EXHIBIT 10.12
RADIOLOGY SERVICES AGREEMENT
This Radiology Services Agreement (this AAgreementA) is made and entered into
this 1st day of September, 1997 by and among ▇▇▇.▇▇▇., Inc., a Texas corporation
("PHYMED") and The PRS Group, PA., a Texas professional association (PRS), to be
effective as of the 1st day of September, 1997 (the "Effective Date").
RECITAL
A. PHYMED owns and operates an imaging center for the performance of
radiology services located on White Rock Trail in the City of Dallas, Dallas
County, Texas and anticipates owning and operating in the future one or more
additional imaging centers in Dallas and/or Tarrant County, Texas (the Center on
White Rock Trail and any new, other or additional imaging centers owned by
PHYMED and located in Dallas or Tarrant County, Texas shall be referred to
herein collectively as the "Center");
B. PA is engaged in the delivery of radiology services through its
member and physician employees (each a ARadiologist" and collectively the
"Radiologists"), each of whom is a physician specializing in the field of
radiology, qualified and duly licensed to practice medicine in the State of
Texas;
C. PHYMED desires to enter into an agreement with PA whereby PA,
through its member and contracted or employed physicians, will be the exclusive
provider of radiology services at the Center; and
D. The parties desire to enter into this Agreement in order to set
forth a full statement of their respective duties and responsibilities.
AGREEMENT
NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements contained herein, the parties, each intending to be legally bound
hereby, agree as follows:
1. ENGAGEMENT OF PA
1.1 Scope of Engagement. PHYMED hereby engages PA, and PA hereby
agrees, to provide professional Radiology Services in the Center in accordance
with the terms of this Agreement. As used in this Agreement, the term "Radiology
Services" shall include, but not necessarily be limited to, the performance,
reading, and interpretation of x-rays and other radiographic and imaging
procedures, diagnostic ultrasound, CT scanning, fluoroscopic examinations,
mammography, magnetic resonance imaging ("MRI"), inpatient and outpatient
interventional procedures, and nuclear radiologic services.
1.2 Term of Agreement. This Agreement shall be effective as of the
Effective Date, and continue for a term of ten (10) years (the "Primary Term"),
unless earlier terminated pursuant to the provisions of this Agreement. The term
of this Agreement shall be extended for additional five (5) year periods (each
an "Extended Term"), whether one or more, commencing on the expiration of the
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Primary Term and on the expiration of each succeeding Extended Term, unless (i)
at least six (6) months before the expiration of the Primary Term or any
Extended Term, as applicable, either party delivers to the other written notice
of its election not to renew this Agreement, or (ii) either party is in material
default of its obligations hereunder. For the purposes of this Section, a
material default by PA or PHYMED shall not be deemed to exist unless and until
the notice requirements set forth in Section 9.1 are satisfied and the time to
cure the default has elapsed without PHYMED or PA, as applicable, taking the
action necessary to cure such default. The provisions of this Section relating
to extension of the term of this Agreement shall not in any way negate the right
of either party to terminate this Agreement in accordance with the provisions of
Section 9 hereof.
2. RELATIONSHIP OF PARTIES
2.1 Independent Contractor Status. In performing its responsibilities
pursuant to this Agreement, it is understood and agreed that PA, any
Radiologists, and any non-physician employees of PA performing services
hereunder are at all times acting as independent contractors of PHYMED. Neither
party is a partner, joint-venturer, or employee of the other. PHYMED shall
neither have nor exercise any control or direction over the medical judgment of
PA or the Radiologists, nor over the methods or manner by which PA or the
Radiologists perform their work and functions under this Agreement as they
relate to the diagnosis or treatment of any disease, disorder, defect or injury.
2.2 Compensation and Benefits. Neither PA, its employees performing
services in the Center, nor any Radiologist shall be entitled to any salary or
other compensation from PHYMED, or to any employee benefits provided by PHYMED.
Except for the fees for billing and collection provided for in Section 5,
neither PHYMED nor its employees shall be entitled to any salary or other
compensation from PA, or to any employee benefits provided by PA.
2.3 Compliance With Laws and Regulations. The parties recognize that
this Agreement is subject to, and agree to comply with, applicable local, state,
and federal statutes, rules and regulations. Any provisions of applicable
statutes, rules or regulations that invalidate any term of this Agreement, that
are inconsistent with any term of this Agreement, or that would cause one or
both of the parties hereto to be in violation of law shall be deemed to have
superseded the terms of this Agreement; provided, however, that the parties
shall use their best efforts to accommodate the terms and intent of this
Agreement to the greatest extent possible consistent with the requirements of
applicable statutes, rules and regulations and negotiate in good faith toward
amendment of this Agreement if required to comply with applicable law.
3. DUTIES OF PA.
3.1 Radiologist Services.
a. Services to be offered. PA shall provide professional Radiology
Services to the patients of the Center consistent with the skill, training and
expertise of the Radiologists and with sound medical judgment.
b. Schedule of Coverage. PA will provide adequate on-site professional
coverage for radiology services in the Center during the normal business hours
of the Center.
c. Physician Staffing. PA shall provide as many Radiologists as are
necessary for the timely, proper, and efficient provision of the Radiology
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Services in the Center. PA may provide physicians who are not members or
employees of PA, but are engaged by PA under contract to provide such physician
services to the Center (who shall also in such capacity be deemed Radiologists).
Each Radiologist must possess all necessary qualifications, training,
experience, and current licensure in the State of Texas to perform the duties
that are required of the Radiologists hereunder.
d. Additional Radiologists. To expand further the diagnostic and
treatment capabilities of the Center, the PA shall meet periodically with PHYMED
to assess whether additional radiologists or specialists in subspecialties of
radiology are needed at the Center. PHYMED will cooperate in the recruitment of
such persons if and when required in the judgment of the PA and PHYMED. Any such
radiologists will be available for appropriate procedures and interpretation in
accordance with this Agreement.
3.2 Equipment. PA shall consult with PHYMED with respect to the
selection of additional and replacement equipment for the Center. The PA shall
assist PHYMED in its efforts to ensure that all radiology equipment provided at
the Center is calibrated, accredited, licensed, and inspected (as applicable),
and that such equipment complies with all applicable regulatory requirements.
Pursuant to Section 4 hereof, PHYMED shall bear the expense of all such
calibration, accreditation, licensing, and inspection by qualified personnel.
3.3 Records. PA, through the Director, shall keep and maintain (or
cause to be kept and maintained) appropriate records relating to the
professional services rendered under this Agreement. PA shall permit PHYMED
personnel reasonable access to records, reports, and claims necessary to assure
compliance with the terms of this Agreement.
3.4 Performance of Duties. The Radiologists shall perform their duties
under this Agreement in accordance with such standards of professional ethics
and practice as may from time to time be applicable during the term of this
Agreement.
3.5 Insurance. PA shall have and shall maintain, and shall cause each
of the radiologists to have and maintain, at its or their expense, with such
companies and coverage shall be reasonably satisfactory to PHYMED, professional
liability (medical malpractice) insurance covering the PA and the Radiologists
for malpractice claims made during and after termination of this Agreement based
on conduct alleged to have occurred during the term of this Agreement, with
limits not less than $500,000.00 for each claim and $1,000,000.00 in the,
aggregate for the policy year. Such insurance shall not be cancelable except
upon at least thirty (30) days prior written notice to PA, with a copy of such
notice to be delivered contemporaneously to PHYMED. PA shall furnish or cause to
be furnished to PHYMED certificates of insurance evidencing the existence of
such coverage or before the Effective Date, and shall during the term hereof,
upon demand, furnish evidence of continuing coverage.
3.6 Reimbursement. PA, as appropriate, shall be reimbursed for
reasonable out-of-pocket marketing and other business-related expenses incurred
on behalf of PHYMED. The PA agrees to maintain records and submit reports for
reimbursement of said expenses following the established policies of PHYMED for
payment of such expenses for its own employees. PHYMED reserves the right to
change and/or modify the reimbursement policies for marketing and
business-related expenses from time to time as it deems appropriate and in the
best interest of the Center.
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4. DUTIES OF PHYMED
4.1 General. PHYMED shall furnish for the performance of PA's
responsibilities hereunder and the outside medical services and business
activities permitted hereby, such space, utilities, services, equipment,
supplies, and non-physician personnel as may be necessary or appropriate,
including but not limited to the following:
(a) Facilities. PHYMED shall provide and maintain, at its own cost,
the Center and all such facilities, furniture, and fixtures as are necessary or
appropriate for the proper and efficient operation of the Center. PHYMED shall
keep and maintain the Center and all such facilities, furniture, and fixtures in
good order and repair. PHYMED shall be responsible for and pay all real and
personal property lease payments, expenses, taxes and insurance related to
operation of the Center or any such facilities, furniture, or fixtures, or any
portion thereof.
(b) Equipment. PHYMED shall provide, install at the Center, and
maintain, at its own cost, such radiology equipment as it deems necessary or
appropriate for the proper and efficient operation of the Center. The type,
quantity, and brand of all such equipment shall be determined by PHYMED upon
consultation with the PA. PHYMED agrees to investigate teleradiology equipment
for the transmission of CT scans, sonography and plain film studies, and MRI
studies. PHYMED shall bear the expense of all calibrations, accreditation's,
licensing, and inspections by qualified personnel relating to such equipment.
PHYMED shall, at its own cost, keep and maintain such equipment in good order
and repair or replace such equipment or any part of it that becomes worn out or
obsolete.
(c) Supplies. PHYMED shall provide, at its own cost, such drugs and
supplies, including chemicals, x-ray film, papers, stationery, and similar
items, as are necessary or appropriate for the proper and efficient operation of
the Center. The type, quantity, and brand of all such supplies shall be as
determined by PHYMED in consultation with the PA.
(d) Personnel. PHYMED shall employ, at its own cost, all
technologists, nurses, and professional (nonphysician) and nonprofessional
personnel to be assigned to the Center. The number and qualifications of such
personnel shall be appropriate to accomplish the proper and efficient operation
of the Center, and PHYMED shall consult with the PA regarding the number,
qualifications, and assignments of such personnel. PHYMED agrees to provide, at
its own cost, adequate nonphysician personnel for the Center during all hours of
on-site coverage.
(e) Support Services. PHYMED shall provide, at its own cost, such
janitorial, ordinary laundry, administrative, accounting, engineering, and
purchasing, messenger and medical records services, utilities for light and
power, and refuse disposal as may be necessary for the proper and efficient
operation of the Center.
4.2 Insurance. PHYMED shall have and shall maintain, at its expense,
with such companies and coverage as shall be reasonably satisfactory to PA,
liability insurance covering PHYMED for any and all claims made during and after
termination of this Agreement based on conduct alleged to have occurred during
the term of this Agreement with limits of not less than $500,000.00 for each
claim and $1,000,000.00 in the aggregate for each policy year. Such insurance
shall not be cancelable except upon thirty (30) days prior written notice to
PHYMED, with a copy of such notice to be delivered contemporaneously to PA.
PHYMED shall furnish to PA certificates of insurance evidencing the existence of
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such coverage on or before the Effective Date of this Agreement, and shall
during the term hereof, upon demand, furnish evidence of continuing coverage.
4.3 Exclusivity. Both parties agree that the relationship under this
Agreement is built upon mutual exclusivity. Therefore, during the term of this
Agreement, PHYMED shall not retain or engage in any manner, and shall not allow,
any Physician or other professional not affiliated with, hired or designated by
PA to perform any duties required to be performed by PA pursuant to this
Agreement, including, but not limited to, the reading of any images taken by
equipment located on or off the premises of the Center; provided, however, that
the foregoing shall not prevent PHYMED from allowing other non-radiologist
physicians to have access to any property, equipment or staff of the Center for
the purposes of rendering medical services of any nature to their patients.
During the term of this Agreement, PA shall not perform for any other person or
entity any duties required to be performed by PA pursuant to this Agreement,
including, but not limited to, the reading of any images for any center,
hospital or any other healthcare facility; provided, however, that the foregoing
shall not prevent PA from engaging part-time or temporary radiologists for
purposes of meeting the terms under this Agreement that may be engaged in
providing radiological services to other centers, hospitals or other healthcare
facilities. Both parties have the right to waive this exclusivity with an
expressed written consent.
5. COMPENSATION BILLING AND FINANCIAL ARRANGEMENTS
5.1 PA and Radiologist Compensation. PA shall be solely responsible for
(a) establishing its fees, and (13) billing and collection (whether directly or
through an agent) of fees for the professional component of the Radiology
Services rendered pursuant to this Agreement.
5.2 PHYMED Charges. PHYMED shall establish the amounts to be charged to
patients for the technical (non-professional) component of the Radiology
Services rendered in the Center, and PHYMED shall be solely responsible for
billing and collection for such services.
5.3 Access to Records. The parties agree to permit each other's
accountants and other representatives reasonable access during normal working
hours to billing, patient, and reimbursement records relating to the operations
of the Center for purposes of, and to the extent necessary to perform, billing,
collection and accounting functions, subject to the provisions of law relating
to confidentiality of patient records. PA and PHYMED each agree to cooperate
with the other, and with the agent(s) of the other, in an effort to promote
efficient, coordinated billing for services rendered at the Center.
6. OUTSIDE ACTIVITIES. This Agreement permits PA and the Radiologists to perform
business activities outside the scope of this Agreement and other than for
PHYMED, provided PA complies with its obligations under this Agreement. Such
outside activities may be conducted on the premises of the Center, using such
space, utilities, and supplies furnished pursuant to this Agreement as shall be
required so long as the outside activities in no way infringe upon or materially
adversely affect the performance of the radiology services called for by this
Agreement.
7. USE OF PREMISES.
7.1 No Lease. Nothing contained in this Agreement shall be construed by
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the parties hereto to constitute a lease to PA of any particular or specific
portion of the premises of the Center, and insofar as PA may use a portion of
said premises, PA does so as a licensee only, and PHYMED shall at all times have
full and free access to the same.
7.2 Additions. Alterations. Improvements or Repairs. No additions,
alterations, improvements or repairs shall be made by PA to any space,
facilities or equipment furnished to PA by PHYMED unless PA has received prior
written permission therefor from PHYMED. Such permission shall not be
unreasonably withheld. Any equipment or movable improvements paid for by PA
shall remain the property of PA.
8. RECORDS AND REPORTS
8.1 Medical Records and Reports. All parties will generate medical
records and reports pertaining to patients treated, which records and reports
shall be kept in the format determined by PHYMED upon consultation of the PA.
All medical records shall be maintained in a form and for the period of time
required by applicable law.
8.2 Notice of Request. If any party is requested to disclose any books,
documents, or records relevant to this Agreement for the purpose of an audit or
investigation, such party shall notice the other parties to this Agreement of
the nature and scope of such request and shall make all books, documents, or
records so disclosed available to the other parties upon written request.
9.0 TERMINATION
9.1 Termination for Cause. Either party may terminate this Agreement if
the other party materially breaches any provisions of this Agreement, upon seven
(7) days prior written notice to the other party; provided, however, that the
party which desires to terminate this Agreement has given the breaching party
written notice of such material breach along with written notice of the
intention to terminate this Agreement, and such breach has not been cured within
the applicable notice period provided for in this sentence. The notice of breach
under this Section shall specify with reasonable particularity the nature and
extent of the alleged material breach.
9.2 Termination for Insolvency. Either party may terminate this
Agreement immediately (i) if either PHYMED or PA is adjudicated bankrupt or
becomes insolvent; (ii) if either PHYMED or PA institutes or consents to any
voluntary bankruptcy or other similar arrangement; or (iii) if a receiver or
trustee is appointed for either PHYMED or PA for any similar reasons.
9.3 Termination as to a Radiologist. PHYMED may terminate the right of
any Radiologist to provide services under this Agreement, effective immediately
upon notice, in the event of the expulsion, suspension or imposition of
disciplinary action against the Radiologist by the Texas State Board of Medical
Examiners.
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9.4 Optional Termination. PHYMED or PA may terminate this Agreement
upon six (6) months prior written notice to the other without cause.
9.5 Termination By Mutual Consent. The parties may terminate this
Agreement before the expiration of any term by mutual written agreement.
10. ASSIGNMENT. PA shall not, without the prior written consent of PHYMED,
assign any rights or delegate any duties not permitted to be assigned or
delegated under this Agreement; provided, however, that PA may delegate the
responsibility for performing certain of its duties and obligations to provide
Radiology Services to the Radiologists in accordance with this Agreement. PHYMED
may, with prior the prior written consent of PA, assign its rights or delegate
its duties hereunder to any entity that operates or assumes some or all of the
facilities and functions of the Center. Any attempted assignment in
contravention of this Section shall be void and shall constitute a material
breach of this Agreement.
11. AMENDMENT. This Agreement may be amended only by an instrument in
writing signed by the parties hereto and PA.
12. NOTICE. Whenever, under the terms of this Agreement, written notice is
required or permitted to be given such notice shall be deemed to have been
delivered upon receipt if personally delivered, or on the third business day
after this notice is deposited in the United States mail in a properly stamped
envelope, certified mail, return receipt requested, addressed to the party to
whom it is to be given at the address set forth below:
TO PHYMED: TO PA:
PHYMED, Inc. The PRS Group, P.A.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, M.D.
13. MISCELLANEOUS
13.1 Entire Agreement. This Agreement sets forth the entire
understanding and agreement between the parties and shall be binding upon the
parties, their subsidiaries, affiliates, successors, and permitted assigns. Any
and all prior negotiations, agreements, and understandings are superseded
hereby.
13.2 Section Heading. The headings preceding the text of the several
sections of this Agreement are inserted solely for convenience of reference and
shall not constitute a part of this Agreement, nor shall they affect the meaning
or construction, of any section hereof.
13.3 Governing Law. This Agreement shall be construed and enforced
pursuant to the laws of the State of Texas.
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13.4 Severability. All provisions of this Agreement shall be considered
severable from the remainder and in the event that any provision should be
determined to be unenforceable as written for any reason, such determination
shall not adversely affect the remainder of this Agreement.
13.5 Counterparts. This document may executed in multiple counterparts,
each of which when taken together shall constitute but one and the same
instrument.
13.6 Agreement to Benefit Only PHYMED / PA.. No provision of this
Agreement is intended to benefit any person or entity, including, but not
limited to, any Radiologist who is not a party to this Agreement, nor shall any
person or entity not a party to this Agreement have any right to seek to enforce
any right or remedy with respect hereto.
IN WITNESS WHEREOF, the said parties have executed this Agreement by their
respective duly authorized representatives or personally, as the case may be.
▇▇▇.▇▇▇., INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
President
Date: 9/1/97
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THE PRS GROUP, PA
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, M.D.
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, M.D.
Managing Partner
Date: 9/1/97
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