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EXHIBIT 10.123
MENTAL HEALTH INPATIENT HOSPITALIZATION
SERVICES AGREEMENT
This MENTAL HEALTH INPATIENT HOSPITALIZATION SERVICES AGREEMENT
("Agreement") is entered into for reference purposes only as of the __ day of
December, 1999, by and between San Xxxxxxxx Community Hospital, a California
nonprofit public benefit corporation doing business as Mission Community
Hospital and San Xxxxxxxx Community Hospital ("Hospital") and OptimumCare
Corporation, a Delaware corporation ("Manager").
RECITALS
A. Hospital owns and operates a duly license acute care hospital which
operates at locations in San Xxxxxxxx and Panorama City, California.
B. The San Xxxxxxxx location ("Facility") includes an adult inpatient
short-term crisis intervention psychiatric program (the "Program") for
the treatment of psychiatric disorders for patients eighteen (18) years
of age or older whose length of stay is less than or equal to eight (8)
days.
C. Manager is in the business of providing a variety of consulting,
administrative and management services to facilities who treat patients
with psychiatric disorders.
D. Manager presently provides various services to the Program at the
Facility, and Hospital desires to retain Manager, and Manger desires to
be retained, to provide certain services with respect to the Program.
E. Hospital and Manager desire to enter into this Agreement to provide a
clear understanding of their respective rights, duties and obligations
with respect to the subject matter hereof.
AGREEMENT
ARTICLE 1
MANAGER'S RIGHTS AND OBLIGATIONS
1.1 General Intent and Purpose.
1.1.1 Management Expectations. Manager will manage the Program
in accordance with the mission, vision and values of Hospital, the Hospital's
strategic plan, the Hospital's compliance plan, and the Hospital's annual budget
and operating plan. Manager's management responsibilities shall be fulfilled
within the policies, procedures and organizational structure of the Hospital, as
it may exist from time to time. Manager's Program Administrator, Medical
Director, and Director of Inpatient Psychiatric Nursing, as such terms are
defined in Section 1.2 hereof, shall perform their responsibilities of
management in accordance with the management structure and standards as required
of Hospital employed managers and Hospital
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contracted Medical Directors, as such standards and structure may exist from
time to time. Although Hospital shall have the right, in its sole discretion
from time to time, to change its management structure and standards, as of the
commencement of the Agreement and until notice to Manager, the Program
Administrator shall be a member of Hospital's Senior Management Team. Manager
shall assure that all services are managed in accordance with the rules and
regulations that regulate the provision of psychiatric services, including but
not limited to assuring that all issues related to patient movement into and out
of the Program are accomplished within the guidelines established by the Los
Angeles County Department of Mental Health, in accordance with state and federal
law, and in accordance with all Hospital policies. Manager will provide
expertise to Hospital to recommend, and after approval by Hospital, to implement
appropriate Hospital policies, procedures, rules and regulations. It is
anticipated that all personnel provided by Manager will comply with all of the
requirements established for Hospital personnel, including but not limited to,
orientation, safety, health and assuring that any of Manager's personnel who
oversee or direct Hospital employees do so in accordance with Hospital's human
resources policies as they may be established by Hospital from time to time. On
an annual basis, and more often if specified by Hospital, the Chief Executive
Officer of Hospital ("CEO") or his designee shall perform a performance
appraisal of the Manager's Program Administrator, Medical Director, and Nursing
Director, similar to performance appraisals of individuals with management
responsibilities or directorship agreements at Hospital.
1.1.2 Administration and Clinical Management. Subject to
Hospital's ultimate retention of control and authority, Manager shall assist
Hospital in the administration and clinical management of the Program and report
to Hospital daily as to the administration of the Program and the care and
treatment of Program patients while at the Facility in accordance with and
subject to the patient's physician's orders. Manager does not provide
psychiatric care (including diagnosis, development of individual treatment
plans, determining changes in the care place and discharge planning), which care
is provided by licensed physicians who are members in good standing of
Hospital's Medical Staff with appropriate privileges.
1.2 Manager's Provision of Staffing.
1.2.1 Program Administrator and Medical Director, Staffing.
Manager shall employ and/or independently contract with, and shall be
financially responsible for staffing the Program with;
(a) one full-time Program Administrator ("Program
Administrator") who shall work full-time exclusively at Facility and who shall
meet the criteria and fulfil the duties set forth in Exhibit 1.2.1.(a). The
parties hereby acknowledge and agree that the Manager's total cost of providing
the Program Administrator (including wages, Employee Benefits [as defined in
Section 2.5] and overhead) is deemed, for the purposes of this Agreement, and as
the parties' best estimate of fair market value, is the amount set forth in
Exhibit 1.2.1.(a); and
(b) one medical director ("Medical Director") who shall
provide not less than thirty (30) hours of administrative services for the
Program per month and who shall meet the criteria and terms set forth in Exhibit
1.2.1(b). The parties hereby acknowledge and agree that
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the Medical Director's compensation is deemed, for the purposes of this
Agreement, and as the parties' best estimate of fair market value, is the amount
set forth in Exhibit 1.2.1.(b); and
(c) one full-time Director of Inpatient Psychiatric Nursing
Service ("Nursing Director") who shall work exclusively at Facility and shall
meet the criteria and fulfil the duties set forth in Exhibit 1.2.1.(c). The
parties hereby acknowledge and agree that the Manager's total cost of providing
the Nursing Director (including wages, Employee Benefits [as defined in Section
2.5] and overhead) deemed, for the purposes of this Agreement, and as the
parties best estimate of fair market value, is the amount set forth in Exhibit
1.2.1.(c).
1.2.2. Additional Personnel Staffing. Manager shall employ and/or
independently contract with and shall be financially responsible for staffing
the Program with professional counseling staff, therapists, case managers and
utilization review managers and staff, in the categories, at the staffing
levels, and at the costs (cumulatively for each category), including wages and
Employee Benefits and overhead, as set forth in Exhibit 1.2.2.
1.2.3 Need for Staffing. The staffing set forth in Section 1.2
hereof is based upon the anticipated Program needs to operate the Program as
required (i) by applicable State and Federal law and regulation as required for
licensure and accreditation and for certification for participation in and
reimbursement from the Medicare and Medi-Cal programs, (ii) the Program's
reasonable requirements, and (iii) community standards.
1.2.4 Changes to Staffing Levels. Manager shall not, without
Hospital's prior written consent, which shall not be unreasonably withheld,
deviate from, change, or decrease the agreed staffing levels as set forth in
this Section 1.2.
1.2.5 Staff Compensation. Manager is solely responsible for
compensating the individuals Manager provides hereunder, including Employee
Benefits, and shall defend and hold Hospital harmless from claims for
compensation or Employee Benefits from such individuals. "Employee Benefits"
shall include, by way of illustration and not limitation, an employer's
contribution under the Federal Insurance Contributions Act, unemployment
compensation and related insurance, payroll and other employment taxes, pension
and retirement plan contributions, workers= compensation and related insurance,
group life, health, disability, and accident insurance, severance, and other
benefits. In entering into or continuing any financial relationship (e.g.,
ownership or compensation arrangements) with any physicians and their immediate
family members (as defined under the Xxxxx law at 42 U.S.C. '1395nn and Cal.
Bus. & Prof. Code " 650.01 et seq.), Manager shall assure that such financial
arrangements meet the requirements of an applicable exception under those laws
such that Hospital is not prohibited from presenting any claims for services
pursuant to such physician self-referral laws.
1.2.6 Acceptability of Staff Members. Prior to retaining any
individuals to provide services at Facility pursuant to Section 1.2 hereof.
Manager shall obtain the prior written approval of such individual from the CEO.
Manager shall submit such information regarding proposed personnel as the CEO
reasonably requests. Manager shall use reasonable efforts to resolve any issues
regarding the acceptability to Hospital of Program staff employed or otherwise
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contracted for by Manager. All professional individuals, including Medical
Director, provided by Manager, shall meet the applicable standards of Hospital's
Medical Staff Bylaws.
1.2.7 Removal of Staff Member. At the request of Hospital, in its
sole and absolute discretion, Manager shall immediately remove any employee or
independent contractor of Manager from providing services at the Facility or to
the Program.
1.2.8 Staff Member Conduct and Care. Manager shall cause all
employees and independent contractors of Manager at all times to conduct their
activities in compliance with all bylaws, rules and regulations, policies and
procedures of Hospital and its medical staff and in compliance with all
applicable federal, state and local laws and regulations, and with the standards
and requirements established by the Joint Commission on Accreditation of
Healthcare Organizations and other relevant professional organizations pertinent
to the operation of the Program.
1.3 Licensure and Accreditation. Manager shall advise and assist
Hospital in order for Hospital to obtain all necessary licenses and approvals
from governmental and accrediting agencies, including the Joint Commission on
the Accreditation of Healthcare Organizations, and in order for Hospital to
obtain all certifications and approvals necessary to participate in the Medicare
and Medi-Cal programs. Manager shall advise and assist Hospital to assure
Hospital timely undertakes all activities necessary to obtain and maintain all
necessary licenses and approvals from governmental and accrediting agencies,
including without limitation, the California Department of Health Services, and
is responsible for timely advising and assisting Hospital to undertake all
activities necessary to maintain all certifications and approvals necessary to
participate in the Medi-Cal and Medicare programs are performed. Manager shall
advise and assist Hospital to enable Hospital to timely prepare, file, and
supplement all regulatory applications, reports, and forms required by any
local, state or federal regulatory agency and shall prepare the Facility for,
and monitor, regulatory surveys and inspections of the Program. Manager shall
use its best efforts to assure that Hospital promptly remedies any deficiencies
identified in such surveys and inspections to the extent such deficiencies are
within Manager's control. If the subject matter of the deficiency is Manager's
responsibility hereunder, Manager shall promptly correct such deficiency.
Manager shall use its best efforts to assure that the Program and the Facility
are operated and maintained in compliance with all applicable federal, state,
and local laws, rules and regulations.
1.4 Policies and Procedures.
1.4.1 Development and Implementation of Policies and Procedures.
Manager shall develop and recommend, and upon Hospital's approval, assist
Hospital in implementing all policies and procedures necessary for the safe and
efficient operation of the Program, and shall educate Program staff on such
policies and procedures. The foregoing shall include, but not be limited to,
proposed policies and procedures for performance improvement and utilization
review which are consistent with Hospital's policies and procedures for
performance improvement and utilization review in other Hospital programs and
services. Manager shall develop and recommend, and following Hospital approval
implement, clinical treatment programs and
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protocols for non-physician care that are reflective of current unrecognized
standards for psychiatric programs. Manager shall provide orientation and
training for all Program staff, irrespective of whether such staff members are
employees or independent contractors of Hospital or Manager. Manager shall
assure that all personnel who provide services at the Facility participate in
Hospital's orientation for new Facility employees. Manager shall as reasonably
necessary provide ongoing in-service training such as to assure that Program
staff have the requisite knowledge and skill required to delivery quality
healthcare services at the Facility and through the Program.
1.4.2 Hospital Approval. The implementation of the policies and
procedures and clinical treatment programs required under Section 1.4 shall be
subject to prior approval by the Hospital's administration and, where
appropriate, the Hospital's medical staff.
1.4.3 Compliance Plan. Manager shall require that all personnel
provided by Manager to work at Hospital or to provide services on behalf of
Hospital at all times comply with Hospital's Compliance Plan and its components
as they may be in effect from time to time.
1.5 Indemnification by Manager. Manager shall protect, indemnify, hold
harmless, and defend Hospital, its legal representatives, employees, agents,
officers, trustees, affiliates and assigns, and each of them, from and against
any and all claims, actions, demands, proceedings, losses, damages, costs,
expenses and liabilities (including reasonable attorneys= fees) arising out of
or related to the performance or nonperformance by Manager of any obligations to
be performed or services to be provided hereunder. This indemnification
obligation survives the expiration or earlier termination of this Agreement.
1.6 Insurance.
1.6.1 General Liability Insurance. Manager shall procure and
maintain, at its sole cost and expense, throughout the term hereof, a policy or
policies of comprehensive general liability and malpractice insurance covering
itself and the individuals it provides pursuant to Section 1.2 hereof from an
insurance carrier licensed and authorized to sell or approved to place liability
insurance policies of this nature by the State of California with limits of not
less than Five Million Dollars ($5,000,000) per occurrence. Manager shall cause
to be issued to Hospital, by the insurance carriers issuing such coverage,
certificates of insurance evidencing that the foregoing covenants of this
Agreement have been complied with and stating that said insurance carriers shall
provide not less than ten (10) calendar days prior written notice to Hospital of
any cancellation or material modification of the policy or coverage described
herein, or, if any such carrier shall not agree to provide such notice, then
Manager shall provide notice to Hospital of any such cancellation or
modification immediately upon receipt of notice of the foregoing from the
carrier. Any deductible, co-insurance, or aggregate limits shall be subject to
Hospital's approval, which shall not be unreasonably withheld.
1.6.2 Workers Compensation Insurance. Manager shall procure and
maintain, at its sole cost and expense, throughout the term hereon, a policy or
policies of workers' compensation insurance covering its employees from an
insurance carrier licensed and authorized to sell or approved to place such
liability insurance policies of this nature by the State of California. Manager
shall add Hospital as an additional insured on such policy.
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1.6.3 Extended Reporting Period. If any liability insurance policy
procured pursuant to Section 1.6 is on a "claims made" rather than "occurrence"
basis, then such policy shall include an option to purchase a "tail" or an
extended reporting period, which option shall be exercisable upon termination or
cancellation of said policy or upon any material modification of said policy
that has the effect of causing the coverage of said policy to fail, in any
respect, to meet the requirements of Section 1.6, regardless of whether such
termination, cancellation or modification shall occur during the term hereof or
thereafter. The tail or extended reporting period shall provide coverage meeting
all of the requirements set forth in Section 1.6, for a period of at least seven
(7) years after termination, cancellation or modification of the underlying
policy. Such policy shall provide that the carrier shall give Hospital or Manger
at least thirty (30) calendar days advance written notice of the date upon which
the option may be exercised regardless of whether such date shall occur during
the term hereof or thereafter and shall specifically provide that Hospital shall
be permitted to exercise the option upon failure of Manager to do so. Upon such
notice, Manager shall take all steps, including but not limited to the payment
of money, necessary to exercise such option, and if Manager shall fail to
effectively exercise such option, then Hospital may do so and Manager shall
fully and immediately reimburse Hospital, within ten (10) calendar days notice
thereof by Hospital, for all monies expended by Hospital in connection
therewith. The provisions of this Section 1.6.3 survive the expiration or
earlier termination of this Agreement.
1.7 Record keeping and Access to Documents. Manager shall take all
actions required by the Medicare or Medi-Cal programs to generate and maintain
all necessary records as may be required of Hospital by the Medicare or Medi-Cal
programs. Such records are the property of Hospital. In addition, for the
purpose of implementing Section 1861(v)(1)(1) of the Social Security Act, as
amended, and any regulations promulgated pursuant thereto, Manager agrees to
comply with the following statutory requirements governing the maintenance of
documentation to verify the cost of services rendered under this Agreement:
(i) until the expiration of four years after the furnishing of
such services pursuant to such contract, Manager shall make available, upon
written request to the Secretary of the U.S. Department of Health and Human
Services, or upon request to the Comptroller General, or any of their duly
authorized representatives, the contract and books, documents, and records of
such costs, and
(ii) if Manager carries out any of the duties of the contract
through a subcontract with a value or cost of Ten Thousand Dollars ($10,000) or
more over a twelve-month period, with a related organization, such subcontract
shall contain a clause to the effect that until the expiration of four years
after the furnishing of such services pursuant to such a subcontract, the
related organization shall make available, upon written request to the
Secretary, or upon request to the Comptroller General, or any of their duly
authorized representatives, the subcontract and books, documents, and records of
such organization that are necessary to verify the nature and extent of such
costs.
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1.8 Audit Disclosure. If Manager is requested to disclose books,
documents, or records for purposes of an audit, Manager shall notify Hospital of
the nature and scope of such request and Manager shall make available, upon
written request of Hospital, all such books, documents, or records, during
regular business hours of Manager. The provisions of Sections 1.7 and 1.8
survive the expiration or earlier termination of this Agreement.
1.9 Reports.
1.9.1 Monthly Report. Manager shall provide monthly written
reports to Hospital administration which detail the staffing provided each day
during the prior month pursuant to Article I of this Agreement. Such monthly
reports shall accompany Manager's invoice as required pursuant to Section 4.3.3
of this Agreement. The monthly reports shall include such detail as reasonably
requested by Hospital, the submission of such reports to Hospital to be an
express condition precedent to Hospital obligation to pay to Manager the
Management Fee as required by Section 4 of this Agreement.
1.9.2 Quarterly Report. Manager shall provide quarterly written
reports to Hospital administration regarding all aspects of the operations of
the Program. Such quarterly reports shall address, among other things, the
therapies provided to patients, any notable therapeutic successes or failures
experienced by patients of the Program, any changes in Program staff, any
complaints received by Manager regarding the operation and administration of the
Program and the Facility, Program census, staffing provided the Program by
Manager, and such other information regarding the staffing, and any other items
or issues significant to the administration of the Program requested by
Hospital.
1.10 Adverse Actions. Manager shall commit no act or omission which
adversely affects any licensure or certification of the Hospital.
1.11 Admissions and Professional Services. Patients only shall be
admitted by Hospital pursuant to an order by a physician member of Hospital's
medical staff with admitting privileges. Manager shall assure that medical
treatment shall only be ordered and provided by physicians who are members of
Hospital's medical staff with appropriate clinical privileges. To the extent
that Manager or its personnel makes Section 5150 assessments of individuals and
places holds on such individuals at the Facility, Manager shall comply with all
requirements of Section 5150 and the associated regulations and policies adopted
by the County of Los Angeles.
1.12 Additional Reports. Manager shall prepare an annual report for the
CEO regarding the Program. The Senior Management of Manager's Corporate Offices
shall meet with the CEO and/or his designee upon the CEO's request, the
foregoing to occur at least on a quarterly basis. Manager shall require that the
Program Administrator and Nursing Director provide periodic reports in
accordance with the requirements and expectations of other Hospital managers.
Manager shall promptly provide Hospital with reports and information that
Hospital reasonably requests with respect to the Program, including but not
limited to admissions and discharges.
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1.13 Additional Duties. Manager shall provide the additional duties set
forth in Exhibit 1.13.
ARTICLE II.
HOSPITAL's RIGHTS AND OBLIGATIONS
2.1 Ultimate Control. Hospital shall have and maintain throughout the
period hereof ultimate control and authority for the operation of the Program.
Not to limit the foregoing, all admissions to the Program shall be in compliance
with the admissions criteria which is established by Hospital after considering
Manager's recommendations. Hospital has ultimate authority and control regarding
decisions to accept a patient.
2.2 Space. Hospital shall continue to provide the space currently
being provided for the Program which Manger agrees is adequate in all respects
for the proper operation of the Program. Such space includes the fifty-six (56)
bed contiguous space, administrative space, non-exclusive meeting space, and
non-exclusive counseling space. Hospital shall be free to make any changes it
desires to the Facility, or to relocate the Program so long as such changes do
not materially and adversely interfere with the ability of Manager or Hospital
to carry out their duties hereunder.
2.3 Hospital's Employees. Except for those positions designated to be
provided by Manager, Hospital shall employ, or shall independently contract
with, and shall be financially responsible for staffing the Program with all
personnel necessary for the proper and efficient administration and clinical
operation of the Program, including registered nurses, licensed vocational
nurses and mental health workers, the foregoing in numbers appropriate based on
the Program's anticipated daily census, and the services of a registered
dietician and an office Manager. All personnel employed or otherwise contracted
for (including the Office Manager) shall be required to comply with the Program
policies and procedures as mutually developed and agreed upon in writing by
Hospital and Manager.
2.4 Diagnostic Facilities. Hospital shall make available to Program
patients the Hospital's inpatient, diagnostic, and other facilities as are
available at Hospital and ordered from time to time by such patients' attending
physicians or appropriately requested by Program staff.
2.5 General Services. Hospital shall provide the following support
services for the efficient and proper operation of the Program.
2.5.1 Dietary services for patients of the Program (to be served
to each patient at the Facility and the part-time services of the Hospital's
nutritionist/dietician).
2.5.2 Housekeeping services for the facility.
2.5.3 Janitorial and physical upkeep of the Facility.
2.5.4 All utilities for the Facility.
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2.5.5. Such clerical support, office supplies and general supplies
necessary for the proper operation of the Program.
2.5.6 Record keeping services, in accordance with state and
federal laws and regulations.
2.5.7 Transportation as Hospital determines, after consultation
with Manager, is necessary to operate the Program.
Nothing in this Agreement is intended to or shall be construed to limit
or restrict the Hospital's ability to outsource the provisions of the goods and
services contemplated in this Section.
2.6 Policies and Procedures. Hospital shall provide all Program staff
(including employees and independent contractors of Manager) with copies of all
relevant Hospital and Program policies and procedures, as amended from time to
time.
2.7 Health Screening. Hospital shall provide to all Program staff
(including employees and independent contractors of Manager) such appropriate
pre-employment and periodic diagnostic and health screening examinations as are
customarily provided by Hospital for Hospital employees.
2.8 Accreditation. With the assistance of Manager, Hospital shall
maintain accreditation by the Joint Commission on the Accreditation of
Healthcare Organizations, and shall be financially responsible for paying all
such fees related to such accreditation. Notwithstanding any other provisions in
this Agreement, the sole remedy for Hospital's sole breach of this Section 2.8
is the right of termination of this Agreement by Manager pursuant to Section
5.2.3.
2.9 Performance Improvement Review. With the assistance of Manager and
the staff provided by Manager pursuant to Section 1.2 hereof, Hospital shall
oversee the utilization review and performance improvement services with respect
to services provided by the Program.
2.10 Insurance. Hospital shall maintain professional and public
liability insurance coverage for the Program under the same terms and conditions
and for the same coverage limits as for other Hospital programs. Said insurance
shall cover claims for negligence of Hospital or its employees. Written
certificate of such coverage shall be provided to Manager. Hospital shall have
the right to provide the foregoing coverage through the self-insurance programs
of its parent, sister, or related entities.
2.11 Y2K. Hospital shall use its best efforts to identify and take such
actions as are necessary in order for all systems and equipment which are
essential for the Program to be Y2K compliant prior to January 1, 2000.
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ARTICLE III.
REPRESENTATIONS AND WARRANTIES BY MANAGER
3.1 Representations by Manager.
3.1.1 Corporate Status. Manager is a corporation duly organized
and existing under the laws of the State of Delaware, is authorized and
qualified to conduct business in the State of California, and has the power and
authority to carry on the activities in which it is engaged and to perform its
obligations hereunder.
3.1.2 Execution of Agreement. The execution of this Agreement and
the performance of the obligations of the Manager hereunder will not result in
any breach of any of the terms, conditions, or provisions of any agreement or
other instrument to which Manager is a party or by which it may be bound or
affected, or any governmental license, franchise, permit or other authorization
possessed by the Manager, nor will such execution and performance violate any
federal, state or local law, rule or regulation.
3.1.3 Litigation. There is no litigation, administrative
proceeding or investigation pending or threatened against Manager, nor is the
Manager subject to any judgment, order, decree or regulation of any court or
other governmental or administrative agency, which would materially adversely
affect the performance of Manager's obligations hereunder.
3.2 Representations and Warranties by Hospital.
3.2.1 Corporate Status. Hospital is a non-profit public benefit
corporation duly organized and validly existing in good standing under the laws
of the State of California with the power and authority to perform its
obligations hereunder subject to licensure by the California Department of
Health Services.
3.2.2 Execution of Agreement. To Hospital's knowledge, the
execution of this Agreement will not be in violation of any governmental
license, permit or other authorization possessed by Hospital. Hospital is
accredited by the Joint Commission on the Accreditation of Healthcare
Organizations.
3.2.3 Litigation. To Hospital's knowledge, there is no litigation,
administrative proceeding or investigation pending or threatened against
Hospital, nor is the Hospital subject to any judgment, order, decree or
regulation of any court or other government or administrative agency which would
materially adversely affect the performance of Hospital's obligations hereunder.
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ARTICLE IV.
BILLING AND COLLECTIONS; MANAGEMENT FEE
4.1. Facility Services Billing and Collections. Hospital has in effect
a schedule of fees and patient charges for the administrative and technical
component of all services rendered by the Program. Said fees and charge may be
modified by Hospital from time to time in its sole and absolute discretion, but
Hospital shall give prior notice of such modification to Manager for
informational purposes. Hospital shall have the sole and exclusive right to xxxx
and collect for Hospital's fees and charges with reference to services provided
by the Program in accordance with such schedule. Hospital shall be responsible
for preparing and submitting its annual cost report. The parties agree, if
necessary and appropriate, to alter their billing arrangements in order to avoid
reimbursement disallowance for Hospital pursuant to the Tax Equity and Fiscal
Responsibility Act of 1982 or 42 C.F.R., Part 405, as it may be revised from
time-to-time.
4.2 Professional Services Billing and Prohibition on Billing.
4.2.1 Physicians and Clinical Psychologists. Physicians and
clinical psychologists who provide services at the Program are responsible for
billing and collecting for their own professional services.
4.2.2 LCSWs and MFCCs. Hospital and Manager shall xxxx and collect
for their respectively employed licensed or directly contracted social workers
("LCSWs"); manager, family and child counselors ("MFCCs"); and other licensed
therapists unless such LCSWs, MFCCs, and other licensed therapists agree to be
responsible for billing and collecting for their professional services.
4.2.3 Prohibition on Billing. Manager shall not and shall cause
the Medical Director and any other physicians or psychologists associated,
employed by or under contract with Manager not to xxxx or cause to be billed,
the Medicare Program, any Medicare beneficiary, a Medicare (Part B) carrier or
any other third party payor or patient for any portion of the administrative,
supervisory or other provider services in violation of 42 CFR, Section 405.550.
Manager shall indemnify and hold harmless Hospital from any breach of this
Section 4.2.
4.3 Management Fee.
4.3.2 Invoice for Management Fee. The parties have negotiated at
arms-length negotiations the compensation to Manager to be a fair market value
amount for Manager's services and not to be determined in a manner that takes
into consideration the volume or value of any referrals or business generated to
or within Hospital. Hospital shall pay to Manager an annual management fee of
Two Million Four Hundred Twenty Three Thousand, Four Hundred Sixty One Dollars
($2,423,461), payable in equal monthly installments of Two Hundred One Thousand
Nine Hundred Fifty Five Dollars and Eight Cents ($201,955.08) ("Management
Fee").
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4.3.3 Timing of Management Fee Payment. Manager shall prepare and
submit to Hospital on a monthly fee basis an invoice for its services rendered
hereunder. Said invoice shall include information as to the amount of time and
services provided by Manager. Manager shall submit with the invoice the monthly
report required under Section 1.9. Claims will be settled within 30 days of
receipt of invoice.
4.4 Adjustments to Management Fee.
4.4.1 Management Fee Offset. In the event any of the Program staff
to be provided by Manager are not provided in accordance with this Agreement for
a period of more than forty-five (45) days, Hospital may deduct from Manager's
Management Fee an amount equal to the budgeted compensation for such position,
including Employee Benefits. This right to deduct shall not excuse Manager from
its obligation to provide staffing at the level set forth in Section 1.2.
4.4.2 Payments Declined. Within thirty (30) days of written notice
from Hospital, Manager shall reimburse Hospital twenty percent (20%) of
Hospital's charges for all patient days in excess of 8% during the term of this
Agreement for which payment was denied for clinical reasons or as a result of
inappropriate or inadequate documentation. Hospital may offset, among other
rights, such amount against any monies owed to Manager under this Agreement or
any other agreement. A "patient day" shall be deemed to exist with respect to
each patient in the Program at 12:01 a.m. Manager may request, and Hospital may
authorize, that Manager appeal such denial of payment with the costs of such
appeal being borne by the parties equally.
ARTICLE V.
TERM AND TERMINATION
5.1 Term. This Agreement commences effective 12:01 a.m., January 1,
2000, and expires 12:59 p.m., December 31, 2002, unless earlier terminated in
accordance with the provisions of this Agreement.
5.2 Termination by Manager.
5.2.1 Manager may terminate this Agreement upon ninety (90) days
prior to written notice to Hospital, if Hospital should have a bankruptcy,
reorganization, or similar action filed by or against it, or become insolvent,
or sell all or substantially all of its assets (but subject to the assignment
rights set forth in this Agreement).
5.2.2 In the event Hospital fails to comply with the terms of this
Agreement in any material respect, Manager may notify Hospital of such breach,
in writing, and Hospital shall have thirty (30) days to cure such breach;
provided that if the breach is for failure to staff the Facility as required
hereunder, Hospital shall have sixty (60) days to cure such breach. In the event
Hospital fails to cure such breach within said period, the Agreement may be
terminated by Manger upon ninety (90) days prior to written notice to Hospital.
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5.2.3 Manager may terminate this Agreement upon ninety (90) days
prior written notice to Hospital in the event Hospital fails to maintain
accreditation by the Joint Commission on the Accreditation of Health Care
Organizations, or in the event Hospital fails to maintain any license or
certification granted to it by a regulatory agency without which the Program
would be materially and adversely affected, unless the responsibility to assist
in the maintenance of such license or certification is a responsibility of
Manager pursuant to Section 1.3.
5.2.4 Manager may terminate this Agreement upon ten (10) days
prior written notice to Hospital in the event Hospital fails to maintain
insurance in accordance with the requirements of Section 2.10.
5.3 Termination by Hospital.
5.3.1 Hospital may terminate this Agreement upon ninety (90) days
prior written notice to Manager, if Manager fails to pay its obligations in a
timely manner under any agreement, should have a bankruptcy, reorganization, or
similar action filed by or against it, or become insolvent, or sell all or
substantially all of its assets.
5.3.2 In the event Manager fails to comply with the terms of this
Agreement in any material respect, Hospital may notify Manager of such breach,
in writing, and Manager shall have thirty (30) days to cure such breach;
provided that if the breach is for failure to staff the Facility as required
hereunder, Manager shall have sixty (60) days to cure such breach. In the event
Manager fails to cure such breach within said period, the Agreement may be
terminated by Hospital upon ninety (90) days prior written notice.
5.3.3 Hospital may terminate this Agreement upon thirty (30) days
prior written notice to Manager in the event Hospital fails to maintain
accreditation by the Joint Commission on the Accreditation of Healthcare
Organizations, in the event Hospital fails to maintain any license, permit,
certification and/or other required authorizations to operate the Program or the
Facility, or if Hospital loses or surrenders its participation in the Medicare
and/or Medi-Cal programs.
5.3.4 Hospital may terminate this Agreement upon ten (10) days
prior written notice to Manager in the event Manager fails to maintain insurance
in accordance with the requirements of Section 1.6.
5.3.5 Hospital may terminate this Agreement if (a) Manager, or any
of its principals, officers, Managers or directors ("Management Personnel") is
convicted of an offense related to healthcare or listed by a Federal agency as
being disbarred, excluded or otherwise ineligible for Federal program
participation, or (b) any of the staff Manager employs or contracts with, other
than Management Personnel, are convicted of an offense related to healthcare or
listed by a Federal agency as being disbarred, excluded or otherwise ineligible
for Federal program participation and Manager does not immediately remove such
non-Management Personnel from providing services hereunder.
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5.3.6 We agree to develop within the next 60 days a mutually
acceptable addendum to the contract which addresses the question of establishing
reasonable management accountability for bottom line performance.
5.4 Immediate Threat to Patient Care. Notwithstanding any other term
of this Agreement, in the event a party ever fails to meet a condition of this
Agreement which breach poses a threat to patient care, the operation, licensure
or reimbursement of the Hospital or the Program, the party not in breach may
require the other immediately to take such remedial steps as are necessary to
alleviate said threat to patient care or operations. If said threat is not
immediately remedied, the other party shall have the right to immediately
terminate this Agreement or take such remedial steps as such other party deems
necessary to cure the threat.
5.5 Renegotiation/Termination.
5.5.1 Tax Exempt Financing. In the event Hospital seeks additional
or replacement tax exempt financing, Manager agrees to amend this Agreement as
may be necessary in order for Hospital to obtain or maintain such financing, or
to secure the legal opinions which may be required to secure or maintain such
financing. Immediately upon request by Hospital, Manager shall execute any and
all such amendments presented by Hospital and shall return promptly said fully
executed original amendments to Hospital. If Manager fails to comply with this
provision, Hospital may terminate this Agreement upon ten (10) days written
notice to Manager.
5.5.2 Changes in Reimbursement. Acknowledging that a substantial
portion of the Program's services will be reimbursed under the Medicare and
Medi-Cal programs and that a substantial portion of the Hospital's services are
reimbursed under the Medicare and Medi-Cal programs, the parties agree that this
Agreement is terminable by either party effective upon any changes in the
Medicare or Medi-Cal laws, regulations and/or payment programs which
substantially and adversely affect either party, including but not limited to
changes in Hospital's reimbursement for Program services; provided, however, the
parties agree to negotiate diligently and in good faith to revise this Agreement
to eliminate the substantial and adverse effect caused by such change(s).
5.5.3 Hospital's Licensure and Status. It is understood and agreed
that Hospital is a licensed general acute care facility which is owned by a
nonprofit corporation which has tax-exempt financing and participates in the
Medicare and Medi-Cal programs. Hospital is bound by the federal and state laws,
regulations and interpretations thereof pertaining to the foregoing. The parties
agree that this Agreement shall be interpreted from time-to-time as they may
affect Hospital, its licensure, nonprofit status, tax exempt financing and
participation in and reimbursement by the Medicare and Medi-Cal programs. In the
event this Agreement or one or more of its terms or provisions is interrupted
from time-to-time as they may affect Hospital, its licensure, nonprofit status,
tax exempt financing and participation in and reimbursement of the Medicare and
Medi-Cal programs. In the event this Agreement or one or more of its terms or
provisions is interpreted by Hospital's counsel to pose a risk of violation of
any of the foregoing laws, regulations or interpretations thereof, Hospital's
bond covenants, the conditions or
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restrictions pertinent to providers who participate in the Medicare and Medi-Cal
programs, to potentially subject Hospital to monetary sanctions or penalties, or
to adversely affect Hospital's right to xxxx and collect for services, the
parties agree (i) to continue to perform their respective obligations hereunder
except for the offending provisions; and (ii) to negotiate diligently and in
good faith to reach an agreement without the offending provisions within ten
(10) days after notice that the Agreement requires renegotiation pursuant to
this Section 5.5.3, then this Agreement shall terminate immediately upon notice
served by either party in accordance with Section 8.10 hereof.
5.6 Effects of Termination. Upon termination of this Agreement each
party shall continue to be bound by (a) all covenants and restrictions that by
their nature or terms continue to be binding (for example, but without
limitation, access to books and records, confidentiality indemnification), and
(b) all amounts payable as compensation or offset for services rendered during
the term of this Agreement. The parties agree that policies and procedures
prepared by Manager and adopted by Hospital may be used by Hospital after the
termination of this Agreement in its sole discretion.
ARTICLE VI.
CONFIDENTIAL INFORMATION
NON-COMPETITION AND NON-SOLICITATION
6.1 Confidential Information Acknowledgment. Each party acknowledges
and agrees that Confidential Information may be disclosed to it in confidence by
the other party with the understanding that it constitutes business information
developed by the other party. Each party further agrees that it shall not use
such Confidential Information for any purpose other than in connection with the
Program. Each party further agrees not to disclose such Confidential Information
to any third party except as required by law or regulation or in order to serve
the purpose of the Program or as permitted by written authorization of the other
party. "Confidential Information" shall mean all confidential information and
trade secrets of each party, including without limitation, financial statements,
internal memoranda, reports, patient lists, memoranda, manuals, handbooks,
pamphlets, production books and audio and visual recordings, models, techniques,
formulations, procedures, business plans, and other materials or records of a
confidential and/or proprietary nature not known or available to the public or
within the industry and which are shared by a party with the other party in the
course and scope of performing its obligations hereunder. For purposes of this
Agreement, policies and procedures and other materials developed by Manager for
Hospital are not Confidential Information of Manager.
6.2 License. Manager hereby grants to Hospital for the term of this
Agreement, a non-exclusive license to use the registered service marks of
Manager when identifying the Program. These service marks are to remain the
exclusive property of Manager.
6.3. Use of Name or Likeness. Neither party shall have the right to use
the other party's name or likeness in any advertising, directories, brochures or
announcements without the other party's approval of the specific usage. If the
parties agree to develop any forms of advertising for the Program, all costs
shall be borne equally by the parties.
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6.4 Patient Information. Manager covenants, represents and warrants
that neither Manager not its staff shall disclose to any third party, except
where permitted or authorized by applicable law or expressly approved in writing
by Hospital, any patient or medical record information, and that Manager and its
staff are knowledgeable regarding and will comply with the Federal and State
laws regarding the confidentiality of such information.
6.5 Covenant Not to Compete. During the term of this Agreement,
Hospital is willing to permit Manager access to Hospital's Confidential
Information if Manager agrees during the term of this Agreement to avoid
conflicts of interest by entering into this covenant not to compete. During the
term of this Agreement, neither Manager nor any of its shareholders, officers or
directors, or any entity controlled by or under control with or subject to
common management with one of the foregoing, shall directly or indirectly
perform or arrange to perform in any capacity the type of services called for
hereunder by Manager for any psychiatric program, nor shall the foregoing have
any ownership interest in any entity or sole proprietorship which has a
psychiatric program. This covenant not to compete shall be effective within a
ten (10) mile radius of Facility. If Hospital relocates the Program, the
covenant not to compete shall be effective within a ten (10) mile radius of the
new location; provided, however, if as a result of the relocation, Manager then
has a relationship with a psychiatric program which would violate this covenant
not to compete such pre-existing relationship shall be exempt from this covenant
not to compete. Hospital shall have the right to enforce the foregoing through
legal or equitable action, including but not limited to, injunctive relief, for
such injunctive relief or equitable relief to be available without the necessity
of posting a bond, cash or otherwise. In addition to the foregoing, Hospital
shall have the right at its option to immediately terminate this Agreement and
to seek damages for such breach or to continue this Agreement and to recover
damages for the breach.
6.6 Non-Solicitation.
6.6.1 Non-Solicitation Limitations. Manager and Hospital each
acknowledge that the other party has expended and will continue to expend
substantial time, effort, and money to train its respective employees and
contracted personnel in the operation of the Program, and that the other party's
respective employees and contracted personnel have access to and possess
Confidential Information of the other party. Each party therefore agrees that
for the earlier of (i) one (1) year after the cessation of the employment or
agency relationship between the other party and an employee or contracted person
of the other party, or (ii) one (1) year after termination of this Agreement, it
will not knowingly (and it will not induce any of its agents or affiliates to)
solicit the employment of or contract with any employee, former employee, or
contracted personnel or former agent of the other party if such individual has
been employed by or retained by the other party to provide services at Facility
unless the other party gives express written consent thereto.
6.6.2 Permissible Employment Contracting.
(i) This Section prohibits solicitation but not the actual
employment or contracting of an individual if such individual desires such
employment or contract and initiates an application for such employment or
contract.
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(ii) Notwithstanding anything to the contrary, this Section
does not apply to (a) Manager if Manager terminates this Agreement pursuant to
Section 5.2.1, 5.2.2 or 5.2.4 of this Agreement, and (b) Hospital if Hospital
terminates this Agreement pursuant to Section 5.3.1, 5.3.2, 5.3.4, or 5.3.5 of
this Agreement.
(iii) Notwithstanding anything to the contrary, a party
shall not be restricted from contracting with the other party's employees or
independent contractors, if such employee or independent contractor had at any
time an employment or other contractual relationship with or was on the Medical
or Allied Health Professional Staff of such party.
ARTICLE VII.
APPLICABLE LAWS
7.1 Kickback and Anti-Referral Laws. Each party agrees to comply with
applicable federal, state and local laws respecting the Program and the conduct
of their respective businesses and professions, including but not limited to the
federal and California laws governing the referral of patients which are in
effect or will become effective during the term of this Agreement. These laws
include prohibitions on:
7.1.1 Payment for referral or to induce the referral of patients
(Social Security Act Section 1128; Cal Business and Professions Code Section
325); and
7.1.2 The referral of patients by a physician for certain
designated health care services to an entity with which a physician (or his/her
immediate family) has a financial relationship (Cal. Labor Code " 139.3 and
139.31, applicable to referrals for workers= compensation services; Cal.
Business and Professions Code "6501.01 and 650.02, applicable to all other
patient referrals within the State; and '1877 of the Social Security Act,
applicable to referrals of Medicare and Medi-Cal patients).
7.2 Acknowledgments. As consideration for each party hereto to enter
into this Agreement, the parties:
7.2.1 Acknowledge that (i) each has had the opportunity to engage
independent counsel of her/its choice for advice as to the requirements of the
anti-referral laws referred to in this Section 7; and (ii) each has had the
opportunity to consult with legal counsel or other experts as each deems
appropriate to assist in the determination by each party that the terms of this
Agreement are commercially reasonable;
7.2.2 Represent to the other that is the intent that the terms of
this Agreement shall be commercially reasonable; and
7.2.3 Represent to the other that it is the intent that
compensation for each of the services which are provided under this Agreement
and the services of the Medical Director shall be based on the fair market value
of such services.
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7.3 No Referral Requirement. Nothing in this Agreement is intended or
shall require any party to violate the California or federal prohibitions on
payments for referrals, and this Agreement shall not be interpreted to:
7.3.1 Require the Medical Director to make referrals to Hospital,
be in a position to make or influence referrals to Hospital, or otherwise
generate business for Hospital;
7.3.2 Restrict Medical Director from establishing staff privileges
at, referring any service to, or otherwise generating any business for any other
entity of his/her choosing; and
7.3.3 Interfere in any way with Medical Director's professional
prerogatives and medical decisions.
7.4 No Gifts to Beneficiaries. Under no circumstances whatsoever shall
Manager, its employees or agents offer to make any gift or payment to any
individual as a means of encouraging such person to seek medical or psychiatric
attention from Hospital, Manager, or through the Program, or from any other
provider of health care.
7.5 Audits. Hospitals shall have the right, but not the obligation, to
interview patients who receive services through the Program, and to conduct
audits of all types of the Program, for the purpose of determining whether
Manager is in compliance with all applicable federal, state, and local laws,
regulations, and ordinances, as well as Hospital rules, regulations, bylaws,
policies, and procedures and this Agreement.
ARTICLE VIII.
MISCELLANEOUS PROVISIONS
8.1 Compulsory Arbitration. Any controversy, dispute, or claim arising
out of or relating to this Agreement, or the breach or alleged breach thereof,
shall be settled by binding arbitration in accordance with the rules of the
American Health Lawyers Association Alternative Dispute Resolution Services
Rules of Procedure, and judgment on the award may be entered in any court having
jurisdiction. The provisions of this Section 8.1 shall not apply with respect to
any claim arising out of or relating to bodily injury or death.
8.2 Attorneys' Fees. If any legal action, including arbitration, is
necessary to enforce the terms of this Agreement, the prevailing party shall be
entitled to reasonable attorney's fees and costs awarded against the other party
in addition to any other relief to which the prevailing party may be entitled.
8.3 Governing Law. The validity of this Agreement and any of it terms
or provisions, the interpretation of the rights and duties of the parties
hereunder, and the construction of the terms or provisions hereof shall be
governed in accordance with the laws of the State of California.
8.4 Force Majeure. If either of the parties hereto is delayed or
prevented from fulfilling any of its obligations hereunder by force majeure,
said party shall not be liable for said delay or
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failure. "Force Majeure" shall mean any cause beyond the reasonable control of a
party, including but not limited to, an act of God, act or omission of civil or
military authorities, fire, strike, flood, riot, war, delay of transportation,
or inability due to the aforementioned causes to obtain necessary labor,
materials or facilities.
8.5 Severability. If any part of this Agreement is held to be void or
unenforceable, such part will be treated as severable, leaving valid the
remainder of this Agreement notwithstanding the part found void or
unenforceable, unless the severed part contains an essential economic term.
8.6 Waiver. A waiver by either party of a breach or failure to perform
shall not constitute a waiver of any provision hereof or of any other breach or
failure whether or not similar. There shall be no waiver unless in writing
signed by the party against whom the waiver is sought to be enforced.
8.7 Binding Effect and Assignment. This Agreement shall be binding on
the successors and assigns of the respective parties, provided however that
neither party may assign or otherwise transfer this Agreement or delegate
obligations hereunder without the other's written consent, except as otherwise
provided herein.
8.8. Complete Agreement. This Agreement constitutes the complete
understanding of the parties hereto with respect to the subject matter hereof,
and no other agreement, representation, statement, or promise relating to the
subject matter of this Agreement which is not contained herein shall be valid or
binding. Any and all prior agreements and understandings, including but not
limited to, the Agreement entered into November 27, 1995, [as extended by mutual
agreement,] are superseded by this Agreement and no further force or effect.
There shall be no amendment hereof unless such amendment is in writing and is
signed by both parties.
8.9 No Agency or Partnership. The relationship between Manager and
Hospital is that of independent contractors and nothing in the Agreement shall
be deemed to create an agency, joint venture, partnership or similar
relationship between the parties hereto. Neither party shall have the right to
bid for the other or enter into any contract or commitment in the name of, or on
behalf of, the other.
8.10 Notices. All notices hereunder shall be in writing, delivered
personally or by U.S. Certified or Registered postal mails, postage prepaid,
return receipt requested, and shall be deemed given when delivered personally or
upon the earlier of actual receipt or five (5) days afer deposit in said United
States mail, addressed as below with proper postage affixed, but each party may
change its address by written notice in accordance with this Section.
If to Hospital: Mission Community Hospital
00000 Xxxxxx Xxxxxxxxx
Xxxxxxxx Xxxx, Xxxxxxxxxx 00000
Attn: Chief Executive Officer
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If to Manager: OptimumCare Corporation
00000 Xxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxx Xxxxxx, Xxxxxxxxxx 00000-0000
Attn: Xx Xxxxxxx
8.11 Captions. Any captions to or headings of the articles, sections,
subsections, paragraphs, or subparagraphs of this Agreement are solely for the
convenience of the parties, are not a part of this Agreement and shall not be
used for the interpretation or determination of validity of this Agreement or
any provisions hereof.
8.12 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts together shall constitute but one and the same instrument.
8.13 Assistance in Litigation. Manager and Medical Director shall, at
no charge, provide information and testimony and otherwise assist Hospital in
defending against litigation brought against Hospital, its directors, officers,
shareholders, members or employees based upon a claim of negligence, malpractice
or any other cause of action, arising out of this Agreement, except where
Manager and/or Medical Director is a named adverse party.
8.14 Gender and Number. Whenever the context hereto requires, the
gender of all words shall include the masculine, feminine and neuter, and the
number of all words shall include the singular and plural.
8.15 Legal Counsel. Each party understands the advisability of seeking
legal counsel and has exercised its own judgment in this regard.
8.16 Interpretation. No provision of this Agreement shall interpreted
or construed for or against either party because that party's legal
representatives drafted such provision.
8.17 Facilitation. Each party agrees promptly to perform further acts
and to execute, acknowledge and deliver any documents which may be reasonably
necessary to carry out the provisions of this Agreement or effect its purposes.
8.18 Sale or Lease of Hospital and/or the Facility. If Hospital and/or
the Facility is sold or leased, or is the subject of a joint operating agreement
or joint venture, regardless of the identity of the purchaser/lessee or party
which will continue to operate Facility, Hospital will have the right to assign
the Agreement, delegate all rights and duties thereunder to such
purchaser/lessee or successor operator and Hospital shall have no further
responsibilities or liabilities pursuant to the Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed his Agreement as
of the day and year first above written.
"HOSPITAL"
SAN XXXXXXXX COMMUNITY HOSPITAL
d/b/a/ MISSION COMMUNITY HOSPITAL and
SAN XXXXXXXX COMMUNITY HOSPITAL
By: /s/ Xxxxxxx Xxxxxx
------------------------------
Xxxxxxx Xxxxxx
Its: CEO
"MANAGER"
OPTIMUMCARE CORPORATION,
a Delaware corporation
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------
Xxxxxx X. Xxxxxxx
Its: CEO
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EXHIBIT 1.2.1 (a)
INPATIENT PROGRAM
The Program Administrator shall be a licensed health professional with
at least three (3) years psychiatric program management experience. Manager
represents to Hospital that, on the basis of training expertise, the Program
Administrator is knowledgeable regarding inpatient psychiatric programs and that
the Program Administrator is qualified to perform and will use his/her best
efforts to perform the following duties:
1. Have overall day to day responsibility for the Program and be
available to the Program 24-hours per day, seven (7) days per week, fifty-two
(52) weeks per year. When Manager is absent due to illness, vacation or
continuing education, Manager shall provide a substitute Program Administrator
with the knowledge and expertise to fulfil the responsibilities of the Program
Administrator in his/her absence.
2. Oversees and supervises all of the Hospital's admissions to and
discharges from the Program, assuring a manageable and safe flow of patient
admissions.
3. Supervises the Treatment Planning System and Clinical Reviews for
utilization review.
4. Monitors the Program's compliance with Patient Rights, Department of
Health Services.
5. Prepares, on the Hospital's behalf, initial drafts of responses to
any deficiency statements.
6. Assists Hospital in maintaining appropriate relationships with
regulatory and accrediting agencies.
7. Consults with Hospital's Human Resources personnel and nurse
managers regarding the Hospital's hiring of staff for the Program and discipline
of Program staff.
8. Consults with the Hospital's Human Resources personnel and nurse
managers regarding human resource issues, such as orientation, timely
performance appraisals, recruitment, retention, ongoing motivation, etc.
9. Recommends, and after approval by Hospital, implements an education
plan which includes, but is not limited to cross training both of Hospital's
campuses and Hospital's Intake Office.
10. In conjunction with Hospital staff, conducts weekly patient groups
to obtain patient feedback and to problem solve.
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11. Assures that a Patient Rights log is maintained per Patient Rights
quarterly reports.
12. Assures that all mandatory statistics are maintained per Patient
Rights and Department of Health Services.
13. Supervises Hospital's Performance Evaluation Team ("PET").
14. Recommends appropriate disciplinary actions for Hospital staff and
Manager personnel who provide services at or for the Program.
15. Recommends a system to monitor P.E.T. Performance Improvement
("P.I.") in accordance with Hospital's overall P.I. system, and implements the
P.E.T. P.I. system after Hospital's approval of it.
16. Works with Hospital to develop and maintain appropriate physician
relationships.
17. Works with Hospital and its Medical Staff to monitor compliance
with applicable policies, procedures, rules and regulations; assists in
counseling regarding compliance with the foregoing as requested by Hospital or
the Medical Staff.
18. Recommends, and upon Hospital's approval, implements P.I. programs
for the Program consistent with Hospital's P.I. program.
19. Participates in Hospital's Function Team and PI Council. Upon
Hospital's request, fulfils the responsibilities of the chair of the Patient's
Rights/Organizational Ethics Committee.
20. Appropriately responds to customer service issues from relatives,
caretakers and other providers on behalf of Hospital and recommends appropriate
Hospital actions in response to such issues.
21. Works cooperatively with and is available to Hospital's ER
physicians and ER nursing staff (24-hours per day, seven days per week, 52 weeks
per year) with respect to psychiatric referrals.
22. Performs 5150's in the ER as needed.
23. If requested by Hospital, attends and represents Hospital at
County, Service Area, and RFP meetings and at Hospital Association of Southern
California Behavioral Healthcare Subcommittee meetings.
24. Assists Hospital in its interaction, and represents Hospital, if
requested to do so by Hospital, with respect to local community services (fire,
police department) and neighboring agencies, such as other hospitals, community
healthcare centers, clinics, etc.
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25. Identifies and recommends to Hospital opportunities for community
outreach and development. If requested by Hospital, participates in identified
community outreach opportunities and assists in the Hospital's strategies for
the Program's development.
26. At all times strives to maintain and improve Patient Care,
performing such managerial duties as are necessary to monitor and maintain
quality patient care.
27. Acts as a member of the Hospital's Senior Management structure, as
established and modified from time to time by the CEO.
28. Reports to the CEO or designee and performs such managerial duties
with respect to the Program and the Hospital as reasonably requested from time
to time by Hospital's Chief Executive Officer or designee.
Manager's Cost of Providing Program Administrator
For purposes of this Agreement, Manager's deemed cost of providing the Nursing
Director shall be as set forth in Exhibit 1.2.2.
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EXHIBIT 1.2.1 (b)
1. Medical Director Qualifications. Manager represents, warrants,
covenants and agrees that:
(a) At all times during the term of this Agreement, Medical Director
shall be a physician duly licensed to practice medicine in the
State of California, shall be a member of the Hospital's Active
Medical Staff with clinical privileges sufficient to permit Medical
Director to perform all services reasonably required of him/her as
Medical Director of the Program, and shall be in legitimate
possession of all customary narcotics and controlled substances
narcotics and controlled substances and numbers and licenses;
(b) Manager shall obtain the Medical Director's written representation
and warranty that at no time prior to or during the term of this
Agreement, shall Medical Director's license to practice medicine in
any state ever have been suspended, revoked, or restricted, ever
have been reprimanded, sanctioned or disciplined by any licensing
board or state or local medical society or specialty board, ever
have been suspended, excluded, barred or sanctioned under the
Medicare or Medi-Cal programs, or any other governmental agency,
ever have been denied membership or reappointment of membership on
the medical staff of any hospital, or ever had his/her medical
staff membership or clinical privileges suspended, curtailed or
revoked for a medical disciplinary cause or reason; and
(c) The terms and conditions of the Medical Director's agreement with
Manager shall be in compliance with all applicable law, including
but limited to, state and federal anti-referral legislation such
that Hospital shall not be limited from billing and receiving
payment for services rendered. Manager shall indemnify and hold
Hospital harmless from any damages, costs and expenses Hospital
incurs as the result of Manager's failure to assure that Manager's
agreement with the Medical Director is in compliance with the
foregoing. Hospital shall have the right to review and approve the
proposed Agreement between the Medical Director and Manager.
2. Medical Director Duties. The Medical Director shall provide the
professional administrative services as hereafter set forth as an independent
contractor of Manager. The Medical Director shall furnish the following for the
operation of the Program:
(a) Medical Director shall serve as Medical Director of the Program.
Medical Director shall, during the entire term of this Agreement,
supervise the clinical, medical and psychiatric operation of the
Program and shall devote such time as is necessary to carry out
such duties and ensure efficient and effective medical
administration of the Program. The primary objective is to provide
appropriate utilization of the Program's facilities, equipment and
staff and to provide quality services to all patients;
(b) Manager shall assure that Medical Director shall be available at
reasonable times for consultation with the Board of Directors, the
Chief Executive Officer or designee, the
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Chief of Staff, individual members of the medical staff, committees
of the professional staff and nursing, be available by electronic
pager for emergency consultation during all hours that the Program
is in operation and Medical Director is offsite; provided, however,
that Medical Director may arrange for coverage of this on-call
obligation by a substitute who must be approved by the CEO or
designee, which coverage shall be provided by a physician licensed
to practice medicine in the State of California with clinical
privileges at Hospital sufficient to perform services required
hereunder and shall be at Manager's or Medical Director's sole cost
and expense;
(c) Medical Director shall actively participate in the affairs of the
professional staff of the Hospital and shall perform such tasks and
provide such services as the professional staff or any committee
may from time to time appropriately request. Hospital's medical
staff committees shall conduct at regular intervals ongoing
monitoring and reviewing of the professional performance of Program
and the Medical Director; the results of these reviews to be
reviewed by Hospital's CEO;
(d) The Medical Director shall recommend to Hospital and its Medical
Staff proposed treatment programs and protocols for physician care.
Upon approval of the foregoing, Medical Director shall assist with
the implementation of said treatment programs and protocols.
(e) If requested by the CEO, Medical Director shall serve on committees
and perform duties commensurate with the requirements of the
Medical Directors who contract directly with Hospital; and
(f) Medical Director shall perform such duties as may be reasonably
requested by the CEO from time to time.
3. Medical Director's Compensation. The Medical Director will be paid
at the rate of One Hundred Dollars ($100) per hours; provided, however, in no
event will the Medical Director be paid in excess of Three Thousand Dollars
($3,000) per month for services rendered hereunder.
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EXHIBIT 1.2.1 (c)
INPATIENT PROGRAM
The Nursing Director shall be a California licensed registered nurse with at
least three (3) years of psychiatric program management experience. Manager
represents to Hospital that, on the basis of training and expertise, the Nursing
Director is knowledgeable regarding inpatient psychiatric programs and that the
Director of Inpatient Psychiatric Nursing Services is qualified to perform and
will use his/her best efforts to perform the following duties:
1. Assure clinical staffing for the Program meets acuity levels, both
in numbers and in the expertise of the professional staff.
2. Assume the responsibilities as the manager of the clinical staff who
provide services in the Program, including but not limited to day to day direct
oversight of clinical services provided to Program patients.
3. Integrate Program objectives and resources in the provision of
patient care services.
4. Ensure that patients who are admitted to the Program meet all
criteria for admission and are at the appropriate level of care.
5. Take appropriate measures, consistent with Hospital policies and
procedures which may be in effect from time to time, to encourage growth,
development and education of the Program's patient care services staff.
6. Conduct monthly meetings to facilitate communication with both
professional and non-professional staff.
7. Timely inform the Program Administrator and the Hospital's Director
of Patient Care Services of issues that affect patient care.
8. Establish positive working relationship and promote teamwork between
the Program and other Hospital Departments.
9. Facilitate the resolution of conflicts which may arise from time to
time, such as conflicts between the individual needs of the staff who, directly
or indirectly, report to the Director of Inpatient Psychiatric Nursing Services
and the needs of the Program and Hospital.
10. Perform all duties which may be necessary or appropriate from time
to time for a Hospital Department head or as may be assigned from time to time
by the Program Administrator, the Hospital's Director of Patient Care Services,
the Hospital's CEO, or their designees.
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Manager's Cost of Providing Nursing Director
For purposes of this Agreement, Manager's deemed cost of providing the Nursing
Director shall be as set forth in Exhibit 1.2.2.
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EXHIBIT 1.2.2
Manager shall provide the following personnel in the categories, at the staffing
levels and the costs, including wages, Employee Benefits and overhead, as set
forth below:
For purposes of this Agreement, the total costs for providing each of the
personnel (including wages, Employee Benefits and overhead) will be deemed to be
One Hundred Twenty Five percent (125%) of the weighted average rates stated in
the most recently published Healthcare Association of Southern California
Compensation Survey ("HASC"), or other mutually agreed upon professional
association survey data if the HASC survey no longer is available to the
parties, for the most comparable position included in the HASC survey. Attached
hereto are copies of pages from the HASC survey as most recently published prior
to the effective date of this Agreement. The parties agree that the employee
categories on the attached copies of pages of the HASC survey represent the
positions most comparable to those positions to be provided by Manager hereunder
and that the geographic areas identified for each position represent the most
applicable market which is included in the HASC survey for the applicable
position. Following each of the positions listed below is the page of the most
recent HASC survey applicable to the particular position, the applicable
geographic market, and the weighted hourly rate or weighted salary to be
effective as of the date of this Agreement and which will remain in effect until
superseded by another survey, as described above. The parties have agreed that
the Employee Benefits and overhead for each of the personnel shall be deemed to
be twenty five percent (25 %) of the hourly rate or salary as it may be in
effect from time to time.
Each of the positions listed below as "FT" shall work for the Program on a full
time basis, regardless of the Program census. Each of the positions listed below
as "PD" shall work for the Program on a part time basis, to fluctuate depending
upon the Program census. Although the actual staffing of personnel listed as
"PD" shall vary from week to week depending upon the census, each month such
personnel shall work for the Program a percent of full-time as as set forth
below. For example, an individual who is designated as .2 FTE shall work the
equivalent of twenty percent (20%) of a full-time employee.
FT Program Administrator; N-06; All Southern; weighted annual salary $73,907
FT Nurse Manager; N-10; All Southern; weighted annual salary $65,699
FT Administrative Assistant; C-05; North Western; weighted hourly rate $13.35
FT Assistant to Nursing Manager; C-05; North Western; weighted hourly rate
$13.35
FT Rehabilitation Therapy Coordinator; P-07; North Western; weighted hourly rate
$18.56
FT Rehabilitation Therapy Aide; P-07; North Western; weighted hourly rate
$18.56
FT Recreation Therapist, RT; P-07; North Western; weighted hourly rate
$18.56
PD Recreation Therapist, RT (.2 FTE); P-07; North Western; weighted hourly rate
$18.56
PD Recreation Therapy Aide (.2 FTE); P-07; North Western; weighted hourly rate
$18.56
PD Occupation Therapist, OT (.2 FTE); P-07; North Western; weighted hourly rate
$18.56
FT Social Services Coordinator, LCSW; P-08; All Hospitals; weighted hourly rate
$24.68
FT Social Worker, BSW; P-07; P-08; All Hospitals; weighted hourly rate $24.68
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FT Social Worker, MA; P-08; All Hospitals; weighted hourly rate $24.68
PD Social Worker, LCSW (.2 FTE); P-08; All Hospitals; weighted hourly rate
$24.68
PD Social Worker, MA, MFCC Intern (.6 FTE); P-08; All Hospitals; weighted hourly
rate $24.68
PD Social Worker, MSW (0-.1 FTE); P-08; All Hospitals; weighted hourly rate
$24.68
FT Utilization Review RN; R-03; North Western; weighted hourly rate $24.81
FT Utilization Review RN; R-03; North Western; weighted hourly rate $24.81
FT Utilization Review Administrative Assistant; C-05; North Western; weighted
hourly rate $13.35
PD Licensed Psychologist (.2 FTE); P-15; All Hospitals; weighted hourly rate
$29.76
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EXHIBIT 1.13
Manager in conjunction with its corporate offices, will provide to the
Hospital, as part of the Manager's fixed Management Fee (as such term is defined
in Section 4.3.2 hereof) the following services:
A. Administrative Services:
1. Hiring, initial and ongoing training of, the Program
Administrator, Nursing Director, Medical Director, and other Manager personnel.
2. Assist Hospital's management team in the selection, initial
training and ongoing training of Hospital personnel who work within or provide
services to the Program.
3. Recommend to Hospital strategies and opportunities for the
Program, including but not limited to, networking, support and education, and
assist the Hospital in implementing such strategies and opportunities, if
requested by Hospital.
4. Provide resources and published materials for use in the
management of the Program.
5. Manager's Corporate Clinical Director shall be available to
perform mock surveys and to assist Hospital in: clinical staff training,
customer service training, documentation in-servicing, quality care promotion
and education, support to Hospital's human resources functions, community
liaison efforts, and evaluation of current Program activities. Managaer's
Corporate Clinical Director also shall advise Hospital regarding current trends,
current regulations, and successful strategies and programs.
6. Manager's Corporate Director of Utilization Review shall be
available to perform mock surveys and assist Hospital in clinical staff
training, quality care promotion and education.
7. Make available 24-hours a day, 7 days a week, 52 weeks per year
the services of a Corporate Intake Services Department to provide management
services and advice to Hospital's Admitting Department and to provide prompt and
courteous responses to patients, their families and the community.
8. The provision of a Psychiatric Mobile Response Tem (P.M.R.T.)
which is available 24-hours per days, 7 days per week, 52 weeks per year with
licensed clinical social workers, registered nurses and psychologists who have
extensive experience with behavioral healthcare and the Department of Mental
Health and Patients Rights who shall be promptly available to advise the Program
and its personnel with respect to issues that might arise requiring P.M.R.T.
expertise.
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9. Advise Hospital regarding the establishment of community liaison
activities to promote the community's awareness of the Hospital and the Program,
including but not limited to systems for making follow-up visits to assure
patient satisfaction, to provide education to the community, and to enhance the
services Hospital provides to patients and the community. If requested by
Hospital, Manager shall act on behalf of Hospital in implementing community
liaison activities which have been approved by Hospital.
B. Clinical Services:
10. Manager's Corporate Clinical Director, Chief Executive Officer
and Chief Operating Officer shall consult with Hospital regarding the selection,
training and ongoing education of Hospital's clinical staff and Manager's staff
who provide services at or to the Program.
11. Manager's Corporate Clinical Director and Corporate Director of
Utilization Review, who each shall be licensed registered nurses, shall be
available to assist the Hospital with respect to clinical issues, including but
not limited to education, documentation, patient care and regulatory
requirements.
12. Manager's Corporate Clinical Staff shall provide guidance to the
Medical Director, including but not limited to treatment planning.
13. Ongoing review and advice to Hospital regarding Hospital's
admission criteria for Medi-Cal and Medicare to assure Hospital's admissions to
the Program are appropriate.
14. Provide training to Hospital's clinical staff and perform daily
chart reviews to assure that the clinical staff appropriately documents in
accordance with Hospital's criteria, appropriately documents treatment and
planning, and complies with regulatory standards for documentation, as the
foregoing may exist from time to time.
15. Take timely action to appropriately implement discharge criteria
for the Program which have been approved by Hospital.
16. Assure that the clinical staff have prepared appropriate
documentation of discharge criteria.
17. Recommend to Hospital, and undertake on behalf of Hospital if
requested, appropriate post-discharge follow-up communications with families and
board and care facilities to maintain and enhance the patient's quality of life.
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18. Support Hospital's and its Medical Staff's ongoing education by
providing education on clinical topics such as medication, cognitive therapy,
care planning, treatment planning, confidentiality, patient rights, etc., and
education on such topics as how to deal with and appropriately handle
psychiatric patients, mental health laws, psychiatric patients with chronic
medical illnesses, etc.
C. Utilization Review:
19. Recommend appropriate utilization review process policies,
procedures and criteria to the Hospital. Upon approval, then to implement these
processes so as to assure the timely and efficient management of the processing
of all TAR obligations as per the Medi-Cal TAR Unit requirements, as they may
exist from time to time. To assure that these processes are promptly modified
from time to time as may be required in order to remain n compliance with the
applicable requirements as they may exist from time to time.
20. Recommend protocols and procedures to the Hospital, and
following Hospital's approval of these protocols and procedures, assist with
their implementation. The foregoing shall include, but not be limited to,
protocols and procedures which assure that all charts are copied within ten (10)
working days of discharge and that copies of charts are sent to the TAR Unit
along with the required LA County codes; the foregoing protocols, procedures and
time frames to be promptly modified from time to time to comply with applicable
requirements as they may exist from time to time.
21. In addition to the reviews conducted by Hospital and its Medical
Staff, Manager shall review each day all charts to assure appropriateness of
admissions, continued stay criteria and documentation of care.
22. Advise and assist Hospital's UR Staff to assure that all denials
are timely and properly appealed by the Hospital on the first level, and if
necessary, on the second level.
23. Support Hospital's and the Medical Staff's ongoing education,
including but not limited to providing in-services to clinical staff and
physicians regarding criteria and County charting requirements.
24. Recommend systems to the Hospital, and following the Hospital's
approval, monitor those systems to assure that Hospital's UR Staff enters all
Medi-Cal patients into the county's MIS system within 24-hours of admission and
discharge, five (5) days a week (Monday through Friday); the foregoing
mechanisms and time frames to be promptly modified from time to time to remain
in compliance with applicable requirements as they may exist from time to time.
25. Maintain current knowledge regarding regulatory changes to
timely recommend revisions to Hospital pre-admissions screening tools consistent
with regulatory changes.
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26. Recommend P.I. audits for the Program which are consistent with
the P.I. program at Hospital. Following Hospital's approval of proposed Program
P.I. audits, to actively participate in the implementation and monitoring of the
approved P.I. Program audit.
27. Participate in treatment planning as part of the Treatment
Planning Team.
28. All individuals provided by Manager to assist with review of
Program patient's utilization shall report to the Hospital's Director of
Utilization Review, or the manager designated by Hospital from time-to-time to
fulfill the duties of a director of utilization review.
D. Educational Services:
29. Maintain continuing education provider numbers from the Board of
Registered Nursing and the Board of Behavioral Sciences to enable healthcare
providers to obtain continuing education credits for continuing education
provided by Manager.
30. Recommend to Hospital, and upon Hospital's request, provide
training and education to Hospital's management, including but not limited to
education and training regarding teamwork, management of difficult employees,
motivation, etc.
31. Recommend, and upon Hospital's request, provide ongoing clinical
education, including but not limited to ongoing training of Manager's staff and
Hospital staff in proper crisis intervention technique, patient care issues,
etc.
32. In support of Hospital's and its Medical Staff ongoing
education, provide ongoing Physician in-services and training and ongoing staff
education and training or documentation requirements.
33. Recommend, and upon Hospital's request, manage the
implementation of a customer service program and education for the Program.
34. Recommend to Hospital, and upon Hospital's request, provide
regularly scheduled educational offerings related to the Program.
35. Perform such managerial responsibilities with respect to the
Program as reasonably requested from the CEO or designee from time to time,
including but not limited to performing managerial responsibilities and timely
reporting in accordance with the management structure and standards as required
by Hospital of its managers, as said structure and standards may exist from time
to time.
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EXHIBIT 5.3.6
Direct Expenses
Direct Expenses are expenditures incurred for the operation of a specific
department and/or function. The management function has the ability to control,
influence and/or provide input regarding Direct Costs. For purposes of this
Agreement , Direct Expenses are deemed to include the following which are
incurred for the operation and/or function of the Program:
Salaries and Wages
Employee Benefits
Consulting Fees
Medical Director Fees
Consumable Supplies
Repair and Maintenance
Lease/Rentals
Purchased Services
Depreciation
Dues, Books and Subscriptions
Other Direct Expenses deemed necessary or appropriate for the operation and/or
function of the Program
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MENTAL HEALTH OUTPATIENT HOSPITALIZATION
SERVICES AGREEMENT
This MENTAL HEALTH OUTPATIENT HOSPITALIZATION SERVICES AGREEMENT
("Agreement") is entered into for reference purposes only as of the __ day of
December, 1999, by and between San Xxxxxxxx Community Hospital, a California
nonprofit public benefit corporation doing business as Mission Community
Hospital and San Xxxxxxxx Community Hospital ("Hospital") and OptimumCare
Corporation, a Delaware corporation ("Manager").
RECITALS
A. Hospital owns and operates a duly license acute care hospital which
operates at locations in San Xxxxxxxx and Panorama City, California.
B. The Panorama City location ("Facility") includes an outpatient partial
hospitalization program (the "Program") for the treatment of patients
with psychiatric disorders.
C. Manager is in the business of providing a variety of consulting,
administrative and management services to facilities with outpatient
partial hospitalization programs for the treatment of patients with
psychiatric disorders.
D. Manager presently provides various services to the Program at the
Facility, and Hospital desires to retain Manager, and Manger desires to
be retained, to provide certain services with respect to the Program.
E. Hospital and Manager desire to enter into this Agreement to provide a
clear understanding of their respective rights, duties and obligations
with respect to the subject matter hereof.
AGREEMENT
ARTICLE 1
MANAGER's RIGHTS AND OBLIGATIONS
1.1 General Intent and Purpose.
1.1.1 Management Expectations. Manager will manage the Program in
accordance with the mission, vision and values of Hospital, the Hospital's
strategic plan, the Hospital's compliance plan, and the Hospital's annual budget
and operating plan. Manager's management responsibilities shall be fulfilled
within the policies, procedures and organizational structure of the Hospital, as
it may exist from time to time. Manager's Program Administrator and Medical
Director, as such terms are defined in Section 1.2 hereof, shall perform their
responsibilities of management in accordance with the management structure and
standards as required of Hospital employed managers and Hospital contracted
Medical Directors, as such standards and structure may exist from time to time.
Although Hospital shall have the right, in
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its sole discretion from time to time, to change its management structure and
standards, as of the commencement of the Agreement and until notice to Manager,
the Program Administrator shall be and function as a hospital department head.
Manager shall assure that all services are managed in accordance with the rules
and regulations that regulate the provision of psychiatric services, including
but not limited to assuring that all issues related to patient movement into and
out of the Program are accomplished within the guidelines established by the Los
Angeles County Department of Mental Health, in accordance with state and federal
law, and in accordance with all Hospital policies. Manager will provide
expertise to Hospital to recommend, and after approval by Hospital, to implement
appropriate Hospital policies, procedures, rules and regulations. It is
anticipated that all personnel provided by Manager will comply with all of the
requirements established for Hospital personnel, including but not limited to,
orientation, safety, health and assuring that any of Manager's personnel who
oversee or direct Hospital employees do so in accordance with Hospital's human
resources policies as they may be established by Hospital from time to time. On
an annual basis, and more often if specified by Hospital, the Chief Executive
Officer of Hospital ("CEO") or his designee shall perform a performance
appraisal of the Manager's Program Administrator and Medical Director, similar
to performance appraisals of individuals with management responsibilities or
directorship agreements at Hospital.
1.1.2 Administration and Clinical Management. Subject to Hospital's
ultimate retention of control and authority, Manager shall assist Hospital in
the administration and clinical management of the Program and report to Hospital
daily as to the administration of the Program and the care and treatment of
Program patients while at the Facility in accordance with and subject to the
patient's physician's orders. Manager does not provide psychiatric care
(including diagnosis, development of individual treatment plans, determining
changes in the care place and discharge planning), which care is provided by
licensed physicians who are members in good standing of Hospital's Medical Staff
with appropriate privileges.
1.2 Manager's Provision of Staffing.
1.2.1 Program Administrator and Medical Director, Staffing. Manager
shall employ and/or independently contract with, and shall be financially
responsible for staffing the Program with;
(a) one full-time Program Administrator ("Program
Administrator") who shall work full-time exclusively at Facility and who shall
meet the criteria and fulfil the duties set forth in Exhibit 1.2.1.(a). The
parties hereby acknowledge and agree that the Manager's total cost of providing
the Program Administrator (including wages, Employee Benefits [as defined in
Section 2.5] and overhead) is deemed, for the purposes of this Agreement, and as
the parties= best estimate of fair market value, is the amount set forth in
Exhibit 1.2.1.(a); and
(b) one medical director ("Medical Director") who shall
provide not less than Thirty (30) hours of administrative services for the
Program per month and who shall meet the criteria and terms set forth in Exhibit
1.2.1(b). The parties hereby acknowledge and agree that the Medical Director's
compensation is deemed, for the purposes of this Agreement, and as the parties=
best estimate of fair market value, is the amount set forth in Exhibit
1.2.1.(b); and
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1.2.2. Additional Personnel Staffing. Manager shall employ and/or
independently contract with and shall be financially responsible for staffing
the Program with professional counseling staff, therapists, case managers and
utilization review managers and staff, in the categories, at the staffing
levels, and at the costs (cumulatively for each category), including wages and
Employee Benefits and overhead, as set forth in Exhibit 1.2.2.
1.2.3 Need for Staffing. The staffing set forth in Section 1.2
hereof is based upon the anticipated Program needs to operate the Program as
required (i) by applicable State and Federal law and regulation as required for
licensure and accreditation and for certification for participation in and
reimbursement from the Medicare and Medi-Cal programs, (ii) the Program's
reasonable requirements, and (iii) community standards.
1.2.4 Changes to Staffing Levels. Manager shall not, without
Hospital's prior written consent, which shall not be unreasonably withheld,
deviate from, change, or decrease the agreed staffing levels as set forth in
this Section 1.2.
1.2.5 Staff Compensation. Manager is solely responsible for
compensating the individuals Manager provides hereunder, including Employee
Benefits, and shall defend and hold Hospital harmless from claims for
compensation or Employee Benefits from such individuals. "Employee Benefits"
shall include, by way of illustration and not limitation, an employer's
contribution under the Federal Insurance Contributions Act, unemployment
compensation and related insurance, payroll and other employment taxes, pension
and retirement plan contributions, workers= compensation and related insurance,
group life, health, disability, and accident insurance, severance, and other
benefits. In entering into or continuing any financial relationship (e.g.,
ownership or compensation arrangements) with any physicians and their immediate
family members (as defined under the Xxxxx law at 42 U.S.C. '1395nn and Cal.
Bus. & Prof. Code " 650.01 et seq.), Manager shall assure that such financial
arrangements meet the requirements of an applicable exception under those laws
such that Hospital is not prohibited from presenting any claims for services
pursuant to such physician self-referral laws.
1.2.6 Acceptability of Staff Members. Prior to retaining any
individuals to provide services at Facility pursuant to Section 1.2 hereof.
Manager shall obtain the prior written approval of such individual from the CEO.
Manager shall submit such information regarding proposed personnel as the CEO
reasonably requests. Manager shall use reasonable efforts to resolve any issues
regarding the acceptability to Hospital of Program staff employed or otherwise
contracted for by Manager. All professional individuals, including Medical
Director, provided by Manager, shall meet the applicable standards of Hospital's
Medical Staff Bylaws.
1.2.7 Removal of Staff Member. At the request of Hospital, in its
sole and absolute discretion, Manager shall immediately remove any employee or
independent contractor of Manager from providing services at the Facility or to
the Program.
1.2.8 Staff Member Conduct and Care. Manager shall cause all
employees and independent contractors of Manager at all times to conduct their
activities in compliance with all
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bylaws, rules and regulations, policies and procedures of Hospital and its
medical staff and in compliance with all applicable federal, state and local
laws and regulations, and with the standards and requirements established by the
Joint Commission on Accreditation of Healthcare Organizations and other relevant
professional organizations pertinent to the operation of the Program.
1.3 Licensure and Accreditation. Manager shall advise and assist
Hospital in order for Hospital to obtain all necessary licenses and approvals
from governmental and accrediting agencies, including the Joint Commission on
the Accreditation of Healthcare Organizations, and in order for Hospital to
obtain all certifications and approvals necessary to participate in the Medicare
and Medi-Cal programs. Manager shall advise and assist Hospital to assure
Hospital timely undertakes all activities necessary to obtain and maintain all
necessary licenses and approvals from governmental and accrediting agencies,
including without limitation, the California Department of Health Services, and
is responsible for timely advising and assisting Hospital to undertake all
activities necessary to maintain all certifications and approvals necessary to
participate in the Medi-Cal and Medicare programs are performed. Manager shall
advise and assist Hospital to enable Hospital to timely prepare, file, and
supplement all regulatory applications, reports, and forms required by any
local, state or federal regulatory agency and shall prepare the Facility for,
and monitor, regulatory surveys and inspections of the Program. Manager shall
use its best efforts to assure that Hospital promptly remedies any deficiencies
identified in such surveys and inspections to the extent such deficiencies are
within Manager's control. If the subject matter of the deficiency is Manager's
responsibility hereunder, Manager shall promptly correct such deficiency.
Manager shall use its best efforts to assure that the Program and the Facility
are operated and maintained in compliance with all applicable federal, state,
and local laws, rules and regulations.
1.4 Policies and Procedures.
1.4.1 Development and Implementation of Policies and Procedures.
Manager shall develop and recommend, and upon Hospital's approval, assist
Hospital in implementing all policies and procedures necessary for the safe and
efficient operation of the Program, and shall educate Program staff on such
policies and procedures. The foregoing shall include, but not be limited to,
proposed policies and procedures for performance improvement and utilization
review which are consistent with Hospital's policies and procedures for
performance improvement and utilization review in other Hospital programs and
services. Manager shall develop and recommend, and following Hospital approval
implement, clinical treatment programs and protocols for non-physician care that
are reflective of current unrecognized standards for psychiatric programs.
Manager shall provide orientation and training for all Program staff,
irrespective of whether such staff members are employees or independent
contractors of Hospital or Manager. Manager shall assure that all personnel who
provide services at the Facility participate in Hospital's orientation for new
Facility employees. Manager shall as reasonably necessary provide ongoing
in-service training such as to assure that Program staff have the requisite
knowledge and skill required to delivery quality healthcare services at the
Facility and through the Program.
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1.4.2 Hospital Approval. The implementation of the policies and
procedures and clinical treatment programs required under Section 1.4 shall be
subject to prior approval by the Hospital's administration and, where
appropriate, the Hospital's medical staff.
1.4.3 Compliance Plan. Manager shall require that all personnel
provided by Manager to work at Hospital or to provide services on behalf of
Hospital at all times comply with Hospital's Compliance Plan and its components
as they may be in effect from time to time.
1.5 Indemnification by Manager. Manager shall protect, indemnify, hold
harmless, and defend Hospital, its legal representatives, employees, agents,
officers, trustees, affiliates and assigns, and each of them, from and against
any and all claims, actions, demands, proceedings, losses, damages, costs,
expenses and liabilities (including reasonable attorneys= fees) arising out of
or related to the performance or nonperformance by Manager of any obligations to
be performed or services to be provided hereunder. This indemnification
obligation survives the expiration or earlier termination of this Agreement.
1.6 Insurance.
1.6.1 General Liability Insurance. Manager shall procure and
maintain, at its sole cost and expense, throughout the term hereof, a policy or
policies of comprehensive general liability and malpractice insurance covering
itself and the individuals it provides pursuant to Section 1.2 hereof from an
insurance carrier licensed and authorized to sell or approved to place liability
insurance policies of this nature by the State of California with limits of not
less than Five Million Dollars ($5,000,000) per occurrence. Manager shall cause
to be issued to Hospital, by the insurance carriers issuing such coverage,
certificates of insurance evidencing that the foregoing covenants of this
Agreement have been complied with and stating that said insurance carriers shall
provide not less than ten (10) calendar days prior written notice to Hospital of
any cancellation or material modification of the policy or coverage described
herein, or, if any such carrier shall not agree to provide such notice, then
Manager shall provide notice to Hospital of any such cancellation or
modification immediately upon receipt of notice of the foregoing from the
carrier. Any deductible, co-insurance, or aggregate limits shall be subject to
Hospital's approval, which shall not be unreasonably withheld.
1.6.2 Workers Compensation Insurance. Manager shall procure and
maintain, at its sole cost and expense, throughout the term hereon, a policy or
policies of workers= compensation insurance covering its employees from an
insurance carrier licensed and authorized to sell or approved to place such
liability insurance policies of this nature by the State of California. Manager
shall add Hospital as an additional insured on such policy.
1.6.3 Extended Reporting Period. If any liability insurance policy
procured pursuant to Section 1.6 is on a "claims made" rather than "occurrence"
basis, then such policy shall include an option to purchase a "tail" or an
extended reporting period, which option shall be exercisable upon termination or
cancellation of said policy or upon any material modification of said policy
that has the effect of causing the coverage of said policy to fail, in any
respect, to meet the requirements of Section 1.6, regardless of whether such
termination, cancellation or
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modification shall occur during the term hereof or thereafter. The tail or
extended reporting period shall provide coverage meeting all of the requirements
set forth in Section 1.6, for a period of at least seven (7) years after
termination, cancellation or modification of the underlying policy. Such policy
shall provide that the carrier shall give Hospital or Manger at least thirty
(30) calendar days advance written notice of the date upon which the option may
be exercised regardless of whether such date shall occur during the term hereof
or thereafter and shall specifically provide that Hospital shall be permitted to
exercise the option upon failure of Manager to do so. Upon such notice, Manager
shall take all steps, including but not limited to the payment of money,
necessary to exercise such option, and if Manager shall fail to effectively
exercise such option, then Hospital may do so and Manager shall fully and
immediately reimburse Hospital, within ten (10) calendar days notice thereof by
Hospital, for all monies expended by Hospital in connection therewith. The
provisions of this Section 1.6.3 survive the expiration or earlier termination
of this Agreement.
1.7 Record keeping and Access to Documents. Manager shall take all
actions required by the Medicare or Medi-Cal programs to generate and maintain
all necessary records as may be required of Hospital by the Medicare or Medi-Cal
programs. Such records are the property of Hospital. In addition, for the
purpose of implementing Section 1861(v)(1)(1) of the Social Security Act, as
amended, and any regulations promulgated pursuant thereto, Manager agrees to
comply with the following statutory requirements governing the maintenance of
documentation to verify the cost of services rendered under this Agreement:
(i) until the expiration of four years after the furnishing of such
services pursuant to such contract, Manager shall make available, upon written
request to the Secretary of the U.S. Department of Health and Human Services, or
upon request to the Comptroller General, or any of their duly authorized
representatives, the contract and books, documents, and records of such costs,
and
(ii) if Manager carries out any of the duties of the contract
through a subcontract with a value or cost of Ten Thousand Dollars ($10,000) or
more over a twelve-month period, with a related organization, such subcontract
shall contain a clause to the effect that until the expiration of four years
after the furnishing of such services pursuant to such a subcontract, the
related organization shall make available, upon written request to the
Secretary, or upon request to the Comptroller General, or any of their duly
authorized representatives, the subcontract and books, documents, and records of
such organization that are necessary to verify the nature and extent of such
costs.
1.8 Audit Disclosure. If Manager is requested to disclose books,
documents, or records for purposes of an audit, Manager shall notify Hospital of
the nature and scope of such request and Manager shall make available, upon
written request of Hospital, all such books, documents, or records, during
regular business hours of Manager. The provisions of Sections 1.7 and 1.8
survive the expiration or earlier termination of this Agreement.
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1.9 Reports.
1.9.1 Monthly Report. Manager shall provide monthly written reports
to Hospital administration which detail the staffing provided each day during
the prior month pursuant to Article I of this Agreement. Such monthly reports
shall accompany Manager's invoice as required pursuant to Section 4.3.3 of this
Agreement. The monthly reports shall include such detail as reasonably requested
by Hospital, the submission of such reports to Hospital to be an express
condition precedent to Hospital obligation to pay to Manager the Management Fee
as required by Section 4 of this Agreement.
1.9.2 Quarterly Report. Manager shall provide quarterly written
reports to Hospital administration regarding all aspects of the operations of
the Program. Such quarterly reports shall address, among other things, the
therapies provided to patients, any notable therapeutic successes or failures
experienced by patients of the Program, any changes in Program staff, any
complaints received by Manager regarding the operation and administration of the
Program and the Facility, Program census, staffing provided the Program by
Manager, and such other information regarding the staffing, and any other items
or issues significant to the administration of the Program requested by
Hospital.
1.10 Adverse Actions. Manager shall commit no act or omission which
adversely affects any licensure or certification of the Hospital.
1.11 Admissions and Professional Services. Patients only shall be
treated by Hospital pursuant to an order by a physician member of Hospital's
medical staff with appropriate privileges. Manager shall assure that medical
treatment shall only be ordered and provided by physicians who are members of
Hospital's medical staff with appropriate clinical privileges. To the extent
that Manager or its personnel makes Section 5150 assessments of individuals and
places holds on such individuals at the Facility, Manager shall comply with all
requirements of Section 5150 and the associated regulations and policies adopted
by the County of Los Angeles.
1.12 Additional Reports. Manager shall prepare an annual report for the
CEO regarding the Program. The Senior Management of Manager's Corporate Offices
shall meet with the CEO and/or his designee upon the CEO's request, the
foregoing to occur at least on a quarterly basis. Manager shall require that the
Program Administrator provide periodic reports in accordance with the
requirements and expectations of other Hospital managers. Manager shall promptly
provide Hospital with reports and information that Hospital reasonably requests
with respect to the Program, including but not limited to admissions and
discharges.
1.13 Additional Duties. Manager shall provide the additional duties set
forth in Exhibit 1.13.
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ARTICLE II.
HOSPITAL's RIGHTS AND OBLIGATIONS
2.1 Ultimate Control. Hospital shall have and maintain throughout the
period hereof ultimate control and authority for the operation of the Program.
Not to limit the foregoing, all admissions to the Program shall be in compliance
with the admissions criteria which is established by Hospital after considering
Manager's recommendations. Hospital has ultimate authority and control regarding
decisions to accept a patient.
2.2 Space. Hospital shall continue to provide the space currently being
provided for the Program which Manger agrees is adequate in all respects for the
proper operation of the Program. Hospital shall be free to make any changes it
desires to the Facility, or to relocate the Program so long as such changes do
not materially and adversely interfere with the ability of Manager or Hospital
to carry out their duties hereunder.
2.3 Hospital's Employees. Except for those positions designated to be
provided by Manager, Hospital shall employ, or shall independently contract
with, and shall be financially responsible for staffing the Program with all
personnel necessary for the proper and efficient administration and clinical
operation of the Program, including registered nurses, licensed vocational
nurses and mental health workers, the foregoing in numbers appropriate based on
the Program's anticipated daily census, and the services of a registered
dietician and an office Manager. All personnel employed or otherwise contracted
for (including the Office Manager) shall be required to comply with the Program
policies and procedures as mutually developed and agreed upon in writing by
Hospital and Manager.
2.4 Diagnostic Facilities. Hospital shall make available to Program
patients the Hospital's inpatient, diagnostic, and other facilities as are
available at Hospital and ordered from time to time by such patients= attending
physicians or appropriately requested by Program staff.
2.5 General Services. Hospital shall provide the following support
services for the efficient and proper operation of the Program.
2.5.1 Dietary services for patients of the Program (to be served to
each patient at the Facility and the part-time services of the Hospital's
nutritionist/dietician).
2.5.2 Housekeeping services for the facility.
2.5.3 Janitorial and physical upkeep of the Facility.
2.5.4 All utilities for the Facility.
2.5.5. Such clerical support, office supplies and general supplies
necessary for the proper operation of the Program.
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2.5.6 Record keeping services, in accordance with state and federal
laws and regulations.
2.5.7 Transportation as Hospital determines, after consultation
with Manager, is necessary to operate the Program.
Nothing in this Agreement is intended to or shall be construed to limit
or restrict the Hospital's ability to outsource the provisions of the goods and
services contemplated in this Section.
2.6 Policies and Procedures. Hospital shall provide all Program staff
(including employees and independent contractors of Manager) with copies of all
relevant Hospital and Program policies and procedures, as amended from time to
time.
2.7 Health Screening. Hospital shall provide to all Program staff
(including employees and independent contractors of Manager) such appropriate
pre-employment and periodic diagnostic and health screening examinations as are
customarily provided by Hospital for Hospital employees.
2.8 Accreditation. With the assistance of Manager, Hospital shall
maintain accreditation by the Joint Commission on the Accreditation of
Healthcare Organizations, and shall be financially responsible for paying all
such fees related to such accreditation. Notwithstanding any other provisions in
this Agreement, the sole remedy for Hospital's sole breach of this Section 2.8
is the right of termination of this Agreement by Manager pursuant to Section
5.2.3.
2.9. Performance Improvement Review. With the assistance of Manager and
the staff provide by Manager pursuant to Section 1.2 hereof, Hospital shall
oversee utilization review and performance improvement services with respect to
services provided by the Program.
2.10 Insurance. Hospital shall maintain professional and public
liability insurance coverage for the Program under the same terms and conditions
and for the same coverage limits as for other Hospital programs. Said insurance
shall cover claims for negligence of Hospital or its employees. Written
certificate of such coverage shall be provided to Manager. Hospital shall have
the right to provide the foregoing coverage through the self-insurance programs
of its parent, sister, or related entities.
2.11 Y2K. Hospital shall use its best efforts to identify and take such
actions as are necessary in order for all systems and equipment which are
essential for the Program to be Y2K compliant prior to January 1, 2000.
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ARTICLE III.
REPRESENTATIONS AND WARRANTIES BY MANAGER
3.1 Representations by Manager.
3.1.1 Corporate Status. Manager is a corporation duly organized and
existing under the laws of the State of Delaware, is authorized and qualified to
conduct business in the State of California, and has the power and authority to
carry on the activities in which it is engaged and to perform its obligations
hereunder.
3.1.2 Execution of Agreement. The execution of this Agreement and
the performance of the obligations of the Manager hereunder will not result in
any breach of any of the terms, conditions, or provisions of any agreement or
other instrument to which Manager is a party or by which it may be bound or
affected, or any governmental license, franchise, permit or other authorization
possessed by the Manager, nor will such execution and performance violate any
federal, state or local law, rule or regulation.
3.1.3 Litigation. There is no litigation, administrative proceeding
or investigation pending or threatened against Manager, nor is the Manager
subject to any judgment, order, decree or regulation of any court or other
governmental or administrative agency, which would materially adversely affect
the performance of Manager's obligations hereunder.
3.2 Representations and Warranties by Hospital.
3.2.1 Corporate Status. Hospital is a non-profit public benefit
corporation duly organized and validly existing in good standing under the laws
of the State of California with the power and authority to perform its
obligations hereunder subject to licensure by the California Department of
Health Services.
3.2.2 Execution of Agreement. To Hospital's knowledge, the
execution of this Agreement will not be in violation of any governmental
license, permit or other authorization possessed by Hospital. Hospital is
accredited by the Joint Commission on the Accreditation of Healthcare
Organizations.
3.2.3 Litigation. To Hospital's knowledge, there is no litigation,
administrative proceeding or investigation pending or threatened against
Hospital, nor is the Hospital subject to any judgment, order, decree or
regulation of any court or other government or administrative agency which would
materially adversely affect the performance of Hospital's obligations hereunder.
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ARTICLE IV.
BILLING AND COLLECTIONS; MANAGEMENT FEE
4.1. Facility Services Billing and Collections. Hospital has in effect
a schedule of fees and patient charges for the administrative and technical
component of all services rendered by the Program. Said fees and charge may be
modified by Hospital from time to time in its sole and absolute discretion, but
Hospital shall give prior notice of such modification to Manager for
informational purposes. Hospital shall have the sole and exclusive right to xxxx
and collect for Hospital's fees and charges with reference to services provided
by the Program in accordance with such schedule. Hospital shall be responsible
for preparing and submitting its annual cost report. The parties agree, if
necessary and appropriate, to alter their billing arrangements in order to avoid
reimbursement disallowance for Hospital pursuant to the Tax Equity and Fiscal
Responsibility Act of 1982 or 42 C.F.R., Part 405, as it may be revised from
time-to-time.
4.2 Professional Services Billing and Prohibition on Billing.
4.2.1 Physicians and Clinical Psychologists. Physicians and
clinical psychologists who provide services at the Program are responsible for
billing and collecting for their own professional services.
4.2.2 LCSWs and MFCCs. Hospital and Manager shall xxxx and collect
for their respectively employed licensed or directly contracted social workers
("LCSWs"); manager, family and child counselors ("MFCCs"); and other licensed
therapists unless such LCSWs, MFCCs, and other licensed therapists agree to be
responsible for billing and collecting for their professional services.
4.2.3 Prohibition on Billing. Manager shall not and shall cause the
Medical Director and any other physicians or psychologists associated, employed
by or under contract with Manager not to xxxx or cause to be billed, the
Medicare Program, any Medicare beneficiary, a Medicare (Part B) carrier or any
other third party payor or patient for any portion of the administrative,
supervisory or other provider services in violation of 42 CFR, Section 405.550.
Manager shall indemnify and hold harmless Hospital from any breach of this
Section 4.2.
4.3 Management Fee.
4.3.2 Invoice for Management Fee. The parties have negotiated at
arms-length negotiations the compensation to Manager to be a fair market value
amount for Manager's services and not to be determined in a manner that takes
into consideration the volume or value of any referrals or business generated to
or within Hospital. Hospital shall pay to Manager an annual management fee of
Six Hundred Seventy Two Thousand, Two Hundred Sixty Nine Dollars ($672,269),
payable in equal monthly installments of Fifty Six Thousand Twenty Two Dollars
($56,022) ("Management Fee").
4.3.3 Timing of Management Fee Payment. Manager shall prepare and
submit to Hospital on a monthly fee basis an invoice for its services rendered
hereunder. Said invoice
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shall include information as to the amount of time and services provided by
Manager. Manager shall submit with the invoice the monthly report required under
Section 1.9. Claims will be settled within 30 days of receipt of invoice.
4.4 Adjustments to Management Fee.
4.4.1 Management Fee Offset. In the event any of the Program staff
to be provided by Manager are not provided in accordance with this Agreement for
a period of more than forty-five (45) days in a month, Hospital may deduct from
Manager's Management Fee an amount equal to the budgeted compensation for such
position, including Employee Benefits. This right to deduct shall not excuse
Manager from its obligation to provide staffing at the level set forth in
Section 1.2.
4.4.2 Payments Declined. Within thirty (30) days of written notice
from Hospital, Manager shall reimburse Hospital twenty percent (20%) of all
charges for patient services in excess of 8% during the term of this Agreement
for which payment was denied for clinical reasons or as a result of
inappropriate or inadequate documentation. Hospital may offset, among other
rights, such amount against any monies owed to Manager under this Agreement or
any other agreement. Manager may request, and Hospital may authorize, that
Manager appeal such denial of payment with the costs of such appeal being borne
by the parties equally.
ARTICLE V.
TERM AND TERMINATION
5.1 Term. This Agreement commences effective 12:01 a.m., January 1,
2000, and expires 11:59 p.m., December 31, 2002, unless earlier terminated in
accordance with the provisions of this Agreement.
5.2 Termination by Manager.
5.2.1 Manager may terminate this Agreement upon ninety (90) days
prior to written notice to Hospital, if Hospital should have a bankruptcy,
reorganization, or similar action filed by or against it, or become insolvent,
or sell all or substantially all of its assets (but subject to the assignment
rights set forth in this Agreement).
5.2.2 In the event Hospital fails to comply with the terms of this
Agreement in any material respect, Manager may notify Hospital of such breach,
in writing, and Hospital shall have thirty (30) days to cure such breach;
provided that if the breach is for failure to staff the Facility as required
hereunder, Hospital shall have sixty (60) days to cure such breach. In the event
Hospital fails to cure such breach within said period, the Agreement may be
terminated by Manger upon ninety (90) days prior to written notice to Hospital.
5.2.3 Manager may terminate this Agreement upon ninety (90) days
prior written notice to Hospital in the event Hospital fails to maintain
accreditation by the Joint Commission on the Accreditation of Health Care
Organizations, or in the event Hospital fails to maintain any license or
certification granted to it by a regulatory agency without which the Program
would be materially and adversely affected, unless the responsibility to assist
in the maintenance of such license or certification is a responsibility of
Manager pursuant to Section 1.3.
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5.2.4 Manager may terminate this Agreement upon ten (10) days prior
written notice to Hospital in the event Hospital fails to maintain insurance in
accordance with the requirements of Section 2.10.
5.3 Termination by Hospital.
5.3.1 Hospital may terminate this Agreement upon ninety (90) days
prior written notice to Manager, if Manager fails to pay its obligations in a
timely manner under any agreement, should have a bankruptcy, reorganization, or
similar action filed by or against it, or become insolvent, or sell all or
substantially all of its assets.
5.3.2 In the event Manager fails to comply with the terms of this
Agreement in any material respect, Hospital may notify Manager of such breach,
in writing, and Manager shall have thirty (30) days to cure such breach;
provided that if the breach is for failure to staff the Facility as required
hereunder, Manager shall have sixty (60) days to cure such breach. In the event
Manager fails to cure such breach within said period, the Agreement may be
terminated by Hospital upon ninety (90) days prior written notice.
5.3.3 Hospital may terminate this Agreement upon thirty (30) days
prior written notice to Manager in the event Hospital fails to maintain
accreditation by the Joint Commission on the Accreditation of Healthcare
Organizations, in the event Hospital fails to maintain any license, permit,
certification and/or other required authorizations to operate the Program or the
Facility, or if Hospital loses or surrenders its participation in the Medicare
and/or Medi-Cal programs.
5.3.4 Hospital may terminate this Agreement upon ten (10) days
prior written notice to Manager in the event Manager fails to maintain insurance
in accordance with the requirements of Section 1.6.
5.3.5 Hospital may terminate this Agreement if (a) Manager, or any
of its principals, officers, Managers or directors ("Management Personnel") is
convicted of an offense related to healthcare or listed by a Federal agency as
being disbarred, excluded or otherwise ineligible for Federal program
participation, or (b) any of the staff Manager employs or contracts with, other
than Management Personnel, are convicted of an offense related to healthcare or
listed by a Federal agency as being disbarred, excluded or otherwise ineligible
for Federal program participation and Manager does not immediately remove such
non-Management Personnel from providing services hereunder.
5.3.6 We agree to develop within the next 60 days a mutually
acceptable addendum to the contract which addresses the question of establishing
reasonable management accountability for bottom line performance.
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5.4 Immediate Threat to Patient Care. Notwithstanding any other term of
this Agreement, in the event a party ever fails to meet a condition of this
Agreement which breach poses a threat to patient care, the operation, licensure
or reimbursement of the Hospital or the Program, the party not in breach may
require the other immediately to take such remedial steps as are necessary to
alleviate said threat to patient care or operations. If said threat is not
immediately remedied, the other party shall have the right to immediately
terminate this Agreement or take such remedial steps as such other party deems
necessary to cure the threat.
5.5 Renegotiation/Termination.
5.5.1 Tax Exempt Financing. In the event Hospital seeks additional
or replacement tax exempt financing, Manager agrees to amend this Agreement as
may be necessary in order for Hospital to obtain or maintain such financing, or
to secure the legal opinions which may be required to secure or maintain such
financing. Immediately upon request by Hospital, Manager shall execute any and
all such amendments presented by Hospital and shall return promptly said fully
executed original amendments to Hospital. If Manager fails to comply with this
provision, Hospital may terminate this Agreement upon ten (10) days written
notice to Manager.
5.5.2 Changes in Reimbursement. Acknowledging that a substantial
portion of the Program's services will be reimbursed under the Medicare and
Medi-Cal programs and that a substantial portion of the Hospital's services are
reimbursed under the Medicare and Medi-Cal programs, the parties agree that this
Agreement is terminable by either party effective upon any changes in the
Medicare or Medi-Cal laws, regulations and/or payment programs which
substantially and adversely affect either party, including but not limited to
changes in Hospital's reimbursement for Program services; provided, however, the
parties agree to negotiate diligently and in good faith to revise this Agreement
to eliminate the substantial and adverse effect caused by such change(s).
5.5.3 Hospital's Licensure and Status. It is understood and agreed
that Hospital is a licensed general acute care facility which is owned by a
nonprofit corporation which has tax-exempt financing and participates in the
Medicare and Medi-Cal programs. Hospital is bound by the federal and state laws,
regulations and interpretations thereof pertaining to the foregoing. The parties
agree that this Agreement shall be interpreted from time-to-time as they may
affect Hospital, its licensure, nonprofit status, tax exempt financing and
participation in and reimbursement by the Medicare and Medi-Cal programs. In the
event this Agreement or one or more of its terms or provisions is interrupted
from time-to-time as they may affect Hospital, its licensure, nonprofit status,
tax exempt financing and participation in and reimbursement of the Medicare and
Medi-Cal programs. In the event this Agreement or one or more of its terms or
provisions is interpreted by Hospital's counsel to pose a risk of violation of
any of the foregoing laws, regulations or interpretations thereof, Hospital's
bond covenants, the conditions or restrictions pertinent to providers who
participate in the Medicare and Medi-Cal programs, to potentially subject
Hospital to monetary sanctions or penalties, or to adversely affect Hospital's
right to xxxx and collect for services, the parties agree (i) to continue to
perform their respective obligations hereunder except for the offending
provisions; and (ii) to negotiate diligently and in
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good faith to reach an agreement without the offending provisions within ten
(10) days after notice that the Agreement requires renegotiation pursuant to
this Section 5.5.3, then this Agreement shall terminate immediately upon notice
served by either party in accordance with Section 8.10 hereof.
5.6 Effects of Termination. Upon termination of this Agreement each
party shall continue to be bound by (a) all covenants and restrictions that by
their nature or terms continue to be binding (for example, but without
limitation, access to books and records, confidentiality indemnification), and
(b) all amounts payable as compensation or offset for services rendered during
the term of this Agreement. The parties agree that policies and procedures
prepared by Manager and adopted by Hospital may be used by Hospital after the
termination of this Agreement in its sole discretion.
ARTICLE VI.
CONFIDENTIAL INFORMATION
NON-COMPETITION AND NON-SOLICITATION
6.1 Confidential Information Acknowledgment. Each party acknowledges
and agrees that Confidential Information may be disclosed to it in confidence by
the other party with the understanding that it constitutes business information
developed by the other party. Each party further agrees that it shall not use
such Confidential Information for any purpose other than in connection with the
Program. Each party further agrees not to disclose such Confidential Information
to any third party except as required by law or regulation or in order to serve
the purpose of the Program or as permitted by written authorization of the other
party. "Confidential Information" shall mean all confidential information and
trade secrets of each party, including without limitation, financial statements,
internal memoranda, reports, patient lists, memoranda, manuals, handbooks,
pamphlets, production books and audio and visual recordings, models, techniques,
formulations, procedures, business plans, and other materials or records of a
confidential and/or proprietary nature not known or available to the public or
within the industry and which are shared by a party with the other party in the
course and scope of performing its obligations hereunder. For purposes of this
Agreement, policies and procedures and other materials developed by Manager for
Hospital are not Confidential Information of Manager.
6.2 License. Manager hereby grants to Hospital for the term of this
Agreement, a non-exclusive license to use the registered service marks of
Manager when identifying the Program. These service marks are to remain the
exclusive property of Manager.
6.3. Use of Name or Likeness. Neither party shall have the right to use
the other party's name or likeness in any advertising, directories, brochures or
announcements without the other party's approval of the specific usage. If the
parties agree to develop any forms of advertising for the Program, all costs
shall be borne equally by the parties.
6.4 Patient Information. Manager covenants, represents and warrants
that neither Manager not its staff shall disclose to any third party, except
where permitted or authorized by applicable law or expressly approved in writing
by Hospital, any patient or medical record
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information, and that Manager and its staff are knowledgeable regarding and will
comply with the Federal and State laws regarding the confidentiality of such
information.
6.5 Covenant Not to Compete. During the term of this Agreement,
Hospital is willing to permit Manager access to Hospital's Confidential
Information if Manager agrees during the term of this Agreement to avoid
conflicts of interest by entering into this covenant not to compete. During the
term of this Agreement, neither Manager nor any of its shareholders, officers or
directors, or any entity controlled by or under control with or subject to
common management with one of the foregoing, shall directly or indirectly
perform or arrange to perform in any capacity the type of services called for
hereunder by Manager for any psychiatric program, nor shall the foregoing have
any ownership interest in any entity or sole proprietorship which has a
psychiatric program. This covenant not to compete shall be effective within a
ten (10) mile radius of Facility. If Hospital relocates the Program, the
covenant not to compete shall be effective within a ten (10) mile radius of the
new location; provided, however, if as a result of the relocation, Manager then
has a relationship with a psychiatric program which would violate this covenant
not to compete such pre-existing relationship shall be exempt from this covenant
not to compete. Hospital shall have the right to enforce the foregoing through
legal or equitable action, including but not limited to, injunctive relief, for
such injunctive relief or equitable relief to be available without the necessity
of posting a bond, cash or otherwise. In addition to the foregoing, Hospital
shall have the right at its option to immediately terminate this Agreement and
to seek damages for such breach or to continue this Agreement and to recover
damages for the breach.
6.6 Non-Solicitation.
6.6.1 Non-Solicitation Limitations. Manager and Hospital each
acknowledge that the other party has expended and will continue to expend
substantial time, effort, and money to train its respective employees and
contracted personnel in the operation of the Program, and that the other party's
respective employees and contracted personnel have access to and possess
Confidential Information of the other party. Each party therefore agrees that
for the earlier of (i) one (1) year after the cessation of the employment or
agency relationship between the other party and an employee or contracted person
of the other party, or (ii) one (1) year after termination of this Agreement, it
will not knowingly (and it will not induce any of its agents or affiliates to)
solicit the employment of or contract with any employee, former employee, or
contracted personnel or former agent of the other party if such individual has
been employed by or retained by the other party to provide services at Facility
unless the other party gives express written consent thereto.
6.6.2 Permissible Employment Contracting.
(i) This Section prohibits solicitation but not the actual
employment or contracting of an individual if such individual desires such
employment or contract and initiates an application for such employment or
contract.
(ii) Notwithstanding anything to the contrary, this Section
does not apply to (a) Manager if Manager terminates this Agreement pursuant to
Section 5.2.1, 5.2.2 or 5.2.4 of this Agreement, and (b) Hospital if Hospital
terminates this Agreement pursuant to Section 5.3.1, 5.3.2, 5.3.4, or 5.3.5 of
this Agreement.
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(iii) Notwithstanding anything to the contrary, a party shall
not be restricted from contracting with the other party's employees or
independent contractors, if such employee or independent contractor had at any
time an employment or other contractual relationship with or was on the Medical
or Allied Health Professional Staff of such party.
ARTICLE VII.
APPLICABLE LAWS
7.1 Kickback and Anti-Referral Laws. Each party agrees to comply with
applicable federal, state and local laws respecting the Program and the conduct
of their respective businesses and professions, including but not limited to the
federal and California laws governing the referral of patients which are in
effect or will become effective during the term of this Agreement. These laws
include prohibitions on:
7.1.1 Payment for referral or to induce the referral of patients
(Social Security Act Section 1128; Cal Business and Professions Code Section
325); and
7.1.2 The referral of patients by a physician for certain
designated health care services to an entity with which a physician (or his/her
immediate family) has a financial relationship (Cal. Labor Code " 139.3 and
139.31, applicable to referrals for workers= compensation services; Cal.
Business and Professions Code "6501.01 and 650.02, applicable to all other
patient referrals within the State; and '1877 of the Social Security Act,
applicable to referrals of Medicare and Medi-Cal patients).
7.2 Acknowledgments. As consideration for each party hereto to enter
into this Agreement, the parties:
7.2.1 Acknowledge that (i) each has had the opportunity to engage
independent counsel of her/its choice for advice as to the requirements of the
anti-referral laws referred to in this Section 7; and (ii) each has had the
opportunity to consult with legal counsel or other experts as each deems
appropriate to assist in the determination by each party that the terms of this
Agreement are commercially reasonable;
7.2.2 Represent to the other that is the intent that the terms of
this Agreement shall be commercially reasonable; and
7.2.3 Represent to the other that it is the intent that
compensation for each of the services which are provided under this Agreement
and the services of the Medical Director shall be based on the fair market value
of such services.
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7.3 No Referral Requirement. Nothing in this Agreement is intended or
shall require any party to violate the California or federal prohibitions on
payments for referrals, and this Agreement shall not be interpreted to:
7.3.1 Require the Medical Director to make referrals to Hospital,
be in a position to make or influence referrals to Hospital, or otherwise
generate business for Hospital;
7.3.2 Restrict Medical Director from establishing staff privileges
at, referring any service to, or otherwise generating any business for any other
entity of his/her choosing; and
7.3.3 Interfere in any way with Medical Director's professional
prerogatives and medical decisions.
7.4 No Gifts to Beneficiaries. Under no circumstances whatsoever shall
Manager, its employees or agents offer to make any gift or payment to any
individual as a means of encouraging such person to seek medical or psychiatric
attention from Hospital, Manager, or through the Program, or from any other
provider of health care.
7.5 Audits. Hospitals shall have the right, but not the obligation, to
interview patients who receive services through the Program, and to conduct
audits of all types of the Program, for the purpose of determining whether
Manager is in compliance with all applicable federal, state, and local laws,
regulations, and ordinances, as well as Hospital rules, regulations, bylaws,
policies, and procedures and this Agreement.
ARTICLE VIII.
MISCELLANEOUS PROVISIONS
8.1 Compulsory Arbitration. Any controversy, dispute, or claim arising
out of or relating to this Agreement, or the breach or alleged breach thereof,
shall be settled by binding arbitration in accordance with the rules of the
American Health Lawyers Association Alternative Dispute Resolution Services
Rules of Procedure, and judgment on the award may be entered in any court having
jurisdiction. The provisions of this Section 8.1 shall not apply with respect to
any claim arising out of or relating to bodily injury or death.
8.2 Attorneys= Fees. If any legal action, including arbitration, is
necessary to enforce the terms of this Agreement, the prevailing party shall be
entitled to reasonable attorney's fees and costs awarded against the other party
in addition to any other relief to which the prevailing party may be entitled.
8.3 Governing Law. The validity of this Agreement and any of it terms
or provisions, the interpretation of the rights and duties of the parties
hereunder, and the construction of the terms or provisions hereof shall be
governed in accordance with the laws of the State of California.
8.4 Force Majeure. If either of the parties hereto is delayed or
prevented from fulfilling any of its obligations hereunder by force majeure,
said party shall not be liable for said delay or
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failure. "Force Majeure" shall mean any cause beyond the reasonable control of a
party, including but not limited to, an act of God, act or omission of civil or
military authorities, fire, strike, flood, riot, war, delay of transportation,
or inability due to the aforementioned causes to obtain necessary labor,
materials or facilities.
8.5 Severability. If any part of this Agreement is held to be void or
unenforceable, such part will be treated as severable, leaving valid the
remainder of this Agreement notwithstanding the part found void or
unenforceable, unless the severed part contains an essential economic term.
8.6 Waiver. A waiver by either party of a breach or failure to perform
shall not constitute a waiver of any provision hereof or of any other breach or
failure whether or not similar. There shall be no waiver unless in writing
signed by the party against whom the waiver is sought to be enforced.
8.7 Binding Effect and Assignment. This Agreement shall be binding on
the successors and assigns of the respective parties, provided however that
neither party may assign or otherwise transfer this Agreement or delegate
obligations hereunder without the other's written consent, except as otherwise
provided herein.
8.8. Complete Agreement. This Agreement constitutes the complete
understanding of the parties hereto with respect to the subject matter hereof,
and no other agreement, representation, statement, or promise relating to the
subject matter of this Agreement which is not contained herein shall be valid or
binding. Any and all prior agreements and understandings, including but not
limited to, the Agreement entered into November 27, 1995, [as extended by mutual
agreement,] are superseded by this Agreement and no further force or effect.
There shall be no amendment hereof unless such amendment is in writing and is
signed by both parties.
8.9 No Agency or Partnership. The relationship between Manager and
Hospital is that of independent contractors and nothing in the Agreement shall
be deemed to create an agency, joint venture, partnership or similar
relationship between the parties hereto. Neither party shall have the right to
bid for the other or enter into any contract or commitment in the name of, or on
behalf of, the other.
8.10 Notices. All notices hereunder shall be in writing, delivered
personally or by U.S. Certified or Registered postal mails, postage prepaid,
return receipt requested, and shall be deemed given when delivered personally or
upon the earlier of actual receipt or five (5) days afer deposit in said United
States mail, addressed as below with proper postage affixed, but each party may
change its address by written notice in accordance with this Section.
If to Hospital: Mission Community Hospital
00000 Xxxxxx Xxxxxxxxx
Xxxxxxxx Xxxx, Xxxxxxxxxx 00000
Attn: Chief Executive Officer
If to Manager: OptimumCare Corporation
00000 Xxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxx Xxxxxx, Xxxxxxxxxx 00000-0000
Attn: Xx Xxxxxxx
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8.11 Captions. Any captions to or headings of the articles, sections,
subsections, paragraphs, or subparagraphs of this Agreement are solely for the
convenience of the parties, are not a part of this Agreement and shall not be
used for the interpretation or determination of validity of this Agreement or
any provisions hereof.
8.12 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts together shall constitute but one and the same instrument.
8.13 Assistance in Litigation. Manager and Medical Director shall, at
no charge, provide information and testimony and otherwise assist Hospital in
defending against litigation brought against Hospital, its directors, officers,
shareholders, members or employees based upon a claim of negligence, malpractice
or any other cause of action, arising out of this Agreement, except where
Manager and/or Medical Director is a named adverse party.
8.14 Gender and Number. Whenever the context hereto requires, the
gender of all words shall include the masculine, feminine and neuter, and the
number of all words shall include the singular and plural.
8.15 Legal Counsel. Each party understands the advisability of seeking
legal counsel and has exercised its own judgment in this regard.
8.16. Interpretation. No provision of this Agreement shall interpreted
or construed for or against either party because that party's legal
representatives drafted such provision.
8.17 Facilitation. Each party agrees promptly to perform further acts
and to execute, acknowledge and deliver any documents which may be reasonably
necessary to carry out the provisions of this Agreement or effect its purposes.
8.18 Sale or Lease of Hospital and/or the Facility. If Hospital and/or
the Facility is sold or leased, or is the subject of a joint operating agreement
or joint venture, regardless of the identity of the purchaser/lessee or party
which will continue to operate Facility, Hospital will have the right to assign
the Agreement, delegate all rights and duties thereunder to such
purchaser/lessee or successor operator and Hospital shall have no further
responsibilities or liabilities pursuant to the Agreement.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have executed his Agreement as
of the day and year first above written.
"HOSPITAL"
SAN XXXXXXXX COMMUNITY HOSPITAL
d/b/a/ MISSION COMMUNITY HOSPITAL and
SAN XXXXXXXX COMMUNITY HOSPITAL
By: /s/ Xxxxxxx Xxxxxx
----------------------------
Xxxxxxx Xxxxxx
Its: CEO /30/99
"MANAGER"
OPTIMUMCARE CORPORATION,
a Delaware corporation
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------
Xxxxxx X. Xxxxxxx
Its: CEO
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EXHIBIT 1.2.1 (a)
OUTPATIENT PROGRAM
The Program Administrator shall be a licensed health professional with
at least three (3) years psychiatric program management experience. Manager
represents to Hospital that, on the basis of training expertise, the Program
Administrator is knowledgeable regarding Outpatient psychiatric programs and
that the Program Administrator is qualified to perform and will use his/her best
efforts to perform the following duties:
1. Have overall day to day responsibility for the Program and be
available to the Program 24-hours per day, seven (7) days per week, fifty-two
(52) weeks per year. When Manager is absent due to illness, vacation or
continuing education, Manager shall provide a substitute Program Administrator
with the knowledge and expertise to fulfil the responsibilities of the Program
Administrator in his/her absence.
2. Oversees and supervises all of the Hospital's admissions to and
discharges from the Program, assuring a manageable and safe flow of patient
admissions.
3. Supervises the Treatment Planning System and Clinical Reviews for
utilization review.
4. Monitors the Program's compliance with Patient Rights, Department of
Health Services.
5. Prepares, on the Hospital's behalf, initial drafts of responses to
any deficiency statements.
6. Assists Hospital in maintaining appropriate relationships with
regulatory and accrediting agencies.
7. Consults with Hospital's Human Resources personnel and nurse
managers regarding the Hospital's hiring of staff for the Program and discipline
of Program staff.
8. Consults with the Hospital's Human Resources personnel and nurse
managers regarding human resource issues, such as orientation, timely
performance appraisals, recruitment, retention, ongoing motivation, etc.
9. Recommends, and after approval by Hospital, implements an education
plan which includes, but is not limited to cross training both Hospital and
Program staff.
10. In conjunction with Hospital staff, conducts weekly patient groups
to obtain patient feedback and to problem solve.
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11. Recommends appropriate disciplinary actions for Hospital staff and
Manager personnel who provide services at or for the Program.
12. Recommends a system to monitor Performance Improvement ("P.I.") in
accordance with Hospital's overall P.I. system, and implements the P.E.T. P.I.
system after Hospital's approval of it.
13. Works with Hospital to develop and maintain appropriate physician
relationships.
14. Works with Hospital and its Medical Staff to monitor compliance
with applicable policies, procedures, rules and regulations; assists in
counseling regarding compliance with the foregoing as requested by Hospital or
the Medical Staff.
15. Participates in Hospital's Function Teams.
16. Appropriately responds to customer service issues from relatives,
caretakers and other providers on behalf of Hospital and recommends appropriate
Hospital actions in response to such issues.
17. Works cooperatively with and is available to Hospital's ER
physicians and ER nursing staff (24-hours per day, seven days per week, 52 weeks
per year) with respect to psychiatric referrals.
18. If requested by Hospital, attends and represents Hospital at
County, Service Area, and RFP meetings and at Association of Ambulatory
Behavioral Healthcare Services meetings.
19. Assists Hospital in its interaction, and represents Hospital, if
requested to do so by Hospital, with respect to local community services (fire,
police department) and neighboring agencies, such as other hospitals, community
healthcare centers, clinics, etc.
20. Identifies and recommends to Hospital opportunities for community
outreach and development. If requested by Hospital, participates in identified
community outreach opportunities and assists in the Hospital's strategies for
the Program's development.
21. At all times strives to maintain and improve Patient Care,
performing such managerial duties as are necessary to monitor and maintain
quality patient care.
22. Acts as a member of the Hospital's Senior Management structure, as
established and modified from time to time by the CEO.
23. Reports to the CEO or designee and performs such managerial duties
with respect to the Program and the Hospital as reasonably requested from time
to time by Hospital's Chief Executive Officer or designee.
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Manager's Cost of Providing Program Administrator
For purposes of this Agreement, Manager's deemed cost of providing the Nursing
Director shall be as set forth in Exhibit 1.2.2.
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EXHIBIT 1.2.1 (b)
1. Medical Director Qualifications. Manager represents, warrants,
covenants and agrees that:
(a) At all times during the term of this Agreement, Medical Director
shall be a physician duly licensed to practice medicine in the
State of California, shall be a member of the Hospital's Active
Medical Staff with clinical privileges sufficient to permit Medical
Director to perform all services reasonably required of him/her as
Medical Director of the Program, and shall be in legitimate
possession of all customary narcotics and controlled substances
narcotics and controlled substances and numbers and licenses;
(b) Manager shall obtain the Medical Director's written representation
and warranty that at no time prior to or during the term of this
Agreement, shall Medical Director's license to practice medicine in
any state ever have been suspended, revoked, or restricted, ever
have been reprimanded, sanctioned or disciplined by any licensing
board or state or local medical society or specialty board, ever
have been suspended, excluded, barred or sanctioned under the
Medicare or Medi-Cal programs, or any other governmental agency,
ever have been denied membership or reappointment of membership on
the medical staff of any hospital, or ever had his/her medical
staff membership or clinical privileges suspended, curtailed or
revoked for a medical disciplinary cause or reason; and
(c) The terms and conditions of the Medical Director's agreement with
Manager shall be in compliance with all applicable law, including
but limited to, state and federal anti-referral legislation such
that Hospital shall not be limited from billing and receiving
payment for services rendered. Manager shall indemnify and hold
Hospital harmless from any damages, costs and expenses Hospital
incurs as the result of Manager's failure to assure that Manager's
agreement with the Medical Director is in compliance with the
foregoing. Hospital shall have the right to review and approve the
proposed Agreement between the Medical Director and Manager.
2. Medical Director Duties. The Medical Director shall provide the
professional administrative services as hereafter set forth as an independent
contractor of Manager. The Medical Director shall furnish the following for the
operation of the Program:
(a) Medical Director shall serve as Medical Director of the Program.
Medical Director shall, during the entire term of this Agreement,
supervise the clinical, medical and psychiatric operation of the
Program and shall devote such time as is necessary to carry out
such duties and ensure efficient and effective medical
administration of the Program. The primary objective is to provide
appropriate utilization of the Program's facilities, equipment and
staff and to provide quality services to all patients;
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(b) Manager shall assure that Medical Director shall be available at
reasonable times for consultation with the Board of Directors, the
Chief Executive Officer or designee, the Chief of Staff, individual
members of the medical staff, committees of the professional staff
and nursing, be available by electronic pager for emergency
consultation during all hours that the Program is in operation and
Medical Director is offsite; provided, however, that Medical
Director may arrange for coverage of this on-call obligation by a
substitute who must be approved by the CEO or designee, which
coverage shall be provided by a physician licensed to practice
medicine in the State of California with clinical privileges at
Hospital sufficient to perform services required hereunder and
shall be at Manager's or Medical Director's sole cost and expense;
(c) Medical Director shall actively participate in the affairs of the
professional staff of the Hospital and shall perform such tasks and
provide such services as the professional staff or any committee
may from time to time appropriately request. Hospital's medical
staff committees shall conduct at regular intervals ongoing
monitoring and reviewing of the professional performance of Program
and the Medical Director; the results of these reviews to be
reviewed by Hospital's CEO;
(d) The Medical Director shall recommend to Hospital and its Medical
Staff proposed treatment programs and protocols for physician care.
Upon approval of the foregoing, Medical Director shall assist with
the implementation of said treatment programs and protocols.
(e) If requested by the CEO, Medical Director shall serve on committees
and perform duties commensurate with the requirements of the
Medical Directors who contract directly with Hospital; and
(f) Medical Director shall perform such duties as may be reasonably
requested by the CEO from time to time.
3. Medical Director's Compensation.. The Medical Director will be paid
at the rate of One Hundred Dollars ($100) per hours; provided, however, in no
event will the Medical Director be paid in excess of Three Thousand Dollars
($3,000) per month for services rendered hereunder.
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EXHIBIT 1.2.2
Manager shall provide the following personnel in the categories, at the staffing
levels and the costs, including wages, Employee Benefits and overhead, as set
forth below:
For purposes of this Agreement, the total costs for providing each of the
personnel (including wages, Employee Benefits and overhead) will be deemed to be
One Hundred Twenty Five percent (125%) of the weighted average rates stated in
the most recently published Healthcare Association of Southern California
Compensation Survey ("HASC"), or other mutually agreed upon professional
association survey data if the HASC survey no longer is available to the
parties, for the most comparable position included in the HASC survey. Attached
hereto are copies of pages from the HASC survey as most recently published prior
to the effective date of this Agreement. The parties agree that the employee
categories on the attached copies of pages of the HASC survey represent the
positions most comparable to those positions to be provided by Manager hereunder
and that the geographic areas identified for each position represent the most
applicable market which is included in the HASC survey for the applicable
position. Following each of the positions listed below is the page of the most
recent HASC survey applicable to the particular position, the applicable
geographic market, and the weighted hourly rate or weighted salary to be
effective as of the date of this Agreement and which will remain in effect until
superseded by another survey, as described above. The parties have agreed that
the Employee Benefits and overhead for each of the personnel shall be deemed to
be twenty five percent (25 %) of the hourly rate or salary as it may be in
effect from time to time.
Each of the positions listed below as "FT" shall work for the Program on a full
time basis, regardless of the Program census. Each of the positions listed below
as "PD" shall work for the Program on a part time basis, to fluctuate depending
upon the Program census. Although the actual staffing of personnel listed as
"PD" shall vary from week to week depending upon the census, each month such
personnel shall work for the Program a percent of full-time as as set forth
below. For example, an individual who is designated as .2 FTE shall work the
equivalent of twenty percent (20%) of a full-time employee.
FT Program Administrator; N-06; All Southern; weighted annual salary $73,907
FT Administrative Assistant; C-05; North Western; weighted hourly rate $13.35
FT Program Coordinator; P-07; North Western; weighted hourly rate $18.56
FT Activity Therapist, MA, ATR; P-07; North Western; weighted hourly rate
$18.56
FT Program Therapist, MFT Intern; P-07; North Western; weighted hourly rate
$18.56
PD Program Therapist, MFT (.6 FTE); P-07; North Western; weighted hourly rate
$18.56
FT Social Worker, LCSW; P-08; All Hospitals; weighted hourly rate $24.68
PD Social Worker, MSW (.6 FTE); P-08; All Hospitals; weighted hourly rate $24.68
PD Licensed Psychologist (.2 FTE); P-15; All Hospitals; weighted hourly rate
$29.76
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EXHIBIT 1.13
Manager in conjunction with its corporate offices, will provide to the
Hospital, as part of the Manager's fixed Management Fee (as such term is defined
in Section 4.3.2 hereof) the following services:
A. Administrative Services:
1. Hiring, initial and ongoing training of, the Program
Administrator, Nursing Director, Medical Director, and other Manager personnel.
2. Assist Hospital's management team in the selection, initial
training and ongoing training of Hospital personnel who work within or provide
services to the Program.
3. Recommend to Hospital strategies and opportunities for the
Program, including but not limited to, networking, support and education, and
assist the Hospital in implementing such strategies and opportunities, if
requested by Hospital.
4. Provide resources and published materials for use in the
management of the Program.
5. Manager's Corporate Clinical Director shall be available to
perform mock surveys and to assist Hospital in: clinical staff training,
customer service training, documentation in-servicing, quality care promotion
and education, support to Hospital's human resources functions, community
liaison efforts, and evaluation of current Program activities. Managaer's
Corporate Clinical Director also shall advise Hospital regarding current trends,
current regulations, and successful strategies and programs.
6. Manager's Corporate Director of Utilization Review shall be
available to perform mock surveys and assist Hospital in clinical staff
training, quality care promotion and education.
7. Make available 24-hours a day, 7 days a week, 52 weeks per year
the services of a Corporate Intake Services Department to provide management
services and advice to Hospital's Admitting Department and to provide prompt and
courteous responses to patients, their families and the community.
8. The provision of a Psychiatric Mobile Response Tem (P.M.R.T.)
which is available 24-hours per days, 7 days per week, 52 weeks per year with
licensed clinical social workers, registered nurses and psychologists who have
extensive experience with behavioral healthcare and the Department of Mental
Health and Patients Rights who shall be promptly available to advise the Program
and its personnel with respect to issues that might arise requiring P.M.R.T.
expertise.
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9. Advise Hospital regarding the establishment of community liaison
activities to promote the community's awareness of the Hospital and the Program,
including but not limited to systems for making follow-up visits to assure
patient satisfaction, to provide education to the community, and to enhance the
services Hospital provides to patients and the community. If requested by
Hospital, Manager shall act on behalf of Hospital in implementing community
liaison activities which have been approved by Hospital.
B. Clinical Services:
10. Manager's Corporate Clinical Director, Chief Executive Officer
and Chief Operating Officer shall consult with Hospital regarding the selection,
training and ongoing education of Hospital's clinical staff and Manager's staff
who provide services at or to the Program.
11. Manager's Corporate Clinical Director and Corporate Director of
Utilization Review, who each shall be licensed registered nurses, shall be
available to assist the Hospital with respect to clinical issues, including but
not limited to education, documentation, patient care and regulatory
requirements.
12. Manager's Corporate Clinical Staff shall provide guidance to the
Medical Director, including but not limited to treatment planning.
13. Ongoing review and advice to Hospital regarding Hospital's
admission criteria for Medi-Cal and Medicare to assure Hospital's admissions to
the Program are appropriate.
14. Provide training to Hospital's clinical staff and perform daily
chart reviews to assure that the clinical staff appropriately documents in
accordance with Hospital's criteria, appropriately documents treatment and
planning, and complies with regulatory standards for documentation, as the
foregoing may exist from time to time.
15. Take timely action to appropriately implement discharge criteria
for the Program which have been approved by Hospital.
16. Assure that the clinical staff have prepared appropriate
documentation of discharge criteria.
17. Recommend to Hospital, and undertake on behalf of Hospital if
requested, appropriate post-discharge follow-up communications with families and
board and care facilities to maintain and enhance the patient's quality of life.
18. Support Hospital's and its Medical Staff's ongoing education by
providing education on clinical topics such as medication, cognitive therapy,
care planning, treatment planning, confidentiality, patient rights, etc., and
education on such topics as how to deal with and appropriately handle
psychiatric patients, mental health laws, psychiatric patients with chronic
medical illnesses, etc.
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C. Utilization Review:
19. Recommend appropriate utilization review process policies,
procedures and criteria to the Hospital. Upon approval, then to implement these
processes so as to assure the timely and efficient management of the processing
of all TAR obligations as per the Medi-Cal TAR Unit requirements, as they may
exist from time to time. To assure that these processes are promptly modified
from time to time as may be required in order to remain n compliance with the
applicable requirements as they may exist from time to time.
20. Recommend protocols and procedures to the Hospital, and
following Hospital's approval of these protocols and procedures, assist with
their implementation. The foregoing shall include, but not be limited to,
protocols and procedures which assure that all charts are copied within ten (10)
working days of discharge and that copies of charts are sent to the TAR Unit
along with the required LA County codes; the foregoing protocols, procedures and
time frames to be promptly modified from time to time to comply with applicable
requirements as they may exist from time to time.
21. In addition to the reviews conducted by Hospital and its Medical
Staff, Manager shall review each day all charts to assure appropriateness of
admissions, continued stay criteria and documentation of care.
22. Advise and assist Hospital's UR Staff to assure that all denials
are timely and properly appealed by the Hospital on the first level, and if
necessary, on the second level.
23. Support Hospital's and the Medical Staff's ongoing education,
including but not limited to providing in-services to clinical staff and
physicians regarding criteria and County charting requirements.
24. Recommend systems to the Hospital, and following the Hospital's
approval, monitor those systems to assure that Hospital's UR Staff enters all
Medi-Cal patients into the county's MIS system within 24-hours of admission and
discharge, five (5) days a week (Monday through Friday); the foregoing
mechanisms and time frames to be promptly modified from time to time to remain
in compliance with applicable requirements as they may exist from time to time.
25. Maintain current knowledge regarding regulatory changes to
timely recommend revisions to Hospital pre-admissions screening tools consistent
with regulatory changes.
26. Recommend P.I. audits for the Program which are consistent with
the P.I. program at Hospital. Following Hospital's approval of proposed Program
P.I. audits, to actively participate in the implementation and monitoring of the
approved P.I. Program audit.
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27. Participate in treatment planning as part of the Treatment
Planning Team.
28. All individuals provided by Manager to assist with review of
Program patient's utilization shall report to the Hospital's Director of
Utilization Review, or the manager designated by Hospital to fulfill the duties
of a director of utilization review.
D. Educational Services:
29. Maintain continuing education provider numbers from the Board of
Registered Nursing and the Board of Behavioral Sciences to enable healthcare
providers to obtain continuing education credits for continuing education
provided by Manager.
30. Recommend to Hospital, and upon Hospital's request, provide
training and education to Hospital's management, including but not limited to
education and training regarding teamwork, management of difficult employees,
motivation, etc.
31. Recommend, and upon Hospital's request, provide ongoing clinical
education, including but not limited to ongoing training of Manager's staff and
Hospital staff in proper crisis intervention technique, patient care issues,
etc.
32. In support of Hospital's and its Medical Staff ongoing
education, provide ongoing Physician in-services and training and ongoing staff
education and training or documentation requirements.
33. Recommend, and upon Hospital's request, manage the
implementation of a customer service program and education for the Program.
34. Recommend to Hospital, and upon Hospital's request, provide
regularly scheduled educational offerings related to the Program.
35. Perform such managerial responsibilities with respect to the
Program as reasonably requested from the CEO or designee from time to time,
including but not limited to performing managerial responsibilities and timely
reporting in accordance with the management structure and standards as required
by Hospital of its managers, as said structure and standards may exist from time
to time.
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EXHIBIT 5.3.6
Direct Expenses
Direct Expenses are expenditures incurred for the operation of a specific
department and/or function. The management function has the ability to control,
influence and/or provide input regarding Direct Costs. For purposes of this
Agreement , Direct Expenses are deemed to include the following which are
incurred for the operation and/or function of the Program:
Salaries and Wages
Employee Benefits
Consulting Fees
Medical Director Fees
Consumable Supplies
Repair and Maintenance
Lease/Rentals
Purchased Services
Depreciation
Dues, Books and Subscriptions
Other Direct Expenses deemed necessary or appropriate for the operation and/or
function of the Program
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