EXHIBIT 10.56
Note: Certain portions of this exhibit have been omitted and filed separately
with the Securities and Exchange Commission pursuant to a Request for
Confidential Treatment.
ADMINISTRATIVE SERVICE PROVIDER CONTRACT
FOR MEDICARE GLOBAL RISK SERVICES
This Administrative Provider Service Contract (the
"Agreement") is made as of this 30th day of September, 1997 ("Effective Date"),
by and between NYLCare Health Plans of the Mid-Atlantic, Inc. ("NYLCare
Mid-Atlantic"), a Maryland corporation licensed to operate as a health
maintenance organization ("HMO") and Doctors Health, Inc. ("Doctors Health"), a
Maryland corporation organized to arrange for the provision of health services
and medical management services.
WHEREAS, NYLCare Mid-Atlantic is a licensed HMO authorized to
market the NYLCare Mid-Atlantic medicare risk product known as NYLCare 65 in the
State of Maryland, the Commonwealth of Virginia, and in the District of
Columbia;
WHEREAS, NYLCare Mid-Atlantic arranges for the provision of
certain health services to persons enrolled in NYLCare 65 by contracting
directly, or through intermediaries, with physicians, hospitals, and other
health care practitioners and entities (the "NYLCare Mid-Atlantic Network");
WHEREAS; NYLCare Mid-Atlantic has concluded that it is
necessary, desirable, and convenient in the operation of NYLCare 65 to enter
into this Agreement in order to provide medical services to persons enrolled in
NYLCare 65;
WHEREAS, Doctors Health contracts directly or through
intermediaries with payors, employers, insurers, health maintenance
organizations, sponsors and others to arrange for or administer the provision of
health care services, including hospital services;
WHEREAS, Doctors Health contracts directly or through
intermediaries with physicians, hospitals, and other health care practitioners
and entities, to provide, arrange for or administer the delivery of such health
care services (the "Doctors Health Network"); and
WHEREAS, Doctors Health desires, pursuant to the terms and
conditions set forth herein, to arrange for the provision of medical services to
NYLCare Mid-Atlantic and NYLCare 65 Enrollees.
NOW, THEREFORE, NYLCare Mid-Atlantic and Doctors Health agree
as follows:
1.0 DEFINITIONS
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For purposes of this Agreement, the following terms shall have
the meanings specified below:
1.1 Adjusted Average Per Capita Cost (AAPCC) means the methodology
used to develop the premium rate paid to health maintenance
organizations by the Federal government for Medicare
recipients in a given geographic region.
1.2 Affiliate means a corporation or other legal entity related by
common ownership, management, or control.
1.3 Agreement means this Agreement.
1.4 Capitated Services means those Covered Services which are
provided or arranged by Participating Providers in exchange
for a fixed monthly payment per Enrollee.
1.5 Copayment means a fixed amount that an Enrollee is required to
pay for any one of certain Covered Services pursuant to the
Health Plan.
1.6 Covered Services means those health care services:
(a) for which benefits are provided
pursuant to the terms of the NYLCare 65 Medicare
Health Plan; and
(b) which are Medically Necessary.
1.7 Deductible means the amount that an Enrollee must pay for
Covered Services per specified period in accordance with the
Enrollee's Health Plan before benefits will be paid.
1.8 Doctors Health means Doctors Health, Inc., a Maryland
corporation, engaged in the managed care and physician
practice management business.
1.9 Doctors Health Network means the network of Participating
Providers under agreements with Doctors Health.
1.10 Doctors Health Physicians means those Participating Providers
who, directly or indirectly, have agreed to participate with
Doctors Health in the provision of health care services to
Enrollees.
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1.11 Doctors Health Repricing Group means the Doctors Health employees assigned
to and physically located at the administrative offices of NYLCare Mid-Atlantic
and who perform the functions described in Section 2.16.2(3) of this Agreement.
1.12 Emergency Services means:
(a) inpatient or outpatient Covered Services that are
needed immediately due to an injury or sudden illness
and which may be rendered by a Participating Provider
or, when the time required to reach a Participating
Provider would mean permanent damage to the
Enrollee's health, a non-Participating Provider; or
(b) those Covered Services defined to be Emergency
Services by applicable statutes or regulations.
1.13 Enrollee or Member means a person who is eligible for coverage
is enrolled in NYLCare 65 because the person is eligible for
benefits under Title XIII of the Social Security Act, and is
covered under a Medicare risk contract between NYLCare
Mid-Atlantic and HCFA to provide services to persons receiving
benefits.
1.14 HCFA means the Health Care Financing Administration.
1.15 Health Plan means NYLCare 65 benefit plan.
1.16 Initial Term means the first thirty-six (36) months of the
Agreement.
1.17 Medically Necessary means that the service:
(a) is required for the diagnosis, treatment, or
prevention of an illness or injury, or a medical
condition such as pregnancy;
(b) could not be omitted without adversely affecting
the Enrollee's condition;
(c) is generally accepted as safe and effective
treatment under standard medical practice in the
community where the service is rendered;
(d) is provided in the most cost-efficient manner
that is consistent with an appropriate level of care;
and
(e) is not primarily for the convenience of the
Member or Provider.
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1.18 Out-of-Area Urgent Services means services that:
(a) are needed urgently by an Enrollee while he or
she is outside the Service Area, the need for which
could not reasonably have been anticipated before the
Enrollee left the Service Area; and
(b) cannot safely be postponed until the Enrollee can
return to the Service Area to obtain care from or
through his or her Participating PCP.
Out-of-Area Urgent Services do not include services provided
by non-Participating Providers after the point at which the
Enrollee could safely be transferred to the care of a
Participating Provider.
1.19 Participating Hospital means a hospital which has entered into
an agreement with Doctors Health to provide or arrange for the
provision of Covered Services to Enrollees in the Doctors
Health Service Area.
1.20 Participating Physician means a physician who has directly
or indirectly agreed to provide or arrange for the
provision of Covered Services to Enrollees through
Doctors Health. Participating Physicians include
Participating Primary Care Physicians and Participating
Specialist Physicians.
1.21 Participating Primary Care Physician ("PCP") means a
Participating Physician:
(a) whose practice is primarily family medicine,
internal medicine, or general pediatrics, or who is
otherwise designated as a PCP by Doctors Health; and
(b) who has agreed to provide primary care services
and to coordinate and manage certain Covered Services
for Enrollees who have selected or been assigned to
such Participating Primary Care Physician.
1.22 Participating Provider means a Provider who has entered,
directly or indirectly, provide or arrange for the
provision of Covered Services to Enrollees through
Doctors Health. Participating Providers include, without
limitation, Participating Hospitals, Participating
Physicians, and ancillary practitioners and facilities.
1.23 Participating Specialist means a Participating Physician who
has been credentialed as a Specialist Physician in one or more
designated medical specialties.
1.24 Parties means Doctors Health and NYLCare Mid-Atlantic.
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1.25 Party means either Doctors Health or NYLCare Mid-Atlantic.
1.26 Payor means an employer, insurer, managed care organization,
labor union, state or federal agency, trust, or other person
or entity which has agreed to be responsible for funding
benefit payments, or otherwise paying, for Covered Services
provided to Enrollees under the terms of a health plan.
NYLCare Mid-Atlantic is the applicable Payor for NYLCare 65.
1.27 Policies and Procedures means all of NYLCare Mid-Atlantic's
policies, procedures, and rules, including but not limited to
the Provider Manual, as revised and amended from time to time,
but as it relates to the Health Plan or adversely effects
Doctors Health, only with the prior written consent of Doctors
Health.
1.28 Premium means the applicable AAPCC adjusted annually by HCFA,
plus any subscriber or employer premiums.
1.29 Provider means a duly licensed or certified health
care professional or health care facility.
2.0 OBLIGATIONS OF NYLCARE
2.1 Administration of Agreement. NYLCare Mid-Atlantic agrees to
perform or have performed all necessary accounting, marketing,
enrollment, information management, data reporting and other
functions appropriate to the administration of NYLCare
Mid-Atlantic and this Agreement. However, the internal
administrative tasks of Doctors Health necessary to support
their responsibilities under this Agreement and all functions
relating thereto shall be performed by Doctors Health.
Allowance for administrative costs have been excluded from the
capitation payment set forth in Attachment B. The parties
understand that certain duties and obligations of NYLCare
Mid-Atlantic may, to the extent permitted by law, be assigned
by NYLCare Mid-Atlantic to one or more network managers, any
one of whom may be Doctors Health or an Affiliate of Doctors
Health.
2.2 Benefit Determinations. NYLCare Mid-Atlantic retains authority
and responsibility, after appropriate consultation with
Doctors Health, to make all final benefit determinations. All
communication to Enrollees regarding benefit determinations,
bills, and other matters relating to NYLCare Mid-Atlantic
shall be made by NYLCare Mid-Atlantic. All benefit
determinations and communications with Enrollees shall be made
by NYLCare Mid-Atlantic in a timely fashion.
2.3 Medical Services - Exclusive Domain of Doctors Health
Providers. NYLCare Mid-Atlantic agrees not to intervene in any
manner in the rendition of medical service by Doctors Health's
Participating Providers, and nothing contained herein
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shall interfere with the professional relationship between
Enrollee and his/her Physician. Under no circumstances shall a
decision by NYLCare Mid-Atlantic to deny benefits be
deemed an interference with the relationship between a
NYLCare Mid-Atlantic Enrollee and his/her Participating
Physician.
2.4 Collection of Premiums and Other Income. NYLCare Mid-Atlantic
agrees to collect all premiums and other items of income to
which NYLCare Mid-Atlantic is entitled, except for any
copayments which may be required of Enrollees at the time of
service. Such copayments, if any, will be collected by
Participating Providers when medical services requiring
copayments are rendered. Cancellation of enrollment for
persons who fail to make copayments will be at the discretion
of NYLCare Mid-Atlantic. NYLCare Mid-Atlantic agrees to give
consideration to recommendations by Doctors Health related to
disenrollment.
2.5 Compensation to Doctors Health. The amount and conditions of
all compensation to be paid to Doctors Health by NYLCare
Mid-Atlantic during the term of this Agreement are set forth
in Attachment B annexed hereto.
2.6 NYLCare Mid-Atlantic Network. NYLCare Mid-Atlantic shall have
and retain the right, to the extent that it is not
inconsistent with this Agreement, to administer its network of
Participating Providers, including, without limitation:
(a) designating each Participating Physician as a
Participating PCP or Participating Specialist
pursuant to any request from Doctors Health which is
in accordance with NCQA standards;
(b) granting direct access to its network of
Participating Providers to Payors or other entities
that offer or administer Health Plans;
(c) establishing subsets of the network of
Participating Providers for specific Covered
Services; and
(d) enforcing compliance by its Participating
Providers with the terms and conditions of their
provider agreements.
2.7 Administrative Services. NYLCare Mid-Atlantic shall directly
or indirectly provide all of the following administrative
services, which it may assign or delegate to one or more
network managers:
(a) Serving as a direct resource to enrollees, which
shall include but not limited to, administering
NYLCare Mid-Atlantic's standard Medicare appeals and
grievances process;
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(b) Generating Participating Provider directories;
(c) Defining standards for professional liability
insurance and credentialing;
(d) Approving the credentialing of all Participating
Providers in accordance with NCQA standards;
(e) Generating Provider Manuals; and
(f) Performing all TPA functions, including, but not
limited to, claims administration as set forth in and
limited by Section 2.16, claims payments to
providers, claims adjudication, enrollee and provider
services, and network contracting, unless such
functions, or any part of them, are assigned by
NYLCare Mid-Atlantic to one or more network managers,
any one of whom may be Doctors Health or an affiliate
of Doctors Health.
2.8 Public and Governmental Relations. NYLCare Mid-Atlantic shall
be solely responsible for the advertising and promotion,
public relations and governmental requirements relating to
this Agreement, specifically including assuring compliance
with applicable laws and regulations relating to the
organization and operation of the HMO. Such requirements shall
include the satisfaction of all reporting requirements to
State and Federal agencies and organizations insuring the
solvency of the HMO. Doctors Health shall provide NYLCare
Mid-Atlantic with all necessary information on a timely basis
to meet such requirements and otherwise fully cooperate in
assuring ongoing compliance with operational and reporting
requirements of regulatory agencies. Nothing in this paragraph
shall prohibit Doctors Health from advertising and promoting
its services to the public.
2.9 NYLCare Mid-Atlantic's Professional Liability and Other
Insurance. NYLCare Mid-Atlantic, at its sole cost and expense,
shall procure and maintain such policies of general liability
and professional liability insurance and other insurance as
shall be necessary to insure NYLCare Mid-Atlantic and its
employees against any claim or claims for damages arising by
reason of personal injuries or death occasioned directly or
indirectly in connection with the performance of any service
by NYLCare Mid-Atlantic, the use of any property and
facilities or equipment provided by NYLCare Mid-Atlantic, and
the activities performed by NYLCare Mid-Atlantic in connection
with this Agreement. Memoranda of the above insurance
policies, as well as all reinsurance and insolvency policies,
if any, shall be provided to Doctors Health upon Doctors
Health's request. NYLCare Mid-Atlantic shall notify Doctors
Health of any malpractice claims against NYLCare Mid-Atlantic
initiated by Enrollees who have selected Doctors Health as
their primary provider of care.
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2.10 Monthly Listing. NYLCare Mid-Atlantic shall submit to Doctors
Health each month a report listing the names of Enrollees who,
as of the first (1st) calendar day of the month, have
selected, or are assigned to, any Doctors Health Primary Care
Physician as their Primary Care Physician.
2.11 Members List. NYLCare Mid-Atlantic shall arrange for the
provision of appropriate identification cards to Enrollees,
which shall include a toll-free number that shall be used
twenty-four (24) hours per day, seven (7) days per week, to
determine an Enrollee's eligibility to receive Covered
Services and to obtain general information about the scope of
Covered Services under the Health Plan. Notwithstanding the
foregoing, NYLCare Mid-Atlantic and Doctors Health may
mutually agree upon other reasonable mechanisms or procedures
to permit Doctors Health Participating Physicians to verify
eligibility of Enrollees, such as electronic connectivity.
2.12 Benefit Statements. NYLCare Mid-Atlantic will from time to
time provide Doctors Health with a concise summary benefit
description for the Health Plan. The summary statement will
identify Covered Services, any and all copayments, deductibles
or other charges and payments, and all exclusions, limitations
or conditions applicable to Covered Services. Summary
statements will be replaced or updated if modifications or
amendments are made in the agreements to which they relate.
NYLCare Mid-Atlantic will supply Doctors Health with copies of
the group and individual Enrollee agreements and any and all
amendments, modifications and revisions thereto to which the
summary statements relate.
2.13 Utilization Reports. NYLCare Mid-Atlantic agrees to provide
Doctors Health with information relevant to Doctors Health
generated by NYLCare Mid-Atlantic's management information
systems upon request by Doctors Health. Doctors Health shall
from time to time provide a list of requested monthly or other
reports to NYLCare Mid-Atlantic periodically and NYLCare
Mid-Atlantic shall use best efforts to provide such reports
without cost to Doctors Health by the tenth (10th) day of each
month.
2.14 Facilities List. NYLCare Mid-Atlantic agrees to provide
Doctors Health with a list of approved health care providers,
hospitals, skilled nursing facilities, home health agencies,
hospices and other health care facilities, which list shall be
amended from time to time as necessary or appropriate. Said
list is attached hereto as Attachment 2.14. The parties
recognize that Doctors Health may use these and additional
other facilities in order to perform their obligations under
this Agreement.
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2.15 Licensure and Accreditation. NYLCare Mid-Atlantic shall
throughout the term of this Agreement maintain all licenses
and accreditations.
2.16 Claims Administration.
2.16.1 Claims Payments. NYLCare Mid-Atlantic is solely
responsible for making payments for any and all
claims for non-capitated Covered Services in
cooperation with Doctors Health and otherwise in
accordance with the procedures in this Section
2.16. Claims payments to Participating Providers
for non-capitated Covered Services, processed and
approved strictly in accordance with this
Section 2.16, shall be made by NYLCare
Mid-Atlantic and then deducted from the
compensation due Doctors Health under Section 2.5 of
this Agreement subject to all of the conditions
set forth in subparagraph 2.16.3 below.
2.16.2 Claims Submission, Review and Disposition.
(1) Participating Providers shall submit
claims to NYLCare Mid-Atlantic for
non-capitated Covered Services rendered to
Members. Each Participating Provider shall
submit such claims in accordance with the
Policies and Procedures.
(2) NYLCare Mid-Atlantic shall review all
claims for non-capitated Covered Services to
Enrollees by Participating Providers and
make an initial determination:
(a) whether the Enrollee is eligible
under the Health Plan;
(b) whether the Participating
Provider provided the Enrollee
with a Covered Service;
(c) whether the Covered Service was
authorized by Doctors Health in
accordance with Doctors Health
policies and procedures in effect,
and provided to NYLCare
Mid-Atlantic, and as amended from
time to time in the sole discretion
of Doctors Health (the "Doctors
Health Policies and Procedures");
and
(d) whether, for bundled claims
submitted by hospitals or other
institutional providers, the Covered
Service was authorized by Doctors
Health in the form it was submitted
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and, if not, to determine the
correct manner in which the claim is
to be unbundled or deoptimized.
(3) NYLCare Mid-Atlantic shall give
preliminary approval or denial to a claim
processed under Section 2.16.2(2) above
within ten (10) calendar days of receipt of
the claim. NYLCare Mid-Atlantic shall then
transfer all claims which receive their
preliminary approval directly to the Doctors
Health Repricing Group. Upon receipt of a
transferred claim, the Repricing Group shall
then have ten (10) calendar days to make the
following determinations:
(a) whether the Covered Service was
authorized by Doctors Health in
accordance with the Doctors Health
Policies and Procedures;
(b) if the claim is a bundled claim,
whether the claim has been unbundled
or deoptimized in accordance with
the Doctors Health Policies and
Procedures and, if not, the correct
manner in which the claim is to be
unbundled or deoptimized; and
(c) setting the price for the
Covered Service as the lowest of the
NYLCare Mid-Atlantic rate, the
Medicare rate, or the Doctors Health
rate.
(4) Doctors Health shall, once it has made
the determinations set forth in Section
2.16.2(3)(a)-(c) above, transfer the claim
back to NYLCare Mid-Atlantic with one of the
following designated actions which shall be
followed by NYLCare Mid-Atlantic:
(a) The claim is approved for
payment at the price set in
Section 2.16.2(3)(c) above for a
Participating Provider;
(b) The claim is denied because the
Covered Service was not authorized
by Doctors Health in accordance with
the Doctors Health Policies and
Procedures; or
(c) The claim is approved in part at
the price set in Section
2.16.2(3)(c) and denied in part in
accordance withthe unbundling and
deoptimizing rules set forth in the
Doctors Health Policies and
Procedures, and applied to the
submitted claim.
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2.16.3 Payment of Approved Claims. NYLCare Mid-Atlantic
shall make timely payment for all approved claims
in the amount approved by Doctors Health, in
accordance with the provisions of Section 2.16.2(4)
above, and in accordance with applicable law and
regulation. The total payments on such claims
made to Participating Providers by NYLCare
Mid-Atlantic in any calendar month shall be deducted
from the compensation due to be paid to Doctors
Health under Section 2.5 on the tenth (10th)
day of the following month. In the event that the
total amount for claims paid by NYLCare
Mid-Atlantic exceeds the total compensation due to
be paid to Doctors Health for that month, then
NYLCare Mid-Atlantic shall invoice Doctors Health
for the balance due and Doctors Health shall pay
NYLCare Mid-Atlantic within sixty (60) days of the
date of receipt of the invoice.
2.16.4 Special Representations of NYLCare Mid-Atlantic.
NYLCare Mid-Atlantic represents that it will
perform all of its obligations related to
claims administration in a commercially reasonable
manner, strictly in accordance with the terms and
conditions of this Section 2.16, and strictly in
accordance with the applicable standards in the
health care industry for the timely
adjudication and payment of claims. Any
penalties, including interest payments required by
applicable law, associated with the failure to pay
claims in a timely fashion and within the
periods required by applicable law, shall be borne
by NYLCare Mid-Atlantic and not Doctors Health. At
any time during the Initial Term of this
Agreement, when conditions warrant, Doctors
Health may make one or more of the following
determinations, using its discretion reasonably
applied, that NYLCare Mid-Atlantic has:
(a) failed to demonstrate the ability or the
capacity to perform all of its obligations
related to claims administration in
accordance with the terms and conditions of
this Agreement; or
(b) failed to demonstrate the ability or the
capacity to perform all of its obligations
related to the timely adjudication and
payment of claims in the manner required or
contemplated by applicable law or otherwise
in a commercially reasonable manner; or
(c) failed to demonstrate the ability or
the capacity to perform all of its
obligations related to the timely
adjudication and payment of claims in
accordance with the applicable standards
in the health care industry.
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2.16.5 Special Rights of Doctors Health. In the event
that Doctors Health makes one or more of the
determinations set out in Section 2.16(4)(a)(b) or
(c) above, and NYLCare Mid-Atlantic, within ten
(10) days of receiving written notice of the
determination from Doctors Health, agrees and does
not dispute such determination, then NYLCare
Mid-Atlantic shall, within sixty (60) days of such
date assign the functions of claims administration to
Doctors Health under a Network Management Agreement.
If, within ten (10) days of receiving written
notice of the determination NYLCare Mid-Atlantic
disputes the determination by Doctors Health, then
the dispute shall be resolved in accordance with
the provisions of Section 6.0 below. If a majority of
the arbitrators decide that Doctors Health has made
a correct determination, then a final and binding
decision to that effect shall be issued under
Section 6.5(c). Within sixty (60) days of the
issuance of the final and binding decision by AAA,
NYLCare Mid-Atlantic shall assign the function of
claims administration to Doctors Health under a
Network Management Agreement, and the parties
thereafter agree to use their good faith best
efforts to amend this Agreement to implement the
necessary process for the orderly and efficient
assignment of Claims Administration to Doctors
Health.
2.17 Additional Doctors Health Physicians. NYLCare Mid-Atlantic
will add a physician who becomes a Doctors Health Physician to
the panel of Doctors Health Physicians to which this Agreement
applies, effective within thirty (30) days of notification
from Doctors Health or the Physician.
3.0 OBLIGATIONS OF DOCTORS HEALTH
3.1 Provision of Health Care Services. Doctors Health agrees to
arrange for the provision of Covered Services identified in
Attachment C hereto to Enrollees who have selected or are
assigned to a Doctors Health Participating Primary Care
Physician. Doctors Health further agrees to arrange for the
provision of additional medical services which may be required
during the course of this Agreement by State or Federal law
governing NYLCare Mid-Atlantic, or by changes or modifications
to the Product Description, provided that the monthly
capitation paid by NYLCare Mid-Atlantic and referred to on
Attachment B shall be increased by amounts mutually acceptable
to the parties to cover the cost of such additional services.
3.2 Selection of Primary Care Physician. Doctors Health agrees
that each Enrollee seeking care shall be required to select a
Primary Care Physician as his/her personal Primary Care
Physician for coordinating his/her overall health care
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needs, in exchange for which Doctors Health shall be entitled
to the capitation payments set forth on Attachment B.
3.3 Professional Standards. In providing Covered Services to
Enrollees under this Agreement, Doctors Health agrees to cause
Participating Providers to (1) use diligent efforts and
professional skills and judgment; and (2) perform professional
services and render care to Enrollees in accordance with, and
in a manner consistent with, customary and recognized
standards of the medical profession.
3.4 Availability of Covered Services. Doctors Health shall, and
shall cause all Participating Providers to, make necessary and
appropriate arrangements to ensure that Covered Services are
available twenty-four (24) hours per day, seven (7) days per
week, including, without limitation, arrangements to ensure
coverage after hours or when a particular Participating
Provider is otherwise absent, consistent with the Policies and
Procedures. For Covered Services, Doctors Health shall, and
shall cause all Participating Providers to, make suitable
arrangements regarding the amount and manner in which
Participating Providers will be compensated.
3.5 Credentialing. During the Initial Term of this Agreement, and
any renewal terms, Doctors Health shall cause all
Participating Physicians to comply, at a minimum, with all
credentialing requirements as NYLCare Mid-Atlantic may
establish and amend from time to time. No Physician shall
become a Participating Physician until Doctors Health, using,
at a minimum, all applicable NYLCare Mid-Atlantic
credentialing requirements and procedures, has determined that
such Physician meets all such requirements. NYLCare
Mid-Atlantic hereby delegates credentialing functions to
Doctors Health pursuant to the delegation letter, which is
Attachment 3.5 to this Agreement, as required by NCQA
standards. NYLCare Mid-Atlantic shall, on the Effective Date,
provide a copy of all credentialing requirements and
procedures applicable to Doctors Health Participating
Physicians. NYLCare Mid-Atlantic shall provide to Doctors
Health, in a timely manner, a copy of each change to such
requirements. NYLCare Mid-Atlantic may, at any time during
regular business hours and after reasonable notice, audit
Doctors Health's credentialing of Participating Physicians.
3.6 Professional Liability and Other Insurance. Doctors Health, at
its sole cost and expense, shall procure and maintain such
policies of general liability and professional liability
insurance and other insurance as shall be necessary to insure
Doctors Health and its employees against any claim or claims
for damages arising by reason of personal injuries or death
occasioned directly or indirectly in connection with the
performance of any service by Doctors Health, the use of any
property and facilities or equipment provided by Doctors
Health, and the activities performed by Doctors Health in
connection with this Agreement. Doctors Health
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shall notify NYLCare Mid-Atlantic of any claims against
Doctors Health initiated by Enrollees who receive Covered
Services through NYLCare Mid-Atlantic.
3.7 No Recourse Against Enrollees. Doctors Health hereby agrees
that in no event shall Doctors Health or any Participating
Provider associated with Doctors Health xxxx, charge or
otherwise seek compensation for Covered Services from an
Enrollee or any other person, other than NYLCare Mid-Atlantic,
provided, however, that this provision shall not prohibit
Participating Providers from billing and collecting from
Enrollees applicable co-payments, coinsurance, or deductibles.
This provision shall not prohibit collection from Enrollees of
payment for services which are not Covered Services.
3.8 Non-Discrimination. Doctors Health and the Participating
Providers shall not discriminate against Enrollees on the
basis of their status as Enrollees, nor on the basis of the
Enrollees' source of payment, race, color, sex, age, religion,
state of health, marital status, lawful occupation, creed,
status as a Medicare beneficiary, national origin, ancestry,
economic status, cost or extent of Covered Services required,
or any other grounds prohibited by law or this Agreement. Each
Participating Provider shall provide services to Enrollees
with at least the same degree of care and skill as customarily
provided to patients of such Participating Provider who are
not Enrollees.
3.9 Communications with Members. Doctors Health agrees that all
Enrollee communications relating to benefit determinations,
access, complaints and grievances and records related to such
complaints shall be referred to NYLCare Mid-Atlantic in
accordance with its standard Medicare appeals and grievance
process for response by NYLCare Mid-Atlantic. Any such
response by NYLCare Mid-Atlantic shall be made in a timely
manner and only after consultation with Doctors Health. No
materials, pamphlets or explanatory letters regarding NYLCare
Mid-Atlantic are to be distributed unless approved in advance
by NYLCare Mid-Atlantic, such approval not to be unreasonably
withheld.
3.10 Thirty (30) Day Provision of Services. Doctors Health will
continue to arrange for the provision of medically necessary
services for a period of thirty (30) days, notwithstanding the
inability of NYLCare Mid-Atlantic to pay the capitation amount
due.
3.11 Continuing Education. Doctors Health agrees to encourage, and
contribute to, the continuing education of Doctors Health
Physicians, including participation in NYLCare Mid-Atlantic
continuing education programs.
3.12 Administrative and Support Staff. Doctors Health agrees to
provide adequate administrative and support personnel for care
management, monitoring of
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coordination of benefits, and patient satisfaction.
Doctors Health will, at its sole expense, engage nurse,
technicians, other non-physician support personnel, and
clerical and administrative personnel reasonably required
by Doctors Health, to perform its obligations under this
Agreement.
3.13 Roster of Providers. Doctors Health agrees to maintain on
record with NYLCare Mid-Atlantic a current roster of all of
the Doctors Health Participating Providers. Doctors Health
will use reasonable efforts to notify NYLCare Mid-Atlantic
thirty (30) days prior to any additions, deletions or other
changes to the information provided pursuant to this
paragraph. Doctors Health agrees that NYLCare Mid-Atlantic may
publicize the information contained in this roster to all
Enrollees and prospective Enrollees. NYLCare Mid-Atlantic
agrees to update the directory of Participating Providers, or
issue an addendum thereto, as soon as reasonably possible
after notification of any additions, deletions or other
changes by Doctors Health, but such update or addendum will
always be issued in a time period consistent with applicable
industry standards.
3.14 Physician Requirements and Responsibilities. It is mutually
agreed that Doctors Health will cause all Doctors Health
Physicians to adhere to the following requirements:
1. All Physicians shall be duly licensed to practice
medicine;
2. Physicians will have, where appropriate, a current
narcotics number issued by the appropriate authority;
3. Doctors Health in cooperation with NYLCare
Mid-Atlantic will jointly review methods and details
of staffing and scheduling to ensure appropriate
access at all times; and
4. A Doctors Health Physician will be forbidden from
treating NYLCare Mid-Atlantic Enrollees should health
care services provided by that Physician be
determined to be sub-standard. Physician may appeal
the determination through the grievance procedure in
the Provider Manual, an individual copy of which will
be furnished upon request.
3.15 Administrative, Accounting and Medical Records. Doctors Health
agrees to maintain adequate and appropriate administrative,
accounting and medical record systems governing services to
Enrollees and Doctors Health's performance under this
Agreement, in accordance with applicable laws, regulations and
accreditation standards.
15
3.15.1 Doctors Health and NYLCare Mid-Atlantic agree that
all medical records of Enrollees shall be treated as
confidential so as to comply with all State and
Federal laws and regulations pertaining to the
confidentiality of such records. Medical records
shall be legible, reflect all aspects of pertinent
care, and contain a current and complete medical
history. For each patient encounter, there shall be
completed, dated and signed progress notes which, at
a minimum, shall contain the chief complaint or
purpose of the encounter, diagnosis or findings and
therapeutic plan.
3.15.2 Doctors Health and NYLCare Mid-Atlantic agree to
maintain records of account for all financial
transactions related to this Agreement. Records of
billing, receipt, collection and reconciliation of
all revenues and appropriate disbursement of required
monies will be made and maintained in accordance with
generally acceptable accounting principles.
3.15.3 Since the value or cost of services provided under
this Agreement will be $10,000 or more within a
twelve (12) month period, to the extent that the
cost of such services is reimbursable by the
Medicare Program, Doctors Health agrees to comply
with the Access to Books, Documents and Records of
Subcontractor's provision of Section 952 of the
Omnibus Reconciliation Action of 1980 (P.L.
96-499), and 42 CFR Part 420, Subpart D, Section
420.300 et seq. In accordance with these
provisions, Doctors Health will allow the
Department, the Comptroller General of the United
States, the Secretary of Health and Human Services
and their duly authorized representatives access
to this Agreement, as well as the books, documents
and records of Doctors Health and its
Participating Providers. Such access will be
allowed, upon request, until the expiration of
four (4) years after the Medicare/Medicaid
reimbursable services are furnished pursuant to
this Agreement.
3.16 Complaint and Grievance Procedure. Doctors Health shall
cooperate with NYLCare Mid-Atlantic in NYLCare Mid-Atlantic's
complaint and grievance procedure and shall abide by such
grievance procedure. Doctors Health shall submit to NYLCare
Mid-Atlantic complaint and grievance information to meet the
requirements of appropriate regulatory agencies. Medical
information shall be provided to NYLCare Mid-Atlantic as
appropriate and without violation of pertinent State and
Federal laws regarding the confidentiality of medical records.
NYLCare Mid-Atlantic's grievance procedure is also available
to Doctors Health for purposes of requesting disenrollment of
a non-compliant Enrollee (including but not limited to one who
consistently fails to make copayments) or challenging a
benefit determination. NYLCare agrees to give consideration to
recommendations by Doctors Health related to disenrollment or
benefit determinations.
16
3.17 Physician-Patient Relationship Maintained. Physicians shall
maintain the relationship of physician and patient with
Enrollees, without intervention in any manner by NYLCare
Mid-Atlantic, Doctors Health, or their agents or employees,
and Physicians shall be solely responsible for all medical
advice to and treatment of Enrollees and for the performance
of all Covered Services set forth in Attachment C, in
accordance with accepted professional standards and practices.
3.18 Compliance with NYLCare Mid-Atlantic Policies and Procedures.
To the extent they affect the Health Plan or adversely affect
Doctors Health, NYLCare Mid-Atlantic will consult with Doctors
Health concerning any significant proposed changes in NYLCare
Mid-Atlantic's policies and procedures prior to implementation
of such policies and procedures, and shall obtain Doctors
Health's prior written consent to such changes, which shall
not be unreasonably withheld.
3.18.1 NYLCare Mid-Atlantic agrees to compensate Doctors
Health in the event any policy implemented hereunder
results in Doctors Health incurring additional
expenses not originally contemplated under this
Agreement.
3.19 Capitation Payments. Doctors Health shall have sole financial
responsibility for capitation payments to Participating
Providers for Covered Services provided to Members with the
funds received from NYLCare Mid-Atlantic. The amount and
extent of such payments shall, to the extent permitted by law,
be determined in Doctors Health's sole discretion; provided,
however, that Doctors Health shall cause Participating
Providers to xxxx and collect from Enrollees any applicable
Copayments, Coinsurance, and Deductibles.
3.20 Other Accounting and Administrative Records. Doctors Health
shall, and shall cause each Participating Provider to,
maintain accurate accounting and administrative books and
records consistent with the Policies and Procedures for all
Covered Services rendered to Members for a minimum of six (6)
years. Doctors Health shall provide to NYLCare Mid-Atlantic,
on a monthly basis, a written report that identifies all
payments made and to be made by Doctors Health to
Participating Providers, if any. Annual financial statements
shall be prepared by Doctors Health in accordance with
generally accepted accounting principles, and shall be
provided to NYLCare Mid-Atlantic on an annual basis. NYLCare
Mid-Atlantic and its agents and representatives, as well as
representatives of the federal Department of Health and Human
Services and state agencies having jurisdiction over the
subject matter of this Agreement or the Parties, shall have
the right upon reasonable prior notice to inspect, audit, and
copy at mutually agreed upon times all such accounting and
administrative books and records of Doctors Health and each
Participating Provider.
17
3.21 Letter of Credit. Doctors Health will, within thirty (30) days
of the Effective Date, provide NYLCare with an irrevocable
standby Letter of Credit from a financial institution
reasonably acceptable to NYLCare Mid-Atlantic. This Letter of
Credit is intended by the parties to satisfy Doctors Health's
financial responsibility to Participating Providers for
Covered Services rendered to Members. Such letter of credit
shall comply with applicable state law and the Policies and
Procedures. The parties agree that Doctors Health has
demonstrated to NYLCare Mid-Atlantic that the letter of credit
required under this Section is sufficient to satisfy Doctors
Health's obligations to Participating Providers for Covered
Services rendered to Members.
(a) The Letter of Credit is intended by the
parties to serve solely as security for the
payment of claims to Participating
Providers. NYLCare Mid-Atlantic shall not be
permitted to draw on the Letter of Credit
for purpose except to pay any balance due
under Section 2.16.3 following the
expiration of the applicable sixty (60) day
period.
(b) The parties acknowledge that the
provisions of this Section 3.20.3 and
Section 3.20.4 above are intended to comply
with the terms and conditions of the
Annotated Code of Maryland, Health General,
Section 19-713.2 and any of its implementing
regulations.
3.22 Coordination of Benefits. Doctors Health shall establish and
implement a system for coordination of benefits. NYLCare
Mid-Atlantic hereby authorizes Doctors Health to seek payment,
on a fee-for-service basis or otherwise, from any insurance
carrier, organization, government agency or any other entity
which is primarily responsible for the payment or provision of
professional Health Care Services provided by Doctors Health
under this Agreement which can be recovered by reason of
coordination of benefits, motor vehicle injury, workmen's
compensation, temporary disability, occupational disease, or
similar exclusionary or limiting provisions, to the extent
authorized by and not otherwise prohibited by law.
3.23 Effects of Complaints/Malpractice. Doctors Health agrees to
remove a physician from the roster of physicians servicing
NYLCare Mid-Atlantic Enrollees in the event said physician is
the object of recurring Enrollee complaints adjudicated in
favor of complainant according to NYLCare Mid-Atlantic's
grievance procedures and/or malpractice claims adjudicated in
favor of the complainant by the Maryland Health Claims
Arbitration Office or by a court of competent jurisdiction.
18
4.0 REPRESENTATIONS AND WARRANTIES
4.1 Mutual Representations and Warranties. Each party hereby
represents and warrants to the other that:
(a) It is in good standing under applicable laws
and regulations governing its existence and
operations;
(b) It has any and all licenses or certifications
required to perform its duties hereunder;
(c) It has full legal right, authority, and capacity
to execute and deliver this Agreement, to bind its
Affiliates, if any, to the terms of this Agreement,
to carry on its health care business as currently
conducted, and to perform its obligations set forth
herein;
(d) It has executed this Agreement through its duly
authorized representative;
(e) Execution and performance of this Agreement shall
not cause it to violate any term or covenant of any
other agreement or arrangement existing or
hereinafter created.
4.2 Medicare Representations and Warranties. Doctors Health
hereby represents, warrants, and agrees that:
(a) to the best of Doctors Health knowledge, no
proceeding, action, or investigation which could lead
to the revocation, suspension, limitation, or
curtailment of any Participating Provider's license,
authority, accreditation, or certification, or which
could otherwise materially impair the ability of
Doctors Health to carry out its obligations under
this Agreement, is pending or has been threatened;
(b) Doctors Health shall cause Participating
Providers to provide Covered Services to Medicare
Members and to comply with Title XVIII of the Social
Security Act and the regulations, policies, and
manuals promulgated thereunder, as amended from time
to time;
(c) No Participating Provider is excluded under Title
XVIII of the Social Security Act from participation
in Medicare;
19
(d) Doctors Health shall cause all Participating
Providers to be compensated only for referrals of
Medicare Members only to Providers who are
Participating Providers, except for Emergency
Services and as otherwise required by applicable law;
(e) Doctors Health shall, and shall cause all
Participating Providers to, follow the appeals and
grievance process for Medicare Members as set forth
by federal law and regulation, in effect from time to
time. Doctors Health shall, and shall cause all
Participating Providers to, be bound by any and all
HCFA requirements regarding initial determination
letters and other correspondence directed to Medicare
Members;
(f) Doctors Health shall, and shall cause all
Participating Providers to, establish and maintain
procedures and controls so that no information
contained in its records or obtained from HCFA or
from others in carrying out the provisions of this
Agreement shall be used or disclosed by Doctors
Health, any agent or employee of Doctors Health, any
Doctors Health Participating Provider, or any agent
or employee of any Doctors Health Participating
Provider, except as provided in Section 1106 of the
Social Security Act, or any successor provision, and
regulations prescribed thereunder, in effect from
time to time;
(g) Doctors Health shall, and shall cause all Doctors
Health Participating Providers to, provide NYLCare
Mid-Atlantic immediately upon request, complete
information regarding any significant business
transaction to which Doctors Health or any
Participating Provider was a party during the six (6)
year period immediately preceding the date of HCFA's
request to NYLCare Mid-Atlantic for such information.
(h) Advance Directives: Doctors Health shall, and
shall cause all Participating Providers to:
(1) not condition treatment or otherwise
discriminate against a Medicare Member on
the basis of whether or not the Medicare
Member has executed an advance directive;
(2) comply with applicable state law
(whether statutory or recognized by courts
of competent jurisdiction) on advance
directives; and
(3) cooperate with NYLCare Mid-Atlantic's
educational efforts regarding advance
directives;
20
(i) Physician Incentive Plan Disclosure. Doctor's
Health shall, and shall cause all Participating
Providers, to, disclose to NYLCare Mid-Atlantic
within such reasonable timeframe as established by
NYLCare Mid-Atlantic all information regarding
physician incentive plans deemed necessary by
NYLCare Mid-Atlantic to comply with federal
requirements.
4.3 Historical Cost Representations and Warranties. NYLCare
Mid-Atlantic represents and warrants that the historical
pharmacy, institutional, ancillary and capitated network
carveout costs set forth on Schedule 4.3 are accurate in all
material respects.
5.0 TERM AND TERMINATION
5.1 Term of Agreement. This Agreement shall begin on the Effective
Date and, unless otherwise terminated in accordance with the
provisions hereof, shall have an initial term ending on the
third (3rd) anniversary of the Effective Date; provided,
however, that after the initial term ends as provided in this
Section, this Agreement shall continue from year to year
thereafter, unless terminated by a party upon 90 days' prior
written notice delivered to the other party or otherwise in
accordance with the provisions hereof.
5.2 Termination for Cause. The parties agree that they will
promptly notify the other in the event of any of the
following, and that upon the occurrence of any such event,
either party may, but shall not be required to, terminate this
Agreement upon thirty (30) days written notice to the other:
and
(a) Failure to maintain any insurance required under
this Agreement;
(b) Dissolution, termination of existence, insolvency
or business failure of either party, commission of
any act of bankruptcy by, or appointment of a
receiver or other legal representative for any party
of the property of either party;
(c) Assignment for the benefit of creditors or
commencement of any proceeding under and bankruptcy
or insolvency law by either party; entry for an order
for relief against either party or commencement of
any proceedings under any bankruptcy or insolvency
law against either party;
21
(d) Withdrawal or suspension of, or failure to renew,
or notice of intent to withdraw, suspend, or fail to
renew any license or certification required to
operate in conformity with this Agreement;
(e) Any purported combination, consolidation or
merger of the a party into another entity, in a
transaction where such party is not the surviving
entity under applicable law; provided, however, that
an initial public offering shall not be considered
grounds for termination of this Agreement;
(f) The commission or omission of any act or any
conduct or allegation of conduct for which the a
party's license, certification or accreditation, or
right to participate in the Medicare program, may be
subject to revocation or suspension, whether or not
actually revoked or suspended, or if the party is
otherwise disciplined by any licensing, regulatory,
professional entity, or any professional organization
with appropriate jurisdiction;
(g) Failure by NYLCare Mid-Atlantic to pay any amount
due Doctors Health under this Agreement.
5.3 Cure Period. If either party to this Agreement substantially
fails to perform any material duty or obligation imposed upon
it by this Agreement or otherwise is in material breach of
this Agreement, other than an event of default set forth in
Section 5.2, and such default shall continue for a period of
ninety (90) days after written notice thereof specifying the
nature of the default has been given to it by the other party,
(or such longer time if the failure can not be cured within
such 90 days as long as the party in breach has initiated and
is diligently pursuing a cure within the 90 day time period
which is reasonably likely to cure the breach in a
commercially reasonable time frame), the other party may
terminate this Agreement upon ninety (90) days prior written
notice and seek such relief or pecuniary loss or damages
caused by such breaching party, including, without limitation,
actual damages. Failure to make payments by NYLCare
Mid-Atlantic in accordance with this Agreement is grounds for
immediate termination after NYLCare Mid-Atlantic has had
thirty (30) days to cure such default.
5.4 Termination by Agreement. In the event NYLCare Mid-Atlantic
and Doctors Health shall mutually agree in writing, this
Agreement may be terminated effective on the date specified in
such written agreement.
5.5 Termination Based on Prospective Regulatory Changes.
Notwithstanding the parties' agreement to modify this
Agreement when necessary because of prospective legal events
as set forth in Section 7.4, if an amendment to this
22
Agreement is required based on regulatory mandate and such
amendment involves a modification which is substantially
burdensome on either party and which was not contemplated by
the burdened party as of the date of execution of this
Agreement, such burdened party may terminate this Agreement
upon ninety (90) days written notice to the other party
without penalty.
5.6 Procedure Upon Termination. In the event of the termination of
this Agreement by either party for any reason, following the
effective date of termination, Doctors Health will cause
Doctors Health Participating Providers to comply with the
following obligations:
(1) Active Treatment. Doctors Health shall cause
Doctors Health Participating Providers to continue to
provide Covered Services to Enrollees under active
treatment as of such effective date until the earlier
of completion of active treatment or NYLCare
Mid-Atlantic's orderly transition of the Enrollee's
care to another Participating Provider, but not for
any period in excess of thirty (30) days. Doctors
Health shall cause any such continuing services to be
provided on a fee for service basis and shall be
compensated by NYLCare Mid-Atlantic on a fee for
service basis.
(2) Insolvency or Cessation of Operations. If this
Agreement terminates as a result of insolvency or
cessation of operations of NYLCare Mid-Atlantic, and
as to Enrollees of NYLCare Mid-Atlantic that become
insolvent or cease operations, then in addition to
other obligations set forth elsewhere in this
Section, Doctors Health shall cause all Doctors
Health Participating Providers to continue to provide
Covered Services to Enrollees for the lesser of:
(1) thirty (30) calendar days;
(2) the period for which premium has been
paid;
(3) as to Enrollees confined in an acute
inpatient facility on the date of insolvency
or other cessation of operations; or
(4) any such longer period as required by
applicable law.
Upon effective date of nonrenewal or termination, Enrollees and others inquiring
about the participating status of all Doctors Health Participating Providers
shall be advised that they no longer participate.
5.7 Rights and Obligations Upon Termination. Upon termination of
this Agreement for any reason, the rights of each party
hereunder shall terminate, except as
23
provided in elsewhere in this Agreement. Any such
termination, however, shall not release NYLCare
Mid-Atlantic or Doctors Health from its obligations under
this Agreement prior to the effective date of termination.
5.8 Applicable Law. The Parties agree that this Section is subject
to applicable federal, state, or District of Columbia law
regarding Provider terminations and subsequent Provider
obligations.
6.0 ALTERNATIVE DISPUTE RESOLUTION
6.1 Agreement to Arbitrate. Any controversy, dispute, or claim
arising out of or relating to this Agreement or the breach
thereof, including any question regarding the existence of an
event of default or the interpretation, existence, validity or
termination of this Agreement, shall be resolved in accordance
with the procedures set forth in this Section, which culminate
with final and binding arbitration; however, the procedures,
including arbitration, shall not be binding in a legal
proceeding brought by a third party against NYLCare
Mid-Atlantic or Doctors Health (a "Defendant"), or any cross
claim or third party claim by such Defendant against NYLCare
Mid-Atlantic or Doctors Health.
6.2 Informal Resolution. A party serve shall serve written notice
of any dispute, controversy, or claim arising out of this
Agreement. The notice shall describe the dispute, controversy,
or claim with sufficient specificity to give the other party
notice of its nature. Within thirty (30) days of the written
notice, representatives of the parties with authority to
settle the matter shall meet and confer in good faith at a
mutually acceptable time and place, and as often thereafter as
they may deem reasonably necessary, in an effort to reach an
amicable solution.
6.3 Demand for Arbitration. If the parties are unable to reach an
amicable solution after making good faith attempts as
described in Section 6.2, either party may initiate
arbitration proceedings by filing a demand for arbitration
with the American Arbitration Association ("AAA") in
Washington, D.C. A party wishing to commence arbitration will
send a written notice of intent to arbitrate to the other
party, and arbitration will be commenced within thirty (30)
days after such notice is received.
6.4 Mediation. The parties agree that arbitration will be stayed
pending mediation in accordance with the Mediation Rules of
the American Arbitration Association. If the parties are
unable to agree on the selection of a mediator, a mediator
will be selected from a list of neutrals provided by AAA. The
parties will request that AAA provide a list of three
neutrals, each of whom shall have a minimum of seven (7) years
of experience in the provision of legal services to the health
care
24
industry. If the parties are unable to agree on a
mediator from the list provided by AAA, AAA will select a
mediator from the list provided. Prior to the selection of the
mediator by AAA, the parties shall each be permitted one
strike from the mediator list provided by AAA. If the parties
are unable to reach an amicable resolution of the dispute
after good faith attempts at mediation, then the parties shall
proceed to final and binding arbitration as set forth in
Section 6.5.
6.5 Arbitration Procedures. Except as expressly provided in this
Section, the arbitration will be conducted in accordance with
the Commercial Arbitration Rules of the American Arbitration
Association, as they are in effect when the arbitration is
conducted.
(a) The arbitration will take place before a panel of
three (3) independent and neutral arbitrators, each
of whom shall have demonstrated expertise in their
respective fields in the health care industry. The
arbitration panel will be composed of one attorney,
one Chief Financial Officer from a major health care
provider, and one person who has served as a Chief
Executive Officer of a major health care provider,
except that none of these individuals may be an
employee of an insurance company or be in direct or
indirect competition with any party. The person who
has served as Chief Executive Officer will be the
chair of the arbitration panel.
(b) The arbitration shall be conducted in Baltimore,
Maryland unless otherwise agreed upon by both
parties.
(c) The decision of the majority of the arbitrators
will be final and binding. Judgment upon the award
rendered may be entered and enforced in any court of
competent jurisdiction. The parties shall bear their
own discretionary costs, including attorneys' fees
but the cost of the arbitration itself will be shared
equally by the parties.
6.6 Injunctive Relief. Notwithstanding this agreement to
arbitrate, NYLCare Mid-Atlantic and Doctors Health may seek
interim and/or permanent injunctive relief pursuant to this
Agreement in any court of competent jurisdiction.
7.0 MISCELLANEOUS
7.1 Relationship of the Parties. This Agreement is not intended to
create nor shall be construed to create any relationship
between Doctors Health and NYLCare Mid-Atlantic other than
that of independent persons or entities contracting for the
purpose of effecting provisions of this Agreement. Neither
party nor any of their
25
representatives shall be construed to be the agent, employer,
employee or representative of the other.
7.2 Independent Judgment. Nothing in this Agreement, shall be
construed to interfere with or in any way affect Doctors
Health Participating Providers' obligation to exercise
independent medical judgment in rendering health care services
to Enrollees.
7.3 Third Party Beneficiaries. This Agreement is not intended to
create or confer a third party beneficiary status or rights in
any person not a party to this Agreement, including Enrollees,
Payors, Participating Providers or other third parties, unless
such rights are expressly set forth in this Agreement.
7.4 Contract Modifications for Prospective Legal Events. In the
event that any state or federal laws or regulations, now
existing or enacted or promulgated after the effective date of
this Agreement, are interpreted by judicial decision, a
regulatory agency or legal counsel to either party in such a
manner as to indicate that the structure of this Agreement may
be in violation of such laws or regulations, NYLCare
Mid-Atlantic and Doctors Health shall amend this Agreement as
necessary to bring it into compliance with the law. To the
maximum extent possible, any such amendment shall preserve the
underlying economic and financial arrangements between NYLCare
Mid-Atlantic and Doctors Health, which may include equitable
adjustments in the capitation rates or the consideration
received by Doctors Health pursuant to this Agreement.
7.5 Confidentiality. The parties acknowledge that as a result of
this Agreement, each may have access to certain trade secrets
and other confidential and proprietary information of the
other. Each party shall hold such trade secrets and other
confidential and proprietary information, including the terms
and conditions of this Agreement, in confidence and shall not
disclose such information, either by publication or otherwise,
to any person not otherwise bound by a duty of confidentiality
without the prior written consent of the other party except as
may be required by law and except as may be required to
fulfill the rights and obligations set forth in this
Agreement.
7.6 Assignment and Delegation of Duties. This Agreement and the
rights and duties created hereunder may not be assigned or
transferred by NYLCare Mid-Atlantic or Doctors Health without
the prior written consent of the other party, nor may, or
will, any such rights or duties be assumed or delegated by
operation of law by any successor entity in a statutory merger
or similar business combination involving one of the parties
hereto in a transaction where such party is not the surviving
entity under applicable law. Any attempted transfer or
assignment by contract shall be void and of no effect.
Notwithstanding anything to the contrary in this
26
Section 7.6, Doctors Health may assign this Agreement and
the rights and duties created hereunder to a controlled
affiliate of Doctors Health.
7.7 Governing Law. The validity, interpretation and performance of
this Agreement shall be governed and construed in accordance
with the laws and regulations of the State of Maryland,
including its choice of law rules, except to the extent such
laws and regulations are preempted or superceded by federal
law or regulation. The parties acknowledge that Doctors Health
is not authorized or qualified to engage in any activity which
may be construed or deemed to constitute the practice of
medicine or the business of insurance. To the extent any act
or service required of Doctors Health in this Agreement should
be construed or deemed, by any governmental authority, agency
or court to constitute the practice of medicine or the
business of insurance, the performance of said act or service
by Doctors Health shall be deemed waived.
7.8 Amendment. Except as provided above, amendments to this
Agreement shall be agreed to in advance in writing by NYLCare
Mid-Atlantic and Doctors Health.
7.9 Entire Contract. This Agreement and the attachments hereto
contains all the terms and conditions agreed upon by the
parties with respect to the subject matter hereof, and
supersedes all other agreements, express or implied, regarding
the subject matter hereof.
7.10 Notice. Any notice required hereunder shall be in writing and
shall be effective two (2) days after it is sent by United
States mail, postage prepaid, to Doctors Health and NYLCare
Mid-Atlantic at the address set forth below:
If to Doctors Health: Doctors Health, Inc.
00000 Xxxx Xxx Xxxxxx
00xx Xxxxx
Xxxxxx Xxxxx, Xxxxxxxx 00000
Attn: Stewart B. Gold
Chief Executive Officer & President
If to NYLCare Mid-Atlantic: NYLCare Health Plans of the Mid-Atlantic, Inc.
0000 Xxx Xxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxx Xxxxxxxx
Chief Executive Officer
or to such other address as either party shall notify in writing.
7.11 Enforceability and Waiver. The invalidity and non
enforceability of
27
any term or provision of this Agreement shall in no way
affect the validity or enforceability of any other term or
provision. The waiver by either party of a breach of any
provision of this Agreement shall not operate as or be
construed as a waiver of any subsequent breach thereof.
7.12 Non-discrimination. Each party agrees not to discriminate
against any Enrollee on account of race, color, age, marital
status, religion, national origin, gender, or physical or
mental handicap, or the source of payment.
7.13 Interpretation. For all purposes of interpretation or
construction of this Agreement, the singular shall include the
plural and the plural shall include the singular, and each
gender shall include the other gender. Captions and section
headings used herein are for convenience only and are not part
of this Agreement and shall not be used in construing it.
7.14 Additional Documents. Each of the parties hereto agrees to
execute any document or documents that may be requested from
time to time by the other party to implement or complete such
party's obligations pursuant to this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the 3rd day of October, 1997.
Witness: DOCTORS HEALTH, INC.
/s/ Xxxx X. Xxxxxx By: /s/ Stewart B. Gold
------------------ -------------------
Stewart B. Gold
Chief Executive Officer & President
Witness:
NYLCARE HEALTH PLANS
OF THE MID-ATLANTIC, INC.
28
/s/ Xxxxxx X. Xxxx By: /s/ Xxxx Xxxxxxx
------------------ ----------------
Xxxx Xxxxxxx
Chief Executive Officer
29
ATTACHMENT A
------------
For purposes of this Agreement, the Service Area for use by
NYLCare Mid-Atlantic for the enrollment of Members and to define in-area
emergency services shall be as follows:
The State of Maryland
The District of Columbia
The Cities and Counties in the Commonwealth
of Virginia identified in the map attached
as Exhibit 1 to this Attachment A.
30
EXHIBIT 1
---------
Map depicting NYLCare's service area in Maryland, the District of Columbia and
Virginia.
31
ATTACHMENT B
------------
CAPITATION/FINANCIAL ARRANGEMENTS
---------------------------------
1. NYLCare Mid-Atlantic shall make Capitation payments to Doctors
Health on the tenth (10th) day of each month for all Members enrolled
in the Health Plan on the first (1st) day of such month and who
have selected or been assigned to a Doctors Health Physician as
their Primary Care Physician. A summary listing showing such
Enrollees will be provided with the payment check from NYLCare
Mid-Atlantic. Also on the listing will be a calculation of any
retroactive adjustments either adding or deleting such Members;
provided, however, that such retroactive adjustments must be made
within ninety (90) days. Claims payments to Participating Providers
for non-capitated Covered Services will be deducted from the
capitation payments due Doctors Health as provided in Section 2.16
of the Agreement. Doctors Health shall be liable for the cost of all
Covered Services provided after the Effective Date to any Member who
selects or is assigned to a Doctors Health Primary Care Physician.
For purposes of this Attachment B, Covered Services shall not include
Emergency Services or Out-Of-Area Urgent Services provided outside of
the Service Area. NYLCare Mid-Atlantic shall be responsible for only
Covered Services to Members which were initiated on or prior to
September 30, 1997.
2. In consideration of such capitation amounts, and except as set forth
above, Doctors Health shall provide or arrange for all those Covered
Services to Members as set forth in Attachment C, and shall assume the
responsibility for the cost of said services. Regardless of the number
of Doctors Health Physicians rendering services, if any, to Member
during any month, only one capitation payment will be made to Doctors
Health each month for each Member. The capitation payment shall be made
regardless of the type or amount of service rendered to the Member
during a given month.
3. Capitation Schedule (Per Member Per Month)
Except as provided below, the capitation schedule (per member per month) shall
be **.*% of the Premium.
4. Capitation Schedule (Per Member Per Month) For Eligible Members
In Certain Counties and Cities in the Commonwealth of Virginia
--------------------------------------------------------------
For the period October 1, 1997 through June 30, 1998, NYLCare
Mid-Atlantic will pay Doctors Health at least $*** PMPM for NYLCare 65
Members residing in the following counties and cities in Virginia
regardless of AAPCC and/or Premium then in effect.
***
32
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
With respect to Members residing in Virginia counties not listed in this
Attachment B, NYLCare Mid-Atlantic will, through December 31, 1997, pay Doctors
Health at least $*** PMPM, regardless of the AAPCC and/or Premium then in
effect.
33
ATTACHMENT C
------------
All services as set forth in the description of the
Health Plan other than optometry and optical
services.
