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EXHIBIT 10.18
THIRD MEDICAL ASSISTANCE
MEDICAL SERVICES AGREEMENT
BETWEEN
PRUDENTIAL HEALTH CARE PLAN, INC.
AND
XXXXX XXXXXXX MEDICAL SERVICES CORPORATION
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TABLE OF CONTENTS
PAGE
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RECITALS............................................................................1
ARTICLE I - DEFINITIONS.............................................................2
ARTICLE II - MARYLAND MEDICAID MANAGED CARE PROGRAM.................................7
ARTICLE III - PHCP ADMINISTRATIVE SERVICES.........................................11
ARTICLE IV - JHMSC OBLIGATIONS.....................................................14
ARTICLE V - EXCLUSIVITY............................................................21
ARTICLE VI - COMPENSATION..........................................................23
ARTICLE VII - DATA EXCHANGE........................................................27
ARTICLE VIII - TRANSITION PERIOD...................................................29
ARTICLE IX - SUBCONTRACTS..........................................................30
ARTICLE X - TERMS AND TERMINATION..................................................32
ARTICLE XI - DISPUTE RESOLUTION....................................................42
ARTICLE XII - COVERED PERSONS PROTECTIONS..........................................43
ARTICLE XIII - GENERAL PROVISIONS..................................................44
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EXHIBITS
EXHIBIT A EXCLUSIVE AREA
EXHIBIT B EXHIBIT B PROVIDERS
EXHIBIT C JHMSC CITY SITES
EXHIBIT D BENCHMARKS
EXHIBIT E PHCP ADMINISTRATIVE SERVICE RATES
EXHIBIT F PHCP SUBCONTRACTORS
EXHIBIT G FORM OF SUBCONTRACT
EXHIBIT H INDEPENDENT EXPERTS
EXHIBIT I METHODOLOGY FOR MEASURING CHANGES IN THE
COMPOSITE CAPITATION RATE
EXHIBIT J DATA ELEMENTS
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THIRD MEDICAL ASSISTANCE
MEDICAL SERVICES AGREEMENT
BETWEEN
PRUDENTIAL HEALTH CARE PLAN, INC.
AND
XXXXX XXXXXXX MEDICAL SERVICES CORPORATION
THIS AGREEMENT, to be effective as of the 1st day of July, 1996, is made
and entered into by and between PRUDENTIAL HEALTH CARE PLAN, INC. D/B/A
PRUDENTIAL HEALTH CARE PLAN OF THE MID-ATLANTIC, a corporation organized under
the Laws of the State of Texas (hereinafter referred to as "PHCP") and XXXXX
XXXXXXX MEDICAL SERVICES CORPORATION, a corporation organized under the laws of
the State of Maryland (hereinafter referred to as "JHMSC"). The capitalized
terms used in the Recitals below are defined in Article I of this Agreement.
RECITALS
WHEREAS, PHCP operates a Maryland-certified health maintenance
organization;
WHEREAS, PHCP has entered into Contracts with the Department to provide or
arrange for the provision of Covered Services on a prepaid capitated basis to
Eligible Persons and intends to continue to do so;
WHEREAS, as of the Effective Date of this Agreement, approximately
twenty-five percent (25%) of the Maryland Medicaid population is voluntarily
enrolled in six HMOs (including one operated by PHCP) that contract with the
Department under the Maryland Voluntary Medicaid Managed Care Program. Another
fifty percent (50%) of the Maryland Medicaid population is served through the
MAC Program, a primary care case management program whereunder enrollment is
mandatory if the recipient is not enrolled in an HMO. The remaining twenty-five
percent (25%) of the Maryland Medicaid population is not enrolled in managed
care programs;
WHEREAS, in May 1996, Senate Xxxx 750 was enacted in Maryland pursuant to
which the State of Maryland will seek from the Federal government a waiver of
various provisions in the Social Security Act so as to permit the State of
Maryland to
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require most of the Maryland Medicaid population to enroll in an MCO under the
Maryland Mandatory Medicaid Managed Care Program to be implemented pursuant to
the waiver and Senate Xxxx 750. Under the Maryland Mandatory Medicaid Managed
Care Program, entities that wish to qualify as MCOs (including HMOs that
currently contract with the Department) must apply to and be approved by the
Department. PHCP intends to qualify as an MCO and JHHC, an Affiliate, or a
related entity of either of JHHC's joint venturers intends to qualify as an MCO.
The Maryland Mandatory Medicaid Managed Care Program is scheduled to begin
implementation as of January 1, 1997; and
WHEREAS, PHCP and JHMSC wish to enter into this Agreement to set forth
the terms under which JHMSC shall provide or arrange for the provision of
Covered Services and assume certain other responsibilities as set forth in this
Agreement for the Contract Year commencing July 1, 1996 and subsequent Contract
Years under PHCP's Contract(s) with the Department.
NOW, THEREFORE, it is mutually agreed as follows:
ARTICLE I - DEFINITIONS
A. "Affiliate" means any person or entity which controls, is
controlled by, or is controlled in common with a party and, for such purposes,
the term "control" shall mean (a) an employer-employee relationship; (b) the
possession of, or right to exercise, fifty percent (50%) of the voting or
partnership rights in an entity or, if less, that percentage necessary to cause
the entity to take, or to prevent the entity from taking, an action; (c) the
right to elect, or approve the election of, fifty percent (50%) of the governing
body of an entity or, if less, that proportion of the governing body necessary
to veto or prevent an action of the entity; or (d) ownership of fifty percent
(50%) or more of the assets, or the right to receive fifty percent (50%) or more
of such assets upon dissolution, of an entity.
B. "Benchmarks" means those requirements set forth in Exhibit D which
must be met as a condition of the performance of JHMSC Service(s) being
transferred from PHCP to JHMSC.
C. "Business Agreement" means that certain Agreement between JHMSC
and PHCP dated February 4, 1995 and executed contemporaneously with a Settlement
Agreement between JHMSC and PHCP.
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D. "Composite Capitation Rate" and "Adjusted Composite Capitation
Rate" means the per Member per month rate(s) calculated in accordance with the
methodology set forth in Exhibit I.
E. "Contract" means the then current agreement between PHCP and the
Department whereunder PHCP assumes risk for the provision or arrangement of
Covered Services to Members.
F. "Contract Year" means the period July 1, 1996 through June 30,
1997 and each successive twelve month period thereafter, or portion thereof,
during the term of this Agreement.
G. "Covered Services" means the health care services to which Members
are entitled under the terms of the Contract, excluding Program Carve-Outs and
subject to determinations of medical necessity when permitted under the
Contract.
H. "Department" means the Department of Health and Mental Hygiene of
the State of Maryland.
I. "Eligible Person" means any person eligible to receive services
and benefits through an HMO or MCO under the Maryland Medicaid Managed Care
Program as it may be amended from time to time.
J. "Exclusive Area" means the geographic area described in Exhibit A
of this Agreement.
K. "Exclusive Eligibles" means Eligible Persons living inside the
Exclusive Area.
L. "Exhibit B Provider(s)" means those health care provider(s) listed
in Exhibit B to this Agreement.
M. "EQRO" means the external quality review organization appointed by
the Department to conduct reviews of HMOs and/or MCOs.
N. "Gross Capitation Rates" means the actual capitation rates per
Member per month paid by the Department to PHCP under the Contract to assume
full risk for the provision of Covered Services to Members, which rates may vary
based upon Member demographics and other factors.
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O. "Xxxxxxx MCO" means an MCO operated by JHHC or an Affiliate or a
related entity of either of JHHC's joint venturers under the Maryland Mandatory
Medicaid Managed Care Program.
P. "JHHC" means Xxxxx Xxxxxxx HealthCare, LLC, a joint venture of The
Xxxxx Xxxxxxx Health System Corporation and The Xxxxx Xxxxxxx University.
Q. "JHMSC City Sites" means those six medical facilities in the
Exclusive Area operated by JHMSC and listed in Exhibit C of this Agreement,
subject to Article IV, Section B.1.
R. "JHMSC Medicaid Sale" means the payment of cash or other valuable
consideration to JHMSC or a JHMSC Affiliate by a party other than a JHMSC
Affiliate in return for the transfer, directly or indirectly, of Members to any
other entity including, but not limited to, an HMO or MCO (other than the
Xxxxxxx MCO or JHMSC Affiliate). "Payment of cash or other valuable
consideration" shall not include fair market value compensation to JHMSC or a
JHMSC Affiliate from any other such entity including, but not limited to, an HMO
or MCO, for providing or arranging Covered Services to Members or the
performance of related administrative services.
S. "JHMSC Obligations" means JHMSC's provision or arranging for the
provision of Covered Services to Members, JHMSC's performance of JHMSC Services,
and JHMSC's performance of its other obligations under this Agreement, all of
the foregoing subject to the terms and conditions of this Agreement.
T. "JHMSC Primary Care Provider" means a Primary Care Provider who is
(1) an employee of JHMSC or an Affiliate or Subcontractor (including MAC
Providers and providers rendering medical services in school-based health
clinics) who renders medical services at a JHMSC City Site or in an office
located in the Exclusive Area; or (2) an Exhibit B Provider (and employees
thereof).
U. "JHMSC Services" means those services to be provided by JHMSC as
set forth in Article IV, Section B.
V. "MAC Program" means the Maryland Access to Care Program.
W. "MAC Provider" means a health care provider that participates in
the MAC Program or a health care provider that participated in the MAC Program
and
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became a participating Primary Care Provider in one or more MCOs under the
Maryland Mandatory Medicaid Managed Care Program.
X. "Maryland Mandatory Medicaid Managed Care Program" means the
program adopted by the State of Maryland under Senate Xxxx 750 to implement the
Maryland Medicaid Section 1115 Health Care Reform Demonstration Proposal.
Y. "Maryland Medicaid Managed Care Program" means the Maryland
Voluntary Medicaid Managed Care Program and/or the Maryland Mandatory Medicaid
Managed Care Program.
Z. "Maryland Voluntary Medicaid Managed Care Program" means the
current program whereunder the Department contracts with HMOs to provide or
arrange Covered Services to Eligible Persons on a prepaid capitated basis.
AA. "Member" means any Eligible Person that enrolls in PHCP's HMO or
MCO under the Maryland Medicaid Managed Care Program, and who has selected or
been assigned to JHMSC or a JHMSC Primary Care Provider.
BB. "MCO" means a managed care organization, as defined in Maryland
Senate Xxxx 750.
CC. "NCQA" means the National Committee for Quality Assurance or such
other organizations from whom PHCP is seeking accreditation.
DD. "Primary Care Provider" means a physician or other health
professional that is eligible under the Maryland Medicaid Managed Care Program
to serve as the coordinator of Covered Services for Eligible Persons, including
providers rendering primary care services in school-based clinics subject to the
Maryland Medicaid Managed Care Program.
EE. "Program Carve-Outs" means specific populations and/or services
that are excluded from the general Maryland Medicaid Managed Care Program, and
addressed through a separate Department program, which may be a managed care
program or fee-for-service program. Program Carve-Outs shall not include
specific mental health and/or substance abuse populations or mental health
and/or substance abuse services so long as PHCP assumes full responsibility for
providing and/or arranging for the provision of such services to the applicable
population. In the event PHCP does not assume such responsibility for specified
services and/or
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populations (as applicable to mental health and/or substance abuse), such
services and/or populations shall constitute "Program Carve-Outs."
FF. "PHCP MCO" means an MCO operated by PHCP under the Maryland
Mandatory Medicaid Managed Care Program.
GG. "PHCP Medical Director" means a duly licensed physician or his/her
designee who has been designated by PHCP to coordinate and supervise the
provision of Covered Services to Members.
HH. "PHCP Medicaid Sale" means (1) the transfer, whether by sale,
assignment, exchange or otherwise, to any person or entity that is not an
Affiliate of PHCP or Prudential of all or a material portion of the PHCP
services to be performed hereunder and/or PHCP's rights under this Agreement
subject to the balance of this Article I, Section HH; (2) the granting or
delegation to any person or entity other than an Affiliate of PHCP or Prudential
of the right to exercise (by veto or affirmative action or otherwise) all or a
material portion of the monitoring, supervising and approval rights over JHMSC
Obligations; (3) the transfer, whether by sale, assignment, exchange or
otherwise, of all or a material portion of the Contract to any person or entity
other than an Affiliate of PHCP or Prudential; (4) any transaction pursuant to
which PHCP is no longer an Affiliate of Prudential; or (5) any transaction which
effectuates a de facto sale or transfer of all or a material portion of the
Contract to an entity other than an Affiliate of PHCP or Prudential, except as
expressly permitted herein, and provided further that PHCP may delegate one or
more of its administrative services or obligations under this Agreement or the
Contract (a) to a PHCP Affiliate so long as PHCP assumes ultimate responsibility
hereunder and/or (b) to one or more parties that are not Affiliates so long as
PHCP or an Affiliate maintains the Contract with the Department.
II. "Prudential" shall mean The Prudential Insurance Company of
America, an Affiliate of PHCP.
JJ. "QI Program" means the PHCP quality improvement program designed
to objectively and systematically monitor and evaluate the quality and
appropriateness of health care, pursue opportunities to improve health care, and
resolve identified problems. The QI Program, at a minimum, shall satisfy the
quality assurance requirements of the Maryland Medicaid Managed Care Program.
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KK. "Second MAMSA" means that certain Medical Assistance Medical
Services Agreement dated July 31, 1992 between JHMSC and PHCP.
LL. "Second Settlement Agreement" means that certain Second Settlement
Agreement and Release dated even date herewith by and between PHCP, Prudential,
The Xxxxx Xxxxxxx Health System Corporation and JHMSC.
MM. "Service Area" means Baltimore County, Baltimore City, Xxxxxxx
County, Xxxxxxxxx County, Xxxxxx Xxxxxx'x Xxxxxx, Xxxx Xxxxxxx Xxxxxx,
Xxxxxxxxxx Xxxxxx and Xxxxxx County.
NN. "Subcontractor" means a health care provider that has entered into
a contract with JHMSC for the provision of Covered Services to Members.
OO. "UM Program" means PHCP's utilization management program, which is
part of the QI Program, and involves a comprehensive effort to monitor and
manage the effective, efficient and timely use of health care services. The UM
Program, at a minimum, shall satisfy the utilization management requirements of
the Maryland Medicaid Managed Care Program.
ARTICLE II - MARYLAND MEDICAID MANAGED CARE PROGRAM
A. INTERPRETATION AND ENFORCEMENT OF STANDARDS, POLICIES, AND
PROCEDURES. Notwithstanding anything in this Agreement to the contrary, with
respect to all Benchmarks, standards, and PHCP and Prudential relevant policies,
procedures and guidelines of general application ("PHCP Policies and
Procedures") which JHMSC has agreed to comply with, follow and implement under
this Agreement (including, but not limited to, those set forth in this Article
II and in Article IV), the following numbered principles under this Article II,
Section A shall govern and control the interpretation, application and
enforcement of those Benchmarks, standards, and PHCP Policies and Procedures
("Compliance Activities"):
1. It is the express intention and desire of the parties that
JHMSC begin to perform all of the JHMSC Services not later
than January 1, 1997, or, in the event that, despite both
parties' best efforts, such deadline is missed for any of
the JHMSC Services, then as soon after January 1, 1997 as
reasonably possible. Further, it is the express intention
and desire of the parties that JHMSC continue the
performance of JHMSC Services on an uninterrupted basis
throughout the term of this Agreement. Should such
performance be interrupted notwithstanding the parties'
best efforts to maintain uninterrupted performance, then
the parties desire and intend that JHMSC's performance of
JHMSC Ser-
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vices be resumed as soon as reasonably possible. The
parties will use their best efforts throughout the term of
this Agreement to ensure that the foregoing set forth in
this Article II, Section A.1. occurs.
2. JHMSC acknowledges that PHCP has implemented its own
policies and procedures, and will implement new policies
and procedures, to improve both the administration and
delivery of health care services beyond the standards
required by the Department. In addition, JHMSC acknowledges
that, because PHCP assumes ultimate responsibility for
performance of duties and obligations under the Contract,
PHCP must implement procedures to ensure that statutory and
Department requirements are met.
3. The parties acknowledge that interpretation may be required
with respect to the Compliance Activities, and agree to:
(a) exercise discretion permitted hereunder as regards
Compliance Activities in a reasonable manner, acting
in good faith;
(b) coordinate with the other party as reasonably
necessary to enable the other party to meet its
obligations under this Agreement or the Contract, as
the case may be;
(c) reasonably take into account the structure and
characteristics of JHMSC as a mature delivery system
serving large numbers of persons under capitation
and risk arrangements, and as an organization that
assumes related medical management and other
responsibilities;
(d) reasonably take into account the structure and
character of PHCP and Prudential as a national,
multi-line insurer, managed care organization and
administrator
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of employee benefits programs which must address
policy issues, operational standards and data
requirements on a national basis to reflect their
lines of business and corporate goals; and
(e) exchange data and information as reasonably
requested by one party to the other party as
reasonably necessary for the requesting party to
meet its obligations under this Agreement and/or the
Contract, subject to appropriate protection against
disclosure of proprietary information to third
parties or use of information other than as
contemplated under this Agreement, subject to
Article XIII, Section P.
B. JHMSC RESPONSIBILITIES. Subject to the terms of this Agreement,
JHMSC shall perform the JHMSC Obligations. In providing or arranging for Covered
Services, JHMSC shall have the option to utilize capitated single service
networks under contract to PHCP and pay, through PHCP, the applicable rates set
forth in those contracts without any xxxx-up or administrative load or fee being
paid to PHCP, consistent with the procedures set forth in Article VIII, Section
B. PHCP shall use its best efforts to ensure that future PHCP capitated vendor
contracts do not preclude JHMSC utilizing capitated single service networks
under contract to PHCP. In any event, use of capitated single service network
vendors by JHMSC is limited to those vendors serving Eligible Persons enrolled
in PHCP. JHMSC shall be compensated for performing the JHMSC Obligations in
accordance with Article VI. JHMSC shall accept such compensation as payment in
full.
C. APPLICATION OF STANDARDS, POLICIES AND PROCEDURES.
1. JHMSC and its Subcontractors shall comply with the
standards established by the Department for providers under
the Maryland Medicaid Managed Care Program including, but
not limited to, access standards, quality assurance
standards, utilization management standards, and
credentialing standards as reasonably interpreted by PHCP.
Such standards shall be interpreted and applied to JHMSC in
a manner generally consistent with the interpretation and
application of these standards to other PHCP providers
participating in the Maryland Medicaid Managed Care
Program.
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2. JHMSC and its Subcontractors shall also comply with PHCP
Policies and Procedures including, but not limited to, PHCP
Policies and Procedures pertaining to access, quality
assurance, utilization management, claims adjudication and
payment and credentialing. PHCP Policies and Procedures
shall be interpreted and applied to JHMSC in a manner
generally consistent with the interpretation and
application of PHCP Policies and Procedures to other PHCP
providers.
3. PHCP shall use its best efforts to apply the standards
applicable to the Maryland Medicaid Managed Care Program
and PHCP's Policies and Procedures in a generally
consistent manner. In the event of a conflict between
different standards and/or different policies and
procedures, the standards and/or policies and procedures
that create a higher standard or more stringent
requirements than the other shall govern, unless PHCP
otherwise elects.
4. References in this Agreement to application of standards,
and/or PHCP Policies and Procedures in a "consistent"
manner shall mean application in a consistent manner and no
less stringent than generally applied.
D. MARYLAND MANDATORY MEDICAID MANAGED CARE PROGRAM SUBMISSIONS. PHCP
shall provide to JHMSC copies of all submissions with respect to PHCP's MCO
application and Contract application under the Maryland Mandatory Managed Care
Program (and any amendments thereto and/or filings made subsequent to the
initial filings) which submissions relate to quality improvement, utilization
management or provider service requirements as well as the service standards set
forth in Article IV. PHCP shall use its best efforts to provide such copies to
JHMSC with sufficient advance notice so as to permit JHMSC a meaningful
opportunity to review those submissions and provide comments to PHCP, which PHCP
shall consider in good faith in finalizing such submissions. Such documents may
only be used by JHMSC for purposes of implementing the terms of this Agreement.
E. IMPLEMENTATION. In no event shall any standard and/or policies and
procedures applicable to JHMSC be binding upon JHMSC until copies have first
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been provided to JHMSC. PHCP shall use its best efforts to provide copies of any
such standards and/or policies and procedures to JHMSC at least thirty (30) days
in advance of their implementation date or as soon as reasonably possible if
thirty (30) days notice is not reasonably possible, and JHMSC shall comply with
such requirements promptly, unless a specific time period is required by law or
under the Contract, in which case JHMSC shall comply with the specified time
frames.
ARTICLE III - PHCP ADMINISTRATIVE SERVICES
A. PHCP ADMINISTRATIVE SERVICES. PHCP shall use its best efforts to
maintain Contract(s) with the Department under the Maryland Voluntary Medicaid
Managed Care Program and/or under the Maryland Mandatory Medicaid Managed Care
Program, as applicable. Subject to Article IV, PHCP shall retain full
administrative responsibility for the Contract(s) including, but not limited to,
the following functions:
1. Contract(s) with the State of Maryland. PHCP shall be
responsible to apply for, obtain and maintain the
Contract(s) and meet all requirements under the
Contract(s). PHCP shall provide to JHMSC a copy of each
Contract within five (5) business days following execution
of the Contract. Under the Contract(s), PHCP shall accept
payment for the highest option for risk assumption for
Covered Services as currently contemplated regarding
Covered Services.
2. Oversight of JHMSC Obligations. Consistent with Article IV,
Section A, PHCP shall monitor the performance of JHMSC
Obligations and shall have final authority over the
implementation of PHCP's Policies and Procedures by JHMSC
as well as JHMSC's implementation of Department standards.
3. Member Services. PHCP shall have responsibility for
establishing, maintaining and coordinating member services
under the Maryland Medicaid Managed Care Program and PHCP's
Policies and Procedures, including, but not limited to,
complaint and grievance processes. Such processes shall be
generally consistent with the processes maintained by PHCP
for other Eligible Persons enrolled in PHCP. JHMSC shall be
notified in writing of any complaint by a Member and
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JHMSC's input regarding resolution of the complaint shall
be considered in good faith. Notification to JHMSC shall be
made as soon as possible if the Member complaint involves a
pending emergency or urgent care issue or a serious risk
management or quality of care issue. JHMSC shall receive
monthly summaries of all Member complaints in PHCP's
standard format. In the event JHMSC receives a Member
complaint of a serious nature directly, JHMSC shall provide
notice of the Member complaint to PHCP within two (2)
business days of receipt by JHMSC, and within ten (10)
business days with respect to all other complaints.
4. Enrollment and Disenrollment. Under the Maryland Medicaid
Managed Care Program, eligibility determinations (including
retroactive determinations) are made by the Department.
Under the Maryland Voluntary Medicaid Managed Care Program,
HMOs perform various functions under the enrollment and
disenrollment process. PHCP shall be responsible for all
such functions. Under the Maryland Mandatory Medicaid
Managed Care Program, PHCP shall be responsible for
complying with all Department requirements pertaining to
enrollment and disenrollment that are applicable to MCOs.
5. Marketing. PHCP shall have responsibility for and shall
assume all costs associated with marketing activities
permitted by the Department and initiated by PHCP. With
respect to any permitted marketing efforts directed to
Exclusive Eligibles, PHCP shall use its best efforts to
provide advanced notice of marketing activities and copies
of marketing materials to JHMSC with sufficient advance
notice so as to permit JHMSC a meaningful opportunity to
consider those activities and review those materials. PHCP
will seek JHMSC's input regarding marketing activities and
will consider, in good faith, any reasonable suggestions
made by JHMSC regarding such initiatives and materials. The
foregoing shall not apply to PHCP's general marketing
activities which are not targeted specifically to Exclusive
Eligibles. JHMSC shall not initiate any marketing
activities specifically aimed at enrollment of Exclusive
Eligibles on behalf of or for the benefit of PHCP
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without the prior written consent of PHCP which consent
shall not be unreasonably withheld or delayed. Use of the
"Xxxxxxx" name or "Prudential" name or any derivative
thereof, shall require the express written consent of JHMSC
or PHCP, as applicable, other than inclusion of JHMSC's
name or the names of JHMSC Primary Care Providers in PHCP
provider directories distributed to Eligible Persons.
6. Non-Contracted Benefits.
(a) Under the Maryland Mandatory Medicaid Managed Care
Program, PHCP shall be free to offer non-contracted
benefits that are not Covered Services to all
Eligible Persons (including Members) enrolled with
PHCP and for which no payment is included in the
Gross Capitation Rates paid by the Department to
PHCP. JHMSC may propose to PHCP non-contracted
benefits that it would like offered to Eligible
Persons and PHCP shall consider in good faith any
reasonable proposals made by JHMSC. The final
decision of what non-contracted benefits, if any, to
be offered shall rest with PHCP.
(b) The cost of such non-contracted benefits shall be
determined by PHCP on an actuarially sound per
member per month basis. With respect to Members, the
above-referenced cost of non-contracted benefits
shall be shared fifty percent (50%) by PHCP and
fifty percent (50%) by JHMSC; provided that JHMSC
shall not be required to contribute more than a per
Member per month amount that is equal to five tenths
of one percent (.5%) of the Gross Capitation Rates
received by PHCP for Members.
(c) In the event PHCP requires substantially all of its
participating Primary Care Providers to provide
directly such non-contracted benefits, then JHMSC
Primary Care Providers shall provide such services.
JHMSC shall be paid at the highest rates paid by
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PHCP to any other provider in the Service Area for
the same non-contracted benefits.
(d) PHCP shall use its best efforts to include JHMSC and
JHMSC Affiliates in delivery networks established by
PHCP for arranging or providing non-contracted
benefits not falling within the scope of subsection
(c) above (particularly in cases affecting
continuity of care and member satisfaction), to the
extent consistent with PHCP's business objectives.
(e) Regardless of whether JHMSC provides non-contracted
benefits, JHMSC shall inform Members of the
availability of such non-contracted benefits and
provide Members with information on how to access
such benefits so long as PHCP provides JHMSC with
sufficient information for such Member education.
ARTICLE IV - JHMSC OBLIGATIONS
A. PHCP CONTRACTING FOR JHMSC OBLIGATIONS. Pursuant to this Agreement
PHCP is contracting with JHMSC to perform the JHMSC Obligations. PHCP shall
retain final authority, responsibility and accountability for all such JHMSC
Obligations even though JHMSC shall perform associated services and assume
associated responsibilities as specified in this Article IV and elsewhere in
this Agreement.
B. JHMSC SERVICES. Subject to the terms set forth in this Agreement,
JHMSC shall perform the following services and functions with respect to
Members:
1. Network Development. JHMSC shall develop and maintain a
network of primary care, specialist, institutional,
ancillary service and pharmacy providers to furnish Covered
Services to Members. Such providers shall include
Subcontractors, and the applicable subcontracts shall be
subject to approval pursuant to Article IX. JHMSC shall
maintain the JHMSC City Sites listed on Exhibit C (as it
may be amended pursuant to the balance of this Article IV,
Section B.1. below) in accordance with applicable law and
regulation. JHMSC shall take
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all reasonable steps to ensure that JHMSC Primary Care
Providers and Subcontractors are adequately staffed and
equipped and have adequate clinical hours sufficient to
provide acceptable Member access consistent with PHCP
Policies and Procedures and Department standards. To the
extent reasonably possible, JHMSC shall, subject to
Department requirements, provide PHCP with no less than one
hundred twenty (120) days notice of a change in the
location of a JHMSC City Site, or the opening of a new site
in the Exclusive Area. In the event there is a new site or
a change of location for a site, Exhibit C shall be amended
accordingly.
2. Claims. JHMSC shall provide claims adjudication, claims
processing, and claims payment services (and the related
customer service function) with respect to all claims for
Covered Services rendered to Members. JHMSC shall pay
claims in a timely manner in accordance with all Department
and PHCP requirements and any other applicable requirements
under Maryland law. Notwithstanding the foregoing in this
Article IV, Section B.2., in the event the Department
requires that MCOs be compensated for designated Covered
Services on a fee-for-service basis, and the Department's
requirements under such fee-for-service program would
prohibit an entity other than the MCO itself (such as
JHMSC) from adjudicating, processing, and submitting the
fee-for-service claims to the Department for payment,
and/or paying such claims, or the delegation of such
fee-for-service claims functions would preclude PHCP from
directly performing such functions with respect to Eligible
Persons other than Members, then PHCP shall assume
responsibility for such fee-for-service claims functions.
In such event, PHCP shall charge JHMSC a transaction fee
for such fees-for-service claims services. The transaction
fee shall be the lesser of (a) the lowest fee PHCP charges
any other provider or entity for similar services (if
applicable); or (b) PHCP's actual, reasonable costs.
3. Utilization Management. JHMSC shall assume responsibility
for performance of utilization management functions and
services pursuant to the UM Program. Notwithstanding that
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responsibility for utilization management shall be JHMSC's
responsibility, PHCP shall retain the final authority to
determine whether a service is a Covered Service and
appropriate for payment. In the event of a disagreement
regarding whether a service is a Covered Service as between
JHMSC and PHCP, PHCP may require that such service be
provided and paid; provided that JHMSC may appeal its
financial liability for the cost of such service under the
dispute resolution process set forth in Article XI. A
determination by PHCP that a service is not a Covered
Service shall not prevent JHMSC or a Subcontractor from
providing the service on a case by case basis, and shall
not prevent JHMSC from paying for such service while
appealing its financial liability or otherwise. Subject to
any appeal, the provision of such services by JHMSC shall
be without cost, obligation or liability to PHCP.
4. Quality Management. JHMSC shall assume responsibility for
performance of quality management functions and services
pursuant to the QI Program.
5. Patient Education, Prevention and Outreach. JHMSC shall
provide patient education, prevention and outreach services
in accordance with applicable Department and PHCP
requirements.
6. Credentialing. JHMSC shall perform the credentialing and
recredentialing function with respect to all JHMSC Primary
Care Providers and Subcontractors utilizing standards that,
at a minimum, are consistent with PHCP credentialing
standards and requirements. With respect to providers who
are PHCP participating providers on the effective date of
this Agreement and retain that status subsequent to the
effective date, JHMSC shall be required only to
recredential such providers upon the expiration of their
current appointment/credentialing by PHCP.
C. ADDITIONAL SERVICES. In the event additional services relating to
medical management are required by the Department, by Maryland law or
regulation, or PHCP consistent with Article II, Section C, JHMSC shall be
responsible for
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the provision of or arranging for the provision of such additional services.
JHMSC shall not be entitled to any additional compensation from PHCP for the
provision of those additional services. PHCP shall be responsible for any
administrative services including, but not limited to, services related to
Contract administration and compliance, such as provision of data and reports to
the Department and performing member satisfaction surveys.
D. STANDARDS APPLICABLE TO JHMSC OBLIGATIONS. JHMSC's performance of
JHMSC Obligations shall be subject to satisfaction by JHMSC of PHCP's national
delegation standards, as amended from time to time, a copy of which, including
amendments, shall be provided to JHMSC in advance of being applicable to JHMSC
and subject to a reasonable time period for compliance if compliance is not
reasonably possible immediately upon receipt of such standards. Such standards
shall be applied consistently to all entities performing similar delegated
services and functions. The standards shall include, but are not limited to, the
following:
1. In connection with JHMSC's performance of the quality
management, utilization management and credentialing
services pursuant to Article IV, Section B above, JHMSC's
internal quality management, utilization management and
credentialing plans (the "Plans"), as applicable to the
performance of JHMSC Obligations, shall be consistent with
the QI Program and the UM Program and shall meet all
applicable Department requirements. JHMSC shall provide
copies of JHMSC's Plans to PHCP for approval prior to the
transition of these functions to JHMSC in accordance with
Article IV, Section G below, and shall provide copies
annually as well. JHMSC shall obtain prior written approval
from PHCP of any material modifications to its Plans, as
applicable to the performance of JHMSC Obligations, which
approval shall not be unreasonably withheld or delayed.
JHMSC shall provide PHCP copies of all modifications to the
Plans applicable to the performance of JHMSC Obligations.
Furthermore, JHMSC Obligations shall be performed in
compliance with the procedures and criteria established by
the Department, the NCQA, and EQRO.
2. JHMSC shall seek PHCP's approval in the event it proposes
to waive or make exceptions to any requirements under its
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Plan(s), as applicable to the performance of JHMSC
Obligations. Such approval shall not be unreasonably
withheld or delayed. As part of any such waiver or
exemption request, JHMSC shall provide PHCP with a copy of
all relevant documents related to the matter.
E. MONITORING OF JHMSC OBLIGATIONS. JHMSC agrees that PHCP, NCQA,
EQRO and/or Department staff shall have the right, consistent with the terms set
forth in Article XIII, Section A, to conduct periodic audits and/or assessments
of JHMSC's provision of JHMSC Obligations which shall include, but not be
limited to, reasonable access to all quality improvement, utilization
management, and provider files (including credentialling files), medical
documentation and related committee or subcommittee minutes. JHMSC agrees to
cooperate in good faith in any audit or assessment of its performance of JHMSC
Obligations, including providing information reasonably requested in a timely
fashion.
F. NON-COMPLIANCE WITH DELEGATION STANDARDS.
1. In the event PHCP, in good faith, determines that JHMSC is
not in compliance with the above requirements for JHMSC
Services, PHCP shall provide JHMSC with written notice of
non-compliance, including a detailed written description of
areas of non-compliance sufficient to permit JHMSC to
develop corrective actions. JHMSC shall have thirty (30)
days from receipt of notice to cure the deficiency, or, if
such deficiency is not capable of cure within thirty (30)
days, to commence a corrective action plan within that
thirty (30) day period that is satisfactory to PHCP, in
PHCP's reasonable discretion. The cure period may be
reduced or eliminated in the event that PHCP determines in
the exercise of its reasonable discretion that irreparable
harm to the health and safety of Members would result if
JHMSC were permitted to utilize the entire cure period.
During the thirty (30) day cure period, interim progress
reports shall be made. In the event the deficiency is not
cured within thirty (30) days in PHCP's reasonable
discretion, or the corrective action plan is not acceptable
to PHCP, in its reasonable discretion, then PHCP will have
the right, upon written notice to JHMSC, to assume
responsibility for performance of the applicable JHMSC
Service.
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2. In the event PHCP assumes responsibility for such
service(s), PHCP may not unilaterally adjust the
compensation paid to JHMSC under this Agreement, unless
JHMSC agrees in writing as to a compensation adjustment. In
the event JHMSC objects to PHCP's assumption of any JHMSC
Service(s), JHMSC shall request that the dispute be
submitted to mediation within ten (10) days of PHCP's
assumption of such JHMSC Service(s), subject to Article XI.
In the event JHMSC does not file a request for mediation
within the above ten (10) days or file suit to contest
PHCP's assumption of responsibility of the applicable JHMSC
Service(s) within sixty (60) days following termination of
the mediation process set forth in Article XI, then PHCP
shall receive payment for the applicable JHMSC Service(s)
retroactive to the first day of the month following
assumption by PHCP. JHMSC's decision not to file a
mediation request or a suit within the above time frames
shall be without prejudice and shall not constitute a
waiver of any right to challenge PHCP's conduct at a future
time.
3. Payment to PHCP for any JHMSC Service(s) assumed by PHPC
shall be at the Administrative Service Rates set forth in
Exhibit F, not to exceed fifteen percent (15%) of the Gross
Capitation Rates, subject to the following adjustment. For
purposes of this Article IV, Section F only, the aggregate
per Member per month amount for all JHMSC Services shall be
adjusted beginning with the second Contract Year hereunder
by the increase, if any, in the general non-medical
expenses reflected in the Consumer Price Index, Baltimore
City Average, for the previous twelve (12) month period.
This adjustment shall then be applied pro rata to each
Administrative Service Rate set forth in Exhibit E,
provided that in no event shall the amount PHCP is paid for
assuming responsibility for the JHMSC Services, combined
with the amount PHCP is paid under Article VI, Section A,
exceed fifteen percent (15%) of the Gross Capitation Rates.
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G. TRANSITION OF JHMSC SERVICES. Notwithstanding anything in this
Article IV to the contrary, JHMSC shall not begin to perform any JHMSC Services
until JHMSC has met the Benchmarks described in Article IV, Section H and
Exhibit D. Accordingly, PHCP shall, effective July 1, 1996, retain the
responsibility to perform all the JHMSC Services. Subject to JHMSC meeting the
Benchmarks, the responsibility to perform JHMSC Services shall be transitioned
to JHMSC on or prior to January 1, 1997. Subject to Article IV, Section H below,
each respective JHMSC Service shall be transitioned to JHMSC the first day of
the month following the month in which it is determined that JHMSC has met the
Benchmarks for that particular JHMSC Service.
H. BENCHMARKS FOR TRANSITION. Set forth in Exhibit D are Benchmarks
which must be achieved by JHMSC with respect to each JHMSC Service before the
responsibility for performing each such JHMSC Service will be transitioned to
JHMSC. The determination of whether JHMSC has achieved the respective Benchmarks
shall be made by PHCP in its reasonable discretion and in good faith in
accordance with the following. JHMSC shall notify PHCP when it believes that it
has satisfied the Benchmarks for one or more of the JHMSC Services. PHCP shall
then have fifteen (15) days to review that submission and determine whether
JHMSC has satisfied such Benchmarks and to notify JHMSC in writing of its
determination. JHMSC shall provide along with the above notification all
relevant information as well as access to JHMSC personnel and facilities
reasonably required by PHCP for the purpose of reviewing whether JHMSC has
satisfied the Benchmarks. In the event PHCP reasonably determines in good faith
that JHMSC has not met one or more of the Benchmarks for any given JHMSC
Service, PHCP shall, in its notice to JHMSC, specify the manner in which JHMSC
has not met the Benchmark(s) in sufficient detail such as to permit JHMSC to
develop remedial steps necessary for JHMSC to satisfy the Benchmark(s).
Following implementation of the remedial steps, JHMSC shall, at its discretion,
initiate the above notification process once again. In the event, as of January
1, 1997, there remains one or more JHMSC Service(s) which has not been
transitioned to JHMSC, JHMSC shall have the right to request that the issue of
whether the Benchmark(s) have been satisfied be submitted to mediation in
accordance with the procedures set forth in Article XI; provided, however, such
matter shall not be submitted to mediation until the process outlined above
(i.e., JHMSC notification and submission, PHCP response, and JHMSC resubmission)
has occurred once. The matter may be submitted to mediation, at JHMSC's
discretion, after the passage of fifteen (15) days following resubmission as
JHMSC deems appropriate, and after the mediation, such dispute may be resolved
pursuant to Article XI, Section B.
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I. TRANSITION SUPPORT. In order to facilitate the transition of JHMSC
Services to JHMSC, the parties shall provide to each other information as may
reasonably be requested by the other (including, but not limited to, the
information set forth in Exhibit D) and shall make their employees,
representatives and agents reasonably available to meet with or consult with the
other party's representatives regarding the transition of JHMSC Services.
ARTICLE V - EXCLUSIVITY
A. EXCLUSIVITY WITHIN EXCLUSIVE AREA.
1. Subject to Article V, Section B and Section C, JHMSC City
Sites shall be available as Primary Care Provider sites
under the Maryland Medicaid Managed Care Program
exclusively through PHCP during the term of this Agreement.
2. Except for Exhibit B Providers, MAC Providers employed by
JHMSC or an Affiliate that provide services from office
locations in the Exclusive Area shall be available as
Primary Care Providers under the Maryland Medicaid Managed
Care Program exclusively through PHCP during the term of
this Agreement. In the event that a MAC Provider employed
by JHMSC or an Affiliate renders services from multiple
office locations, the above restriction shall apply only to
office locations in the Exclusive Area.
3. JHMSC shall use its best efforts to subcontract with MAC
Providers not employed by JHMSC or an Affiliate who have
offices in the Exclusive Area, with particular emphasis on
those providers designated by PHCP, to be available as
Primary Care Providers to PHCP to enroll Eligible Persons
under the Maryland Medicaid Managed Care Program. Those MAC
Providers who are not employees of JHMSC or an Affiliate
shall be free to participate in other MCOs as Primary Care
Providers in the Exclusive Area but not the Xxxxxxx MCO
(and otherwise shall be free to participate in any contract
or arrangement to provide services to Medicaid recipients
and others). However, in the event any such MAC Providers
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maintain multiple office locations, such providers may
participate in the Xxxxxxx MCO with respect to office
locations outside of the Exclusive Area.
4. Except as set forth in Article V, Section B and Section C
below, neither PHCP nor its Affiliates shall contract,
directly or indirectly, with any Primary Care Providers
within the Exclusive Area for services to Eligible Persons
other than JHMSC (and indirectly with JHMSC Primary Care
Providers by virtue of JHMSC's contracts and arrangements
with JHMSC Primary Care Providers). However, in the event
any such Primary Care Providers maintain multiple office
locations, PHCP and its Affiliates may contract with such
providers with respect to office locations outside of the
Exclusive Area.
5. JHMSC shall subcontract with the Exhibit B Providers to
serve as JHMSC Primary Care Providers for PHCP, except that
JHMSC shall not be required to subcontract with any such
provider which is precluded by legal or financial status
from providing services to Eligible Persons or any such
provider that does not otherwise generally provide services
to the Medicaid population. Exhibit B Providers shall not
be subject to any exclusivity or non-competition covenants
or restrictions under this Agreement whatsoever (i.e.,
Exhibit B Providers shall be free to participate in the
Xxxxxxx MCO and in other MCOs as Primary Care Providers for
Eligible Persons) and otherwise shall be free to
participate in any contract or arrangement to provide
services to Medicaid recipients and others.
6. All Eligible Persons who enroll in PHCP under the Contract
shall have the option of selecting JHMSC Primary Care
Providers. Neither PHCP nor its Affiliates shall take any
action to influence Eligible Persons not to select JHMSC
Primary Care Providers. In the event PHCP or its Affiliates
has the ability to assign Exclusive Eligibles and/or
Eligible Persons living outside the Exclusive Area that
were previously enrolled at JHMSC City Sites or influence
the assignment of
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such Eligible Persons to Primary Care Providers, PHPC and
its Affiliates shall use its best efforts to maximize
enrollment of such Eligible Persons at JHMSC City Sites,
subject to access requirements.
7. Except as expressly provided in this Agreement, JHMSC and
its Affiliates and PHCP and its Affiliates shall not be
bound by any exclusivity restrictions or non-competition
covenants specifically pertaining to the provision of
services to Medicaid recipients.
B. UNION MEMORIAL EXCEPTION. PHCP shall be permitted to enroll
Exclusive Eligibles (not to exceed 42,000 member months per Contract Year) who
select Primary Care Providers located in the area known as the "Union Memorial
Hospital Campus," as designated in Exhibit A to this Agreement. PHCP shall
submit to JHMSC biannually a report specifying the number of Exclusive Eligibles
who select a Primary Care Provider in the Union Memorial Hospital Campus area.
C. PROGRAM CARVE-OUTS. PHCP and JHMSC and their Affiliates shall be
free to contract directly with the State of Maryland or contract with other
organizations and entities with respect to Program Carve-Outs. For Program
Carve-Outs, PHCP shall have access to providers in the Exclusive Area employed
by entities controlled by The Xxxxx Xxxxxxx Health System Corporation or The
Xxxxx Xxxxxxx University, including, but not limited to, The Xxxxx Xxxxxxx
University School of Medicine and Exhibit B Providers (to the extent such
providers participate in the same carve-out(s) through the Xxxxxxx MCO or
another Xxxxxxx Affiliate), at the same pricing then in place between such
providers and the Xxxxxxx MCO or Xxxxxxx Affiliate for such carve-out(s). As
permitted in Article V, Section A.1. above, PHCP may contract with Primary Care
Providers in the Exclusive Area, other than JHMSC, for participation in its
delivery network solely for such Program Carve-Outs.
ARTICLE VI - COMPENSATION
A. RETENTION BY PHCP. For each Member selecting or assigned to JHMSC
Primary Care Providers, ten percent (10%) of the monthly Gross Capitation Rates
paid by the Department to PHCP shall be retained by PHCP for provision of the
administrative services set forth in Article III, Section A. Payment of this 10%
shall be full compensation for all PHCP Services and other obligations of XXXX
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under this Agreement, except as provided in Article VIII, Section A and Article
IV, Section F.
B. PAYMENTS TO JHMSC. Subject to Article VIII, Section A, for each
Member selecting or assigned to JHMSC Primary Care Providers, ninety percent
(90%) of the monthly Gross Capitation Rates paid by the Department to PHCP shall
be paid by PHCP to JHMSC by the fifteenth (15th) day of each month for the
enrollment for the current month (e.g., capitation payments for Covered Services
provided in January shall be made by January 15). In consideration of such
payments, JHMSC shall perform the JHMSC Obligations, subject to Article VIII,
Section A. This shall include payment for any stop-loss coverage JHMSC may elect
to purchase, any stop-loss coverage MCOs may be required to obtain for Covered
Services as well as stop-loss coverage required under State or Federal law,
including, but not limited to, the Federal Physician Incentive Regulations (if
applicable). JHMSC shall be entitled to receive payment for the actual number of
Member months for which PHCP has been paid by the Department, including, but not
limited to, retroactive payment adjustments. Retroactive payment adjustments
shall be made monthly and shall be included with the monthly capitation payments
made by PHCP to JHMSC.
C. REDUCTION IN COMPOSITE RATES. The defined terms in this Article
VI, Section C shall have the meanings set forth in Exhibit I. In the event the
Comparison Year Composite Capitation Rate for a Contract Year is lower than the
Adjusted Composite Capitation Rate Threshold (without an attendant reduction in
Covered Services or population carve-out such that the effective rate decrease
is less than nine percent (9%), adjusted for inflation, as contemplated in
Exhibit I, or a material increase in Covered Services or the introduction of new
populations as Eligible Persons causes the same effect, as determined on an
actuarially sound basis), JHMSC shall have the option to: (1) continue the
compensation arrangement set forth above in this Article VI, Sections A and B;
or (2) elect to be compensated by PHCP on the basis of (a) a multi-specialty
capitation (for a market basket of Covered Services substantially equivalent to
the services for which JHMSC received a multi-specialty capitation under the
Second MAMSA) and (b) a shared bonus pool which pool will receive an actuarial
allocation for all Covered Services other than multi-specialty capitated
services, with any surplus in the pool at the end of the Contract Year, less an
incurred but not reported ("IBNR") claims adjustment (subject to final
reconciliation and payment within six months after the end of the applicable
Contract Year(s)), divided equally between PHCP and JHMSC. The methodology set
forth in Exhibit I shall be used to determine whether there has been a nine
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percent (9%) reduction in the Composite Capitation Rate, adjusted for inflation,
as described above. In the event JHMSC elects this option, JHMSC shall be paid
under a most favored nations rate methodology. Subject to Article VI, Sections D
and E below, under such methodology, JHMSC shall receive the most favorable
combination of multi-specialty capitation and shared bonus pool allocation then
in effect between PHCP and other multi-specialty groups, subject to any benefit
specific actuarial adjustments necessary to reflect the services provided by
JHMSC under the Second MAMSA, and any actuarial adjustments necessary to reflect
any differences in administrative services provided by the respective groups as
specified by PHCP.
D. ALTERNATIVE TO MOST FAVORED NATIONS METHODOLOGY.
1. In the event JHMSC elects to accept a multi-specialty
capitation pursuant to Article VI, Section C above, the
most favored nations rate methodology will apply so long as
at least two (2) multi-specialty providers in the Service
Area that contract with PHCP to provide or arrange Covered
Services for Eligible Persons enrolled in PHCP have
accepted such capitation and allocation rates and not less
than 2,500 Eligible Persons enrolled in PHCP have selected
each such provider as a Primary Care Provider.
2. In the event the conditions set forth in Article VI,
Section D. 1. above are not met, the multi-specialty
capitation and allocation rates shall be determined based
upon the following procedure. The parties shall retain the
firm of Xxxxxxxx and Xxxxxxxxx or its successor (and share
the cost equally), to establish market capitation and
allocation rates utilizing the methodology set forth below.
JHMSC shall have the right to designate the independent
actuary (i.e., a Fellow of the Society at Actuaries and
qualified member of the American Academy of Actuaries),
within Xxxxxxxx and Xxxxxxxxx to perform and/or supervise
the engagement, and shall inform PHPC of the designation
prior to notifying Xxxxxxxx and Xxxxxxxxx; provided that,
in the event PHCP presents a compelling reason why the
independent actuary designated by JHMSC is not suitable or
appropriate for this engagement, JHMSC shall make another
selection, subject to PHCP's right to object for a
compelling reason.
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3. In establishing market rates, it shall be presumed that the
utilization assumptions used by PHCP in its own actuarial
rate model(s) to establish provider payment and allocation
rates under the Maryland Medicaid Managed Care Program in
the Service Area are reasonable. The independent actuary
shall use such assumptions unless the actuary finds or is
presented with clear and convincing evidence that one or
more utilization assumptions in the PHCP rate model(s) is
not reasonable, in which case the independent actuary may
use such other assumption(s) as he or she deems reasonable.
With respect to pricing of particular services and
categories of services in determining market rates, the
independent actuary shall consider the pricing factors used
in the PHCP actuarial rate model(s), but the independent
actuary may also rely on and use any other managed care
pricing data in the Service Area he or she believes is
appropriate. The independent actuary shall also make any
necessary adjustments to reflect any factors relevant to
JHMSC specifically not included or reasonably reflected in
the PHCP actuarial model(s) (but not including utilization
and pricing factors which shall be addressed as set forth
in this subsection), shall incorporate any state-mandated
medical loss ratio requirements into the determination of
market rates and shall treat any stop-loss expense
(incurred as a result of State or Federal law requirements)
as a medical expense of JHMSC.
4. The actuary's determination of market rates shall be made
on an annual basis for remaining Contract Year(s) in the
initial term or renewal term unless the multi-specialty
groups referenced in the first sentence of this Section
then exist, in which event the most favored rate
methodology in Article VI, Section C above shall apply. The
rates determined by the independent actuary pursuant to
this Section shall be final and binding upon the parties
and not subject to appeal.
E. VERIFICATION OF MOST FAVORED RATES. In the event JHMSC elects to
accept a multi-specialty capitation and shared bonus pool allocation pursuant to
Article VI, Section C above, and the conditions precedent to application of the
most
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favored nations methodology set forth in Article VI, Section D above are met,
Xxxxxxxx and Xxxxxxxxx shall be retained pursuant the process set forth in
Article VI, Section D.2. to advise which is the most favored rate pursuant to
Article VI, Section C.
F. RATE CLASSIFICATION. All multi-specialty capitation and allocation
rates utilized pursuant to Article VI, Sections C, D and E above, shall employ
the demographic rate classifications and other factors used by the Department in
the then current Contract.
G. TIMING OF ELECTION. JHMSC shall make its election under Article
VI, Section C within thirty (30) days after most favored rates or market rates,
as applicable, are determined pursuant to the procedures set forth in Article
VI, Sections C, D, E and F above.
H. PERFORMANCE OF JHMSC SERVICES. In the event JHMSC elects under
Article VI, Section C to be paid most favored rates or market rates, as
applicable, PHCP shall assume responsibility for JHMSC Services to the extent
JHMSC is not otherwise compensated for all or part of those services under the
most favored rates or market rates, as the case may be.
ARTICLE VII - DATA EXCHANGE
A. CLAIMS WITH DATES OF SERVICE ("DOS") PRIOR TO DATE OF TRANSITION
OF CLAIMS PAYMENT FUNCTION TO JHMSC. In connection with all claims for Covered
Services rendered to Members having a DOS prior to the date the claims payment
function is transitioned to JHMSC, PHCP shall provide to JHMSC the data elements
and management reports specified in Section A.6. of the Business Agreement, and
the Exhibits thereto.
B. CLAIMS WITH DOS ON OR AFTER DATE OF TRANSITION OF CLAIMS PAYMENT
FUNCTIONS TO JHMSC. In connection with all claims for Covered Services rendered
to Members having a DOS on or after the date that the claims payment function is
assumed by JHMSC as a JHMSC Service, JHMSC shall provide to PHCP the data and
information as set forth in Exhibit J. The parties acknowledge that JHMSC will
be required to provide PHCP with certain reports, but agree that they will work
together in good faith to identify data elements to be provided by JHMSC in
accordance with Exhibit J, so that, where reasonably feasible, PHCP will produce
its own reports.
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C. ENROLLMENT AND CAPITATION INFORMATION. PHCP shall provide to JHMSC
enrollment data via tape or other mutually acceptable electronic medium not less
frequently than weekly. As soon as PHCP and JHMSC systems reasonably permit,
such data shall be exchanged through electronic data interchange on an
agreed-upon frequency. PHCP shall also make available (on a call-in basis) to
JHMSC its then-standard Maryland Medicaid Managed Care Program enrollment
verification system which it may use to verify enrollment as a supplement to the
foregoing. Further, at the time capitation payments are made to JHMSC pursuant
to Article VI, PHCP shall provide to JHMSC supporting detail for such payments,
on tape or other mutually acceptable electronic medium on a monthly basis, in a
form and format to facilitate reconciliation of capitation payments to
enrollment electronically.
ARTICLE VIII - TRANSITION PERIOD
A. COMPENSATION DURING THE TRANSITION PERIOD. The allocation of the
monthly Gross Capitation Rates between PHCP and JHMSC in accordance with Article
VI, Sections A and B presumes that JHMSC shall perform all the JHMSC
Obligations. With respect to those JHMSC Services which PHCP retains during the
transition period in accordance with Article IV, Section G, JHMSC shall
compensate PHCP at the per Member per month rates set forth on Exhibit E, for
the period of time from July 1, 1996 until each respective JHMSC Service is
transitioned from PHCP to JHMSC; provided that, in no event, shall the total
compensation paid to PHCP for its administrative services under Article VI,
Section A and the amount paid to PHCP under this Article VIII exceed fifteen
percent (15%) of the monthly Gross Capitation Rates paid by the Department to
PHCP each month. Notwithstanding the preceding sentence, JHMSC shall pay to
PHCP, in addition to the Administrative Service Rates set forth in Exhibit E a
fee of $28,800 per month for the twelve (12) month period beginning July 1, 1996
and ending June 30, 1997 for services provided by PHCP to facilitate and
expedite the transition of JHMSC Services from PHCP to JHMSC. The obligation set
forth in the preceding sentence shall survive the termination of this Agreement
for any reason. In accordance with Article VI, Section B, PHCP will pay to JHMSC
ninety percent (90%) of the Gross Capitation Rates not later than the fifteenth
(15th) day of each month. Any compensation to PHCP from JHMSC for administrative
services to be performed by PHCP during the transition period shall be deducted
by PHCP from the monthly capitation payment to JHMSC.
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B. USE OF PHCP SUBCONTRACTORS.
1. During the period from July 1, 1996 up to and including
December 31, 1996, PHCP shall continue to assume
responsibility for the provision of home health and
ambulance services and PHCP shall be paid by JHMSC for the
provision of such services in the amount of eight tenths of
one percent (.8%) of the Gross Capitation Rates. PHCP may
deduct such amount from the payments due JHMSC pursuant to
Article VI. No later than October 1, 1996, JHMSC may elect
for PHCP to continue to assume responsibility for the
provision of home health and ambulance services, and PHCP
shall be paid by JHMSC for the provision of such services
in the amount of eight-tenths of one percent (.8%) of the
Gross Capitation Rates unless the prices paid by PHCP to
its home health and ambulance vendors have increased from
the prices in effect on July 1, 1996. In the event such
prices have increased, the eight-tenths of one percent
(.8%) shall be adjusted by PHCP to reflect the increase.
2. For those Covered Services which, as of July 1, 1996, were
delivered under the Second MAMSA though PHCP subcontractors
under capitation arrangements, JHMSC shall continue to use
such subcontractors during the term of this Agreement
unless JHMSC provides notice to PHCP of its desire to
discontinue using those subcontractors upon ninety (90)
days prior written notice and provided further that PHCP's
subcontractor(s) may be discontinued without violation of
the applicable PHCP subcontract in effect as of July l,
1996. A list of applicable PHCP subcontractors is set forth
in Exhibit F.
3. Notwithstanding Article VIII, Section A above, JHMSC agrees
to continue using CMG as the mental health/substance abuse
subcontractor through at least the expiration or
termination of the current contract between PHCP and CMG,
which shall not be later than March 31, 1997. JHMSC may
utilize PHCP's mental health/substance abuse subcontractor
that will replace CMG if notice is received by PHCP no
later than
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September 1, 1996. PHCP may deduct payments made to CMG
from payments due to JHMSC pursuant to Article VI.
4. JHMSC shall have the right to utilize other PHCP single
service capitated contractors pursuant to Article II,
Section B on behalf of Members, upon no less than ninety
(90) days prior notice that it intends to use such
subcontractors. However, once JHMSC elects to use such
subcontractors, JHMSC may not end such use until the
expiration of the then-current contract year for the
applicable subcontract and shall provide not less than
ninety (90) days prior notice to PHCP in advance of the
expiration of the contract year for the applicable
subcontract. With respect to existing and future PHCP
subcontracts, PHCP shall provide JHMSC with all relevant
pricing information reasonably requested by JHMSC within
ten (10) days of JHMSC's request. In the event JHMSC elects
to utilize a PHCP single service capitated contractor, PHCP
shall pay such contractor on behalf of JHMSC and deduct
such payment from the amount otherwise due JHMSC pursuant
to Article VI. PHCP shall provide JHMSC supporting detail
for any such deductions. PHCP shall not be entitled to any
transaction fee regarding such payments.
ARTICLE IX - SUBCONTRACTS
A. AUTHORITY.
1. JHMSC shall have the express authority to engage the
services of Subcontractors to provide Covered
Services to Members. All Subcontractors shall comply
with State licensure regulations for providers and
shall be subject to the credentialing and
recredentialing standards and procedures implemented
by JHMSC under this Agreement. All Subcontractors
and related subcontracts shall be subject to
approval by PHCP, which approval shall not be
unreasonably withheld and shall be provided as
promptly as reasonably possible upon submission of
proposed subcontracts by JHMSC. JHMSC shall require
that Subcontractors comply with the terms of this
Agreement applicable to JHMSC Primary Care Providers
(including, but
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not limited to, provision of encounter data), unless
the context otherwise requires.
2. PHCP agrees that the form subcontract attached to
this Agreement as Exhibit G is in form and substance
acceptable to and approved by PHCP, which approval
shall remain in effect unless or until a change in
applicable law or regulation or in Department
standards or PHCP Policies and Procedures would
require modification of the form. JHMSC may use this
form without further approval required by PHCP;
provided that material changes to the form or any
specific subcontract shall require PHCP's advance
written approval, which shall not be unreasonably
withheld or delayed. PHCP shall be provided with a
copy of all non-material changes to the form or any
specific subcontract within fifteen (15) days of
adoption by JHMSC.
3. JHMSC shall submit all subcontracts to be entered
into after the effective date of this Agreement for
approval by PHPC prior to execution. PHCP shall,
within fifteen (15) days of receipt of a proposed
subcontract from JHMSC, either approve such
subcontract in writing or provide JHMSC with an
itemized list of those proposed modifications to the
subcontract necessary for compliance with Department
requirements or PHCP Policies and Procedures. The
parties agree to use their best efforts, in good
faith, to address PHCP's objections, if any, and to
agree upon an approved subcontract as promptly as
reasonably possible following submission by JHMSC.
When submitting subcontracts for PHCP approval,
JHMSC shall highlight any changes from the approved
form, and shall include with such submissions any
attachments or exhibits to the subcontract, provided
that JHMSC shall not be required to provide any
compensation provisions unless the provision of the
same is required by State or Federal law or
regulation and then only to the extent required by
such law or regulation, consistent with Article
XIII, Section P.
4. JHMSC shall provide PHCP with notice of termination
of any subcontract 0within fifteen (15) days after
JHMSC gives or
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receives notice of termination, or, in the event
JHMSC or a Subcontractor terminates a Subcontract
for cause, then JHMSC shall provide PHCP with notice
of the same within two (2) business days after
notice is given or received from the Subcontractor,
as applicable.
B. COOPERATION. The parties hereby agree to cooperate and use their
best efforts to ensure that the approval process for subcontracts is efficient
so as to facilitate, to the maximum extent possible, JHMSC's performance
hereunder through the use of its designated Subcontractors.
ARTICLE X - TERMS AND TERMINATION
A. TERMS. Unless sooner terminated in accordance with the provisions
of this Article, the initial term of this Agreement shall be from July 1, 1996
through June 30, 2001 and this Agreement shall continue on a year-to-year basis
after the initial term, unless either party shall provide notice of termination
to the other not less than twelve (12) months prior to the expiration of the
initial term or renewal term.
B. PAYMENT UPON TERMINATION BY JHMSC. Subject to the limitations set
forth in this Article X, Section B, in the event JHMSC elects to terminate this
Agreement under Article X, Section A (i.e., at the expiration of the initial
term or a renewal term by delivery of notice under Article X, Section A), the
following shall apply:
1. JHMSC shall pay PHCP an amount equal to fifty percent (50%)
of the fair market value of the Members, not to exceed Five
Million Dollars ($5,000,000).
2. Fair market value of the Members shall be determined by
Ernst & Young or its successor, and shall be determined as
of the date notice is delivered under Article X, Section A
above. PHCP and JHMSC shall jointly engage Ernst & Young.
The independent valuation shall be completed within ninety
(90) days after notice of termination is provided. The
engagement of Ernst & Young, or its successor, shall
expressly include that time frame as a performance
requirement.
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3. Except as provided in Article V, Section B and Section C
and in Article X, Section B.4.b. below, PHCP and its
Affiliates shall not contract, directly or indirectly, with
Primary Care Providers located in the Exclusive Area to
provide Covered Services to Eligible Persons during the
remaining term of the Agreement and during the one year
period following the termination date.
4. In the event fifty percent (50%) of fair market value of
the Members exceeds Five Million Dollars ($5,000,000), the
following shall apply:
(a) JHMSC may elect to pay to PHCP the difference
between Five Million Dollars ($5,000,000) and fifty
percent (50%) of the fair market value of the
Members, and the non-competition restriction set
forth in Article X, Section B.3. above shall apply;
or
(b) JHMSC may elect not to pay the difference between
Five Million Dollars ($5,000,000) and fifty percent
(50%) of the fair market value of the Members or to
pay only a portion of the difference between Five
Million Dollars ($5,000,000) and fifty percent (50%)
of fair market value of the Members, and, in either
case, PHCP may contract with one Primary Care
Provider in the Exclusive Area (e.g., a single
full-time equivalent physician or other full-time
equivalent health professional, or more than one
part-time physician or health professional which in
combination constitutes a full time equivalent) for
each One Hundred Thousand Dollars ($100,000) of the
amount such fifty percent (50%) of the fair market
value of the Members exceeds the amount paid by
JHMSC. PHCP's Primary Care Provider contracts may
become effective and PHCP may begin to enroll
Eligible Persons with such Primary Care Provider(s)
as of the ninety first (91st) day following the
issuance of the notice of termination, in accordance
with the procedures set forth in Article X, Section
B.4.d. below.
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(c) In the event fair market value of the Members is not
determined within ninety (90) days after notice of
termination as contemplated under Article X, Section
B.2. above, and it is determined subsequent to PHCP
entering into any of the above-referenced contracts
with Primary Care Providers that insufficient
credits exist for one or more such contracts, PHCP
shall assign one or more of such contracts to JHMSC
(as designated by JHMSC), or revise such contracts
as appropriate, subject to the terms of those
contracts. If the terms do not permit such
assignment, PHCP shall terminate the contract(s), as
applicable, as soon as possible
(d) In the event PHCP contracts with one or more JHMSC
Primary Care Providers (i.e., JHMSC Subcontractors)
prior to termination of this Agreement, as permitted
in Article X, Section B.4.b. above, it is agreed
that: (1) all Eligible Persons that selected or were
assigned to such JHMSC Primary Care Providers as of
the date of delivery of the notice of termination
through the ninetieth (90th) day following the
delivery of notice of termination shall remain
Members subject to the terms of this Agreement
(including those Eligible Persons that involuntarily
disenroll during the period between the dates of
delivery of notice and ninety (90) days following
such notice and re-enroll within ninety (90) days of
disenrollment provided the Department permits
automatic reassignment to JHMSC); and (2) Eligible
Persons that enroll with PHCP and select or are
assigned to such JHMSC Primary Care Provider(s)
subsequent to the ninetieth (90th) day following the
delivery of notice of termination (including former
Members who voluntarily disenrolled) shall be
allocated equally to this Agreement and to PHCP
separate and apart from this Agreement.
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5. In the event of a JHMSC Medicaid Sale within the three-year
period following the termination date, PHCP shall be
entitled to share in the proceeds of the sale in an amount
equal to the difference between (a) fifty percent (50%) of
fair market value of the Members determined pursuant to
Article X, Section B.2., and (b) the amount paid by JHMSC
under Article X, Section B.2. above plus One Hundred
Thousand Dollars ($100,000) for each Primary Care Provider
in the Exclusive Area with whom PHCP contracts as set forth
in Article X, Section B.4.b. above.
6. Any payments due under this Section shall be made within
thirty (30) days after termination of this Agreement, and
thirty (30) days after proceeds of the JHMSC Medicaid Sale
have been received by JHMSC (if applicable), as the case
may be.
C. TERMINATION BY PHCP. In the event PHCP elects to terminate this
Agreement under Article X, Section A (i.e., upon expiration of the initial term
or renewal term), the following shall apply:
1. JHMSC shall not be required to make any payment to PHCP;
provided, however, JHMSC may elect to restrict PHCP and its
Affiliates from contracting, directly or indirectly, with
Primary Care Providers in the Exclusive Area (other than as
permitted under Article V, Sections B and C) to provide
services to Eligible Persons during the remaining term of
this Agreement and during the two (2) year period following
the termination date by electing to pay PHCP twenty-five
percent (25%) of the fair market value of the Members as of
the date of the notice of termination, not to exceed Five
Million Dollars ($5,000,000).
2. Fair market value of the Members shall be determined as set
forth in Article K, Section B.2. above.
3. Article X, Section B.4.b. shall not apply.
4. Any payments due under this Section shall be made within
thirty (30) days after termination of this Agreement.
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D. PHCP MEDICAID SALE. In the event of a PHCP Medicaid Sale, then
JHMSC shall have the right to accelerate the termination of this Agreement, as
provided in this Article X, Section D. PHCP shall provide JHMSC notice of the
sale promptly after execution of definitive agreement(s) or prior thereto at
PHCP's election, which notice shall set forth the scheduled closing date. JHMSC
shall provide notice of its election upon the earlier to occur of: thirty (30)
days after its receipt of notice of the pending sale; or thirty (30) days prior
to the scheduled closing date of the sale.
1. In the event JHMSC elects to accelerate termination, the
purchaser does not operate an MCO or, during the period
prior to commencement of the Maryland Mandatory Medicaid
Managed Care Program in the Exclusive Area, an HMO under
the Maryland Medicaid Managed Care Program in the Exclusive
Area, and the purchaser is an assignee under Article XIII,
Section K, then the following shall apply:
(a) Termination shall be effective twelve (12) months
after closing of the sale.
(b) JHMSC shall pay to PHCP or its designee upon
termination of this Agreement, fifty percent (50%)
of the fair market value of the Members as of the
date of JHMSC's notice of its acceleration of
termination, not to exceed Five Million Dollars
($5,000,000).
(c) Fair market value shall be determined as set forth
in Article X, Section B.2.
(d) PHCP and the purchaser and their respective
Affiliates shall be prohibited from contracting,
directly or indirectly, with Primary Care Providers
in the Exclusive Area (other than as permitted under
Article V, Sections B and C) for purposes of serving
Eligible Persons during the remaining term of this
Agreement and for one year thereafter.
(e) Article X, Section B.4.b. shall not apply.
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(f) Any payments due under this Article X, Section D.1.
shall be made within thirty (30) days after
termination of this Agreement.
2. In the event JHMSC elects to accelerate termination, the
purchaser operates an MCO or, during the period prior to
commencement of the Maryland Mandatory Medicaid Program in
the Exclusive Area, an HMO under the Maryland Medicaid
Managed Care Program in the Exclusive Area and the
purchaser is an assignee under Article XIII, Section K, the
following would apply:
(a) Termination shall be effective twelve (12) months
after closing of the sale.
(b) JHMSC shall not be required to make any payment to
PHCP or its designees. After the termination of this
Agreement, neither the purchaser nor JHMSC or their
Affiliates would be subject to any non-competition
restrictions.
(c) PHCP and its Affiliates shall be prohibited from
contracting, directly or indirectly, with Primary
Care Providers in the Exclusive Area (other than as
permitted under Article V, Sections B and C) for
purposes of serving Eligible Persons during the
remaining term of this Agreement and for one year
thereafter.
3. In the event JHMSC elects to accelerate termination, and
the purchaser is not an assignee under Article XIII,
Section K, then the following shall apply:
(a) Termination shall be effective as of the date of the
closing of the sale; provided that, in the event the
PHCP Medicaid Sale closes prior to the actual start
date of the Maryland Mandatory Medicaid Managed Care
Program in the Exclusive Area, termination shall be
effective as of (i) the actual start date of the
Xxxx-
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land Mandatory Medicaid Managed Care Program, or
(ii) such earlier date as JHMSC may elect.
(b) JHMSC shall not be required to make any payments to
PHCP or its designee. After the termination of this
Agreement, neither the purchaser nor JHMSC or their
Affiliates would be subject to any non-competition
restrictions.
(c) PHCP and its Affiliates shall be prohibited from
contracting, directly or indirectly, with Primary
Care Providers in the Exclusive Area (other than as
permitted under Article V, Sections B and C) for
purposes of serving Eligible Persons during the
remaining term of this Agreement and for one year
thereafter.
E. TERMINATION IN THE EVENT OF CONTRACT TERMINATION. In the event
PHCP receives a notice from the Department of the Department's intention to
terminate the Contract or not to enter into another Contract for an additional
term, PHCP shall provide a copy of such notification to JHMSC within two (2)
business days of receipt by PHCP. This Agreement shall automatically terminate
upon the effective date of termination or non-renewal contained in the
Department's notice to PHCP unless such notice is revoked, suspended or enjoined
or the effective termination date extended. This Article X, Section E shall
apply in the event PHCP fails to qualify as an MCO as of the actual start date
of the Maryland Mandatory Medicaid Managed Care Program affecting the Exclusive
Area. In the event of termination under this Article X, Section E, JHMSC shall
not be required to make any payments to PHCP, and neither party shall be subject
to any post-termination non-competition covenants.
F. TERMINATION FOR CAUSE. In the event of a default by either party
with respect to one or more of the substantive provisions of this Agreement, the
non-defaulting party may give written notice of such default to the defaulting
party and the defaulting party shall have sixty (60) days after receipt of
written notice to cure the default or, in the event the default is not capable
of being cured within such sixty (60) day period, to substantially commence the
cure of such default. Such notice shall include a description of the alleged
default with sufficient detail to fairly inform the defaulting party. If the
default is not cured, or the cure is not substantially commenced, within the
sixty (60) day period, the Agreement shall terminate as
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of the expiration of the sixty (60) day notice period. In the event of a default
falling within the scope of Article IV, Section F, JHMSC's right to cure a for
cause termination shall be limited to the cure rights provided therein. In the
event of termination under this Article X, Section F, JHMSC shall not be
required to make any payments to PHCP, and neither party shall be subject to any
post-termination non-competition covenants.
G. TERMINATION IN EVENT PHCP FAILS TO MAINTAIN GOOD STANDING AS AN
MCO.
1. In the event PHCP is not in good standing as an MCO any
time during the term of this Agreement and, as a direct
result, (1) further enrollment of Eligible Persons in PHCP
in the Exclusive Area is suspended (except as provided in
this Article X, Section G below), (2) all or part of the
Gross Capitation Rates are withheld, or (3) another penalty
is imposed that would have a material adverse impact upon
JHMSC, then, unless the reason for the loss of good
standing is JHMSC's non-compliance with the terms and
conditions of this Agreement, JHMSC shall have the right to
terminate this Agreement upon not less than thirty (30)
days prior written notice to PHCP, subject to a right to
cure within the thirty (30) day notice period. If a cure is
achieved within the thirty (30) day notice period, JHMSC's
notice of termination shall be withdrawn and deemed void.
Cure shall be deemed to have been achieved if the adverse
impact referenced above is substantially eliminated. In the
event the default is not cured within the thirty (30) day
period, the Agreement shall terminate as of the expiration
period or the thirty (30) day notice period.
2. In the event PHCP receives notice of a sanction or penalty
by the Department directly related to services to Members
or which has a material adverse impact on the arrangements
contemplated under this Agreement, PHCP shall provide JHMSC
with a copy of any such notice within two (2) business days
of PHCP's receipt of the same. Notwithstanding Article X,
Section G.1. above, in the event enrollment of Exclusive
Eligibles in PHCP is suspended at any time subsequent to
one year after the start date of the Maryland Manda-
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tory Medicaid Managed Care Program in the Exclusive Area,
the time period for PHCP to cure the suspension shall be
extended to one hundred eighty (180) days; provided that
commencing on the thirty-first (31st) day of the
suspension, JHMSC City Sites may participate in the Xxxxxxx
MCO as Primary Care Providers. Upon the lifting of the
suspension by the Department, JHMSC City Sites shall cease
to be available as Primary Care Providers through the
Xxxxxxx MCO.
3. In the event of termination under this Article X, Section
G, JHMSC shall not be required to make any payments to
PHCP, and neither party shall be subject to any
post-termination non-competition covenants.
H. MEDICAL LOSS RATIO REQUIREMENTS. Under the Maryland Mandatory
Medicaid Managed Care Program, the Department has the authority to reduce Gross
Capitation Rates paid to an MCO if the MCO's medical loss ratio is less than
mandated by applicable law. In the event the law sets, or the Department
defines, "medical loss ratio" in a manner that would require material
modification of the terms of this Agreement in order to avoid a reduction in
Gross Capitation Rates paid by the Department to PHCP, both parties shall take
all reasonable steps within the limits of applicable law and regulation,
including such lobbying efforts as may be permitted by law, to avoid a reduction
of Gross Capitation Rates while maintaining the substance of the financial terms
contemplated hereunder. In the event PHCP receives notification from the
Department of a possible or pending reduction in Gross Capitation Rates due to
the medical loss ratio requirements, PHCP shall provide a copy of said notice to
JHMSC within two (2) business days of receipt of the same. In the event of a
reduction in Gross Capitation Rates due to the medical loss ratio requirements,
either party would have the right to terminate this Agreement upon thirty (30)
days prior written notice to the other. In the event notice is provided by
either party, the following would apply:
1. If, during the notice period, either party takes steps to
eliminate any adverse impact of the reduced Gross
Capitation Rates upon the other party, such as by
supplementing the other party's compensation, the notice of
termination shall be withdrawn and deemed void.
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2. In the event notice of termination is not withdrawn, then
either of the following options shall apply, at JHMSC's
election:
(a) Termination of the Agreement shall be effective as
of the end of the then-current Contract Year, and,
for the balance of the then-current Contract Year,
JHMSC shall be compensated as a multi-specialty
provider on the basis set forth in Article VI,
Sections C and D. In addition, JHMSC shall pay to
PHCP twenty-five percent (25%) of the fair market
value of the Members, not to exceed Two Million Five
Hundred Thousand Dollars ($2,500,000), as of the
date notice was provided pursuant to the procedures
set forth in Article X, Section C, in which event
PHCP and its Affiliates shall not contract, directly
or indirectly, with Primary Care Providers located
in the Exclusive Area to provide Covered Services to
Members during the remaining term of the Agreement
and during the one-year period following the
termination date (except as provided in Article V,
Section B and C), and Article X, Section B.4.b.
shall not apply; or
(b) This Agreement shall remain in effect until the
expiration of the initial term or renewal term, as
the case may be, and, for the balance of the
then-current term, JHMSC shall be paid as a
multi-specialty provider on the basis set forth in
Article VI, Sections C and D above. In such event,
JHMSC would not be required to make any payment to
PHCP under Article X, Section B upon the expiration
of the initial term or a renewal term, as the case
may be, and neither party shall be subject to any
post-termination non-competition covenants.
I. RE-ENROLLMENT COOPERATION. In the event this Agreement is
terminated pursuant to Article X, Section A, Section B, Section C, Section D.l.,
Section E, Section F (other than by PHCP), Section G, or Section H, PHCP will
take any and all actions reasonably requested by JHMSC to cause the efficient
re-enrollment of Members in the Xxxxxxx MCO or other entity designed by JHMSC,
and to
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facilitate such re-enrollment process with the least possible disruption to
Members. The foregoing shall be subject to PHCP's rights to enroll Eligible
Persons under Article X, Section B.4.b.
ARTICLE XI - DISPUTE RESOLUTION
A. MEDIATION. Disputes that arise between the parties under this
Agreement shall be subject to the following: The parties shall employ
non-binding mediation utilizing a single mediator under the rules of the
American Arbitration Association ("AAA"). The parties shall request the AAA, to
the extent reasonably possible, to provide a list of mediators that have
expertise in the substantive field in which the dispute falls. The parties shall
have five (5) business days from receipt of the list of mediators to mutually
agree upon a mediator from that list. If the parties fail to do so, the AAA may
select the mediator. The mediation shall be completed no later than sixty (60)
days from the submission date of the mediation request to the AAA and both
parties agree to seek completion of the mediation within that time frame. If the
mediation is not completed within that time frame, either party may terminate
the mediation and pursue such other rights as it may have, including litigation.
The mediator shall have the right, but not the obligation, to seek expert advice
on the dispute from the applicable lists of experts set forth in Exhibit H. The
mediation shall be conducted in a confidential manner and treated as settlement
negotiations. None of the documents, information, statements or similar
materials which are made part of the mediation by one party shall be admissible
in any subsequent litigation unless obtained independently of the mediation. All
costs of any mediation, including the costs of any experts used by the mediator,
shall be borne equally by the parties. Attorney's fees and the costs of a
party's own experts shall be borne by that party. The parties agree that any
applicable statute of limitation or of repose shall be deemed to be, and shall
be, tolled upon demand for mediation and for a period of sixty (60) days
following the end of the mediation process.
B. RESOLUTION OF DISPUTES. Disputes arising under this Agreement may
be resolved through litigation in a court of competent jurisdiction, unless
otherwise settled by the parties by mutual agreement, after non-binding
mediation, as applicable. Exhaustion of the mediation process as set forth in
Article XI, Section A above, shall not be a pre-condition to obtaining an
injunction or restraining order in a court of law or equity.
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C. NO DEDUCTION OR SET-OFF. In the event a dispute arises regarding
whether either party is in compliance with the terms and conditions of this
Agreement, such dispute shall be resolved by the dispute resolution procedures
set forth in this Article XI. In no event shall PHCP or JHMSC have the
unilateral right to reduce the amount of any payments hereunder to the other or
make set-offs against such payments unless authorized by the other party in
writing.
ARTICLE XII - COVERED PERSONS PROTECTIONS
A. NON-DISCRIMINATION. JHMSC agrees not to differentiate or
discriminate in the treatment of Members on the basis of source of payment for
health care services, economic status, sex, age, race, color, religion, origin,
place of residence, health status or handicap. JHMSC will observe, protect and
promote the rights of Members as patients.
B. COMPLAINTS. JHMSC and PHCP agree to cooperate in resolving Member
complaints about services rendered by JHMSC Primary Care Providers or
Subcontractors. Such complaints will be resolved using the PHCP Member complaint
resolution and grievance procedures. PHCP shall have the final authority in
resolving any complaint or grievance except as otherwise provided by the
Contract or Department requirements.
C. HOLD-HARMLESS. JHMSC and its Subcontractors will look solely to
PHCP for payment for Covered Services provided to Members (except for any
permitted co-payments, if applicable). Neither JHMSC nor its Subcontractors
shall, under any circumstances including, but not limited to, PHCP's insolvency
or inability to pay, assert any claim for compensation for Covered Services
against Members (or persons acting on their behalf), the Department, the State
of Maryland or HCFA. JHMSC agrees that this Article XII, Section C shall survive
the termination of this Agreement regardless of the reason for termination,
shall be construed to be for the benefit of Members, the Department, the State
of Maryland and HCFA and shall supersede any other existing or future oral or
written agreement between JHMSC or a Subcontractor and a Member or a person
acting on a Member's behalf. Any modifications, additions or deletions to the
provisions of this Section shall become effective on a date no earlier than
thirty (30) days after the Maryland Commissioner of Insurance has received
written notice of such proposed changes.
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ARTICLE XIII - GENERAL PROVISIONS
A. CONFIDENTIALITY. Each party recognizes that all non-public
materials provided to it by the other party, including material prepared and/or
provided by the Department (unless available through applicable freedom of
information statutes and regulations) and encounter data supplied to PHCP by
JHMSC, are the proprietary property of the party providing the information and
the party receiving the information shall not disclose or release such material
to any third-party with the exception of the Department, EQRO, NCQA or as
otherwise required herein for PHCP's administration of this Agreement or the
Contract without the prior written consent of the party providing the
information, except as otherwise required by law or regulation or by order of a
court of competent jurisdiction. In addition, such materials shall only be used
by the receiving party to perform its obligations under this Agreement and for
the purpose of audits and accreditations and for no other purposes. Upon
termination of this Agreement, each party agrees to make a reasonable effort to
return all such materials to the party that provided the information, including
all copies thereof, unless otherwise waived in writing by the party to receive
the information. The parties agree that any violation of this provision shall
result in irreparable injury to the other party; therefore, notwithstanding
Article XI, in addition to any relief otherwise available to the parties, either
party is entitled to obtain an injunction enjoining and restraining the other
party and any related individuals or parties from violating this provision. If
it is determined that the scope of this provision is too extensive to be
enforceable by a court, then it shall be modified to the extent determined by a
court to be reasonable in order to obtain enforcement, and the parties hereto
agree to accept such determination subject to any appeals.
B. SOLICITATION. During the term of this Agreement, JHMSC or JHMSC
Primary Care Providers shall not solicit Members to disenroll from PHCP nor
solicit Exclusive Eligibles to enroll in another HMO or MCO under the Maryland
Medicaid Managed Care Program; provided that general marketing to Eligible
Persons (i.e., not specifically targeted to Exclusive Eligibles) shall not be
prohibited, nor shall any JHMSC Primary Care Providers be precluded from
informing the public of their participation in other HMOs or MCOs. In addition,
JHMSC Primary Care Providers may participate in, but not initiate, promotional
activities initiated by other HMOs and/or MCOs so long as such JHMSC Primary
Care Providers agree to participate in similar activities initiated by PHPC.
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C. INDEMNIFICATION AND CONTRIBUTION. The parties agree to adhere to
and be bound by the Maryland common law and statutory principles of
indemnification and contribution.
D. SEVERABILITY. The provisions of this Agreement shall be severable.
If any portion of this Agreement is held to be unlawful or unenforceable, that
portion shall not affect any other portion of this Agreement, and the remaining
terms and conditions or portions will remain in effect. The portion held to be
unlawful or unenforceable shall be reformed in a manner so as to be lawful and
enforceable, as agreed to by the parties.
E. WAIVER. The waiver by either party of a breach or violation of any
provision of this Agreement shall not operate or be construed as a waiver of any
later breach or violation.
F. HEADINGS. The headings of the various Articles and Sections of
this Agreement are merely for convenience and do not, expressly or by
limitation, limit, define or extend the terms of the Articles and Sections to
which they apply.
G. REMEDIES CUMULATIVE. All rights and remedies under this Agreement
will be cumulative, and not alternative.
H. GOVERNING LAW. This Agreement shall be construed by and governed
according to the internal laws of the State of Maryland without regard to its
choice of laws or conflict of laws provisions, including, without limitation, in
relation to all matters of formation, interpretation, construction, validity,
performance and enforcement.
I. AMENDMENT. No term or provision of this Agreement may be changed,
discharged, modified or terminated orally or in any manner other than by an
instrument in writing signed by the parties hereto; provided that this Agreement
shall be self-amending in order to conform to any changes in Federal or State
laws or regulations unless any such self-amendment would materially alter the
obligations or benefits of either party under this Agreement.
J. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, which, when read together, shall comprise one instrument.
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49
K. ASSIGNMENT. This Agreement, including the rights, benefits, and
duties hereunder, shall not be assigned, sublet, delegated or transferred by
either party without the prior written consent of the other and the Department;
provided that PHCP may assign this Agreement to a purchaser of its Medicaid line
of business with the consent of the Department but without the consent of JHMSC.
Any such assignment shall be subject to provisions of Article X, Section D.
Notwithstanding the above, this Agreement may be assigned by PHCP to The
Prudential Insurance Company of America or an Affiliate.
L. INSURANCE. JHMSC shall maintain malpractice coverage for all
physicians and other health professionals employed by JHMSC or its subsidiaries
or its Affiliates. For each individual physician, the coverage limits shall be
no less than One Million Dollars ($1,000,000) per claim or occurrence and Three
Million Dollars ($3,000,000) per year. JHMSC agrees to submit to PHCP evidence
that it has obtained such insurance coverage. Subcontractors shall maintain
comparable coverage. JHMSC shall maintain general liability insurance and
liability insurance covering utilization management activities with coverage
limits customary for organizations of similar size and performing similar
functions.
M. SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit
of and be binding upon all permitted successors and assigns of the parties.
N. INDEPENDENT CONTRACTORS. The relationship among PHCP, JHMSC and
Subcontractors are those of independent contractors. None of the provisions of
this Agreement create nor are they intended to create or to be construed to
create an agency, partnership, joint venture or employer-employee relationship
between PHCP and JHMSC or its Subcontractors.
O. NOTICE. Any notice required to be given pursuant to the terms and
provisions hereof shall be in writing and shall be sent by either pre-paid,
certified mail return receipt requested, or overnight courier delivery service,
to:
Prudential Health Care Plan, Inc.
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: President
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50
with copies to: Gnessin & Xxxxxxx
0000 00xx Xxxxxx, XX
Xxxxx 000
Xxxxxxxxxx, X.X. 00000
Attn: Xxxx X. Xxxxxxx
and
The Prudential Insurance Company of America
000 Xxxxxxxxx Xxxx
Xxxxxxxx 0 Xxxxx
Xxxxxxx, XX 00000
Attn: Counsel
Xxxxx Xxxxxxx Medical Services Corporation
0000 Xxxxx Xxxx Xxxxx
Xxxxxxxxx, XX 00000
Attn: President
with a copy to: The Xxxxx Xxxxxxx Health System Corporation
000 Xxxxx Xxxxx Xxxxxx, Xxxxx. Xx. 000
Xxxxxxxxx, XX 00000-0000
Attn: General Counsel
Either party may, at any time, change the address for receipt of notices
by giving written notice to the other party.
P. PHCP DATA REQUESTS. In the event PHCP requests information from
JHMSC pursuant to this Agreement as needed for compliance by PHCP with PHCP
Policies and Procedures or Departmental standards, the Contract, NCQA, EQRO, or
applicable law, JHMSC shall provide such information. However, the parties agree
that, if any PHCP request involves JHMSC uniquely sensitive information, in the
reasonable opinion of JHMSC, JHMSC may request PHCP to provide a brief
description of the basis for the request and explore with PHCP the possibility
of limiting production of the information so as to avoid the provision of the
uniquely sensitive information. In addition, and subject to the balance of this
Article XIII, Section P, JHMSC shall provide PHCP with information in a manner
and form that will not cause JHMSC to waive any confidentiality privileges
available to it under applicable law. However, if such information cannot
reasonably be provided in a
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manner and form as reasonably required by PHCP to meet its above informational
requirements, then, notwithstanding any confidentiality privileges available to
JHMSC, JHMSC will provide to PHCP the information required under the terms of
this Agreement. Notwithstanding the foregoing and anything in this Agreement to
the contrary, JHMSC shall not be required to provide PHCP with vendor or
provider pricing data; provided, however, in the event the Department, the EQRO,
or the NCQA requires such information, JHMSC shall provide such information
directly to such entity, if acceptable to such entity. In addition, JHMSC will
provide such information, as applicable, directly to PHCP to the extent
necessary for PHCP to perform and comply with applicable State or Federal law.
It is agreed by the parties that this Article XIII, Section P shall be read in
conjunction with all provisions of this Agreement pertaining to the provision of
information and data by JHMSC to PHCP.
Q. SCOPE OF AGREEMENT. Upon execution of this Agreement, the Second
MAMSA shall automatically terminate, effective at 12:00 midnight June 30, 1996
without further action of the parties. In addition, all terms and provisions
contained in the Asset Purchase Agreement entered into between The Xxxxx Xxxxxxx
Health Plan, Inc. and Prudential Health Care Plan, Inc. on May 20, 1991 (the
"Asset Purchase Agreement") and the Non-Competition Agreement entered into
between The Xxxxx Xxxxxxx Health System Corporation and Prudential Health Care
Plan, Inc. on May 20, 1991 (the "Non-Competition Agreement") pertaining to the
provision of services to Medicaid recipients are expressly superseded by this
Agreement. Other than the restrictions set forth in this Agreement, JHMSC, JHHC,
The Xxxxx Xxxxxxx Health System Corporation and their respective Affiliates or
related entities shall not be subject to any exclusivity or non-competition
restrictions whatsoever as regards the provision of, arranging of,
administration of or underwriting of services to Medicaid recipients. Paragraphs
6, 8 and 10 of the Second Settlement Agreement and Release are by reference
incorporated into this Agreement. Subject to the above in this Article XIII,
Section Q, this Agreement, together with any supplements, addenda, amendments,
modifications or attachments, is the complete Agreement. Neither party has made
any representations or warranties other than as set forth in this Agreement and
any Exhibits hereto.
R. SURVIVAL OF PROVISIONS. The following provisions of this Agreement
shall survive the termination of this Agreement: Article II, Section A; Article
III, Section A.5.; Article IV, Section B.2.; Article IV, Section B.3.; Article
IV, Section E; Article VII (with respect to dates of service prior to
termination date); Article X (except Section A); Article XI; Article XII;
Article XIII, Section A; Article XIII,
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52
Section C; Article XIII, Section D; Article XIII, Section E; Article XIII,
Section G; Article XIII, Section H; Article XIII, Section O; Article XIII,
Section P; and Article XIII, Section Q.
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53
IN WITNESS WHEREOF, the parties hereto have executed this Agreement to be
effective as of the date first above written.
XXXXX XXXXXXX MEDICAL SERVICES CORPORATION PRUDENTIAL HEALTH CARE PLAN, INC.
By: /s/ Xxxxxx X'Xxxxxx By: /s/ Xxxx X. Xxxxx
------------------------------- ---------------------------------------
Xxxxxx X'Xxxxxx Print or
President Type Name: Xxxxxx X. Xxxxx
--------------------------------
Title: Senior Vice President
Date: 8/2/96 Date: 8/2/96
------------------------------------------------ -------------------------------------------
ACKNOWLEDGED AND AGREED:
In consideration of the mutual promises and good and valuable consideration
passing between PHCP and JHMSC for which the Xxxxx Xxxxxxx Health System
Corporation ("JHHS") derives considerable financial and non-financial benefits,
which consideration and benefits are hereby acknowledged, JHHS guarantees all of
the financial obligations of JHMSC under this Agreement. JHMSC and JHHS
recognize that but for such financial guarantee, PHCP would not have entered
into this Agreement.
THE XXXXX XXXXXXX HEALTH
SYSTEM CORPORATION
By:[illegible signature]
---------------------------
Title: V.P. of General Counsel
-----------------------
Date: 8/2/96
------------------------
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54
In consideration of the mutual promises and good and valuable consideration
passing between PHCP and JHMSC for which Prudential derives considerable
financial and non-financial benefits, which consideration and benefits are
hereby acknowledged, Prudential agrees that it shall be bound by the provisions
set forth in Article V, Section A.4. and Section A.6. and Article X, Section
B.3., Section C.l., Section D.1.d., D.2.c. and D.3.c., and Section H.2.a., and
that it shall take no action, directly or indirectly, the effect of which would
be to cause PHPC not to perform fully its obligations under this Agreement.
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
By:
-----------------------------
Title:
-------------------------
Date:
---------------
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AMENDMENT AND ASSIGNMENT OF
THIRD MEDICAL ASSISTANCE
MEDICAL SERVICES AGREEMENT
THIS AMENDMENT AND ASSIGNMENT amends that certain Third Medical
Assistance Medical Services Agreement ("Third MAMSA") between Prudential Health
Care Plan, Inc. ("PHCP") and Xxxxx Xxxxxxx Medical Service Corporation ("JHMSC")
dated as of July 1, 1996, and assigns the Third MAMSA to AMERIGROUP Maryland,
Inc., A Managed Care Organization ("AMERIGROUP"), a corporation organized under
the laws of Delaware with its principal place of business in Virginia Beach,
Virginia. Capitalized terms not defined when used below shall have the meanings
given such terms in Article I of the Third MAMSA.
RECITALS
WHEREAS, PHCP and JHMSC have previously entered into the Third MAMSA, and
WHEREAS, PHCP contracted with AMERIGROUP on December 23, 1998 to transfer
certain assets related to PHCP's Maryland Medicaid managed care business to
AMERIGROUP (such contract the "Purchase Agreement"), and
WHEREAS, the Department will enter into a contract with AMERIGROUP
effective June 1, 1999 (the "AMERIGROUP MCO Agreement") whereunder Medicaid
patients that do not elect to disenroll from PHCP during the 30-day period prior
to the sale of assets by PHCP to AMERIGROUP will be automatically re-enrolled
with AMERIGROUP, subject to voluntary disenrollment during the 90-day period
after the consummation of the sale, and
WHEREAS, PHCP and JHMSC desire to amend the Third MAMSA as set forth
herein and PHCP desires to assign the Third MAMSA from PHCP to AMERIGROUP as set
forth below, and
WHEREAS, PHCP and AMERIGROUP are also entering into this Amendment and
Assignment in reliance on the covenant of the Mid-Atlantic Association of
Community Health Centers in the Covenant Not to Xxx attached hereto.
56
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged by each party, the parties agree as
follows:
1. SCOPE OF AMENDMENT: In the event of a conflict between the
terms of this Amendment and Assignment and the Third MAMSA,
the terms of Amendment and Assignment shall prevail.
2. TERMINATION OF EXCLUSIVITY: Effective as of the closing of
the sale of assets by PHCP to AMERIGROUP and the effective
date of the AMERIGROUP MCO Agreement (collectively "the
Closing"), Article V of the Third MAMSA shall be, and
hereby is, deleted and of no force or effect whatsoever.
Effective as of the execution of this Amendment and
Assignment (the "Execution Date"), the respective
obligations of the parties to the Third MAMSA are hereby
modified to permit each party to enter into contracts which
will become effective only at Closing contemporaneously
with the termination of Article V as described in the
preceding sentence. If Closing does not occur on or before
July 1, 1999, Article V will remain in full force and
effect and the contingent contracts entered into during the
period prior to and including July 1, 1999 will be null and
void.
3. TERMINATION OF BUYOUT AND NON-COMPETITION PROVISIONS:
Effective as of the Closing, Article X.B., Article X.C. and
Article X.D. of the Third MAMSA shall be deleted and of no
force or effect whatsoever. Accordingly, without limiting
the foregoing, Article I.HH. shall be of no force or effect
from and after such time.
4. TERM AND TERMINATION OF THIRD MAMSA: Effective as of the
Closing, Article X.A. of the Third MAMSA shall be deleted
and the following substituted in lieu thereof:
A. TERM: Unless sooner terminated in accordance with
the provisions of this Article, the term of this
Agree-
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ment shall be from July 1,1996 through and ending upon
December 31, 2000.
Article X.H. shall be deleted as of the Closing and shall be of no
further force or effect.
5. ASSIGNMENT OF THIRD MAMSA: Effective as of the Closing, the
Third MAMSA shall be hereby assigned from PHCP to
AMERIGROUP pursuant to Article XIII.K. of the Third MAMSA.
This Amendment and Assignment will be null and void if the
Closing does not occur on or before July 1, 1999. PHCP (and
Prudential, but only to the extent of the obligations it
assumed under the Third MAMSA relating to provisions not
otherwise terminated hereunder) shall remain liable for any
liabilities or obligations which arise under the Third
MAMSA prior to Closing (including obligations arising
before the Closing the performance of which is required
post-Closing) and AMERIGROUP shall not be deemed to have
assumed any of such liabilities or obligations; provided,
however, to the extent data or information related to such
obligations has been delivered by PHCP to AMERIGROUP,
AMERIGROUP covenants to PHCP to use commercially reasonable
efforts to provide PHCP with such data or information as
may be necessary to discharge such obligations (nothing
herein shall be deemed to modify or limit the respective
obligations of PHCP and AMERIGROUP under the Purchase
Agreement). Further, JHMSC shall remain liable to PHCP for
any liabilities and the performance of any obligations
arising prior to Closing. From and after Closing,
AMERIGROUP shall be solely liable for the liabilities and
obligations of "PHCP" under the Third MAMSA, the initial
performance of which is due after Closing, and PHCP shall
have no liability with respect to such liabilities and
obligations. From and after Closing, AMERIGROUP shall have
the rights, benefits and privileges of PHCP (and
Prudential) under the Third MAMSA, as amended hereby.
Notwithstanding the foregoing, PHCP is not hereby released
from its acts or omissions related to the transition of its
operations to AMERIGROUP pursuant to the Purchase Agreement
for which it shall remain
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responsible; provided, however, that this sentence shall
not vest in JHMSC any rights as a third party beneficiary
or otherwise to enforce any of the obligations of PHCP owed
to AMERIGROUP under the terms of the Purchase Agreement.
6. COMPENSATION: Effective as of the Closing, Article VI.C.,
VI.D., VI.E., VI.F., VI.G. and VI.H. are deleted and of no
force or effect whatsoever. Article VI.B. is hereby
amended, effective as of the Closing, as it pertains to
stop-loss coverage, as set forth in this paragraph. Prior
to May 1, 1999, the Department provided to MCOs, on a
mandatory basis, stop-loss coverage at specified deductible
and coverage levels. As of May 1,1999, the Department will
no longer provide stop-loss coverage and MCOs shall have
the option, but not the obligation, to obtain stop-loss
coverage. JHMSC shall have the following three options with
respect to stop-loss coverage: (a) at JHMSC's request,
AMERIGROUP will provide stop-loss coverage for the benefit
of JHMSC at the levels provided by the State prior to May
1, 1999 (or such other coverage level as may be agreed by
the parties) at AMERIGROUP's actual cost in the event
AMERIGROUP purchases such coverage from a third-party
insurer or, in the event AMERIGROUP self-insures for
catastrophic claims, the cost to JHMSC shall be the
actuarially projected cost with no profit markup or risk
retention markup by AMERIGROUP; (b) JHMSC may elect to
purchase stop-loss coverage from a commercial insurer of
its choosing; or (c) JHMSC may elect to forego obtaining
stop-loss coverage and the Gross Capitation Rates upon
which JHMSC's percentage of premium is based shall not
reflect any deduction or charge for stop-loss coverage; the
foregoing notwithstanding, JHMSC also shall be responsible
to comply, at its expense, with any applicable stop-loss
and reporting requirements imposed upon AMERIGROUP under
the Federal Physician Incentive Plan Regulations by virtue
of JHMSC's contracts with its groups and physicians.
7. RE-ENROLLMENT COOPERATION: Effective as of the Closing,
Article X.I. shall be deleted and the following inserted in
lieu thereof:
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I. RE-ENROLLMENT COOPERATION. JHMSC hereby agrees that
its ability to send written notice to Members
pertaining to the participation of JHMSC and/or its
Subcontractors as providers in MCOs shall be limited
to, and AMERIGROUP agrees to cooperate in all
reasonable respects with JHMSC (upon JHMSC's
request) with respect to, the following: (a) the
provision of one notice by JHMSC and/or its
Subcontractors to Members on or after the Execution
Date of the MCOs (all listed similarly and including
AMERIGROUP) with whom JHMSC and/or its
Subcontractors then participate; and (b) the
provision of notice by JHMSC and/or its
Subcontractors to Members on or after December
1,1999 of the MCOs (all listed similarly and
including AMERIGROUP) with whom JHMSC and/or its
Subcontractors then participate as well as of the
termination date of the Third MAMSA and the Members'
option to select another MCO if necessary for the
Member to retain his or her selection of a JHMSC
Primary Care Provider, provided that the parties
will use their reasonable efforts (including but not
limited to AMERIGROUP's providing JHMSC with all
available data from the Department or otherwise in
AMERIGROUP's possession as to Member identity,
address and annual open enrollment renewal date)
from and after December 1, 1999 to enable JHMSC
periodically to provide such notice to Members
reasonably in advance of each Member's annual open
enrollment renewal date for switching to a new MCO.
8. SOLICITATION: As of the Closing, Article XIIL.B. shall be
deleted and the following inserted in lieu thereof:
B. SOLICITATION. The parties (including, in the
case of JHMSC, its Subcontractors) will
comply with applicable law and Department
regulations and requirements with respect to
marketing to and solicitation of Eligible
Persons
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(which is understood to include Members)
including Department requirements pertaining
to the contents of written communications
with Eligible Persons. In accordance with
Department requirements, all MCOs with whom
JHMSC or its Subcontractors participate
(including AMERIGROUP) will be similarly
advertised, identified and displayed, as
applicable, in the offices and clinics of
JHMSC and its Subcontractors and in the
member education materials disseminated by
JHMSC and its Subcontractors.
9. ASSIGNMENT: As of the Closing, Article XIII.K. shall be
deleted and the following inserted in lieu thereof:
K. ASSIGNMENT. This Agreement, including the rights,
benefits, and duties hereunder, shall not be
assigned, sublet, delegated or transferred by either
party without the written consent of the other. The
foregoing notwithstanding, AMERIGROUP may upon sixty
(60) days prior written notice to JHMSC assign this
Agreement without JHMSC's written consent to any
entity that acquires all or substantially all of
AMERIGROUP'S assets related to its Maryland Medicaid
business in a transaction approved by the
Department. In no event shall an assignment be
effective if it is prohibited by the Department.
10. NOTICE: As of the Closing, Article XIII.O. shall be amended
by inserting the following for notices to AMERIGROUP:
AMERIGROUP Maryland Inc.,
A Managed Care Organization
c/o AMERIGROUP Corporation
0000 Xxxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx Xxxxx, XX 00000
Attn: Xxxxxxx X. XxXxxxxx, CEO
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Xxxxxxx X. Xxxxxxx, Esq., Senior Vice
President and General Counsel
11. This Amendment and Assignment is being entered into by PHCP
and AMERIGROUP in reliance upon (a) JHMSC's non-objection
to the prompt mailing by the Department of the notice to
Members attached as Exhibit A and (b) the execution and
delivery by Mid-Atlantic Community Health Centers, Inc.,
People's Community Health Center, and Baltimore Medical
System, Inc. of the Covenant Not to Xxx attached as Exhibit
B and by Park West Medical Center and South Baltimore
Family Health Center to the acknowledgment letter attached
as Exhibit C.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment and
Assignment as of the 30th day of April, 1999.
XXXXX XXXXXXX MEDICAL SERVICES CORPORATION AMERIGROUP MARYLAND, INC.,
A MANAGED CARE ORGANIZATION
By: By: /s/ Xxxxxxx Xxxxxxx
------------------------------ ---------------------------------
Xxxxxxx X. Xxxxxxxx Xxxxxxx X. Xxxxxxx
President Vice President
PRUDENTIAL HEALTH CARE PLAN, INC.
By:
----------------------------
Name:
---------------------
Title:
---------------------
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63
GUARANTEE: In consideration of the mutual promises and good and valuable
consideration passing between AMERIGROUP and JHMSC, for which the Xxxxx Xxxxxxx
Health System Corporation ("JHHS") and AMERIGROUP Corporation ("AMERIGROUP
Parent") derive considerable financial and non-financial benefits under the
Third MAMSA and this Amendment and Assignment, JHHS and AMERIGROUP Parent each
guarantees all of the obligations of JHMSC and AMERIGROUP, as the case may be,
under the Third MAMSA and this Amendment and Assignment. JHMSC and JHHS and
AMERIGROUP and AMERIGROUP Parent acknowledge that, but for these guarantees,
JHMSC and AMERIGROUP would not have entered into this Amendment and Assignment.
AMERIGROUP CORPORATION XXXXX XXXXXXX HEALTH SYSTEM
CORPORATION
By:Xxxxxxx X. Xxxxxxx By:
--------------------------------------- -------------------------------
Xxxxxxx X. Xxxxxxx Xxxxxx X. Xxxxxxxx
Senior Vice President President
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AMENDMENT NO. 2 OF THE
THIRD MEDICAL ASSISTANCE MEDICAL SERVICES AGREEMENT
THIS AMENDMENT NO.2 amends that certain Third Medical Assistance Medical
Services Agreement ("THIRD MAMSA") between AMERIGROUP MARYLAND, INC., A Managed
Care Organization ("AMERIGROUP") as assignee of PRUDENTIAL HEALTH CARE PLAN,
INC. and XXXXX XXXXXXX MEDICAL SERVICES CORPORATION ("JHMSC") dated as of July
1, 1996 and amended pursuant to that certain Amendment and Assignment of the
Third Medical Assistance Medical Services Agreement dated as of April 30, 1999
("FIRST AMENDMENT").
RECITALS:
WHEREAS, AMERIGROUP and JHMSC have previously entered into the First Amendment;
and
WHEREAS, AMERIGROUP and JHMSC desire to modify the First Amendment as set forth
herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy
which are hereby acknowledged by each party, the parties agree as follows:
1. SCOPE OF AMENDMENT NO. 2. In the event of a conflict between the
terms of this Amendment No. 2 and the First Amendment and/or the Third MAMSA,
the terms of this Amendment No. 2 shall prevail.
2. TERM AND TERMINATION OF THIRD MAMSA. Paragraph "4" of the First
Amendment is hereby modified to provide that the term of the Third MAMSA shall
be from July 1, 1996 through and ending on December 31, 2000.
3. RE-ENROLLMENT COOPERATION. Paragraph "7" of the First Amendment is
hereby modified by substituting "December 1, 2000" for "December 1, 1999" in the
two places such date appears in subparagraph (b).
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IN WITNESS WHEREOF, the parties have executed this Amendment No. 2 as of the 2nd
day of February, 2000.
XXXXX XXXXXXX MEDICAL SERVICES
CORPORATION
By:/s/ Xxxxxxx X. Xxxxxxxx
-------------------
Xxxxxxx X. Xxxxxxxx
Vice President
AMERIGROUP MARYLAND, INC.
A MANAGED CARE ORGANIZATION
By:/s/ Xxxxxxx X. Xxxxxxx
------------------
Xxxxxxx X. Xxxxxxx
Vice President
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66
ACKNOWLEDGED:
The undersigned executed the First Amendment as guarantors of certain
obligations under the Third MAMSA and hereby execute this amendment to
acknowledge that their respective guarantees shall continue in full force and
effect with respect to the Third MAMSA as amended hereby.
AMERIGROUP CORPORATION XXXXX XXXXXXX HEALTH SYSTEM
CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxx By: /s/ Xxxxxx X. Xxxxxxxx
--------------------------------------- -----------------------------------
Xxxxxxx X. Xxxxxxx Name: Xxxxxx X. Xxxxxxxx
Senior Vice President Title: President
3
