EXHIBIT 10.3
FIRST AMENDMENT TO HEALTH SERVICES AGREEMENT BETWEEN
HIP OF NEW JERSEY, INC. AND PINNACLE HEALTH ENTERPRISES, L.L.C.
(DATED AS OF JULY 24, 1997)
HIP of New Jersey, Inc. and Pinnacle Health Enterprises, L.L.C. hereby
agree that the Health Services Agreement by and between HIP of New Jersey, Inc.
and Pinnacle Health Enterprises, L.L.C. dated as of July 24, 1997 is hereby
amended as follows:
1. A new Section 2A is hereby added as follows:
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2. Section 2.1 is hereby deleted and replaced with the following:
Independent Contractors. The Plan and PHE are independent contractors and
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separate legal entities. The relationship between the Plan and PHE is
reflected in this Agreement, and neither the Plan, PHE, nor the employees,
servants or representatives of either, shall be considered the employee,
servant or representative of the other. None of the provisions of this
Agreement are intended to create or to be construed as creating any
partnership, joint venture or employer-employee relationship between or
among the Plan, PHE or any of their respective employees, servants or
representatives.
3. Section 2.4 is hereby deleted and replaced with the following:
PORTIONS OF THIS EXHIBIT MARKED BY "*" HAVE BEEN OMITTED PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT. THE OMITTED PORTIONS HAVE BEEN FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
Subcontracts. [****************************************************
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The parties agree that PHE shall not enter any agreement with any third-
party for the delivery of health care services to HIP covered persons which
is subject to N.J.A.C. 8:38-15.1(a) and (b), without first meeting the
requirements of N.J.A.C. 8:38-15.2 including required approvals from the
State of New Jersey.
4. Section 3.6(a) is hereby deleted and replaced with the following:
(a) PHE has two basic models of PHE Provider Agreements; one for Medical
Group, which is the Medical Services Agreement, and one for other PHE
Providers, which is the Provider Agreement. The form of the Medical
Services Agreement is annexed as Exhibit A, and the model form of Provider
Agreement is annexed as Exhibit B. These forms are approved by all
applicable governmental authorities and Accreditation Agencies (to the
extent required). PHE shall have the right to modify these agreements,
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**************] subject to approval of governmental agencies with
jurisdiction, PHE shall provide the Plan with prior notice of any material
changes to the model forms described herein and any changes required by law
or regulation. [**********************************************************
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**************] PHE hereby represents and warrants, and has secured from
Medical Group in the Medical Services Agreement and will secure from other
Providers in the Provider Agreement, their representation and warranty,
that it has the authority to bind the Medical Group and Providers, and that
it will require the Medical Group and Providers to comply with the
applicable provisions of this Agreement, [*********************************
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PORTIONS OF THIS EXHIBIT MARKED BY "*" HAVE BEEN OMITTED PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT. THE OMITTED PORTIONS HAVE BEEN FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
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5. Section 3.9(a) is deleted and replaced with the following:
(a) PHE hereby agrees that in no event, including, but not limited to non-
payment by the Plan, insolvency or breach of this Agreement, shall PHE, [**
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collect a deposit from, seek compensation, remuneration or reimbursement
from, or have any recourse against any Covered Person, or persons other
than the Plan or PHE acting on their behalf, for Covered Services provided
pursuant to this Agreement. This provision shall not prohibit collection of
fees for Non-Covered Services, Coinsurance, Copayments, or Deductibles in
accordance with the terms of the Covered Person's Coverage Plan. PHE
further agrees that (I) this Section 3.9 shall survive the termination of
this Agreement regardless of the cause giving rise to termination and shall
be construed to be for the benefit of Covered Persons and (ii) supersedes
any oral or written contrary agreement now existing or hereafter entered
into between PHE and Medical Group, or between medical Group or PHE and a
PHE Provider and a Covered Person, or Persons acting on their behalf. Any
modification, addition, or deletion to the provisions of this Section 3.9
shall become effective on a date no earlier than thirty (30) days after the
Commissioner of Banking and Insurance has received written notice of such
proposed changes and the change has been deemed approved, or else the
Commissioner of Banking and Insurance has approved the proposed changes.
6. Section 3.19(a) is deleted and replaced with the following:
(a) [**********************************************************************
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7. Section 3.20 is deleted and replaced with the following:
Coordination of Benefits. The parties shall cooperate, and PHE shall cause
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PHE Providers to cooperate, in the performance of coordination of benefits.
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PORTIONS OF THIS EXHIBIT MARKED BY "*" HAVE BEEN OMITTED PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT. THE OMITTED PORTIONS HAVE BEEN FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
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Covered Person who is treated by a PHE Provider is covered by health care
coverage provided by any Person other than the Plan, and if such other
Person is the primary carrier, PHE shall, and shall cause PHE Providers to,
cooperate with the Plan in all xxxxxxxx of such primary carrier on behalf
of the Covered Person for the Covered Services rendered by PHE or PHE
Providers, such xxxxxxxx to be at PHE Providers [***************** fee.]
Furthermore, PHE shall, or shall cause PHE Providers to execute any
necessary document in connection with the submission of such bills and
claims by the Plan or the Covered Person. The parties agree to abide by any
applicable state or federal law concerning coordination of benefits.
8. Section 3.26 is deleted and replaced with the following:
Claims Processing. [******************************************************
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**********************************************] PHE shall adjudicate all
Provider claims for all Covered Services in accordance with its policies
and procedures, subject to approval by the Plan, which shall not be
unreasonably withheld. PHE shall provide to the Plan claims payment
reports reasonably satisfactory to the Plan including those claims paid for
ASO and POS products. PHE shall perform claims processing in accordance
with the applicable standards set forth in Attachment 5.5 and shall comply
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with all applicable laws, rules and regulations regarding claims
processing. Without limiting the foregoing, the parties agree to abide by
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the requirements of N.J.S.A. 26:25-5.1, including with respect to Network
provider claims. [***************************************************
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9. Section 3.27 is deleted and replaced with the following:
Financial Net Worth. PHE shall be responsible at all times to have
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sufficient funds to perform its financial responsibilities under this
Agreement related to payment of all incurred claims. PHE shall report to
the Plan on its fiscal soundness and fiscal solvency [*********************
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PORTIONS OF THIS EXHIBIT MARKED BY "*" HAVE BEEN OMITTED PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT. THE OMITTED PORTIONS HAVE BEEN FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
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10. Section 3.28(a) is hereby deleted and replaced with the following:
(a) The Plan and the State shall have the right to audit the accuracy of
claims [*****] Such audit shall be conducted in accordance with the
standards established by the Plan and as otherwise required by federal and
State regulators and/or Accreditation Agencies [*********************
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***********] Such audit shall be during normal business hours of PHE. [***
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************] The Plan, at its own cost, may engage a third party to
conduct such audit on its behalf, provided that such third party agrees in
writing to the limitations on right to audit set forth in Subsection (b)
below.
11. A new Section 6.1(a) is hereby added as follows:
(a) [*********************************************************************
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PORTIONS OF THIS EXHIBIT MARKED BY "*" HAVE BEEN OMITTED PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT. THE OMITTED PORTIONS HAVE BEEN FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
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12. Attachment 1.1B first paragraph is deleted and replaced with the
following:
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13. Except as amended as expressly provided herein, all other terms and
conditions of the Health Services Agreement by and between HIP of New
Jersey, Inc. and Pinnacle Health Enterprises, L.L.C., dated as of July 24,
1997, shall remain in full force and effect.
PORTIONS OF THIS EXHIBIT MARKED BY "*" HAVE BEEN OMITTED PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT. THE OMITTED PORTIONS HAVE BEEN FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
14. This First Amendment to the Health Services Agreement by and between HIP of
New Jersey, Inc. and Pinnacle Health Enterprises, L.L.C., dated as of July
24, 1997, shall be effective on the date signed by the last party to sign
this Amendment.
HIP OF NEW JERSEY, INC. PINNACLE HEALTH ENTERPRISES, L.L.C.
By: /s/ Xxxxxxxx X. Xxxxx By: /s/ Xxxx X. Xxxxxxx, M.D.
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Date: October 31, 1997 Date: October 31, 1997
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