILITY is on a monthly billing cycle. PROVIDER
shall accordingly issue a credit in the amount of any such
adjustment on the invoice due in the next billing cycle after
receipt by PROVIDER of notice of such adjustment by FACILITY. If
FACILITY does not notify PROVIDER of adjustments within such four
(4) or fifteen (15) business day period, PROVIDER shall issue an
appropriate credit in the amount of any such adjustment on the
next invoice after receipt of such notice of adjustment. PROVIDER
shall give FACILITY thirty (30) days' written notice prior to
changing FACILITY's applicable billing period under this
paragraph.
Except in the circumstances set out in paragraphs 3.2 and 3.3 above
where FACILITY has the obligation to provide PROVIDER with written notice of the
intravenous therapy services and products which will be provided by PROVIDER to
FACILITY or to certain FACILITY residents, PROVIDER will be solely responsible
for determining the Appropriate Payor for each FACILITY resident. FACILITY will
make reasonably available any information it may have regarding any FACILITY
resident's Appropriate Payor, provided that PROVIDER will have no recourse
against FACILITY in the event the information made available is inaccurate,
incomplete or misleading.
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4. CIVIL RIGHTS
PROVIDER will comply with Titles VI and VII of the Civil Rights Act of
1964, Sections 503 and 504 of the Rehabilitation Act of 1973, and all
requirements imposed by or pursuant to the regulations of the Department of
Health and Human Services issued pursuant to these Acts.
5. RECORDS
Pursuant to Section l395x(V)(l)(i) of Title 42 of the United States
Code, with respect to any services lurm shed under this Agreement, the value or
cost of which is more than Ten Thousand Dollars ($10,000) or more over a twelve
(12) month period, until the expiration of four (4) years after the termination
of this contract, PROVIDER shall make available promptly upon written request to
the Secretary of the United States Department of Health and Human Services, the
Comptroller General of the United States General Accounting Office, or any of
their duly authorized representatives, a copy of this Agreement and such books,
documents and records as are necessary to verify the nature and extent to the
costs of the products and/or related services provided under this Agreement.
PROVIDER further agrees to provide promptly to FACILITY any records as may be
required under the Omnibus Budget Reconciliation Acts of 1987 and 1990.
PROVIDER further agrees that in the event PROVIDER carries out any of
its duties under this Agreement through a subcontract with the value or cost of
Ten Thousand Dollars ($10,000) or more over a twelve (12) month period, such
subcontract shall contain a clause to the effect that until the expiration of
four (4) year after the lurnishing of such,services under such subcontract, the
subcontractor shall make available promptly upon written request to the
Secretary of the United States Department of Health and Human Services, the
Comptroller General of the United States General Accounting Office or any of
their duly authorized representative, the subcontract and such books, documents
and records as are necessary to verify the nature and extent of such costs of
the products and/or related services provided under the subcontract.
PROVIDER agrees to save, indemnify and hold harmless FACILITY of and
from any and all liability, loss, costs and expenses incurred directly or
indirectly because of failure of PROVIDER to comply with the obligations set
forth above in paragraph 5 or for any inaccurate or fraudulent claims submitted
to FACILITY by PROVIDER for billing purposes.
6. CHANGE IN LAW OR REGULATION
a. If, during the term of this Agreement, there shall be (i) a
change in the Medicare or Medicaid statute, regulations, or general instructions
(or in the application thereof), or any governmental payor system, including but
not limited to the Veterans Administration ("VA"), or (ii) the adoption of new
legislation or regulations applicable to this Agreement (for purposes of this
Paragraph 6 (an "Affected Agreement", and together with any other similarly
affected agreement for pharmaceutical and/or related services between Xxxxxxx
Enterprises, Inc. and PharMerica Corporation or their respective subsidiaries or
Affiliates, the "Affected Agreements"), or (iii) a change in any other third
party reimbursement system, or (iv) the initiation of enforcement action with
respect to legislation, regulations, or instructions applicable to this
Agreement, any of which changes, legislation, regulations or action affects the
continuing legality of this Agreement or the
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34
ability of FACILITY to obtain reimbursement for the lull cost of any intravenous
therapy services and products (collectively, for purposes of this Paragraph 6,
the "Services") at the levels then in effect, as charged to FACILITY by
PROVIDER, FACILITY may, at any time within one year of the effective date as to
FACILITY, of any such changes, legislation, regulation or action, upon written
notice as provided herein, propose an amendment to this Agreement, modifying the
same to the minimum extent necessary to assure the continuing legality of this
Agreement or to eliminate the luture impediment or impairment to reimbursement.
For periods beginning January 1, 1998, in the event that reimbursement is denied
for the FACILITY covered by this Agreement for covered items or Services under
the Medicare program because PROVIDER's charges exceed the usual, customary and
reasonable charges for such Services or covered items, as evidenced by a Notice
of Medicare Reimbursement ("NPR"), FACILITY shall provide PROVIDER as promptly
as practicable with a copy of such NPR, and any change to this Agreement
effectuated for the purpose of obtaining reimbursement shall be made applicable
only for reimbursement periods subsequent to the period to which the NPR
related, for the remainder of the term of this Agreement. In the event that
PROVIDER is unable or unwilling to supply the items or Services at price levels
sufficient to assure such reimbursement, then FACILITY may, at its sole option,
elect to obtain such items or Services from other sources or to accept the
prices offered by PROVIDER.
b. If, during the term of this Agreement, the system of
reimbursement under which Medicare, Medicaid or any other third party
governmental payor reimburses providers of health care services such as
FACILITY for covered Services (hereinafter, the "Affected Services") shall be
changed by law or regulation, from an existing cost-based reimbursement system
to any other system, including but not limited to a prospective payment system,
under which FACILITY or its Affiliates (as hereinafter defined) is placed at
risk for lull reimbursement of the Affected Services covered by this Agreement,
then the parties agree that, at any time within one year of the effective date
as to FACILITY, of any such change, upon written notice of such change as
provided herein, they shall prospectively renegotiate the pricing terms with
respect to the Affected Services under this Agreement to reflect the impact of
such risk-based reimbursement for the remainder of the term of this Agreement
or, at their option, the parties may elect to negotiate a risk-based pricing
structure for this Agreement. In either event, the parties agree that they shall
negotiate in good faith to achieve a fair distribution of any adverse impact of
such change in the reimbursement system as it impacts the Affected Services. In
the event the parties are unable to reach agreement on modified pricing terms
with respect to Affected Service's (hereinafter, the "Adjusted Pricing
Structure"), FACILITY on written notice to PROVIDER may elect to take the
following procedures:
(1) FACILITY, acting alone if it has the only
Affected Agreement with Provider for similarly situated Services being provided
by PROVIDER, or in concert with any other Affiliates having Affected Agreements
with PROVIDER for similarly situated Services, may solicit proposals (each a
"Proposed Alternative Bid" and collectively, the "Proposed Alternative Bids")
from any other qualified pharmacy provider for it or them, as applicable, to
provide the Affected Services to it or them, as applicable, which are affected
by such changes in the reimbursement system (such facilities, whether one or
more, being referred to in this Paragraph 6 collectively as the "Affected
Facilities") during the remainder of the term of the Affected Agreement then in
effect As used herein, "qualified pharmacy provider" means a provider of
institutional pharmacy services which alone or with Affiliates has the
capability of servicing the FACILITY and at least 75% of the other Affected
Facilities then being served by PROVIDER.
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(2) Upon receipt of such Proposed Alternative Bids to
provide the Affected Services to the FACILITY and the other Affected Facilities,
if any, if all such Proposed Alternative Bids are equal to or greater than the
Adjusted Pricing Structure last offered by the PROVIDER, FACILITY shall
forthwith notify PROVIDER of that fact, and the Adjusted Pricing Structure last
offered by PROVIDER shall thereupon be in effect for the duration of the term of
this Agreement with respect to the Affected Services, subject to the continuing
application of all the other terms and conditions of this Agreement, including
the provisions of this Paragraph 6. If any of such Proposed Alternative Bids is
less than the Adjusted Pricing Structure last offered by PROVIDER for the
Affected Services, FACILITY shall provide such Proposed Alternative Bids to
PROVIDER within 30 days after receipt of the last of such Bid or Bids. PROVIDER
shall thereupon have the opportunity to revise its Adjusted Pricing Structure to
provide the Affected Services in the FACILITY and in all other similarly
situated Affected Facilities, if any, then being served by PROVIDER for the
duration of the term then in effect of this Agreement and such other Affected
Agreements, as applicable, to an amount (the "Average Adjusted Pricing
Structure") equal to (i) the average of the three lowest Proposed Alternative
Bids received by FACILITY with respect to such Affected Services, or (ii) if
there are less than three qualified pharmacy providers at the time which submit
Proposed Alternative Bids, the average of the two Proposed Alternative Bids
received by FACILITY with respect to the Affected Services, or (iii) if there
are less than two qualified pharmacy providers at the time which submit Proposed
Alternative Bids, the Proposed Alternative Bid received by FACILITY with respect
to the Affected Services.
(3) If PROVIDER elects to meet the Proposed
Alternative Bid or Bids, as applicable, with respect to the Affected Services,
as set forth in subparagraph (2) above, it shall notify FACILITY not less than
30 days after receipt of all the Proposed Alternative Bids by PROVIDER of
PROVIDER's election to continue to provide the Affected Services under the
Average Adjusted Pricing Structure to the Facility for the duration of the term
of this Agreement then in effect, subject to the continuing application of all
the other terms and conditions of this Agreement, including the provisions of
this Paragraph 6.
(4) If PROVIDER does not elect to provide the
Affected Services under the Average Adjusted Pricing Structure as hereinabove
set forth, then FACILITY may, at its sole option, elect to obtain such Affected
Services from any of the qualified pharmacy providers whose Proposed Bid is
equal to or less than the Average Adjusted Pricing Structure or accept the
Adjusted Pricing Structure last offered by PROVIDER for the duration of the term
of this Agreement then in effect.
c. If, during the term of this Agreement, the system of
reimbursement under which Medicare, Medicaid or any other governmental
third-party payor reimburses providers of health care services such as the
FACILITY for Affected Services shall be changed, by law or regulation, from an
existing cost-based reimbursement system to any other system, including but not
limited to a Prospective Payment System, under which FACILITY is required to
absorb, as part of an all-inclusive rate or payment, the cost of Affected
Services covered by this Agreement which were previously billed by PROVIDER
directly to Medicare, Medicaid or other governmental third-party payor, then the
parties agree that, at any time within one year of the effective date as to
FACILITY, of any such change, upon written notice of such change as provided
herein, they shall prospectively renegotiate the pricing terms with respect to
the Affected Services under this Agreement to reflect
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36
the impact of such risk-based reimbursement for the remainder of the term of
this Agreement, and this Agreement shall be amended to reflect the new prices
for those Affected Services. In the event the parties are unable to reach
agreement on modified pricing terms with respect to Affected Services, FACILITY
on written notice to PROVIDER may elect to follow the procedures set forth in
subparagraphs 6 b (1) through (4), inclusive, to determine the Adjusted Pricing
Structure for the Affected Services to be in effect with PROVIDER or other
qualifying pharmacy providers for the duration of the term of this Agreement
then in effect.
d. FACILITY shall have sole discretion as to any election to
appeal, settle or compromise the amounts denied, disallowed or recouped by
Medicare, Medicaid or any other third party reimbursement source.
7. QUALIFICATIONS
PROVIDER represents and warrants that PROVIDER, its employees and
agents have all the necessary qualifications, certifications and licenses
required under federal, state or local laws and regulations to provide the
intravenous therapy services and products under this Agreement. PROVIDER will
provide to FACILITY a copy of the appropriate certifications and/or licenses in
effect at the effective date of this Agreement and at each successive renewal.
8. INSURANCE AND INDEMNIFICATION
Subject to the minimum coverage requirements set forth below, PROVIDER
shall procure and maintain at all times throughout the term of this Agreement
such insurance as will fully protect PROVIDER from all acts, errors or omissions
while providing the intravenous therapy services and products under this
Agreement.
PROVIDER shall submit to FACILITY prior to the effective date of this
Agreement, a certificate of insurance issued by an insurer authorized to conduct
insurance business in this state and reasonably acceptable to FACILITY,
indicating that PROVIDER has complete liability insurance coverage, including
coverage for any acts of professional malpractice. Such insurance shall be in
amounts reasonably satisfactory to FACILITY or in amounts required by the laws
of this state, whichever is greater, but shall not be less than $1,000,000 per
injury or incident to persons and $3,000,000 aggregate per year and $100,000
each occurrence property damage coverage. Coverage in amounts less than stated
must be approved in writing in advance by FACILITY's Corporate Risk Management
Department. Said certificate shall provide that the insurer will not cancel said
policy of insurance without giving FACILITY thirty (30) days advance written
notice. Further, PROVIDER shall provide to FACILITY thirty (30) days advance
written notice (or as soon as practicable) as to any material restriction,
limitation, modification or revision to the coverage contemplated herein.
PROVIDER shall save, indemnify and hold FACILITY harmless of and from
any and all liability, loss, costs and expenses incurred directly or indirectly
from any acts, errors or omissions by PROVIDER, its agents, employees, invitees
from any cause arising from or relating to PROVIDER's performance under this
Agreement.
8
37
Within the limits of its applicable insurance coverage and to the
extent not otherwise inconsistent with state law, FACILITY shall save, indemnify
and hold PROVIDER harmless of and from any and all liability, loss, costs and
expenses incurred directly or indirectly by FACILITY, its agents, employees or
invitees from any cause arising from or relating to FACILITY's performance under
this Agreement.
9. INDEPENDENT CONTRACTOR
This Agreement does not constitute hiring of PROVIDER as an employee of
FACILITY. It is the parties' intention that PROVIDER shall be an independent
contractor and not FACILITY's employee. PROVIDER shall retain discretion and
judgment regarding the manner and means of providing intravenous therapy
services and products to FACILITY subject to all applicable laws, regulations
and FACILITY's policies. FACILITY assumes professional and administrative
responsibility for the services rendered under this Agreement only to the extent
that FACILITY will assure itself that (1) PROVIDER and each of its employees,
agents and servants providing services under this Agreement are qualified to
render the services contracted for; and (2) PROVIDER is satisfying the
obligations set forth herein in a timely manner. This Agreement shall not be
construed as a partnership and FACILITY shall not be liable for any obligations
incurred by PROVIDER.
10. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware.
11. BINDING ON SUCCESSORS
This Agreement shall be binding on and shall inure to the benefit of
any and all successors, trustees, assignees, agents, heirs, executors,
administrators, personal representatives, and any other successor in interest of
the parties to this Agreement.
12. CONFIDENTIALITY OF INFORMATION
In the course of the relationship established between PROVIDER and
FACILITY, certain confidential information about each party and/or its parent
organization may be disclosed to the other party. Such information includes,
without limitation, FACILITY resident names, medical records, business
information and similar information of any kind whatsoever (collectively
referred to as "Confidential Information"). PROVIDER and FACILITY shall hold
Confidential Information in the strictest confidence as fiduciaries and shall
not, voluntarily or involuntarily, sell, transfer, publish, disclose or
otherwise make available to others, any portion of the Confidential Information
or related materials without the express written consent of the other party
except as provided for under paragraph 5 herein or as required for the
performance of this Agreement. PROVIDER and FACILITY shall use their best
efforts to protect the Confidential Information consistent with the manner in
which they protect their most confidential business and client information.
9
38
13. ATTORNEY'S FEES
If suit is brought to enforce any of the terms or conditions of this
Agreement, the prevailing party shall be entitled to recover such sums as the
court may fix as costs and reasonable attorney's fees, in addition to any other
relief to which it may be entitled.
14. NOTICES
Any notice required to be provided to any party to this Agreement shall
be in writing and shall be considered effective three (3) days after the date of
deposit with the United States Postal Service by certified or registered mail,
first class postage prepaid, return receipt requested, and addressed to the
party as follows:
Any notice required to be provided to any party to this Agreement shall
be in writing and shall be considered effective three (3) days after the date of
deposit with the United States Postal Service by certified or registered mail,
first class postage prepaid, return receipt requested, or by facsimile
transmission (receipt confirmed) and addressed to the party as follows:
FACILITY:
----------------------------------
----------------------------------
----------------------------------
Attention:
-----------------------
and to: Xxxxxxx Enterprises, Inc.
0000 Xxxxxx Xxx., Xxxxx 00-X
Xxxx Xxxxx, XX 00000-0000
Attention: Xxxxx X. Xxxxx, Chairman of the Board
Facsimile: 000-000-0000
with copies to: Xxxxxx X. Xxxxxxxxxxx, Esq.
Executive Vice President, Secretary and General Counsel
Xxxxxxx Enterprises, Inc.
0000 Xxxxxx Xxxxxx, Xxxxx 00-X
Xxxx Xxxxx, XX 00000-0000
Facsimile: 501452-3760
and
H. Xxxx Xxxxxxx, III, Esq.
Xxxxxx, Xxxxxxx, Xxxxxx & Xxxxxx, PLC
000 Xxxxxx Xxxxxx - Xxxxx 0000
Xxxxxx Xxxx, XX 00000
Facsimile: 000-000-0000
10
39
PROVIDER: PharMerica Corporation
0000 Xxxxx Xxxx Xxxxx
Xxxxx, XX 00000
Attention:_____________________________
Facsimile: 000-000-0000
with copies to:
---------------------------------------
---------------------------------------
---------------------------------------
15. INTEGRATION
This Agreement supersedes all previous agreements, oral or written,
between the parties and embodies the complete Agreement between the parties.
This Agreement may only be amended or modified by written agreement signed by
both parties.
IN WITNESS WHEREOF, the parties by their duly authorized
representatives have entered into this Agreement as of the date first above
written.
FACILITY: *
----------------------------------
d/b/a **
---------------------------
By:
-------------------------------
Title:
----------------------------
PROVIDER: PHARMERICA CORPORATION
By:
-------------------------------
Title:
-----------------------------
-----------------
* Fill in name of correct Corporate Subsidiary.
**Fill in name of Facility.
11
40
EXHIBIT A
OTHER SPECIFIC SERVICES
12
41
EXHIBIT B
SCHEDULE OF RATES OR METHODOLOGY FOR DETERMINING PAYMENT RATES
13
42
Exhibit to PPA
HEALTH CARE PRODUCTS AND RELATED SERVICES AGREEMENT
THIS HEALTH CARE PRODUCTS AND RELATED SERVICES AGREEMENT (this
"Agreement"), in accordance with the terms of that certain Preferred Provider
Agreement for Pharmaceutical and Related Services between Xxxxxxx Enterprises,
Inc. and PharMerica Corporation (the "PPA") is made effective this ____ day of
_____________199__ by and between *_________________________ d/b/a
**____________________________, located at ______________________________ (the
"FACILITY"), and PharMerica Corporation, a Delaware corporation with its
principal place of business at ____________________________________ d/b/a
___________________________________, duly licensed as a pharmacy in this state,
located at ______________________________________ ("PROVIDER"). In consideration
of the mutual promises set forth below in the body of this Agreement, the
parties agree as follows:
1. TERM
The term of this Agreement shall commence on ___________, 1997, and
shall continue in full force and effect for a period of five (5) years
thereafter unless terminated earlier pursuant to this Paragraph. This Agreement
shall be renewed at the end of the stated term by written agreement of both
parties in accordance with the PPA. This Agreement may, however, be terminated
immediately for cause upon the occurrence of any one of the following events:
(a) dissolution and/or bankruptcy of either party; (b) the making of a general
assignment for the benefit of creditors by either party; (c) after written
notice by Facility of a default by PROVIDER and a reasonable time, not to exceed
sixty (60) days for PROVIDER to cure such default, the failure of PROVIDER to
provide the health care products and/or services agreed to in this Agreement in
a manner reasonably satisfactory to FACILITY or that causes FACILITY to be out
of compliance with federal, state or local licensure or certification
requirements; or (d) PROVIDER's becoming insolvent or having a receiver
appointed because of insolvency.
2. SERVICES
The parties agree that PROVIDER is to provide health care product
services under the terms and conditions of this Agreement and in accordance with
any applicable requirements of Federal, State or Local laws, rules and/or
regulations, including provisions of the Omnibus Budget Reconciliation Acts of
1987 and 1990. PROVIDER shall have the right to serve as FACILITY's exclusive
provider of the services specified therein as long as PROVIDER is not in breach
of this Agreement, subject to the rights of patients, patients' insurers or
payors and patients' physicians to select other providers.
------------------
* Fill in name of correct Corporate Subsidiary.
**Fill in name of Facility.
43
PROVIDER agrees to:
a. Set up automatic shipments for items used by patients with
specific patient orders.
b. Adjust FACILITY's current inventory to a two-to three week
supply based on current usage.
c. Provide a complete procedural inservice to all FACILITY
staff involved with program.
d. Pay weekly delivery and postage charges.
e. Obtain Enteral Certification and/or diagnosis verifications
from the patient's physician.
f. Provide to FACILITY a copy of all billed charges from
PROVIDER to payors other than the FACILITY for all residents of FACILITY.
FACILITY agrees to:
a. Provide all requested patient billing information by
filling out Patient Information Form completely on each person using PROVIDER
and returning the forms within forty-eight (48) hours of receipt to PROVIDER.
The patient disclosure portion of the form must be signed by the patient or
authorized person.
b. Retain all administrative duties.
c. One of the following for Medicare Part A patients who also
qualify for Part B enteral program:
_________ FACILITY will xxxx Medicare Part A directly to its
intermediary. FACILITY will provide PROVIDER with a status report whenever
patient is eligible for Part A and pay PROVIDER for items used within that
period.
_________ PROVIDER will xxxx the enteral items to Part B carrier when
the item and the patient are qualified under Medicare prosthetic clause.
Notwithstanding the foregoing, it is agreed that PROVIDER reserves the
right to discontinue the provision of services for nonpayment by or on behalf of
any patient or third party payer, upon not less than thirty (30) days' notice,
unless FACILITY elects prior to the end of such thirty (30) day period to have
PROVIDER xxxx FACILITY for such services in the future and to reimburse PROVIDER
for unpaid prior services billed to such patient or third party payor.
2
44
3. COMPENSATION
PROVIDER will be compensated by FACILITY for services rendered from the
______ day of a calendar month to the ______ day of the calendar month ("BILLING
PERIOD") according to invoices submitted by PROVIDER to FACILITY in accordance
with the price list set forth in Exhibit A attached hereto. FACILITY agrees to
pay for all health care products and supplies furnished by PROVIDER to FACILITY
for all floor stock (HOUSE SUPPLY), including non-Part B covered items and/or
residents, inventory lost or wasted, any co-payment and/or deductible, if
applicable, within sixty (60) days following the date of which PROVIDER's
invoices are received by FACILITY. FACILITY shall review each invoice and use
its reasonable efforts to notify PROVIDER of any credit adjustments determined
by FACILITY to be due FACILITY from PROVIDER on such invoice within four (4)
business days after receipt of PROVIDER's invoice if FACILITY is on a weekly
billing cycle and within fifteen (15) business days if FACILITY is on a monthly
billing cycle. PROVIDER shall accordingly issue a credit in the amount of any
such adjustment on the invoice due in the next billing cycle after receipt by
PROVIDER of notice of such adjustment by FACILITY. If FACILITY does not notify
PROVIDER of adjustments within such applicable four (4) or fifteen (15) business
day period, PROVIDER shall issue an appropriate credit in the amount of any such
adjustment on the next invoice after receipt of such notice of adjustment.
In the event monies remain due and unpaid to PROVIDER from FACILITY for
more than thirty (30) days after they become due, such amount shall bear
interest at the rate of eighteen percent (18%) per annum (or the maximum amount
permitted by law, whichever is less) from the due date of payment.
4. CIVIL RIGHTS
PROVIDER will comply with Titles VI and VII of the Civil Rights Act of
1964, Sections 503 and 504 of the Rehabilitation Act of 1973, and all
requirements imposed by or pursuant to the regulations of the Department of
Health and Human Services issued pursuant to these Acts.
5. RECORDS
Pursuant to Section 1395x(V)(l)(i) of Title 42 of the United States
Code, with respect to any services furnished under this Agreement, the value or
cost of which is more than Ten Thousand Dollars ($10,000) or more over a twelve
(12) month period, until the expiration of four (4) years after the termination
of this contract, PROVIDER shall make available promptly upon written request to
the Secretary of the United States Department of Health and Human Services, the
Comptroller General of the United States General Accounting Office, or any of
their duly authorized representatives, a copy of this Agreement and such books,
documents and records as are necessary to verify the nature and extent to the
costs of the products and/or related services provided under this Agreement.
PROVIDER further agrees to provide promptly to FACILITY any records as may be
required under the Omnibus Budget Reconciliation Acts of 1987 and 1990.
PROVIDER further agrees that in the event PROVIDER carries out any of
its duties under this Agreement through a subcontract with the value or cost of
Ten Thousand Dollars ($10,000) or more over a twelve (12) month period, such
subcontract shall contain a clause to the effect that until
3
45
the expiration of four (4) years after the furnishing of such services under
such subcontract, the subcontractor shall make available promptly upon written
request to the Secretary of the United States Department of Health and Human
Services, the Comptroller General of the United States General Accounting Office
or any of their duly authorized representative, the subcontract and such books,
documents and records as are necessary to verify the nature and extent of such
costs of the products and/or related services provided under the subcontract.
PROVIDER agrees to save, indemnify and hold harmless FACILITY of and
from any and all liability, loss, costs and expenses incurred directly or
indirectly because of failure of PROVIDER to comply with the obligations set
forth above in paragraph 5 or for any inaccurate or fraudulent claims submitted
to FACILITY by PROVIDER for billing purposes.
6. CHANGE IN LAW OR REGULATION
a. If, during the term of this Agreement, there shall be (i) a
change in the Medicare or Medicaid statute, regulations, or general instructions
(or in the application thereof), or any governmental payor system, including but
not limited to the Veterans Administration ("VA"), or (ii) the adoption of new
legislation or regulations applicable to this Agreement (for purposes of this
Paragraph 6 (an "Affected Agreement", and together with any other similarly
affected agreement for pharmaceutical and/or related services between Xxxxxxx
Enterprises, Inc. and PharMerica Corporation or their respective subsidiaries or
Affiliates, the "Affected Agreements"), or (iii) a change in any other third
party reimbursement system, or (iv) the initiation of enforcement action with
respect to legislation, regulations, or instructions applicable to this
Agreement, any of which changes, legislation, regulations or action affects the
continuing legality of this Agreement or the ability of FACILITY to obtain
reimbursement for the full cost of any health care products and services
(collectively, for purposes of this Paragraph 6, the "Services") at the levels
then in effect, as charged to FACILITY by PROVIDER, FACILITY may, at any time
within one year of the effective date as to FACILITY, of any such changes,
legislation, regulation or action, upon written notice as provided herein,
propose an amendment to this Agreement, modifying the same to the minimum extent
necessary to assure the continuing legality of this Agreement or to eliminate
the future impediment or impairment to reimbursement. For periods beginning
January 1, 1998, in the event that reimbursement is denied for the FACILITY
covered by this Agreement for covered items or Services under the Medicare
program because PROVIDER's charges exceed the usual, customary and reasonable
charges for such Services or covered items, as evidenced by a Notice of Medicare
Reimbursement ("NPR"), FACILITY shall provide PROVIDER as promptly as
practicable with a copy of such NPR, and any change to this Agreement
effectuated for the purpose of obtaining reimbursement shall be made applicable
only for reimbursement periods subsequent to the period to which the NPR
related, for the remainder of the term of this Agreement. In the event that
PROVIDER is unable or unwilling to supply the items or Services at price levels
sufficient to assure such reimbursement, then FACILITY may, at its sole option,
elect to obtain such items or Services from other sources or to accept the
prices offered by PROVIDER.
b. If, during the term of this Agreement, the system of
reimbursement under which Medicare, Medicaid or any other third party
governmental payor reimburses providers of health care services such as FACILITY
for covered Services (hereinafter, the "Affected Services") shall be changed by
law or regulation, from an existing cost-based reimbursement system to any
4
46
other system, including but not limited to a prospective payment system, under
which FACILITY or its Affiliates (as hereinafter defined) is placed at risk for
full reimbursement of the Affected Services covered by this Agreement, then the
parties agree that, at any time within one year of the effective date as to
FACILITY, of any such change, upon written notice of such change as provided
herein, they shall prospectively renegotiate the pricing terms with respect to
the Affected Services under this Agreement to reflect the impact of such
risk-based reimbursement for the remainder of the term of this Agreement or, at
their option, the parties may elect to negotiate a risk-based pricing structure
for this Agreement. In either event, the parties agree that they shall negotiate
in good faith to achieve a fair distribution of any adverse impact of such
change in the reimbursement system as it impacts the Affected Services. In the
event the parties are unable to reach agreement on modified pricing terms with
respect to Affected Services (hereinafter, the "Adjusted Pricing Structure"),
FACILITY on written notice to PROVIDER may elect to take the following
procedures:
(1) FACILITY, acting alone if it has the only
Affected Agreement with Provider for similarly situated Services being provided
by PROVIDER, or in concert with any other Affiliates having Affected Agreements
with PROVIDER for similarly situated Services, may solicit proposals (each a
"Proposed Alternative Bid" and collectively, the "Proposed Alternative Bids")
from any other qualified pharmacy provider for it or them, as applicable, to
provide the Affected Services to it or them, as applicable, which are affected
by such changes in the reimbursement system (such facilities, whether one or
more, being referred to in this Paragraph 6 collectively as the "Affected
Facilities") during the remainder of the term of the Affected Agreement then in
effect. As used herein, "qualified pharmacy provider" means a provider of
institutional pharmacy services which alone or with Affiliates has the
capability of servicing the FACILITY and at least 75% of the other Affected
Facilities then being served by PROVIDER.
(2) Upon receipt of such Proposed Alternative Bids
to provide the Affected Services to the FACILITY and the other Affected
Facilities, if any, if all such Proposed Alternative Bids are equal to or
greater than the Adjusted Pricing Structure last offered by the PROVIDER,
FACILITY shall forthwith notify PROVIDER of that fact, and the Adjusted Pricing
Structure last offered by PROVIDER shall thereupon be in effect for the duration
of the term of this Agreement with respect to the Affected Services, subject to
the continuing application of all the other terms and conditions of this
Agreement, including the provisions of this Paragraph 6. If any of such Proposed
Alternative Bids is less than the Adjusted Pricing Structure last offered by
PROVIDER for the Affected Services, FACILITY shall provide such Proposed
Alternative Bids to PROVIDER within 30 days after receipt of the last of such
Bid or Bids. PROVIDER shall thereupon have the opportunity to revise its
Adjusted Pricing Structure to provide the Affected Services in the FACILITY and
in all other similarly situated Affected Facilities, if any, then being served
by PROVIDER for the duration of the term then in effect of this Agreement and
such other Affected Agreements, as applicable, to an amount (the "Average
Adjusted Pricing Structure") equal to (i) the average of the three lowest
Proposed Alternative Bids received by FACILITY with respect to such Affected
Services, or (ii) if there are less than three qualified pharmacy providers at
the time which submit Proposed Alternative Bids, the average of the two Proposed
Alternative Bids received by FACILITY with respect to the Affected Services, or
(iii) if there are less than two qualified pharmacy providers at the time which
submit Proposed Alternative Bids, the Proposed Alternative Bid received by
FACILITY with respect to the Affected Services.
5
47
(3) If PROVIDER elects to meet the Proposed
Alternative Bid or Bids, as applicable, with respect to the Affected Services,
as set forth in subparagraph (2) above, it shall notify FACILITY not less than
30 days after receipt of all the Proposed Alternative Bids by PROVIDER of
PROVIDER's election to continue to provide the Affected Services under the
Average Adjusted Pricing Structure to the Facility for the duration of the term
of this Agreement then in effect, subject to the continuing application of all
the other terms and conditions of this Agreement, including the provisions of
this Paragraph 6.
(4) If PROVIDER does not elect to provide the
Affected Services under the Average Adjusted Pricing Structure as hereinabove
set forth, then FACILITY may, at its sole option, elect to obtain such Affected
Services from any of the qualified pharmacy providers whose Proposed Bid is
equal to or less than the Average Adjusted Pricing Structure or accept the
Adjusted Pricing Structure last offered by PROVIDER for the duration of the term
of this Agreement then in effect.
c. If, during the term of this Agreement, the system of
reimbursement under which Medicare, Medicaid or any other governmental
third-party payor reimburses providers of health care services such as the
FACILITY for Affected Services shall be changed, by law or regulation, from an
existing cost-based reimbursement system to any other system, including but not
limited to a Prospective Payment System, under which FACILITY is required to
absorb, as part of an all-inclusive rate or payment, the cost of Affected
Services covered by this Agreement which were previously billed by PROVIDER
directly to Medicare, Medicaid or other governmental third-party payor, then the
parties agree that, at any time within one year of the effective date as to
FACILITY, of any such change, upon written notice of such change as provided
herein, they shall prospectively renegotiate the pricing terms with respect to
the Affected Services under this Agreement to reflect the impact of such
risk-based reimbursement for the remainder of the term of this Agreement, and
this Agreement shall be amended to reflect the new prices for those Affected
Services. In the event the parties are unable to reach agreement on modified
pricing terms with respect to Affected Services, FACILITY on written notice to
PROVIDER may elect to follow the procedures set forth in subparagraphs 6b (1)
through (4), inclusive, to determine the Adjusted Pricing Structure for the
Affected Services to be in effect with PROVIDER or other qualifying pharmacy
providers for the duration of the term of this Agreement then in effect.
d. FACILITY shall have sole discretion as to any election to
appeal, settle or compromise the amounts denied, disallowed or recouped by
Medicare, Medicaid or any other third party reimbursement source.
7. QUALIFICATIONS
PROVIDER represents and warrants that PROVIDER, its employees and
agents have all the necessary qualifications, certifications and licenses
required under federal, state pr local laws and regulations to provide the
health care products and/or related services under this Agreement. PROVIDER will
provide to FACILITY a copy of the appropriate certifications and/or licenses in
effect at the effective date of this Agreement and at each successive renewal.
6
48
8. INSURANCE AND INDEMNIFICATION
Subject to the minimum coverage requirements set forth below, PROVIDER
shall procure and maintain at all times throughout the term of this Agreement
such insurance as will fully protect PROVIDER from all acts, errors or omissions
while providing the products and/or related services under this Agreement.
PROVIDER shall submit to FACILITY prior to the effective date of this
Agreement, a certificate of insurance issued by an insurer authorized to conduct
insurance business in this state and reasonably acceptable to FACILITY,
indicating that PROVIDER has complete liability insurance coverage, including
coverage for any acts of professional malpractice. Such insurance shall be in
amounts reasonably satisfactory to FACILITY or in amounts required by the laws
of this state, whichever is greater, but shall not be less than $1,000,000 per
injury or incident to persons and $3,000,000 aggregate per year and $100,000
each occurrence property damage coverage. Coverage in amounts less than stated
must be approved in writing in advance by FACILITY's Corporate Risk Management
Department. Said certificate shall provide that the insurer will not cancel said
policy of insurance without giving FACILITY thirty (30) days advance written
notice. Further, PROVIDER shall provide to FACILITY thirty (30) days advance
written notice (or as soon as practicable) as to any material restriction,
limitation, modification or revision to the coverage contemplated herein.
PROVIDER shall save, indemnify and hold FACILITY harmless of and from
any and all liability, loss, costs and expenses incurred directly or indirectly
from any acts, errors or omissions by PROVIDER, its agents, employees, invitees
from any cause arising from or relating to PROVIDER'S performance under this
Agreement.
Within the limits of its applicable insurance coverage and to the
extent not otherwise inconsistent with state law, FACILITY shall save, indemnify
and hold PROVIDER harmless of and from any and all liability, loss, costs and
expenses incurred directly or indirectly by FACILITY, its agents, employees or
invitees from any cause arising from or relating to FACILITY's performance under
this Agreement.
9. INDEPENDENT CONTRACTOR
This Agreement does not constitute hiring of PROVIDER as an employee of
FACILITY. It is the parties' intention that PROVIDER shall be an independent
contractor and not FACILITY's employee. PROVIDER shall retain discretion and
judgment regarding the manner and means of providing health care products and/or
related services to FACILITY subject to all applicable laws, regulations and
FACILITY's policies. FACILITY assumes professional and administrative
responsibility for the services rendered under this Agreement only to the extent
that FACILITY will assure itself that (1) PROVIDER and each of its employees,
agents and servants providing services under this Agreement are qualified to
render the services contracted for; and (2) PROVIDER is satisfying the
obligations set forth herein in a timely manner. This Agreement shall not be
construed as a partnership and FACILITY shall not be liable for any obligations
incurred by PROVIDER.
7
49
10. CONFIDENTIALITY OF INFORMATION
In the course of the relationship established between PROVIDER and
FACILITY, certain confidential information about each party and/or its parent
organization may be disclosed to the other party. Such information includes,
without limitation, FACILITY resident names, medical records, business
information and similar information of any kind whatsoever (collectively
referred to as "Confidential Information"). PROVIDER and FACILITY shall hold
Confidential Information in the strictest confidence as fiduciaries and shall
not, voluntarily or involuntarily, sell, transfer, publish, disclose or
otherwise make available to others, any portion of the Confidential Information
or related materials without the express written consent of the other party
except as provided for under paragraph 5 herein and except as required for the
performance of their duties under this Agreement PROVIDER and FACILITY shall use
their best efforts to protect the Confidential Information consistent with the
manner in which they protect their most confidential business and client
information.
11. ATTORNEY'S FEES
If suit is brought to enforce any of the terms or conditions of this
Agreement, the prevailing party shall be entitled to recover such sums as the
court may fix as costs and reasonable attorney's fees, in addition to any other
relief to which it may be entitled.
12. NOTICES
Any notice required to be provided to any party to this Agreement shall
be in writing and shall be considered effective three (3) days after the date of
deposit with the United States Postal Service by certified or registered mail,
first class postage prepaid, return receipt requested, or by facsimile
transmission (receipt confirmed) and addressed to the party as follows:
FACILITY:
-------------------------------------
-------------------------------------
-------------------------------------
Attention:
--------------------------
and to: Xxxxxxx Enterprises, Inc.
0000 Xxxxxx Xxx., Xxxxx 00-X
Xxxx Xxxxx, XX 00000-0000
Attention: Xxxxx X. Xxxxx, Chairman of the Board
Facsimile: 000-000-0000
with copies to: Xxxxxx X. Xxxxxxxxxxx, Esq.
Executive Vice President, Secretary and General
Counsel
Xxxxxxx Enterprises, Inc.
0000 Xxxxxx Xxxxxx, Xxxxx 00-X
Xxxx Xxxxx, XX 00000-0000
Facsimile: 501452-3760
8
50
and
H. Xxxx Xxxxxxx, III, Esq.
Xxxxxx, Xxxxxxx, Xxxxxx & Xxxxxx, PLC
000 Xxxxxx Xxxxxx - Xxxxx 0000
Xxxxxx Xxxx, XX 00000
Facsimile: 000-000-0000
PROVIDER: PharMerica Corporation
0000 Xxxxx Xxxx Xxxxx
Xxxxx, XX 00000
Attention:___________________________
Facsimile: 000-000-0000
with copies to:
-------------------------------------
-------------------------------------
-------------------------------------
or to such other or additional addresses as may be provided by either party from
time to time in the manner described above.
13. GOVERNING LAW
This Agreement shall be governed and construed in accordance with the
laws of the State of Delaware.
14. BINDING ON SUCCESSORS
This Agreement shall be binding on and shall inure to the benefit of
any and all successors, trustees, assignees, agents, heirs, executors,
administrators, personal representatives and any other successor in interest of
the parties to this Agreement
15. INTEGRATION
This Agreement supersedes all previous agreements, oral or written,
between the parties and embodies the complete Agreement between the parties.
This Agreement may only be amended or modified by written agreement signed by
both parties.
9
51
IN WITNESS WHEREOF, the parties by their duly authorized
representatives have entered into this Agreement as of the date first above
written.
FACILITY: *
---------------------------------
d/b/a **
--------------------------
By:
------------------------------
Title:
----------------------------
PROVIDER: PHARMERICA CORPORATION
By:
------------------------------
Title:
---------------------------
-----------------------
* Fill in name of correct Corporate Subsidiary.
**Fill in name of Facility.
10
52
EXHIBIT A
SCHEDULE OF RATES
11
53
Exhibit to PPA
PHARMACEUTICAL SERVICES AGREEMENT
THIS PHARMACEUTICAL SERVICES AGREEMENT (the "Agreement"), in accordance
with the terms of that certain Preferred Provider Agreement for Pharmaceutical
and Related Services between Xxxxxxx Enterprises, Inc. and PharMerica
Corporation (the "PPA") is made effective this ____ day of ________________
199___ by and between *_______________________________ d/b/a
**________________________________, located at _________________________________
(the "FACILITY"), and PharMerica Corporation, a Delaware corporation which
operates a licensed pharmacy in this state, located at ________________________
(the "PHARMACY"). In consideration of the mutual promises set forth below in the
body of this Agreement, the parties agree as follows:
1. TERM
The term of this Agreement shall commence on ___________, 1997, and
shall continue in full force and effect for a period of five (5) years
thereafter. This Agreement shall be renewed at the end of the initial term by
written agreement of both parties in accordance with the terms of the PPA. This
Agreement, may, however, be terminated immediately for cause upon the occurrence
of one of the following events: (a) dissolution and/or bankruptcy of either
xxxxx; (b) the making of a general assignment for the benefit of creditors by
either party, (c) after written notice by Facility of a default by PHARMACY and
a reasonable time, not to exceed sixty (60) days for PHARMACY to cure such
default, the failure of PHARMACY to provide the services agreed to in this
Agreement in a manner not reasonably satisfactory to FACILITY or that causes
FACILITY to be out of compliance with federal, state or local licensure and/or
certification requirements; or (d) PHARMACY's becoming insolvent or having a
receiver appointed because of insolvency.
2. PHARMACEUTICAL SERVICES
PHARMACY shall provide pharmaceutical services under the terms and
conditions of this Agreement and in accordance with any applicable requirements
of federal, state or local laws, rules and/or regulations, including provisions
of the Omnibus Budget Reconciliation Acts (OBRA) of 1987 and 1990. PHARMACY
shall have the right to serve as FACILITY's exclusive PHARMACY subject to the
rights of patients, patients' insurers or payors, and patients' physicians to
choose another PHARMACY.
PHARMACY agrees to:
a. Supply and replenish emergency drug kits in conformance
with the policies and procedures of FACILITY.
-------------------------
* Fill in name of correct Corporate Subsidiary.
**Fill in name of Facility.
54
b. Label all medications in accordance with Federal, State and
Local laws, regulations and rules.
c. Provide routine pharmaceutical services to FACILITY six (6)
days per week.
d. Provide emergency services to FACILITY twenty-four (24)
hours per day, seven (7) days per week.
e. Provide to FACILITY a copy of all billed charges from
PHARMACY to payors other than the FACILITY for all residents of FACILITY.
f. Provide medication carts for a mobile medication system.
(See Paragraph 9.) The carts shall remain the property of PHARMACY.
FACILITY agrees to:
a. Provide proper billing information such as admission data,
source of payment status changes, and Medicaid information on a prompt and
timely basis.
b. Designate the employee(s) responsible for implementing the
services contemplated in this Agreement who shall act as coordinator(s) with
PHARMACY.
3. COMPENSATION
PHARMACY and FACILITY shall agree to a Schedule of Rates or a
Methodology for Determining Payment Rates prior to the effective date of this
Agreement. Such Schedule of Rates or Methodology for Determining Payment Rates
shall be attached to and incorporated by reference into this Agreement as
Exhibit A.
PHARMACY will receive payment by one or more of the following methods:
(Both parties must initial the choice(s) selected).
_____ 3.1 PHARMACY will be compensated for services rendered to or on
behalf of FACILITY residents by directly billing the resident,
the resident's responsible party, Medicare, Medicaid, a managed
care organization or any other third party reimbursement source
(collectively referred to as the "Appropriate Payor"). PHARMACY
will not look to FACILITY for payment, in whole or in part, for
service or medications to FACILITY residents. In the event
PHARMACY fails to receive payment in whole or in part, from any
Appropriate Payor for a service or medication provided to or on
behalf of a FACILITY resident, PHARMACY will not look to FACILITY
for payment, in whole or in part, and PHARMACY will have no right
of recovery against FACILITY. Notwithstanding the foregoing, it
is agreed that PHARMACY reserves the right to discontinue the
provision of services for nonpayment by or on behalf of any
patient or third party payer, upon not less than thirty (30)
days' notice, unless FACILITY elects prior to the end of such
thirty (30) day period to have PHARMACY xxxx FACILITY for such
services in the future and
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to reimburse PHARMACY for unpaid prior services billed to such
patient or third party payor.
_____ 3.2 Notwithstanding paragraph 3.1 above, FACILITY may agree to
provide PHARMACY's services to certain FACILITY residents where
such services will be paid for as part of a per diem,
all-inclusive rate or other direct payment to FACILITY by an
Appropriate Payor. Under such circumstances, FACILITY will give
PHARMACY written notice of those residents and services for which
FACILITY has agreed to receive direct payment prior to the
provision of services to FACILITY resident(s). (In the absence of
such written notice from FACILITY to PHARMACY, PHARMACY will look
only to an Appropriate Payor, if any, for payment) PHARMACY will
then submit to FACILITY on a monthly basis an invoice for those
services to FACILITY residents in accordance with the Schedule of
Rates or the Methodology for Determining Payment Rates agreed to
by FACILITY and PHARMACY prior to the effective date of this
Agreement. The Schedule of Rates or Methodology for Determining
Payment Rates is attached as Exhibit A and incorporated by
reference into this Agreement and will remain in effect for the
term of the Agreement. In those instances in which PROVIDER bills
FACILITY for services or products pursuant to this paragraph,
PROVIDER shall xxxx FACILITY on a weekly basis if FACILITY is on
the A5400 dispensing system; if FACILITY is not on such system,
PROVIDER shall xxxx FACILITY on a monthly basis. The invoice will
reflect services rendered from the first day of the applicable
billing period to the last day of the applicable billing period,
will be in the form required by FACILITY and will be submitted to
FACILITY within days of the end of the applicable billing period.
FACILITY agrees to pay PHARMACY within sixty (60) days of receipt
of PHARMACY's invoice. FACILITY shall review each invoice and use
its reasonable efforts to notify PROVIDER of any credit
adjustments determined by FACILITY to be due FACILITY from
PROVIDER on such invoice within four (4) business days after
receipt of PROVIDER's invoice if FACILITY is on a weekly billing
cycle and within fifteen (15) business days if FACILITY is on a
monthly billing cycle. PROVIDER shall accordingly issue a credit
in the amount of any such adjustment on the invoice due in the
next billing cycle after receipt by PROVIDER of notice of such
adjustment by FACILITY. If FACILITY does not notify PROVIDER of
adjustments within such four (4) or fifteen (15) business day
period, PROVIDER shall issue an appropriate credit in the amount
of any such adjustment on the next invoice after receipt of such
notice of adjustment. PROVIDER shall give FACILITY thirty (30)
days' written notice prior to changing FACILITY's applicable
xxxxxxx period under this paragraph.
_____ 3.3 Notwithstanding paragraph 3.1 above, FACILITY may order or
request PHARMACY's services to be provided directly to FACILITY
(and not to or on behalf of a particular resident) where such
services will be paid for directly by FACILITY. Under such
circumstances, FACILITY will give PHARMACY written notice of
those services for which FACILITY will pay PHARMACY directly
prior to the provision of services to FACILITY. PHARMACY will
submit to FACILITY
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56
on a monthly basis an invoice for such services in accordance
with the Schedule of Rates or Methodology for Determining Payment
Rates agreed to by FACILITY and PHARMACY prior to the effective
date of this Agreement and attached as Exhibit A. The Schedule of
Rates or the Methodology for Determining Payment Rates will be
attached to and incorporated by reference into this Agreement. In
those instances in which PROVIDER bills FACILITY for services or
products pursuant to this paragraph, PROVIDER shall xxxx FACILITY
on a weekly basis if FACILITY is on the A5400 dispensing system;
if FACILITY is not on such system, PROVIDER shall xxxx FACILITY
on a monthly basis. The invoice will reflect the services
rendered from the first day of the applicable billing period to
the last day of the applicable billing period, will be in the
form required by FACILITY and will be submitted to FACILITY
within _____ days of the end of the applicable billing period.
FACILITY agrees to pay PHARMACY within sixty (60) days of receipt
of PHARMACY's invoices. FACILITY shall review each invoice and
use its reasonable efforts to notify PROVIDER of any credit
adjustments determined by FACILITY to be due FACILITY from
PROVIDER on such invoice within four (4) business days after
receipt of PROVIDER's invoice if FACILITY is on a weekly billing
cycle and within fifteen (15) business days if FACILITY is on a
monthly billing cycle. PROVIDER shall accordingly issue a credit
in the amount of any such adjustment on the invoice due in the
next billing cycle after receipt by PROVIDER of notice of such
adjustment by FACILITY. If FACILITY does not notify PROVIDER of
adjustments within such applicable four (4) or fifteen (15)
business day period, PROVIDER shall issue an appropriate credit
in the amount of any such adjustment on the next invoice after
receipt of such notice of adjustment. PROVIDER shall give
FACILITY thirty (30) days' written notice prior to changing
FACILITY's applicable billing period under this paragraph.
Except in the circumstances set out in paragraphs 3.2 and 3.3 above
where FACILITY has the obligation to provide PHARMACY with written notice of
services being provided by PHARMACY to FACILITY or to certain FACILITY
residents, PHARMACY will be solely responsible for determining the Appropriate
Payor for each FACILITY resident. FACILITY will make reasonably available any
information it may have regarding any FACILITY resident's Appropriate Payor,
provided that PHARMACY will have no recourse against FACILITY in the event the
information made available by FACILITY to PHARMACY is inaccurate, incomplete or
misleading.
4. CIVIL RIGHTS
PHARMACY shall comply with Titles VI and VII of the Civil Rights Act of
1964, Sections 503 and 504 of the Rehabilitation Act of 1973, and all
requirements imposed by or pursuant to the regulations of the Department of
Health and Human Services issued pursuant to these Acts.
5. RECORDS
Pursuant to Section 1395x(V)(1)(i) of Title 42 of the United States
Code, with respect to any services furnished under this Agreement, the value' or
cost of which is Ten Thousand Dollars
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($10,000) or more over a twelve (12) month period, until the expiration of four
(4) years after the termination of this contract, PHARMACY shall make available
promptly upon written request to the Secretary of the United States Department
of Health and Human Services, the Comptroller General of the United States
General Accounting Office, or any of their duly authorized representatives, a
copy of this Agreement and such books, documents and records as are necessary to
verify the nature and extent of the costs of the services provided under this
Agreement. PHARMACY further agrees to provide promptly to FACILITY any records
as may be required under the Omnibus Budget Reconciliation Acts of 1987 and
1990.
PHARMACY further agrees that in the event PHARMACY carries out any of
its duties under this Agreement through a subcontract with a value or cost of
Ten Thousand Dollars ($10,000) or more over a twelve (12) month period, such
subcontract shall contain a clause to the effect that until the expiration of
four (4) years after the furnishing of such services under such subcontract, the
subcontractor shall make available promptly upon written request to the
Secretary of the United States Department of Health and Human Services, the
Comptroller General of the United States General Accounting Office, or any of
their duly authorized representatives, the subcontract and such books, documents
and records as are necessary to verify the nature and extent of such costs.
PHARMACY agrees to save, indemnify and hold harmless FACILITY of and
from any and all liability, loss, costs and expenses incurred directly or
indirectly because of failure of PHARMACY to comply with the obligations set
forth above in paragraphs. or for any inaccurate or fraudulent claims submitted
to FACILITY by PHARMACY for billing purposes.
6. CHANGE IN LAW OR REGULATION
a. If, during the term of this Agreement, there shall be (i) a
change in the Medicare or Medicaid statute, regulations, or general instructions
(or in the application thereof), or any governmental payor system, including but
not limited to the Veterans Administration ("VA"), or (ii) the adoption of new
legislation or regulations applicable to this Agreement (for purposes of this
Paragraph 6 (an "Affected Agreement", and together with any other similarly
affected agreement for pharmaceutical and/or related services between Xxxxxxx
Enterprises, Inc. and PharMerica Corporation or their respective subsidiaries or
Affiliates, the "Affected Agreements"), or (iii) a change in any other third
party reimbursement system, or (iv) the initiation of enforcement action with
respect to legislation, regulations, or instructions applicable to this
Agreement, any of which changes, legislation, regulations or action affects the
continuing legality of this Agreement or the ability of FACILITY to obtain
reimbursement for the full cost of any pharmacy services and products
(collectively, for purposes of this Paragraph 6, the "Services") at the levels
then in effect, as charged to FACILITY by PROVIDER, FACILITY may, at any time
within one year of the effective date as to FACILITY, of any such changes,
legislation, regulation or action, upon written notice as provided herein,
propose an amendment to this Agreement, modifying the same to the minimum extent
necessary to assure the continuing legality of this Agreement or to eliminate
the future impediment or impairment to reimbursement. For periods beginning
January 1, 1998, in the event that reimbursement is denied for the FACILITY
covered by this Agreement for covered items or Services under the Medicare
program because PROVIDER'S charges exceed the usual, customary and reasonable
charges for such Services or covered items, as evidenced by a Notice of Medicare
Reimbursement ("NPR"), FACILITY shall provide PROVIDER as promptly as
practicable with a
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58
copy of such NPR, and any change to this Agreement effectuated for the purpose
of obtaining reimbursement shall be made applicable only for reimbursement
periods subsequent to the period to which the NPR related, for the remainder of
the term of this Agreement. In the event that PROVIDER is unable or unwilling to
supply the items or Services at price levels sufficient to assure such
reimbursement, then FACILITY may, at its sole option, elect to obtain such items
or Services from other sources or to accept the prices offered by PROVIDER.
b. If, during the term of this Agreement, the system of
reimbursement under which Medicare, Medicaid or any other third party
governmental payor reimburses providers of health care services such as FACILITY
for covered Services (hereinafter, the "Affected Services") shall be changed by
law or regulation, from an existing cost-based reimbursement system to any other
system, including but not limited to a prospective payment system, under which
FACILITY or its Affiliates (as hereinafter defined) is placed at risk for full
reimbursement of the Affected Services covered by this Agreement, then the
parties agree that, at any time within one year of the effective date as to
FACILITY, of any such change, upon written notice of such change as provided
herein, they shall prospectively renegotiate the pricing terms with respect to
the Affected Services under this Agreement to reflect the impact of such
risk-based reimbursement for the remainder of the term of this Agreement or, at
their option, the parties may elect to negotiate a risk-based pricing structure
for this Agreement. In either event, the parties agree that they shall negotiate
in good faith to achieve a fair distribution of any adverse impact of such
change in the reimbursement system as it impacts the Affected Services. In the
event the parties are unable to reach agreement on modified pricing terms with
respect to Affected Services (hereinafter, the "Adjusted Pricing Structure"),
FACILITY on written notice to PROVIDER may elect to take the following
procedures:
(1) FACILITY, acting alone if it has the only
Affected Agreement with Provider for similarly situated Services being provided
by PROVIDER, or in concert with any other Affiliates having Affected Agreements
with PROVIDER for similarly situated Services, may solicit proposals (each a
"Proposed Alternative Bid" and collectively, the "Proposed Alternative Bids")
from any other qualified pharmacy provider for it or them, as applicable, to
provide the Affected Services to it or them, as applicable, which are affected
by such changes in the reimbursement system (such facilities, whether one or
more, being referred to in this Paragraph 6 collectively as the "Affected
Facilities") during the remainder of the term of the Affected Agreement then in
effect. As used herein, "qualified pharmacy provider" means a provider of
institutional pharmacy services which alone or with Affiliates has the
capability of servicing the FACILITY and at least 75% of the other Affected
Facilities then being served by PROVIDER.
(2) Upon receipt of such Proposed Alternative Bids to
provide the Affected Services to the FACILITY and the other Affected Facilities,
if any, if all such Proposed Alternative Bids are equal to or greater than the
Adjusted Pricing Structure last offered by the PROVIDER, FACILITY shall
forthwith notify PROVIDER of that fact, and the Adjusted Pricing Structure last
offered by PROVIDER shall thereupon be in effect for the duration of the term of
this Agreement with respect to the Affected Services, subject to the continuing
application of all the other terms and conditions of this Agreement, including
the provisions of this Paragraph 6. If any of such Proposed Alternative Bids is
less than the Adjusted Pricing Structure last offered by PROVIDER for the
Affected Services, FACILITY shall provide such Proposed Alternative Bids to
PROVIDER within 30 days after receipt of the last of such Bid or Bids. PROVIDER
shall thereupon have the
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opportunity to revise its Adjusted Pricing Structure to provide the Affected
Services in the FACILITY and in all other similarly situated Affected
Facilities, if any, then being served by PROVIDER for the duration of the term
then in effect of this Agreement and such other Affected Agreements, as
applicable, to an amount (the "Average Adjusted Pricing Structure") equal to (i)
the average of the three lowest Proposed Alternative Bids received by FACILITY
with respect to such Affected Services, or (ii) if there are less than three
qualified pharmacy providers at the time which submit Proposed Alternative Bids,
the average of the two Proposed Alternative Bids received by FACILITY with
respect to the Affected Services, or (iii) if there are less than two qualified
pharmacy providers at the time which submit Proposed Alternative Bids, the
Proposed Alternative Bid received by FACILITY with respect to the Affected
Services.
(3) If PROVIDER elects to meet the Proposed
Alternative Bid or Bids, as applicable, with respect to the Affected Services,
as set forth in subparagraph (2) above, it shall notify FACILITY not less than
30 days after receipt of all the Proposed Alternative Bids by PROVIDER of
PROVIDER's election to continue to provide the Affected Services under the
Average Adjusted Pricing Structure to the Facility for the duration of the term
of this Agreement then in effect, subject to the continuing application of all
the other terms and conditions of this Agreement, including the provisions of
this Paragraph 6.
(4) If PROVIDER does not elect to provide the
Affected Services under the Average Adjusted Pricing Structure as hereinabove
set forth, then FACILITY may, at its sole option, elect to obtain such Affected
Services from any of the qualified pharmacy providers whose Proposed Bid is
equal to or less than the Average Adjusted Pricing Structure or accept the
Adjusted Pricing Structure last offered by PROVIDER for the duration of the term
of this Agreement then in effect.
c. If, during the term of this Agreement, the system of
reimbursement under which Medicare, Medicaid or any other governmental
third-party payor reimburses providers of health care services such as the
FACILITY for Affected Services shall be changed, by law or regulation, from an
existing cost-based reimbursement system to any other system, including but not
limited to a Prospective Payment System, under which FACILITY is required to
absorb, as part of an all-inclusive rate or payment, the cost of Affected
Services covered by this Agreement which were previously billed by PROVIDER
directly to Medicare, Medicaid or other governmental third-party payor, then the
parties agree that, at any time within one year of the effective date as to
FACILITY, of any such change, upon written notice of such change as provided
herein, they shall prospectively renegotiate the pricing terms with respect to
the Affected Services under this Agreement to reflect the impact of such
risk-based reimbursement for the remainder of the term of this Agreement, and
this Agreement shall be amended to reflect the new prices for those Affected
Services. In the event the parties are unable to reach agreement on modified
pricing terms with respect to Affected Services, FACILITY on written notice to
PROVIDER may elect !o follow the procedures set forth in subparagraphs 6 b (1)
through (4), inclusive, to determine the Adjusted Pricing Structure for the
Affected Services to be in effect with PROVIDER or other qualifying pharmacy
providers for the duration of the term of this Agreement then in effect.
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d. FACILITY shall have sole discretion as to any election to
appeal, settle or compromise the amounts denied, disallowed or recouped by
Medicare, Medicaid or any other third party reimbursement source.
7. QUALIFICATIONS
PHARMACY represents and warrants that PHARMACY has all the necessary
qualifications, certifications, and/or licenses required by federal, state and
local laws and regulations to provide the services under this Agreement PHARMACY
will provide FACILITY with a copy of its current license in effect on the
effective date of this Agreement and at each successive renewal.
8. INSURANCE AND INDEMNITY
Subject to the minimum coverage requirements set forth below, PHARMACY
shall procure and maintain at all times throughout the Term of this Agreement
such insurance as will fully protect both PHARMACY from all acts, errors or
omissions while performing the services provided for in this Agreement.
PHARMACY shall submit to FACILITY prior to the effective date of this
Agreement, a certificate of insurance issued by an insurer authorized to conduct
insurance business in this state and reasonably acceptable to FACILITY,
indicating that PHARMACY has complete liability insurance coverage, including
coverage for any acts of professional malpractice. Such insurance shall be in
amounts reasonably satisfactory to FACILITY or in amounts required by the laws
of this state, whichever is greater, but shall not be less than $1,000,000 per
injury or incident to persons and $3,000,000 aggregate per year and $100,000
each occurrence property damage coverage. Coverage in amounts less than stated
amounts must be approved in writing in advance by FACILITY's Corporate Risk
Management Department. Said certificate shall provide that the insurer will not
cancel said policy of insurance without giving FACILITY thirty (30) days advance
written notice. Further, PHARMACY shall provide to FACILITY thirty (30) days
advance written notice (or as soon as practicable) as to any material
restriction, limitation, modification or revision to coverage contemplated
herein.
PHARMACY shall save, indemnify and hold FACILITY harmless of and from
any and all liability, loss, costs and expenses incurred directly or indirectly
from any acts, errors or omissions by PHARMACY, its agents, employees or
invitees from any cause arising from or relating to PHARMACY's performance under
this Agreement.
Within the limits of its applicable insurance coverage, and to the
extent not otherwise inconsistent with state law, FACILITY shall save, indemnify
and hold PHARMACY harmless of and from any and all liability, loss, costs and
expenses incurred directly or indirectly from any acts, errors or omissions by
FACILITY, its agents, employees or invitees from any cause arising from or
relating to FACILITY's performance under this Agreement.
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9. EQUIPMENT AND SUPPLIES
When PHARMACY uses equipment and/or supplies provided by FACILITY,
PHARMACY shall use such equipment and supplies properly and be solely
responsible for injuries or damages resulting from any misuse. In addition,
PHARMACY shall notify FACILITY in writing whenever equipment or supplies
provided by FACILITY and used by PHARMACY for providing services need repair or
replacement.
PHARMACY and FACILITY agree that when PHARMACY provides mobile
medication cart(s) as part of PHARMACY's drug distribution system, both parties
agree the ownership remains with the PHARMACY. Necessary replacement as a result
of normal wear and use shall be the responsibility of PHARMACY. SHOULD the carts
require replacement as a result of misuse by FACILITY personnel, FACILITY agrees
to cover the reasonable costs of that replacement FACILITY is responsible for
keeping the carts clean and in normal working order. Two sets of keys will be
furnished by PHARMACY to FACILITY upon original delivery of each cart. Lost or
duplicate keys are the responsibility of FACILITY. The cart(s) are identified as
follows:
QUANTITY MODEL NUMBER SERIAL NUMBER
-------- ------------ -------------
10. INDEPENDENT CONTRACTOR
This Agreement does not constitute a hiring of PHARMACY as an employee
of FACILITY. It is the parties' intention that PHARMACY shall be an independent
contractor and not FACILITY's employee. PHARMACY shall retain discretion and
judgment regarding the manner and means of providing services to FACILITY
subject to all applicable laws, regulations and FACILITY's policies. FACILITY
assumes professional and administrative responsibility for the services rendered
only to the extent that FACILITY will assure itself that (1) PHARMACY and each
of its employees, agents or servants providing services under this Agreement is
qualified by education and experience to render the services contracted for; and
(2) PHARMACY is satisfying the obligations set forth herein in a timely manner.
This Agreement shall not be construed as a partnership and FACILITY shall not be
liable for any obligations incurred by PHARMACY.
11. CONFIDENTIALITY
PHARMACY agrees to respect and abide by all federal, state and local
laws pertaining to confidentiality and disclosure with regard to all information
and records obtained or reviewed in the course of providing services to FACILITY
and/or its residents. In the course of the relationship established between
PHARMACY and FACILITY, certain confidential information about each party and/or
its parent organization may be disclosed to the other party. Such information
includes, without limitation, FACILITY resident names, medical records, business
information and similar information of any kind whatsoever (collectively
referred to as "Confidential Information"). PHARMACY and FACILITY shall hold
Confidential Information in the strictest confidence as fiduciaries and shall
not, voluntarily or involuntarily, sell, transfer, publish, disclose or
otherwise make available to
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others, any portion of the Confidential Information or related materials without
the express written consent of the other party except as provided for under
paragraph 5 herein and except as required for the performance of their duties
under this Agreement. PHARMACY and FACILITY shall use their best efforts to
protect the Confidential Information consistent with the manner in which they
protect their most confidential business and client information.
12. ATTORNEY'S FEES
If suit is brought to enforce any of the terms or conditions of this
Agreement, the prevailing party shall be entitled to recover such sums as the
court may fix as costs and reasonable attorney's fees, in addition to any other
relief to which it may be entitled.
13. NOTICES
Any notice required to be provided to any party to this Agreement shall
be in writing and shall be considered effective three (3) days after the date of
deposit with the United States Postal Service by certified or registered mail,
first class postage prepaid, return receipt requested, or by facsimile
transmission (receipt confirmed) and addressed to the xxxxx as follows:
FACILITY:
---------------------------------
---------------------------------
---------------------------------
Attention:
-----------------------
and to: Xxxxxxx Enterprises, Inc.
0000 Xxxxxx Xxx., Xxxxx 00-X
Xxxx Xxxxx, XX 00000-0000
Attention: Xxxxx X. Xxxxx, Chairman of the Board
Facsimile: 000-000-0000
with copies to: Xxxxxx X. Xxxxxxxxxxx, Esq.
Executive Vice President, Secretary and General Counsel
Xxxxxxx Enterprises, Inc.
0000 Xxxxxx Xxxxxx, Xxxxx 00-X
Xxxx Xxxxx, XX 00000-0000
Facsimile: 501452-3760
and
H. Xxxx Xxxxxxx, III, Esq.
Xxxxxx, Xxxxxxx, Xxxxxx & Xxxxxx, PLC
000 Xxxxxx Xxxxxx - Xxxxx 0000
Xxxxxx Xxxx, XX 00000
Facsimile: 000-000-0000
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PROVIDER: PharMerica Corporation
0000 Xxxxx Xxxx Xxxxx
Xxxxx, XX 00000
Attention:_________________________
Facsimile: 000-000-0000
with copies to:
--------------------------------------
--------------------------------------
--------------------------------------
or to such other or additional addresses as may be provided by either xxxxx from
time to time in the manner described above.
14. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware.
15. BINDING ON SUCCESSORS
This Agreement shall be binding on and shall inure to the benefit of
any and all successors, trustees, assignees, agents heirs executors
administrators, personal representatives and other successors in interest of the
parties to this Agreement.
16. INTEGRATION
This Agreement supersedes all previous agreements, oral or written,
between parties and embodies the complete Agreement between the parties. This
Agreement may only be amended or modified by written agreement signed by both
parties.
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IN WITNESS WHEREOF, the parties by their duly authorized
representatives have entered into this Agreement as of the date first above
written.
FACILITY: *
----------------------------------
d/b/a **
---------------------------
By:
--------------------------------
Title:
----------------------------
PROVIDER: PHARMERICA CORPORATION
By:
-------------------------------
Title:
----------------------------
----------------------
* Fill in name of correct Corporate Subsidiary.
**Fill in name of Facility.
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EXHIBIT A
SCHEDULE OF RATES OR METHODOLOGY FOR DETERMINING PAYMENT RATES
13
