EXHIBIT 10.32
AMENDMENT TO
MASTER AGREEMENT FOR INFUSION THERAPY PRODUCTS AND SERVICES
AGREEMENT made and entered into to as of the 19th day of September 1997 by
and between Vitalink Pharmacy Services, Inc. ("Vitalink") and ManorCare Health
Services, Inc. ("MCHS").
WHEREAS, Vitalink and MCHS have previously entered into that certain Master
Agreement for Infusion Therapy Products and Services dated June 1, 1991 (the
"Agreement"); and
WHEREAS, Vitalink and MCHS desire to amend the Agreement.
NOW, THEREFORE, in consideration of the mutual covenants herein, and other
good and sufficient consideration, receipt of which is acknowledged, the parties
agree as follows:
1. Section 1 of the Agreement is replaced in its entirety by the
following new Section 1:
1. TERM. The term of this Agreement shall be from June 1, 1991 to
September 30, 2002. At each October 1 during the remaining period of
this Agreement, the term shall automatically renew for an additional
one (1) year period unless either party notifies the other party of
its intent not to renew no later than ninety (90) days prior to each
such October 1.
2. Section 5 of the Agreement is replaced in its entirety by the
following new Section 5:
5. INFUSION CHARGES:
----------------
A. Vitalink's charges for infusion therapy drugs under each
separate Infusion Therapy Services Agreement shall be based upon
prevailing market rates for each Facility. "Market rates" shall be
defined as those within the fiftieth percentile (50%) of charges paid
by similar licensed non-MCHS facilities that receive similar services
from Vitalink. MCHS shall be allowed to audit Vitalink's books and
records to verify market rates.
B. Effective January 1, 1998, Vitalink's charges for infusion
therapy services under each separate Infusion Therapy Services
Agreement for residents whose charges are paid by a third party payor
such as an insurance company,
-2-
HMO, or Medicare risk contract payor shall be as stated in Exhibit A,
attached hereto.
3. Each Infusion Therapy Services Agreement for the Facilities shall be
deemed to have been amended consistently with the terms, conditions
and obligations contained herein.
4. Except as specifically provided herein the Agreement remains in full
force and effect.
IN WITNESS WHEREOF, the parties enter into this Agreement on the date first
above written.
VITALINK PHARMACY SERVICES, INC.
ATTEST:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ III By: /s/ ▇▇▇▇▇ ▇. ▇▇ ▇▇▇▇▇
------------------------ ------------------------------
Secretary
Title: President
---------------------------
MANORCARE HEALTH SERVICES, INC.
ATTEST:/s/ K. ▇▇▇▇▇ ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------ ------------------------------
Secretary
Title: Senior Vice President
---------------------------
_
-3-
EXHIBIT A
---------
1. MCHS will pay Vitalink a percentage of the per diem rate received by MCHS
for each managed care patient whether such patient receives medication or
not, as set forth below.
2. If a managed care patient in a MCHS facility receives no medications,
Vitalink will be paid 7.2% of the per diem rate received by MCHS for such
patient.
3. If the contracted per diem rate received by MCHS includes routine
medications only (i.e., oral, topical medications and all insulin), Vitalink
will be paid 7.2% of the per diem rate for each day of service.
4. If the contracted per diem rate received by MCHS includes routine (i.e.,
oral, topical medications and all insulin) and extraordinary (i.e.,
injectible (excluding insulin) and infusion medications) Vitalink will be
paid 13% of the per diem rate for each day of service.
5. If the managed care contract with MCHS excludes all medications, MCHS will
so advise Vitalink in writing in advance of accepting any such patient.
Vitalink and the managed care organization will thereafter negotiate drug
prices separately. Vitalink will be solely responsible for the billing and
collection of any services provided in such circumstances.
6. The percentages described above will be paid for all MCHS patients covered
by managed care contracts and referred through the MCHS Coordinated Care
Center. MCHS will notify the pharmacy at the time of admission that a
patient is covered under a managed care contract. If such patients are not
identified at such time, then usual and customary pricing will be utilized
by Vitalink and paid by MCHS.
7. All managed care patients will be subject to a formulary as agreed upon by
Vitalink and the managed care organization which identifies those drugs
which may be therapeutically substituted. In addition, drugs with extremely
high cost (i.e., AWP per dose greater than $35.00) will be carved out of any
such contract between the managed care organization and MCHS and be treated
separately. In the event that Vitalink and the managed care organization
cannot agree to such formulary, Vitalink has the right to refuse to provide
services to the patients of such managed care organization. In the event
that Vitalink so refuses, Manor Care shall have the right to identify an
alternative provider for such services.
8. The percentages set forth above will be reviewed periodically (i.e., every
six months). The review will compare the current actual percentages (based
on actual utilization at usual and customary charges divided by the
applicable per diem rates) to those percentages set forth above. The
percentage of the per diem rate to be billed thereafter will be the
percentages set forth above plus or minus 50% of the difference between
those percentages and the current actual percentages depending on whether
the current actual percentages are higher (plus) or lower (minus) than the
percentages set forth above.
At the time of discharge, any drugs not administered to managed care
patients, are to be returned to the pharmacy or disposed of in compliance
with government regulations. Unused medications may not be sent home with
patients.
