EXHIBIT 10.92
PHARMACY DISPENSING SERVICES AGREEMENT
BY AND BETWEEN
AMERICAN PHARMACEUTICAL SERVICES, INC.
AND
--------------------------------------
1
PHARMACY DISPENSING SERVICES AGREEMENT
This Pharmacy Dispensing Services Agreement ("Agreement") is made and
entered into as of the first day of January 2001, by and between American
Pharmaceutical Services, Inc., a Delaware corporation ("APS"), and
_____________________, a __________ corporation doing business as
_____________________________________, located at
______________________________________________("Facility").
RECITALS
WHEREAS, the Facility is engaged in the operation of a nursing
facility;
WHEREAS, APS is a licensed pharmacy in the State of _______________ and
is in the business of selling and supplying prescription and nonprescription
pharmaceutical products ("Pharmacy Products") to residents of nursing, assisted
living and other long-term care facilities; and
WHEREAS, the parties hereto desire to enter into this Agreement with
respect to the provision of Pharmacy Products identified on Exhibit A hereto and
as set forth herein by APS to the Facility and to the residents of the Facility
("Residents");
NOW, THEREFORE, for and in consideration of the foregoing recitals and
of the mutual promises contained in this Agreement the parties hereto hereby
agree as follows:
ARTICLE I
REPRESENTATIONS AND WARRANTIES OF APS
1.1 Necessary Licenses and Qualifications. APS represents and warrants that
it has and shall maintain for the term hereof all necessary
qualifications, certificates, approvals, permits and licenses required
pursuant to applicable federal, state and local laws and regulations to
provide the Pharmacy Products under this Agreement.
1.2 Authority. APS represents and warrants that it has all necessary power
and authority to execute, deliver and perform this Agreement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF FACILITY
2.1 Necessary Licenses and Qualifications. Facility represents and warrants
that it has and shall maintain for the term hereof all necessary
qualifications, certificates, approvals, permits and licenses required
pursuant to applicable federal, state and local laws and regulations to
operate the Facility.
2
2.2 Authority. Facility represents and warrants that it has all necessary
power and authority to execute, deliver and perform this Agreement with
respect to the Facility.
2.3 Professional Management Responsibility. Facility hereby represents and
warrants that it retains professional management responsibility over
all services furnished hereunder, and retains all management and
administrative rights and responsibilities normally assumed by the
operator of a nursing facility.
ARTICLE III
APS SERVICES
APS shall provide the Pharmacy Products set forth in this Article III
to the Facility in compliance with the standards set forth herein and as may be
otherwise required by applicable law.
3.1 Pharmacy Products.
(a) Upon the prescribing physician's or Facility's, as the case
may be, order, APS agrees to deliver promptly prescription and
non-prescription drugs and supplies within reasonable times to
the Facility. If, for any reason, APS is unable to deliver
requested item(s) within a reasonable time, then APS shall
promptly notify the Facility of its inability to so deliver.
APS will, at all times, use its best efforts to secure and
deliver all ordered drugs and supplies. In the event that the
item ordered is not available, APS will use its best efforts
to contact the prescribing physician to determine whether an
alternate item might be prescribed.
(b) APS will provide the Facility with an appropriate number of
stat medication kits and a use policy which shall conform to
all applicable rules and regulations. It is further understood
and agreed by both parties that use of an item from such kit
shall be pursuant only to a drug order by a licensed
physician. Facility agrees to promptly report to APS the usage
of any item from the stat medication kit to facilitate the
billing for said items to the appropriate Resident. In the
event that Facility fails to report such usage, the cost of
replenishing the stat medication kit to the approved list of
contents shall be borne by Facility.
3.2 Pharmacy Consulting Services. This Agreement does not include the
provision of pharmacy consulting services as required under the
conditions of participation in the Medicare and Medicaid programs for
nursing facilities. The provision of those services on a consultant or
advisory basis shall be provided under and covered exclusively by a
separate agreement.
3.3 APS General Service Requirements.
(a) APS agrees to provide all Pharmacy Products pursuant to the
terms of this Agreement Monday through Friday during normal
business hours and shall provide on-call services twenty-four
(24) hours per day, seven (7) days per week throughout the
calendar year.
3
(b) APS shall institute purchase order, invoice and product
shipment procedures to facilitate efficient and timely
ordering and delivery of Pharmacy Products for use in
connection with Residents. APS shall arrange for the delivery
of Pharmacy Products at such time or times as are appropriate
to facilitate their use in the treatment of Residents for whom
the Pharmacy Products are ordered.
(c) APS shall provide to the Facility all forms APS deems
necessary for the proper execution of the Pharmacy Supply
delivery system. Such forms include, but shall not be limited
to, drug order and re-order forms, delivery receipt forms and
communication orders.
(d) As permitted by applicable law, APS shall, from time to time,
make available to the Facility certain materials and equipment
necessary or appropriate for the ordering and provision of the
Pharmacy Products provided hereunder. The materials and
equipment so provided may include, without limitation and as
mutually agreed by the parties hereto, stat medication kits,
medication carts and drug delivery systems, telecommunications
equipment, reference books, films, slides, manuals and
audio-visual equipment and training aids. It is understood and
agreed to by Facility that all such items of material and
equipment shall at all times remain the property of APS and
upon demand by APS shall be returned to APS in their original
condition subject to normal wear and tear. Facility shall
cause all such items to be used solely in connection with the
ordering or provision of Pharmacy Products hereunder.
ARTICLE IV
FACILITY OBLIGATIONS WITH RESPECT TO SERVICES
In connection with the ordering and receipt of the Pharmacy Products
set forth in Article III, Facility agrees that:
4.1 Resident Status. The Facility will notify APS as to the status of each
Resident regarding source of reimbursement for Pharmacy Products and
shall promptly notify APS as to changes of reimbursement. Notification
shall include the provision to APS of copies of Medicare, Medicaid and
insurance coverage cards.
4.2 Physician Orders. The Facility shall promptly notify APS regarding the
physician order for Pharmacy Products, including any physician change
orders.
4.3 Use of Material and Equipment Provided by APS. Facility shall be liable
for, and shall indemnify and defend APS from and against, any and all
damages, costs, liabilities, expenses and losses, including, without
limitation, the cost of repairs or replacement, whatsoever sustained or
incurred as a result of casualty to or loss of, or the misuse or
otherwise improper use of, any and all material and equipment provided
by APS for the use of Facility in connection with the provision of
Pharmacy Products pursuant to the terms hereof.
4
ARTICLE V
BILLING AND PAYMENT
5.1 Billing and Payment for Pharmacy Products.
(a) The payment rates applicable to the Pharmacy Products provided
hereunder shall be as set forth in Exhibit A attached hereto.
(b) Except as provided to the contrary in Section 5.1(c) below,
APS shall ▇▇▇▇ Residents and third party payors with respect
to Residents, as appropriate, for all Pharmacy Products
provided by APS to Residents under this Agreement. Other than
as expressly provided for herein to the contrary, Facility
shall have no obligation to pay APS or liability to APS in
connection therewith with respect to any and all amounts that
may be billed by APS directly to third party payors or
Residents pursuant to applicable law.
(c) APS shall ▇▇▇▇ Facility, and Facility shall be liable for
payment, with respect to all Pharmacy Products provided to
Residents:
(1) for whom coverage is provided under Medicare Part A
at the time the Pharmacy Products are provided
hereunder;
(2) for whom coverage is provided under Medicare Part B
consolidated billing requirements in effect at the
time the Pharmacy Products are provided hereunder;
(3) for whom coverage is provided under Medicaid payment
to Facility covering the Pharmacy Products provided
hereunder, or where applicable federal or state law
precludes direct billing by APS of the Medicaid
agency or the Resident;
(4) for whom payment is made by a third party payor to
Facility pursuant to the terms of a contract
governing payment for the Pharmacy Products provided
hereunder.
5.2 Reimbursement Denial.
(a) In the event APS claims and receives payment from Facility for
Pharmacy Products which are later disallowed or recouped by
Medicare, Medicaid or other third party reimbursement source,
APS will repay Facility for such disallowed or recouped
amounts. At its option, subject to the provisions of Section
5.2(b) below, Facility may either offset the amounts
disallowed or recouped from any payment due to APS or may
require APS to immediately repay Facility for the amount
disallowed or recouped.
(b) In the event of a denial or disallowance received by the
Facility, the Facility will be responsible for notifying APS
within seven (7) business days and shall
5
communicate the exact nature of the denial or request for
medical necessity information.
(c) APS shall furnish to Facility all information necessary to
support and substantiate the claim for payment.
(d) Facility shall have sole discretion as to any election to
appeal, settle or compromise the amount that is disallowed or
recouped by Medicare, Medicaid or other third party
reimbursement source.
5.3 Monthly Billing and Payment. APS shall ▇▇▇▇ Facility on a monthly basis
by the fifth (5th) working day of each month for Facility charges
incurred during the past month. Facility shall pay APS within thirty
(30) days of receipt of an invoice from APS. All amounts past due by
more than thirty (30) days shall bear interest at the rate of one and
one-half percent (1.5%) per month, or the maximum monthly rate of
interest permitted by applicable law, whichever is less.
ARTICLE VI
TERM AND TERMINATION
6.1 Term. The initial term of this Agreement shall commence on the date
first written above and shall continue for a period of one (1) year.
Thereafter, this Agreement shall automatically renew for successive one
(1) year terms, and during any such renewal term either party shall
have the right to terminate this Agreement without cause by providing
to the other party not less than thirty (30) days prior written notice
of termination.
6.2 Termination.
(a) This Agreement shall automatically terminate with respect to
the Facility upon the revocation or cancellation of the
Facility's license or certification.
(b) Upon the suspension of the Facility's license or
certification, APS shall have the right to terminate this
Agreement immediately upon written notice to Facility.
(c) If either party should materially fail to fulfill its
obligations or conditions set forth herein and such default
shall not be cured within thirty (30) days after written
notice from the other party specifying the nature of default,
the aggrieved party shall have the right to terminate this
Agreement by giving written notice of termination to the
defaulting party, and this Agreement shall terminate on the
thirtieth (30th) day after such notice is given. Either party
shall have the right to cure any such default up to, but not
after, the giving of such notice of termination.
(d) This Agreement may be terminated pursuant to the terms of
Section 8.10(b).
6
ARTICLE VII
RECORDS
7.1 Patient Records. APS shall maintain accurate patient records, adequate
to meet the needs of various sources of payment for patient services
(payors) from which the Facility may submit bills and expect payments.
Records shall be maintained of the Pharmacy Products supplied to each
Resident, in accordance with the directions for the Resident's
attending physician and the Facility. Notwithstanding the foregoing,
the production of medical records shall remain the responsibility of
the Facility.
7.2 Government Access to Records. APS and its subcontractors shall make
available, upon written request from the Secretary of the U.S.
Department of Health and Human Services, or the Comptroller General of
the United States General Accounting Office, or any of their duly
authorized representatives, this Agreement, and the books, documents
and records of APS that are necessary to verify the extent of costs
incurred by Facility with respect to providing services under this
Agreement for four (4) years thereafter the provision of such services.
7.3 APS Access to Records.
(a) The Facility shall give APS reasonable access to all resident
records, facilities and supplies necessary for the performance
of its duties herein.
(b) In the event of any dispute arising from any claim or ▇▇▇▇
submitted by APS, Facility shall give APS access to all
reasonable and necessary documents and records to investigate
the accuracy of the claim. Such access shall be during normal
business hours following reasonable advance notice from APS.
ARTICLE VIII
MISCELLANEOUS
8.1 Freedom of Choice. Each Resident shall have the express right to
purchase and obtain pharmaceuticals from the vendor or supplier of his
or her choice, from time-to-time and at any time during the term
hereof; provide, however that the Facility shall whenever possible use
APS as its primary vendor, in all cases where an individual resident
does not make a request for the services of another pharmacy.
8.2 Independent Contractors. In the performance by each party hereto of
their respective obligations hereunder, the parties shall at all times
hereunder be deemed to be independent contractors, and not the agent of
the other. Except to the extent expressly provided for herein to the
contrary, neither party shall have the right or power to bind the
other.
8.3 Insurance.
(a) APS shall maintain, during the term of this Agreement,
liability insurance coverage for its acts and omissions in
amounts of no less than one million dollars per claim and
three million dollars annual aggregate. Prior to the
commencement of this Agreement, APS shall provide to Facility
a certificate of insurance
7
indicating that such coverage is in effect and providing that
Facility will be notified at least thirty (30) days prior to
any modification, cancellation, reduction or non-renewal of
such coverage. Any substantial change in coverage that might
adversely affect or actually materially adversely affects
Facility shall be a breach of this Agreement.
(b) Facility shall maintain, during the term of this Agreement,
liability insurance coverage for its acts and omissions in
amounts of no less than one million dollars per claim and
three million dollars annual aggregate. Prior to the
commencement of this Agreement, Facility shall provide to APS
a certificate of insurance indicating that such coverage is in
effect and providing that APS will be notified at least thirty
(30) days prior to any modification, cancellation, reduction
or non-renewal of such coverage. Any substantial change in
coverage that might adversely affect or actually materially
adversely affects APS shall be a breach of this Agreement.
8.4 Indemnification.
(a) Facility shall defend, indemnify, protect and hold harmless
APS and its affiliates, and the officers, directors, employees
and agents of each of them, from and against any and all
liability, obligation, damage, loss, cost, claim, judgment,
settlement, expense or demand whatsoever, of any kind or
nature, including reasonable attorneys fees and defense costs
in connection therewith, arising directly or indirectly from
actions taken or omissions made by Facility in its performance
under this Agreement.
(b) APS shall defend, indemnify, protect and hold harmless
Facility and its affiliates, and the officers, directors,
employees and agents of each of them, from and against any and
all liability, obligation, damage, loss, cost, claim,
judgment, settlement, expense or demand whatsoever, of any
kind or nature, including reasonable attorneys fees and
defense costs in connection therewith, arising directly or
indirectly from actions taken or omissions made by APS or its
affiliates in its performance under this Agreement.
8.5 Governing Law. Disputes arising under this Agreement shall be governed
according to the internal laws of the State of ____________, without
regard to the conflicts of laws provisions thereof.
8.6 Compliance with Applicable Law. In all aspects relative to the
performance of their respective obligations under this Agreement, both
parties shall conduct their respective businesses in accordance with
applicable law.
8.7 Successors and Assigns. This Agreement shall be binding upon either
party's purchasers, transferees, successors and assigns, whether by
operation of law or otherwise, including but not limited to the sale of
the stock, assets or any other ownership interest of a party hereto to
another, or the merger or consolidation of a party hereto into another,
or any transaction by which a party to this Agreement transfers its
business to another as to which the duties and obligations provided for
under this Agreement by either or both parties hereto arise.
8
8.8 Waiver of Breach. The waiver of any breach of this Agreement by either
party shall not constitute a continuing waiver or a waiver of any
subsequent breach of either the same or any other provision of this
Agreement.
8.9 Notices. Any notice or other communication made or contemplated to be
made under this Agreement shall be in writing and shall be deemed to
have been received by the party to whom it is addressed on the date of
delivery, if delivered by hand, or three (3) business days after it is
deposited in the United States Mail, postage prepaid, return receipt
requested, or the next business day after it is transmitted by Federal
Express or similar overnight delivery services, addressed, in the case
of APS to:
American Pharmaceutical Services, Inc.
▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇, ▇▇▇. ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: President
with a copy to:
American Pharmaceutical Services, Inc.
▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇, ▇▇▇. ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: General Counsel
and in the case of Facility to:
-----------------------------------
-----------------------------------
-----------------------------------
Attn: Administrator
Either party may change its address for notices given hereunder by
giving fifteen (15) days prior written notice in accordance with this
Section 8.9.
8.10 Entire Agreement; Amendments.
(a) This Agreement, together with all Exhibits hereto, which are
incorporated herein and made a part hereof by this reference,
constitutes the entire Agreement between the parties hereto
and supersedes and cancels any other prior agreements or
understandings whether written, oral or implied. This
Agreement may not be amended except by an instrument in
writing signed by both the parties hereto.
(b) In the event of any material change in statutes, regulations,
or enforceable governmental policies applicable to either
party's obligations arising under this Agreement, or in the
event of the severance of any provision hereof pursuant to
Section 8.11, and either party is materially and adversely
affected thereby so as to materially diminish the benefits of
this Agreement reasonably intended by such affected party,
such affected party may provide notice of such material
adverse effect to the other, and request that this Agreement
be amended to resolve such
9
material adverse effect. The parties shall then be obligated
to engage in good faith negotiations in an attempt to agree
upon an acceptable amendment to this Agreement for the
purpose of resolving the material adverse effect. If the
parties fail to agree to amend this Agreement within thirty
(30) days after receipt of notice of material adverse effect,
the affected party may terminate this Agreement at any time
thereafter, upon notice given to the other party.
8.11 Severability. The invalidity or unenforceability of any term or
provision hereof shall not affect the validity or enforceability of any
other term or provision hereof.
8.12 Section Headings. The section headings contained in this Agreement are
for reference purposes only and shall not affect the construction of
this Agreement.
8.13 Nondiscrimination. APS shall provide all Pharmacy Products and
otherwise perform all of its duties and responsibilities hereunder
without unlawful discrimination on the basis of race, color, religion,
national origin, sex ancestry, disability or any other basis protected
by law.
[SIGNATURE PAGE FOLLOWS]
* * *
10
IN WITNESS WHEREOF, the parties have executed this Agreement in
multiple counterparts, each of which shall be deemed to be an original, and all
of which together shall constitute this Agreement, effective as of the date
first written above.
AMERICAN PHARMACEUTICAL SERVICES, INC.
By:
-----------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its: Vice President
Date: February ___, 2001
FACILITY
By:
-----------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Its: Vice President
Date: February ___, 2001
11
Exhibit A
PAYMENT RATES FOR PHARMACY PRODUCTS
Pricing/Basic Rates
- APS will charge Facility the prevailing Medicaid rate in the respective
state.
Scope:
- Basic rate will be effective for ALL prescription medications for which
APS looks to the Facility for payment. This includes but may not
necessarily be limited to private patients, HMO or managed care
patients, PBM patients, and Medicare Part A patients.
- All payor sources except Medicaid or any other party which APS will
▇▇▇▇ direct.
Medicaid Rates by State...
Georgia AWP -10% +4.62 Illinois* AWP -10% +5.00
North Carolina AWP -10% +5.60 Indiana AWP -10% +4.00
Florida AWP -12% +4.23 Louisiana AWP -10.5 +5.77
Alabama AWP +5.45 Massachusetts AWP -12% +3.00
Virginia AWP -9% +4.25 Mississippi AWP -10% +4.91
California AWP -5% +3.80 New Jersey AWP -10% +5.00
Michigan AWP -13.5% +3.72 Tennessee AWP -10% +5.00
Wisconsin AWP -10% +4.38 Texas AWP -15% +5.27
Colorado AWP -10% +4.08 ---------------
Connecticut AWP -12% +4.10 .98
Arizona* AWP -15% +1.50
*Note: Average of various formula charges. See Appendix "A."
OVER THE COUNTER (OTC)
(NON-PRESCRIPTION MEDICATIONS)
Pricing/Basic Rates
- APS is not the preferred provider for Facility for non-prescription,
OTC, floor stock medications.
- APS will charge acquisition cost x 1.5 for all OTC items ordered by
Facility for nonprescription needs.
- APS will fill all OTC, floor stock orders at the above pricing in its
role of secondary supplier.
- Any OTC packaged patient specific should be priced the same as other
prescription orders (i.e. Medicaid formula).
▇▇
▇▇▇▇▇▇▇▇ "▇"
▇▇▇▇▇ MEDICAID CHARGE DETAIL
ARIZONA, ILLINOIS
ARIZONA:
MEDICAID REIMBURSEMENT BY PLAN
MEDICAID PLAN
-------------
APIPA AWP -12%+$1.50
PHP AWP -12%+$2.95
Cigna Comm. Choice AWP -15%+$1.40
Cochise Health Varies by contract
Comcare AWP -15%+$1.25
Health Choice AWP -15%+$1.50
Mercy Care AWP -13%+$1.60
Yavapai County Varies
Maricopa County AWP -15%+$1.50
Indian Health Varies by contract
AHCCCS FFS Varies by rate code
LTC FFS Varies by rate code
ILLINOIS:
VARIABLE FEE SCHEDULE
If AWP is $0 to $3.58 then variable fee is $3.58.
If AWP is $3.59 to $14.99 then variable fee is equal to AWP.
If AWP is $15.00 or more then variable fee is $15.00.
13
I.V. THERAPY
(INTRAVENOUS THERAPY PRODUCTS AND SERVICES)
Pricing/Basic Charge (Products and Pumps)
- Medications and solutions - AWP x .9 + $35 per diem for each therapy
- Ancillary supplies - Acquisition cost x 1.7
- I.V. electronic pumps:
- Stationary $10/day
- Ambulatory $12/day
- Elastomeric $10/dose
Pricing/Basic Charge (Support Services)
- APS will provide support and I.V. education services as requested and
will charge according to a fee schedule shown on the following page.
- Services for which APS will charge said fees will be documented on the
"Infusion Therapy Services/Report of Contact Charge Slip" shown on the
page behind the fee schedule.
Total Parenteral Nutrition (TPN) Pricing
- Pricing does not include charges for supply kits, administration kits,
or pump rental, which are billed at the IV therapy rates.
- Pricing does not include Vascular Access for product delivery. The
charges for those services will be consistent with the contracted price
for the Customer.
- There are two price tiers based on grams of protein for the final
solution:
Tier I: Standard TPN solution without lipids for 1,000 cc. $ 130.00/day
10-120 grams of protein, electrolytes, TE, MTV
Tier II: For TPN solutions in excess of 120 grams of protein the
pricing formula is AWP x 2.3
14
INFUSION THERAPY SERVICE MENU
CODE: INFUSION THERAPY SERVICE DESCRIPTION: MPAN CHARGE:
-----------------------------------------------------------------------------------------------------------
IV 002A IV Therapy Special Needs of the Elderly 12.6 CEU's via American $75.00 per nurse
Nurses Credentialing Center (Multi-facility class only)
-----------------------------------------------------------------------------------------------------------
IV 002B Midline Insertion Class for RN's Only - multi-facility class $100.00 per nurse
-----------------------------------------------------------------------------------------------------------
IV 002C PICC Insertion Class for RN's Only - multi-facility class $125.00 per nurse
-----------------------------------------------------------------------------------------------------------
IV 002D On-site, facility-based, Inservice based on four-hour or $50.00 for two hours
two-hour increments: i.e. annual re-certification, per participant
chemotherapy/TPN Inservice
-----------------------------------------------------------------------------------------------------------
IV 003A Peripheral Insertion or Attempt $90.00
-----------------------------------------------------------------------------------------------------------
IV 003B PICC Insertion or Attempt $250.00
-----------------------------------------------------------------------------------------------------------
IV 003C Midline/PICC Assessment $100.00
-----------------------------------------------------------------------------------------------------------
IV 003D Midline Insertion or attempt $150.00
-----------------------------------------------------------------------------------------------------------
IV 004 Intravenous Therapy Reference Manual (replacement) $100.00 per manual
-----------------------------------------------------------------------------------------------------------
IV 005 Remove PICC/Non-Tunneled Catheter $150.00
-----------------------------------------------------------------------------------------------------------
IV 006 Access or De-Access Implanted Port $150.00
-----------------------------------------------------------------------------------------------------------
IV 007A Declot Central Catheters $150.00
-----------------------------------------------------------------------------------------------------------
IV 007B Repair Central Catheters $150.00
-----------------------------------------------------------------------------------------------------------
15
INFUSION THERAPY SERVICE'S / REPORT OF CONTACT CHARGE
SLIP
Facility: Date:
------------------------------- ---------------------
Patient: Station: Room:
------------------------ ----- ----- ----------
Time in facility: AM / PM Time out: AM / PM
------------- -----------------
Nursing Support / Mentoring Visit: NO CHARGE
SUPPLIES USED QTY SUPPLIES USED QTY
----------------------------------------------------------------------------------------------------------------
APS IV Start Kit Ultrasite Injection Cap
----------------------------------------------------------------------------------------------------------------
Insyte Autogard Catheter 24g Clave Injection Cap
----------------------------------------------------------------------------------------------------------------
Insyte Autogard Catheter 22g BD Needle 18 gauge
----------------------------------------------------------------------------------------------------------------
Insyte Autogard Catheter 20 g BD Needle 20 gauge
----------------------------------------------------------------------------------------------------------------
First Midline Insertion Tray BD Syringe 10cc
----------------------------------------------------------------------------------------------------------------
First PICC Insertion Tray BD Syringe 5cc
----------------------------------------------------------------------------------------------------------------
Prep Tray Clave Vial Adapter
----------------------------------------------------------------------------------------------------------------
Central Line Dressing Tray Microbore 7" extension set
----------------------------------------------------------------------------------------------------------------
PICC Line Dressing Tray IV Tubing End Cap Protector
----------------------------------------------------------------------------------------------------------------
Heparin Flush 10u/ml 30cc Peripheral Insertion or Attempt
----------------------------------------------------------------------------------------------------------------
Heparin Flush 100u/ml 30cc PICC Insertion or Attempt
----------------------------------------------------------------------------------------------------------------
NCAL 0.9% Flush 30cc Midline/PICC Assessment
----------------------------------------------------------------------------------------------------------------
SASH Kit 10u/ml 5cc syringe Midline Insertion or attempt
----------------------------------------------------------------------------------------------------------------
SASH Kit 100u/ml 5cc syringe Remove PICC/Non-Tunneled Catheter
----------------------------------------------------------------------------------------------------------------
SASH Kit 10u/ml 10cc syringe Access or De-Access Implanted Port
----------------------------------------------------------------------------------------------------------------
SASH Kit 100u/ml 10cc syringe Declot Central Catheters
----------------------------------------------------------------------------------------------------------------
Midline / PICC line Introducer only Repair Central Catheters
----------------------------------------------------------------------------------------------------------------
Other: Other:
----------------------------------------------------------------------------------------------------------------
EDUCATION ACTIVITY CHARGES: # PARTICIPANTS:
----------------------------------------------------------------------------------------------------------------
Basic IV Therapy Course Offering
----------------------------------------------------------------------------------------------------------------
Midline Insertion Course Offering
----------------------------------------------------------------------------------------------------------------
PICC Line Insertion Course Offering
----------------------------------------------------------------------------------------------------------------
Facility On-site Education # hours:
----------------------------------------------------------------------------------------------------------------
Other:
----------------------------------------------------------------------------------------------------------------
COMMENTS:
----------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
===============================================================================
APS IV RN SIGNATURE: FACILITY NURSE SIGNATURE:
------------------ ---------------
16
REQUIRED STANDARDS OF SERVICE FOR PHARMACY DISPENSING
Pharmacy Dispensing Model
- Within states permitting pharmacy prescription returns, a 28 or 30-day
dispensing system supply of medications will be provided.
- Within states NOT permitting pharmacy prescription returns, a 14-day
dispensing system supply of medications will be provided for all
Facility paid residents (i.e. Medicare Part A patients). All other
patients may be provided with a 28 or 30-day supply of medications.
Returns/Restocking Fee
- There is a $5.00 restocking fee per prescription.
After Hours Service
- After hours non-emergency requests for the following will be
provided at a fee of $50 per request:
- Routine medication refill (due to Facility error)
- Replace lost medication cart keys
- Non-emergency requests for equipment
- Floor stock/OTC orders
- Healthcare supply orders
- Emergency kit exchanges
- Providing prescription service to a Resident who has not
selected APS as his or her primary pharmacy supplier
Billing
- APS will ▇▇▇▇ the Facility for Medicare A patients only. At the
Facility's discretion, private pay and/or selected third party patients
may be billed to the Facility at the same rate as a Medicare A patient.
Reimbursement Denials
- Subject to the provisions of Section 5.2 of this Agreement but
notwithstanding the provisions of Section 5.2(d) of this Agreement, APS
may request and Facility shall permit APS to further appeal a
disallowance or recoupment under the circumstances described in Section
5.2.
17
Delivery
- The standard delivery model is a once a day delivery, seven days per
week. Facilities specified below will receive twice a day delivery due
to higher acuity patient needs. New orders will be delivered within 4
hours and may require special delivery outside of the standard delivery
run.
FACILITIES REQUIRING TWICE A DAY DELIVERY
DELIVERY FREQUENCY
FACILITY NAME (PER DAY)
-------------------------------------------------------------------------------------------------------------
WEST REGION
-------------------------------------------------------------------------------------------------------------
Desert Sky Health & Rehab 2
-------------------------------------------------------------------------------------------------------------
Desert Haven Nursing Center 2
-------------------------------------------------------------------------------------------------------------
Desert Terrace Nursing Center 2
-------------------------------------------------------------------------------------------------------------
East Valley HCC 2
-------------------------------------------------------------------------------------------------------------
Hearthstone of Mesa 2
-------------------------------------------------------------------------------------------------------------
Las ▇▇▇▇▇▇ HCC 2
-------------------------------------------------------------------------------------------------------------
SOUTH REGION
-------------------------------------------------------------------------------------------------------------
Mariner Health at Hunters Creek 2
-------------------------------------------------------------------------------------------------------------
SouthHaven Manor Nursing Home 2
-------------------------------------------------------------------------------------------------------------
Mariner Health of Bel Air 2
-------------------------------------------------------------------------------------------------------------
BC Nursing Care - Powder Springs 2
-------------------------------------------------------------------------------------------------------------
BC Nursing Care - Austell 2
-------------------------------------------------------------------------------------------------------------
Mariner Health of ▇▇▇▇▇▇ Lakes 2
-------------------------------------------------------------------------------------------------------------
Mariner Health of Orange City 2
-------------------------------------------------------------------------------------------------------------
Mariner Health of Palm City 2
-------------------------------------------------------------------------------------------------------------
Mariner Health of Boynton Beach 2
-------------------------------------------------------------------------------------------------------------
Cedar Crest 2
-------------------------------------------------------------------------------------------------------------
Mariner Health of Deland 2
-------------------------------------------------------------------------------------------------------------
Mariner Health of Atlantic Shores 2
-------------------------------------------------------------------------------------------------------------
Boulevard Manor 2
-------------------------------------------------------------------------------------------------------------
Mariner Health of Tallahassee 2
-------------------------------------------------------------------------------------------------------------
Medicana 2
-------------------------------------------------------------------------------------------------------------
Mariner Health of Titusville 2
-------------------------------------------------------------------------------------------------------------
Mariner Health of Tampa 2
-------------------------------------------------------------------------------------------------------------
Mariner Health of Metrowest 2
-------------------------------------------------------------------------------------------------------------
Mariner Health of Inverness 2
-------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇ 2
-------------------------------------------------------------------------------------------------------------
Mariner Health of Port Orange 2
-------------------------------------------------------------------------------------------------------------
Mariner Health of Clearwater 2
-------------------------------------------------------------------------------------------------------------
Mariner Health of Palmetto 2
-------------------------------------------------------------------------------------------------------------
Mariner Health of Tuskawilla 2
-------------------------------------------------------------------------------------------------------------
Mariner Health of Winterhaven 2
-------------------------------------------------------------------------------------------------------------
GREAT LAKES
-------------------------------------------------------------------------------------------------------------
Mariner Health of Westchester 2
-------------------------------------------------------------------------------------------------------------
Mariner Health of Methuen 2
-------------------------------------------------------------------------------------------------------------
Mariner Health of Longwood 2
-------------------------------------------------------------------------------------------------------------
Mariner Health of Southeastern MA 2
-------------------------------------------------------------------------------------------------------------
Cape Regency Rehab & Nursing Ctr. 2
-------------------------------------------------------------------------------------------------------------
18
ATLANTIC COAST
-------------------------------------------------------------------------------------------------------------
Mariner Health at Bridebrook 2
-------------------------------------------------------------------------------------------------------------
Mariner Health of Belair 2
-------------------------------------------------------------------------------------------------------------
Mariner Health of Southern Maryland 2
-------------------------------------------------------------------------------------------------------------
Mariner Health of Kensington 2
-------------------------------------------------------------------------------------------------------------
Mariner Health of Greater Laurel 2
-------------------------------------------------------------------------------------------------------------
Mariner Health of Bethesda 2
-------------------------------------------------------------------------------------------------------------
Mariner Health of Southern Connecticut 2
-------------------------------------------------------------------------------------------------------------
Mariner Health of North Arundel 2
-------------------------------------------------------------------------------------------------------------
Mariner Health of Forest Hill 2
-------------------------------------------------------------------------------------------------------------
Mariner Health of Overlea 2
-------------------------------------------------------------------------------------------------------------
Mariner Health of NE Atlanta 2
-------------------------------------------------------------------------------------------------------------
Mariner Health of ▇▇▇▇ Burnie 2
-------------------------------------------------------------------------------------------------------------
Mariner Health at Circle Manor 2
-------------------------------------------------------------------------------------------------------------
Mariner Health of Catonsville 2
-------------------------------------------------------------------------------------------------------------
Mariner Health at ▇▇▇▇▇▇▇▇▇ 2
-------------------------------------------------------------------------------------------------------------
ROCKY MOUNTAIN
-------------------------------------------------------------------------------------------------------------
Mariner Health of Greenwood 2
-------------------------------------------------------------------------------------------------------------
Mariner Health of Denver 2
-------------------------------------------------------------------------------------------------------------
Alpine Living Center 2
-------------------------------------------------------------------------------------------------------------
Boulder Manor 2
-------------------------------------------------------------------------------------------------------------
Applewood Living Center 2
-------------------------------------------------------------------------------------------------------------
Terrace Gardens HCC 2
-------------------------------------------------------------------------------------------------------------
Spring Creek HCC 2
-------------------------------------------------------------------------------------------------------------
MID-AMERICA
-------------------------------------------------------------------------------------------------------------
Mariner Health of Lebanon 2
-------------------------------------------------------------------------------------------------------------
Mariner Health of Nashville 2
-------------------------------------------------------------------------------------------------------------
Mariner Health of Newport 2
-------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ HCC 2
-------------------------------------------------------------------------------------------------------------
Chateau HCC 2
-------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ HCC 2
-------------------------------------------------------------------------------------------------------------
SOUTHEAST / TEXAS
-------------------------------------------------------------------------------------------------------------
Hearthstone 2
-------------------------------------------------------------------------------------------------------------
Green Acres - Humble 2
-------------------------------------------------------------------------------------------------------------
Holiday Lodge 2
-------------------------------------------------------------------------------------------------------------
Memorial Medical 2
-------------------------------------------------------------------------------------------------------------
Mariner Health of Cypresswood 2
-------------------------------------------------------------------------------------------------------------
Mariner Health of First Colony 2
-------------------------------------------------------------------------------------------------------------
Mariner Health of NW Houston 2
-------------------------------------------------------------------------------------------------------------
Mariner Health of ▇▇ ▇▇▇▇▇▇▇ 2
-------------------------------------------------------------------------------------------------------------
North Dallas Rehab 2
-------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇▇ 2
-------------------------------------------------------------------------------------------------------------
RM Harlington 2
-------------------------------------------------------------------------------------------------------------
The Village 2
-------------------------------------------------------------------------------------------------------------
Allenbrook HCC 2
-------------------------------------------------------------------------------------------------------------
Las Palmas HCC 2
-------------------------------------------------------------------------------------------------------------
Beechnut Manor 2
-------------------------------------------------------------------------------------------------------------
Westbury Place 2
-------------------------------------------------------------------------------------------------------------
19
MASTER AMENDMENT TO PHARMACY DISPENSING SERVICES AGREEMENTS
THIS MASTER AMENDMENT TO PHARMACY DISPENSING SERVICES AGREEMENTS
("Amendment") is made and entered into effective as of the ______ day of
________, 2001, by and between American Pharmaceutical Services, Inc., a
Delaware corporation, together with its subsidiaries and affiliates identified
on the signature page to this Amendment (collectively, "APS") and all of the
skilled nursing and/or nursing facilities set forth on Exhibit A to this
Amendment (collectively, the "Facilities") which are owned, managed and/or
leased by the subsidiaries and affiliates of Mariner Post-Acute Network, Inc, a
Delaware corporation, identified on the signature page to this Amendment
(collectively, "MPAN").
WHEREAS, MPAN and certain APS entities are debtors under those jointly
administered cases (the "Bankruptcy Cases") filed with the United States
Bankruptcy Court for the District of Delaware (the "Bankruptcy Court") on
January 18, 2000 captioned "In Re: Mariner Post-Acute Network, Inc., a Delaware
corporation, and affiliates, Debtors" Case No. 00-113 (MFW) (Jointly
Administered Case Nos. 00-113 (MFW) through 00-214 (MFW), inclusive);
WHEREAS, APS provides pharmacy products and services (collectively,
"Pharmacy Services") to the Facilities and to the residents of those Facilities
(the "Residents");
WHEREAS, MPAN and APS have entered into written agreements, and propose
to enter into additional written agreements, that conform with the requirements
of 42 C.F.R. ss.488.3, 483.60, and 483.75(h), to provide those Pharmacy Services
(collectively, the "Pharmacy Agreements") to the Facilities;
WHEREAS, it is contemplated that substantially all of the business and
assets of APS will be sold (the "APS Sale") upon the approval of such sale by
the Bankruptcy Court;
WHEREAS, upon the December 31, 2001, expiration of the current term of
a large number of the Pharmacy Agreements between MPAN and APS, the Pharmacy
Agreements will renew for a twelve (12) month term, but will be subject to
termination by either party, without cause, upon thirty (30) days notice;
WHEREAS, in the event the purchaser of APS would elect to terminate
all, or any number of its Pharmacy Agreements with MPAN, MPAN would need to
obtain Pharmacy Services from one or more institutional pharmacy providers in
thirty (30) days, and would be disadvantaged in negotiating competitive terms
because of the above circumstances, and possibly be unable to find a suitable
institutional pharmacy provider for certain of its Facilities and Residents due
to such things as the geographic location of the Facility and the low payment
rate by the Medicaid program in the state where the Facility is located;
WHEREAS, MPAN desires to amend the Pharmacy Agreements expiring
December 31, 2001, to protect its Facilities and Residents against such
terminations;
WHEREAS, APS is willing to amend the Pharmacy Agreements expiring
December 31, 2001, to address the concerns of MPAN;
WHEREAS, both MPAN and APS recognize that as a result of proposed
Federal legislative changes, Residents who currently obtain Pharmacy Services
under the Medicare and/or Medicaid programs, could become eligible for a
Medicare and/or Medicaid drug benefit
-2-
that would subject any Pharmacy Agreements between MPAN and/or APS to a
capitated payment, block grant, or other managed care delivery model;
WHEREAS, MPAN and APS desire to be in a position to respond to any such
legislative and/or regulatory changes through their Pharmacy Agreements; and
WHEREAS, MPAN and APS, upon approval by the Bankruptcy Court, desire to
amend further the Pharmacy Agreements in the manner provided in this Amendment
to insure the continuity of the provision of Pharmacy Services to the Facilities
and the Residents upon the APS Sale, as well as to ensure that MPAN can continue
to obtain the provision of quality and cost-effective Pharmacy Services for
those Facilities and Residents, and that APS is not unfavorably disadvantaged,
under applicable Medicare, Medicaid, and other third party payment systems and
any legislative and/or regulatory changes to such payment systems;
NOW THEREFORE, for and in consideration of the foregoing recitals and
of the mutual promises contained in this Agreement the parties hereto hereby
agree as follows:
1. TERM.
A. INITIAL POST-SALE TERM. The term of each Pharmacy
Agreement shall automatically renew for a term of eighteen (18) months,
commencing as of the closing of the APS Sale (the "Initial Post-Sale Term").
B. POST SALE RENEWAL TERMS. Subsequent to the Initial
Post-Sale Term, each Pharmacy Agreement shall automatically renew for successive
one (1) year terms (each a "Post-Sale Renewal Term") unless either party
provides written notice of non-renewal (the "Non-
-3-
Renewal Notice") not less than one hundred eighty (180) days prior to the
expiration of the Initial Post-Sale Term or any Post-Sale Renewal Term.
C. WITHOUT CAUSE TERMINATION. Notwithstanding any
provision to the contrary in each Pharmacy Agreement, a Pharmacy Agreement may
not be terminated "without cause" by either party during the Initial Post-Sale
Term or any Post-Sale Renewal Term.
D. OTHER BASES FOR TERMINATION. Except as specifically
provided above, each Pharmacy Agreement may be terminated in accordance with the
terms, and subject to the conditions, set forth in each such Pharmacy Agreement.
E. CONSULTANT PHARMACIST AGREEMENTS AND RESPIRATORY
THERAPY EQUIPMENT AGREEMENTS. All consultant pharmacist agreements and
respiratory therapy equipment agreements entered into, or to be entered into,
between APS and MPAN (collectively, the "Additional Agreements") are also
amended in a manner consistent with the amendments to the Pharmacy Agreements
provided in this Section 1.
2. RIGHT TO MATCH COMPETITIVE BID.
A. DEFINITIONS. For the purposes of this Section 2, the
following terms shall have the following meanings:
(I) "Affiliate" shall mean, as to any Person,
any Person controlling, controlled by or under common control with such Person.
For purposes of this Amendment, (y) "Control" shall mean the direct or indirect
power to direct or cause the direction of the management of a Person, by
ownership of equity securities, by contract, or otherwise, and shall be deemed
to exist with respect to any entity as to which the Person in question owns,
directly or
-4-
indirectly, 50% or more of the outstanding voting rights, and (z) "Person" shall
mean any individual, corporation, partnership, limited liability company, or
other legal entity of any nature whatsoever.
(II) "Competitive Bid" shall mean a written, bona
fide, binding offer by a Qualified Pharmacy Provider (as defined below) to
provide pharmacy services to the Facility: (A) on terms which are more
competitive on price and, as to each of the following attributes, on terms and
conditions which are comparable or superior to the terms and conditions under
which such pharmacy services are then being provided by APS to the Facility
pursuant to the Pharmacy Agreement: timeliness of services provided, and scope
of services provided; (B) on terms which would not entail any material risk of a
violation of any applicable law or regulation or of any challenge thereto by
regulatory authorities with the Facility; and (C) also specifies the
requirements of the next sentence. Without limitation of the foregoing, such
Competitive Bid must (A) expressly offer to provide at least the same range of
pharmacy and ancillary services (including consultant pharmacy services and
respiratory supplies and services) as is then being provided to the Facility by
APS pursuant to the Pharmacy Agreement, (B) expressly offer to provide pharmacy
services for prices (with the specific price levels offered for each item of
pharmacy services stated expressly) which are in the aggregate lower than those
charged by APS under the Pharmacy Agreement, (C) expressly state the specific
terms and conditions under which the Qualified Pharmacy Provider offers to
provide each of the following attributes of pharmacy services: price, quality,
timeliness of services provided, and scope of services provided, and (D)
expressly offer to provide pharmacy services for a minimum of five thousand
(5,000) beds at the Facilities (including those beds at the Facility) and for a
duration of not less than two (2) years.
-5-
(III) "Qualified Pharmacy Provider" shall mean an
institutional pharmacy (A) which possesses, and employs or otherwise retains
individuals possessing, all licenses, permits, and authorizations required under
applicable laws and regulations to provide pharmacy services to the Facility in
the state where such Facility is located, (B) which is capable of actually
providing the pharmacy services to the Facility in the state where such Facility
is located, on the terms offered by such provider, (C) whose offer to provide
pharmacy services, if set forth in an agreement, would not entail any material
risk of a violation of any applicable law or regulation or of any challenge
thereto by regulatory authorities with the Facility, and (D) which is not APS,
an Affiliate of APS, any Person to which any Pharmacy Agreements are assigned by
APS (but only with respect to such assigned agreements), or an Affiliate of any
such Person (but only with respect to such assigned agreements).
B. RIGHT TO MATCH COMPETITIVE BID UPON RECEIPT OF
NON-RENEWAL NOTICE. For the Initial Post-Sale Term only, APS shall have the
right, in the event a Facility (the "Terminating Facility") receives a
Competitive Bid from a Qualified Pharmacy Provider and thereafter issues to APS
a Non-Renewal Notice, to match any Competitive Bid that a Qualified Pharmacy
Provider has submitted to the Terminating Facility to provide pharmacy services
to that Terminating Facility. The Non-Renewal Notice provided by the Terminating
Facility to APS during the Initial Post-Sale Term only shall be accompanied by a
competitive bid notice that meets the requirements of subsection 2.C. below (a
"Competitive Bid Notice"). Upon the giving of such Competitive Bid Notice, the
provisions of subsections 2.C. through 2.D. below shall apply. The right of APS
to match a Competitive Bid as provided under this Section 2 shall be limited to
the Initial Post-Sale Term only.
-6-
C. COMPETITIVE BID NOTICE. In order to constitute a
Competitive Bid Notice pursuant to this Section 2, the notice given by the
Terminating Facility must (i) be in writing and be delivered to APS, (ii)
include a copy of the Competitive Bid from the Qualified Pharmacy Provider or,
if the Terminating Facility is prohibited from including a copy of such
Competitive Bid, a summary of the terms of the Competitive Bid in reasonably
sufficient detail to enable APS to respond to such Competitive Bid, and (iii)
certify to APS that such Competitive Bid constitutes a good faith Competitive
Bid from a Qualified Pharmacy Provider which the Terminating Facility desires in
good faith to accept, unless APS matches the terms thereof as set forth in
subsection 2.D. below.
D. RIGHT TO MATCH COMPETITIVE BID. In the event that APS
receives a Competitive Bid Notice meeting the requirements of subsection 2.C.,
APS shall have the right, for a period of forty five (45) days after its receipt
thereof, but no obligation whatsoever, to match the Competitive Bid by
furnishing notice to the Terminating Facility of its election to do so (a
"Matching Bid Notice"). In the event that a Matching Bid Notice is given within
such period, the Terminating Facility and APS shall promptly execute and deliver
to each other an amendment to the Pharmacy Agreement modifying the terms to
incorporate the terms of such Matching Bid Notice, which amendment shall be
effective for the term specified in the Competitive Bid Notice. In the event APS
fails to give a Matching Bid Notice within said forty five (45) day period, the
Terminating Facility may, at any time within the next thirty (30) days, notify
APS that it has elected to accept such Competitive Bid and that the Pharmacy
Agreement with APS will terminate effective as of the expiration of its then
current term, provided, that within such thirty (30) day period the Terminating
Facility and such Qualified Pharmacy Provider shall have executed and delivered
an agreement containing the terms set forth in the Competitive Bid and shall
have delivered a copy of same to APS. If, within the thirty (30) day period
specified in the preceding sentence, the Terminating Facility and such Qualified
Pharmacy Provider do not execute and deliver an agreement containing the terms
set forth in the
-7-
Competitive Bid, or do not deliver a copy of same to APS, the Pharmacy Agreement
shall not terminate and shall remain in full force and effect in accordance with
the terms and conditions hereof and such Pharmacy Agreement (including, without
limitation, the same pricing terms contained in such Pharmacy Agreement). In the
event such Qualified Pharmacy Provider and the Terminating Facility enter into
an agreement containing the terms set forth in the Competitive Bid, the
Terminating Facility shall have the option, exercisable upon written notice to
APS from the Terminating Facility, to extend the Pharmacy Agreement (on the same
pricing terms contained in such Pharmacy Agreement) with APS for period of not
less than thirty (30) days, but not more than ninety (90) days, beyond the
expiration of its then current term to allow for a smooth transition to the
utilization of the Qualified Pharmacy Provider.
E. DISPUTE RESOLUTION. The parties or their successors,
as applicable, agree to meet and confer in good faith to resolve, through
discussions between the parties or their successors, as applicable, any disputes
with respect to any Competitive Bid or any other aspect of the provisions of
this Section 2. If the parties or their successors, as applicable, are unable to
resolve the dispute through such discussions, either party or its successor, as
applicable, may submit such dispute to binding arbitration before a single
arbitrator in Atlanta, Georgia in accordance with the American Health Lawyers
Association Alternative Dispute Resolution Service Rules of Procedure for
Arbitration, and judgment upon the award of the arbitrator may be entered in any
court having jurisdiction. The prevailing party in any such arbitration (as
determined by the arbitrator) shall be entitled to its costs and reasonable
attorney's fees incurred
-8-
in connection with the arbitration. Until any such dispute is resolved through
mutual agreement or binding arbitration, each party or its successor, as
applicable, shall continue to observe all other terms of the Pharmacy Agreement
as amended by this Amendment; provided, however, that the prices paid for
pharmacy services pursuant to such Pharmacy Agreement will be, commencing on the
date on which the pricing terms under the Competitive Bid would have taken
effect, the lesser of (i) the prices set forth in the Pharmacy Agreement or (ii)
the prices set forth under the Competitive Bid which is the subject of
arbitration. In addition to the foregoing costs and fees, if any such
arbitration is resolved in favor of APS or its successors (as applicable) such
Terminating Facility shall pay to APS or its successors (as applicable) the
amount, if any, resulting from the application of the prices set forth in the
Competitive Bid (as described in the preceding sentence) to such Pharmacy
Agreement. Notwithstanding anything to the contrary contained in this Amendment
or in any Pharmacy Agreement, neither party shall have the right to notify the
other that it is in breach of a Pharmacy Agreement on the basis of any dispute
with respect to a Competitive Bid or any other aspect of the provisions of this
Section 2 unless and until the arbitrator shall have entered an award in favor
of such party with respect to such matter. This subsection 2.E. shall not be
construed (i) to require that the parties arbitrate any dispute under any
Pharmacy Agreement other than those with respect to Competitive Bids or other
aspects of this Section 2 or (ii) to prohibit or otherwise limit the parties'
entitlement to pursue any and all other remedies that may be available to them,
at law or in equity, with respect to damages they may incur as a result of the
breach of any provision of any Pharmacy Agreement, as amended by this Amendment,
other than the provisions relating to Competitive Bids and other aspects of this
Section 2.
-9-
F. PURCHASER IN APS SALE. For the purposes of this
Section 2 only, the term APS shall also be deemed to mean and include the
purchaser of the business and assets of APS in any APS Sale.
3. REMAINING TERMS AND CONDITIONS. Except as otherwise
specifically provided in this Amendment, each Pharmacy Agreement and Additional
Agreement shall remain in full force and effect in accordance with the
respective terms and conditions thereof. To the extent there is any conflict
between any provision of this Amendment and any provision of any Pharmacy
Agreement or Additional Agreement, the provision of this Agreement shall
control.
4. AMENDMENTS. This Amendment may not be amended except by an
instrument in writing signed by the parties hereto.
5. COUNTERPARTS. This Amendment may be executed in counterparts,
each of which shall be an original and all of which together shall constitute
one and the same instrument.
6. SUCCESSORS AND ASSIGNS. This Amendment shall be binding upon,
and inure to the benefit of, the parties' respective purchasers, transferees,
successors and assigns, whether by operation of law or otherwise, including but
not limited to the sale of the stock, assets or any other ownership interest of
a party hereto to another, or the merger or consolidation of a party hereto in
another, or any transaction by which a party to this Amendment transfers its
business to another as to which the duties and obligations provided for under
this Amendment by the parties hereto arise.
[SIGNATURE PAGES FOLLOW]
-10-
IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date first written above.
MPAN:
AMERICAN-CAL MEDICAL SERVICES, INC.
AMS GREEN TREE, INC.
AMS PROPERTIES, INC.
▇▇▇▇▇ CENTER NURSING CARE/AUSTELL, INC.
▇▇▇▇▇ CENTER NURSING CARE/HICKORY, INC.
▇▇▇▇▇ CENTER NURSING CARE/POWDER SPRINGS,
INC.
▇▇▇▇▇ CENTER OF ASHEBORO, INC.
▇▇▇▇▇ CENTER OF CENTRAL COLUMBIA, INC.
CAMBRIDGE BEDFORD, INC.
CAMBRIDGE EAST, INC.
CAMBRIDGE NORTH, INC.
CAMBRIDGE SOUTH, INC.
CLINTONAIRE NURSING HOME, INC.
CRESTMONT HEALTH CENTER, INC.
EH ACQUISITION CORP.
EH ACQUISITION CORP. II
EH ACQUISITION CORP. III
GCI BELLA VITA, INC.
GCI CAMELLIA CARE CENTER, INC.
GCI ▇▇▇▇▇▇ VILLAGE, INC.
GCI EAST VALLEY MEDICAL & REHABILITATION
CENTER, INC.
GCI FAITH NURSING HOME, INC.
GCI ▇▇▇▇▇▇ ACRES, INC.
GCI PALM COURT, INC.
GCI PRINCE ▇▇▇▇▇▇, INC.
GCI SPRINGDALE VILLAGE, INC.
GCI VILLAGE GREEN, INC.
GCI-WISCONSIN PROPERTIES, INC.
GRANCARE OF NORTHERN CALIFORNIA, INC.
GRANCARE SOUTH CAROLINA, INC.
GRANCARE, INC.
HERITAGE NURSING HOME, INC.
HMI CONVALESCENT CARE, INC.
HOSTMASTERS, INC.
LIVING CENTERS - EAST, INC.
LIVING CENTERS - ROCKY MOUNTAIN, INC.
LIVING CENTERS - SOUTHEAST, INC.
LIVING CENTERS OF TEXAS, INC.
-▇▇-
▇▇▇▇▇▇▇▇▇▇-▇▇▇▇ NURSING HOME, INC.
NATIONAL HERITAGE REALTY, INC.
PROFESSIONAL HEALTH CARE MANAGEMENT, INC.
By:
------------------------------------------
Print Name:
----------------------------------
Title:
---------------------------------------
APS:
AMERICAN MEDICAL INSURANCE BILLING SERVICES,
INC.
AMERICAN PHARMACEUTICAL SERVICES, INC.
APS PHARMACY MANAGEMENT, INC.
COMPASS PHARMACY SERVICES, INC.
COMPASS PHARMACY SERVICES OF TEXAS, INC.
By:
------------------------------------------
Print Name:
----------------------------------
Title:
---------------------------------------
-12-
EXHIBIT A
APS AND FACILITIES
-13-
MASTER AMENDMENT TO PHARMACY DISPENSING SERVICES AGREEMENTS
THIS MASTER AMENDMENT TO PHARMACY DISPENSING SERVICES AGREEMENTS
("Amendment") is made and entered into effective as of the ______ day of
________, 2001, by and between American Pharmaceutical Services, Inc., a
Delaware corporation, together with its subsidiaries and affiliates identified
on the signature page to this Amendment (collectively, "APS") and all of the
skilled nursing and/or nursing facilities set forth on Exhibit A to this
Amendment (collectively, the "Facilities") which are owned, managed and/or
leased by the subsidiaries and affiliates of Mariner Health Group, Inc., a
Delaware corporation, identified on the signature page to this Amendment
(collectively, "MHG").
WHEREAS, MHG and certain APS entities are debtors under those jointly
administered cases (the "Bankruptcy Cases") filed with the United States
Bankruptcy Court for the District of Delaware (the "Bankruptcy Court") on
January 18, 2000 captioned "In Re: Mariner Health Group, Inc., a Delaware
corporation, and affiliates, Debtors" Case No. 00-215 (MFW) (Jointly
Administered Case Nos. 00-215 (MFW) through 00-301 (MFW), inclusive);
WHEREAS, APS provides pharmacy products and services (collectively,
"Pharmacy Services") to the Facilities and to the residents of those Facilities
(the "Residents");
WHEREAS, MHG and APS have entered into written agreements, and propose
to enter into additional written agreements, that conform with the requirements
of 42 C.F.R. ss.488.3, 483.60, and 483.75(h), to provide those Pharmacy Services
(collectively, the "Pharmacy Agreements") to the Facilities;
WHEREAS, it is contemplated that substantially all of the business and
assets of APS will be sold (the "APS Sale") upon the approval of such sale by
the Bankruptcy Court;
WHEREAS, upon the December 31, 2001, expiration of the current term of
a large number of the Pharmacy Agreements between MHG and APS, the Pharmacy
Agreements will renew for a twelve (12) month term, but will be subject to
termination by either party, without cause, upon thirty (30) days notice;
WHEREAS, in the event the purchaser of APS would elect to terminate
all, or any number of its Pharmacy Agreements with MHG, MHG would need to obtain
Pharmacy Services from one or more institutional pharmacy providers in thirty
(30) days, and would be disadvantaged in negotiating competitive terms because
of the above circumstances, and possibly be unable to find a suitable
institutional pharmacy provider for certain of its Facilities and Residents due
to such things as the geographic location of the Facility and the low payment
rate by the Medicaid program in the state where the Facility is located;
WHEREAS, MHG desires to amend the Pharmacy Agreements expiring December
31, 2001, to protect its Facilities and Residents against such terminations;
WHEREAS, APS is willing to amend the Pharmacy Agreements expiring
December 31, 2001, to address the concerns of MHG;
WHEREAS, both MHG and APS recognize that as a result of proposed
Federal legislative changes, Residents who currently obtain Pharmacy Services
under the Medicare and/or Medicaid programs, could become eligible for a
Medicare and/or Medicaid drug benefit
-2-
that would subject any Pharmacy Agreements between MHG and/or APS to a capitated
payment, block grant, or other managed care delivery model;
WHEREAS, MHG and APS desire to be in a position to respond to any such
legislative and/or regulatory changes through their Pharmacy Agreements; and
WHEREAS, MHG and APS, upon approval by the Bankruptcy Court, desire to
amend further the Pharmacy Agreements in the manner provided in this Amendment
to insure the continuity of the provision of Pharmacy Services to the Facilities
and the Residents upon the APS Sale, as well as to ensure that MHG can continue
to obtain the provision of quality and cost-effective Pharmacy Services for
those Facilities and Residents, and that APS is not unfavorably disadvantaged,
under applicable Medicare, Medicaid, and other third party payment systems and
any legislative and/or regulatory changes to such payment systems;
NOW THEREFORE, for and in consideration of the foregoing recitals and
of the mutual promises contained in this Agreement the parties hereto hereby
agree as follows:
1. TERM.
A. INITIAL POST-SALE TERM. The term of each Pharmacy
Agreement shall automatically renew for a term of eighteen (18) months,
commencing as of the closing of the APS Sale (the "Initial Post-Sale Term").
B. POST SALE RENEWAL TERMS. Subsequent to the Initial
Post-Sale Term, each Pharmacy Agreement shall automatically renew for successive
one (1) year terms (each a "Post-Sale Renewal Term") unless either party
provides written notice of non-renewal (the "Non-
-3-
Renewal Notice") not less than one hundred eighty (180) days prior to the
expiration of the Initial Post-Sale Term or any Post-Sale Renewal Term.
C. WITHOUT CAUSE TERMINATION. Notwithstanding any
provision to the contrary in each Pharmacy Agreement, a Pharmacy Agreement may
not be terminated "without cause" by either party during the Initial Post-Sale
Term or any Post-Sale Renewal Term.
D. OTHER BASES FOR TERMINATION. Except as specifically
provided above, each Pharmacy Agreement may be terminated in accordance with the
terms, and subject to the conditions, set forth in each such Pharmacy Agreement.
E. CONSULTANT PHARMACIST AGREEMENTS AND RESPIRATORY
THERAPY EQUIPMENT AGREEMENTS. All consultant pharmacist agreements and
respiratory therapy equipment agreements entered into, or to be entered into,
between APS and MHG (collectively, the "Additional Agreements") are also amended
in a manner consistent with the amendments to the Pharmacy Agreements provided
in this Section 1.
2. RIGHT TO MATCH COMPETITIVE BID.
A. DEFINITIONS. For the purposes of this Section 2, the
following terms shall have the following meanings:
(I) "Affiliate" shall mean, as to any Person,
any Person controlling, controlled by or under common control with such Person.
For purposes of this Amendment, (y) "Control" shall mean the direct or indirect
power to direct or cause the direction of the management of a Person, by
ownership of equity securities, by contract, or otherwise, and shall be deemed
to exist with respect to any entity as to which the Person in question owns,
directly or
-4-
indirectly, 50% or more of the outstanding voting rights, and (z) "Person" shall
mean any individual, corporation, partnership, limited liability company, or
other legal entity of any nature whatsoever.
(II) "Competitive Bid" shall mean a written, bona
fide, binding offer by a Qualified Pharmacy Provider (as defined below) to
provide pharmacy services to the Facility: (A) on terms which are more
competitive on price and, as to each of the following attributes, on terms and
conditions which are comparable or superior to the terms and conditions under
which such pharmacy services are then being provided by APS to the Facility
pursuant to the Pharmacy Agreement: timeliness of services provided, and scope
of services provided; (B) on terms which would not entail any material risk of a
violation of any applicable law or regulation or of any challenge thereto by
regulatory authorities with the Facility; and (C) also specifies the
requirements of the next sentence. Without limitation of the foregoing, such
Competitive Bid must (A) expressly offer to provide at least the same range of
pharmacy and ancillary services (including consultant pharmacy services and
respiratory supplies and services) as is then being provided to the Facility by
APS pursuant to the Pharmacy Agreement, (B) expressly offer to provide pharmacy
services for prices (with the specific price levels offered for each item of
pharmacy services stated expressly) which are in the aggregate lower than those
charged by APS under the Pharmacy Agreement, (C) expressly state the specific
terms and conditions under which the Qualified Pharmacy Provider offers to
provide each of the following attributes of pharmacy services: price, quality,
timeliness of services provided, and scope of services provided, and (D)
expressly offer to provide pharmacy services for a minimum of five thousand
(5,000) beds at the Facilities (including those beds at the Facility) and for a
duration of not less than two (2) years.
-5-
(III) "Qualified Pharmacy Provider" shall mean an
institutional pharmacy (A) which possesses, and employs or otherwise retains
individuals possessing, all licenses, permits, and authorizations required under
applicable laws and regulations to provide pharmacy services to the Facility in
the state where such Facility is located, (B) which is capable of actually
providing the pharmacy services to the Facility in the state where such Facility
is located, on the terms offered by such provider, (C) whose offer to provide
pharmacy services, if set forth in an agreement, would not entail any material
risk of a violation of any applicable law or regulation or of any challenge
thereto by regulatory authorities with the Facility, and (D) which is not APS,
an Affiliate of APS, any Person to which any Pharmacy Agreements are assigned by
APS (but only with respect to such assigned agreements), or an Affiliate of any
such Person (but only with respect to such assigned agreements).
B. RIGHT TO MATCH COMPETITIVE BID UPON RECEIPT OF
NON-RENEWAL NOTICE. For the Initial Post-Sale Term only, APS shall have the
right, in the event a Facility (the "Terminating Facility") receives a
Competitive Bid from a Qualified Pharmacy Provider and thereafter issues to APS
a Non-Renewal Notice, to match any Competitive Bid that a Qualified Pharmacy
Provider has submitted to the Terminating Facility to provide pharmacy services
to that Terminating Facility. The Non-Renewal Notice provided by the Terminating
Facility to APS during the Initial Post-Sale Term only shall be accompanied by a
competitive bid notice that meets the requirements of subsection 2.C. below (a
"Competitive Bid Notice"). Upon the giving of such Competitive Bid Notice, the
provisions of subsections 2.C. through 2.D. below shall apply. The right of APS
to match a Competitive Bid as provided under this Section 2 shall be limited to
the Initial Post-Sale Term only.
-6-
C. COMPETITIVE BID NOTICE. In order to constitute a
Competitive Bid Notice pursuant to this Section 2, the notice given by the
Terminating Facility must (i) be in writing and be delivered to APS, (ii)
include a copy of the Competitive Bid from the Qualified Pharmacy Provider or,
if the Terminating Facility is prohibited from including a copy of such
Competitive Bid, a summary of the terms of the Competitive Bid in reasonably
sufficient detail to enable APS to respond to such Competitive Bid, and (iii)
certify to APS that such Competitive Bid constitutes a good faith Competitive
Bid from a Qualified Pharmacy Provider which the Terminating Facility desires in
good faith to accept, unless APS matches the terms thereof as set forth in
subsection 2.D. below.
D. RIGHT TO MATCH COMPETITIVE BID. In the event that APS
receives a Competitive Bid Notice meeting the requirements of subsection 2.C.,
APS shall have the right, for a period of forty five (45) days after its receipt
thereof, but no obligation whatsoever, to match the Competitive Bid by
furnishing notice to the Terminating Facility of its election to do so (a
"Matching Bid Notice"). In the event that a Matching Bid Notice is given within
such period, the Terminating Facility and APS shall promptly execute and deliver
to each other an amendment to the Pharmacy Agreement modifying the terms to
incorporate the terms of such Matching Bid Notice, which amendment shall be
effective for the term specified in the Competitive Bid Notice. In the event APS
fails to give a Matching Bid Notice within said forty five (45) day period, the
Terminating Facility may, at any time within the next thirty (30) days, notify
APS that it has elected to accept such Competitive Bid and that the Pharmacy
Agreement with APS will terminate effective as of the expiration of its then
current term, provided, that within such thirty (30) day period the Terminating
Facility and such Qualified Pharmacy Provider shall have executed and delivered
an agreement containing the terms set forth in the
-7-
Competitive Bid and shall have delivered a copy of same to APS. If, within the
thirty (30) day period specified in the preceding sentence, the Terminating
Facility and such Qualified Pharmacy Provider do not execute and deliver an
agreement containing the terms set forth in the Competitive Bid, or do not
deliver a copy of same to APS, the Pharmacy Agreement shall not terminate and
shall remain in full force and effect in accordance with the terms and
conditions hereof and such Pharmacy Agreement (including, without limitation,
the same pricing terms contained in such Pharmacy Agreement). In the event such
Qualified Pharmacy Provider and the Terminating Facility enter into an agreement
containing the terms set forth in the Competitive Bid, the Terminating Facility
shall have the option, exercisable upon written notice to APS from the
Terminating Facility, to extend the Pharmacy Agreement (on the same pricing
terms contained in such Pharmacy Agreement) with APS for period of not less than
thirty (30) days, but not more than ninety (90) days, beyond the expiration of
its then current term to allow for a smooth transition to the utilization of the
Qualified Pharmacy Provider.
E. DISPUTE RESOLUTION. The parties or their successors,
as applicable, agree to meet and confer in good faith to resolve, through
discussions between the parties or their successors, as applicable, any disputes
with respect to any Competitive Bid or any other aspect of the provisions of
this Section 2. If the parties or their successors, as applicable, are unable to
resolve the dispute through such discussions, either party or its successor, as
applicable, may submit such dispute to binding arbitration before a single
arbitrator in Atlanta, Georgia in accordance with the American Health Lawyers
Association Alternative Dispute Resolution Service Rules of Procedure for
Arbitration, and judgment upon the award of the arbitrator may be entered in any
court having jurisdiction. The prevailing party in any such arbitration (as
determined by the arbitrator) shall be entitled to its costs and reasonable
attorney's fees incurred
-8-
in connection with the arbitration. Until any such dispute is resolved through
mutual agreement or binding arbitration, each party or its successor, as
applicable, shall continue to observe all other terms of the Pharmacy Agreement
as amended by this Amendment; provided, however, that the prices paid for
pharmacy services pursuant to such Pharmacy Agreement will be, commencing on the
date on which the pricing terms under the Competitive Bid would have taken
effect, the lesser of (i) the prices set forth in the Pharmacy Agreement or (ii)
the prices set forth under the Competitive Bid which is the subject of
arbitration. In addition to the foregoing costs and fees, if any such
arbitration is resolved in favor of APS or its successors (as applicable) such
Terminating Facility shall pay to APS or its successors (as applicable) the
amount, if any, resulting from the application of the prices set forth in the
Competitive Bid (as described in the preceding sentence) to such Pharmacy
Agreement. Notwithstanding anything to the contrary contained in this Amendment
or in any Pharmacy Agreement, neither party shall have the right to notify the
other that it is in breach of a Pharmacy Agreement on the basis of any dispute
with respect to a Competitive Bid or any other aspect of the provisions of this
Section 2 unless and until the arbitrator shall have entered an award in favor
of such party with respect to such matter. This subsection 2.E. shall not be
construed (i) to require that the parties arbitrate any dispute under any
Pharmacy Agreement other than those with respect to Competitive Bids or other
aspects of this Section 2 or (ii) to prohibit or otherwise limit the parties'
entitlement to pursue any and all other remedies that may be available to them,
at law or in equity, with respect to damages they may incur as a result of the
breach of any provision of any Pharmacy Agreement, as amended by this Amendment,
other than the provisions relating to Competitive Bids and other aspects of this
Section 2.
-9-
F. PURCHASER IN APS SALE. For the purposes of this
Section 2 only, the term APS shall also be deemed to mean and include the
purchaser of the business and assets of APS in any APS Sale.
3. REMAINING TERMS AND CONDITIONS. Except as otherwise
specifically provided in this Amendment, each Pharmacy Agreement and Additional
Agreement shall remain in full force and effect in accordance with the
respective terms and conditions thereof. To the extent there is any conflict
between any provision of this Amendment and any provision of any Pharmacy
Agreement or Additional Agreement, the provision of this Agreement shall
control.
4. AMENDMENTS. This Amendment may not be amended except by an
instrument in writing signed by the parties hereto.
5. COUNTERPARTS. This Amendment may be executed in counterparts,
each of which shall be an original and all of which together shall constitute
one and the same instrument.
6. SUCCESSORS AND ASSIGNS. This Amendment shall be binding upon,
and inure to the benefit of, the parties' respective purchasers, transferees,
successors and assigns, whether by operation of law or otherwise, including but
not limited to the sale of the stock, assets or any other ownership interest of
a party hereto to another, or the merger or consolidation of a party hereto in
another, or any transaction by which a party to this Amendment transfers its
business to another as to which the duties and obligations provided for under
this Amendment by the parties hereto arise.
[SIGNATURE PAGES FOLLOW]
-10-
IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date first written above.
MHG:
BRIDE BROOK NURSING & REHABILITATION CENTER,
INC.
CYPRESS NURSING FACILITY, INC.
LONGWOOD REHABILITATION CENTER, INC.
MARINER HEALTH AT BONIFAY, INC.
MARINER HEALTH CARE OF ATLANTIC SHORES, INC.
MARINER HEALTH CARE OF DELAND, INC.
MARINER HEALTH CARE OF INVERNESS, INC.
MARINER HEALTH CARE OF LAKE WORTH, INC.
MARINER HEALTH CARE OF MACCLENNY, INC.
MARINER HEALTH CARE OF METROWEST, INC.
MARINER HEALTH CARE OF NASHVILLE, INC.
MARINER HEALTH CARE OF ORANGE CITY, INC.
MARINER HEALTH CARE OF PALM CITY, INC.
MARINER HEALTH CARE OF PINELLAS POINT, INC.
MARINER HEALTH CARE OF PORT ORANGE, INC.
MARINER HEALTH CARE OF SOUTHERN
CONNECTICUT, INC.
MARINER HEALTH CARE OF TUSKAWILLA, INC.
MARINER HEALTH OF FLORIDA, INC.
MARINER HEALTH OF JACKSONVILLE, INC.
MARINER HEALTH OF MARYLAND, INC.
MARINER HEALTH OF ORLANDO, INC.
MARINER HEALTH OF PALMETTO, INC.
MARINER HEALTH PROPERTIES IV, LTD.
MERRIMACK VALLEY NURSING & REHABILITATION
CENTER, INC.
METHUEN NURSING & REHABILITATION CENTER,
INC.
MYSTIC NURSING & REHABILITATION CENTER, INC.
▇▇▇▇▇▇▇▇▇ NURSING & REHABILITATION CENTER,
INC.
PINNACLE CARE CORPORATION OF NASHVILLE
PINNACLE CARE CORPORATION OF SENECA
SASSAQUIN NURSING & REHABILITATION CENTER,
INC.
-11-
TAMPA MEDICAL ASSOCIATES, INC.
By:
------------------------------------------
Print Name:
----------------------------------
Title:
---------------------------------------
APS:
AMERICAN PHARMACEUTICAL SERVICES, INC.
COMPASS PHARMACY SERVICES, INC.
COMPASS PHARMACY SERVICES OF MARYLAND, INC.
PINNACLE PHARMACEUTICAL SERVICES, INC.
THE OCEAN PHARMACY, INC.
COMPASS PHARMACY SERVICES OF TEXAS, INC.
By:
------------------------------------------
Print Name:
----------------------------------
Title:
---------------------------------------
-12-
EXHIBIT A
APS AND FACILITIES
-13-
