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EXHIBIT 10.41
CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED BASED UPON A REQUEST FOR
CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 UNDER THE SECURITIES EXCHANGE
ACT OF 1934. THE OMITTED PORTIONS HAVE BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
AMGEN
AMENDMENT #1 DATED FEBRUARY 10, 1999 TO AGREEMENT XX. 000000
Xxxxxxxxx Xx. 000000, between Amgen Inc. ("Amgen") and Renal Care Group, Inc.,
shall be amended and restated in its entirety to read as stated below. Provided
this Amendment is signed on or before March 26, 1999, this Amendment shall
become effective on April 1, 1999. If this Amendment is not signed on or before
March 26, 1999, this Amendment shall be null and void, and the original
Agreement and all of the terms described therein shall remain in force through
the original expiration date of March 31, 1999.
This Agreement ("Agreement") between Amgen Inc. ("Amgen") and Renal Care Group,
Inc., including the freestanding dialysis center affiliate(s) listed on
Appendix B, (collectively, "Dialysis Center"), sets forth the terms and
conditions for the purchase of EPOGEN(R) (Epoetin alfa) by Dialysis Center.
1. TERM OF AGREEMENT. The "Term" of this Agreement shall be defined as
April 1, 1999 ("Commencement Date") through March 31, 2000
("Termination Date").
2. DIALYSIS CENTER AFFILIATES. Dialysis Center must provide Amgen with a
complete list of its dialysis center affiliates ("Affiliates") on or
before the date this Agreement is executed by Dialysis Center.
Modifications to the dialysis center Affiliates listed on Appendix B
may be made pursuant to the request of Dialysis Center's corporate
headquarters and are subject to approval and acknowledgment by Amgen in
writing. Amgen requires no less than 30 days notice before the
effective date of change for any addition or deletion of Affiliates
hereunder. Amgen reserves the right to accept, reject, or immediately
terminate any Affiliates with regard to participation in this
Agreement.
3. OWN USE. Dialysis Center hereby certifies that EPOGEN(R) purchased
hereunder shall be for Dialysis Center's "own use."
4. AUTHORIZED WHOLESALERS. Dialysis Center must provide Amgen with a
complete list of its current wholesalers, from whom Dialysis Center
intends to purchase EPOGEN(R), and must provide the list to Amgen on or
before the date this Agreement is executed by Dialysis Center's
corporate headquarters. The list must include the name and complete
address of each designated wholesaler. Wholesalers designated by
Dialysis Center and approved by Amgen to participate in this program
will be deemed "Authorized Wholesalers." A current listing of Dialysis
Center's Authorized Wholesalers is referenced in Appendix B.
Notification of proposed changes to the list of Authorized Wholesalers
must be provided to Amgen in writing at least 30 days before the
effective date of the proposed change. Amgen reserves the right to
accept, reject, or immediately terminate any wholesaler with regard to
participation in this Agreement. Dialysis Center agrees to require all
Authorized Wholesalers to submit product sales information to a
third-party sales reporting organization designated by Amgen.
5. QUALIFIED PURCHASES. EPOGEN(R) purchased under this Agreement by
Dialysis Center *.
*Omitted information is the subject of a request for confidential treatment
pursuant to Rule 24b-2 under the Securities Exchange Act of 1934 and has been
filed separately with the Securities and Exchange Commission.
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6. COMMITMENT TO PURCHASE. Dialysis Center agrees to purchase EPOGEN(R)
for all of its dialysis use requirements for recombinant human
erythropoietin. Dialysis Center may purchase another brand of
recombinant human erythropoietin for its dialysis use requirements only
for the time, and only to the extent, that Amgen has notified Dialysis
Centers corporate headquarters in writing that Amgen cannot supply
EPOGEN(R) within and for the time period reasonably required by
Dialysis Center.
7. CONFIDENTIALITY. Both Amgen and Dialysis Center agree that this
Agreement represents and contains confidential information which shall
not be disclosed to any third party, or otherwise made public, without
prior written authorization of the other party, except where such
disclosure is contemplated hereunder or required by law.
8. DISCOUNTS. Dialysis Center may qualify for discounts in accordance with
the schedules and terms set forth in Appendix A. Discounts in arrears
will be paid in the form of a check payable to Dialysis Center's
corporate headquarters. Discounts in arrears will be calculated in
accordance with Amgen's discount calculation policies based on * using
the prevailing * (*) as the calculation price, except as otherwise
provided hereunder. Upon vesting, Amgen will use its best efforts to
make such discounts available within 60 days after receipt by Amgen of
data, in a form acceptable to Amgen, detailing all * during the
applicable period. Payment amounts, as calculated by Amgen, must equal
or exceed $100.00 for the applicable period to qualify. Subject to the
section entitled "Breach of Agreement," in the event that Amgen is
notified in writing that Dialysis Center, legally known as Renal Care
Group, Inc., and/or any Affiliates (the "Acquiree") is acquired by
another entity or a change of control otherwise occurs with respect to
the Acquiree, any discounts which may have been earned hereunder shall
be paid in the form of a check payable to the Acquiree's corporate
headquarters subject to the conditions described herein. If any
Affiliates are added to or deleted from this Agreement during any of
the periods used for comparison, for any of the discounts paid in
arrears contained herein, Amgen reserves the right in its sole
discretion to appropriately adjust Dialysis Center's discounts for the
relevant periods, by including or excluding any purchases made by those
Affiliates during any of those periods.
9. TREATMENT OF DISCOUNTS. Dialysis Center agrees that it will properly
disclose and account for any discount or other reduction in price
earned hereunder, in whatever form, (i.e. pricing, discount, or
incentive), in a way that complies with all applicable federal, state,
and local laws and regulations, including without limitation, Section
11286(b) of the Social Security Act and its implementing regulations.
Section 1126B(b) requires that a provider of services will properly
disclose and appropriately reflect the value of any discount or other
reduction in price earned in the costs claimed or charges made by the
provider under a federal health care program, as that term is defined
in Section 1128B(f). Dialysis Center also agrees that it will (a) claim
the benefit of such discount received, in whatever form, in the fiscal
year in which such discount was earned or the year after, (b) fully and
accurately report the value of such discount in any cost reports filed
under Title XVIII or Title XIX of the Social Security Act, or a state
health care program, and (c) provide, upon request by the U.S.
Department of Health and Human Services or a state agency or any other
federally funded state health care program, the information furnished
by Amgen concerning the amount or value of such discount. Dialysis
Center's corporate headquarters agrees that it will advise all
Affiliates, in writing, of any discount received by Dialysis Center's
corporate headquarters hereunder with respect to purchases made by such
Affiliates and that said Affiliates will account for any such discount
in accordance with the above stated requirements.
*Omitted information is the subject of a request for confidential treatment
pursuant to Rule 24b-2 under the Securities Exchange Act of 1934 and has been
filed separately with the Securities and Exchange Commission.
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10. DISCOUNT LIMITATION. Notwithstanding anything contained herein to the
contrary, the amount of any discount available to Dialysis Center from
Amgen, under this Agreement or otherwise, shall be limited to *, taking
into account the aggregate value of all discounts ultimately available
to Dialysis Center for the relevant quarter.
11. DATA COLLECTION. Dialysis Center agrees that all data to be provided to
Amgen pursuant to this Agreement, shall be in a form that does not
disclose the identity or name of any patient or other
patient-identifying information such as address, telephone number, or
social security number. Dialysis Center acknowledges that the data to
be supplied to Amgen pursuant to this Agreement shall be used to
support verification of the discounts and incentives referenced herein,
as well as for Amgen-sponsored research concerning the role of
EPOGEN(R)in improving treatment outcomes and quality of life of
dialysis patients. Dialysis Center shall consistently use a unique
alpha-numeric code (which shall not be the same as the patient's social
security number) as a "case identifier" to track the care rendered to
each individual patient over time, and such case identifier shall be
included in the data provided to Amgen. The key or list matching
patient identities to their unique case identifiers shall not be
provided to Amgen personnel. In furtherance of Amgen research, Dialysis
Center may agree from time to time to use its key to update the patient
care data by linking it with information concerning health outcomes,
quality of life, and other pertinent data that may become available to
Amgen from other sources. Any such linking of data sources shall not
provide the identity of any patient to Amgen. Amgen agrees that it will
maintain data supplied under this agreement in confidence and that it
will not use such data to identify or contact any patient. No reports
by Amgen concerning analyses of the data or the results of such
research shall disclose the identity of any patient.
12. BREACH OF AGREEMENT. Either party may terminate this Agreement for
breach upon 30 days advance written notice. In addition, in the event
that Dialysis Center breaches any provision of this Agreement, Amgen
shall have no obligation to continue to offer the terms described
herein or pay any further discounts to Dialysis Center.
13. WARRANTIES. Each party represents and warrants to the other that this
Agreement (a) has been duly authorized, executed, and delivered by it,
(b) constitutes a valid, legal, and binding agreement enforceable
against it in accordance with the terms contained herein, and (c) does
not conflict with or violate any of its other contractual obligations,
expressed or implied, to which it is a party or by which it may be
bound. The party executing this Agreement on behalf of Dialysis Center
specifically warrants and represents to Amgen that it is authorized to
execute this Agreement on behalf of and has the power to bind Dialysis
Center and the Affiliates to the terms set forth in this Agreement.
14. GOVERNING LAW. This Agreement shall be governed by the laws of the
State of California and the parties submit to the jurisdiction of the
California courts, both state and federal.
15. NOTICES. Any notice or other communication required or permitted
hereunder shall be in writing and shall be deemed given or made when
delivered in person or when sent to the other party by first class mail
or other means of written communication at the respective party's
current address or at such other address as the party shall have
furnished to the other in accordance with this provision.
16. COMPLIANCE WITH HEALTH CARE PRICING LEGISLATION AND STATUTES.
Notwithstanding anything contained herein to the contrary, at any time
following the enactment of any federal, state, or local law or
regulation that in any manner reforms, modifies, alters, restricts, or
otherwise affects
*Omitted information is the subject of a request for confidential treatment
pursuant to Rule 24b-2 under the Securities Exchange Act of 1934 and has been
filed separately with the Securities and Exchange Commission.
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the pricing of or reimbursement available for EPOGEN(R), Amgen may, in
its sole discretion, upon 30 days notice (a) terminate this Agreement,
or (b) exclude any Affiliates from participating in this Agreement
unless such Affiliate(s) certifies in writing that they are, or will
be, exempt from the provisions thereunder. Additionally, in order to
assure compliance with any existing federal, state or local statute,
regulation or ordinance, Amgen reserves the right, in its sole
discretion, to exclude any Affiliates from the pricing, discount, and
incentive provisions of this Agreement.
17. FORCE MAJEURE. Neither party will be liable for delays in performance
or nonperformance of this Agreement or any covenant contained herein if
such delay or nonperformance is a result of Acts of God, civil or
military authority, civil disobedience, epidemics, war, failure of
carriers to furnish transportation, strike, lockout or other labor
disturbances, inability to obtain material or equipment, or any other
cause of like or different nature beyond the control of such party.
18. MISCELLANEOUS. No modification of this Agreement will be effective
unless made in writing and executed by a duly authorized representative
of each party, except as otherwise provided hereunder. Neither party
may assign this Agreement to a third party without the prior written
consent of the other party. This Agreement may be executed in one or
more counterparts, each of which is deemed to be an original but all of
which taken together constitutes one and the same agreement.
19. ENTIRE AGREEMENT. This Agreement constitutes the entire understanding
between the parties and supersedes all prior written or oral proposals,
agreements, or commitments pertaining to the subject matter herein.
Please retain one fully executed original for your records and return the other
fully executed original to Amgen.
The parties executed this Amendment as of the dates set forth below.
AMGEN INC. RENAL CARE GROUP, INC.
Signature: /s/ Xxx Xxxxx Signature: /s/ Xxxx Xxxxxxxx
---------------------------- -------------------------
Print Name: Xxx Xxxxx Print Name: Xxxx Xxxxxxxx
--------------------------- ------------------------
Print Title: National Account Manager Print Title: EVP-COO
------------------------- -----------------------
Date: 03/19/99 Date: 03/26/99
--------------------------------- ------------------------------
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APPENDIX A. DISCOUNT PRICING, SCHEDULE, AND TERMS
1. PRICING. Dialysis Center may purchase EPOGEN(R) through Authorized
Wholesalers at a guaranteed * off of the prevailing *. Amgen reserves
the right to change the * at any time. *
2. OPTIONAL HEMATOCRIT/HEMOGLOBIN INCENTIVE. Each individual Affiliate may
qualify for an Optional Hematocrit/Hemoglobin Incentive ("OHI")
provided the following requirements are met.
A. REQUIREMENTS: Dialysis Center's aggregate * of EPOGEN(R) purchases by
all Affiliates as listed on Appendix B on the Commencement Date of this
Agreement for each calendar quarter during the Term must equal or
exceed * of the aggregate * of EPOGEN(R) purchases by those same
Affiliates for the same time period from the previous year. In
addition, at least * of Dialysis Centers patients must have Average
Patient Hematocrits (as defined in Section 2(b) below) greater than or
equal to * during each calendar quarter of the Term. If either of these
criteria is not met during any given calendar quarter of the Term, none
of Dialysis Center's Affiliates will qualify for the OHI during that
quarter.
In order to participate in the OHI, Dialysis Center must provide the
following to Amgen or to a data collection vendor specified by Amgen,
on a monthly basis, and no later than 30 days after the end of each
month:
i) all hematocrit test results for each dialysis patient, the
date of each test, and a consistent, unique, alpha-numeric
identifier (sufficient to consistently track an individual
patient without in any way disclosing the identity of the
patient), along with the name, address and phone number of the
particular Affiliate at which each patient received treatment
(collectively the "Data"). Amgen may utilize the Data for any
purpose, and reserves the right to audit all Data. Under no
circumstances should the Data include any patient identifiable
information including, without limitation, name, complete
social security number, address or birth date. The identity of
the account submitting the Data and any association with the
Data will remain confidential. The hematocrit test results
must be derived from blood samples taken immediately before
dialysis treatment using any automated red blood cell counter
testing method (e.g. Xxxxxxx-counter, Bayer-Technicon, Sysmex,
CellDyne), must be reported to the nearest tenth of one
percent, and must be submitted directly from the clinical
laboratory in a format acceptable to Amgen. Hand written
reports are not acceptable; electronic submission of the Data
is preferred, and
ii) a properly executed "Certification Letter," a sample of which
is attached hereto as Exhibit #1, that will be provided to
Dialysis Center's corporate headquarters, unless otherwise
requested, before each payment period.
B. CALCULATION: Assuming Dialysis Center has fulfilled all requirements as
described in Section 2(a) above, the OHI for each individual Affiliate
will be calculated as follows:
The "Average Patient Hematocrit" for each dialysis patient will be
based upon the average of all hematocrit test results gathered for each
patient during each calendar quarter of the Term. The Average Quarterly
Percentage of all dialysis patients with Average Patient Hematocrits
greater than or equal to * will be determined for each Affiliate by
dividing the total number of dialysis patients with Average Patient
Hematocrits greater than or equal to *, by the total number of dialysis
patients treated by that Affiliate.
*Omitted information is the subject of a request for confidential treatment
pursuant to Rule 24b-2 under the Securities Exchange Act of 1934 and has been
filed separately with the Securities and Exchange Commission.
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C. PAYMENT: The OHI for each Affiliate will be calculated on a
quarterly basis and paid to Dialysis Center's corporate
headquarters, except as otherwise provided hereunder. Payment
is contingent upon receipt by Amgen of the Certification
Letters and all required Data for the corresponding quarter.
If the Data from any given Affiliate is received more then 30
days after the last day of any relevant month, such Affiliate
will not qualify for the OHI for that quarter. Quarterly OHI
payments for each individual Affiliate will be based upon the
Data received for that Affiliate from the previous quarter *
governed by the OHI schedule listed below. Notwithstanding the
foregoing, payment for any period during the Term that is not
equivalent to a complete calendar quarter, will be based on an
average of the Data that is available for that period. If
requested by Amgen, Dialysis Center will provide any
information necessary * 30 days of Amgen's written request. If
Dialysis Center is unable to provide detailed * for each
Affiliate, Amgen may calculate the OHI based on Dialysis
Center's *. Amgen reserves the right to modify the OHI if the
EPOGEN(R)package insert language changes.
Optional
Average Quarterly Percentage of all dialysis patients at each Hematocrit
Affiliate with Average Patient Hematocrits greater than or equal to * Incentive
Please direct your attention to the EPOGEN(R) package insert Percentage
* .................................................... *
* .................................................... *
* .................................................... *
* .................................................... *
* .................................................... *
D VESTING: The OHI for each Affiliate will vest on the last day of the
corresponding quarter.
E. HEMOGLOBIN CONVERSION: Dialysis Center may choose to submit hemoglobin
test results rather than hematocrit test results as a measurement of
anemia. If during the Term, Dialysis Center elects to use hemoglobin
test results, Dialysis Center must: i) submit a "Notification Letter"
to Amgen, a sample of such Notification Letter is attached hereto as
Exhibit #2, and ii) begin submitting all hemoglobin test results for
all dialysis patients along with all other information described in
Section 2(a) above, rather than hematocrit test results for all
dialysis patients at each Affiliate for purposes of participating in
the OHI.
Amgen will accept the hemoglobin test results, multiply each test
result by *, and apply the converted results to the same schedule,
requirements and calculations described above in place of the
hematocrit test results.
For the calendar quarter in which Dialysis Center submits its
Notification Letter ("Grace Period"), Amgen will apply each Affiliate's
Average Quarterly Percentage from the last calendar quarter in which
complete hematocrit test results were received ("AQP-Hematocrit") to
the OHI schedule listed above in order to determine the applicable OHI
Percentage earned for each Affiliate. If Dialysis Center's overall
performance on the OHI after the Grace Period does not equal or exceed
the overall performance by Dialysis Center prior to conversion to
hemoglobin, Amgen will continue to apply each Affiliate's
AQP-Hematocrit through the remainder of the Term, provided that during
the time period the AQP-Hematocrit is applied *.
*Omitted information is the subject of a request for confidential treatment
pursuant to Rule 24b-2 under the Securities Exchange Act of 1934 and has been
filed separately with the Securities and Exchange Commission.
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In the event any Affiliates still earning the OHI based on hematocrit
test results are added to this Agreement after Dialysis Center has
converted to hemoglobin, each such Affiliate's OHI payment for the
calendar quarter in which they were added, shall be determined based on
each such Affiliate's hematocrit test result for that quarter. All
subsequent OHI payments to such added Affiliates must be based solely
on hemoglobin test results. Hematocrit test results will not be
accepted for any subsequent OHI payment calculations.
3. ADDITIONAL OHI INCENTIVE. In addition to the OHI referenced above,
beginning with the quarter commencing October 1, 1999, each Affiliate
may be eligible to quality to receive an additional * incentive payment
of their *. In order to qualify for the Additional OHI Incentive, each
Affiliate must first meet all of the requirements for the OHI as
described in this Appendix A, Section 2a, and for the quarters
beginning October 1, 1999 through December 31, 1999 and January 1, 2000
through March 31, 2000, such Affiliate must have at least * of its
patients with Average Patient Hematocrits greater than or equal to *.
If such Affiliate meets these requirements for both quarters referenced
herein, such Affiliate will qualify for the Additional OHI Incentive.
If such Affiliate has at least * of its patients with Average Patient
Hematocrits greater than or equal to * for only one of the quarters
described above, such Affiliate will not qualify for the Additional OHI
Incentive. The Additional * incentive payment will be calculated as *
during the quarter beginning October 1, 1999 through December 31, 1999
and for the quarter beginning January 1, 2000 through March 31, 2000.
4. ELECTRONIC DATA INCENTIVE. Each Affiliate may be eligible to receive an
additional * incentive payment if certain data elements are transmitted
to Amgen electronically. The additional * will be calculated as a
percentage of each * during that quarter. In order to qualify for the
additional *, the following EPOGEN(R) Related Patient Data must be
submitted by all Affiliates in an electronic format acceptable to
Amgen: Facility ID, Patient ID, Draw Date, Hematocrit, Hemoglobin,
Transferrin Saturation, and Ferritin. Such EPOGEN(R) Related Patient
Data must be submitted, on a monthly basis, and no later than 30 days
after the end of each month. If such EPOGEN(R) Related Patient Data is
not submitted by any Affiliate for any given calendar quarter of the
second year of the Term, such Affiliate will not qualify for the
Electronic Data Incentive.
5. VOLUME PERFORMANCE INCENTIVE. Dialysis Center may qualify for the
Volume Performance Incentive ("VPI") as described below.
A. CALCULATION: Dialysis Center's VPI Will be calculated in accordance
with the following formula.
*
where
*
Estimated payments will be made quarterly using Amgen's discount
calculation policies, and the VPI will be reconciled at the end of the
Term.
Vesting: Dialysis Center's VPI will vest quarterly.
*Omitted information is the subject of a request for confidential treatment
pursuant to Rule 24b-2 under the Securities Exchange Act of 1934 and has been
filed separately with the Securities and Exchange Commission.
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Appendix B: List of Dialysis Center Affiliates
(See attached Contract List)
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To ensure you receive the appropriate discount it is important that we have your
current list of Authorized Wholesalers. The following list represents the
Wholesalers Amgen currently has associated with your contract. Please update the
list by adding or deleting Wholesalers as necessary,
Xxxxx Xxxxxx, Incorporated
0 Xxxxxx Xxxx Xxxxx
Xxxx Xxxxxxxxxx, XX 00000
Metro Medical Supply, Incorporated
0000 Xxxxxx Xxxx
Xxxxxxxxx, XX 00000
Priority Healthcare Corporation
Xxxxxxx Xxxxxxx Division
000 Xxxx Xxxxxxx Xxxxxxx, Xxxxx 0000
Xxxxxxxxx Xxxxxxx, XX 00000
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EXHIBIT #1
SAMPLE CERTIFICATION LETTER
Month X, 199X
FSDC Legal Name
Xxxxxx Xxxxxxx
Xxxx, XX Xxx
RE: Amgen Agreement No. XXXX)(X
Dear _____________________:
Thank you for your participation in the Optional Hematocrit/Hemoglobin Incentive
Program. In order for us to enroll you, we require that a duly authorized
representative of your organization sign the certification below.
Upon receipt of this executed document, we will calculate the value of your
incentive. If we do not receive the executed certification, we cannot provide
you with this incentive.
If you have any questions regarding this letter please contact me at (805)
000-0000. Thank you for your assistance in returning this certification.
Sincerely,
Xxxxx Xxxx
FSDC Market Segment Manager
CERTIFICATION:
On behalf of FSDC Legal Name and all eligible Affiliates participating in the
Optional Hematocrit/Hemoglobin Incentive Program under Agreement No. XXXXXX, the
undersigned hereby certifies that the hematocrit/hemoglobin data submitted for
each eligible Affiliate during this calendar quarter includes the required
hematocrit/hemoglobin results from all dialysis patients of such Affiliate, and
does not include hematocrit/hemoglobin results from non-patients. The party
executing this document also represents and warrants that it (i) has no reason
to believe that the submitted hematocrit/hemoglobin data is incorrect, and (ii)
is authorized to make this certification on behalf of all eligible Affiliates
submitting hematocrit/hemoglobin data.
FSDC LEGAL NAME
Signature:
--------------------------
Print Name:
--------------------------
Print Title:
--------------------------
Date:
----------------------------------
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EXHIBIT #2
Sample Notification Letter
Month X, 199X
Xxxxx Xxxx
FSDC Market Segment Manager
Amgen Inc,
Xxx Xxxxx Xxxxxx Xxxxx
Xxxxxxxx Xxxx, XX 00000
RE: Amgen Agreement No. XXXXXX
Dear Xx. Xxxx:
This letter serves as notification that FSDC Legal Name and all eligible
Affiliates participating in the Optional Hematocrit/Hemoglobin Incentive Program
under Agreement No. XXXXXX, will begin using hemoglobin test results as a
measurement of anemia as of Month X, 199X, and will begin submitting hemoglobin
test results rather than hematocrit test results for purposes of participating
in the Optional Hematocrit/Hemoglobin Incentive Program.
We understand that any discount under the Optional Hematocrit/Hemoglobin
Incentive Program will now be based solely on hemoglobin test results and that
hematocrit test results will no longer be accepted. We also understand that such
hemoglobin test results will be converted and applied to the same schedule,
requirements, and calculations described in the Optional Hematocrit/Hemoglobin
Incentive Program outlined in the Agreement,
Sincerely,
Name of Administrator
Title
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