EXHIBIT 10.148
AGREEMENT
THIS AGREEMENT is entered into as of this 1st day of August, 2002, by and
between Xxxxxxx Oaks Hospital and Health Center, ("Hospital") and OptimumCare(R)
Corporation ("Manager"), a Delaware Corporation.
RECITALS
A. Hospital operates an acute care facility in Xxxxxxx Oaks,
California and desires to operate an outpatient Partial Hospitalization
Programs (the PHP) for the treatment of psychiatric disorders, and
B. Manager is in the business of providing management services for
the treatment of patients with psychiatric disorders; and
C. Hospital desires to retain Manager, and Manager desires to be
retained, to provide the services described herein; and
D. Hospital will provide (subject to the provisions of this
Agreement) appropriate program and office space for the use of these Partial
Hospitalization Programs during the term of this Agreement.
THEREFORE, it is mutually agreed as follows:
1. DEFINITIONS
(a) "Confidential Information" of the Manager shall mean all documents
and other materials provided by Manager not available through sources in the
public domain. Manager's documents and other materials may include, but are not
limited to, memoranda, manuals, handbooks, pamphlets, production books and audio
and visual recordings, which contain information relating to the Partial
Hospitalization Programs (including written materials distributed to Program
patients or for promotion of the Programs); and all models, techniques,
formulations and procedures used to provide psychiatric services to Program
patients.
(b) "Employee Benefits" shall include, by way of illustration and not
limitation, the employer's contribution under the Federal Insurance
Contributions Act, unemployment compensation and related insurance, payroll and
other employment taxes, pension and retirement plan contributions, worker's
compensation and related insurance, group life, health, disability and accident
insurance, severance and other benefits.
(c) A "Patient Day" shall be deemed to exist with each out-patient visit
to the "Program."
(d) "PHP" shall mean the out-patient partial hospitalization psychiatric
programs managed by Manager at the Hospital.
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2. TERM
(a) This Agreement shall have an initial term commencing on August 1,
2002 and terminating July 31, 2003.
(b) Termination provisions are in Section (11) of this Agreement.
3. COVENANTS OF HOSPITAL
Hospital will:
(a) Furnish necessary and identified program space and provide support,
ancillary, and standard out-patient services to Partial Hospitalization Program
patients, including available diagnostic facilities as directed by each Program
patient's attending physician. Medical treatment shall be provided as directed
only by physicians duly licensed to practice medicine in the state in which the
hospital is located and who are appointees to the Hospital medical staff with
appropriate privileges. Hospital will cooperate with Manager in providing
appropriate program space for a capacity of at least thirty (30) chairs at each
facility.
(b) Provide support activities including: i) maintenance of or
installation of carpet and decorating of patient treatment areas as needed; ii)
(a) dietary service for patients, (b) housekeeping services for patients and
Manager's offices at the Hospital, (c) utilities for patient areas and Manager's
offices at the Hospital, (d) staff offices, furniture, electrical support and
office supplies, (e) daily patient transportation within the normal primary
service area, (f) services of a nutritionist, (g) a psychiatric registered
nurse, and (iii) other services customarily provided in the ordinary course of
business for Hospital's patients (e.g. record keeping, etc.).
(c) Charge and collect all PHP charges due from Partial Hospitalization
Program patients or third party payors.
(d) Staff the Partial Hospitalization Program with qualified personnel
in accordance with the staffing table and be solely liable to those personnel
who are Hospital employees for their wages, compensation and employee benefits.
Nursing staff will be supervised by Hospital's nursing management system.
Hospital personnel shall comply with the Program policies and procedures as
mutually agreed upon in writing by Hospital and Manager. Hospital shall not,
without Manager's prior written consent (which shall not be unreasonably
withheld), deviate, change or otherwise decrease the agreed staffing table.
(e) Provide to Manager's Program staff such appropriate pre-employment
and periodic diagnostic and health screening procedures as are customarily
provided by Hospital for Hospital employees.
(f) Maintain accreditation by the Joint Commission on Accreditation
of Healthcare Organizations and pay all related fees.
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(g) Provide Manager's employees and contracted personnel with copies of
all relevant Policies and Procedures, as amended from time to time.
(h) Indemnify, save harmless, and defend Manager from all claims and
liability and expenses (including reasonable attorney's fees) arising solely
from the negligence of or breach of this Agreement by Hospital or its employees
or contracted personnel.
(i) Use reasonable efforts to resolve any issues regarding acceptability
of Hospital personnel to Program personnel and patients which may arise with
respect to any of Hospital's employees or contracted personnel.
(j) Provide admissions and billing services. It is further understood
that Hospital may deny admission to a patient who, in its opinion, is not
financially qualified to meet financial obligations.
(k) Provide appropriate Utilization Review and Quality Assessment
services for all Partial Hospitalization Program patients under the supervision
and with the continuous guidance of the partial hospitalization program
administrator. The administrator is responsible for reviewing and validating by
signature the above named services.
(l) Maintain professional and comprehensive general liability insurance
for itself and its employees and contracted personnel in an amount not less than
$5,000,000 per occurrence or claim and whenever reasonably requested provide
Manager with a certificate from the insurer stating that such insurance is in
effect and which also states that Manager will be given at least ten (10) days
advance written notice of any cancellation, non-renewal, or changes in policy
limits, deductible, or co-insurance. Any deductible or co-insurance or aggregate
limits shall be subject to Managers approval which shall not be unreasonably
withheld. Manager agrees that $100,000 is an acceptable deductible or
co-insurance. Hospital shall maintain "tail" coverage if necessary for any
terminated "claims made" policy so as to apply to any of its acts or omissions
which occur during the term of this Agreement until the expiration of any
applicable statute of limitation but not to exceed seven (7) years.
(m) As a condition precedent to this agreement, obtain appropriate
California state license to operate the Program.
(n) Provide a medical director, the Hospital will contract with a
physician duly licensed in the state wherein the Hospital is situated and shall
be required to fulfill the requirements to be admitted as a member of the
Hospital's medical staff.
4. COVENANTS OF MANAGER
Manager will do the following at its own cost and expense:
(a) Provide the following: (i) Partial Hospitalization Administrator
(note: he/she will educate UR/QI staff and mentor, review and validate these
activities); (ii) Social Services; (iii) Psychological Services; (iv) Activities
Services; (v) Community Educators; (vi) Program
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Coordinator; and (vii) Part-time services of Corporate Director of Utilization
Review. All such personnel shall be subject to Hospital approval. Such personnel
shall not be deemed employees or contracted personnel or borrowed servants of
Hospital. Manager shall have full responsibility for their wages, payroll taxes
and employee benefits and acts or omissions and shall indemnify, save harmless
and defend Hospital from all claims and liability expenses (including reasonable
attorneys' fees) arising from any claims, actions, causes of actions, damages or
settlements with respect to any of the foregoing. Manager will assist Hospital
in its screening, interviewing, and selecting of employees for the Program
staff.
(b) Provide Partial Hospitalization Program orientation and training for
all appropriate personnel and serve as a resource to the Hospitals Education
Department regarding psychiatric topics and M.A.B. training.
(c) Indemnify, save harmless, and defend Hospital from all claims and
liability and expenses (including reasonable attorney's fees) (1) arising solely
from the negligence of or breach of this Agreement by Manager or its employees
or contracted personnel or (2) arising out of Hospital negligence if the sole
basis for any such negligence consists of entering into this Agreement with
Manager, failing to properly supervise, monitor, or oversee Manager or its
employees or agents, or failing to properly review or act upon its review of the
qualifications of Manager or its employees or contracted personnel.
(d) Consult, manage and support the Partial Hospitalization Program
treatment team's effort to provide quality psychiatric treatment while
maintaining prudent control of patient length of stay in concert with patient
needs and insurance and regulatory requirements.
(e) Require all employees to participate in mandatory Hospital education
and orientation programs.
(f) Administrative Services: Program Administrator will report to
Hospital COO on a regular basis; in conjunction with Hospital Management.
Provide availability of Corporate Clinical Director and Corporate Director of UR
for mock surveys, training of clinical staff, customer service training,
documentation inservicing in conjunction with Hospital staff; plus ongoing,
active evaluation of program according to needs of clients and Hospital. Provide
full involvement with JCAHO survey and preparation for survey in conjunction
with Hospital staff. Services of 24 hour/day Intake Office. Maintain
communication with County Patient Rights Office, and provide ongoing an
appropriate education/inservice. Provide Hospital community education regarding
Behavioral Health patients and issues.
(g) Clinical Services: Training of all clinical staff with Program
Administrator and Hospital COO responsible for licensed staff. Medical Director
to be responsible to lead treatment planning, utilizing concepts of teamwork for
quality care, insure admission and discharge criteria are appropriate. Training
and reviews to insure documentation criteria are met, and treatment team
planning and documentation meet regulatory standards.
(h) Utilization Review Services: Periodic audits by Director of UR to
monitor compliance and report to Hospital UR Department. Attendance at
appropriate county and/or
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Federal meetings and educational events to maintain current knowledge related to
changes in regulations, documentation requirements, billing requirements, etc.,
with appropriate follow-up for clinical staff, Program Administrator, and
Hospital COO.
(i) Maintain professional and comprehensive general liability insurance
for itself and its employees and contracted personnel in an amount not less than
$5,000,000 per occurrence or claim and whenever reasonably requested provide
Hospital with a certificate from the insurer stating that such insurance is in
effect and which also states that Hospital will be given at least ten (10) days
advance written notice of any cancellation, non-renewal, changes in policy
limits, deductible, or co-insurance or aggregate limits. Any deductible or
co-insurance or aggregate limits shall be subject to Hospital's approval which
shall not be unreasonably withheld. Hospital agrees that $100,000 is an
acceptable deductible or co-insurance. Hospital shall maintain "tail" coverage
if necessary for any terminated "claims made" policy so as to apply to any of
its acts or omissions which occur during the term of this Agreement until the
expiration of any applicable statute of limitation but not to exceed seven (7)
years. Manager shall use reasonable efforts to have Hospital named as an
additional insured on Manager's insurance with respect to any claim or liability
arising solely out of any act of omission by Manager, its employees, or
contracted personnel.
(j) Until the expiration of four (4) years after the furnishing of any
services to be provided under this Agreement make available, upon request, to
the Secretary of Health and Human Services or to the Comptroller General of the
United States of America, or their duly authorized representatives, this
Agreement and books, documents and records which are necessary to certify the
nature and extent of reimbursable costs under the Medicare laws.
(k) Comply with all applicable laws (including but not limited to 42
U.S.C. 1395 (nn) (b) or any similar law or regulation), regulations, medical
staff bylaws, Hospital policies and procedures, Partial Hospitalization Program
policies and procedures and any applicable standards of care.
(l) Use reasonable efforts to resolve any issues regarding acceptability
of Program personnel to Hospital personnel and to Program patients which may
arise with respect to any of Manager's employees or contracted personnel.
(m) Provide monthly written reports to Hospital as requested, regarding
the operation of the Partial Hospitalization Program.
(n) Commit no act or omission which adversely affects the Hospital
license with respect to the psychiatric chairs.
(o) Admit patients to the Partial Hospitalization Program (including but
not limited to Medicare and MediCal patients) only if the admission is ordered
by a physician on the Hospital medical staff with admitting privileges.
(p) Allow use of the corporate software tracking program for claims
paid.
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5. REPRESENTATION AND WARRANTS OF HOSPITAL
Hospital hereby represents to Manager as follows:
(a) Hospital is owned by Xxxxxxx Oaks Health System, a California,
non profit public benefit corporation duly organized and validly existing in
good standing under the laws of the State in which the Hospital resides with the
power and authority to carry on the business in which it is engaged and to
perform its obligations under this Agreement subject to obtaining the license
described in subpart (m) of Section (3).
(b) The execution of this Agreement and the performance of the
obligations of the Hospital hereunder will not result in any breach of any of
the terms, conditions or provisions of any agreement or other instrument to
which Hospital is a party or by which it may be bound or affected, or any
governmental license, franchise, permit or other authorization possessed by the
Hospital, nor will such execution and performance violate any Federal, State or
local law, rule or regulation. The Hospital is accredited by the Joint
Commission on Accreditation of Healthcare Organizations.
(c) There is no litigation, administrative proceeding or investigation
pending or threatened against Hospital (nor is the Hospital subject to any
judgement, order, decree or regulation of any court or other governmental
administrative agency) which would materially adversely affect the performance
of Hospital's obligations hereunder.
(d) No Certificate of Need is required by Hospital from any state
regulatory agency for the operation of the PHP.
6. REPRESENTATIONS OF MANAGER
Manager hereby represents to Hospital as follows:
(a) Manager is a corporation duly organized and validly existing in good
standing under the laws of the State of Delaware with the power and authority to
carry on the business in which it is engaged and to perform its obligations
under this Agreement.
(b) 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
the 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.
(c) There is no litigation, administrative proceeding or investigation
pending or threatened against Manager (nor is Manager subject to any judgement,
order, decree or regulation of any court or other governmental administrative
agency) which would materially adversely affect the performance of Manager's
obligations hereunder.
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7. MANAGEMENT FEE
(a) Hospital shall pay to manager a monthly fee of $79,200. Manager will
be paid its contractual fee forty five (45) days following the month for which
services were performed. For example, the management fee for August, 2002 will
be due on October 15, 2002. As of an effective date of this agreement, the
management fee discussed above replaces any and all previous arrangement in
force.
8. PAYMENT BY HOSPITAL
(a) On or before the fifth (5th) day of each calendar month, Manager
will forward to Hospital an invoice for the fees payable by Hospital under this
Section 7. If any amount so invoiced is not paid within 45 days of the end of
the calendar month in which the invoice is sent, the outstanding balance shall
bear simple interest from the date of said invoice at a rate of five percent
(5%) per annum until such amount shall be paid in full, but in no event will
this percentage be greater than the maximum permitted by law. Any payments made
thereafter and received by manager shall be applied first to interest accrued,
but unpaid, and then to the oldest unpaid invoice. In addition, the parties
agree that a failure by Hospital to pay any such invoice by the sixtieth (60th)
day of the calendar month in which the invoice is sent shall be a material
breach of this Agreement by written notice to Hospital delivered personally or
deposited in the United States Mail, Certified or Registered, with postage
prepaid and addressed to Hospital as indicated in Section 10 hereof. If contract
is terminated by Hospital, all management fees are due and payable prior to the
effective date of termination and any such termination of this Agreement by
Manager shall not affect Hospitals obligation to pay amounts due Manager under
this Agreement, but no such payment shall affect the effectiveness of such
termination.
9. CONFIDENTIAL AND PROPRIETARY INFORMATION
(a) Hospital agrees and acknowledges that Confidential Information is
disclosed to it in confidence with the understanding that it constitutes
business information developed by Manager. Hospital further agrees that it shall
not use such Confidential Information for any purpose other than in connection
with the Partial Hospitalization Program. Hospital 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 purposes of the Partial
Hospitalization Program or as permitted by written authorization of Manager.
(b) 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 Partial Hospitalization Program. These service marks are the
exclusive property of Manager.
(c) Manager agrees not to disclose confidential information pertaining
to the Hospital business or Partial Hospitalization Program patients except as
required by law or regulation or as permitted by written authorization of
Hospital or the respective patient as the case may be.
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10. RECRUITMENT OF EMPLOYEES AND AGENTS
(a) Hospital acknowledges that Manager has expended and will continue to
expend substantial time, effort, and money to train its employees and contracted
personnel in the operation of the Partial Hospitalization Program. The employees
and contracted personnel of Manager who will operate the Partial Hospitalization
Program at the Hospital will have access to and possess Confidential Information
of Manager. Hospital, therefore, agrees that for the earlier of one (1) year
after the cessation of the employment or agency relationship between the Manager
and the employee or agent or one (1) year after termination of this Agreement,
it will not knowingly (and it will not induce any of its affiliates to) employ
or solicit the employment of, or in any way retain the services of any employee,
former employee, or contracted personnel or former agent of Manager if such
individual has been employed or retained by Manager in the Partial
Hospitalization Program unless Manager gives Hospital prior written consent
therein or unless this Agreement is terminated by Hospital pursuant to paragraph
(11) of this agreement.
(b) Manager agrees that during the same respective period of time, it
will not knowingly (and it will not induce any of its affiliates to) employ or
solicit the employment of or in any way retain the services of any employee,
former employee, or contracted personnel or former agent of Hospital without
Hospital's prior written consent thereto.
11. TERMINATION
(a) Termination by Manager:
(1) By written notice to Hospital, if Hospital should have a
bankruptcy, reorganization or similar action filed by or against it, become
insolvent, go into liquidation for any purpose.
(2) In the event Hospital has failed to comply with the terms of
this Agreement in any material respect, including substantial completion of all
refurbishing in the identified program space, Manager shall, in writing, notify
all of the nature of the breach, and Hospital shall have thirty (30) days to
cure such breach or else the Agreement will thereupon be terminated upon written
notice to Hospital.
(3) By written notice to Hospital if Hospital fails to maintain
its accreditation by the Joint Commission on Accreditation of Healthcare
Organizations or any license granted to it by a regulatory agency without which
the PHP would be materially and adversely affected.
(4) By written notice to Hospital if Hospital fails to maintain
professional and general liability insurance in the minimum amount of
$5,000,000.
(b) Termination by Hospital:
1. By written notice to Manager if Manager should have a
bankruptcy, reorganization or similar action filed by or against it, become
insolvent, or go into liquidation for any purpose.
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2. In the event Manager has failed to comply with the terms of
this Agreement in any material respect, Hospital shall, in writing, notify
Manager of the nature of the breach, and Manager shall have thirty (30) days to
cure such breach or else the Agreement will thereupon be terminated upon written
notice to Manager.
3. By written notice to Manager if Manager fails to provide
professional and general liability insurance in the minimum amount of
$5,000,000.
4. In the event Manager is acquired by another entity, Hospital
shall have the option to terminate the contract upon thirty (30) days written
notice to Manager.
5. In the event Medicare changes in reimbursement and/or
regulations make the program financially or operationally onerous for the
Hospital to operate. Such determination shall be at the sole discretion of the
Hospital.
12. MISCELLANEOUS PROVISIONS
(a) Compulsory Arbitration: Any controversy or claim arising out of or
relating to this Agreement, or the breach thereof, shall be settled by binding
arbitration in accordance with the rules of the American Arbitration
Association, and judgement on the award rendered may be entered in any court
having jurisdiction. However, this shall not apply with respect to any claim for
indemnity for bodily injury or death.
(b) 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 attorneys' fees and costs awarded against the other party
in addition to any other relief to which that party may be entitled.
(c) Liquidated Damages: If Hospital should terminate Manager's services
without cause, for any reason, Hospital agrees to pay Manager in the amount of
$20,000 per month for the remainder of the contractual period.
(d) UCC1: Hospital agrees to allow Manager, at Manager's expense, to
file a UCC1 or any similar local law or regulation with respect to a "payment
promise" against the Hospital's psychiatric outpatient accounts receivables
referred to in this agreement.
(e) Governing Law: The validity of this Agreement and of any of its
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.
(f) Force Majeure: If either of the parties hereto is delayed or
prevented from fulfilling any of its obligations under this Agreement by force
majeure, said party shall not be liable for said delay or failure. "Force
Majeure" means any cause beyond the reasonable control of a party, including but
not limited to an act of God, act or omission of civil military authorities,
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fire, strike, earthquake, flood, riot, war, delay of transportation, or
inability due to the aforementioned causes to obtain necessary labor, materials,
or facilities.
(g) 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.
(h) 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.
(i) Binding Effect: This Agreement shall be binding on the successors,
and assigns of the respective parties, provided, however, neither party may
assign or otherwise transfer this Agreement or delegate obligations hereunder
without the other's written consent.
(j) Complete Agreement: This Agreement constitutes the complete
understanding of the parties and supersedes all other agreements, either oral or
in writing, between 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. There shall be no amendment unless in writing signed by both
parties.
(k) 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.
(l) Notice: 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 after deposit in said United
States Mail, addressed as below with proper postage affixed, but each party may
change his address by written notice in accordance with this Paragraph.
(m) Changes in Reimbursement Rules: In the event that Medicare,
Medicaid, a third party payor or other Federal, State, Local laws, rules,
regulations, or interpretations thereof at any time during this agreement
duration; prohibit, restrict or substantially change the method, payment or
amount of reimbursement or the like for services provided under this agreement,
then the Hospital and Manager in good faith shall amend or cancel the agreement
to provide for payment of compensation to each other in a manner consistent with
any such prohibition restriction and/or limitation. Specifically, Manager agrees
to amend its staffing to ensure compliance with any new rules and/or regulations
and adjust its management fee commensurate with such changes in the cost of
services provided.
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(n) Compliance Plan Provisions: Hospital has adopted a compliance
plan to (i) prevent accidental and intentional non-compliance with applicable
laws; (ii) detect such non-compliance if it occurs; (iii) discipline those
involved in non-compliance behavior; and (iv) prevent future non-compliance.
Hospital also contemplates entering into a corporate integrity agreement with
the United States Department of Health and Human Services to promote compliance
with the statutes, regulations and written directives of Federal health
programs. Manager hereby acknowledges and certifies that it has received and
read:
1. Hospital's Code of Conduct
2. Hospital's Policies and Procedures
3. Notice of and Education in the use of Hospital's Confidential
Disclosure Program
and that Manager has received appropriate training for the services it will
provide to Hospital, the requirements of the Corporate Integrity Agreement and
the Compliance Program.
Manager agrees to inform and train any individual, or employee of
Manager who will render services to Hospital as to the above.
Hospital's Address: Xxxxxxx Oaks Hospital and Health Center
0000 Xxx Xxxx Xxxx.
Xxxxxxx Xxxx, XX 00000
Manager's Address: OptimumCare(R)Corporation
00000 Xxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxx Xxxxxx, XX 00000-0000
IN WITNESS WHEREOF, this Agreement has been executed on ,
2002, at , California.
Manager Hospital:
OPTIMUMCARE(R)CORPORATION XXXXXXX OAKS HOSPITAL AND HEALTH CENTER
By: By:
---------------------------- -------------------------------------
Xxxxxx X. Xxxxxxx Xxxxx Xxxxxxxxx
Chairman of the Board & CEO Chief Executive Officer
By: By:
---------------------------- -------------------------------------
Mulumebet Xxxxx Xxxxxxx Xxxx X'Xxxxxx
President & COO COO
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