EXHIBIT 10.94
RESPIRATORY THERAPY EQUIPMENT AGREEMENT
BY AND BETWEEN
AMERICAN PHARMACEUTICAL SERVICES, INC.
AND
1
RESPIRATORY THERAPY EQUIPMENT AGREEMENT
This Respiratory Therapy Equipment Agreement ("Agreement") is made and
entered into as of the first day of January 2001, by and between American
Pharmaceutical Services, Inc., a Delaware corporation ("APS"), and
_____________________, a __________ corporation doing business as
_____________________________________, located at
______________________________________________ ("Facility").
RECITALS
WHEREAS, the Facility is engaged in the operation of a nursing
facility;
WHEREAS, APS is in the business of selling and supplying equipment and
supplies related to the administration of respiratory therapy ("Respiratory
Therapy Equipment and Supplies") to residents of nursing, assisted living and
other long-term care facilities; and
WHEREAS, the parties hereto desire to enter into this Agreement with
respect to the provision of the equipment and supplies related to the
administration of respiratory therapy identified on Exhibit A hereto (the
"Respiratory Therapy Equipment and Supplies") and as set forth herein by APS to
the Facility and to the residents of the Facility ("Residents");
NOW, THEREFORE, for and in consideration of the foregoing recitals and
of the mutual promises contained in this Agreement the parties hereto hereby
agree as follows:
ARTICLE I
REPRESENTATIONS AND WARRANTIES OF APS
1.1 Necessary Licenses and Qualifications. APS represents and warrants
that it has and shall maintain for the term hereof all necessary
qualifications, certificates, approvals, permits and licenses required
pursuant to applicable federal, state and local laws and regulations
to provide the Respiratory Therapy Equipment and Supplies under this
Agreement.
1.2 Authority. APS represents and warrants that it has all necessary power
and authority to execute, deliver and perform this Agreement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF FACILITY
2.1 Necessary Licenses and Qualifications. Facility represents and
warrants that it has and shall maintain for the term hereof all
necessary qualifications, certificates, approvals, permits and
licenses required pursuant to applicable federal, state and local laws
and regulations to operate the Facility.
2.2 Authority. Facility represents and warrants that it has all necessary
power and authority to execute, deliver and perform this Agreement
with respect to the Facility.
2
2.3 Professional Management Responsibility. Facility hereby represents and
warrants that it retains professional management responsibility over
all services furnished hereunder, and retains all management and
administrative rights and responsibilities normally assumed by the
operator of a nursing facility.
ARTICLE III
APS SERVICES
APS shall provide the Respiratory Therapy Equipment and Supplies set
forth in this Article III to the Facility in compliance with the standards set
forth herein and as may be otherwise required by applicable law.
3.1 Respiratory Therapy Equipment and Supplies. APS shall provide
Respiratory Therapy Equipment and Supplies to Residents of Facility in
accordance with the order or prescription of each Resident's attending
physician. Additionally, APS shall provide Respiratory Therapy
Equipment and Supplies to the Facility described below:
(a) APS shall provide the Facility with an adequate supply of
cylinder oxygen to assure a safe supply for all the Residents
using oxygen.
(b) APS shall have support available for the Facility utilizing
Respiratory Therapy Equipment and Supplies provided by APS.
Such support shall include providing information and
instruction regarding the equipment provided to the Residents
receiving respiratory care.
3.2 APS General Service Requirements.
(a) APS agrees to provide all Respiratory Therapy Equipment and
Supplies pursuant to the terms of this Agreement Monday
through Friday during normal business hours and shall provide
on-call services twenty-four (24) hours per day, seven (7)
days per week throughout the calendar year.
(b) APS shall institute purchase order, invoice and product
shipment procedures to facilitate efficient and timely
ordering and delivery of Respiratory Therapy Equipment and
Supplies for use in connection with Residents. APS shall
arrange for the delivery of Respiratory Therapy Equipment and
Supplies at such time or times as are appropriate to
facilitate their use in the treatment of Residents for whom
the Respiratory Therapy Equipment and Supplies are ordered.
(c) APS shall provide to the Facility all forms APS deems
necessary for the proper execution of the Respiratory Therapy
Equipment and Supplies delivery system. Such forms include,
but shall not be limited to, order and re-order forms,
delivery receipt forms and communication orders.
(d) As permitted by applicable law, APS shall, from time to time,
make available to the Facility certain materials and
equipment necessary or appropriate for the ordering and
provision of the Respiratory Therapy Equipment and Supplies
3
provided hereunder. The materials and equipment so provided
may include, without limitation and as mutually agreed by the
parties hereto, telecommunications equipment, reference
books, films, slides, manuals and audio-visual equipment and
training aids. It is understood and agreed to by Facility
that all such items of material and equipment shall at all
times remain the property of APS and upon demand by APS shall
be returned to APS in their original condition subject to
normal wear and tear. Facility shall cause all such items to
be used solely in connection with the ordering or provision
of Respiratory Therapy Equipment and Supplies hereunder.
ARTICLE IV
FACILITY OBLIGATIONS WITH RESPECT TO SERVICES
In connection with the ordering and receipt of the Respiratory Therapy
Equipment and Supplies set forth in Article III, the Facility agrees that:
4.1 Resident Status. The Facility will notify APS as to the status of each
Resident regarding source of reimbursement for Respiratory Therapy
Equipment and Supplies and shall promptly notify APS as to changes of
reimbursement. Notification shall include the provision to APS of
copies of Medicare, Medicaid and insurance coverage cards.
4.2 Physician Orders. The Facility shall promptly notify APS regarding the
physician order for Respiratory Therapy Equipment and Supplies,
including any physician change orders.
4.3 Use of Material and Equipment Provided by APS. The Facility shall be
liable for, and shall indemnify and defend APS from and against, any
and all damages, costs, liabilities, expenses and losses, including,
without limitation, the cost of repairs or replacement, whatsoever
sustained or incurred as a result of casualty to or loss of, or the
misuse or otherwise improper use of, any and all material and
equipment provided by APS for the use of Facility in connection with
the provision of Respiratory Therapy Equipment and Supplies pursuant
to the terms hereof.
ARTICLE V
BILLING AND PAYMENT
5.1 Billing and Payment for Respiratory Services and Supplies.
(a) The payment rates applicable to the Respiratory Therapy
Equipment and Supplies provided hereunder shall be as set
forth in Exhibit A attached hereto.
(b) Except as provided to the contrary in Section 5.1(c) below,
APS shall xxxx Residents and third party payors with respect
to Residents, as appropriate, for all Respiratory Therapy
Equipment and Supplies provided by APS to Residents under
this Agreement. Other than as expressly provided for herein
to the contrary, Facility shall have no obligation to pay APS
or liability to APS in connection therewith with respect to
any and all amounts that may be billed by APS directly to
third party payors or Residents pursuant to applicable law.
4
(c) APS shall xxxx Facility, and Facility shall be liable for
payment, with respect to all Respiratory Therapy Equipment
and Supplies provided to Residents:
(1) for whom coverage is provided under Medicare Part A
at the time the Respiratory Therapy Equipment and
Supplies are provided hereunder;
(2) for whom coverage is provided under Medicare Part B
consolidated billing requirements in effect at the
time the Respiratory Therapy Equipment and Supplies
are provided hereunder;
(3) for whom coverage is provided under Medicaid payment
to Facility covering the Respiratory Therapy
Equipment and Supplies provided hereunder, or where
applicable federal or state law precludes direct
billing by APS of the Medicaid agency or the
Resident;
(4) for whom payment is made by a third party payor to
Facility pursuant to the terms of a contract
governing payment for the Respiratory Therapy
Equipment and Supplies provided hereunder.
5.2 Reimbursement Denial.
(a) In the event APS claims and receives payment from Facility
for Respiratory Therapy Equipment and Supplies which are
later disallowed or recouped by Medicare, Medicaid or other
third party reimbursement source, APS will repay Facility for
such disallowed or recouped amounts. At its option, subject
to the provisions of Section 5.2(b) below, Facility may
either offset the amounts disallowed or recouped from any
payment due to APS or may require APS to immediately repay
Facility for the amount disallowed or recouped.
(b) In the event of a denial or disallowance received by the
Facility, the Facility will be responsible for notifying APS
within seven (7) business days and shall communicate the
exact nature of the denial or request for medical necessity
information.
(c) APS shall furnish to Facility all information necessary to
support and substantiate the claim for payment.
(d) Facility shall have sole discretion as to any election to
appeal, settle or compromise the amount that is disallowed or
recouped by Medicare, Medicaid or other third party
reimbursement source.
5.3 Monthly Billing and Payment. APS shall xxxx Facility on a monthly
basis by the fifth (5th) working day of each month for Facility
charges incurred during the past month. Facility shall pay APS within
thirty (30) days of receipt of an invoice from APS. All
5
amounts past due by more than thirty (30) days shall bear interest at
the rate of one and one-half percent (1.5%) per month, or the maximum
monthly rate of interest permitted by applicable law, whichever is
less.
ARTICLE VI
TERM AND TERMINATION
6.1 Term. The initial term of this Agreement shall commence on the date
first written above and shall continue for a period of one (1) year.
Thereafter, this Agreement shall automatically renew for successive
one (1) year terms, and during any such renewal term either party
shall have the right to terminate this Agreement without cause by
providing to the other party not less than thirty (30) days prior
written notice of termination.
6.2 Termination.
(a) This Agreement shall automatically terminate with respect to
the Facility upon the revocation or cancellation of the
Facility's license or certification.
(b) Upon the suspension of the Facility's license or
certification, APS shall have the right to terminate this
Agreement immediately upon written notice to Facility.
(c) If either party should materially fail to fulfill its
obligations or conditions set forth herein and such default
shall not be cured within thirty (30) days after written
notice from the other party specifying the nature of default,
the aggrieved party shall have the right to terminate this
Agreement by giving written notice of termination to the
defaulting party, and this Agreement shall terminate on the
thirtieth (30th) day after such notice is given. Either party
shall have the right to cure any such default up to, but not
after, the giving of such notice of termination.
(d) This Agreement may be terminated pursuant to the terms of
Section 8.10(b).
ARTICLE VII
RECORDS
7.1 Patient Records. APS shall maintain accurate patient records, adequate
to meet the needs of various sources of payment for patient services
(payors) from which the Facility may submit bills and expect payments.
Records shall be maintained of the Respiratory Therapy Equipment and
Supplies supplied to each Resident, in accordance with the directions
for the Resident's attending physician and the Facility.
Notwithstanding the foregoing, the production of medical records shall
remain the responsibility of the Facility.
7.2 Government Access to Records. APS and its subcontractors shall make
available, upon written request from the Secretary of the U.S.
Department of Health and Human Services, or the Comptroller General of
the United States General Accounting Office, or any of their duly
authorized representatives, this Agreement, and the books, documents
and records of APS that are necessary to verify the extent of costs
incurred by Facility with
6
respect to providing services under this Agreement for four (4) years
thereafter the provision of such services.
7.3 APS Access to Records.
(a) The Facility shall give APS reasonable access to all resident
records, facilities and supplies necessary for the
performance of its duties herein.
(b) In the event of any dispute arising from any claim or xxxx
submitted by APS, Facility shall give APS access to all
reasonable and necessary documents and records to investigate
the accuracy of the claim. Such access shall be during normal
business hours following reasonable advance notice from APS.
ARTICLE VIII
MISCELLANEOUS
8.1 Freedom of Choice. Each Resident shall have the express right to
purchase and obtain Respiratory Therapy Equipment and Supplies from
the vendor or supplier of his or her choice, from time-to-time and at
any time during the term hereof; provide, however that the Facility
shall whenever possible use APS as its primary vendor, in all cases
where an individual resident does not make a request for the services
of another vendor.
8.2 Independent Contractors. In the performance by each party hereto of
their respective obligations hereunder, the parties shall at all times
hereunder be deemed to be independent contractors, and not the agent
of the other. Except to the extent expressly provided for herein to
the contrary, neither party shall have the right or power to bind the
other.
8.3 Insurance.
(a) APS shall maintain, during the term of this Agreement,
liability insurance coverage for its acts and omissions in
amounts of no less than one million dollars per claim and
three million dollars annual aggregate. Prior to the
commencement of this Agreement, APS shall provide to Facility
a certificate of insurance indicating that such coverage is
in effect and providing that Facility will be notified at
least thirty (30) days prior to any modification,
cancellation, reduction or non-renewal of such coverage. Any
substantial change in coverage that might adversely affect or
actually materially adversely affects Facility shall be a
breach of this Agreement.
(b) Facility shall maintain, during the term of this Agreement,
liability insurance coverage for its acts and omissions in
amounts of no less than one million dollars per claim and
three million dollars annual aggregate. Prior to the
commencement of this Agreement, Facility shall provide to APS
a certificate of insurance indicating that such coverage is
in effect and providing that APS will be notified at least
thirty (30) days prior to any modification, cancellation,
reduction or non-renewal of such coverage. Any substantial
change in coverage that might
7
adversely affect or actually materially adversely affects APS
shall be a breach of this Agreement.
8.4 Indemnification.
(a) Facility shall defend, indemnify, protect and hold harmless
APS and its affiliates, and the officers, directors,
employees and agents of each of them, from and against any
and all liability, obligation, damage, loss, cost, claim,
judgment, settlement, expense or demand whatsoever, of any
kind or nature, including reasonable attorneys fees and
defense costs in connection therewith, arising directly or
indirectly from actions taken or omissions made by Facility
in its performance under this Agreement.
(b) APS shall defend, indemnify, protect and hold harmless
Facility and its affiliates, and the officers, directors,
employees and agents of each of them, from and against any
and all liability, obligation, damage, loss, cost, claim,
judgment, settlement, expense or demand whatsoever, of any
kind or nature, including reasonable attorneys fees and
defense costs in connection therewith, arising directly or
indirectly from actions taken or omissions made by APS or its
affiliates in its performance under this Agreement.
8.5 Governing Law. Disputes arising under this Agreement shall be governed
according to the internal laws of the State of ____________, without
regard to the conflicts of laws provisions thereof.
8.6 Compliance with Applicable Law. In all aspects relative to the
performance of their respective obligations under this Agreement, both
parties shall conduct their respective businesses in accordance with
applicable law.
8.7 Successors and Assigns. This Agreement shall be binding upon either
party's purchasers, transferees, successors and assigns, whether by
operation of law or otherwise, including but not limited to the sale
of the stock, assets or any other ownership interest of a party hereto
to another, or the merger or consolidation of a party hereto into
another, or any transaction by which a party to this Agreement
transfers its business to another as to which the duties and
obligations provided for under this Agreement by either or both
parties hereto arise.
8.8 Waiver of Breach. The waiver of any breach of this Agreement by either
party shall not constitute a continuing waiver or a waiver of any
subsequent breach of either the same or any other provision of this
Agreement.
8.9 Notices. Any notice or other communication made or contemplated to be
made under this Agreement shall be in writing and shall be deemed to
have been received by the party to whom it is addressed on the date of
delivery, if delivered by hand, or three (3) business days after it is
deposited in the United States Mail, postage prepaid, return receipt
requested, or the next business day after it is transmitted by Federal
Express or similar overnight delivery services, addressed, in the case
of APS to:
8
American Pharmaceutical Services, Inc.
0000 X. Xxxxx Xxxx, Xxx. 000
Xxxxxxxxxx, Xxxxxxxx 00000
Attn: President
with a copy to:
American Pharmaceutical Services, Inc.
0000 X. Xxxxx Xxxx, Xxx. 000
Xxxxxxxxxx, Xxxxxxxx 00000
Attn: General Counsel
and in the case of Facility to:
-----------------------------------
-----------------------------------
-----------------------------------
Attn: Administrator
Either party may change its address for notices given hereunder by
giving fifteen (15) days prior written notice in accordance with this
Section 8.9.
8.10 Entire Agreement; Amendments.
(a) This Agreement, together with all Exhibits hereto, which are
incorporated herein and made a part hereof by this reference,
constitutes the entire Agreement between the parties hereto
and supersedes and cancels any other prior agreements or
understandings whether written, oral or implied. This
Agreement may not be amended except by an instrument in
writing signed by both the parties hereto.
(b) In the event of any material change in statutes, regulations,
or enforceable governmental policies applicable to either
party's obligations arising under this Agreement, or in the
event of the severance of any provision hereof pursuant to
Section 8.11, and either party is materially and adversely
affected thereby so as to materially diminish the benefits of
this Agreement reasonably intended by such affected party,
such affected party may provide notice of such material
adverse effect to the other, and request that this Agreement
be amended to resolve such material adverse effect. The
parties shall then be obligated to engage in good faith
negotiations in an attempt to agree upon an acceptable
amendment to this Agreement for the purpose of resolving the
material adverse effect. If the parties fail to agree to
amend this Agreement within thirty (30) days after receipt of
notice of material adverse effect, the affected party may
terminate this Agreement at any time thereafter, upon notice
given to the other party.
8.11 Severability. The invalidity or unenforceability of any term or
provision hereof shall not affect the validity or enforceability of
any other term or provision hereof.
9
8.12 Section Headings. The section headings contained in this Agreement are
for reference purposes only and shall not affect the construction of
this Agreement.
8.13 Nondiscrimination. APS shall provide all Respiratory Therapy Equipment
and Supplies and otherwise perform all of its duties and
responsibilities hereunder without unlawful discrimination on the
basis of race, color, religion, national origin, sex ancestry,
disability or any other basis protected by law.
[SIGNATURE PAGE FOLLOWS]
* * *
10
IN WITNESS WHEREOF, the parties have executed this Agreement in
multiple counterparts, each of which shall be deemed to be an original, and all
of which together shall constitute this Agreement, effective as of the date
first written above.
AMERICAN PHARMACEUTICAL SERVICES, INC.
By:
------------------------------------
Xxxxx X. Xxxxxx
Its: Vice President
Date: February ___, 2001
FACILITY
By:
------------------------------------
Xxxxxxx X. Xxxxx
Its: Vice President
Date: February ___, 2001
11
EXHIBIT A
RESPIRATORY THERAPY EQUIPMENT, SUPPLIES AND PAYMENT RATES
Respiratory Equipment
Air Compression (50 psi) $2.50 / day ($75.00 per month cap)
BiPAP $20.00 / day ($400.00 per month cap)
Concentrator $4.00 / day ($90.00 per month cap)
CPAP $7.00 / day ($175.00 per month cap)
IPPB $3.00 / day
Oxygen Analyzer $60.00 / month
Pulse Oximeter $75.00 / month
Suction Machine $1.20 / day
Treatment Nebulizer $1.00 / day
12
GASEOUS OXYGEN PRODUCTS
Gaseous Oxygen
"D" Cylinder Contents $8.00 / each
"E" Cylinder Contents $10.00 / each
"M" Cylinder Contents $12.00 / each
"H" Cylinder Contents $14.00 / each
Gaseous Equipment Rental
"D" Cylinder Demmurge $3.00 / each
"E" Cylinder Regulator $12.00 / month
"E" Cylinder Cart $11.00 / month
"E" Cylinder Demmurge $3.00 /each
"E" Cylinder Rack (6) $15.00 / month
"E" Cylinder Rack (12) $20.00 / month
"M" Cylinder Demmurge $5.50 / each
"H" Cylinder Regulator $12.00 / month
"H" Cylinder Dolly $20.00 / month
"H" Cylinder Demmurge $5.50 / each
Oxygen Delivery Fee
An emergency delivery charge per delivery based upon documented charges from
third party contractors may be passed on to the Facility.
Additional
APS will provide medical gas obtained by an oxygen vendor that is in compliance
with the FDA procedures. APS will obtain medical gas that is prepared in
accordance with purity standards of the United States Pharmacopoeia (USP).
13
LIQUID OXYGEN PRODUCTS
LIQUID OXYGEN CONTENTS
Stationary Unit - Liquid Contents $0.95 / lb
VGL Contents - Used for Stationary Refills $100.00 / VGL Unit
VGL Contents - Used for Piped in Oxygen $100.00 / VGL Unit
RESERVOIRS RENTAL
Liquid Stationary Unit $35.00 / month
Liquid Portable Unit $25.00 / month
VGL Reservoir - Used for Stationary Refills $45.00 / month
VGL Reservoir - Used for Piped in Oxygen $45.00 month
LIQUID BULK SYSTEM
Bulk Cryogenic Vessel see below
Liquid Bulk Content see below
APS will assist the Facility with requirements justifying the installation of a
bulk cryogenic vessel on-site. The Facility will assume the responsibility for
the installation of an exterior "Bulk Liquid Cryogenic Vessel" if the Facility
so desires this type of oxygen delivery. APS will assist the Facility to
acquire expert advice for the layout and cost of such unit. The Facility will
be responsible for securing an adequate area to accommodate the unit/units and
manifold. The Facility will retain the responsibility for acquisition of a
cement base and the installation of appropriate fencing to secure the liquid
equipment and its contents. The cost of the bulk cryogenic vessel and bulk
liquid oxygen contents will be determined at that time. APS will arrange for
the transfilling of bulk liquid oxygen contents by using an oxygen vendor that
maintains standards in accordance with DOT regulations, maintains astringent
guidelines established by the Compressed Gas Association (CGA), and the FDA.
Oxygen Delivery Fee
An emergency delivery charge per delivery based upon documented charges from
third party contractors may be passed on to the Facility.
Additional
APS will provide cryogenic oxygen obtained by an oxygen vendor that is in
compliance with the FDA procedures. APS will obtain cryogenic oxygen that is
prepared in accordance with purity standards of the United States Pharmacopoeia
(USP). After receiving oxygen from the oxygen vendor, any Facility that
transfills cryogenic oxygen from a Liquid Oxygen System, to a Cryogenic Home
Vessel (CHV), a liquid stationary unit, will assume all responsibility for
maintaining FDA requirements, regulations, and documentation. APS does not
assume responsibility for any Facility transfilling liquid oxygen.
14
PREVENTATIVE MAINTENANCE
PREVENTATIVE MAINTENANCE ACTIVITY
Preventative Maintenance on all APS-owned equipment Included in monthly rental fee
Preventative Maintenance on Facility-owned equipment in $10.00/modality/month plus APS'
buildings where the Facility is not utilizing a cost plus 25% on parts and filters
portion of APS' Respiratory Program (Facility
monthly invoice greater than $500.00)
Preventative Maintenance on Facility-owned equipment in $20.00/modality/month plus APS' cost
buildings where the Facility is not utilizing plus 25% on parts and filters
APS' Respiratory Program (Facility monthly invoice
less than $500.00)
Monthly Preventative Maintenance reports on all APS-owned Included in monthly
rental fee equipment (sorted by region and Facility)
Monthly Preventative Maintenance reports on all $10.00 per month
Facility-owned equipment (sorted by region and Facility)
Maintenance/Repair
- APS personnel will provide preventative maintenance on Facility-owned
items as requested.
- APS will maintain documentation for preventative maintenance performed
as requested.
- Costs to repair Facility-owned equipment will include parts,
accessories, and labor. These are additional charges to the Facility.
- Repair costs will appear on the Facility invoice.
MISCELLANEOUS
Reimbursement Denials
- Subject to the provisions of Section 5.2 of this Agreement but
notwithstanding the provisions of Section 5.2(d) of this Agreement,
APS may request and Facility shall permit APS to further appeal a
disallowance or recoupment under the circumstances described in
Section 5.2.
15
