Exhibit 10.13
** Indicates information which has been omitted and filed separately with the
SEC pursuant to a confidential treatment request. Asterisks appear on page 2
and Exhibit A of this agreement.
WORKERS' COMPENSATION MASTER PREFERRED CLIENT AGREEMENT
-------------------------------------------------------
This Workers' Compensation and/or Work Related Injury/Illness Master Preferred
Client Agreement ("Agreement") is entered into by Beyond Benefits, a Delaware
corporation (herein referred to as "Beyond") and Rockport Healthcare Group, Inc.
a Delaware Corporation, (herein referred to as "Client"). The effective date of
this Agreement is July 1, 2000 ("Effective Date").
RECITALS
--------
A. Beyond and its subsidiaries, including but not limited to Preferred
Health Network, Inc. (PHN) and HealthStar, Inc. (HealthStar), have established a
preferred provider organization ("Beyond" or "Beyond PPO") by contracting with
hospitals, physicians, home health and other institutional and professional
providers who agree to provide health care services to eligible employees and or
insureds of Beyond's Clients in exchange for discounted rates (collectively
referred to in this Agreement as "PPO Network" or "PPO Network Providers").
B. Client provides or arranges for health care services under its
workers' compensation and/or work related injury/illness program for its
Customers' employees and or insureds and desires to contract with the Beyond PPO
to provide or arrange for such services for its Customers'eligible employees and
or insureds through PPO Network Providers.
C. PPO Network Providers are willing to provide or arrange for health
care services at a discounted rate in exchange for Client's agreement to educate
their Customers to identify and encourage their eligible employees and or
insureds to PPO Network Providers.
D. Client and Beyond desire to enter into this Agreement on the terms
and conditions described below.
ARTICLE I
---------
RESPONSIBILITY OF THE PARTIES
-----------------------------
1.01 ACCESS TO NETWORK, PRIMARY STATES
-------------------------------------
(a) Beyond grants to Client the right to participate in the Beyond PPO
and enjoy the benefit of Beyond's PPO Network Providers' negotiated discount
rates ("Network Rates") on the terms of this Agreement. As a result of such
grant, Beyond agrees that the Network Rates offered by PPO Network Providers
shall be available to individuals who have selected and are entitled to benefits
under Client's or Client's customers workers' compensation and/or work related
injury/illness preferred provider program ("Program"). Beyond shall notify
Client of the identity of its PPO Network Providers on or before the Effective
Date and provide Client with monthly updates by the 10th day of the following
month to the Provider roster.
(b) Unless Client's customers direct otherwise, Client shall use the
Beyond PPO Network as its preferred provider network in any states or markets
where Beyond has PPO Network Providers in sufficient number of Occupational
Health specialties, geographic locations, and penetration rates and percent of
savings to meet the reasonable needs of Client and Client's customers. These
states are referred to as "Primary Markets," and are (or shall be) listed on
Exhibit A to this Agreement, which Exhibit is attached hereto and incorporated
herein by reference. Notwithstanding the foregoing, nothing in this Agreement
shall prevent Client and its customers from using hospitals, physicians and
other health care providers that have provider contracts with Client and who are
part
1
of a preferred provider network owned or controlled by Client, whether or not
they are located in the Primary Markets. However, should Client acquire
ownership or control of providers in the Primary Markets after the Effective
Date, which results in an overlap of services with Beyond PPO Providers (the
"Event"), Client shall immediately notify Beyond in writing of the Event and
shall ensure that Beyond PPO Providers continue to be used as preferred
Providers for all Program Participants who are enrolled with Client on the date
of the Event for no less than twelve (12) months with the following exception of
provider(s) that are under current negotiation, by Client, prior to Effective
Date of this Agreement. For those Beyond Network PPO Provider(s) that Client
identifies having unusually low to no PPO savings, Beyond agrees to attempt to
re-contract provider(s) at better, discounted rates and/or allow Client the
opportunity to contract provider(s) at better, discounted rates. Beyond agrees
to allow Client to contract any non Beyond Network PPO provider to enhance and
improve Client's existing network. After expiration of this twelve (12) month
period, Client and Beyond agree to cooperate in any transfer of Client's Program
Participants to non-Beyond PPO Providers.
1.02 USE OF RATES. Client represents and warrants that the Network
--------------
Rates made available to it through PPO Network Providers shall be utilized
exclusively for individuals who are covered under Client's Workers' Compensation
and/or Work Related Injury/Illness Program and who are eligible for benefits
under such Program (such individuals are referred to in this Agreement as
"Participants').
1.03 REPORTS. Since Client or Client's customers shall process their
-------
PPO bills, Client shall submit to Beyond monthly reports which summarize the
following information for all such bills and itemize such information for each
such xxxx:
(a) Gross charges submitted;
(b) Recommended allowance to be paid by Client based on the Network Rates;
and
(c) Resulting savings to Client.
1.04 Repricing Services. Client or Client's customers shall reprice
-------------------
and pay all Client PPO Network claims accessing the Beyond PPO Network. Beyond
shall provide Client with Network Rates applicable to PPO Network Providers, in
a mutually acceptable format, monthly by the 10th day of each month in order for
Client to conduct repricing on-site at their facility. Client's ability to
select this option is conditional on Beyond's prior review and approval of
Client's proven information system capability to reprice claims which approval
shall not be unreasonably withheld. Client further acknowledges and agrees that
Beyond shall have no obligation to provide to Client any other information,
including underlying computer logic used in repricing calculations, it being
understood that such information constitutes Beyond's Confidential Information,
as defined in Section 1.13 below.
1.05 Fees. Client shall pay Beyond a fee equal to ** percent (**%) of
----
the PPO revenue Client receives as a result of applying Beyond's contracted PPO
network rates to official state fee schedules, usual and customary reimbursement
rates, or billed charges (as applicable). Client shall pay Beyond by the
fifteenth day of the following month that payment is received from Client's
customer(s).
Client shall be prohibited from marketing or selling access to the PHN PPO
network for lower than **% of savings, except with written consent by PHN.
With the exception of the first ninety (90) days from the effective date of
this Agreement, Client agrees that if said fees payable to Beyond, on a monthly
basis, are less than one thousand dollars ($1,000) for all Beyond services
utilized per month, Client will pay a minimum of one thousand dollars ($1,000)
per month to Beyond.
2
1.06 LATE CHARGE. Client shall pay to Beyond a late charge in the
--------------
amount of one and one-half percent (1-1/2%) per month for any payment that is
not mailed by the fifteenth day of the following month that payment is received
from Client's customer(s).
1.07 PATIENT REFERRAL. Since referral of patients to Beyond PPO Network
----------------
Providers is essential in order for Beyond to secure cost-effective contracts
with health care providers, Client and Client's customers agree to use their
best efforts under any jurisdiction's workers' compensation law to encourage its
Program Participants to Beyond PPO Network Providers. In addition, Client and
Client's customers shall do one or more of the following:
(a) Provide work site supervisors and Program Participants written
materials describing use of the program and Beyond PPO Network Providers;
(b) Post work site poster listing Beyond's PPO Network Providers or
distribute directories containing a list of Beyond PPO Network Providers to work
site supervisors and or Program Participants;
(c) Provide Program Participants with access to Beyond's or Client's
"800" PPO referral line; or
(d) Provide referrals in some other manner acceptable to Beyond and
Client.
1.08 PARTICIPANT IDENTIFICATION. Since identification of Client's
---------------------------
Program Participants by Beyond PPO Network Providers is an integral part of
provider compliance and network management, Client shall ensure that all of its
Program Participants have a method of identifying themselves as Beyond PPO
participants.
1.09 ELIGIBLE PARTICIPANTS. Client represents and warrants that the
----------------------
Network Rates made available to its Program Participants through the Beyond PPO
Network shall only be utilized for individuals who are covered under Client's or
Client's customers Workers' Compensation and/or Work Related Injury/Illness
Program and who are eligible for benefits under such Program.
1.10 PROVIDER CREDENTIALING. Beyond requires that each Beyond PPO
-----------------------
Network Provider meet specific participation and credentialing criteria in order
to participate in the Beyond PPO Network.
1.11 PARTICIPANT ELIGIBILITY AND BENEFIT VERIFICATION. Client
----------------------------------------------------
understands and agrees that it is solely responsible for providing Beyond PPO
Network Providers with timely, accurate coverage information. Client shall have
a system in place that allows it to readily provide the following information to
PPO Network Providers: (a) whether a particular individual is a Beyond PPO
Program Participant; (b) a description of the benefits available under Client's
Workers' Compensation and/or Work Related Injury/Illness Program; and (c) the
name of the individual who can verify patient eligibility for benefits at the
Network Rates.
1.12 1.13 CONFIDENTIALITY. Client acknowledges that all details of the
---------------
Beyond PPO including, but not limited to, Network Rates, are confidential and
constitute proprietary information ("Confidential Information"). Client agrees
not to cause or permit the disclosure, reproduction, use, transfer, or
dissemination of any or all of the Confidential Information in any form
whatsoever. Client shall use its best efforts to protect the Confidential
Information consistent with the manner in which it protects its own confidential
business and patient information. Client agrees not to use any Confidential
Information to contract with any Beyond PPO Network Provider. Client further
agrees not to contract with any Beyond PPO Network Provider, whether such
---
contractual arrangement is direct or indirect, during the term of this Agreement
and for a period of one (1) year following termination of this Agreement with
the following exception of provider(s) that are under current negotiation, by
Client, prior to Effective Date of this Agreement. For those Beyond Network PPO
Providers that Client identifies having unusually low to no PPO savings, Beyond
agrees to attempt to re-contract provider(s) at better, discounted rates and/or
allow Client the opportunity to contract provider(s) at better, discounted
rates. Client understands that any disclosure or use of Confidential Information
will result in substantial harm to Beyond. Client agrees that if it breaches any
provision of this Section 1.13, Beyond would not have an adequate remedy at law
and, in addition to any other available
3
remedies, Beyond would be entitled to injunctive relief against Client. Client
agrees that the terms of this Section 1.13 shall survive termination of this
Agreement for any reason.
1.14 TIMELY PAYMENT AND EXPLANATION OF BENEFITS. Client or Client's
---------------------------------------------
customers shall ensure that Beyond PPO Network Providers are paid within thirty
(30) days of Client's or Client's customers receipt of clean, non-contested
claims or as mandated by the Workers' Compensation rules and regulations for the
State which medical care was rendered. If payment is not made within this time
period, Beyond may determine, in its sole discretion, that Client or Client's
customer has lost its right to use Network Rates, in which case all payments due
to PPO Network Providers will automatically be based on applicable state
Workers' Compensation fee schedule or usual and customary reimbursement.
1.15 MARKETING. Beyond shall have the right to use Client's
----------
customer(s) name as this information is made available to Client and approved by
Client's customer(s) for purposes of marketing. Beyond may seek Client's
approval to use other information for marketing purposes, including without
limitation the number of Program Participants, which approval shall not be
unreasonably withheld.
ARTICLE II
----------
TERM AND TERMINATION
--------------------
2.01 TERM. The term of this Agreement shall be for one(1) year from
----
the Effective Date, unless earlier terminated as set forth in this Agreement.
This Agreement shall be automatically renewed for successive one(1) year terms
thereafter, unless either party gives the other party written notice of
non-renewal at least sixty (60) days prior to the end of the then current term.
2.02 TERMINATION WITHOUT CAUSE. This Agreement may be terminated by
----------------------------
either party, without cause, on ninety (90) days' prior written notice to the
other party.
2.03 TERMINATION FOR FEE ADJUSTMENTS. The fees set forth in Section
----------------------------------
1.05 above shall not be modified for one (1) year from the Effective Date unless
both Client and Beyond mutally agree to do so at an earlier date. Thereafter,
Beyond shall have the right to adjust its fees at any time upon sixty (60) days
prior written notice to Client. In the event any such fee adjustment is
unacceptable to Client, Client may terminate this Agreement upon sixty (60) days
prior written notice to Beyond.
2.04 TERMINATION FOR MISUSE. Client shall use Network Rates
------------------------
exclusively for the purpose of adjudicating claims for Program Participants who
use the Beyond PPO Network. Client understands and agrees that its use of
Network Rates for non-eligible beneficiaries may result in immediate termination
of this Agreement by Beyond, which termination shall be effective upon Client's
receipt of written notice. Should misuse by Client occur, Client expressly
agrees to reimburse all Beyond PPO Network Providers the difference between the
sum of any inappropriately taken discounts and the sum of the PPO Network
Providers' full charges.
2.05 MATERIAL BREACH. Either party may terminate this Agreement in the
---------------
event of a material breach by the other party by providing (60) days prior
written notice of termination. The notice shall include a description of the
facts underlying the breach. Remedy of the breach in a manner satisfactory to
the non-breaching party within thirty (30) days of receipt of such notice shall
continue the Agreement in effect for the remaining term, subject to the right of
earlier termination as described in this Agreement.
2.06 FAILURE TO PAY. Notwithstanding any other provision of this
----------------
Agreement, Beyond may terminate this Agreement upon ten (10) days prior written
notice to Client, if Client fails to pay Beyond's feesas agreed to in section
1.05.
2.07 EFFECT OF TERMINATION. In the event that this Agreement is
-----------------------
terminated for any reason, Client shall pay for all services provided by Beyond
through the termination date and all fees earned by Beyond for services
4
performed up to such date shall be paidas agreed to in section 1.05.
ARTICLE III
------------
GENERAL PROVISIONS
-------------------
3.01 SEVERABILITY. Should all or any portion of any provision of this
------------
Agreement be held unenforceable or invalid for any reason, the remaining
portions or provisions all be unaffected.
3.02 NOTICES. Any notice required or permitted to be given under this
-------
Agreement shall be in writing and may be personally delivered or sent by
registered or certified mail, return receipt requested, postage prepaid,
addressed to such party at the following address or such other address as may be
provided in writing to the other party:
Beyond:
Xxxxxxx X. Xxxxx
President & COO
000 X. Xxxxx Xxxx., Xxxxx 000
Xxxx Xxxxx, XX 00000
Client:
Xxxxx X. Xxxx
President / CEO
Rockport Healthcare Group, Inc.
00 Xxxxx Xxxxxx Xxxx, Xxxxx 000 Xxxx
Xxxxxxx, XX 00000
If notice is sent by registered or certified mail, such notice shall be
deemed delivered on the third (3rd) business day after the day on which it was
mailed.
3.03 INTEGRATION. This Agreement sets forth the entire understanding
-----------
of the parties relating to the transactions it contemplates, and supersedes all
prior understandings relating to them, whether written or oral. There are no
obligations, commitments, representations or warranties relating to them except
those previously set forth in this Agreement.
3.04 ASSIGNMENT. No interest in any right of any party under this
----------
Agreement is assignable without the prior written consent of the other party,
which consent may be withheld in a party's absolute discretion. Any purported
assignment without consent shall be null and void. However, all obligations of
any party under this Agreement shall be enforceable against such party's
successors and assigns.
3.05 WAIVER/MODIFICATION/AMENDMENT. No amendment of, supplement to or
-----------------------------
waiver of any obligations under this Agreement will be enforceable or admissible
unless set forth in a writing signed by the party against which enforcement or
admission is sought. No delay or failure to require performance of any
provision of this Agreement shall constitute a waiver of that provision as to
that or any other instance. Any waiver granted shall apply solely to the
specific instance expressly stated.
3.06 Indemnification. Beyond and Client agree to indemnify and hold
---------------
each other harmless from and against any and all claims, liabilities, damages,
losses and expenses related in any way to their respective obligations under the
terms of this Agreement. In no event shall either party be liable for any
claim, injury, demand or judgment based on tort, expressed or implied warranty,
or other grounds whatsoever arising out of the provision of services by Beyond
PPO Network Providers.
5
3.07 INDEPENDENT CONTRACTORS. The relationship of the parties to this
------------------------
Agreement is determined solely by the provisions of this Agreement. The parties
do not intend to create any agency, partnership, joint venture, trust or other
relationship with duties or incidents different from those of parties to an
arms-length contract.
3.08 GOVERNMENT APPROVALS. Client and Beyond represent and warrant
---------------------
that they have each secured and shall maintain at all times necessary
governmental authorizations for the performance of their respective
responsibilities under the terms of this Agreement. Both parties will use best
efforts to inform the other in writing of any governmental authorizations that
may be required. Each party agrees to conform to all laws, regulations, and
ordinances and governmental policies that may be applicable to performance of
the terms of this Agreement.
3.09 AUTHORITY. Client and Beyond each represent that they have the
---------
requisite power and authority to carry on their business as conducted. Each
party further represents and warrants that it is qualified to do business in
each jurisdiction in which it is necessary to perform obligations under this
Agreement.
3.10 LIMITATION ON LIABILITY.
-------------------------
(a) Beyond and Client do not assume any risk or responsibility for
payment to Beyond PPO Network Providers or to any other providers providing
medical or other healthcare related services for Client's Program Participants
under this Agreement. Beyond is not a guarantor of the performance by Client,
or by any Beyond PPO Network Provider of any of the terms or conditions set
forth in this Agreement or in any Beyond agreement with a PPO Network Provider.
(b) Beyond and Client shall not be responsible or liable in anyway for
any inaccurate, incomplete, or untimely administrative service or reports which
Beyond and Client have agreed to provide to Client or Beyond under this
Agreement, and Beyond's or Client's only responsibility shall be to correct
errors in such reports, complete such reports, and use reasonable efforts to
prevent further delays in the rendering of services or reports. Beyond or
Client shall have no liability or responsibility for administrative services and
reports that are inaccurate, incomplete, or untimely due to inaccurate,
incomplete, or untimely information or data furnished to Beyond or Client by
Client or Beyond.
(c) Beyond shall have no responsibility or liability to Client,
Client's customers, Client's Program Participants, or any other person, firm,
corporation, or entity for the propriety, necessity, advisability, expenses or
consequences of any treatment, operation, diagnostic or therapeutic procedure,
medicine, drug prescription, care, maintenance, confinement or other matters
relating in any way to the rendition of any health care service by any Beyond
PPO Network Provider or any other physician, practitioner, healthcare
institution, or such individuals, institutions, employees, agents,
representatives, or contractors.
3.11 DISPUTE RESOLUTION AND ARBITRATION. In the event a dispute
-------------------------------------
concerning this Agreement cannot be satisfactorily resolved, the dispute shall
be settled in accordance with the commercial rules of the American Arbitration
Association. The arbitration may be initiated by either party by making a
written demand on the other party within thirty (30) days of the time the
dispute arises. Within thirty (30) days of such demand, the parties will each
designate an arbitrator and give written notice of such designation to the
other. Within ten (10) days after such notices have been received, the two (2)
arbitrators will select a third arbitrator. The three (3) arbitrators will hold
a hearing and decide the matter within thirty (30) days thereafter. The results
of the arbitration shall be final and binding on the parties. The arbitration
proceeding shall take place in the state of residence of the defendant.
Judgment upon an award rendered by the arbitrators may be entered in any court
having jurisdiction thereof. The parties will pay the fee of the arbitrator
each chooses and the parties will share equally the fee of the third arbitrator.
3.12 COUNTERPARTS. This Agreement may be executed in multiple
------------
counterparts, each of which shall be deemed an original, and counterpart
signature pages may be assembled to form as a single original document.
6
3.13 Governing Law. This Agreement shall be governed and construed in
--------------
accordance with the laws of the State of California.
3.14 Attorneys' Fees. In the event of any proceeding related to this
----------------
Agreement, the losing party shall pay the prevailing party's actual attorneys'
fees and expenses incurred in any phase of the dispute.
BEYOND BENEFITS CLIENT
By: /s/ Xxxxxx X. Xxxxxxxx By: /s/ Xxxxx X. Xxxx
---------------------------- -----------------------------
Xxxxxx X. Xxxxxxxx Xxxxx X. Xxxx
Title: CEO Title: President / CEO
---------------------------- --------------------------
Date: 7/10/00 Date: July 5, 2000
---------------------------- ---------------------------
7
EXHIBIT A
---------
PRIMARY MARKETS
Initial Rollout of States that are Primary and Secondary
**
8
