AMENDMENT TO JOINT VENTURE AGREEMENT
This Amendment to the Joint Venture Agreement (the "Amendment") is made
and entered into this 24 day of October 1996, by and among United
Wisconsin Services, Inc., a corporation organized under chapter 180 of the
Wisconsin Statutes ("UWS"), Blue Cross & Blue Shield United of Wisconsin, a
service insurance corporation organized under chapter 613 of the Wisconsin
Statutes ("Blue Cross"), Compcare Health Services Insurance Corporation, a
health maintenance organization organized under chapter 611 of the Wisconsin
Statutes ("Compcare") and Northwoods Health Care, LLC, a limited liability
company organized under Chapter 183 of the Wisconsin Statutes ("NHC").
WHEREAS, the parties entered into a certain joint venture agreement
dated July 1, 1996 (the "Agreement");
WHEREAS, the Agreement provides for an initial term of three calendar
years, commencing on July 1, 1996 and terminating on December 31, 1999; and
WHEREAS, the parties desire to amend the Agreement to extend the initial
term to five calendar years, commencing on July 1, 1996 and terminating on
December 31, 12001, and to amend other provisions of the Agreement consistent
with this extension.
NOW, THEREFORE, in consideration of the premises and the mutual promises
set forth in this Amendment, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree as follows:
1. The parties agree that Article 4, relating to the Medical Services
Agreement, is hereby amended to read in its entirety as follows:
NHC shall arrange for the delivery of all health care services for the
Joint Venture according to the terms of a medical services agreement
(the "Medical Services Agreement") between NHC and Compcare, attached
hereto as EXHIBITS B. The capitation rates to be paid to NHC by
Compcare for calendar years 1997, 1998 and 1999 shall be as
established in the attached EXHIBIT C. Capitation shall be paid to
NHC on a monthly basis for each enrolled plan member; such capitation
shall be adjusted for age, sex and benefit plan design. Compcare and
NHC shall establish the capitation rate for each additional calendar
year of the Joint Venture, including any extensions thereof, in a
written agreement by June 30 of each year, such capitation rate to
become effective in the next succeeding calendar year. It is the
expectation of the Parties that Compcare and NHC will capitate
providers for the delivery of health care services under the Joint
Venture. The provider agreements, executed by NHC, Compcare and
individual providers, shall include provision for: (i) a withhold of
at least fifteen percent (15%), unless such withhold is waived by
unanimous consent of the Governing Committee; and (ii) periodic price
adjustments. The overall responsibility for medical management shall
remain with the underwriters; however, the Medical Services Agreement
shall define those responsibilities relating to medical management and
utilization review that shall be delegated to NHC.
2. The parties agree that section 5.C, relating to limitation on
risk-sharing, is hereby amended to read in its entirety as follows:
5.C. LIMITATION OF RISK-SHARING. As a condition precedent to the UWS
Parties' obligations under this Agreement, Xxxxxx Xxxxx Health Care,
Inc. shall provide capitalization to NHC of TWO (2) MILLION DOLLARS
for the initial term of the Agreement. Such capitalization shall be
in the form of either cash or a non-revocable letter of credit from
Xxxxxx Xxxxx Health Care, Inc. or another party acceptable to UWS.
UWS shall not unreasonably withhold permission to substitute another
party for all or part of the irrevocable letter of credit. NHC's
obligation for sharing in Aggregate Service Losses and Aggregate Net
Underwriting Losses during the initial five (5) year term of the
Agreement shall be limited to a total of TWO (2) MILLION DOLLARS. If
the Joint Venture is extended for an additional term or terms, NHC
shall provide additional capitalization as mutually agreed by the
Parties.
3. The parties agree that amounts owed with respect to the Aggregate
Service Profit (Loss) and the Aggregate Net Underwriting Profit (Loss) shall
be reconciled at the end of the initial five year term, and that section 5.D
is hereby amended to read in its entirety as follows:
5.D RECONCILIATION FOLLOWING INITIAL TERM. The UWS Parties and NHC
shall reconcile amounts owed with respect to the Aggregate Service
Profit (Loss) and the Aggregate Net Underwriting Profit (Loss) within
180 days after the end of the initial five (5) year term of this
Agreement. Either Party may offset any balance, whether on account of
Aggregate Service Profit (Loss) or Aggregate Net Underwriting Profit
(Loss) or Aggregate Net Underwriting Profit (Loss), due from one party
to the other under this Agreement.
4. The parties hereby agree that the initial term of the joint venture
shall commence on July 1, 1996 and terminate on December 31, 2001, and that
sections 6.A and 6.B are hereby amended to read in their entirety as follows:
6.A TERM. The initial term of this Agreement shall commence on July
1, 1996, (the "Effective Date") and terminate five (5) calendar years
from the Effective Date on December 31, 2001. The Joint Venture shall
automatically renew for additional one year terms unless written
notice of termination is give in accordance with section 6.B, below.
6.B TERMINATION. This Agreement may be terminated as follows:
1. Any party may terminate this Agreement at the end of the
initial five (5) year term, or any subsequent term, upon 180 days
advance written notice to all other parties. Termination shall be
effective on December 31.
2. All providers with whom NHC and Compcare have contracted
to provide health care services under this Joint Venture Agreement
shall continue to provide services according to the terms of the
applicable Product benefit plan until the end of the then current
term of such benefit plan.
3. The capitation amounts paid to NHC for the provision of
health care services, as referenced in Article 4 herein, shall
continue to be paid until the end of the applicable Product benefit
plan years thereunder and at the rates in effect at the time of
termination.
IN WITNESS WHEREOF, the parties have caused this Amendment to be
executed by their respective representatives and to become effective as of
the Effective Date.
BLUE CROSS & BLUE SHIELD
UNITED OF WISCONSIN
By: [ILLEGIBLE]
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Title:
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Date:
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UNITED WISCONSIN SERVICES, INC.
By: [ILLEGIBLE]
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Title:
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Date:
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COMPCARE HEALTH SERVICES
INSURANCE CORPORATION
By: [ILLEGIBLE]
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Title:
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Date:
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NORTHWOODS HEALTH CARE, LLC
By: [ILLEGIBLE]
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Title: Manager
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Date: October 24, 1996
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